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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the fiscal year ended December 31, 20192022

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the transition period from                      to                     .

Commission file number: 1‑104661-10466

The St. Joe Company

(Exact name of registrant as specified in its charter)

Florida

    

59‑043251159-0432511

(State or other jurisdiction of

incorporation or organization)

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(I.R.S. Employer

Identification No.)

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133 South Watersound Parkway130 Richard Jackson Boulevard, Suite 200

Watersound, Panama City Beach, Florida

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3246132407

(Address of principal executive offices)

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(Zip Code)

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(850) 231‑6400(850) 231-6400

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

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Trading Symbol(s)

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Name of Exchange on Which Registered

Common Stock, no par value

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JOE

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New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: NONE

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Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐NO☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   YES ☐NO☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   YES☑    NO  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   YES  ☑þ    NO  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b‑212b-2 of the Exchange Act.

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Large accelerated filer

☐☑

Accelerated filer

☑☐

Non-accelerated filer

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Smaller reporting company

☐

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Emerging Growth Company

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑212b-2 of the Exchange Act).   YES  ☐   NO  ☑

The aggregate market value of the registrant’s Common Stock held by non-affiliates based on the closing price on June 30, 2019,2022, was approximately $349.7 million.$1.4 billion.

As of February 24, 2020,20, 2023, there were 59,414,58358,335,541 shares of common stock, no par value, issued of which 59,414,58358,335,541 were outstanding.

Documents Incorporated By Reference

Portions of the Registrant’s definitive proxy statement for its 20202023 Annual Meeting of Shareholders, which proxy statement will be filed no later than 120 days after the close of the Registrant’s fiscal year ended December 31, 2019,2022, are hereby incorporated by reference in Part III of this Annual Report on Form 10‑K.10-K.

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Table of Contents

THE ST. JOE COMPANY

INDEX

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Page No.

PART I

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Item 1. Business

3

Item 1A. Risk Factors

6

Item 1B. Unresolved Staff Comments

2319

Item 2. Properties

2319

Item 3. Legal Proceedings

2420

Item 4. Mine Safety Disclosures

2420

PART II

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Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

2521

Item 6. Selected Financial DataReserved

2722

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

2922

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

6153

Item 8. Financial Statements and Supplementary Data

6253

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

6253

Item 9A. Controls and Procedures

6253

Item 9B. Other Information

6455

PART IIIItem 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections

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PART III

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Item 10. Directors, Executive Officers and Corporate Governance

6556

Item 11. Executive Compensation

6556

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

6556

Item 13. Certain Relationships and Related Transactions and Director Independence

6556

Item 14. Principal Accounting Fees and Services

6556

PART IV

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Item 15. Exhibits, Financial Statement Schedules

6657

SIGNATURES

6859

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PART I

Item 1.    Business

As used throughout this Annual Report on Form 10‑K,10-K, the terms “St. Joe,” the “Company,” “we,” “our,” or “us” include The St. Joe Company, and its consolidated subsidiaries and consolidated joint ventures unless the context indicates otherwise.

GeneralDescription

St. Joe was incorporated in the State of Florida in 1936. We are a Florida real estate development, asset management and operating company with real estate assets and operationscompany. We own 169,000 acres of land in Northwest Florida, which we predominantly use, or intend to use, for or in connection with, our various residential real estate developments, hospitality operations, commercial developments and leasing operations and our forestry operations.

Florida. A significant portion of our 175,000 acres of land is entitled for future development.within The Bay-Walton Sector Plan is a long term master plan(“Sector Plan”), that originally included 110,500 acres of our land with entitlements,entitles, or gives legal rights, for us to develop over 170,000 residential dwelling units, over 22 million square feet of retail, commercial and industrial space and over 3,000 hotel rooms. We anticipate a wide range of residential, commercial,rooms on lands within Florida’s Bay and hospitality uses on these land holdings.Walton counties. We also have additional entitlements, or legal rights, to develop properties we ownacreage outside of this sector plan. We may explore the sale of some of our assets opportunistically or when we believe that we or others can better deploy those resources.

We seek to enhance the valueSector Plan. Approximately 86% of our real estate assets by developing residential, commercial, multi-family,is located in Florida’s Bay, Gulf, and hospitality projects to meet market demand.Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf of Mexico. Our land also surrounds

Strategy

St. Joe believes its long-term, owner-oriented capital and management allows us to optimize the value of Northwest Florida Beaches International Airport (ECP), locatedreal estate by developing residential, hospitality, and commercial projects that meet growing market demands. This strategy is designed to provide opportunities to build recurring revenues and enterprise value for the foreseeable future. We may partner with or explore the sale of discrete assets when we and/or others can better deploy resources.

Capital is invested to achieve risk-adjusted rates of return and support future business initiatives that create value. New projects are planned for stand-alone profitably and to benefit other enterprise activities. Investments, which include investments in Bay County, Florida, which grewjoint ventures and limited partnerships, are funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. Actual investments may vary from planned capital investments for various reasons. We do not anticipate immediate benefits from investments. We may choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits. We continue to maintain low fixed expenses, low corporate debt and high liquidity for sustainability in annual passenger traffic from approximately 300,000 in 2009 to approximately 1.3 million in 2019. We have a large amount of land to meet future market demand as Northwest Florida grows. In 2019 the majority of our revenue was generated from sales, activities and operations on approximately 2% of our land holdings.

Business Strategyall environments.

We believe that our present liquidity positiondistribute cash in excess of expected operating needs to shareholders through cash dividends and our land holdings can provide us with numerous opportunities to continue to increase recurring revenuecommon stock repurchases, as approved by the Board of Directors (the “Board”). A quarterly cash dividend of $0.10 and create long-term value$0.08 was paid in each quarter of 2022 and 2021, respectively, and $0.07 was paid in December 2020. During the year ended December 31, 2022, we repurchased 576,963 shares of common stock for our shareholders by allowing us to focus on our core business activityan aggregate purchase price of real estate development and asset management near$20.0 million. During the Gulfyear ended December 31, 2021, we did not repurchase shares of Mexico, Gulf Intracoastal Waterway, Northwest Florida Beaches International Airport, the Pier Park area and the Scenic Highway 30A corridor.

In 2018, we began the development or construction of 9 new residential, hospitality, multi-family or commercial projects or phases. By contrast, in 2019, we began the development or construction of 27 new residential, hospitality, multi-family or commercial projects or phases. Several of these projects were completed ascommon stock. As of December 31, 2019. In addition,2022, we continue to develop residential homesites in several communities to deliver on the 930 homesites we have under contract to builders or retail consumers.

As of the end of 2019, we had a total of 468 apartment or assisted living units, 597 hotel rooms and 130,785 square feet of commercial and hospitality space under development or construction. We anticipate the completion of construction and placement of these new assets into operations at various times in 2020 and 2021.

In addition to the projects we began in 2018 and 2019, we also began planning, designing and permitting other projects that are expected to move into construction or development in 2020 and beyond. Some of the projects will be constructed through third party joint venture partners. While we expect to commence development and construction of a number of projects in 2020 and beyond, timing of some projects may be delayed due to factors beyond our control.

During the years ended December 31, 2019 and 2018, we repurchased 1,263,159 and 5,238,566 shares, respectively, of our common stock. We have a total of $86.2$80.0 million available for the repurchase of shares pursuant to our Stock Repurchase Program (the “Stock Repurchase Program”). See Item 5. Market for the Registrant’s Common Equity,

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Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 16. 15. Stockholders’ Equity included in Item 15 of this Form 10-K.

Our 2020 capital expenditures budget exceeds our actual 2019 expenditures, as projects move into development or construction and we begin to fund new opportunities to develop, improve or acquire a broad range of asset types that we believe can generate recurring revenue and provide acceptable rates of return, including but not limited to retail, office, hospitality, entertainment, assisted living, industrial, hotel and multi-family properties. We anticipate these future capital commitments will be funded through new financing arrangements, cash on hand, cash equivalents and cash generated from operations. We expect to make these expenditures throughout the coming fiscal year and beyond, but do not anticipate that we will see the full benefit of these investmentsReportable Segments

St. Joe operations are reported in 2020.

We have residential communities at different stages of planning or development, including four new residential communities that we commenced development of in 2019. In 2019, we sold 379 homesites, compared with 202 homesites in 2018 and 177 homesites in 2017. We plan to continue to focus on investing in communities that have the potential for long term and scalable revenue. We expect to continue to be a developer of completed residential homesites for sale to builders and to consumers in our communities. In addition, one of our unconsolidated joint ventures has initiated a 55+ active adult community in Bay County, Florida. We are working with our joint venture partner to develop the first phase of the community planned for approximately 3,500 residential homes.

We presently own and/or operate a wide range of hospitality assets, which already generate significant recurring revenue for us. We are expanding the scope and scale of our hospitality assets and services to enable us to enhance the value and revenue those assets provide.

We presently own a wide range of income producing commercial assets. We intend to explore opportunities to increase the size and scope of our assets in ways that can increase recurring revenue while supporting the growth of our residential and hospitality assets.

We expect to continue our cost and investment discipline to ensure low fixed expenses and bottom line performance in all environments.

We plan to continue to maintain a high degree of liquidity while seeking opportunities to invest our cash in ways that we believe can increase shareholder value, including share repurchases, real estate and other strategic investments.

Our Business

We operate our business in four reportable operatingthree segments: (1) residential, real estate, (2) hospitality and (3) commercial leasing and sales and (4) forestry.commercial. For financial information about our operatingreportable segments, please see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as Note 21. 19. Segment Information included in Item 15 of this Form 10‑K.10-K.

Investments in Joint Ventures and Limited Partnerships

As part of our core business strategy, we have created a meaningful portion of our business through joint ventures and limited partnerships over the past several years. We enter into these arrangements for the purposes of developing

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real estate and other business activities, which we believe allows us to complement our growth strategy, leverage industry expertise and diversify our business.

These entities are beginning to produce substantial revenue. However, in the case of our unconsolidated joint ventures, the revenue generated by these entities is not included in our revenue. Instead, investments in joint ventures in which we are not the primary beneficiary, or a voting interest entity where we do not have a majority voting interest or control, but have significant influence are unconsolidated and accounted for by the equity method. Equity method investments are recorded initially at cost and adjusted subsequently to recognize the investor’s share of earnings, losses and changes in capital of the investee which are included in investment in unconsolidated joint ventures in the accompanying consolidated balance sheets and equity in income (loss) from unconsolidated joint ventures in the accompanying consolidated statements of income. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

Seasonality and Market Variability

Our businessSt. Joe’s operations may be affected by seasonal fluctuations. RevenueThe revenues and earnings from our hospitality operationsbusiness segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic transactions. In addition, homesite prices vary significantly by community, which further impacts period over period results. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or commercial real estate sales. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.

Hospitality revenues are typically higher in the second and third quarters, but canand vary depending on the timing of holidays and school breaks, including spring break. Our residentialbreaks. Commercial real estate business is predominantly composed of sales to homebuilders, who tend to buy multiple homesites in sporadic transactions, which impactsbe non-recurring. Projects depend on uncertain demand. Extraordinary events such as the variability in our resultsemergence of operations. The revenue resulting from our residential real estate operationsnew COVID-19 variants or hurricanes may vary from period to period depending on the communities where homesites are sold, as prices vary significantly by community. Our commercial real estate projects are subject to current demand. These variables may cause our operating results to vary significantly from period to period.dramatically change demand and pricing for products and services.

Competition

Real estate development, sales and leasing are highly competitive and fragmented. We competeSt. Joe competes with local, regional and national real estate leasing and development companies,related companies; some of which may have greater financial, marketing, sales

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and other resources than us. Competition from real estate leasing and development companies may adversely affect our ability to attract tenants to lease our commercial, multi-family and multi-familysenior living properties or to attract purchasers of our residential and commercial real estate.

Highly In addition to the strong competition we face in our residential and commercial segments, highly competitive companies participate in the hospitality business. Our ability to remain competitive and to attract new and repeat guests, customers and club members depends on our success in distinguishing the quality and value of our products and services from those offered by others. We compete based on location, price and amenities.

Our forestry business competes with numerous public and privately held timber companies in our region. The principal methods of competition are price and quality.

Labor markets in the industries in which we operate are also competitive. We must attract, train and retain a large number of qualified employees while controlling related labor costs. We face significant competition for these employees from the industries in which we operate as well as from other industries.

Our forestry business competes with numerous public and privately held timber companies in our region. There can be no assurance we will be able to compete successfully against current or future competitors or that competitive pressures we face in the markets in which we operate will not have a material adverse effect on our business, results of operations, cash flows and financial condition.

Governmental Regulation

OurSt. Joe operations are subject to federal, state and local government laws and regulations that affect every aspect of our business, including environmental and land use laws relating to, among other things, water, air, solid waste, hazardous substances, zoning, construction permits or entitlements, building codes and the requirements of the Federal Occupational Safety and Health Act and comparable state statutes relating to the health and safety of our employees. Although we believe that we are in material compliance with these requirements, there can be no assurance that we will not incur significant costs, civil and criminal penalties, and liabilities, including those relating to claims for damages to property or natural resources, resulting from our operations. We maintain environmental and safety compliance programs for our facilities and timberlands to monitor compliance with these laws and regulations. Enactment of new

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laws or regulations, or changes in existing laws or regulations or the interpretation and enforcement of these laws or regulations, might require significant expenditures.

EmployeesHuman Capital Management

At The St. Joe Company, we believe our employees are our greatest asset. We strive to attract, retain and develop the highest quality talent. As of February 20, 2023, we employed 55 professionals in our corporate offices who oversee operations, as well as 625 full-time employees and 89 part-time and seasonal employees in our day-to-day operations.

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Recruitment and Retention

Success depends upon our ability to attract and retain skilled employees. As such, we are committed to recruiting top talent and offer competitive benefits, wages and a rewarding work environment.

We have a demonstrated history of investing in our workforce by offering competitive salaries and wages, which we continuously evaluate based on the business environment and labor market. We have consistently made enhancements in wages in order to attract talent to support our growth strategy and enhance the customer experience. At times, we rely on the J-1 and H-2B visa programs to bring workers to the United States (“U.S.”) to fill seasonal staffing needs of our hospitality operations and ensure that we have the appropriate workforce in place. These programs allow students participating in internship programs to expand their cultural experience outside of their home country through employment opportunities within the hospitality environment.

In addition to competitive wages, we offer our employees and eligible family members a comprehensive and valuable benefits program. Our suite of benefits offered to all full-time employees include group health plans, which include medical, dental, vision, life and disability benefits with Company sharing of premiums for certain coverages. We also offer discounted gym memberships, a 401(k) retirement savings plan with Company match, paid vacation and holidays, jury pay, bereavement leave, an employee referral bonus program and a tuition reimbursement program. From time to time we provide team members with health care screenings and vaccinations on our properties. Our employees also enjoy discounts at our Company-owned properties and amenities, as well as our “TicketsatWork” benefit, which offers exclusive discounts, special offers and access to preferred seating and tickets to top attractions, theme parks, shows, sporting events, movie tickets, hotels and more.

As well as being a tool for improving our human capital management strategies, we evaluate employee engagement and satisfaction annually. We focus on our employees’ opinions and collect data through focus groups. Our executive team reviews feedback from our team and, based on the response, action plans are developed to focus on areas of opportunity throughout the course of the year. We are pleased to report that our most recent annual engagement results were favorable overall and have shown that our employees are proud to work for the Company. The results of focus groups help us to continuously improve our human capital strategies and find ways to foster engagement and growth for our team members.

Diversity and Inclusion

We believe that a diverse and inclusive workplace is key to our success, and that it is our responsibility to advance racial and social equity. We strive to foster a diverse and inclusive environment where each of our team members are valued and respected while working to build a workplace, community and Company that reflects our core values.

As of February 24, 2020,20, 2023, approximately 22% of our workforce identify as racially diverse and approximately 47% of our workforce, including 50% of our executive management team, is comprised of female employees.

Health and Safety

The health and safety of our team members is a top priority, and we had 55 full-time employees. Most persons employedare committed to providing a safe and injury-free workplace. We continually invest in programs designed to improve physical, mental and social well-being, and provide access to a variety of innovative, flexible and convenient health and wellness programs.

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Community Engagement

We are actively engaged in and committed to supporting the communities we serve. Our community engagement efforts seek to bring our core values to life and make a difference in the day-to-dayplaces where we live and work. We maintain strong connections to these communities, creating positive impact through outreach, recruitment, advocacy, philanthropy, pro bono service, and volunteerism. In addition, our developments positively impact the communities in which they are located, including by creating jobs in the Northwest Florida region and improving the overall quality of life in the area.

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Sustainability

We are committed to the development of sustainable and efficient operations and business practices that enhance and protect our people, our communities and our planet. Our goal is to generate shareholder value while aligning our business practices to support the interests of our hospitality segmentstakeholders and the communities we serve, including the sustainable development of Northwest Florida. Our process of defining sustainability priorities focuses on the simultaneous improvement of the environmental, social and financial position of the Company, and our strong leadership and governance practices that strive to integrate sustainability into our business strategy and corporate culture.

The majority of acreage we own is located in Northwest Florida and is managed in our forestry operations. Many of Northwest Florida's state parks, state forests and wildlife refuges were created in part with St. Joe land.

The guiding principles of our sustainable forest management practices include complying with laws and regulations, developing a long-term sustainable timber harvest plan, and understanding the economic and social impacts on the surrounding region. We take a holistic approach to managing our resources – timber, land, water, soil and wildlife – with the goal of sustainability. We are employedleading by a third partyexample and protecting the best of Florida by working closely with environmental agencies, community leaders and leading environmental and conservation organizations. Our sustainable forest management company engaged pursuant to an employment services agreement. In addition, we utilize part-time employeespractices take many forms, including eradication of invasive plant species, restoring wetlands, thinning forests, replanting trees and independent contractors duringconducting prescribed burns. We carry out prescribed burns annually, which helps restore natural ecosystems, improves wildlife habitats and reduces wildfire hazards.

Additional information regarding our sustainability efforts is available in the year based on seasonal needs.Stewardship section of our website at https://www.joe.com/stewardship.

Available Information

OurSt. Joe’s most recent Annual Report on Form 10‑K,10-K (“Form 10-K”), Quarterly Reports on Form 10‑Q,10-Q (“Form 10-Q”), Current Reports on Form 8‑K,8-K (“Form 8-K”), and amendments to those reports may be viewed or downloaded electronically, free of charge, from our website:website at www.joe.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the U.S. Securities and Exchange Commission (“SEC”). In addition, you may review any materials we file with the SEC on the SEC’s website at www.sec.gov. To obtain information on the operation of the Public Reference room, you may call the SEC at 1‑800‑SEC‑0330.1-800-SEC-0330. Our recent press releases are also available to be viewed or downloaded electronically from the Investor Relations section of our website at www.joe.com.

Wewww.joe.com. St. Joe will also provide electronic copies of our SEC filings free of charge upon request. Any information posted on or linked from our website is not incorporated by reference into this Annual Report on Form 10‑K.10-K.

Item 1A.    Risk Factors

Forward-Looking Statements

This annual report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, among other things, information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, strategies, prospects and objectives. Such forward-looking statements

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can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue" or other similar expressions concerning matters that are not historical facts. The Company cautions that its forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. All business decisions involve assessing known risks. However, some risks may be unknown with changing socio-economic, market conditions and interest rates. Estimates are used to assess, among other things, capital allocation decisions. Actual results or events may differ materially from estimates and those indicated in our forward-looking statements as a result of various important factors. Such factors include, but are not limited to, those discussed below.

Item 1A.    Risk FactorsForward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-Q, 8-K and other reports filed with the SEC.

You should carefully consider the risks described below, together with all of the other information in this Annual Report on Form 10‑K.10-K. The risks described below are not the only risks facing us. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may affect our business. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also materially and adversely affect our business. If any of these risks actually occur, our business, financial condition, results of operations, cash flows, strategies and prospects may be materially adversely affected.affected and could cause our actual results to differ materially from the results contemplated by the forward-looking statements in this report and in the other public statements we make.

Strategic and Competitive Risks Related to Our Current Business Strategy

We may not be able to successfully implement our business strategy, which would adversely affect our financial condition, results of operations, cash flows and financial performance.

strategy.Our current business strategy is the developmentconsists of developing our residential real estate expanding our portfolio of income producing commercial and residential properties and expanding the scope of our hospitality assets and services, our commercial portfolio of income producing properties and our other ventures to build recurring revenues and enhance enterprise value, while always maintaining more than sufficient enterprise liquidity. Management may fail in assessing risks related to this strategy, profitably maintaining and growing operations and allocating capital. We may also face risks from unidentified issues not discovered in due diligence of operations and investments. Management may fail in estimating and most efficiently allocating cash in excess of operational and strategic investment needs, including to shareholders by dividends and the repurchase of common stock.

Management may also fail to accurately forecast financial results, and, as a result, actual results may vary greatly from management estimates. As of December 31, 2022, we had approximately $996.3 million of real estate investments, $50.0 million of investment in unconsolidated joint ventures and $39.6 million of property and equipment, net recorded on our books that may be subject to impairment. If market conditions were to deteriorate, our estimate of undiscounted future cash flows may fall below their carrying value and we may be required to take impairments, which would have an adverse effect on our results of operations and financial condition. Existing and planned operations utilize estimates of revenue, costs, profits, growth, and real estate market values.

We face significant competition across our business units.We compete with local, regional and national real estate leasing and development companies and homebuilders, some of which may have greater financial, marketing, sales and other resources than we do. Hospitality operations are subject to significant competition from other hospitality providers and lodging alternatives. Our ability to remain competitive and to attract new and repeat guests, customers and club members depends on our success in distinguishing the quality and value of our products and services from those offered by others. Competition from real estate leasing and development companies and homebuilders may adversely affect our ability to attract tenants and lease our commercial, multi-family and senior living properties, attract purchasers and sell residential homesites and commercial real estate and attract and retain experienced real estate leasing and development personnel. Labor markets in the industries in which we operate are also competitive, which have led to increased labor costs in recent years. We must attract, train and retain a large number of qualified employees while controlling related

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labor costs. In addition, we face competition for tenants from other retail shopping centers and commercial facilities, as well as for our multi-family and senior living communities. The forestry business is also highly competitive in terms of price and quality. Wood products are subject to increasing competition from a variety of substitute products, including non-wood and engineered wood products. There can be no assurance we will be able to compete successfully against current or future competitors or that competitive pressures will not have a material adverse effect on our business, results of operations, cash flows and financial condition.

A decline in general economic conditions, particularly in our primary market locations, could lead to reduced consumer demand for our products and services. Demand for our products and services is sensitive to changes in economic conditions over which we have no control, including the level of employment, consumer confidence, consumer income, consumer discretionary spending, consumer preferences, inflation, the availability of financing and interest rate levels. In addition, the real estate market is subject to downturns, and our business is especially sensitive to economic conditions in Northwest Florida, where our developments are located, and, more broadly, the Southeast region of the U.S., which in the past has produced a high percentage of customers for our products. If market conditions experience volatility or worsen, tenant and other customers’ demand may materially decline. For example, throughout 2022, we faced macroeconomic headwinds caused by, among other things, inflation, rising interest rates, supply chain disruptions, geopolitical conflicts and the continuing recovery from the COVID-19 pandemic, which impacted buyer sentiment. While demand across our segments remained strong despite these challenges, our business, and residential segment in particular, was impacted from the aforementioned macroeconomic factors, including supply chain disruptions, cost increases and rising interest rates, which, for example, have extended homesite and home deliveries in certain residential communities and increased operating costs. Although these delays generally have not resulted in increased cancellation rates, and therefore only impacted the timing of revenue recognition of our homesites, if conditions worsen or demand declines, we could experience cancellations that could adversely impact our business.

We and the real estate industry in general may be adversely affected during periods of high inflation, primarily because of higher construction and operating costs.

We may invest in new business endeavors or product lines, which are inherently risky and could disrupt our ongoing business and present risks not originally contemplated. In recent years, we have invested, and in the future may invest, in new business endeavors and product lines. New endeavors may involve new risks and uncertainties and may amplify existing risks, including additional competition, distraction of management from current operations, greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with operating in new businesses or product lines, inadequate return on capital and potential impairment of tangible and intangible assets. New ventures are inherently risky and may not be successful. In addition, we may face difficulty integrating new businesses or product lines, assimilating new facilities and personnel and harmonizing diverse businesses and methods of operation. If any of our business endeavors are unsuccessful and we fail to realize the expected benefits of any new investment or product line or are unable to successfully integrate new businesses or product lines, our business, results of operations, cash flows and financial condition could be adversely affected.

Our leasing projects are subject to a variety of risks that could impact returns.Our business strategy includes the development and leasing of multi-family and senior living properties, management of commercial properties and commercial assets for sale. These commercial developments may not be as successful as estimated due to leasing related risks, including the risk that we may not be able to lease new properties or obtain lease rates that are consistent with our projections, as well as the risks generally associated with real estate development. Additionally, development of leasing projects involves the risk associated with the significant time lag between commencement and completion of the project. This time lag subjects us to greater risks relating to, among other things:

●fluctuations in the general economy;
●our ability to obtain construction or permanent financing on favorable commercial terms, if at all;
●our ability to achieve projected rental rates;
●the pace that we will be able to lease to new tenants;
●higher than estimated construction costs (including labor and material costs); and

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●delays in the completion of projects because of, among other factors, inclement weather, labor disruptions, construction delays or delays in receiving zoning or other regulatory approvals, or man-made or natural disasters.

Failure to lease new properties or obtain lease rates that are consistent with our projections or significant time lags between commencement and completion of a commercial project may lead to lower than anticipated returns, which could adversely impact our ability to successfully execute our business strategy.

We face risks stemming from our strategic partnerships.We currently maintain, and in the future may seek additional strategic partnerships, including the formation of joint ventures (“JVs”), to develop real estate or to pursue other business activities, capitalize on the potential of our residential, hospitality and commercial opportunities and maximize the value of our assets. Our partners may take actions contrary to our instructions or requests, or contrary to our policies or objectives. We may not have exclusive control over the development, financing, management and other aspects of the partnership, which may prevent us from taking actions that are in our best interest but opposed by our partner. Our partners may experience financial difficulties, become bankrupt or fail to fund their share of capital contributions, which may delay construction or development of property or increase our financial commitment to the partnership. Our partners may take actions that subject us to liabilities in excess of, or other than, those contemplated. We may disagree with our partners about decisions affecting the partnership, which may result in litigation or arbitration that increases our expenses, distracts our officers and directors and disrupts the day-to-day operations of the property or business, which may delay important decisions until the dispute is resolved. Actions by our partners may subject the JV to liabilities or have other adverse consequences, including if the market reputation of a partner deteriorates. If a JV agreement is terminated or dissolved, we may not continue to own or operate the interests or investments of the JV or may need to purchase such interests or investments at a premium to the market price to continue ownership. In addition, we may not have sufficient resources, experience and/or skills to manage our existing JVs or locate additional desirable partners.

Our real estate investments are generally illiquid.Real estate and timber holdings are relatively illiquid. It may be difficult for us to sell such assets if the need or desire arises, which may limit our ability to make rapid adjustments to the size and content of our property assets. Illiquid assets typically experience greater price volatility, as a ready market does not exist and therefore can be more difficult to value. In addition, validating third party pricing for illiquid assets may be more subjective than more liquid assets. As a result, if we are required to liquidate all or a portion of our real estate or timber assets quickly, we may realize significantly less than the value at which we have previously recorded our assets. This impact may also be exacerbated in periods of general economic instability and capital markets volatility.

We face risks associated with short-term liquid investments.We continue to have significant cash balances that are invested in a variety of short-term, investment-grade investments that are intended to preserve principal value and maintain a high degree of liquidity. We have exposure to credit risk associated with our short-term securities and these instruments are subject to price fluctuations as a result of changes in the financial market’s assessment of issuer credit quality, increases in delinquency and default rates, changes in prevailing interest rates and other economic factors.

A downgrade of the U.S. government’s credit rating may also decrease the value of our investments – debt securities (“Securities”). The market value of these investments is subject to change from period-to-period, especially in light of the continuing recovery from the COVID-19 pandemic which has caused market volatility. Our Securities currently include investments in U.S. Treasury Bills. Credit-related impairment losses can negatively affect earnings. Investments in securities and funds are not successfulinsured against loss of principal. Under certain circumstances we may be required to redeem all or part of an investment, which may result in achievinga loss.

Our investments are supervised and directed by Fairholme Capital Management, L.L.C. pursuant to the terms of an Investment Management Agreement, as amended, (the “Investment Management Agreement”). See Note 5. Investments included in Item 15 of this Form 10-K for additional information.

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RISKS RELATED TO THE OPERATION OF OUR BUSINESS SEGMENTS

We are exposed to risks associated with commercial and residential real estate development and construction.Real estate development and construction, including homebuilding activities, entail risks that may adversely impact our objectives,results of operations, cash flows and financial condition, including:

●general market conditions;
●construction delays or cost overruns, which may increase project development costs;
●labor costs and shortages of skilled labor, particularly as a result of the recent low unemployment rate in the U.S. and Florida especially;
●supply chain disruptions and material shortages;
●claims for construction defects after property has been developed, including claims by purchasers and property owners’ associations, and claims for construction defects arising from third party contractors;
●the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues;
●an inability to obtain required governmental permits and authorizations;
●an inability to secure tenants necessary to support commercial, multi-family or senior living projects;
●compliance with building codes and other local regulations;
●unavailability of raw materials when needed, which may result in project delays, stoppages or interruptions, which may make the project less profitable;
●insufficient infrastructure capacity or availability (e.g., water, sewer and roads) to serve the needs of our projects;
●instability in the financial industry may reduce the availability of financing;
●delay or inability to acquire property, rights of way or easements, which may result in delays or increased costs; and
●weather-related and geological interference, including hurricanes, landslides, earthquakes, floods, drought, wildfires and other events, which may result in delays or increased costs.

The construction and building industry, similar to many other industries, are experiencing worldwide supply chain disruptions and cost increases due to a multitude of factors, including inflation, rising interest rates, geopolitical conflicts, such as the conflict between Russia and Ukraine, the continuing recovery from COVID-19 and labor shortages. Materials, parts and labor costs have increased in recent years, sometimes significantly and over a short period of time. In addition, material time delays or increases in construction costs resulting from the aforementioned factors may impact our ability to realize anticipated returns on such projects, impact the timing of revenue recognition, lead to cancellations and otherwise materially adversely affect our business, results of operations, cash flows and financial condition. As discussed above under “A decline in general economic conditions, particularly in our primary market locations, could lead to reduced consumer demand for our products and services,” our residential segment has been particularly impacted year-over-year as a variety of macroeconomic factors have caused delayed homesite and home deliveries and increased certain operating costs. As a consequence, while we have not yet experienced a material increase in cancellations, it has impacted the timing of revenue we have been able to recognize. Nonetheless, should we experience increased cancellations as a result of such macroeconomic factors, our business could be adversely impacted.

Further, with regard to our residential segment, revenues from homesite sales can fluctuate period-to-period due to variations in the mix of sales from different communities, as well as other variations in product mix. Given these fluctuations in product mix, revenues from our residential segment may significantly vary from year to year.

In addition, real estate approvals may be subject to third party responses. It is not uncommon for delays to occur, which affect the timing of transaction closings and may also impact the terms and conditions of the transaction. Delays related to regulatory approvals may be due to the applicable governmental entity not being open due to the government being shut down or staffed insufficiently due to the government’s budgetary issues. These timing issues may cause our

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operating results, particularly relating to the impact of our land sales, to vary significantly from quarter-to-quarter and year-to-year.

Mortgage financing issues, including lack of supply of mortgage loans, tightened lending requirements and increases in interest rates, may reduce demand for our products. Purchasers of our real estate products may obtain mortgage loans to finance a substantial portion of the purchase price or may need to obtain mortgage loans to finance the construction costs of homes to be built on homesites purchased from us. Homebuilder customers depend on retail purchasers who rely on mortgage financing. Increases in interest rates increase the costs of owning a home and may adversely affect the purchasing power of consumers and lower demand for residential real estate. In addition to residential real estate, increased interest rates and restrictions in the availability of credit may also negatively impact sales or development of our commercial properties or other land we offer for sale. While in 2022, rising interest rates negatively impacted buyers’ ability to obtain financing and the housing market generally, to date we have not experienced material declines in customer demand for our homesites. However, in the event financing challenges reduce demand from homebuilders to purchase homesites, then our sales, results of operations, cash flows and financial condition may be negatively affected.

Our investmentsresidential segment is highly dependent on homebuilders.We are highly dependent on homebuilders to be the primary customers for our homesites and to provide construction services in new business opportunities are inherently risky andour residential developments. The homebuilder customers that have already committed to purchase homesites from us may disruptdecide to reduce, delay or cancel their existing commitments to purchase homesites in our ongoing business and adversely affectdevelopments. From time to time, we finance real estate sales with mortgage note receivables. If these homebuilders fail to pay their debts to us or delay paying us, it would reduce our operations.

We invest in new business opportunities, whichanticipated cash flows. Homebuilders also may involve significant risks and uncertainties, including distractionnot view our developments as desirable locations for homebuilding operations, or they may choose to purchase land from other sellers. Any of management from current operations, insufficient revenue to offset liabilities incurred and expenses associated with these new investments, including development costs, inadequate return of capitalevents may have an adverse effect on our investments, and unidentified issues not discovered in our due diligence of such opportunities. Because these ventures are inherently risky, no assurance can be given that such strategies and offerings will be successful and will not adversely affect our reputation, financial condition and operating results.

Management has discretion as to the investments we make and may not use these funds effectively.

As of December 31, 2019, we had $185.7 million of cash and cash equivalents. Management has discretion in the selection of these investments and may make investments that do not improve ourbusiness, results of operations, cash flows and financial conditioncondition.

Our hospitality segment is subject to various risks inherent to the hospitality industry.The following factors, among others, are common to the hospitality industry, and may reduce the revenues generated by our hotel properties, food and beverage operations, golf courses, beach clubs, marinas and other entertainment assets:

●reduced travel (including from travel-related health concerns, airline disruptions or adverse economic conditions), which we may be susceptible to given that the travel tourism on which our hospitality segment relies can entail a relatively high cost of participation and is based on discretionary consumer spending;
●increased labor costs and shortages of skilled labor;
●inclement weather conditions;
●changes in desirability of geographic regions in which our properties are located;
●significant competition from other hospitality providers and lodging or entertainment alternatives;
●our relationships with and the performance of third-party managers;
●increases in operating costs, including increases in the cost of property insurance, utilities and real estate and personal property taxes, due to inflation and other factors that may not be offset by increased prices; and
●natural or man-made disasters.

Any of these factors may increase our costs or enhancelimit or reduce the valueprices we are able to charge for our hospitality products or services, or otherwise affect our ability to maintain existing properties, develop new properties or add amenities to our existing properties.

Our commercial segment is subject to risks associated with the financial condition of our common stockcommercial tenants.If one or more of our tenants, particularly an anchor tenant, declares bankruptcy, defaults or voluntarily vacates from the leased premises, we may be unable to collect rent payments from such tenant, re-lease such space or to re-lease it on comparable or more favorable terms. Additionally, the loss or failure to renew of an anchor tenant may make it more difficult to lease the remainder of the affected properties, which result in financial losses that may have a material adverse effect on our business, results of operations, cash flows and financial conditioncondition.

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Alternatively, increases in consumer spending through e-commerce channels may significantly affect our tenants’ ability to generate sales in their stores, which could affect their ability to make payments to us. These economic and market conditions, combined with rising inflation and lack of labor availability, may also place a number of our key customers under financial stress, which may adversely affect our occupancy rates and our profitability, which, in turn, may have a material adverse effect on our business, results of operations, cash flows and financial condition.

Our commercial segment is also exposed to operational risks with respect to our senior living communities. We are exposed to various federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards; state regulations regarding senior living resident agreements, which typically require a written resident agreement with each resident; the availability and increases in cost of general and professional liability insurance coverage; state regulation and rights of residents related to entrance fees; and the availability and increases in the cost of labor.

Public health emergencies such as the COVID-19 pandemic have adversely affected, and could in the future, adversely affect our business. An epidemic, pandemic (such as the COVID-19 pandemic) or similar serious public health issue, and the measures undertaken by governmental authorities to address it, could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period, and thereby, and/or along with any associated economic and/or social instability or distress, have a material adverse impact on our results of operations, cash flows and financial condition.

In addition to impacting general economic conditions, a public health emergency such as the COVID-19 pandemic may exacerbate factors that impact our operations, including supply chain disruptions, labor shortages and rising commodity and product costs, which may continue after the public health emergency has subsided. Any continued impact could also amplify the other risks and uncertainties described in this 2022 Form 10-K. The ultimate extent to which a public health emergency such as the COVID-19 pandemic impacts our business is highly uncertain and cannot be predicted with any degree of confidence.

Our financial results may vary significantly period over period. The revenues and earnings from our business segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic transactions. In addition, homesite prices vary significantly by community, which further impacts period over period results. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or commercial real estate sales. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.

Hospitality operations are affected by seasonal fluctuations. Hospitality revenues are typically higher in the second and third quarters, and vary depending on the timing of holidays and school breaks. Commercial real estate sales tend to be non-recurring. Projects depend on uncertain demand. Extraordinary events such as the emergence of new COVID-19 variants or hurricanes may dramatically change demand and pricing for products and services.

We are subject to various geographic risks.

●Growth of Northwest Florida. We are focused on developing real estate and expanding operations in Northwest Florida. Our success will be dependent on strong migration and population expansion in Northwest Florida. The future economic growth of Northwest Florida will largely depend on the ability and willingness of state and local governments, in combination with the private sector, to plan and complete significant infrastructure improvements in the region, such as new transportation hubs, roads, rail, pipeline, medical facilities and schools and to attract families and companies offering high-quality and high salary jobs. Our future revenues will also depend on individuals seeking retirement or vacation homes in Northwest Florida. Florida’s population growth may be negatively affected in the future by a variety of factors, including adverse economic conditions, changes in state income tax or federal immigration laws, the occurrence of natural or manmade disasters or the high cost of real estate, insurance and property taxes. If Northwest Florida experiences an extended period of slow growth, or even net out-migration, our business, results of operations, cash flows and financial condition will likely be materially adversely affected.

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●Hurricanes. Florida is particularly susceptible to the occurrence of hurricanes. Depending on where any particular hurricane makes landfall, our developments in Northwest Florida may experience catastrophic damage. Such damage may materially delay sales or lessen demand for our residential or commercial real estate and lessen demand for our hospitality and leasing operations. If our corporate headquarters facility is damaged or destroyed, we may have difficulty performing certain corporate and operational functions. We maintain property and business interruption insurance, subject to certain deductibles.
●Climate Conditions. The occurrence of other natural disasters and climate conditions in Northwest Florida, such as tornadoes, floods, fires, unusually heavy or prolonged rain, droughts, extreme heat, or other adverse weather events may have a material adverse effect on our ability to develop and sell properties or realize income from our projects. In addition, our timber assets are subject to damage by fire, insect infestation, disease, prolonged drought, flooding, hurricane and natural disasters, which may adversely affect our timber inventory and forestry business. Furthermore, sea level rise due to climate change may have a material adverse effect on our coastal properties. The occurrence of natural disasters and the threat of adverse climate changes (or perceived threat of from climate change) may also have a long-term negative effect on the attractiveness of Northwest Florida. Manmade disasters or disruptions, such as oil spills, acts of terrorism, power outages and communications failures may simultaneously disrupt our operations.

Our insurance coverage on our properties may be inadequate or our insurances costs may increase.We maintain insurance on our properties, including property, liability, fire, flood and extended coverage. However, we do not insure our timber assets. Additionally, our insurance for hurricanes has limitations per named storm and is subject to deductibles. We use our discretion when determining amounts, coverage limits and deductibles for insurance. These terms are determined based on retaining an acceptable level of risk at a reasonable cost. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also may make it unfeasible to use insurance proceeds to replace a facility after it has been damaged or destroyed. Under such circumstances, we may not receive insurance proceeds or the insurance proceeds we receive may not fully cover business interruptions or losses and our earnings, liquidity, or capital resources may be adversely affected.

Homeowner property insurance companies doing business in Florida have reacted to previous hurricanes by increasing premiums, requiring higher deductibles, reducing limits, restricting coverage, imposing exclusions, refusing to insure certain property owners, and in some instances, ceasing insurance operations in the state. It is uncertain what effect these actions may have on future property insurance availability and rates in the state. The high costs of property insurance premiums in Florida may deter potential customers from purchasing a homesite in one of our developments or make Northwest Florida less attractive to new employers that can create high quality jobs needed to increase growth in the region, either of which may have a material adverse effect on our business, results of operations, cash flows and financial condition. Florida’s state-owned property insurance company, Citizens Property Insurance Corp., underwrites homeowner property insurance. If there were to be a catastrophic hurricane or series of hurricanes to hit Florida, the exposure of the state government to property insurance claims may place extreme stress on state finances.

We are dependent on third party service providers for certain services.We rely on various third parties to conduct the day-to-day operations of certain residential, hospitality, multi-family, senior living and other commercial properties. Failure of such third parties to adequately perform their contracted services may negatively impact our ability to retain customers. As a result, any such failure may negatively impact our results of operations, cash flows and financial condition.

Risks RELATED to our existing ownership structure

Our largest shareholder controls approximately 41.6% of our common stock, price.

We intendwhich may limit our minority shareholders’ ability to investinfluence corporate matters. Mr. Bruce R. Berkowitz is the Chairman of our Board. He is the Manager of, and controls entities that own and control, Fairholme Holdings, LLC (“Fairholme”), which wholly owns Fairholme Capital Management, L.L.C. (“FCM”, an investment advisor registered with the SEC). As of December 31, 2022, clients of FCM, including Mr. Berkowitz, beneficially owned approximately 41.6% of our common

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stock. FCM and its client, The Fairholme Fund, a series of investments originating from Fairholme Funds, Inc., may be deemed affiliates of ours. Fairholme is in a position to influence the vote of most matters submitted to our shareholders, including any merger, consolidation or sale of all or substantially all of our assets, the nomination of individuals to our Board and any potential change in ways suchour control. These factors may discourage, delay or prevent a takeover attempt that we willshareholders might consider in their best interests or that might result in shareholders receiving a premium for their common stock. Additionally, our articles of incorporation and certain provisions of Florida law contain anti-takeover provisions that may make it more difficult to effect a change in our control.

Fairholme is in the business of making or advising on investments in companies and may hold, and may, from time to time in the future, acquire interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business. Fairholme may also pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not havebe available to register asus. Furthermore, future sales of our common stock by Fairholme, or the perception in the public markets that these sales may occur, may depress our stock price.

LEGAL, REGULATORY, AND LITIGATION RISK

We run the risk of inadvertently being deemed to be an investment company that is required to register under the Investment Company Act of 1940. As a result, we may be unable to make some potentially profitable investments.

1940 (the “Investment Company Act”).We are not registered as an “investment company” under the Investment Company Act of 1940 (the “Investment Company Act”) and we intend to invest our assets in a manner such that we are not required to register as an investment company. This plan will require monitoring our portfolio so that (a) on an unconsolidated basis we will not have more than 40% of total assets (excluding United States (“U.S.”) government securities and cash items) in investment securities or (b)that we will meet and maintain another exemption from registration. As a result, we may be (1) unable to make some potentially profitable investments, (2) unable to sell assets we would otherwise want to sell or (3) forced to sell investments in investment securities before we would otherwise want to do so.

If Fairholme controls us within the meaning of the Investment Company Act, we may be unable to engage in transactions with potential strategic partners, which may adversely affect our business.

Mr. Bruce R. Berkowitz is the Chairman of our Board of Directors (the “Board”). He is the Manager of, and controls entities that own and control, Fairholme Holdings, LLC (“Fairholme”), which wholly owns Fairholme Capital

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Management, L.L.C. (“FCM”, an investment advisor registered with the SEC). Mr. Berkowitz is the Chief Investment Officer of FCM, which has provided investment advisory services to us since April 2013. FCM does not receive any compensation for services as our investment advisor. As of December 31, 2019, clients of FCM, including Mr. Berkowitz, beneficially owned approximately 44.30% of our common stock. FCM and its client, The Fairholme Fund, a series of the Fairholme Funds, Inc., may be deemed affiliates of ours.

Under the Investment Company Act, “control” means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. Any person who owns beneficially, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of a company is presumed to control such company. The SEC has considered factors other than ownership of voting securities in determining control, including an official position with the company when such was obtained as a result of the influence over the company. Accordingly, even if Fairholme’s beneficial ownership in us is below 25% of our outstanding voting securities, Fairholme may nevertheless be deemed to control us. The Investment Company Act generally prohibits a company controlled by an investment company from engaging in certain transactions with any affiliate of the investment company or affiliates of the affiliate, subject to limited exceptions. An affiliate of an investment company is defined in the Investment Company Act as, among other things, any company 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the investment company, a company directly or indirectly controlling, controlled by, or under common control with, the investment company or a company directly or indirectly owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of the investment company.

This may adversely affect our ability to enter into transactions freely and compete in the marketplace. In addition, significant penalties and other consequences may arise as a result of a violation for companies found to be in violation of the Investment Company Act.

If the SEC were to disagree with our Investment Company Act determinations, our business may be adversely affected.

We have not requested approval or guidance from the SEC with respect to our Investment Company Act determinations, including, in particular: our treatment of any subsidiary as majority-owned; the compliance of any subsidiary with any exemption under the Investment Company Act, including any subsidiary’s determinations with respect to the consistency of its assets or operations with the requirements thereof or whether our interests in one or more subsidiaries constitute investment securities for purposes of the 40% test. If the SEC were to disagree with our treatment of one or more subsidiaries as being majority-owned, exempted from the Investment Company Act, with our determination that one or more of our other holdings do not constitute investment securities for purposes of the 40% test, or with our determinations as to the nature of the business in which we engage or the manner in which we hold ourselves out, we and/or one or more of our subsidiaries would need to adjust our operating strategies or assets in order for us to continue to pass the 40% test (as described above) or register as an investment company, either of which may have a material adverse effect on us. Moreover, we may be required to adjust our operating strategy and holdings, or to effect sales of our assets in a manner that, or at a time or price at which, we would not otherwise choose, if there are changes in the laws or rules governing our Investment Company Act status or that of our subsidiaries, or if the SEC or its staff provides more specific or different guidance regarding the application of relevant provisions of, and rules under, the Investment Company Act.

If the SEC or a court of competent jurisdiction were to find that we were required, but failed, to register as an investment company in violation of the Investment Company Act, we would have to cease business activities, we would breach representations and warranties and/or be in default as to certain of our contracts and obligations, civil or criminal actions may be brought against us, certain of our contracts would be unenforceable unless a court were to require enforcement and a court may appoint a receiver to take control of us and liquidate our business, any or all of which would have a material adverse effect on our business.

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Returns on our investments may be limited by our investment guidelines and restrictions.

On August 23, 2019, we entered into a new Investment Management Agreement (the “Investment Management Agreement”) with FCM, which contains investment guidelines and restrictions approved by the Company. The investment guidelines set forth in the Investment Management Agreement require that, as of the date of any investment: (i) no more than 15% of the investment account may be invested in securities of any one issuer (excluding the U.S. Government), (ii) any investment in any one issuer (excluding the U.S. Government) that exceeds 10% of the investment account, but not 15%, requires the consent of at least two members of the Investment Committee, (iii) 25% of the investment account must be held in cash and cash equivalents, (iv) the investment account is permitted to be invested in common equity securities; however, common stock investments shall be limited to exchange-traded common equities, shall not exceed 5% ownership of a single issuer and, cumulatively, the common stock held in our investment portfolio shall not exceed $100.0 million market value and (v) the aggregate market value of investments in common stock, preferred stock or other equity investments cannot exceed 25% of the market value of our investment portfolio at the time of purchase.

Investment limitations may negatively impact the return that we may otherwise receive from our investment accounts. This may adversely affect our cash flows and results of operations.

We face risks stemming from our strategic partnerships.

We currently maintain, and in the future may seek additional strategic partnerships, including the formation of joint ventures (“JVs”), to develop real estate, capitalize on the potential of our residential, commercial and industrial opportunities and maximize the value of our assets. These strategic partnerships, JVs and other ongoing strategic real estate investments may bring development experience, industry expertise, financial resources, financing capabilities, brand recognition and credibility or other competitive assets, but also involve risks not present where a third party is not involved. These risks include:

·

our partner may take actions contrary to our instructions or requests, or contrary to our policies or objectives with respect to the real estate investments;

·

we may not have exclusive control over the development, financing, management and other aspects of the property or JV, which may prevent us from taking actions that are in our best interest but opposed by our partner;

·

our partner may experience financial difficulties, become bankrupt or fail to fund their share of capital contributions, which may delay construction or development of property or increase our financial commitment to the strategic partnership;

·

our partner may take actions that subject us to liabilities in excess of, or other than, those contemplated;

·

we may disagree with our partner about decisions affecting the real estate investments or partnership, which may result in litigation or arbitration that increases our expenses, distracts our officers and directors and disrupts the day-to-day operations of the property, which may delay important decisions until the dispute is resolved;

·

actions by our partner may subject property owned by the partnership to liabilities or have other adverse consequences, including if the market reputation of a strategic partner deteriorates;

·

if a JV agreement is terminated or dissolved, we may not continue to own or operate the interests or investments underlying the JV relationship or may need to purchase such interests or investments at a premium to the market price to continue ownership; and

·

disputes between us and our partner may result in litigation or arbitration that may increase our expenses and prevent our management from focusing their time and attention on our business.

In addition, we may not have sufficient resources, experience and/or skills to manage our existing strategic partnerships or locate additional desirable partners. We also may not be able to attract partners who want to conduct business in desirable geographic locations and who have the assets, reputation or other characteristics that would

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optimize our development and asset management opportunities. If we cannot successfully execute transactions with strategic partners, our business, results of operations, cash flows and financial condition may be adversely affected.

Losses in the fair value of Securities, and the concentration of our investment portfolio in any particular issuer, industry, group of related industries or geographic sector, may have an adverse impact on our results of operations, cash flows and financial condition. In addition, our equity investments may fail to appreciate and may decline in value or become worthless.

As of December 31, 2019, we had $176.1 million in our investment accounts. Of this amount, we hold $166.3 million in cash equivalents, $0.1 million in corporate debt securities and $9.7 million in preferred stock investments. The market value of these investments is subject to change from period to period. Our investments-debt securities and investments-equity securities (“Securities”) currently include investments in non-investment grade corporate debt securities and preferred stock of five issuers and one issuer of preferred stock that is investment grade. Pursuant to our Investment Management Agreement with FCM, we may invest up to a total of 15% of the investment account in any one issuer as of the date of purchase.

We have exposure to credit risk associated with our Securities and these instruments are subject to price fluctuations as a result of changes in the financial market’s assessment of issuer credit quality, increases in delinquency and default rates, changes in prevailing interest rates and other economic factors. A downgrade of the U.S. government’s credit rating may also decrease the value of our Securities.

Losses in the fair value of our Securities can negatively affect earnings if management determines that such Securities are other-than-temporary impaired. The evaluation of other-than-temporary impairment is based on various factors, including the financial condition, business prospects, industry and creditworthiness of the issuer, severity and length of time the securities were in a loss position, our ability and intent to hold investments until unrealized losses are recovered or until maturity. If a decline in fair value is considered other-than-temporary, the carrying amount of the security is written down and the amount of the credit-related component is recognized in earnings. The unrealized loss related to our investments - debt securities of $0.1 million was determined to be temporary at December 31, 2019.existing government regulations.

The Company’s real estate investments are generally illiquid.

Real estate investments and timber holdings, are relatively illiquid; therefore, it may be difficult for us to sell such assets if the need or desire arises, which may limit our ability to make rapid adjustments in the size and content of our income property portfolio or other real estate or timber assets in response to economic or other conditions. Illiquid assets typically experience greater price volatility, as a ready market does not exist and therefore can be more difficult to value. In addition, validating third party pricing for illiquid assets may be more subjective than more liquid assets. As a result, if we are required to liquidate all or a portion of our real estate or timber assets quickly, we may realize significantly less than the value at which we have previously recorded our assets.

We face risks associated with short-term liquid investments.

We continue to have significant cash balances that are invested in a variety of short-term investments that are intended to preserve principal value and maintain a high degree of liquidity while providing income. From time to time, these investments may include (either directly or indirectly):

·

●

direct obligations issuedDevelopment and Land Use Requirements. Approval to develop real property entails an extensive entitlements process involving multiple and overlapping regulatory jurisdictions and often requiring discretionary action by the U.S. Department of the Treasury (“Treasury”);

local government. This process is often political, uncertain and may require

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·

obligations issued or guaranteed by the U.S. federal government or its agencies;

·

obligations (including certificatessignificant exactions in order to secure approvals. Real estate projects in Florida must generally comply with the provisions of deposit)the Community Planning Act and local land development regulations. Compliance with the State of banksFlorida planning requirements and thrifts;

local land development regulations is usually lengthy and costly and can be expected to materially affect our real estate development activities. The Community Planning Act requires local governments to adopt comprehensive plans guiding and controlling future real property development in their respective jurisdictions and to evaluate, assess and keep those plans current. Included in all comprehensive plans is a future land use map, which sets forth allowable land use development rights. Some of our land has an “agricultural” or “silviculture” future land use designation and we may be required to seek an amendment to the future land use map to develop real estate projects. Approval of these comprehensive plan map amendments is highly discretionary.

·

commercial paper and other instruments consisting of short-term U.S. dollar denominated obligations issued by corporations and banks;

·

both registered and unregistered money market funds; and

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other highly rated short-term securities.

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Investments in these securities and funds are not insured against loss of principal. Under certain circumstances we may be required to redeem all or part of our investment, and our right to redeem some or all of our investment may be delayed or suspended. In addition, there is no guarantee that our investments in these securities or funds will be redeemable at par value. A decline in the value of our investment or a delay or suspension of our right to redeem may have a material adverse effect on our results of operations or financial condition.

We may not be able to fully realize the benefits of the federal “qualified opportunity zone” program, which may adversely affect our financial performance.

As part of the 2017 Tax Cuts and Jobs Act (the “Tax Act”), Congress established the Qualified Opportunity Zone program (the “QOZ Program”), which provides preferential tax treatment to taxpayers who invest eligible capital gains into qualified opportunity funds (“QOFs”). QOFs are self-certifying entities that invest their capital in economically distressed communities that have been designated as qualified opportunity zones (“QOZs”) by the Internal Revenue Service (“IRS”) and Treasury. We have positioned ourselves to take advantage of the tax benefits offered by the QOZ Program. While the IRS has recently issued final regulations which address some of the uncertainties under the QOZ Program, because the QOZ Program is relatively new, a number of open questions remain. To the extent the IRS issues additional interpretive guidance that renders ineligible certain categories of projects that are currently expected to qualify, we may be unable to fully realize the benefits of the QOZ Program as anticipated, which may impact our investment strategy.

The loss of the services of our key management, personnel or our ability to recruit staff may adversely affect our business.

Our ability to successfully implement our business strategy will depend on our ability to attract and retain experienced and knowledgeable management and other professional staff. One of our objectives is to develop and maintain a strong management group at all levels. At any given time, we may lose the services of key executives and other employees. The loss of services of any of our key employees may have an adverse effect upon our results of operations, financial condition, and our ability to execute our business strategy. In addition, we cannot assure that we will be successful in attracting and retaining key management personnel.

Risks Related to our Current Business

Our results of operations may vary significantly from period to period, which may adversely impact our stock price, results of operations, cash flows and financial condition.

Residential real estate sales tend to vary from period to period, particularly sales to homebuilders, who tend to buy multiple homesites in sporadic transactions. Commercial real estate projects are likewise subject to one-off sales and the timing of development of specific projects depends on demand. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or commercial real estate sales.

In addition, hospitality operations are affected by seasonal fluctuations. Revenue from our hospitality operations are typically higher in the second and third quarters; however, they can vary depending on the timing of holidays and school breaks, including spring break. This seasonality causes periodic fluctuations in room revenues, occupancy levels, room rates and operating expenses in particular hotels.

These variables have caused, and may continue to cause, our operating results to vary significantly from period to period, which may have an adverse impact on our stock price, cash flows, results of operations and financial condition.

Our business is subject to extensive regulation and growth management initiatives that may restrict, make more costly or otherwise adversely impact our ability to develop our real estate investments or otherwise conduct our operations.

A large part of our current business and business strategy is dependent on our ability to develop and manage real estate in Northwest Florida. Approval to develop real property in Florida entails an extensive entitlements process involving multiple and overlapping regulatory jurisdictions and often requiring discretionary action by local government.

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This process is often political, uncertain and may require significant exactions in order to secure approvals. Real estate projects in Florida must generally comply with the provisions of the Local Government Comprehensive Planning and Land Development Regulation Act (the “Growth Management Act”) and local land development regulations. Compliance with the Growth Management Act and local land development regulations is usually lengthy and costly and can be expected to materially affect our real estate development activities.

The Growth Management Act requires local governments to adopt comprehensive plans guiding and controlling future real property development in their respective jurisdictions and to evaluate, assess and keep those plans current. Included in all comprehensive plans is a future land use map, which sets forth allowable land use development rights. Some of our land has an “agricultural” or “silviculture” future land use designation and we are required to seek an amendment to the future land use map to develop real estate projects. Approval of these comprehensive plan map amendments is highly discretionary.

All development orders and permits must be consistent with the comprehensive plan. Each plan must address such topics as future land use and capital improvements and make adequate provision for a multitude of public services including transportation, schools, solid waste disposal, sewerage, potable water supply, drainage, affordable housing, open space, parks and others. The local governments’ comprehensive plans must also establish “levels of service” with respect to certain specified public facilities, including roads, schools and services to residents. In many areas, infrastructure funding has not kept pace with growth, causing facilities to operate below established levels of service. Local governments are prohibited from issuing development orders or permits if the development will reduce the level of service for public facilities below the level of service established in the local government’s comprehensive plan, unless the developer either sufficiently improves the services up front to meet the required level of service or provides financial assurances that the additional services will be provided as the project progresses. In addition, local governments that fail to keep their plans current may be prohibited by law from amending their plans to allow for new development.

If any one or more of these factors were to occur, we may be unable to develop our real estate projects successfully or within the expected timeframes. Changes in the Growth ManagementCommunity Planning Act or the interpretation thereof, new enforcement of these laws or the enactment of new laws regarding the development of real property may lead to a decline in our ability to develop and market our communities successfully and to generate positive cash flow from these operations in a timely manner, which may have a materially adverse effect on our ability to service our demand and negatively impact our business, results of operations, cash flows or financial condition.

Our existing real estate investments are concentrated in Northwest Florida; therefore our long-term financial results are largely dependent on the economic growth of Northwest Florida.

The economic growth of Northwest Florida, where our land is located, is an important factor in creating demand for our products and services. We believe that the future economic growth of Northwest Florida will largely depend on the ability and willingness of state and local governments, in combination with the private sector, (1) to plan and complete significant infrastructure improvements in the region, such as new transportation hubs, roads, rail, pipeline, medical facilities and schools and (2) to attract companies offering high-quality, high salary jobs to large numbers of new employees. If new businesses and new employees in Northwest Florida do not grow as anticipated, demand for residential and commercial real estate, as well as hospitality and related communities may be adversely affected.

Changes to the population growth rate or other unfavorable demographic changes in Florida, particularly Northwest Florida, may adversely affect our business.

The success of our communities will be dependent on strong migration and population expansion in our regions of development, primarily Northwest Florida. We also believe that individuals seeking retirement or vacation homes in Florida will remain important target customers for our real estate products in the future. Florida’s population growth may be negatively affected in the future by factors such as adverse economic conditions, changes in state income tax laws, the occurrence of natural or manmade disasters and the high cost of real estate, insurance and property taxes. Furthermore, those persons considering moving to Florida may not view Northwest Florida as an attractive place to live or own a second home and may choose to live in another region. If Florida, especially Northwest Florida, experiences an extended

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period of slow growth, or even net out-migration, our business, results of operations, cash flows and financial condition may suffer.

Significant competition may have an adverse effect on our business.

Our business is highly competitive and fragmented. We compete with local, regional and national real estate leasing and development companies, some of which may have greater financial, marketing, sales and other resources than we do. Competition from real estate leasing and development companies may adversely affect our ability to attract tenants and lease our commercial and multi-family properties, attract purchasers and sell residential and commercial real estate and attract and retain experienced real estate leasing and development personnel. In addition, we face competition for tenants from other retail shopping centers and commercial facilities, as well as for our assisted living communities.

A number of highly competitive companies participate in the hospitality industry. Our ability to remain competitive and to attract and retain guests, customers and club members depends on our success in distinguishing the quality and value of our products and services from those offered by others.

The forestry business is also highly competitive in terms of price and quality. Wood products are subject to increasing competition from a variety of substitute products, including non-wood and engineered wood products.

There can be no assurance we will be able to compete successfully against current or future competitors or that competitive pressures we face in the markets in which we operate will not have a material adverse effect on our business, results of operations, cash flows and financial condition.

Mortgage financing issues, including lack of supply of mortgage loans, tightened lending requirements and possible future increases in interest rates, may reduce demand for our products.

Many purchasers of our real estate products obtain mortgage loans to finance a substantial portion of the purchase price or they may need to obtain mortgage loans to finance the construction costs of homes to be built on homesites purchased from us. Also, our homebuilder customers depend on retail purchasers who rely on mortgage financing. The availability of mortgage financing is significantly influenced by governmental entities such as the Federal Housing Administration, Veteran’s Administration and Government National Mortgage Association and government-sponsored enterprises known as Fannie Mae and Freddie Mac. If these or other lenders’ borrowing standards are tightened and/or the federal government were to reduce or eliminate these mortgage loan programs (including due to any failure of lawmakers to agree on a budget or appropriation legislation to fund relevant programs or operations), it would likely make it more difficult for potential purchasers of our products, including our homebuilder customers to obtain acceptable financing, which may have a negative effect on demand in our communities.

Increases in interest rates increase the costs of owning a home and may adversely affect the purchasing power of consumers and lower demand for residential real estate. In addition to residential real estate, increased interest rates and restrictions in the availability of credit may also negatively impact sales or development of our commercial properties or other land we offer for sale. If interest rates increase and the ability or willingness of prospective buyers to finance real estate purchases is adversely affected, our sales, results of operations, cash flows and financial condition may be negatively affected.

We have significant operations and properties in Northwest Florida that may be materially affected by natural disasters, manmade disasters, severe weather conditions or other significant disruptions.

Our corporate headquarters and properties are located in Northwest Florida. Because of its location between the Gulf of Mexico and the Atlantic Ocean, Florida is particularly susceptible to the occurrence of hurricanes. Depending on where any particular hurricane makes landfall, our developments in Northwest Florida, especially our coastal properties, may experience catastrophic damage. Such damage may materially delay sales or lessen demand for our residential or commercial real estate and lessen demand for our hospitality operations and leasing operations. If our corporate headquarters facility is damaged or destroyed, we may have difficulty performing certain corporate and operational functions.

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On October 10, 2018, Hurricane Michael made landfall in the Florida Panhandle, which resulted in widespread damage to the area. The majority of our properties incurred minimal or no damage; however our Bay Point Marina in Bay County and Port St. Joe Marina in Gulf County, as well as certain timber, commercial and multi-family leasing assets were impacted. The marinas suffered significant damage requiring long-term restoration and will remain closed during the reconstruction of significant portions of these assets, which is currently underway. We maintain property and business interruption insurance, subject to certain deductibles, and are continuing to assess claims under such policies; however, the timing and amount of additional insurance proceeds are uncertain and may not be sufficient to cover all losses. See Note 7. Hurricane Michael included in Item 15 of this Form 10-K for additional information.

The occurrence of other natural disasters and climate conditions in Florida, such as tornadoes, floods, fires, unusually heavy or prolonged rain, droughts, extreme heat, or other adverse weather events may have a material adverse effect on our ability to develop and sell properties or realize income from our projects. In addition, our timber assets are subject to damage by fire, insect infestation, disease, prolonged drought, flooding, hurricane and natural disasters, which may adversely affect our timber inventory and forestry business. Furthermore, sea level rise due to climate change may have a material adverse effect on our coastal properties.

The occurrence of natural disasters and the threat of adverse climate changes may also have a long-term negative effect on the attractiveness of Florida as a location for residences and as a location for new employers that can create high-quality jobs needed to support growth in Northwest Florida. Manmade disasters or disruptions, such as oil spills, acts of terrorism, power outages and communications failures may cause disruption to our properties, which may have a material adverse effect on our business, results of operations, cash flows and financial condition.

Furthermore, any adverse change in the economic, political or regulatory climate of Florida, or the counties where our land is located, may adversely affect our real estate development activities. Ultimately, our ability to execute our business strategy may decline as a result of weak economic conditions or restrictive regulations.

Our insurance coverage on our properties may be inadequate to cover any losses we may incur.

We maintain insurance on our properties, including property, liability, fire, flood and extended coverage. However, we do not insure our timber assets and we self-insure home warranty claims. Additionally, our insurance for hurricanes is capped at $50.0 million per named storm and is subject to deductibles. We use our discretion when determining amounts, coverage limits and deductibles for insurance. These terms are determined based on retaining an acceptable level of risk at a reasonable cost. This may result in insurance coverage that in the event of a substantial loss would not be sufficient to pay the full current market value or current replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also may make it unfeasible to use insurance proceeds to replace a facility after it has been damaged or destroyed. Under such circumstances, we may not receive insurance proceeds or the insurance proceeds we receive may not fully cover business interruptions or losses and our earnings, liquidity, or capital resources may be adversely affected.

Increases in property insurance premiums and decreases in availability of homeowner property insurance in Florida may reduce customer demand for homes and homesites in our developments.

Homeowner property insurance companies doing business in Florida have reacted to previous hurricanes by increasing premiums, requiring higher deductibles, reducing limits, restricting coverage, imposing exclusions, refusing to insure certain property owners, and in some instances, ceasing insurance operations in the state. It is uncertain what effect these actions may have on future property insurance availability and rates in the state.

Furthermore, Florida’s state-owned property insurance company, Citizens Property Insurance Corp., underwrites homeowner property insurance. If there were to be a catastrophic hurricane or series of hurricanes to hit Florida, the exposure of the state government to property insurance claims may place extreme stress on state finances.

The high costs of property insurance premiums in Florida may deter potential customers from purchasing a homesite in one of our developments or make Northwest Florida less attractive to new employers that can create high quality jobs

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needed to increase growth in the region, either of which may have a material adverse effect on our business, results of operations, cash flows and financial condition.

A decline in consumers’ discretionary spending or a change in consumer preferences may reduce our sales and harm our business.

Our real estate and hospitality segments’ revenue ultimately depends on consumer discretionary spending, which is influenced by factors beyond our control, including general economic conditions, the availability of discretionary income and credit, weather, consumer confidence and unemployment levels. Any material decline in the amount of consumer discretionary spending may reduce our revenue and harm our business. These economic and market conditions, combined with continuing difficulties in the credit markets and the resulting pressures on liquidity, may also place a number of our key customers under financial stress, which may adversely affect our occupancy rates and our profitability, which, in turn, may have a material adverse effect on our business, results of operations, cash flows and financial condition.

Downturns of the real estate market in Northwest Florida may adversely affect our operations.

Demand for real estate is sensitive to changes in economic conditions over which we have no control, including the level of employment, consumer confidence, consumer income, the availability of financing and interest rate levels. In addition, the real estate market is subject to downturns, and our business is especially sensitive to economic conditions in Northwest Florida, where our developments are located, and, more broadly, the Southeast region of the U.S., which in the past has produced a high percentage of customers for the hospitality and seasonal vacation products in our Northwest Florida communities. If market conditions experience volatility or worsen, the demand for our hospitality and real estate products may decline, negatively impacting our business, results of operations, cash flows and financial condition.

Recent tax law changes may make home ownership more expensive or less attractive.

In December 2017, the Tax Act established new limits on the federal tax deductions individual taxpayers may take on mortgage loan interest payments and on state and local taxes, including real estate taxes; the new Tax Act also raised the standard deduction. These changes may reduce the perceived affordability of homeownership, and therefore the demand for homes, and/or have a moderating impact on home sales prices. These changes may increase the after-tax cost of owning a home, which is likely to adversely impact the demand for homes and may reduce the prices for which we can sell homesites, particularly in higher priced communities.

Our ability to attract homebuilder customers and their ability or willingness to satisfy their purchase commitments may be uncertain.

We are highly dependent upon our relationships with homebuilders to be the primary customers for our homesites and to provide construction services in our residential developments. The homebuilder customers that have already committed to purchase homesites from us may decide to reduce, delay or cancel their existing commitments to purchase homesites in our developments. From time to time we finance real estate sales with mortgage note receivables. If these homebuilders fail to pay their debts to us or delay paying us, it would reduce our anticipated cash flows. Homebuilders also may not view our developments as desirable locations for homebuilding operations or they may choose to purchase land from other sellers. Any of these events may have an adverse effect on our business, results of operations, cash flows and financial condition.

We are exposed to risks associated with real estate development that may adversely impact our results of operations, cash flows and financial condition.

Our real estate development activities entail risks that may adversely impact our results of operations, cash flows and financial condition, including:

·

construction delays or cost overruns, which may increase project development costs;

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·

shortages of skilled labor, particularly as a result of the recent low unemployment rate in the U.S. and Florida especially;

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claims for construction defects after property has been developed, including claims by purchasers and property owners’ associations, and claims for construction defects arising from third party contractors with whom we are in a principal-agent relationship;

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the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues;

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an inability to obtain required governmental permits and authorizations, an inability to secure tenants necessary to support commercial and multi-family projects;

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compliance with building codes and other local regulations;

·

unavailability of raw materials when needed, which may result in project delays, stoppages or interruptions, which may make the project less profitable;

·

insufficient infrastructure capacity or availability (e.g., water, sewer and roads) to serve the needs of our projects;

·

instability in the financial industry may reduce the availability of financing;

·

delay or inability to acquire property, rights of way or easements, which may result in delays or increased costs; and

·

weather-related and geological interference, including landslides, earthquakes, floods, drought, wildfires and other events, which may result in delays or increased costs.

As certain approvals are subject to third party responses, it is not uncommon for delays to occur, which affect the timing of transaction closings and may also impact the terms and conditions of the transaction. Delays related to regulatory approvals may be due to the applicable governmental entity not being open due to the government being shut down or staffed sufficiently due to the government’s budgetary issues. These timing issues have caused, and may continue to cause, our operating results, particularly relating to the impact of our land sales, to vary significantly from quarter to quarter and year to year.

Our leasing projects may not yield anticipated returns, which may harm our operating results, reduce cash flow, or the ability to sell commercial assets.

Our business strategy includes the development and leasing of commercial and multi-family properties, management of commercial properties and commercial assets for sale. These commercial developments may not be as successful as expected due to leasing related risks, including the risk that we may not be able to lease new properties to an appropriate mix of tenants or obtain lease rates that are consistent with our projections, as well as the risks generally associated with real estate development. Additionally, development of leasing projects involves the risk associated with the significant time lag between commencement and completion of the project. This time lag subjects us to greater risks relating to fluctuations in the general economy, our ability to obtain construction or permanent financing on favorable terms, if at all, our ability to achieve projected rental rates, the pace that we will be able to lease to new tenants, higher than estimated construction costs (including labor and material costs), and delays in the completion of projects because of, among other factors, inclement weather, labor disruptions, construction delays or delays in receiving zoning or other regulatory approvals, or man-made or natural disasters. If any one of these factors negatively impacts our leasing projects we may not yield anticipated returns, which may have a material adverse effect on our operating results, cash flows and ability to sell commercial assets.

We face potential adverse effects from the loss of commercial tenants.

The default, financial distress, or bankruptcy of a major tenant may adversely affect the income produced by our commercial properties. If one or more of our tenants, particularly an anchor tenant, declares bankruptcy, defaults or voluntarily vacates from the leased premises, we may be unable to re-lease such space or to re-lease it on comparable or more favorable terms. Additionally, the loss of an anchor tenant may make it more difficult to lease the remainder of the affected properties, which may have a material adverse effect on our results of operations, cash flows and financial condition. This may adversely affect our properties and growth.

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We are exposed to operational risks with respect to our assisted living communities that may adversely affect our revenue and operations.

We are exposed to various operational risks with respect to our assisted living communities that may increase our costs or adversely affect our ability to generate revenues. These risks include:

·

fluctuations in occupancy, including as a result of general economic conditions, competition and willingness or ability of prospective residents to relocate to our assisted living communities;

·

federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards;

·

state regulations regarding assisted living resident agreements, which typically require a written resident agreement with each resident;

·

the availability and increases in cost of general and professional liability insurance coverage;

·

state regulation and rights of residents related to entrance fees; and

·

the availability and increases in the cost of labor (as a result of unionization or otherwise).

Any one or a combination of these factors may adversely affect our results of operations, cash flows and financial condition.

We are subject to various risks inherent to the hospitality industry beyond our control, any of which may adversely affect our business, results of operations and value of our hospitality assets.

Our business is subject to a number of business, financial and operating risks inherent to the hospitality industry and the agreements under which we operate, including, but not limited to:

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significant competition from other hospitality providers and lodging alternatives;

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an increase in supply of hotel rooms that exceeds increases in demand;

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dependence on business and leisure travel;

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governmental action and uncertainty resulting from U.S. and global political trends, including potential barriers to travel, trade and immigration;

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increases in energy costs and other travel expenses, which may adversely affect travel patterns;

·

our relationships with and the performance of third-party managers and franchisors;

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our ability to satisfy our obligations under our franchise agreements;

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reduced travel due to geo-political uncertainty, including terrorism, legislation or executive policies, travel-related health concerns, including the widespread outbreak of infectious or contagious diseases in the U.S., inclement weather conditions, including natural disasters such as hurricanes and earthquakes, and airline strikes or disruptions;

·

reduced travel due to adverse national, regional or local economic and market conditions;

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changes in desirability of geographic regions in which our hotels are located;

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increases in operating costs, including increases in the cost of property insurance, utilities and real estate and personal property taxes, due to inflation and other factors that may not be offset by increased room rates;

·

labor shortages and increases in the cost of labor due to low unemployment rates or to government regulations surrounding wage rates, health care coverage and other benefits;

·

changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with applicable laws and regulations;

·

natural or man-made disasters, such as earthquakes, tornadoes, hurricanes, wildfires, mudslides and floods; and

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·

any inability to remodel outdated buildings as required by the franchise or lease agreement.

Any of the these factors may increase our costs or limit or reduce the prices we are able to charge for our hospitality products or services, or otherwise affect our ability to maintain existing properties, develop new properties or add amenities to our existing properties. As a result, any of these factors may reduce our revenues and limit opportunities for growth.

If labor costs increase or we fail to attract and retain qualified employees, our business, results of operations, cash flows and financial condition may be adversely affected.

The labor markets in the industries in which we operate are competitive. We must attract, train and retain a large number of qualified employees while controlling related labor costs. We face significant competition for these employees from the industries in which we operate as well as from other industries. Tighter labor markets may make it even more difficult for us to hire and retain qualified employees and control labor costs. Our ability to attract qualified employees and control labor costs is subject to numerous external factors, including prevailing wage rates, employee preferences, employment law and regulation, labor relations and immigration policy. A significant increase in competition or costs increasing arising from any of the aforementioned factors may have a material adverse impact on our business, results of operations, cash flows and financial condition.

In addition, our hospitality operations are highly dependent on a large seasonal workforce. We have historically relied on the H-2B visa program to bring workers to the United States to fill seasonal staffing needs and ensure that we have the appropriate workforce in place. If we are unable to obtain sufficient numbers of seasonal workers, through the H-2B program or otherwise, we may not be able to recruit and hire adequate personnel as the required, and material increases in the cost of securing our workforce may be possible in the future. Increased seasonal wages or an inadequate workforce may have a material adverse effect on our business, results of operations, cash flows and financial condition.

The profitability of our hotels will depend on the performance of hotel management.

The profitability of our hotels and hospitality investments will depend largely upon the ability of management that we employ to generate revenues that exceed operating expenses. The failure of hotel management to manage the hotels effectively would adversely affect the cash flow received from hotel and hospitality operations.

We provide a guarantee of the debt for several of our JVs, and may in the future enter into similar agreements, which may have a material adverse effect on our results of operations, cash flows and financial condition.

We have provided a guarantee of the debt in connection with several of our JVs, and may in the future agree to similar agreements. In certain instances, these guarantees provide for the full payment and performance of the borrower. See Note 12. Debt, Net and Note 22. Commitments and Contingencies included in Item 15 of this Form 10-K for additional information. If we were to become obligated to perform on any of these guarantees our results of operations, cash flows and financial condition may be adversely affected.

Environmental and other regulations may have an adverse effect on our business.

Our properties are subject to federal, state and local environmental regulations and restrictions that may impose significant limitations on our development ability. In most cases, approval to develop requires multiple permits, which involve a long, uncertain and costly regulatory process. Our land holdings contain jurisdictional wetlands, some of which may be unsuitable for development or prohibited from development by applicable law. Development approval most often requires mitigation for impacts to wetlands that require land to be conserved at a disproportionate ratio versus the actual wetlands impacted and approved for development. Some of our property is undeveloped land located in areas where development may have to avoid, minimize or mitigate for impacts to the natural habitats of various protected wildlife or plant species. Additionally, muchsome of our property is in coastal areas that usually have a more restrictive permitting burden or must address issues such as coastal high hazard, hurricane evacuation, floodplains and dune protection.

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In addition, our current or past ownership, operation and leasing of real property, and our current or past transportation and other operations, are subject to extensive and evolving federal, state and local environmental laws and other regulations. The provisions and enforcement of these environmental laws and regulations may become more stringent in the future. Violations of these laws and regulations can result in, among other things, the following:

·

●

Environmental Regulation. Current or past operations are subject to extensive and evolving federal, state and local environmental laws and other regulations. The provisions and enforcement of these environmental laws and regulations may become more stringent in the future, including as a result of attention from environmental advocacy groups. Violations of these laws and regulations can result in, among other things, civil penalties;

·

penalties, remediation expenses;

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expenses, natural resource damages;

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damages, personal injury damages;

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damages, potential injunctions;

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injunctions, cease and desist orders;orders and

criminal penalties. In addition, some of these environmental laws impose strict liability, which means that we may be held liable for any environmental damage on our property regardless of fault.

·

criminal penalties.

In addition, some of these environmental laws impose strict liability, which means that we may be held liable for any environmental damage on our property regardless of fault.

Some of our pastPast and present real property, particularly properties used in connection with our previous transportation

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and papermill operations, were involved in the storage, use or disposal of hazardous substances that may have contaminated and may in the future contaminate the environment. We may bear liability for this contamination and for the costs of cleaning up a site at which we have disposed of, or to which we have transported, hazardous substances. The presence of hazardous substances on a property may also adversely affect our ability to sell or develop the property or to borrow funds using the property as collateral.

Additionally, in recent years, assessments of the potential impacts of climate change have begunWe may be subject to influence governmental authorities, consumer behavior patterns and the general business environment of the U.S., including, but not limited to, energy-efficiency measures, water use measures and land-use practices. The implementation of these polices may require us to invest additional capital in our properties or it may restrict the availability of land we are able to develop. These changes, orrisks from changes in certain governmental policies.

●Mortgage Rates. The availability of mortgage financing is significantly influenced by governmental entities such as the Federal Housing Administration, Veteran’s Administration and Government National Mortgage Association and government-sponsored enterprises known as Fannie Mae and Freddie Mac. Mortgage rates may also be adversely impacted by rising interest rates, which may continue to increase as a result of the government’s response to inflation. If borrowing standards are tightened and/or the federal government were to reduce or eliminate these mortgage loan programs (including due to any failure of lawmakers to agree on a budget or appropriation legislation to fund relevant programs or operations) or if mortgage rates continue to increase generally, it would likely make it more difficult for potential purchasers of our products, including our homebuilder customers to obtain acceptable financing, which may have a negative effect on demand in our communities.
●Climate Regulation. Potential impacts of climate change have begun to influence governmental authorities, consumer behavior patterns and the general business environment of the U.S., including, but not limited to, energy-efficiency measures, water use measures and land-use practices. The implementation of these policies may require us to invest additional capital in our properties or it may restrict the availability of land we are able to develop. These changes, or changes in other environmental laws or their interpretation thereof, new enforcement of laws, the identification of new facts or the failure of other parties to perform remediation at our current or former facilities may lead to new or greater liabilities that may materially adversely affect our business, results of operations, cash flows or financial condition.
●Accounting Standards. Uncertainties posed by various initiatives of accounting standard-setting by the Financial Accounting Standards Board (“FASB”) and the SEC, which create and interpret applicable accounting standards for U.S. companies, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements. These changes and others may have a material impact on how we record and report our financial condition and results of operations. In some cases, we may be required to apply a new or revised standard retroactively, resulting in potentially material restatements of prior period financial statements.

Changes to U.S. tax laws may materially adversely affect us.

●Income Tax. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. In many cases, the application of existing, newly enacted or amended tax laws may be uncertain and subject to differing interpretations. Changes in the tax laws, or in the interpretation or enforcement of existing tax laws, could increase our state and federal tax rates and subject our business to audits, inquiries and legal challenges from taxing authorities. For instance, the Inflation Reduction Act of 2022 was recently signed into law and includes an excise tax on certain corporate stock repurchases (imposed on the corporation repurchasing the stock). As a result of these and other future changes in tax laws, we may incur additional costs, including taxes and penalties for historical periods, which may have a material and adverse effect on our business, results of operations, cash flows or financial condition.
●QOZ Program. As part of the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”), Congress established the Qualified Opportunity Zone program (the “QOZ Program”), which provides preferential tax treatment to taxpayers who invest eligible capital gains into qualified opportunity funds (“QOFs”). QOFs are self-certifying entities that invest their capital in economically distressed communities that have been designated as qualified opportunity zones (“QOZs”) by the Internal Revenue Service (“IRS”) and Treasury. We have positioned ourselves to take advantage of the tax benefits offered by the QOZ Program. While the IRS has issued final regulations which address some of the uncertainties under the QOZ Program, because

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the QOZ Program is relatively new, a number of open questions remain. To the extent the IRS issues additional interpretive guidance that renders ineligible certain categories of projects that are currently expected to qualify, we may be unable to fully realize the benefits of the QOZ Program as anticipated, which may impact our investments.
●NOLs. We have significant state net operating loss carryforwards (“NOLs”). These state NOLs may be used against taxable income in future periods; however, we will not receive any tax benefits with regard to tax losses incurred except to the extent we have taxable income in the remaining NOL period. See Note 13. Income Taxes included in Item 15 of this Form 10-K for additional information.

From time to time, weWe may be subject to periodic litigation and other regulatory proceedings, which may impair our financial results of operations.

From time to time, weproceedings.We may be involved in lawsuits and regulatory actions relating to our business ouragreements, operations, andassets, liabilities, or our position as an owner and operator of real estate and related ventures.a public company. An adverse outcome in any of these matters may adversely affect our financial condition, our results of operations or impose additional restrictions or limitations on us. In addition, regardless of the outcome of any litigation or regulatory proceedings, these proceedings may result in substantial costs and may require that we devote substantial resources to defend our Company.

In addition, the landLand use approval processes we must follow to ultimately develop our projects have become increasingly complex. Moreover, the statutes, regulations and ordinances governing the approval processes provide third parties the opportunity to challenge the proposed plans and approvals. As a result, the prospect of third-party challenges to planned real estate developments provides additional uncertainties in real estate development planning and entitlements. Third-party challenges in the form of litigation may result in denial of the right to develop, or would, by their nature, adversely affect the length of time and the cost required to obtain the necessary approvals. In addition, adverse decisions arising from any litigation would increase the costs and length of time to obtain ultimate approval of a project and may adversely affect the design, scope, plans and profitability of a project.

GENERAL RISKS

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TableRisks associated with our human capital.Our ability to successfully implement our business strategy will depend on our ability to attract and retain skilled employees. The labor markets in the industries in which we operate are competitive. We must attract, train and retain a large number of Contents

Limitations onqualified employees while controlling related labor costs. Tighter labor markets may make it even more difficult for us to hire and retain qualified employees and control labor costs. Our ability to attract qualified employees and control labor costs is subject to numerous external factors, including prevailing wage rates, employee preferences, employment law and regulation, labor relations and immigration policy. While we are committed to recruiting top talent by offering, among other things, competitive wages, a significant increase in competition or labor costs increasing from any of the access to the airport runway at the Northwest Florida Beaches International Airportaforementioned factors may have ana material adverse effectimpact on the demand for our VentureCrossings land adjacent to the airport.

Our land donation agreement with the Panama City-Bay County Airport and Industrial District (the “Airport Authority”) and the deed for the airport land provide access rights to the airport runway from our adjacent lands. We subsequently entered into an access agreement with the Airport Authority that provides access to the airport runway. Under the terms of the access agreement, we are subject to certain requirements of the Airport Authority, including but not limited to the laws administered by the Federal Aviation Administration (the “FAA”), the Florida Department of Environmental Protection (the “FDEP”), the U.S. Army Corps of Engineers (the “Corps of Engineers”), and Bay County. Should security measures at airports become more restrictive in the future due to circumstances beyond our control, FAA regulations governing these access rights may impose additional limitations that may significantly impair or restrict access rights.

In addition, we are required to obtain environmental permits from each of the Corps of Engineers and the FDEP in order to develop the land necessary for access from our planned areas of commercial development to the airport runway. Such permits are often subject to a lengthy agency administrative approval process, and there can be no assurance that such permits will be issued, or that they will be issued in a timely manner.

We believe that runway access is a valuable attribute of some of our VentureCrossings land adjacent to the airport, and the failure to maintain such access, the imposition of significant restrictions on such access, or any associated permitting delays or issues, may adversely affect the demand for such lands and our business, results of operations, cash flows and financial condition.

We face risks associated with third-party service providers, which may negatively impact our profitability.

We currently rely on various third-parties to conduct the day-to-day operations of In addition, our hospitality operations are highly dependent on a large seasonal workforce. We have historically relied on the J-1 and H-2B visa programs to bring workers to the U.S. to fill seasonal staffing needs and ensure that we have the appropriate workforce in place. If we are unable to obtain sufficient numbers of seasonal workers, through the J-1 and H-2B programs or otherwise, we may not be able to recruit and hire adequate personnel, and material increases in the cost of securing our multi-family properties and some ofworkforce may be possible in the future. Increased seasonal wages or an inadequate workforce may have a material adverse effect on our commercial properties. Failure of such third parties to adequately perform their contracted services may negatively impact our ability to retain customers. As a result, any such failure may negatively impact ourbusiness, results of operations, cash flows and financial condition.

Risks Related to Our Company or Common Stock

The market price of our common stock has been, and may continue to be, highly volatile.

The market price of our common stock on the New York Stock Exchange (“NYSE”) has been volatile. We may continue to experience significant volatility in the market price of our common stock. Numerous factors may have a significant effect on the price of our common stock, including:

·

announcements of fluctuations in our operating results;

·

other announcements concerning our Company or business, including acquisitions or litigation announcements;

·

changes in market conditions in Northwest Florida or the real estate or real estate development industry in general;

·

economic and/or political factors unrelated to our performance;

·

changes in recommendations or earnings estimates by securities analysts;

·

less volume due to reduced shares outstanding; and

·

execution of the Stock Repurchase Program will reduce our “public float.”

In addition, the stock market in general has experienced significant price and volume fluctuations in recent years, which have sometimes been unrelated or disproportionate to operating performance. Continued volatility in the market price of our common stock may cause shareholders to lose some or all of their investment in our common stock.

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Our common stock has low trading volume.

Although our common stock trades on the NYSE, it is thinly traded and our daily trading volume is low compared to the number of share of common stock we have outstanding. The low trading volume of our common stock can cause our stock price to fluctuate significantly as well as make it difficult for a stockholder to sell their common stock quickly. As a result of our stock being thinly traded, institutional investors might not be interested in owning our common stock.

Fairholme has the ability to influence major corporate decisions, including decisions that require the approval of stockholders, and its interest in our business may conflict with yours.

Mr. Bruce R. Berkowitz is the Chairman of our Board. He is the Manager of, and controls entities that own and control, Fairholme, which wholly owns FCM. Mr. Berkowitz is the Chief Investment Officer of FCM. As of December 31, 2019, clients of FCM, including Mr. Berkowitz, beneficially owned approximately 44.30% of our common stock. FCM and its client, The Fairholme Fund, a series of the Fairholme Funds, Inc., may be deemed affiliates of ours. Accordingly, Fairholme is in a position to influence:

·

the vote of most matters submitted to our shareholders, including any merger, consolidation or sale of all or substantially all of our assets;

·

the nomination of individuals to our Board; and

·

a change in our control.

These factors may discourage, delay or prevent a takeover attempt that shareholders might consider in their best interests or that might result in shareholders receiving a premium for their common stock. Our articles of incorporation and certain provisions of Florida law contain anti-takeover provisions that may make it more difficult to effect a change in our control.

In addition, Fairholme is in the business of making or advising on investments in companies and may hold, and may, from time to time in the future, acquire interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business. Fairholme may also pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

Furthermore, future sales of our common stock by Fairholme, or the perception in the public markets that these sales may occur, may depress our stock price.

Changes in our income tax estimates may materially impact our results of operations, cash flows and financial condition.

In preparing our consolidated financial statements, significant management judgment is required to estimate our income taxes. Our estimates are based on our interpretation of federal and state tax laws. We estimate our actual current tax due and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. The temporary differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Adjustments may be required by a change in assessment of our deferred tax assets and liabilities, changes due to audit adjustments by federal and state tax authorities, and changes in tax laws and rates, including the Tax Act. To the extent adjustments are required in any given period, we include the adjustments in the deferred tax assets and liabilities in our consolidated financial statements. These adjustments may materially impact our results of operations, cash flows and financial condition.

Changes to U.S. federal and state income tax laws may materially affect us and our stockholders.

The recently enacted Tax Act made substantial changes to the Internal Revenue Code. Among those changes are a significant permanent reduction in the generally applicable corporate tax rate, changes in the taxation of individuals and other non-corporate taxpayers that generally but not universally reduce their taxes on a temporary basis subject to ‘‘sunset’’ provisions, the elimination or modification of various currently allowed deductions (including substantial limitations on the deductibility of interest and, in the case of individuals, the deduction for personal state and local

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taxes), certain additional limitations on the deduction of net operating losses, and certain business income derived by non-corporate taxpayers in comparison to other ordinary income recognized by such taxpayers. The effect of these, and the many other, changes made in the Tax Act is highly uncertain, both in terms of their direct effect on the taxation of an investment in our common equity and their indirect effect on the value of our assets or market conditions generally. Furthermore, many of the provisions of the Tax Act will require guidance through the issuance of Treasury regulations in order to assess their effect. There may be a substantial delay before such regulations are promulgated, increasing the uncertainty as to the ultimate effect of the statutory amendments on us. There may also be technical corrections legislation proposed with respect to the Tax Act, the effect and timing of which cannot be predicted and may be adverse to us or our stockholders.

We may not be able to utilize our net state operating loss carryforwards.

We have suffered losses, for tax and financial statement purposes, which generated significant state net operating loss carryforwards. These state net operating loss carryforwards may be used against taxable income in future periods; however, we will not receive any tax benefits with regard to tax losses incurred except to the extent we have taxable income in the remaining net operating loss carryforward period.

We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness and we will be exposed to risks related to counterparty credit worthiness or non-performance of these instruments.

We have entered into an interest rate swap instrument and may enter into others to limit our exposure to changes in variable interest rates. While our hedging strategy is designed to minimize the impact of increases in interest rates applicable to our variable rate debt, there can be no guarantee that our hedging strategy will be effective, and we may experience credit-related losses in some circumstances. See Note 6. Financial Instruments and Fair Value Measurements included in Item 15 of this Form 10-K for additional information.

A decline in real estate values or continuing operating losses in our operating properties may result in impairments, which would have an adverse effect on our results of operations and financial condition.

As of December 31, 2019, we had approximately $430.8 million of real estate investments and $5.1 million of investment in unconsolidated joint ventures recorded on our books that may be subject to impairment. If market conditions were to deteriorate, our estimate of undiscounted future cash flows may fall below their carrying value and we may be required to take impairments, which would have an adverse effect on our results of operations and financial condition.

Changes in accounting pronouncements may adversely affect our reported operating results, in addition to the reported financial performance of our tenants.

Accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Uncertainties posed by various initiatives of accounting standard-setting by the Financial Accounting Standards Board (“FASB”) and the SEC, which create and interpret applicable accounting standards for U.S. companies, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements. These changes and others may have a material impact on our reported financial condition and results of operations. In some cases, we may be required to apply a new or revised standard retroactively, resulting in potentially material restatements of prior period financial statements.

Failure to maintain the integrity of internal or customer data may result in faulty business decisions, damage of reputation and/or subject us to costs, fines or lawsuits.

We face risks associated with security breaches or disruptions, whether through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, persons inside our organization or persons with access to systems, energy blackouts, natural disasters, terrorism, war, and other significant disruptions of our networks and related systems. For a number of years, we have been increasing our reliancecybersecurity.We are reliant on computers and digital technology.

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While all oftechnology, including certain technology systems from third-party vendors which we use to operate our business and internal employment records require the collection ofwhich are not under our control. We collect digital information our hospitality segment,on all aspects of operations. Hospitality related businesses, in particular, requiresrequire the collection and retention of large volumes of internal and customer data, including credit card numbers and other personally identifiable information of our customers, as such information is entered into, processed, summarized, and reported by the various information systems we use. All of these activities give rise to material cyber risks and potential costs and consequences that cannot be estimated or predicted with any certainty.predicted. The integrity and protection of our customer, employee and other company data, is critical to us. Although weWe make efforts to maintain the security and integrity of these networks and related systems, wesystems. We have implemented various measures to manage the risk of a security breach or disruption, and to date, have not had a significant cyber breach or attack that has had a material impact on our business, theredisruption. There can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions, whether through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses,

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attachments to emails, persons inside our organization or persons with access to systems, energy blackouts, natural disasters, terrorism, war, and other significant disruptions of our networks and related systems, or disruptions would not be successful or damaging.

The Further, the risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments or state-sponsored actors, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In particular, there has been a spike in cybersecurity attacks as work-from-home measures have led businesses to increase reliance on virtual environments and communications systems, which have been subject to increasing third-party vulnerabilities and security risks.

Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we and our service providers may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us and our service providers to entirely mitigate this risk. Our failure to maintain the security of the data, which we are required to protect, including via the penetration of our network security and the misappropriation of confidential and personal information, may result in business disruption, damage to our reputation, fines, penalties, regulatory proceedings and other severe financial and business implications.

We are subject to risks related to corporate social responsibility and reputation.Our reputation and brands are important to our business. Our reputation and brands affect our ability to attract and retain consumers, financing, and secure development opportunities. There are numerous ways our reputation or brands could be damaged. These include, among others, product safety or quality issues, negative media coverage or scrutiny from political figures or interest groups. Customers are also using social media to provide feedback and information about our Company and products and services in a manner that can be quickly and broadly disseminated. To the extent a customer has a negative experience with, or view of, our Company and shares it over social media, it may adversely impact our brand and reputation.

In addition, companies across many industries are facing increasing scrutiny from stakeholders related to their environmental, social, and governance (“ESG”) practices. Investor advocacy groups, including ESG-focused investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. If we fail, or are perceived to be failing, to meet the expectations of our stakeholders, which are evolving, we may suffer from reputational damage and our business mayor financial condition could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting.affected.

The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements, or misrepresentations. While management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives at all times. Deficiencies, including any material weakness, in our internal control over financial reporting, which may occur in the future, may result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity.

Uncertainty about the future of the London Interbank Offer Rate ("LIBOR") may adversely affect our business and financial results.

Many of our current debt agreements have an interest rate tied to LIBOR. In July 2017, the UK’s Financial Conduct Authority, which regulates LIBOR, announced its intent to phase out LIBOR by the end of 2021. It is not possible to predict the effect of this announcement, including whether LIBOR will continue in place, and if so what changes will be made to it, what alternative reference rates may replace LIBOR in use going forward, and how LIBOR will be determined for purposes of loans, securities and derivative instruments currently referencing it if it ceases to exist. If the method for calculation of LIBOR changes, if LIBOR is no longer available or if lenders have increased costs due to changes in LIBOR, we may suffer from potential increases in interest rates on our debt agreements. These uncertainties or their resolution also may negatively impact our borrowing costs and other aspects of our business and financial results.

Our financing arrangements contain restrictions and limitations that could impact our ability to operate our business.

limitations.Our financing arrangements contain customary representations and warranties, andas well as customary affirmative and negative covenants that restrict some of our activities. See Note 12. 10. Debt, Net included in Item 15 of this Annual Report on Form 10-K for additional information. Our ability to comply with the covenants and restrictions contained in our

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financing arrangements may be affected by economic, financial and industry conditions beyond our control, including credit or capital market disruptions. The breach of any of these covenants or restrictions could result in a default that would permit the applicable lenders to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. In any such case, we may be unable to repay the amounts due under such financing arrangements, which could have a material adverse effect on our results of operations, cash flows and financial condition.

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We may provide a public company require significant resources and management attention.

As a public company, we are subject to laws, regulations and requirements, including the requirementsguarantee of the Exchange Act,debt in connection with our JVs. In certain corporate governance provisionsinstances, these guarantees provide for the full payment and performance of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), related regulations of the SEC and requirements of the NYSE. The Exchange Act requires, among other things, that we file annual, quarterly and current reports and proxy statements with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. Section 404 of the Sarbanes-Oxley Act requires our management and independent registered public accounting firm to attest annually on the effectiveness of our internal control over financial reporting. These reporting and other obligations place significant demands on our management, administrative, operational and accounting resources and may cause us to incur significant expenses. We may need to upgrade our systems or create new systems, implement additional financial and management controls, reporting systems and procedures, create or outsource an internal audit function and hire additional legal, accounting and finance staff. If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with the financial reporting requirements and other rules that apply to reporting companies may be impaired. Any failure to operate successfully as a public company may have a material adverse effect on our financial condition and results of operations.

Item 1B.    Unresolved Staff Comments

None.

Item 2.     Properties

We own our principal executive offices located in Watersound, Florida. As of December 31, 2019, we owned approximately 175,000 acres located in Northwest Florida. Our raw land assets are managed by us as timberlands until designated for development. The Bay-Walton Sector Plan is a long term master plan that originally included 110,500 acres of our land with entitlements, or legal rights, to develop over 170,000 residential dwelling units, over 22 million square feet of retail, commercial, and industrial space and over 3,000 hotel rooms. We anticipate a wide range of residential, commercial and hospitality uses on these land holdings. As further described herein, we own and develop land in multiple residential communities. We currently have projects under development or construction in our residential, commercial leasing and sales and hospitality segments. In addition, our hospitality and commercial leasing and sales segments include the following properties:

Clubs. We own three golf courses and a beach club in Northwest Florida that are situated in or near our residential communities. Our golf course property primarily includes the golf course land, clubhouses, other buildings and equipment.

WaterColor Inn, WaterSound Inn and Other Properties. We own the WaterColor Inn, a boutique hotel, and the WaterSound Inn, along with nearby retail and commercial space. We own additional properties in Panama City Beach, Florida that we operate as rental property.

Marinas.  We own and operate two marinas in Northwest Florida. Our marina properties primarily include land and improvements, marina slips and equipment. Subsequent to the landfall of Hurricane Michael on October 10, 2018, the marinas remain closed due to significant damage requiring long-term restoration, which is currently underway. We maintain property and business interruption insurance on the impacted marina assets.borrower. See Note 7. Hurricane Michael 10. Debt, Net and Note 20. Commitments and Contingenciesincluded in Item 15 of this Form 10-K for additional information. If we were to become obligated to perform on any of these guarantees, our results of operations, cash flows and financial condition may be adversely affected.

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TableWe utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates. We may enter into interest rate swap instruments to limit our exposure to changes in variable interest rates. While our hedging strategy is designed to minimize the impact of Contents

Leasing. We own the property includedincreases in interest rates applicable to some of our commercial leasingvariable rate debt, there can be no guarantee that our hedging strategy will be effective, and sales segment, which includes multi-family, retail, officewe may experience credit-related losses in some circumstances. See Note 6. Financial Instruments and commercial property, such as our Beckrich Office Park, property located in our consolidated Pier Park North JV (the “Pier Park North JV”) and Pier Park Crossings apartment JV (the “Pier Park Crossings JV”), WindMark Beach, VentureCrossings industrial park, commerce park buildings, retail shopping centers and other properties, as well as properties under development or construction.

For more information on our real estate assets, see “Item 1. Business” and “Schedule III (Consolidated) - Real Estate and Accumulated Depreciation”Fair Value Measurements included in Item 15 of this Form 10‑K10-K for furtheradditional information.

Item 3.    Legal Proceedings

We are subjectcannot assure you that we will not make changes to a varietyour existing capital allocation plan, including whether we will continue to pay dividends at the current rate or at all.In 2022, we paid quarterly cash dividends of litigation, claims, other disputes and governmental proceedings that arise from time to time in the ordinary course of our business, none of which we believe will have a material adverse effect$0.10 per share on our consolidated financial position, results of operations or liquidity.

In addition, we are subject to environmental laws and regulations, which include obligations to remove or limit the effects on the environment of the disposal or release of certain wastes or substances at various sites, including sites which have been previously sold. See Note 22. Commitments and Contingencies included in Item 15 of this Form 10‑K for further discussion.

Item 4.    Mine Safety Disclosures

Not applicable.

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PART II

Item 5.    Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

On February 24, 2020 we had approximately 891 registered holders of record of our common stock. Our common stock is listed on the NYSE under the symbol “JOE.”

We did notand we currently expect to continue to pay cash dividends in 2019 or 2018.quarterly dividends. The declaration and payment of any future dividends will be at the discretion of our Board after taking into account various factors, including without limitation, our financial condition, earnings, capital requirements of our business, the terms of any credit agreements or indentures to which we may be party at the time, legal requirements, industry practice, and other factors that our Board deems relevant. In addition, we may decide not to make future stock repurchases at the same rate or at all, as a result of, among other factors, the excise tax on stock repurchases, which was recently introduced by the Inflation Reduction Act of 2022.

We may continue to experience significant volatility in the market price of our common stock. Numerous factors may have a significant effect on the price of our common stock, including low trading volumes; announcements of fluctuations in our operating results; other announcements concerning our Company or business, including acquisitions or litigation announcements; changes in market conditions in Northwest Florida or the real estate or real estate development industry in general; economic and/or political factors unrelated to our performance; impacts of the COVID-19 pandemic; comments by public figures or other third parties (including blogs, articles, message boards and social and other media); changes in recommendations or earnings estimates by securities analysts; novel and unforeseen trading strategies adopted by retail investors or other market participants and less volume and reduced shares outstanding due to execution of the Stock Repurchase Program that would reduce our “public float”. The market price of our common stock on the New York Stock Exchange (“NYSE”) has been volatile, which may be unrelated or disproportionate to operating performance. Continued volatility in the market price of our common stock may cause shareholders to lose some or all of their investment in our common stock. Institutional investors might not be interested in owning our common stock.

​

Item 1B.    Unresolved Staff Comments

None.

Item 2.     Properties

St. Joe owns 169,000 acres in Northwest Florida. A portion of our land is within the Sector Plan, that entitles, or gives legal rights, for us to develop over 170,000 residential dwelling units, over 22 million square feet of retail, commercial and industrial space and over 3,000 hotel rooms on lands within Florida’s Bay and Walton counties. We also have additional entitlements, or legal rights, to develop acreage outside of the Sector Plan. Approximately 86% of our real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf of Mexico. Undeveloped land is managed as timberlands until designated for development. We anticipate a wide range of residential, commercial and hospitality uses on these land holdings. We have operating assets and projects under development in our residential, hospitality, and commercial segments.For more information on our real estate assets, see “Item 1. Business” and “Schedule III (Consolidated) - Real Estate and Accumulated Depreciation” included in Item 15 of this Form 10-K for further information. In addition to the properties

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we own, we have investments in unconsolidated joint ventures that own properties such as LMWS, LLC (the “Latitude Margaritaville Watersound JV”) that includes the Latitude Margaritaville Watersound community.

In our residential segment, we develop land in multiple residential communities into homesites for sale to homebuilders and on a limited basis to retail customers. As of December 31, 2022, we had completed homesites and homesites under development, engineering or in conceptual planning in nineteen separate communities. These include the Watersound Origins, Watersound Origins West, Breakfast Point East, Watersound Camp Creek, WindMark Beach, SouthWood, Titus Park, College Station, Park Place, Ward Creek, Salt Creek at Mexico Beach and other Northwest Florida communities.

In our hospitality segment, we own a beach club and three golf courses that are situated in or near our residential communities.We own the WaterColor Inn, The Pearl Hotel, Hilton Garden Inn Panama City Airport, Homewood Suites by Hilton Panama City Beach and the WaterSound Inn, along with nearby retail and commercial space. We have under construction an Embassy Suites by Hilton hotel (the “Pier Park Resort Hotel JV”), Home2 Suites by Hilton, Camp Creek Inn and The Lodge 30A hotel (“The Lodge 30A JV”). We own additional properties in Panama City Beach, Florida that we operate as rental property. We own two marinas. We also have under construction Hotel Indigo and own Harrison’s Kitchen & Bar, a standalone restaurant which opened in 2022, both on leased land in downtown Panama City.

In our commercial segment, we own, or jointly own, the properties used in our operations and have properties under construction that will be used in our operations, which include multi-family, senior living, self-storage, retail, office and commercial property. These commercial properties are located in Beckrich Office Park, where we are headquartered; Pier Park North (the “Pier Park North JV”), Pier Park Crossings (the “Pier Park Crossings JV”), Pier Park Crossings Phase II (the “Pier Park Crossings Phase II JV”), Watersound Origins Crossings (the “Watersound Origins Crossings JV”), Mexico Beach Crossings (the “Mexico Beach Crossings JV”) Watercrest Senior Living (the “Watercrest JV”), North Bay Landing, WindMark Beach, VentureCrossings, Watersound Town Center, West Bay Town Center, Florida State University (“FSU”)/Tallahassee Memorial Hospital (“TMH”) Medical Campus and other Northwest Florida locations.

​

Item 3.    Legal Proceedings

For information regarding legal proceedings, see Note 20. Commitments and Contingencies included in Item 15 of this Form 10-K.

Item 4.    Mine Safety Disclosures

Not applicable.

​

20

Table of Contents

PART II

Item 5.    Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

On February 20, 2023, we had approximately 789 registered holders of record of our common stock. Our common stock is listed on the NYSE under the symbol “JOE.”

During 2022, we paid quarterly cash dividends of $0.10 per share on our common stock ($0.40 per share in the aggregate) and we expect to continue to pay quarterly dividends. During 2021, we paid quarterly cash dividends of $0.08 per share on our common stock ($0.32 per share in the aggregate). In the fourth quarter of 2020, we paid a cash dividend of $0.07 per share on our common stock. While we expect to continue to pay quarterly dividends, the declaration and payment of any future dividends will be at the discretion of our Board after taking into account various factors, including without limitation, our financial condition, earnings, capital requirements of our business, the terms of any credit agreements or indentures to which we may be a party to at the time, legal requirements, industry practice, and other factors that our Board deems relevant. Past payments of dividends should not be construed as a guarantee of payment or declaration of future dividends in the same amount or at all. See Item 1A. Risk Factors – General Risks – We cannot assure you that we will not make changes to our existing capital allocation plan, including whether we will continue to pay dividends at the current rate or at all.

The following performance graph compares our cumulative shareholder returns for the period from December 31, 2014,2017 through December 31, 2019,2022, assuming $100 was invested on December 31, 2014,2017, in our common stock, in the S&P SmallCap 600 Index, and a custom real estate peer group (the “Custom Real Estate Peer Group”), which. The Custom Real Estate Group is composed of the following companies:

Alexander & Baldwin Inc. (ALEX)

Consolidated-Tomoka Land Co., CTO Realty Growth, Inc. (CTO)

, Five Point Holdings, LLC (FPH)

, The Howard Hughes Corporation (HHC)

, Maui Land & Pineapple Company, Inc. (MLP)

, Stratus Properties Inc. (STRS)

and Tejon Ranch Co. (TRC)

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Table of Contents

The total. Total returns shown assume that dividends are reinvested. Total return for the Custom Real Estate Peer Group uses an equal weighting for each of the stocks within the peer group. The stock price performance shown below is not necessarily indicative of future price performance.

Picture 2Graphic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

12/31/2014

    

12/31/2015

    

12/31/2016

    

12/31/2017

    

12/31/2018

    

12/31/2019

The St. Joe Company

 

$

100

 

$

100.65

 

$

103.32

 

$

98.15

 

$

71.62

 

$

107.83

S&P SmallCap 600 Index

 

$

100

 

$

98.03

 

$

124.06

 

$

140.48

 

$

128.56

 

$

157.85

Custom Real Estate Peer Group*

 

$

100

 

$

87.19

 

$

96.76

 

$

104.16

 

$

73.99

 

$

90.65

21

*

The total return for the Custom Real Estate Peer Group was calculated using an equal weighting for each of the stocks within the peer group.

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

12/31/2017

    

12/31/2018

    

12/31/2019

    

12/31/2020

    

12/31/2021

    

12/31/2022

The St. Joe Company

​

$

100

​

$

72.96

​

$

109.86

​

$

235.72

​

$

290.99

​

$

218.03

S&P SmallCap 600 Index

​

$

100

​

$

91.52

​

$

112.37

​

$

125.05

​

$

158.59

​

$

133.06

Custom Real Estate Peer Group

​

$

100

​

$

70.73

​

$

86.79

​

$

61.15

​

$

80.71

​

$

61.13

Stock Repurchase Program

Our Board has approved the Stock Repurchase Program pursuant to which we are authorized to repurchase shares of our common stock. The Stock Repurchase Programprogram has no expiration date.

As of December 31, 2019,2022, we had a total authority of $86.2$80.0 million available for purchase of shares of our common stock pursuant to the Stock Repurchase Program.outstanding. We may repurchase our common stock in open market purchases from time to time, in privately negotiated transactions or otherwise, pursuant to Rule 10b-18 under the Exchange Act. The timing and amount of any additional shares to be repurchased will depend upon a variety of factors, including market and business conditions and is subject to the Company maintaining $100.0 million of cash and cash equivalents.factors. Repurchases may be commenced or suspended at any time or from time to time without prior notice. The Stock Repurchase Programprogram will continue until otherwise modified or terminated by our Board at any time in its sole discretion.

Execution of the Stock Repurchase Program will reduce our “public float”, and the beneficial ownership of common stock by our directors, executive officers and affiliates will proportionately increase as a percentage of our outstanding common stock. However, we do not believe that the execution of the Stock Repurchase Programit will cause our common

26

Table of Contents

stock to be delisted from NYSE or cause us to stop being subject to the periodic reporting requirements of the Exchange Act.

The following table provides information on our There were no stock repurchases of common stock during the three months ended December 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Total Number of Shares

    

Maximum Dollar Value of

 

 

 

 

 

 

 

Purchased as Part of

 

Shares that May Yet Be

 

 

Total Number of

 

Average Price

 

Publicly Announced

 

Purchased Under the

Period

 

Shares Purchased

 

Paid per Share

 

Plans or Programs

 

Plans or Programs

 

 

 

 

 

 

 

 

 

In Millions

October 1-31, 2019

 

121,630

 

$

16.85

 

121,630

 

$

86.2

November 1-30, 2019

 

 —

 

 

 —

 

 —

 

 

 —

December 1-31, 2019

 

 —

 

 

 —

 

 —

 

 

 —

Total

 

121,630

 

$

16.85

 

121,630

 

$

86.2

fourth quarter of 2022.

​

Item 6.    Selected Financial DataReserved

​

The following table sets forth our selected consolidated financial data on a historical basis for the five years ended December 31, 2019. This information should be read in conjunction with our consolidated financial statements (including the related notes thereto) and management’s discussion and analysis of financial condition and results of operations, each included elsewhere in this Form 10‑K. This historical selected consolidated financial data has been derived from our audited consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

    

2019

    

2018

    

2017

    

2016

    

2015

 

 

In thousands, except per share amounts

Statement of Operations Data:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Total revenue (1) (2)

 

$

127,085

 

$

110,276

 

$

100,038

 

$

96,862

 

$

104,901

Total cost of revenue (3)

 

 

64,086

 

 

51,317

 

 

67,194

 

 

62,194

 

 

67,094

Other operating and corporate expenses

 

 

21,389

 

 

20,557

 

 

20,382

 

 

23,019

 

 

33,426

Depreciation, depletion and amortization

 

 

10,287

 

 

8,998

 

 

8,885

 

 

8,571

 

 

9,486

Total expenses

 

 

95,762

 

 

80,872

 

 

96,461

 

 

93,784

 

 

110,006

Operating income (loss)

 

 

31,323

 

 

29,404

 

 

3,577

 

 

3,078

 

 

(5,105)

Other income, net (4) (5) (6) (7)

 

 

4,862

 

 

1,462

 

 

37,778

 

 

19,533

 

 

3,942

Income (loss) before equity in loss from unconsolidated affiliates and income taxes

 

 

36,185

 

 

30,866

 

 

41,355

 

 

22,611

 

 

(1,163)

Equity in loss from unconsolidated affiliates

 

 

(77)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Income tax (expense) benefit (8) (9)

 

 

(9,447)

 

 

736

 

 

17,881

 

 

(7,147)

 

 

(808)

Net income (loss)

 

 

26,661

 

 

31,602

 

 

59,236

 

 

15,464

 

 

(1,971)

Net loss attributable to non-controlling interest

 

 

114

 

 

767

 

 

342

 

 

431

 

 

240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to the Company

 

$

26,775

 

$

32,369

 

$

59,578

 

$

15,895

 

$

(1,731)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Basic and Diluted

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Net income (loss) per share attributable to the Company

 

$

0.45

 

$

0.52

 

$

0.84

 

$

0.21

 

$

(0.02)

(1)

Total revenue includes revenue from real estate revenue, hospitality revenue, leasing revenue and timber revenue.

(2)

Total revenue in 2018 includes $23.1 million for a one-time receipt of RiverTown impact fees related to the 2014 RiverTown transaction. See Note 19. RiverTown Impact Fees included in in Item 15 of this Form 10‑K for further discussion.

(3)

Total cost of revenue includes cost of revenue from real estate revenue, hospitality revenue, leasing revenue and timber revenue.

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Table of Contents

(4)

Other income, net in 2019 includes a $5.3 million gain on insurance recovery and a $2.7 million loss from hurricane damage related to Hurricane Michael. See Note 7. Hurricane Michael included in Item 15 of this Form 10‑K for further discussion.

(5)

Other income, net in 2018 includes a $7.2 million gain on insurance recovery and an $8.6 million loss from hurricane damage related to Hurricane Michael. See Note 7. Hurricane Michael included in Item 15 of this Form 10‑K for further discussion.

(6)

Other income, net in 2017 includes a net gain of $9.8 million from the short term vacation rental management business sale. See Note 8. Sale of Vacation Rental Management included in Item 15 of this Form 10‑K for further discussion.

(7)

Other income, net in 2016 includes $12.5 million related to the Deepwater Horizon oil spill claim settlement.

(8)

Income tax (expense) benefit in 2018 includes a $5.0 million tax benefit due to the release of our valuation allowance and a $2.1 million tax benefit related to recognizing previously unrecognized tax benefits. See Note 14. Income Taxes for further discussion.

(9)

Income tax (expense) benefit in 2017 includes $33.5 million of net tax benefit related to the Tax Act.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 

 

    

2019

    

2018

    

2017

    

2016

    

2015

 

 

In thousands

Balance Sheet Data:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Investment in real estate, net

 

$

430,776

 

$

350,994

 

$

332,624

 

$

314,620

 

$

313,599

Cash and cash equivalents

 

$

185,716

 

$

195,155

 

$

192,083

 

$

241,111

 

$

212,773

Investments

 

$

9,799

 

$

45,090

 

$

111,268

 

$

175,725

 

$

191,240

Property and equipment, net

 

$

19,018

 

$

12,031

 

$

11,776

 

$

8,992

 

$

10,145

Total assets

 

$

909,233

 

$

870,962

 

$

920,993

 

$

1,027,945

 

$

982,742

Debt, net (1)

 

$

92,529

 

$

69,374

 

$

55,630

 

$

55,040

 

$

54,474

Senior notes held by special purpose entity (2)

 

$

177,026

 

$

176,775

 

$

176,537

 

$

176,310

 

$

176,094

Total debt, net

 

$

269,555

 

$

246,149

 

$

232,167

 

$

231,350

 

$

230,568

Total equity

 

$

529,670

 

$

533,111

 

$

592,584

 

$

686,799

 

$

673,447

(1)

Debt, net includes loans held by our Pier Park North JV, Pier Park Crossings JV and Watersound Origins Crossings apartments JV (the “Watersound Origins Crossings JV”), Community Development District debt and other project financing for our commercial leasing and sales and hospitality segments.

(2)

See Note 6. Financial Instruments and Fair Value Measurements included in Item 15 of this Form 10‑K for further discussion on our special purpose entities.

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Table of Contents

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying audited consolidated financial statements and the related notes included in this annual report on Form 10-K. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Forward-Looking Statements” and “Risk Factors” in this annual report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this annual report on Form 10-K, unless required by law.

Business Overview

St. Joe is a real estate development, asset management and operating company with all of its real estate assets and operations in Northwest Florida, which we predominantly use, orFlorida. We intend to use existing assets for or in connection with, our various residential, hospitality and commercial leasing and forestry operations.

ventures. We have significant residential and commercial land-use entitlements. We actively seek higher and better uses for our real estate assets through a range of development activities. As part of our core business strategy, we have created a meaningful portion of our business through joint ventures and limited partnerships over the past several years. We enter into these arrangements for the purposes of developing real estate and other business activities, which we believe allows us to complement our growth strategy, leverage industry expertise and diversify our business. We may also partner with or explore the sale of some of ourdiscrete assets opportunistically or when we believe that we and/or others can better deploy those resources.

As a real estate development company, we We seek to enhance the value of our owned real estate assets by undertaking targeted typesdeveloping residential, commercial and hospitality projects to meet market demand. Approximately 86% of residential and commercialour real estate projects.is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf of Mexico.

We believe our present capital structure, liquidity position and our land holdings provide us with numerousyears of opportunities to increase recurring revenue and create long-term value for our shareholders by allowing usshareholders. We intend to focus on our core business activity of real estate development, asset management and operations.

Our strategic plan includes making investments We continue to develop a broad range of asset types that we believe will contribute towards increasing ourprovide acceptable rates of return, grow recurring revenues and support future profitability. Our 2020 capital expenditure budget exceeds our actual 2019 expenditures due to initiated projects moving into construction and the expected initiationbusiness. Capital

22

Table of new projects. We anticipate that future capital Contents

commitments will be funded through newwith cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements, cash on hand, cash equivalents and cash generated from operations.arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject to delays caused by factors beyond our control. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that we will see the full benefit of these investments during 2020.may delay revenue and profits.

Our real estate investment strategy focuses on projects that meet our long-term investmentrisk-adjusted return criteria. Our practice is to only incur such expenditures when our analysis indicates that a project will generate a return equal to or greater than the threshold return over its life.

2022 highlights include:

●As of December 31, 2022, our unconsolidated Latitude Margaritaville Watersound JV has completed 363 home sale transactions of the total estimated 3,500 homes in the community and had 677 homes under contract. This represents 1,040 home contracts in the first nineteen months of the JV’s sales.
●In December 2022, we acquired The Pearl Hotel, located on Scenic Highway 30A, which was previously operated by our hospitality segment.
●In November 2022, our unconsolidated JV, FDSJ Eventide, LLC, (the “Sea Sound JV”), sold its assets to a third party. Our proportionate share of the gain on sale of $21.7 million is included within equity in income (loss) from unconsolidated joint ventures on the consolidated statements of income.
●In November 2022, we purchased an additional 30.0% ownership interest in the consolidated Pier Park North JV.

Market Conditions

Throughout 2022, we continued to generate positive financial results. While macroeconomic factors such as inflation, rising interest rates, supply chain disruptions, geopolitical conflicts and the continuing recovery from the COVID-19 pandemic, among other things, have created economic headwinds and impacted buyer sentiment, demand across our segments remains strong. We believe this is primarily the result of the continued growth of Northwest Florida, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities, as well as the evolving flexibility in the workplace.

Despite the strong demand across our segments, we also continue to feel the impact from the aforementioned macroeconomic factors, including supply chain disruptions which have extended homesite and home deliveries in certain residential communities, and inflation and rising interests rates, which have increased operating costs and loan rates, as compared to prior periods. However, despite homesite and home delivery delays, we generally have not seen a material increase in cancellation rates, and therefore the impact relates primarily to the timing of revenue recognition. In addition, while rising interest rates have negatively impacted buyers’ ability to obtain financing and the housing market generally, homebuilders have performed on their contractual obligations with us.

Given our diverse portfolio of residential holdings, the mix of sales and pricing from different communities may also impact revenue and margins period over period, as discussed in more detail below.

Further discussion of the potential impacts on our business from the current macroeconomic environment are discussed in Part I. Item 1A. Risk Factors.

Reportable Segments

AsWe conduct primarily all of December 31, 2019, we haveour business in the following four operatingthree reportable segments: 1) residential, real estate, 2) hospitality and 3) commercial leasing and sales and 4) forestry. Commencing in the fourth quarter of 2018, our previously titled “resorts and leisure” segment was retitled “hospitality,” with no effect on the consolidated balance sheets, statements of income, statements of comprehensive income or statements of cash flows for the periods presented.

commercial.

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Table of Contents

The following table sets forth the relative contribution of these operatingreportable segments to our consolidated operating revenue:

 

 

 

 

 

 

 

 

 

 

    

 

Year Ended December 31, 

 

 

 

 

2019

    

2018

    

2017

 

Segment Operating Revenue

 

 

  

 

  

 

  

 

Residential real estate (a)

 

 

32.7

%  

39.2

%  

22.2

%  

Hospitality

 

 

36.0

%  

35.9

%  

54.3

%  

Commercial leasing and sales

 

 

17.7

%  

14.9

%  

14.5

%  

Forestry

 

 

12.9

%  

7.4

%  

8.5

%  

Other (b)

 

 

0.7

%  

2.6

%  

0.5

%  

Consolidated operating revenue

 

 

100.0

%  

100.0

%  

100.0

%  

​

​

​

​

​

​

​

​

​

​

    

​

Year Ended December 31, 

 

​

​

​

2022

    

2021

    

2020

​

Segment Operating Revenue

 

​

  

 

  

 

  

​

Residential

 

​

36.8

%  

54.3

%  

46.3

%  

Hospitality

 

​

38.6

%  

27.9

%  

29.5

%  

Commercial

 

​

23.5

%  

17.1

%  

23.1

%  

Other

 

​

1.1

%  

0.7

%  

1.1

%  

Consolidated operating revenue

 

​

100.0

%  

100.0

%  

100.0

%  

​

(a)

Includes revenue of $23.1 million in 2018 for a one-time receipt of RiverTown impact fees related to the 2014 RiverTown transaction. See Note 19. RiverTown Impact Fees included in Item 15 of this Form 10‑K for further discussion.

(b)

Other includes mitigation bank credit sales and title fee revenue. For 2018, other includes revenue of $2.2 million related to a specific sale of mitigation bank credits.

For more information regarding our operatingreportable segments, see Note 21. 19. Segment Information included in Item 15 of this Form 10‑K.10-K.

Residential Real EstateSegment

Our residential real estate segment typically plans and develops residential communities of various sizes across a wide range of price points and sells homesites to buildershomebuilders or retail consumers. Our residential real estate segment also evaluates opportunities to enter into JV agreements for specific communities such as Latitude Margaritaville Watersound. Below is

Our residential segment includes the Watersound Origins, Watersound Origins West, Watersound Camp Creek, Breakfast Point East, Titus Park, Ward Creek, College Station, Park Place, Salt Creek at Mexico Beach, WindMark Beach and SouthWood communities, which are large scale, multi-phase communities with current development activity, sales activity or future phases. Homesites in these communities are developed based on market demand and sold primarily to homebuilders and on a descriptionlimited basis to retail customers.

The East Lake Creek, East Lake Powell, Lake Powell, Teachee, West Bay Creek and West Laird communities have phases of some of our major residential developmenthomesites in preliminary planning. Homesites in these communities in Northwest Florida that we are inwill be developed based on market demand and sold primarily to homebuilders and on a limited basis to retail customers.

The SummerCamp Beach community has homesites available for sale and along with the process of planning or developing.RiverCamps community, both have additional lands for future development.

The Latitude Margaritaville Watersound community is a planned 55+ active adult residential community in Bay County, Florida. The community is located near the Gulf Intracoastal Waterway with convenient access to the Northwest Florida Beaches International Airport. The community is being developed as athrough our unconsolidated Latitude Margaritaville Watersound JV with our partner Minto Communities USA, a homebuilder and community developer. This JV is unconsolidateddeveloper, and is accounted for under the equity method of accounting. Phase one is estimated to include approximately 3,500 residential homes, which will be developed in smaller increments of discrete neighborhoods. The sales center is currently under construction.

The WaterColor community is a residential community located in South Walton County, Florida. We are currently in the planning and engineering process for the final residential phase of this community.

The Camp Creek community is a proposed residential community located in Watersound, Florida. The community is adjacent to the Camp Creek Golf Club and is proposed to be developed in multiple phases. We are currently in the planning and engineering process for Phase one of this community.

The Watersound Origins community is a large scale, mixed use community in Watersound, Florida with direct access to Lake Powell. As of December 31, 2019, 676 homesites were fully developed, of which 500 have sold. Currently 465 homesites are under site development, which will be completed in phases. As of December 31, 2019, 539 homesites were under contract.

The Breakfast Point community is a residential community in Panama City Beach, Florida, and2022, the Breakfast Point East community is a proposed residential community in Bay County, Florida, adjacent to and east of the Breakfast Point community. Combined, Breakfast Point has received governmental approvals for 2,129 single family homesites and 440 multi-family units. As of December 31, 2019, 369 homesites were fully developed and sold. Engineering is currently in process on a new phase of 80 homesites.

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Table of Contents

The Titus Park community is a new residential community located in north Bay County, Florida. The residential community is proposed to be developed in multiple phases. Currently site development is in process for 154 homesites. As of December 31, 2019, the 154 homesites were under contract.

The College Station community is a new residential community located in Bay County, Florida. The residential community is proposed to be developed in multiple phases. Currently site development is in process for 92 homesites. As of December 31, 2019, 41 homesites were under contract.

The Park Place community is a new residential community located in the City of Callaway in Bay County, Florida. This residential community is proposed to be developed in multiple phases. Currently site development is in process for 103 homesites in Phase one of the Park Place community. As of December 31, 2019, 51 homesites were under contract.

The Mexico Beach Village residential community is a proposed mixed use community located in the City of Mexico Beach in east Bay County, Florida. The residential component of this community is proposed to be developed in multiple phases. Planning and design are currently in process for this community.

The WindMark Beach community is a residential community in Port St. Joe, Florida. The community has received governmental approvals for 1,516 residential homesites. To date, 262 homesites were fully developed and sold. Currently, 56 homesites are under site development, all of which are under contract. Planning and engineering is in process for a new phase of homesites.

The SouthWood community is a large scale, mixed use community located in Tallahassee, Florida. The community has received governmental approvals for 4,770 residential homesites, which includes 2,074 single family and 2,696 multi-family. To date, 2,766 homesites have sold. Currently engineering is in process for 55 homesites and 20 homesites are under site development. As of December 31, 2019, 87 homesites were under contract.

We have other residential communities, such as SummerCamp Beach and RiverCamps that have homesites available for sale or lands for future development. In addition, we have residential communities, such as WaterSound Beach, WaterSound West Beach and Wild Heron that are substantially developed, with homesites in these communities available for sale.

The Bay-Walton Sector Plan is a long term master plan that originally included 110,500 acres of our land with entitlements, or legal rights, to develop over 170,000 residential dwelling units, over 22 million square feet of retail, commercial, and industrial space and over 3,000 hotel rooms. We anticipate a wide range of residential, commercial and hospitality uses on these land holdings. We are utilizing some of the entitlements from the Bay-Walton Sector Plan with the commencement of construction of the sales center for theunconsolidated Latitude Margaritaville Watersound community, engineeringJV had 677 homes under contract, which are expected to result in a sales value of approximately $338.5 million at closing of the Camp Creekhomes. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

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Table of Contents

The residential communityhomesite pipeline by community/project are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential Homesite Pipeline (a)

​

​

​

​

​

Platted or

​

​

​

Additional

​

​

​

​

​

​

​

Under

​

Engineering or

​

Entitlements with

​

​

Community/Project

​

Location

​

​

Development

​

Permitting

​

Concept Plan

​

Total

Breakfast Point East (b)

​

Bay County, FL

​

​

201

​

266

​

104

​

571

College Station

​

Bay County, FL

​

​

—

​

58

​

265

​

323

East Lake Creek (b)

​

Bay County, FL

​

​

—

​

—

​

200

​

200

East Lake Powell (c)

​

Bay County, FL

​

​

—

​

—

​

360

​

360

Lake Powell (d)

​

Bay County, FL

​

​

—

​

—

​

1,352

​

1,352

Latitude Margaritaville Watersound (d) (e)

​

Bay County, FL

​

​

869

​

687

​

1,581

​

3,137

Salt Creek at Mexico Beach (b)

​

Bay County, FL

​

​

—

​

92

​

275

​

367

Salt Creek at Mexico Beach Townhomes (b)

​

Bay County, FL

​

​

42

​

36

​

82

​

160

Park Place

​

Bay County, FL

​

​

82

​

—

​

191

​

273

RiverCamps (c)

​

Bay County, FL

​

​

—

​

—

​

149

​

149

SouthWood (f)

​

Leon County, FL

​

​

20

​

180

​

920

​

1,120

SummerCamp Beach (b)

​

Franklin County, FL

​

​

35

​

—

​

273

​

308

Teachee (d)

​

Bay County, FL

​

​

—

​

—

​

1,750

​

1,750

Titus Park

​

Bay County, FL

​

​

240

​

144

​

560

​

944

Ward Creek (d)

​

Bay County, FL

​

​

567

​

316

​

601

​

1,484

Watersound Camp Creek (f)

​

Walton County, FL

​

​

104

​

—

​

—

​

104

Watersound Origins (f)

​

Walton County, FL

​

​

569

​

—

​

—

​

569

Watersound Origins West (d)

​

Walton County, FL

​

​

83

​

234

​

1,694

​

2,011

West Bay Creek (d)

​

Bay County, FL

​

​

—

​

—

​

5,250

​

5,250

West Laird (d)

​

Bay County, FL

​

​

—

​

1,068

​

1,117

​

2,185

WindMark Beach (f)

​

Gulf County, FL

​

​

128

​

549

​

317

​

994

Total Homesites

​

​

​

​

2,940

​

3,630

​

17,041

​

23,611

(a)The number of homesites are preliminary and are subject to change. Includes homesites platted or currently in concept planning, engineering, permitting or development. We have significant additional entitlements for future residential homesites on our land holdings.
(b)Planned Unit Development (“PUD”).
(c)Development Agreement (“DA”).
(d)Detailed Specific Area Plan (“DSAP”).
(e)The unconsolidated Latitude Margaritaville Watersound JV is building and selling homes in this community.
(f)Development of Regional Impact (“DRI”).

​

In addition to the communities listed above, we have a number of other residential project concepts in various stages of planning and ongoing development of the Watersound Origins community.evaluation.

As of December 31, 2019,2022, we had 930eighteen different homebuilders within our residential communities. As of December 31, 2022, we had 2,197 residential homesites under contract, which are expected to result in revenue of approximately $84.3$176.3 million, plus residuals, at closing of the homesites which are expected over the next several years. AsBy comparison, as of December 31, 20182021, we had 6842,000 residential homesites under contract, which arewith an expected to result in revenue of approximately $67.9$158.9 million, ($9.0 million has been realized through December 31, 2019).plus residuals. The increase in homesites under contract is due to the development of additional homesites and increased builderhomebuilder contracts for residential homesites. The number of homesites under contract are subject to change based on final plattinghomesite closings and homebuilder interest in each community. Homesite prices vary significantly by community and sell in sporadic transactions that may impact quarterly results. As of each community.December 31, 2022, in addition to the 2,197 homesites under contract in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 677 homes under contract, which together with the 2,197 homesites are expected to result in a sales value of approximately $514.8 million at closing of the homesites and homes.

Hospitality Segment

Our hospitality segment features a private membership club (“The Clubs by JOE”(the “Watersound Club”), hotel operations, food and beverage operations, golf courses, beach clubs, retail outlets, gulf-front vacation rentals, management services, marinas

25

Table of Contents

and other entertainment assets. The hospitality segment generates revenue and incurs costs from membership sales, membership reservations, golf courses, the WaterColor Inn and WaterSound Inn,lodging at our hotels, short-term vacation rentals, management of The Pearl Hotel (prior to acquisition in December 2022), food and beverage operations, merchandise sales, marina operations, charter flights, other resort and entertainment activities and beach clubs, which includes operation of the WaterColor Beach Club. Hospitality revenue is generally recognized at the point in time services are provided and represent a single performance obligation with a fixed

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Table of Contents

transaction price. Hospitality revenue recognized over time includes non-refundable club membership initiation fees, club membership dues, management fees and other membership fees. From time to time, we may explore the sale of certain hospitality properties, the development of new hospitality properties, as well as new entertainment and management fees.opportunities. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 10. Debt, Net included in Item 15 of this Form 10-K.

The Clubs by JOE

The Clubs by JOEWatersound Club provides club members and guests in some of our hotels access to our member facilities, which include the Camp Creek, Golf Club, Shark’s Tooth Golfgolf course, WaterSound Beach Club and the WaterSound Beach Club. The Clubs by JOEa Pilatus PC-12 NG aircraft (“N850J”). Watersound Club offers different types of club memberships, each with different access rights and associated fee structures. Watersound Club is focused on creating a world classan outstanding membership experience combined with the luxurious aspects of a destination resort. Club operations include our golf courses, beach club and facilities that generate revenue from membership sales, membership reservations, daily play at the golf courses, merchandise sales, charter flights and food and beverage sales and incur expenses from the services provided, maintenance of the golf courses, aircraft, beach club and facilities and personnel costs. Below isWatersound Origins includes an executive golf course, resort-style pool, fitness center, two tennis courts and a description of some of our club properties, which areprivate dock located in Northwest Florida.the community. Access to amenities is reserved to Watersound Origins members consisting of the community residents. The golf course is available for public play.

WaterSound Beach Club. The WaterSound BeachWatersound Club is The Clubs by JOE’shas a private beach club located in Watersound, Florida,on Scenic Highway 30A, which includes over one mile of Gulf of Mexico frontage, two resort-style pools, two restaurants, three bars, kid’s room and a recreation area.

Shark’s Tooth Golf Club. Shark’s Tooth includes an 18-hole golf course, a full club house, a pro shop, tennis center with four har-tru courts, as well as two food and beverage operations. In addition to the golf course, a The Clubs by JOE tennis center is located in the Wild Heron community.

outlets. Camp Creek Golf Club. Camp Creek includesis an 18-hole golf course and a pro shop with a snack bar. This championship course is located in Watersound, Florida. In the fourth quarter of 2019, we commenced construction on asoon will feature several new hotel and clubamenities. These amenities adjacent to the Camp Creek golf course. Plans include an upscale, 75-room boutique inn near the highly desirable Scenic Highway 30-A corridor that we will operate. Amenities will include a health and wellness center, two restaurants, a tennis center,and pickle ball courts,center, a resort-style pool complex with separate adult pool, a golf teaching academy, pro shop and multi-sportsmulti-sport fields. Once complete, these amenities will be available to The Clubs by JOE members and guests at our hotels.

Watersound Origins. Watersound Origins includes a six-hole golf course, resort-style pool, fitness center, two tennis courts, private lake dock and a café located in the community. Access to amenities are reserved to Watersound Origins members consisting of the community residents. The golf course is available for public play.

SouthWood Golf Club. During 2018, we sold the SouthWood Golf Club, as well as the SouthWood House and cottages.

Hotel Operations, Food and Beverage Operations, Short-Term Vacation Rentals and Other Management Services

We own and operate the award-winning WaterColor Inn, which(which includes the Fish Out of Water (“FOOW”) restaurant,restaurant) and The Pearl Hotel (which includes the Havana Beach Bar & Grill restaurant), as well as the Hilton Garden Inn Panama City Airport, the Homewood Suites by Hilton Panama City Beach, the WaterSound Inn and two gulf-front vacation rental houses. We own and operate retail and commercial outlets near our hospitality facilities. We also operate the award-winning The Pearl Hotel and Havana Beach Bar & Grill restaurant and the WaterColor Beach Club, which includes food and beverage operations and other hospitality related activities, such as beach chair rentals.

Revenue is generated from (1) the WaterColor Inn, WaterSound Inn and(i) lodging at our hotels, (ii) operation of the WaterColor Beach Club, (2)(iii) management of The Pearl Hotel (3)(prior to December 2022), (iv) short-term vacation rentals, and (4)(v) food and beverage operations. The WaterColor Inn, WaterSound Innoperations and (vi) merchandise sales. Lodging at our hotels and operation of the WaterColor Beach Club generate revenue from service and/or daily rental fees and incur expenses from the cost of services and goods provided, maintenance of the facilities and personnel costs. Revenue generated from our management services include management fees. Management servicesfees and expenses consist primarily of internal administrative costs. In December 2017, we soldLodging at our vacation rental management business. Following the December 2017 sale, we no longer manage third party vacation rentals, but continue to manage rental properties we own. Hotel operationshotels and short-term vacation rentals generate revenue from rental fees and incurexpenses from the holding cost of assets we own and standard lodging personnel, such as front desk, reservations and marketing personnel. Our food and beverage operations generate revenue from food and beverage sales and incur expenses from the cost of services and goods provided and standard personnel costs.

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Table of Contents

Embassy Suites hotel. In the third quarter of 2019 we, along with Key International, Inc., commenced construction of an Embassy Suites hotel in the Pier Park area of Panama City Beach, Florida. The hotel is planned to feature 255 guest suites, a pool, meeting space, a fitness center, an on-site restaurant and an upper-level, gulf-view social and event space with catering. Once complete, we will manage the day-to-day operations of this hotel.

Hilton Garden Inn. In the fourth quarter of 2019, we commenced construction of a Hilton Garden Inn brand hotel near the Northwest Florida Beaches International Airport. This hotel is planned to feature 143 guest rooms, meeting space and a full-service restaurant.

Sky Zone. In November 2019, we entered into a franchise agreement to own, construct and operate an approximately 25,000 square feet Sky Zone trampoline park near the Pier Park lifestyle center in Panama City Beach, Florida. Planning is in process for this project.

The Powder Room. In the fourth quarter of 2019, we commenced construction of The Powder Room Shooting Range and Training Center (“The Powder Room”) in Panama City Beach, Florida. The facility is planned to be approximately 17,000 square feet and include 14 shooting lanes and a retail store, as well as training and educational space. Once complete, we will manage the day-to-day operations.

Retail Outlets

We own and operate retail outlets near our hospitality facilities that include the WaterColor store and four additional retail outlets. Our retail outlets generate revenue from merchandise sales which are recognized at the point of sale and incur expenses from the cost of goods provided, personnel costs and facility costs.

MarinasWe are in the process of constructing an Embassy Suites by Hilton hotel, with our JV partner, in the Pier Park area of Panama City Beach, Florida; the waterfront Hotel Indigo in Panama City, Florida’s downtown waterfront district; a Home2 Suites by Hilton hotel in Santa Rosa Beach, Florida; The Lodge 30A, with our JV partner, a boutique hotel on Scenic Highway 30A in Seagrove Beach, Florida; and an upscale boutique inn located adjacent to the Camp Creek golf course near the highly desirable Scenic Highway 30A corridor. Once complete, we intend to manage the day-to-day operations of these hotels. We are also in the process of constructing a Residence Inn by Marriott, with our JV partner, in Panama City Beach, Florida. Once complete, the hotel will be operated by our JV partner.

26

Table of Contents

Our hotel portfolio by property is as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

Rooms (a)

​

​

Location

​

Completed

​

Planned

​

Total

Operational

​

​

​

​

​

​

​

​

WaterColor Inn (b)

​

Walton County, FL

​

67

​

—

​

67

The Pearl Hotel (c)

​

Walton County, FL

​

55

​

—

​

55

WaterSound Inn

​

Walton County, FL

​

11

​

—

​

11

Hilton Garden Inn Panama City Airport (d)

​

Bay County, FL

​

143

​

—

​

143

Homewood Suites by Hilton Panama City Beach (e)

​

Bay County, FL

​

131

​

—

​

131

TownePlace Suites by Marriott Panama City Beach Pier Park (f)

​

Bay County, FL

​

124

​

—

​

124

Total operational rooms

​

​

​

531

​

—

​

531

​

​

​

​

​

​

​

​

​

Under Development/Construction

​

​

​

​

​

​

​

​

Embassy Suites by Hilton Panama City Beach (g)

​

Bay County, FL

​

—

​

255

​

255

Hotel Indigo

​

Bay County, FL

​

—

​

124

​

124

Residence Inn by Marriott, Panama City Beach, Florida (h)

​

Bay County, FL

​

—

​

121

​

121

Home2 Suites by Hilton Santa Rosa Beach

​

Walton County, FL

​

—

​

107

​

107

The Lodge 30A (g)

​

Walton County, FL

​

—

​

85

​

85

Camp Creek Inn

​

Walton County, FL

​

—

​

75

​

75

Total rooms under development/construction

​

​

​

—

​

767

​

767

Total rooms

​

​

​

531

​

767

​

1,298

(a)Includes hotels currently in operation or under development and construction. We have significant additional entitlements for future hotel projects on our land holdings.
(b)Seven additional suites were completed in June 2022.
(c)We acquired the hotel in December 2022. The hotel was previously owned by a third party, but operated by our hospitality segment.
(d)The hotel opened in July 2021.
(e)The hotel opened in March 2022.
(f)The hotel is operated by our JV partner. The Pier Park TPS JV is unconsolidated and is accounted for under the equity method of accounting, which is included within our commercial segment.
(g)Under development with JV partners.
(h)The hotel is under development with our JV partner. Once complete, the hotel will be operated by our JV partner. The Pier Park RI JV (Pier Park RI, LLC, the “Pier Park RI JV”) is unconsolidated and is accounted for under the equity method of accounting, which is included within our commercial segment.

We own and operate two marinas, in Northwest Florida consisting of the Point South Marina Bay Point in Bay County, Florida and Point South Marina and Port St. Joe Marina.in Gulf County, Florida. We are planning new marinas along the Intracoastal Waterway. Our marinas generate revenue from boat slip rentals, boat storage fees and fuel sales, and incur expenses from cost of services provided, maintenance of the marina facilities and personnel costs. SubsequentThe Point South Marina Bay Point fully reopened in the third quarter of 2022 and the Point South Marina Port St. Joe reopened in the fourth quarter of 2022 after completion of reconstruction due to damage from Hurricane Michael.

We also own and operate retail stores, two standalone restaurants and other entertainment assets. These assets generate revenue from merchandise sales, food and beverage sales and other service fees which are recognized at the point of sale and incur expenses from the cost of goods and services provided, personnel costs and facility costs.

In addition to the landfallproperties listed above, we have a number of Hurricane Michael on October 10, 2018, the marinas remain closed due to significant damage requiring long-term restoration, which is currently underway. We maintain property and business interruption insurance on the impacted marina assets. See Note 7. Hurricane Michael includedhospitality projects in Item 15various stages of this Form 10-K for additional information.

From time to time, we may explore the sale of certain hospitality properties, the development of new hospitality properties, as well as new entertainment and management opportunities.planning.

Commercial Leasing and SalesSegment

Our commercial leasing and sales segment includes construction and leasing of multi-family, retail, office and commercial property, cell towersmulti-family, senior living, self-storage and other assets, an assisted living community, as well asassets. The commercial segment also oversees the planning, development, entitlement, management and sale of our commercial and rural land holdings for a variety of uses. These uses, includeincluding a broad range of retail, office, hotel, assisted-living,senior living, multi-family, self-storage and industrial properties. The commercial leasing and sales segment’s portfolio of leasable properties continues to expand and diversify. We are in the process of constructing 361 apartment units, in addition to the 216 that have recently been completed, and 107 assisted living/memory care units. We provide development opportunities for national, regional and local retailers and other strategic partners in Northwest Florida. We own and manage retail shopping centers and develop

27

Table of Contents

commercial parcels. We are currently developing the Watersound Town Center in Walton County, Florida and Watersound West Bay Center in Bay County, Florida. These lifestyle centers are complementary to our Watersound Origins and Latitude Margaritaville Watersound residential communities. In conjunction with FSU and TMH, we are also in the process of developing an 87-acre medical campus in Bay County, Florida. We also have large land holdings near the Pier Park retail center, adjacent to the Northwest Florida Beaches International Airport, near or within business districts in the region and along major roadways. We also lease land for various other uses.

OurThe commercial leasingsegment also manages our timber holdings in Northwest Florida which includes growing and salesselling pulpwood, sawtimber and other products. As of December 31, 2022, we had an estimated 1.9 million tons of marketable pulpwood and 3.0 million tons of marketable sawlogs on approximately 64,000 acres. Based on our annual harvest plan, we anticipate harvesting approximately 260,000 tons of pulpwood and sawlogs during 2023.

The commercial segment generates leasing revenue and incurs leasing expenses primarily from maintenance and management of our properties, personnel costs and asset holding costs. Our commercial leasing and sales segment also generates revenue from the sale of developed and undeveloped land, timber holdings or land with limited development andand/or entitlements and the sale of commercial operating properties. Real estate sales in our commercial leasing and sales segment incur costs of revenue directly associated with the land, development, construction, timber and selling costs. Our commercial segment generates timber revenue primarily from open market sales of timber on site without the associated delivery costs. Some of

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Table of Contents

our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 12. 10. Debt,Netincluded in Item 15 of this Form 10-K.

Below is a listingThe commercial segment’s portfolio of someleasable properties continues to expand and diversify. Through wholly-owned subsidiaries and consolidated and unconsolidated JVs we are in the process of our commercial leasingconstructing 371 multi-family units and sales properties.148 senior living units, in addition to the 757 multi-family units and 107 senior living units that have been completed.

Pier Park North. Our Pier Park North JV owns a retail centerTotal units and percentage leased for multi-family and senior living communities by location are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

​

December 31, 2021

​

​

December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

Percentage

​

​

​

​

​

​

Percentage

​

​

​

​

​

​

Percentage

​

​

​

​

​

​

​

​

​

​

​

Leased

​

​

​

​

​

​

Leased

​

​

​

​

​

​

Leased

​

​

​

​

  

Units

  

Units

​

Units

​

of Units

​

​

Units

​

Units

​

of Units

​

​

Units

​

Units

​

of Units

​

​

​

Location

​

Planned

​

Completed

​

Leased

​

Completed

​

​

Completed

​

Leased

​

Completed

​

​

Completed

​

Leased

​

Completed

​

Multi-family

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pier Park Crossings

​

Bay County, FL

​

240

​

240

​

228

​

95

%

​

240

​

234

​

98

%

​

240

​

237

​

99

%

Pier Park Crossings Phase II

​

Bay County, FL

​

120

​

120

​

115

​

96

%

​

120

​

113

​

94

%

​

120

​

55

​

46

%

Watersound Origins Crossings (a)

​

Walton County, FL

​

217

​

217

​

199

​

92

%

​

217

​

207

​

95

%

​

18

​

—

​

0

%

Sea Sound (b)

​

Bay County, FL

​

N/A

​

N/A

​

N/A

​

N/A

%

​

214

​

203

​

95

%

​

—

​

—

​

N/A

%

North Bay Landing (c)

​

Bay County, FL

​

240

​

120

​

94

​

78

%

​

—

​

—

​

N/A

%

​

—

​

—

​

N/A

%

Mexico Beach Crossings (d)

​

Bay County, FL

​

216

​

—

​

—

​

N/A

%

​

—

​

—

​

N/A

%

​

—

​

—

​

N/A

%

Origins Crossings Townhomes (e)

​

Walton County, FL

​

64

​

48

​

33

​

69

%

​

—

​

—

​

N/A

%

​

—

​

—

​

N/A

%

WindMark Beach (f)

​

Gulf County, FL

​

31

​

12

​

10

​

83

%

​

31

​

31

​

100

%

​

19

​

19

​

100

%

Total multi-family units

​

1,128

​

757

​

679

​

90

%

​

822

​

788

​

96

%

​

397

​

311

​

78%

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Senior living communities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Watercrest

​

Walton County, FL

​

107

​

107

​

88

​

82

%

​

107

​

47

​

44

%

​

107

​

—

​

N/A

%

Watersound Fountains (g)

​

Walton County, FL

​

148

​

—

​

—

​

N/A

%

​

—

​

—

​

N/A

%

​

—

​

—

​

N/A

%

Total senior living units

​

255

​

107

​

88

​

82

%

​

107

​

47

​

44

%

​

107

​

—

​

0

%

Total units

​

1,383

​

864

​

767

​

89

%

​

929

​

835

​

90

%

​

504

​

311

​

62

%

(a)Construction was completed in the fourth quarter of 2021.
(b)Construction of the 300-unit multi-family community was completed in the first quarter of 2022. In November 2022, the Sea Sound JV sold its assets to a third party. The Sea Sound JV is unconsolidated and is accounted for under the equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

28

Table of approximately 330,000 square feet in Panama City Beach, Florida, of which approximately 10,000 square feet remains to be constructed. As of December 31, 2019, Pier Park North JV had 320,310 leasable square feet, of which 95.4% were under lease.Contents

(c)Construction began in the fourth quarter of 2020 and is ongoing.
(d)Construction began in the first quarter of 2022 and is ongoing.
(e)Vertical construction began in the third quarter of 2021 and is ongoing.
(f)The years ended December 31, 2021 and 2020 include 19 units for short-term lease in a vacation rental program. As of December 31, 2022, we were in the process of converting these 19 units for long-term rental use and they were not available for lease.
(g)Construction began in the second quarter of 2021 and is ongoing. The Watersound Fountains Independent Living JV is unconsolidated and is accounted for under the equity method of accounting.

​

Pier Park Crossings. Pier Park Crossings, is beingwhich was developed in two phases, with a total ofincludes 360 completed apartment units in Panama City Beach, Florida. In April 2017, we formedWatersound Origins Crossings includes 217 completed apartment units adjacent to the Pier Park CrossingsWatersound Town Center. Sea Sound, our unconsolidated Sea Sound JV, to develop, manage and lease the initial 240-unit phase of apartments, which is nearing completion. As of December 31, 2019, we hadincluded 300 completed 216apartment units all of which were under lease. In October 2019, we formed the Pier Park Crossings Phase II apartments JV (“Pier Park Crossings Phase II JV”) to develop, manage and lease an additional 120-unit phase, which is currently under construction.

Pier Park Northwest. Pier Park Northwest is entitled for hospitality and commercial uses. In the fall of 2017, we entered into a JV (the “Pier Park TPS JV”) with InterMountain Management, LLC, to construct and manage a TownePlace Suites by Marriott. Construction began in the fourth quarter of 2018 on the 124 room TownePlace Suites and is now nearing completion. The Pier Park TPS JV is unconsolidated and is accounted for under the equity method of accounting. Additionally, we are designing a new multi-tenant commercial building to be constructed, owned and operated by us on a separate portion of this site.

Beckrich Office Park. Beckrich Office Park in Panama City Beach, Florida isnear the Breakfast Point residential community, prior to being expanded to include a third office building that, combined withsold by the two original office buildings, will offer over 100,000 square feet of leasable Class A office space.JV in November 2022. The two existing office buildings include over 67,000 leasable square feet, of which 100.0% were under lease as of December 31, 2019. In December 2019, we alsoWindMark Beach community includes 12 completed construction of a building for a Starbucks at the Beckrich Office Park, for which we have a long term lease. A portion of the third office building will be occupied as our corporate headquarters.

VentureCrossings. VentureCrossings is a commerciallong-term rental units and industrial development adjacent to the Northwest Florida Beaches International Airport. We are soliciting global office, retail and industrial users for this prime development location where we own over 300,000 square feet of manufacturing and office space. Approximately 244,000 square feet of manufacturing and office space are currently under long-term leases. We completed construction of a new 60,000 square foot flex space building in December of 2019, which is available for lease.

Watersound Origins Crossings. In May 2019, we formed the Watersound Origins Crossings JV to develop, manage and lease apartments in Watersound, Florida, which is adjacent to the Watersound Origins Town Center. We are working together, with our JV partner, to develop a 217 unit apartment community, which is currently under construction.

Watersound Origins Town Center. The Watersound Origins Town Center is entitled for approximately 330,000 square feet of retail and entertainment space, as well as approximately 127,000 square feet of office space. In August 2018, we entered into an agreement with Sacred Heart Health Systems to construct and lease an approximately 6,500 square foot healthcare facility. The facility is currently under construction. Additionally, we have begun construction on a new multi-tenant commercial building and are19 units in the early planning phasesprocess of other commercial buildings.

Topsail West. Topsail West is entitled for approximately 61,000 square feet of retail and entertainment spacebeing converted from short-term to long-term rental units in Port St. Joe, Florida. Watercrest includes 107 completed senior living units in Santa Rosa Beach, Florida. In April 2019,addition, we entered into an agreement to constructhave three multi-family communities and lease a build-to-suit restaurant buildingone senior living community under construction. North Bay Landing, planned for First Watch: The Daytime Café. The building240 apartment units, with 120 units completed as of December 31, 2022, is currently under construction.

Watercrest Santa Rosa Beach Assisted Living and Memory Care. In May 2019, we formed a JV (the “Watercrest JV”) to develop and operate a new assisted living and memory care community in Santa Rosa Beach, Florida, which will

34

Table of Contents

be located near Topsail West. The JV parties are working together to develop the 107-unit community, which is currently under construction.

Nautilus North. Nautilus North, located in Panama City, Florida. Mexico Beach Florida,Crossings, planned for 216 apartment units, is located in Mexico Beach, Florida. Origins Crossings Townhomes, planned for 64 units, with 48 units completed as of December 31, 2022, is located near the Watersound Town Center. Watersound Fountains, an unconsolidated JV (WOSL, LLC, the “Watersound Fountains Independent Living JV”), planned for 148 independent living units, is located near the Watersound Origins residential community. We have additional multi-family communities in various stages of planning.

Our leasing portfolio consists of approximately 1,034,000 square feet of leasable space for mixed-use, retail, industrial, office, self-storage and medical uses. This includes our consolidated Pier Park North JV. Through separate unconsolidated JVs, other commercial properties include a commercial development which was platted into seven commercial parcels. In July 2019, we formed a124-room TownePlace Suites by Marriott operated by our JV (the “Busy Beepartner (Pier Park TPS, LLC, the “Pier Park TPS JV”) to develop and operate, a Busy Bee branded fuel station and convenience store thatoperated by our JV partner (SJBB, LLC, the “Busy Bee JV”) and a golf cart sales and service facility, which is currently under construction on two parcels at Nautilus North. The Busy Bee JV is unconsolidated and is accounted for under(SJECC, LLC, the equity method of accounting.

North Glades/Breakfast Point Bank Building. In April 2019, we entered into an agreement with Capital City Bank to construct and lease a full-service banking location“Electric Cart Watersound JV”), all located in Panama City Beach, Florida.

The bank building is currentlytotal net rentable square feet and percentage leased of leasing properties are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

​

December 31, 2021

​

​

December 31, 2020

 

​

    

​

    

Net

    

​

    

​

Net

    

​

​

​

Net

    

​

 

​

​

​

​

Rentable

​

​

​

​

Rentable

​

​

​

​

Rentable

​

​

 

​

​

​

​

Square

​

Percentage

​

​

Square

​

Percentage

​

​

Square

​

Percentage

 

​

​

Location

​

Feet*

​

Leased

​

​

Feet*

​

Leased

​

​

Feet*

​

Leased

 

Pier Park North

 

Bay County, FL

 

320,310

 

97

%  

​

320,310

 

95

%  

​

320,310

 

92

%  

VentureCrossings

 

Bay County, FL

 

303,605

 

96

%  

​

303,605

 

88

%  

​

303,605

 

86

%  

Watersound Town Center (a)

​

Walton County, FL

​

89,662

​

99

%  

​

24,764

​

100

%  

​

6,496

​

100

%  

Beckrich Office Park (b) (c)

 

Bay County, FL

 

78,294

 

99

%  

​

81,065

 

85

%  

​

86,296

 

80

%  

Watersound Self-Storage (d)

​

Walton County, FL

​

67,694

​

87

%  

​

67,694

​

50

%  

​

N/A

​

N/A

%  

WindMark Beach Town Center (b) (e)

 

Gulf County, FL

 

44,748

 

71

%  

​

44,748

 

67

%  

​

44,748

 

47

%  

WaterColor Town Center (b)

 

Walton County, FL

 

22,199

 

100

%  

​

22,199

 

100

%  

​

23,121

 

79

%  

Cedar Grove Commerce Park

​

Bay County, FL

​

19,389

​

100

%  

​

19,389

​

100

%  

​

19,449

​

90

%  

Port St. Joe Commercial

 

Gulf County, FL

 

16,964

 

100

%  

​

16,964

 

100

%  

​

16,964

 

100

%  

Beach Commerce Park (b)

 

Bay County, FL

 

14,800

 

100

%  

​

14,800

 

100

%  

​

17,450

 

76

%  

South Walton Commerce Park (f)

​

Walton County, FL

​

11,570

​

100

%

​

11,570

​

88

%

​

11,570

​

88

%  

WaterSound Gatehouse (b)

 

Walton County, FL

 

10,271

 

100

%  

​

10,271

 

100

%  

​

10,271

 

87

%  

Other (g)

​

Bay, Gulf and Walton Counties, FL

​

34,224

​

100

%  

​

34,224

​

100

%  

​

34,224

​

100

%  

SummerCamp Commercial (h)

 

Franklin County, FL

 

N/A

 

N/A

%  

​

13,000

 

0

%  

​

13,000

 

0

%  

​

 

  

 

1,033,730

 

95

%  

​

984,603

 

87

%  

​

907,504

 

85

%

*Net Rentable Square Feet is designated as the current square feet available for lease as specified in the applicable lease agreements plus management’s estimate of space available for lease based on construction drawings.
(a)Construction of additional leasing space was completed in 2022.
(b)In addition to net rentable square feet there is also space that we occupy or that serves as common area.
(c)Included in net rentable square feet as of December 31, 2022, 2021 and 2020, is 1,500 square feet leased to a consolidated JV.

29

Table of Contents

(d)Construction was completed in the third quarter of 2021.
(e)Included in net rentable square feet as of December 31, 2022, 2021 and 2020, is 13,808 square feet of unfinished space.
(f)Included in net rentable square feet as of December 31, 2022, 2021 and 2020, is 1,364 square feet leased to a consolidated JV.
(g)Includes various other properties, each with less than 10,000 net rentable square feet.
(h)As of December 31, 2022, the space is no longer available for lease. The property was impaired in 2011 and has no basis as of December 31, 2022 and 2021.

​

We have commercial projects under construction.

Port St. Joe Bank Building. In December 2019, we entered into an agreement with Capital City Bank to constructdevelopment and lease a full-service banking locationconstruction as detailed in Port St. Joe, Florida. The bank building is currently under construction.

the table below. In addition to thethese properties, listed above, a flex space building of approximately 19,000 square feet is under construction at Cedar Grove Commerce Park in Panama City, Florida and a flex space building of approximately 10,000 square feet is under construction at Beach Commerce Park in Panama City Beach, Florida. We alsowe have a number of projectsother commercial buildings in various stages of planning, including additional commercial buildings, apartments, assisted living/memory care communities, a grocery store and a self-storage facility.planning.

Forestry

Our forestry segment focuses on the management of our timber holdings in Northwest Florida and generates revenue primarily from open market sales of timber on site without the associated delivery costs. We grow and sell pulpwood, sawtimber and other forest products. As of December 31, 2019, we had approximately 113,000 acres in our forestry segment and expect to have the ability to consistently operate approximately 64,000 of those acres.

As of December 31, 2019, we had an estimated 2.6 million tons of marketable pulpwood and 3.3 million tons of marketable sawlogs on approximately 64,000 acres. Our ability to operate the remaining acreage is limited by geographic restrictions, (e.g., lakes and wetlands that do not yield enough timber to make it cost effective to operate in those areas, land set aside for mitigation banks and certain regulatory restrictions). Based on our annual harvest plan, we anticipate harvesting approximately 305,000 tons of pulpwood and sawlogs during 2020.

We may sell our timber holdings, undeveloped land or land with limited development and easements. Some parcels include the benefits of limited development activity including improved roads, ponds and fencing. We have traditionally sold parcels of varying sizes ranging from less than one acre to thousands of acres. The pricing of these parcels varies significantly based on size, location, terrain, timber quality and other local factors. Costs incurred as part of a sale of these lands may include the cost of timber, land, minimal development costs and selling costs. We also lease land within the forestry segment for hunting and other uses.

35

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

​

Location

​

Completed Net Rentable Square Feet

​

Percentage Leased

​

​

Square Feet Under Construction

​

Additional Planned Square Feet

​

Total Square Feet*

Watersound Town Center

​

Walton County, FL

​

89,662

​

99

%  

​

50,768

​

259,570

​

400,000

Watersound West Bay Center

​

Bay County, FL

​

—

​

N/A

%  

​

—

​

500,000

​

500,000

FSU/TMH Medical Campus

​

Bay County, FL

​

—

​

N/A

%  

​

80,300

​

239,700

​

320,000

​

​

​

​

89,662

​

99

%  

​

131,068

​

999,270

​

1,220,000

*Total square feet are based on current estimates and are subject to change.

Table of Contents​

Results of Operations

Consolidated Results

Revenue and expenses. The following table sets forth a comparison of the results of our operations:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

​

​

In millions

Revenue:

 

​

  

 

​

  

 

​

  

Real estate revenue

​

$

109.2

​

$

158.6

​

$

87.6

Hospitality revenue

​

 

97.2

​

 

75.3

​

 

47.8

Leasing revenue

​

 

39.2

​

 

27.1

​

 

18.8

Timber revenue

​

 

6.7

​

 

6.0

​

 

6.3

Total revenue

​

 

252.3

​

 

267.0

​

 

160.5

Expenses:

​

 

  

​

 

  

​

 

  

Cost of real estate revenue

​

 

50.0

​

 

60.7

​

 

35.8

Cost of hospitality revenue

​

 

77.5

​

 

58.3

​

 

35.2

Cost of leasing revenue

​

 

17.6

​

 

11.6

​

 

5.9

Cost of timber revenue

​

 

0.8

​

 

0.7

​

 

0.8

Corporate and other operating expenses

​

 

22.1

​

 

23.0

​

 

22.9

Depreciation, depletion and amortization

​

 

22.9

​

 

18.2

​

 

12.8

Total expenses

​

 

190.9

​

 

172.5

​

 

113.4

Operating income

​

 

61.4

​

 

94.5

​

 

47.1

Other income (expense):

​

 

  

​

 

  

​

 

  

Investment income, net

​

 

9.9

​

 

7.2

​

 

5.0

Interest expense

​

 

(18.4)

​

 

(15.9)

​

 

(13.6)

Gain on contributions to unconsolidated joint ventures

​

 

2.7

​

 

3.6

​

 

20.0

Equity in income (loss) from unconsolidated joint ventures

​

​

26.0

​

​

(0.9)

​

​

(0.6)

Other income, net

​

 

13.0

​

 

10.2

​

 

1.3

Total other income, net

​

 

33.2

​

 

4.2

​

 

12.1

Income before income taxes

​

 

94.6

​

 

98.7

​

 

59.2

Income tax expense

​

 

(24.4)

​

 

(25.0)

​

 

(13.7)

Net income

​

$

70.2

​

$

73.7

​

$

45.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

 

 

In millions

Revenue:

 

 

  

 

 

  

 

 

  

Real estate revenue

 

$

61.5

 

$

52.2

 

$

27.7

Hospitality revenue

 

 

46.1

 

 

38.8

 

 

53.2

Leasing revenue

 

 

15.6

 

 

13.7

 

 

12.9

Timber revenue

 

 

3.9

 

 

5.6

 

 

6.2

Total revenue

 

 

127.1

 

 

110.3

 

 

100.0

Expenses:

 

 

  

 

 

  

 

 

  

Cost of real estate revenue

 

 

24.3

 

 

13.4

 

 

15.4

Cost of hospitality revenue

 

 

34.5

 

 

32.5

 

 

46.5

Cost of leasing revenue

 

 

4.7

 

 

4.7

 

 

4.5

Cost of timber revenue

 

 

0.6

 

 

0.7

 

 

0.8

Other operating and corporate expenses

 

 

21.4

 

 

20.6

 

 

20.4

Depreciation, depletion and amortization

 

 

10.3

 

 

9.0

 

 

8.9

Total expenses

 

 

95.8

 

 

80.9

 

 

96.5

Operating income

 

 

31.3

 

 

29.4

 

 

3.5

Other income (expense):

 

 

  

 

 

  

 

 

  

Investment income, net

 

 

10.7

 

 

12.2

 

 

35.4

Interest expense

 

 

(12.3)

 

 

(11.8)

 

 

(12.2)

Sale of vacation rental management, net

 

 

 —

 

 

 —

 

 

9.8

Other income, net

 

 

6.5

 

 

1.1

 

 

4.8

Total other income, net

 

 

4.9

 

 

1.5

 

 

37.8

Income before equity in loss from unconsolidated affiliates and income taxes

 

 

36.2

 

 

30.9

 

 

41.3

Equity in loss from unconsolidated affiliates

 

 

(0.1)

 

 

 —

 

 

 —

Income tax (expense) benefit

 

 

(9.4)

 

 

0.7

 

 

17.9

Net income

 

$

26.7

 

$

31.6

 

$

59.2

30

Table of Contents

​

Results of operations in this Form 10-K generally discusses 20192022 and 20182021 items and comparisons. For a detailed discussion of results of operations and comparisons for 20182021 and 2017, please2020, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s Annual Report onour Form 10‑K for the year ended December 31, 20182021 filed with the SEC on February 27, 2019.23, 2022.

36

Table of Contents

Real Estate Revenue and Gross Profit

The following table sets forth a comparison of our total consolidated real estate revenue and gross profit for the three years ended December 31, 2019:profit:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

​

2022

    

% (a)

    

2021

    

% (a)

    

2020

    

% (a)

​

​

​

​

Dollars in millions

 

Revenue:

​

 

​

  

 

  

 

​

  

 

  

 

​

  

 

  

​

Residential real estate revenue

​

​

$

92.8

 

85.0

%  

$

144.7

 

91.2

%  

$

74.1

 

84.6

%

Commercial and rural real estate revenue

​

​

 

13.7

 

12.5

%  

 

12.0

 

7.6

%  

 

11.7

 

13.4

%

Other revenue

​

​

 

2.7

 

2.5

%  

 

1.9

 

1.2

%  

 

1.8

 

2.0

%

Real estate revenue

​

​

$

109.2

 

100.0

%  

$

158.6

 

100.0

%  

$

87.6

 

100.0

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross profit:

​

​

 

  

 

  

​

 

  

 

  

​

 

  

 

  

​

Residential real estate

​

​

$

48.7

 

52.5

%  

$

87.9

 

60.7

%  

$

44.4

 

59.9

%

Commercial and rural real estate

​

​

 

9.7

 

70.8

%  

 

9.5

 

79.2

%  

 

6.2

 

53.0

%

Other

​

​

 

0.8

 

29.6

%  

 

0.5

 

26.3

%  

 

1.2

 

66.7

%

Gross profit

​

​

$

59.2

 

54.2

%  

$

97.9

 

61.7

%  

$

51.8

 

59.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

    

% (1)

    

2018

    

% (1)

    

2017

    

% (1)

 

 

 

Dollars in millions

 

Revenue:

 

 

  

 

  

 

 

  

 

  

 

 

  

 

  

 

Residential real estate revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate revenue

 

$

41.1

 

66.8

%  

$

19.7

 

37.7

%  

$

21.6

 

78.0

%

RiverTown impact fees

 

 

 —

 

 —

%

 

23.1

 

44.3

%

 

 —

 

 —

%

Total residential real estate revenue

 

 

41.1

 

66.8

%

 

42.8

 

82.0

%

 

21.6

 

78.0

%

Commercial real estate revenue

 

 

7.8

 

12.7

%  

 

4.8

 

9.2

%  

 

3.9

 

14.1

%

Rural land and other revenue

 

 

12.6

 

20.5

%  

 

4.6

 

8.8

%  

 

2.2

 

7.9

%

Real estate revenue

 

$

61.5

 

100.0

%  

$

52.2

 

100.0

%  

$

27.7

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

  

 

  

 

 

  

 

  

 

 

  

 

  

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

$

21.1

 

51.3

%  

$

9.9

 

50.3

%  

$

9.1

 

42.1

%

RiverTown impact fees

 

 

 —

 

 —

%

 

23.1

 

100.0

%

 

 —

 

 —

%

Total residential real estate

 

 

21.1

 

51.3

%

 

33.0

 

77.1

%

 

9.1

 

42.1

%

Commercial real estate

 

 

3.9

 

50.0

%  

 

1.7

 

35.4

%  

 

1.1

 

28.2

%

Rural land and other

 

 

12.2

 

96.8

%  

 

4.1

 

89.1

%  

 

2.1

 

95.5

%

Gross profit

 

$

37.2

 

60.5

%  

$

38.8

 

74.3

%  

$

12.3

 

44.4

%

(a)

(1)

Calculated percentage of total real estate revenue and the respective gross margin percentage.

Residential Real Estate Revenue and Gross Profit. During 2019, total2022, residential real estate revenue decreased $1.7$51.9 million, or 4.0%35.9%, to $41.1$92.8 million, as compared to $42.8$144.7 million during 2018 and totalin 2021. During 2022, residential real estate gross profit decreased $11.9$39.2 million, to $21.1$48.7 million (or gross margin of 51.3%52.5%), as compared to $33.0$87.9 million, (or gross margin of 77.1%60.7%) during 2018. Included in 2021. During 2022, we sold 752 homesites and had unimproved residential real estate revenue for 2018 is $23.1land sales of $1.1 million, for a one-time receipt of RiverTown impact fees related to the 2014 RiverTown transaction, resulting in a gross profit margin of 100.0%. See Note 19. RiverTown Impact Fees included in Item 15 of this Form 10‑K for further discussion. Excluding the one-time receipt of the RiverTown impact fees, 2019 residential real estate revenue would have increased $21.4 million, or 108.6%, to $41.1 million, as compared to $19.7804 homesites, two homes and had unimproved residential land sales of $0.1 million during 2018,2021. During 2022 and residential real estate gross profit would have increased $11.2 million, or 113.1%, to $21.1 million, (or gross margin of 51.3%), as compared to $9.9 million, (or gross margin of 50.3%), during 2018. During 2019, we2021 the average revenue, excluding homesite residuals, per homesite sold 379 homesites compared to 202 homesites during 2018.

The number of homesites sold varied each periodwas approximately $98,000 and $157,000, respectively, due to the timingmix of builder contractual closing obligations and the timing of development of completed homesites in our residentialsales from different communities. The revenue, and gross profit and margin for each period was impacted by the volume of sales within each of the communities, the difference in pricing among the communities and the difference in the cost of the homesite development. The number of homesites sold varied in each period due to the timing of homebuilder contractual closing obligations in our residential communities and the extended timing of development of completed homesites.

Commercial and Rural Real Estate Revenue and Gross Profit. During 2019,2022, we had eleventwenty-nine commercial and rural real estate sales totaling approximately 107283 acres for $7.8$12.7 million and land improvement services of $1.0 million, together resulting in a gross profit of $9.7 million (or gross margin of 70.8%). During 2021, we had twenty-two commercial and rural real estate sales totaling approximately 577 acres for $12.0 million, resulting in a gross profit of $9.5 million (or gross margin of 50.0%, of this amount approximately 28 acres totaling $4.3 million in revenue were sold in the SouthWood community79.2%). During 2018, we had fourteen commercial real estate sales totaling approximately 330 acres for $4.8 million resulting in a gross profit margin of 35.4%. Commercial real estate revenue for 2018 included $2.6 million related to the sale of two hospitality properties located in the SouthWood community, including the golf course. Revenue from commercial and rural real estate can vary significantly from period to periodperiod-to-period depending on the proximity to developed areas and mix of commercial real estate sold in each period, with varying compositions of retail, office, industrial and other commercial uses.

37

Table of Contents

Rural Land and Other Revenue and Gross Profit. During 2019, we sold approximately 1,498 acres of rural and timber land for $11.7 million and mitigation bank credits for $0.9 million, resulting in a gross profit margin of approximately 96.8%. Rural land sales for 2019 included $9.9 million related to non-strategic land located in Leon County, Florida, with a gross profit of $9.7 million due to a low historical basis. During 2018, we sold approximately 181 acres of rural and timber land for $1.8 million and mitigation bank credits for $2.8 million, resulting in a gross profit margin of approximately 89.1%. Revenue from rural land can vary significantly from period to period.

Our gross margin can vary significantly from period to periodperiod-to-period depending on the characteristics of the property sold. Sales of rural and timber land typically have a lower cost basis than residential and commercial real estate sales. In addition, our cost basis in residential and commercial real estate can vary depending on the amount of development or other costs spentincurred on the property.

For additional information see the Segment Results sections for Residential Real Estate,  Commercial Leasing31

Table of Contents

Other Revenue. Other revenue primarily consists of mitigation bank credit sales and Sales and Forestry.title insurance business revenue.

Hospitality Revenue and Gross Profit

​

​

​

​

​

​

​

​

​

​

​

​

 

Year Ended December 31, 

 

​

​

2022

    

2021

    

2020

​

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

 

 

In millions

​

​

In millions

Hospitality revenue

 

$

46.1

 

$

38.8

 

$

53.2

 

​

$

97.2

​

$

75.3

​

$

47.8

​

Gross profit

 

$

11.6

 

$

6.3

 

$

6.7

 

​

$

19.7

​

$

17.0

​

$

12.6

​

Gross margin

 

 

25.2

%  

 

16.2

%  

 

12.6

%

​

 

20.3

%  

 

22.6

%  

 

26.4

%

​

Hospitality revenue increased $7.3$21.9 million, or 18.8%29.1%, to $97.2 million during 2019,2022, as compared to 2018. During 2019 the$75.3 million in 2021. The increase in hospitality revenue is primarily due to an in increase in club membership revenue, the re-opening of the FOOW restaurant in June 2018, the opening of the WaterColor store in January 2019 as well as other new retail outlets during 2019, the opening of the Camp WaterColor food and beverage operation in March 2019 and the opening of an additional dining option at the Watersound Beach Club in May 2019. The increases were partially offset by decreases in room revenue for the WaterColor Inn from lower occupancy related to the WaterColor Beach Club being closed during a portion of 2019 for renovations, golf revenuewas primarily related to the sale of the SouthWood Golf Club in the third quarter of 2018 and the impact of Hurricane Michael on the marinas. We offer different typescontinued increase of club memberships, each with different access rightsmembers, as well as an increase in lodging revenue from the Hilton Garden Inn Panama City Airport, which opened in July 2021, the Homewood Suites by Hilton Panama City Beach, which opened in March 2022 and associated fee structures.new WaterColor Inn suites, which opened in June 2022. The increase in hospitality revenue was also due to the opening of a new retail store, standalone restaurants and marinas. As of December 31, 2019, the Clubs by JOE2022, Watersound Club had 1,2742,604 members, compared with 9882,255 members as of December 31, 2018. Hospitality had a gross margin2021, an increase of 349 members. Gross profit during 20192021 includes $0.7 million of 25.2% compared to 16.2% during 2018. The increase is primarily related to the increase in the number of members and membership revenue, business interruption insurance proceeds received for the marinas related to Hurricane MichaelMichael.

Hospitality had a gross margin of 20.3% during 2022, compared to 22.6% during 2021. The decrease in gross margin was due to increased pre-opening expenses and changesonboarding of staff associated with new assets that opened in business strategy, such as new retail opportunities, additional food2022 and beverage operations, concept changesassets scheduled to existing foodopen in 2023, and beverage operationsan increase in cost of labor and products in the salecurrent period. In 2021, gross margin was impacted by the $0.7 million of the SouthWood Gulf Club. Excluding the business interruption proceeds received for the marinas during 2019, our hospitality gross margin was 22.3% during 2019, as compared to 16.2% during 2018. The increase is primarily related to the increase in the number of members and membership revenue and the changes in business strategy as detailed above. In December 2017, we sold our short term vacation rental management business, which reduced our 2019 and 2018 revenue.received.

Leasing Revenue and Gross Profit

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

 

​

​

2022

    

2021

    

2020

​

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

 

 

In millions

 

​

​

In millions

​

Leasing revenue

 

$

15.6

 

$

13.7

 

$

12.9

 

​

$

39.2

​

$

27.1

​

$

18.8

​

Gross profit

 

$

10.9

 

$

9.0

 

$

8.4

 

​

$

21.6

​

$

15.5

​

$

12.9

​

Gross margin

 

 

69.9

%  

 

65.7

%  

 

65.1

%

​

 

55.1

%  

 

57.2

%  

 

68.6

%

​

Leasing revenue increased $1.9$12.1 million, or 13.9%44.6%, to $39.2 million during 2019,2022, as compared to 2018.$27.1 million in 2021. The increase iswas primarily due to new multi-family and senior living leases, at properties such as Beckrich Office Park, Pier Park Crossings apartmentswell as other new leases.

Leasing gross margin decreased to 55.1% during 2022, as compared to 57.2% during 2021, primarily due to start-up and WaterColor Crossings.lease-up expenses for new assets in the current period.

Timber Revenue and Gross Profit

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

 

​

 

2022

    

2021

    

2020

​

​

​

In millions

​

Timber revenue

​

$

6.7

​

$

6.0

​

$

6.3

​

Gross profit

​

$

5.9

​

$

5.3

​

$

5.5

​

Gross margin

​

 

88.1

%  

 

88.3

%  

 

87.3

%

​

Timber revenue increased $0.7 million, or 11.7%, to $6.7 million during 2022, as compared to $6.0 million in 2021. The increase iswas primarily due to an increase in prices and the sales mix of different wood products, partially offset by a decrease in leasing revenue related tosales of fill dirt and other products in the marinas which, subsequent to the landfallcurrent period. There were 275,000 tons of

38

Table of Contents

Hurricane Michael on October 10, 2018, remain closed. Cost of leasing revenue remained essentially flat for 2019 and 2018, which resulted in an increase to gross margin for the period.

Timber Revenue and Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

 

2019

    

2018

    

2017

 

 

 

In millions

 

Timber revenue

 

$

3.9

 

$

5.6

 

$

6.2

 

Gross profit

 

$

3.3

 

$

4.9

 

$

5.4

 

Gross margin

 

 

84.6

%  

 

87.5

%  

 

87.1

%

Timber revenue decreased $1.7 million, or 30.4%, wood products sold during 2019,2022, as compared to 2018.273,000 tons of wood products sold during 2021. Timber gross margin was 88.1% during 2022, compared to 88.3% during 2021.

32

Table of Contents

Corporate and Other Operating Expenses

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

​

​

In millions

Employee costs

​

$

9.6

​

$

10.4

​

$

9.6

Property taxes and insurance

​

 

5.5

​

 

5.4

​

 

5.3

Professional fees

​

 

3.7

​

 

3.2

​

 

4.7

Marketing and owner association costs

​

 

1.1

​

 

1.6

​

 

1.2

Occupancy, repairs and maintenance

​

 

0.7

​

 

0.7

​

 

0.7

Other miscellaneous

​

 

1.5

​

 

1.7

​

 

1.4

Total corporate and other operating expenses

​

$

22.1

​

$

23.0

​

$

22.9

​

Corporate and other operating expenses decreased $0.9 million to $22.1 million during 2022, as compared to $23.0 million in 2021. The decrease is primarily due to a decreasethe $1.2 million of expense during 2021 to 401(k) plan participants related to the final allocation of surplus assets from the pension plan termination in the amount of tons sold, along with price decreases and product mix changes caused by Hurricane Michael’s significant market impact since landfall in October 2018. There were 220,000 tons sold during 2019, as compared to 328,000 tons sold during 2018. Gross margin decreased during 2019 to 84.6%, as compared to 87.5% during the same period in 2018, primarily due to decreases in sales price and volume changes in product mix.

Other Operating and Corporate Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

 

 

In millions

Employee costs

 

$

7.8

 

$

7.3

 

$

6.9

401(k) contribution

 

 

1.1

 

 

1.1

 

 

1.2

Non-cash stock compensation costs

 

 

0.1

 

 

0.1

 

 

0.1

Property taxes and insurance

 

 

5.0

 

 

4.9

 

 

5.2

Professional fees

 

 

4.0

 

 

3.5

 

 

2.9

Marketing and owner association costs

 

 

1.2

 

 

1.2

 

 

1.5

Occupancy, repairs and maintenance

 

 

0.8

 

 

0.9

 

 

0.6

Other miscellaneous

 

 

1.4

 

 

1.6

 

 

2.0

Total other operating and corporate expenses

 

$

21.4

 

$

20.6

 

$

20.4

Other operating and corporate expenses increased $0.8 million during 2019, as compared to 2018. The increase in employee costs of $0.5 million was due to an average of 55 full-time employees during 2019, compared to an average of 47 full-time employees during 2018. The increase of $0.5 million in professional fees was due to increased operations and transactions during 2019.2014.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization expense increased $1.3$4.7 million during 2019,2022, as compared to 2018,2021, primarily due to new assets constructionhospitality and equipmentcommercial assets placed in service.

Investment Income, Net

Investment income, net primarily includes (i) interest and dividends earned (ii)and accretion of the net discount (iii)(ii) net realized gain or loss from the sale of our available-for-sale investments and equity securities, less other-than-temporary impairment loss, (iv) unrealized gain or loss related to investments – equity securities, (v)(iii) interest income earned on the time deposit held by a special purpose entity and (vi)(iv) interest earned on mortgage notes receivable and other receivables as detailed in the table below:

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

​

​

In millions

Interest, dividend and accretion income

​

$

0.8

​

$

0.1

​

$

1.2

Unrealized loss on investments, net

​

​

—

​

​

(1.9)

​

​

(4.7)

Interest income from investments in special purpose entities

​

 

8.0

​

 

8.1

​

 

8.2

Interest earned on notes receivable and other interest

​

 

1.1

​

 

0.9

​

 

0.3

Total investment income, net

​

$

9.9

​

$

7.2

​

$

5.0

39

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

 

 

In millions

Interest and dividend income

 

$

7.3

 

$

9.1

 

$

16.4

Accretion income

 

 

0.1

 

 

0.7

 

 

2.0

Net realized gain (loss) on the sale of investments

 

 

0.1

 

 

(1.0)

 

 

10.7

Other-than-temporary impairment loss

 

 

 —

 

 

(2.3)

 

 

(2.3)

Unrealized loss on investments, net

 

 

(5.3)

 

 

(3.0)

 

 

 —

Interest income from investments in SPEs

 

 

8.2

 

 

8.2

 

 

8.2

Interest accrued on notes receivable and other interest

 

 

0.3

 

 

0.5

 

 

0.4

Total investment income, net

 

$

10.7

 

$

12.2

 

$

35.4

​

Investment income, net decreased $1.5increased $2.7 million to $10.7$9.9 million for 2019,during 2022, as compared to $12.2$7.2 million for 2018. The decrease in interest and dividend income and accretion income for 2019, as compared to the same period in 2018, is primarily due to a reduction in investments held during the period. The decrease in investments during the period is primarily related to the repurchase of common stock during 2019 and 2018 under the Stock Repurchase Program and increased capital expenditures. See Note 16. Stockholders’ Equity included in Item 15 of this Form 10-K for additional information regarding common stock repurchases related to the Stock Repurchase Program.2021. Investment income, net for 2019 includes the sale of certain corporate debt securities, preferred stock and common stock at a net realized gain of $0.1 million, offset by anduring 2022 included de minimis unrealized loss of $5.3 millionon investments, net related to preferred stock. Investment income, net for 2018 includes a net realized loss on the sale of certain corporate debt securities of $1.0stock, compared to $1.9 million an other-than-temporary impairment loss of $2.3 million related to corporate debt securities and an unrealized loss of $3.0 million related to preferred stock.in 2021.

Interest Expense

Interest expense primarily includes interest incurred on our Community Development District (“CDD”) debt, the Senior Notes issued by Northwest Florida Timber Finance, LLC, project financing, Community Development District (“CDD”) debt and finance leases, as well as amortization of debt discount and premium and debt issuance costs as detailed in the table below:

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

​

​

In millions

Interest expense and amortization of discount and issuance costs for Senior Notes issued by special purpose entity

​

$

8.8

​

$

8.8

​

$

8.8

Other interest expense

​

 

9.6

​

 

7.1

​

 

4.8

Total interest expense

​

$

18.4

​

$

15.9

​

$

13.6

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

 

 

In millions

Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE

 

$

8.8

 

$

8.8

 

$

8.8

Other interest expense

 

 

3.5

 

 

3.0

 

 

3.4

Total interest expense

 

$

12.3

 

$

11.8

 

$

12.2

33

Table of Contents

​

Interest expense increased $0.5$2.5 million, or 4.2%15.7%, to $18.4 million in 2019,2022, as compared to 2018,$15.9 million in 2021, primarily related to the increase in project financing.financing and higher interest rates. See Note 12. 10. Debt, Net included in Item 15 of this Form 10-K for additional information regarding project financing.

SaleGain on Contributions to Unconsolidated Joint Ventures

Gain on contributions to unconsolidated joint ventures includes gain on land, impact fees and additional infrastructure improvements contributed to our unconsolidated JVs as detailed in the table below. See Note 4. Joint Ventures included in Item 15 of Vacation Rental Management, netthis Form 10-K for additional information.

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

​

​

In millions

Latitude Margaritaville Watersound JV (a)

​

$

0.9

​

$

0.5

​

$

15.7

Sea Sound JV (b)

​

​

—

​

​

—

​

​

4.3

Watersound Fountains Independent Living JV (c)

​

​

—

​

​

3.1

​

​

—

Pier Park RI JV (d)

​

​

1.4

​

​

—

​

​

—

Electric Cart Watersound JV (e)

​

​

0.4

​

​

—

​

​

—

Gain on Contributions to Unconsolidated Joint Ventures

​

$

2.7

​

$

3.6

​

$

20.0

(a)Includes a gain of $0.9 million and $0.5 million in 2022 and 2021, respectively, on additional infrastructure improvements contributed. Includes a gain of $15.7 million in 2020 on land and additional infrastructure improvements contributed.
(b)Includes a gain of $4.3 million in 2020 on land and mitigation credits contributed.
(c)Includes a gain of $3.1 million in 2021 on land contributed.
(d)Includes a gain of $1.4 million in 2022 on land and impact fees contributed.
(e)Includes a gain of $0.4 million in 2022 on land contributed.

Equity in Income (Loss) from Unconsolidated Joint Ventures

In December 2017, we entered into and consummated an Asset Purchase Agreement (the “PCR Purchase Agreement”) with PCR Rentals LLC, (“PCR”)Equity in income (loss) from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated joint ventures accounted for by the saleequity method. See Note 4. Joint Ventures included in Item 15 of our short term vacation rental management business (the “PCR Rentals Sale”). In December 2017, we completed the sale to PCRthis Form 10-K for approximately $9.9 million, which resulted in a net gain of $9.8 million.additional information.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

​

2022

​

2021

​

2020

​

​

​

In millions

Equity in income (loss) from unconsolidated joint ventures

​

​

​

​

​

​

​

​

​

​

Latitude Margaritaville Watersound JV (a)

​

​

$

3.9

​

$

(1.9)

​

$

(0.5)

Sea Sound JV (b)

​

​

​

21.7

​

​

—

​

​

—

Watersound Fountains Independent Living JV (c)

​

​

​

(0.2)

​

​

—

​

​

—

Pier Park TPS JV

​

​

​

—

​

​

0.6

​

​

(0.1)

Busy Bee JV

​

​

​

0.5

​

​

0.4

​

​

—

Electric Cart Watersound JV (d)

​

​

​

—

​

​

—

​

​

—

Watersound Management JV (e)

​

​

​

0.1

​

​

—

​

​

—

Total equity in income (loss) from unconsolidated joint ventures

​

​

$

26.0

​

$

(0.9)

​

$

(0.6)

(a)The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021.
(b)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. The year ended December 31, 2022, includes our proportionate share of the gain on sale of $21.7 million.
(c)JV was formed in April 2021.
(d)JV was formed in February 2022.

4034

Table of Contents

(e)JV was formed in June 2021.

Other Income, Net

Other income, net primarily includes gain on land contributions, income from our retained interest investments, gain on insurance recovery,recoveries, loss from hurricane damage and other income and expense items as detailed in the table below:

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

2019

    

2018

    

2017

 

In millions

Gain on land contribution

 

$

2.3

 

$

 —

 

$

 —

​

​

In millions

Accretion income from retained interest investments

 

 

1.4

 

 

1.2

 

 

1.1

​

$

1.7

​

$

1.5

​

$

1.4

Gain on insurance recovery

 

 

5.3

 

 

7.2

 

 

 —

Gain on insurance recoveries

​

​

9.8

​

​

4.9

​

​

0.7

Loss from hurricane damage

 

 

(2.7)

 

 

(8.6)

 

 

 —

​

​

—

​

​

(0.1)

​

​

(1.1)

Miscellaneous income, net

 

 

0.2

 

 

1.3

 

 

3.7

​

 

1.5

​

 

3.9

​

 

0.3

Other income, net

 

$

6.5

 

$

1.1

 

$

4.8

​

$

13.0

​

$

10.2

​

$

1.3

​

Other income, net increased $5.4$2.8 million to $13.0 million during 2019,2022, as compared to 2018. Other income, net includes$10.2 million in 2021. The years ended December 31, 2022 and 2021 include a gain on insurance recovery related to Hurricane Michael of $5.3$9.7 million and $7.2$4.9 million, during 2019respectively, and 2018, respectively. The gain on insurance recovery was partially offset by a loss from hurricane damage of $2.7 million and $8.6less than $0.1 million during 2019 and 2018, respectively. The $8.6 million loss from hurricane damage during 2018 includes $7.3 million for loss on disposal of assets related to damage and $1.3 million of hurricane expenseseach period, related to Hurricane Michael. In November 2022, we 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 gain on retained interest investment. Miscellaneous income, net during 2022 and 2021 includes $2.6 million and $0.9 million, respectively, received from the Pier Park CDD for repayment of subordinated notes, which have been fully repaid. Miscellaneous income, net during 2022 also includes expense 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 2021 includes $3.6 million 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 18. Other Income, Net included in Item 15 of this Form 10-K for additional information. Other income, net during 2019 also includes a gain of $0.8 million on land contributed to our unconsolidated Busy Bee JV and a gain of $1.5 million on land contributed to our unconsolidated Pier Park TPS JV. See Note 4. Real Estate Joint Venturesincluded in Item 15 of this Form 10-K for additional information. Miscellaneous income, net during 2018 primarily includes $2.2 million of income related to the final distribution from our unconsolidated JV ALP Liquidating Trust (“ALP”), offset by $0.6 million for a homeowners’ association settlement related to one of our residential communities.information.

Income Tax (Expense) BenefitExpense

The Tax Act was enacted on December 22, 2017, changing many aspects of U.S. corporate income taxation including reducing the U.S. federal corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. We recognized the tax effects of the Tax Act during the year ended December 31, 2017, which included a $33.5 million benefit from the reassessment of net deferred tax balances to reflect the newly enacted tax rate.

Our incomeIncome tax expense was $24.4 million in 2019 was $9.4 million,2022, compared to an income tax benefit of $0.7$25.0 million in 2018.2021. Our effective tax rate was 26.1%25.6% in 2019,2022, as compared to (2.3%)25.1% in 2018.2021.

Our effective rate for 20192022 differed from the federal statutory rate of 21.0% primarily due to state income taxes. Our effective rate for 2021 differed from the federal statutory rate of 21.0% primarily due to state income taxes, the change in valuation allowance, the changes in the 2021 Florida corporate income tax rate from 5.5%4.5% to 4.458%3.5%, tax credits, the benefit recognized for certain investments in QOZs,of QOZ investment and other permanent differences. Our effective rateitems. See Note 13. Income Taxes included in Item 15 of this Form 10-K for 2018 differed from the federal statutory rate of 21.0% in part due to state income taxes and other permanent differences, but largely due to a decrease in our valuation allowance, a decrease in our uncertain tax positions and the 2018 renewal of the Qualified Timber Gain preferential rate retroactively applied to our tax year 2017. In future periods, we expect that our effective rate will be closer to the statutory rate adjusted for state taxes and other permanent differences.

additional information.

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Table of Contents

Segment Results

Residential Real Estate

The table below sets forth the consolidated results of operations of our residential real estate segment:

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

2019

    

2018

    

2017

 

In millions

​

​

In millions

Revenue:

 

 

  

 

 

  

 

 

  

 

​

  

 

​

  

 

​

  

Real estate revenue

 

$

37.0

 

$

17.7

 

$

19.6

​

$

85.1

​

$

137.8

​

$

69.4

Hospitality revenue

 

 

0.5

 

 

0.4

 

 

0.5

Leasing revenue

​

​

0.1

​

​

0.2

​

​

0.2

Other revenue

 

 

4.1

 

 

25.1

 

 

2.1

​

 

7.7

​

 

6.9

​

 

4.6

Total revenue

 

 

41.6

 

 

43.2

 

 

22.2

​

 

92.9

​

 

144.9

​

 

74.2

Expenses:

 

 

  

 

 

  

 

 

  

​

 

  

​

 

  

​

 

  

Cost of real estate and other revenue

 

 

19.9

 

 

9.8

 

 

12.5

​

 

44.1

​

 

56.8

​

 

29.8

Cost of hospitality revenue

 

 

0.6

 

 

0.4

 

 

0.5

Other operating expenses

 

 

4.9

 

 

4.7

 

 

4.3

​

 

4.0

​

 

4.9

​

 

5.3

Depreciation and amortization

 

 

0.3

 

 

0.3

 

 

0.4

Depreciation, depletion and amortization

​

 

0.2

​

 

0.2

​

 

0.2

Total expenses

 

 

25.7

 

 

15.2

 

 

17.7

​

 

48.3

​

 

61.9

​

 

35.3

Operating income

 

 

15.9

 

 

28.0

 

 

4.5

​

 

44.6

​

 

83.0

​

 

38.9

Other income (expense):

 

 

  

 

 

  

 

 

  

​

 

  

​

 

  

​

 

  

Investment income, net

 

 

0.1

 

 

0.2

 

 

0.1

​

​

1.1

​

​

0.8

​

​

0.2

Interest expense

 

 

(0.7)

 

 

(0.8)

 

 

(1.2)

​

 

(0.5)

​

 

(0.6)

​

 

(0.6)

Gain on contributions to unconsolidated joint ventures

​

​

0.9

​

​

0.5

​

​

15.7

Equity in income (loss) from unconsolidated joint ventures

​

​

3.9

​

​

(1.9)

​

​

(0.5)

Other (expense) income, net

 

 

(0.2)

 

 

(0.5)

 

 

0.2

​

 

(0.5)

​

 

0.1

​

 

—

Total other expense, net

 

 

(0.8)

 

 

(1.1)

 

 

(0.9)

Income before equity in loss from unconsolidated affiliates and income taxes

 

$

15.1

 

$

26.9

 

$

3.6

Total other income (expense), net

​

 

4.9

​

 

(1.1)

​

 

14.8

Income before income taxes

​

$

49.5

​

$

81.9

​

$

53.7

​

Real estate revenue includes sales of homesites, homes and other residential land and certain homesite residuals from homebuilder sales that provide us a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold. HospitalityLeasing revenue includes somelong-term leases of our short-term vacation rentals.residential assets. Other revenue includes tap and impact fee credits sold and marketing fees. Certain homesite residuals and other revenue related to homebuilder homesite sales are recognized in revenue at the point in time of the closing of the sale. Other revenue for 2018 includes $23.1 million for a one-time receipt of RiverTown impact fees related to the 2014 RiverTown transaction. See Note 19. RiverTown Impact Fees included in Item 15 of this Form 10‑K for further discussion. For 20192022 and 2018,2021, real estate revenue includes estimated homesite residuals of $2.5$5.8 million and $1.0$4.8 million, respectively. For 20192022 and 2018,2021, other revenue includes certain estimated fees related to homebuilder homesite sales of $2.3$1.9 million and $1.0$2.4 million, respectively. The estimated homesite residuals and other estimated fees related to homebuilder homesite sales increased in 2019, compared to 2018, due to an increase in the volume of homesite sales. Prior to 2018, these homesite residuals and fees were recognized in revenue when consideration was received by us in periods subsequent to the initial recognition of revenue for the sale of the homesite. Cost of real estate revenue includes direct costs (e.g., development and construction costs), selling costs and other indirect costs (e.g., development overhead, capitalized interest and project administration costs).costs.

36

Table of Contents

The following tables set forth our consolidated residential real estate revenue and cost of revenue activity:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2022

​

​

    

Units

    

​

​

    

Cost of

    

Gross

    

Gross

​

​

​

Sold

​

Revenue

​

Revenue

​

Profit

​

Margin

​

​

​

Dollars in millions

Consolidated

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Homesites (a)

​

752

​

$

84.0

​

$

41.0

​

$

43.0

​

51.2

%

Land sales

 

N/A

​

​

1.1

​

​

—

​

​

1.1

​

100.0

%  

Total consolidated

 

752

​

$

85.1

​

$

41.0

​

$

44.1

 

51.8

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Unconsolidated

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Homes (b)

​

316

​

​

​

​

​

​

​

​

​

​

​

​

Total consolidated and unconsolidated

​

1,068

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2019

 

 

    

Units

    

 

 

    

Cost of

    

Gross

    

Gross

 

 

 

Sold

 

Revenue

 

Revenue

 

Profit

 

Margin

 

 

 

Dollars in millions

 

Homesites

 

379

 

$

37.0

 

$

18.6

 

$

18.4

 

49.7

% 

Total

 

379

 

$

37.0

 

$

18.6

 

$

18.4

 

49.7

%

(a)Includes 42 units sold as undeveloped homesites within the SouthWood community.
(b)Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for under the equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2021

​

​

    

Units

    

​

​

    

Cost of

    

Gross

    

Gross

​

​

​

Sold

​

Revenue

​

Revenue

​

Profit

​

Margin

​

​

​

Dollars in millions

​

Consolidated

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Homesites (a)

 

804

​

$

136.7

​

$

52.7

​

$

84.0

​

61.4

%  

Homes

 

2

​

​

1.0

​

​

0.9

​

​

0.1

​

10.0

%  

Land sale

 

N/A

​

​

0.1

​

​

—

​

​

0.1

​

100.0

%  

Total consolidated

 

806

​

$

137.8

​

$

53.6

​

$

84.2

 

61.1

%  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Unconsolidated

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Homes (b)

​

47

​

​

​

​

​

​

​

​

​

​

​

​

Total consolidated and unconsolidated

​

853

​

​

​

​

​

​

​

​

​

​

​

​

(a)Includes 55 units sold as undeveloped homesites within the SouthWood community.
(b)Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for under the equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2020

 

​

​

Units

    

​

​

    

Cost of

    

Gross

    

Gross

 

​

​

Sold

​

Revenue

​

Revenue

​

Profit

​

Margin

 

​

​

Dollars in millions

​

Consolidated

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Homesites

​

509

​

$

67.7

​

$

27.4

​

$

40.3

​

59.5

%

Land sale

​

N/A

​

​

1.7

​

​

0.4

​

​

1.3

​

76.5

%

Total consolidated

​

509

​

$

69.4

​

$

27.8

​

$

41.6

 

59.9

%

Unconsolidated

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Homes (a)

​

—

​

​

​

​

​

​

​

​

​

​

​

​

Total consolidated and unconsolidated

​

509

​

​

​

​

​

​

​

​

​

​

​

​

4237

Table of Contents

(a)Includes the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for under the equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018

 

 

    

Units

    

 

 

    

Cost of

    

Gross

    

Gross

 

 

 

Sold

 

Revenue

 

Revenue

 

Profit

 

Margin

 

 

 

Dollars in millions

 

Homesites

 

202

 

$

17.7

 

$

8.8

 

$

8.9

 

50.3

%  

Total

 

202

 

$

17.7

 

$

8.8

 

$

8.9

 

50.3

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2017

 

 

 

Units

    

 

 

    

Cost of

    

Gross

    

Gross

 

 

 

Sold

 

Revenue

 

Revenue

 

Profit

 

Margin

 

 

 

Dollars in millions

 

Homesites

 

174

 

$

18.2

 

$

10.3

 

$

7.9

 

43.4

%

Homes

 

 3

 

 

1.4

 

 

1.3

 

 

0.1

 

7.1

%

Total

 

177

 

$

19.6

 

$

11.6

 

$

8.0

 

40.8

%

​

Year Ended December 31, 20192022 Compared to the Year Ended December 31, 20182021

The following discussion sets forth details of the consolidated results of operations of our residential segment.

Homesites. Revenue from homesite sales increased $19.3decreased $52.7 million, or 109.0%38.6%, during 2019,2022, as compared to 2018,2021, primarily due to the mix and number of homesites sold per community, the timing of builderhomebuilder contractual closing obligations in our residential communities and the extended timing of development of completed homesites in our residential communities such as Watersound Origins, Breakfast Point, SouthWoodhomesites. During 2022 and WindMark Beach.  During 2019 and 2018,2021, the average revenue, excluding homesite residuals, per homesite sold was approximately $87,000$98,000 and $78,000, respectively,$157,000, respectively. The decrease in average revenue per homesite sold during the period was due to the mix of sales from different communities.communities, primarily from sales in the Watersound Camp Creek and WaterColor communities, which had a higher volume during the prior period. Gross margin decreased to 49.7%51.2% during 2019,2022, as compared to 50.3%61.4% during 2018,2021, primarily due to the mix and number of homesites sold from different communities during each respective period. Gross margin may vary each period depending on the location of homesite sales.

Homes. During 2022, we did not have any home sales. During 2021, we sold two completed homes within our RiverCamps community for a total of $1.0 million, resulting in a gross profit margin of 10.0%.

Land sales. During 2022 we had unimproved residential land sales for $1.1 million, with de minimis cost of revenue. During 2021, we had unimproved residential land sales for $0.1 million, with de minimis cost of revenue.

Other operating expenses include salaries and benefits, property taxes, marketing, professional fees, project administration, support personnel, owner association and CDD assessments and other administrative expenses.

Investment income, net primarily consists of interest earned on our mortgage notes receivable.receivable and unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. See Note 8. Other Assets and Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

Gain on contributions to unconsolidated joint ventures for 2022 and 2021, include a gain of $0.9 million and $0.5 million, respectively, on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. Gain on contributions to unconsolidated joint ventures for 2020 includes a gain of $15.7 million on land and additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

Equity in income (loss) from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated joint ventures accounted for by the equity method. Equity in income (loss) from unconsolidated joint ventures during 2022 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 and sold 316 homes in 2022, compared to 47 in 2021. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

Other (expense) income, net during 2019 primarily consistsfor 2022 includes $1.0 million of loss from hurricane damage and other miscellaneous income and expense items. Other (expense) income, net during 2018 primarily consists of $0.6 million for a homeowners’ association settlement related to one of our residential communities and other miscellaneous income and expense items.

design costs no longer pursued.

4338

Table of Contents

Hospitality

The table below sets forth the consolidated results of operations of our hospitality segment:

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

2019

    

2018

    

2017

 

In millions

​

​

In millions

Revenue:

 

 

  

 

 

  

 

 

  

 

​

  

 

​

  

 

​

  

Hospitality revenue

 

$

45.6

 

$

38.4

 

$

52.7

​

$

96.7

​

$

74.5

​

$

47.4

Leasing revenue

 

 

0.1

 

 

1.2

 

 

1.6

​

​

0.5

​

​

0.1

​

​

—

Total revenue

 

 

45.7

 

 

39.6

 

 

54.3

​

​

97.2

​

​

74.6

​

​

47.4

Expenses:

 

 

  

 

 

  

 

 

  

​

 

  

​

 

  

​

 

  

Cost of hospitality revenue

 

 

33.9

 

 

32.1

 

 

46.0

​

 

76.9

​

 

57.5

​

 

34.7

Cost of leasing revenue

 

 

 —

 

 

1.3

 

 

1.3

​

 

0.9

​

 

—

​

 

—

Other operating expenses

 

 

0.8

 

 

0.6

 

 

0.5

​

 

1.1

​

 

0.9

​

 

1.2

Depreciation

 

 

4.6

 

 

3.6

 

 

4.0

Depreciation, depletion and amortization

​

 

9.4

​

 

7.0

​

 

4.6

Total expenses

 

 

39.3

 

 

37.6

 

 

51.8

​

 

88.3

​

 

65.4

​

 

40.5

Operating income

 

 

6.4

 

 

2.0

 

 

2.5

​

 

8.9

​

 

9.2

​

 

6.9

Other income:

 

 

  

 

 

  

 

 

  

Sale of vacation rental management, net

 

 

 —

 

 

 —

 

 

9.8

Other income (expense), net

 

 

0.2

 

 

(0.2)

 

 

0.3

Other income (expense), net

 

 

0.2

 

 

(0.2)

 

 

10.1

Income before equity in loss from unconsolidated affiliates and income taxes

 

$

6.6

 

$

1.8

 

$

12.6

Other expense:

​

 

  

​

 

  

​

 

  

Interest expense

​

​

(1.7)

​

​

(0.5)

​

​

(0.2)

Other income, net

​

 

1.8

​

 

0.6

​

 

0.5

Total other income, net

​

 

0.1

​

 

0.1

​

 

0.3

Income before income taxes

​

$

9.0

​

$

9.3

​

$

7.2

​

The following table sets forth details of our hospitality segment consolidated revenue and cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2019

 

 

Year Ended December 31, 2018

 

 

Year Ended December 31, 2017

 

 

 

 

 

 

Gross

 

Gross

 

 

 

 

 

Gross

 

Gross

 

   

 

 

    

Gross

    

Gross

 

 

 

Revenue

 

Profit

 

Margin

 

    

Revenue

 

Profit

 

Margin

  

    

Revenue

 

Profit

 

Margin

 

 

 

In millions

Clubs

 

$

20.9

 

$

7.7

 

36.8

%  

 

$

16.5

 

$

3.9

 

23.6

%    

 

$

14.6

 

$

1.3

 

8.9

%

Hotel operations, food and beverage operations, short-term vacation rentals and other management services

 

 

23.3

 

 

3.0

 

12.9

%  

 

 

20.6

 

 

2.1

 

10.2

%    

     

 

36.9

 

 

5.1

 

13.8

%

Retail

 

 

1.5

 

 

0.3

 

20.0

%  

 

 

 —

 

 

 —

 

N/A

%    

 

 

 —

 

 

 —

 

N/A

%  

Marinas

 

 

 —

 

 

0.8

 

 —

%  

 

 

2.5

 

 

0.2

 

8.0

%  

 

 

2.8

 

 

0.6

 

21.4

%

Total

 

$

45.7

 

$

11.8

 

25.8

%  

 

$

39.6

 

$

6.2

 

15.7

%    

 

$

54.3

 

$

7.0

 

12.9

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2022

​

​

Year Ended December 31, 2021

 

​

Year Ended December 31, 2020

 

​

​

​

​

​

Gross

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Profit

​

Gross

​

​

​

​

​

Gross

​

Gross

​

​

​

​

​

Gross

​

Gross

​

​

​

Revenue

​

(Deficit)

​

Margin

​

​

Revenue

​

Profit

​

Margin

 

​

Revenue

​

Profit

​

Margin

 

​

​

In millions

Clubs

​

$

40.7

​

$

12.5

 

30.7

%  

​

$

31.9

​

$

9.3

 

29.2

%

​

$

22.3

​

$

7.6

 

34.1

%

Hotel operations, certain food and beverage operations, short-term vacation rentals and other management services

​

​

47.5

​

​

7.4

 

15.6

%  

​

​

36.8

​

​

6.5

 

17.7

%

​

​

23.2

​

​

3.8

 

16.4

%

Other

​

​

8.5

​

​

(0.1)

​

(1.2)

%  

​

​

5.8

​

​

1.2

​

20.7

%

​

​

1.9

​

 

1.3

 

68.4

%

Total

​

$

96.7

​

$

19.8

 

20.5

%  

​

$

74.5

​

$

17.0

 

22.8

%

​

$

47.4

​

$

12.7

 

26.8

%

​

Year Ended December 31, 20192022 Compared to Year Ended December 31, 20182021

Revenue from our clubs increased $4.4$8.8 million, or 26.7%27.6%, during 2019,2022, as compared to 2018,2021. The increase in revenue in the current period was due to an increaseincreases in the number of club members and membership revenue and the opening of an additional dining option at the Watersound Beach Club in May 2019, partially offset by a decrease in golf revenue primarily related to the sale of the SouthWood Golf Club in the third quarter of 2018. We offer different types of club memberships, each with different access rights and associated fee structures.revenue. As of December 31, 2019, the Clubs by JOE2022, Watersound Club had 1,2742,604 members, compared with 9882,255 members as of December 31, 2018. 2021, an increase of 349 members. Our clubs gross margin increased to 36.8%30.7% during 2019,2022, compared to 23.6%29.2% during 2018. The increase in gross margin was primarily due to the increase in the number of members and membership revenue.2021.

Revenue from our hotel operations, certain food and beverage operations, some of our short-term vacation rentals and other management services increased $10.7 million, or 29.1%, during 2022, as compared to 2021. The increase was primarily due to an increase in lodging revenue from the Hilton Garden Inn Panama City Airport, which opened in July 2021, Homewood Suites by Hilton Panama City Beach, which opened in March 2022, new WaterColor Inn suites, which opened in June 2022 and The Pearl Hotel, which we acquired in December 2022 and managed prior to acquisition. Gross margin decreased to 15.6% during 2022, as compared to 17.7% during 2021. The decrease in gross margin was due to

39

Table of Contents

increased preopening expenses associated with assets that opened in 2022, onboarding of staff for assets scheduled to open in 2023 and an increase in cost of labor and products.

Revenue from other hospitality operations increased $2.7 million, or 13.1%46.6%, during 2019,2022, as compared to 2018.2021. The increase in other hospitality revenue iswas primarily related to revenue from two new standalone restaurants, which opened in December 2021 and August 2022, a new retail store, which opened in March 2022, Point South Marina Bay Point, which fully reopened in the third quarter of 2022 and Point South Marina Port St. Joe, which reopened in the fourth quarter of 2022. Our other hospitality operations gross margin decreased to a negative gross margin of 1.2% during 2022, compared to gross margin of 20.7% during 2021, due to the re-openingopening expenses and onboarding of the FOOW restaurant in June 2018 and the openingstaff for these new assets. Gross margin during 2021 was also impacted by $0.7 million of the Camp WaterColor food and

44

Table of Contents

beverage operation in March 2019. The increase in revenue was partially offset by a decrease in room revenuebusiness interruption insurance proceeds received for the WaterColor Inn from lower occupancymarinas related to the WaterColor Beach Club being closed for renovations during the period. Gross margin increased to 12.9% during 2019, as compared to 10.2% during 2018, primarily due to changes in business strategy, such as additional food and beverage operations and concept changes to existing food and beverage operations.  In December 2017, we sold our short term vacation rental management business, which reduced our 2019 and 2018 revenue. For the year ended December 31, 2017,Hurricane Michael. We did not have revenue for the short term vacation rental business was $18.2 million.

Revenue from our retail outlets increased $1.5 million during 2019, as compared to 2018, due to the opening of the WaterColor store in January 2019, as well as other new retail outlets during 2019.

Revenue from our marinas decreased $2.5 million,during 2021 or 100.0%, during 2019, as compared to 2018,2020 due to the impact of Hurricane Michael on the marinas. Gross profit during 2019Michael.

Leasing revenue includes $1.3 million related to business interruption insurance proceeds received. Subsequent to the landfall of Hurricane Michael on October 10, 2018, the marinas remain closed. We maintain propertymarina boat slip and business interruption insurance on the impacted marina assets. See Note 7. Hurricane Michael included in Item 15 of this Form 10‑K for further discussion.

Our hospitality segment gross margin was 25.8% during 2019 as compared to 15.7% during 2018. The increase is primarily related to the increase in the number of members and membership revenue, business interruption insurance proceeds received related to Hurricane Michael and changes in business strategy, such as new retail opportunities, additional food and beverage operations, concept changes to existing food and beverage operations and the sale of the SouthWood Gulf Club. Excluding the $1.3 million of business interruption proceeds received for the marinas during 2019, our hospitality segment gross margin would have been 23.0% during 2019, as compared to 15.7% during 2018. The increase is primarily related to the increase in the number of members and membership revenue and the changes in business strategy as detailed above.dry storage rentals.

Other operating expenses include salaries and benefits, occupancy fees, professional fees and other administrative expenses.

The increase of $1.0$2.4 million in depreciation, depletion and amortization expense during 2019,2022, as compared to 2018,2021, was primarily due to new assetsproperties placed in service.

SaleInterest expense primarily includes interest incurred from our hospitality project financing. The increase of vacation rental management, net$1.2 million in interest expense during 2017 includes a net gain of $9.8 million.2022, as compared to 2021, was primarily due to an increase in project financing and higher interest rates. See Note 8. Sale of Vacation Rental Management included in Item 15 of this Form 10‑K for further discussion.

Other income (expense), net includes miscellaneous expense and income items, loss from hurricane damage and gain on insurance recovery related to Hurricane Michael. In October 2018, both our Bay Point Marina and our Port St. Joe Marina were impacted by Hurricane Michael and as a result of the property damage, other income (expense), net, for 2018 includes a $4.7 million loss from hurricane damage due to disposal of assets, offset by a $4.7 million gain on insurance recovery. See Note 7. Hurricane Michael 10. Debt, Net included in Item 15 of this Form 10-K for additional information.information.

Other income, net for 2022 and 2021, includes $2.6 million and $0.9 million, respectively, received from the Pier Park CDD for repayment of subordinated notes, partially offset by $0.6 million of expense for a homeowner’s association special assessment in the current period.

4540

Table of Contents

Commercial Leasing and Sales

The table below sets forth the consolidated results of operations of our commercial leasingsegment:

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

2022

    

2021

    

2020

​

​

In millions

Revenue:

 

​

  

 

​

  

 

​

  

Leasing revenue

​

​

​

​

​

​

​

​

​

Commercial leasing revenue

​

$

19.6

​

$

15.8

​

$

14.8

Multi-family leasing revenue

​

​

14.2

​

​

9.0

​

​

3.9

Senior living leasing revenue

​

​

4.7

​

​

2.0

​

​

—

Total leasing revenue

​

​

38.5

​

​

26.8

​

​

18.7

Commercial and rural real estate revenue

​

 

13.7

​

 

12.0

​

 

11.7

Timber revenue

​

​

6.7

​

​

6.0

​

​

6.3

Hospitality revenue

​

​

0.5

​

​

0.7

​

​

0.4

Total revenue

​

 

59.4

​

 

45.5

​

 

37.1

Expenses:

​

 

  

​

 

  

​

 

  

Cost of leasing revenue

​

 

16.4

​

 

11.4

​

 

5.9

Cost of commercial and rural real estate revenue

​

 

4.0

​

 

2.5

​

 

5.5

Cost of timber revenue

​

​

0.8

​

​

0.7

​

​

0.8

Cost of hospitality revenue

​

​

0.6

​

​

0.8

​

​

0.6

Other operating expenses

​

 

4.2

​

 

3.9

​

 

3.7

Depreciation, depletion and amortization

​

 

13.0

​

 

10.7

​

 

7.1

Total expenses

​

 

39.0

​

 

30.0

​

 

23.6

Operating income

​

 

20.4

​

 

15.5

​

 

13.5

Other (expense) income:

​

 

  

​

 

  

​

 

  

Interest expense

​

 

(7.3)

​

 

(5.9)

​

 

(3.8)

Gain on contributions to unconsolidated joint ventures

​

​

1.8

​

​

3.1

​

​

3.9

Equity in income (loss) from unconsolidated joint ventures

​

​

22.1

​

​

1.0

​

​

(0.1)

Other (expense) income, net

​

 

(0.7)

​

 

3.7

​

 

0.1

Total other income, net

​

 

15.9

​

 

1.9

​

 

0.1

Income before income taxes

​

$

36.3

​

$

17.4

​

$

13.6

​

The following table sets forth details of our commercial segment consolidated revenue and sales segment:cost of revenue:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2022

​

​

Year Ended December 31, 2021

 

​

Year Ended December 31, 2020

 

​

​

​

​

​

Gross

​

​

​

​

​

​

​

Gross

​

​

​

​

​

​

​

Gross

​

​

​

​

​

​

​

​

Profit

​

Gross

​

​

​

​

​

Profit

​

Gross

​

​

​

​

​

Profit

​

Gross

​

​

​

Revenue

​

(Deficit)

​

Margin

​

​

Revenue

​

(Deficit)

​

Margin

 

​

Revenue

​

(Deficit)

​

Margin

 

​

​

In millions

Leasing

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial leasing

​

$

19.6

​

$

12.7

 

64.8

%  

​

$

15.8

​

$

10.8

 

68.4

%

​

$

14.8

​

$

10.3

 

69.6

%

Multi-family leasing

​

​

14.2

​

​

8.8

 

62.0

%  

​

​

9.0

​

​

5.6

 

62.2

%

​

​

3.9

​

​

3.0

 

76.9

%

Senior living leasing

​

​

4.7

​

​

0.6

​

12.8

%  

​

​

2.0

​

​

(1.0)

​

(50.0)

%

​

​

—

​

​

(0.5)

​

—

%

Total leasing

​

​

38.5

​

​

22.1

​

57.4

%  

​

​

26.8

​

​

15.4

​

57.5

%

​

​

18.7

​

​

12.8

​

68.4

%

Commercial and rural real estate

​

​

13.7

​

​

9.7

​

70.8

%  

​

​

12.0

​

​

9.5

​

79.2

%

​

​

11.7

​

​

6.2

​

53.0

%

Timber

​

​

6.7

​

​

5.9

​

88.1

%  

​

​

6.0

​

​

5.3

​

88.3

%

​

​

6.3

​

 

5.5

 

87.3

%

Hospitality

​

​

0.5

​

​

(0.1)

​

(20.0)

%  

​

​

0.7

​

​

(0.1)

​

(14.3)

%

​

​

0.4

​

​

(0.2)

​

(50.0)

%

Total

​

$

59.4

​

$

37.6

 

63.3

%  

​

$

45.5

​

$

30.1

 

66.2

%

​

$

37.1

​

$

24.3

 

65.5

%

​

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

    

2019

    

2018

    

2017

 

 

In millions

Revenue:

 

 

  

 

 

  

 

 

  

Leasing revenue

 

 

 

 

 

 

 

 

 

Commercial leasing revenue

 

$

13.5

 

$

11.7

 

$

10.6

Apartment leasing revenue

 

 

1.2

 

 

 —

 

 

 —

Total leasing revenue

 

 

14.7

 

 

11.7

 

 

10.6

Commercial real estate revenue

 

 

7.8

 

 

4.8

 

 

3.9

Total revenue

 

 

22.5

 

 

16.5

 

 

14.5

Expenses:

 

 

  

 

 

  

 

 

  

Cost of leasing revenue

 

 

4.6

 

 

3.3

 

 

3.2

Cost of commercial real estate revenue

 

 

3.9

 

 

3.1

 

 

2.8

Other operating expenses

 

 

3.1

 

 

3.2

 

 

3.4

Depreciation and amortization

 

 

5.0

 

 

4.4

 

 

3.7

Total expenses

 

 

16.6

 

 

14.0

 

 

13.1

Operating income

 

 

5.9

 

 

2.5

 

 

1.4

Other (expense) income:

 

 

  

 

 

  

 

 

  

Interest expense

 

 

(2.7)

 

 

(2.2)

 

 

(2.2)

Other income (expense), net

 

 

3.4

 

 

(0.4)

 

 

 —

Total other income (expense), net

 

 

0.7

 

 

(2.6)

 

 

(2.2)

Income (loss) before equity in loss from unconsolidated affiliates and income taxes

 

$

6.6

 

$

(0.1)

 

$

(0.8)

41

Table of Contents

Year Ended December 31, 20192022 Compared to Year Ended December 31, 20182021

LeasingThe following discussion sets forth details of the consolidated results of operations of our commercial segment.

Total leasing revenue increased $3.0$11.7 million, or 25.6%, and leasing gross profit increased $1.7 million, or 20.2%,43.7% during 20192022, as compared to 2018.2021. The increase iswas primarily due to new multi-family and senior living leases at properties such as Pier Park North, Beckrich Office Park, WaterColor Crossings and Pier Park Crossings, where 216 apartment units were completed during 2019. Leasingwell as other new leases. Total leasing gross margin decreased during 2019 to 68.7%2022 was 57.4%, as compared to 71.8%57.5% during 2018, primarily due to increased leasing expenses and the lease-up of new projects.2021. As of December 31, 2019,2022, we had net rentable square feet of approximately 882,000,1,034,000, of which approximately 758,000987,000 square feet waswere under lease. As of December 31, 2018,2021, we had net rentable square feet of approximately 813,000,985,000, of which approximately 758,000857,000 square feet waswere under lease. As of December 31, 2022, our consolidated entities had 864 multi-family and senior living units completed, of which 767 were leased, compared to 715 multi-family and senior living units completed, of which 632 were leased as of December 31, 2021.

TheCommercial and rural real estate revenue related to sales for the three years ended December 31, 2022 includes the following:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Number of

​

​

​

​

Average Price

​

​

​

​

Gross Profit 

Period

​

Sales

​

Acres Sold

​

Per Acre

​

​

Revenue

​

on Sales

​

 

​

​

​

​

In millions (except for average price per acre)

2022

    

29

    

283

    

$

44,876

    

$

12.7

    

$

9.3

2021

 

22

    

577

    

$

20,797

    

$

12.0

    

$

9.5

2020

 

23

    

473

    

$

24,736

    

$

11.7

    

$

6.2

​

We believe the diversity of our commercial leasing and sales segment complements the growth of our communities and our residential and hospitality segments. Commercial and rural real estate revenue can vary depending on the proximity to developed areas and the mix and characteristics of commercial and rural real estate sold in each period, with varying compositions of retail, office, industrial and other commercial uses. During 2019,2022, we had eleventwenty-nine commercial and rural real estate sales of approximately 283 acres for $12.7 million and land improvement services of $1.0 million, together resulting in a gross margin of approximately 70.8%. During 2021, we had twenty-two commercial and rural real estate sales totaling approximately 107577 acres for $7.8$12.0 million, resulting in a gross profit margin of approximately 50.0%, of this amount approximately 28 acres totaling $4.3 million in revenue were sold in the SouthWood community79.2%.During 2018, we had fourteen commercial real estate sales totaling approximately 330 acres for $4.8 million, resulting in a gross profit margin of 35.4%. Commercial real estate revenue for 2018 included $2.6 million related to the sale of two hospitality properties located in the SouthWood community, including the golf course. As our focus continues to evolve more towards recurring revenue from leasing operations, we expect to have limited commercial and rural real estate sales. Further, we may continue to transform and operate leasingcommercial properties for higher and better use. This may result in certain assets moving from the commercial leasing and sales segment to the hospitality segment.

Timber revenue increased by $0.7 million, or 11.7%, to $6.7 million during 2022, as compared to $6.0 million in 2021. The increase was primarily due to an increase in prices and the sales mix of different wood products, partially offset by a decrease in sales of fill dirt and other products in the current period. There were 275,000 tons of wood products sold during 2022, as compared to 273,000 tons of wood products sold during 2021. The average price of wood products sold increased to $22.71 per ton during 2022, as compared to $19.57 per ton during 2021. Timber gross margin was 88.1% during 2022, as compared to 88.3% during 2021.

The total tons sold and relative percentages of total tons sold by major type of wood product are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December��31, 

 

​

2022

    

2021

    

2020

​

Pine pulpwood

137,000

 

49.8

%  

162,000

 

59.4

%  

208,000

 

64.6

%

Pine sawtimber

130,000

 

47.3

%  

100,000

 

36.6

%  

75,000

 

23.3

%

Pine grade logs

5,000

 

1.8

%  

9,000

 

3.3

%  

26,000

 

8.1

%

Other

3,000

 

1.1

%  

2,000

 

0.7

%  

13,000

 

4.0

%

Total

275,000

 

100.0

%  

273,000

 

100.0

%  

322,000

 

100.0

%

​

Hospitality revenue includes some of our short-term vacation rentals.

42

Table of Contents

Other operating expenses include salaries and benefits, property taxes, CDD assessments, insurance, professional fees, marketing, project administration and other administrative expenses.

46

Table of Contents

The increase of $0.6$2.3 million in depreciation, amortization and depletion expense during 2019,2022, as compared to 2018,2021, was primarily due to new properties placed in service.

Interest expense primarily includes interest incurred from our commercial leasing project financing and CDD debt.

Other income (expense), net for 2019 includes a gain The increase of $0.8$1.4 million on land contributedin interest expense during 2022, as compared to our unconsolidated Busy Bee JV2021, was primarily due to an increase in project financing and a gain of $1.5 million on land contributed to our unconsolidated Pier Park TPS JV.higher interest rates. See Note 4. Real Estate Joint Ventures10. Debt, Net included in Item 15 of this Form 10-K for additional information. In October 2018, property ininformation.

Gain on contributions to unconsolidated joint ventures for 2022, includes a gain of $1.4 million on land and impact fees contributed to our unconsolidated Pier Park CrossingsRI JV and a commercial building in Port St. Joe were impacted by Hurricane Michael. Other income (expense), netgain of $0.4 million on land contributed to our unconsolidated Electric Cart Watersound JV. Gain on contributions to unconsolidated joint ventures for 20192021, includes a $1.2gain of $3.1 million gain on insurance recovery for the Pier Park Crossings JV relatedland contributed to Hurricane Michael. Other income (expense), net, for 2018 includes a $2.6 million loss on disposal of assets as a result of the property damage and $0.3 million of hurricane expenses, offset by a $2.5 million gain on insurance recovery related to Hurricane Michael. our unconsolidated Watersound Fountains Independent Living JV. See Note 7. Hurricane Michael 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.information.

TheEquity in income (loss) from unconsolidated joint ventures includes our 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 net rentable square feet and percentage leasedgain on sale of leasing properties by location are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

    

December 31, 2018

 

 

December 31, 2017

 

 

    

 

    

Net

    

 

    

 

Net

    

 

 

 

Net

    

 

 

 

 

 

 

Rentable

 

 

 

 

Rentable

 

 

 

 

Rentable

 

 

 

 

 

 

 

Square

 

Percentage

 

 

Square

 

Percentage

 

 

Square

 

Percentage

 

 

 

Location

 

Feet

 

Leased

    

     

Feet

 

Leased

 

 

Feet

 

Leased

 

Pier Park North JV

 

Bay County, FL

 

320,310

 

95

%   

 

320,310

 

96

%  

 

320,310

 

96

%

VentureCrossings (1)

 

Bay County, FL

 

303,605

 

80

%  

 

243,605

 

100

%  

 

243,605

 

100

%

Beckrich Office Park (2)

 

Bay County, FL

 

68,398

 

100

%  

 

67,108

 

96

%  

 

67,108

 

52

%

WindMark Beach Commercial (3) (4)

 

Gulf County, FL

 

48,960

 

48

%  

 

49,260

 

56

%  

 

48,035

 

27

%

SouthWood Town Center (4) (5)

 

Leon County, FL

 

34,230

 

80

%  

 

34,230

 

85

%  

 

34,412

 

85

%

WaterColor Town Center (4) (6)

 

Walton County, FL

 

20,033

 

96

%  

 

21,200

 

100

%  

 

22,532

 

100

%

Port St. Joe Commercial (7)

 

Gulf County, FL

 

15,524

 

100

%  

 

15,524

 

100

%  

 

18,107

 

100

%

Beach Commerce Park

 

Bay County, FL

 

14,700

 

100

%  

 

14,700

 

100

%  

 

14,700

 

63

%

SummerCamp Commercial

 

Franklin County, FL

 

13,000

 

 0

%  

 

13,000

 

 0

%  

 

13,000

 

 0

%

South Walton Commerce Park

 

Walton County, FL

 

11,534

 

82

%

 

 —

 

 —

%  

 

 —

 

 —

%  

WaterSound Gatehouse (4) (8)

 

Walton County, FL

 

11,515

 

89

%  

 

13,049

 

100

%  

 

12,624

 

100

%

WaterColor Crossings

 

Walton County, FL

 

7,135

 

100

%

 

7,135

 

100

%  

 

 —

 

 —

%  

395 Office building

 

Walton County, FL

 

6,700

 

100

%  

 

6,700

 

100

%  

 

6,700

 

100

%

Wetappo

 

Gulf County, FL

 

N/A

 

N/A

%  

 

N/A

 

N/A

%  

 

4,900

 

100

%

Pier Park outparcel

 

Bay County, FL

 

5,565

 

100

%  

 

5,565

 

100

%  

 

5,565

 

100

%

WaterColor HOA Office (9)

 

Walton County, FL

 

1,244

 

100

%  

 

1,244

 

100

%  

 

1,244

 

100

%

Watersound Origins (10)

 

Walton County, FL

 

N/A

 

N/A

%  

 

N/A

 

N/A

%  

 

760

 

100

%

 

 

  

 

882,453

 

86

%  

 

812,630

 

93

%  

 

813,602

 

87

%

(1)

In December 2019, we completed construction of a 60,000 square feet flex space building.

(2)

In December 2019, we completed construction of a Starbucks building, for which we have a long term lease.

(3)

Included in net rentable square feet as of December 31, 2019, 2018 and 2017, is 13,808 square feet of unfinished space.

(4)

In addition to net rentable square feet there is also space that we occupy or that serves as common area.

(5)

In January 2020, we sold the SouthWood Town Center.

(6)

In addition to net rentable square feet, there is an additional 1,332 square feet was repurposed during the fourth quarter of 2018 into a new store operated by us.

(7)

During 2018, a building was significantly damaged by Hurricane Michael and 2,583 square feet was removed from net rentable square feet.

(8)

In addition to net rentable square feet, there is an additional 1,534 square feet was repurposed in 2019 into a new store operated by us, as well as office space occupied by us.

(9)

In addition to net rentable square feet, there is an additional 1,276 square feet that currently serves as common area, but is subject to an agreement whereby the current lessee is expected to expand their lease to include the entire building.

(10)

During 2018, a third party broker that was leasing the Watersound Origins sales office relocated into a model home. We plan to occupy this space in the future.

47

Table$36.1 million. Equity in income (loss) during 2022 included $21.7 million related to our proportionate share of Contents

Total units and percentage leased/occupied for apartments and assisted living communities by location are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

Percentage

 

 

 

 

 

 

 

 

 

 

Leased

 

    

 

    

Units

    

Units

 

Units

 

of Units

 

 

Location

 

Planned

 

Completed

 

Leased/Occupied

 

Completed

Apartments

 

 

 

 

 

 

 

 

 

 

Pier Park Crossings (1)

 

Bay County, FL

 

240

 

216

 

216

 

100%

Pier Park Crossings Phase II (2)

 

Bay County, FL

 

120

 

 —

 

 —

 

N/A

Watersound Origins Crossings (3)

 

Walton County, FL

 

217

 

 —

 

 —

 

N/A

Total apartment units

 

 

 

577

 

216

 

216

 

100%

Assisted living communities

 

 

 

 

 

 

 

 

 

 

Watercrest Santa Rosa Beach Assisted Living and Memory Care (4)

 

Walton County, FL

 

107

 

 —

 

 —

 

N/A

Total assisted living community units

 

 

 

107

 

 —

 

 —

 

N/A

Total units

 

 

 

684

 

216

 

216

 

100%

(1)

Construction began in the second quarter of 2018.

(2)

Construction began in the fourth quarter of 2019.

(3)

Construction began in the second quarter of 2019.

(4)

Construction began in the second quarter of 2019.

Real Estate Revenue. Commercial real estate revenue for the three years ended December 31, 2019 includes the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

 

 

 

Average Price

 

 

 

 

Gross Profit 

Period

 

Sales

 

Acres Sold

 

Per Acre

 

 

Revenue

 

on Sales

 

 

 

 

 

 

In millions (except for average price per acre)

2019

    

11

    

107

    

$

72,758

    

$

7.8

    

$

3.9

2018

 

14

    

330

    

$

14,532

    

$

4.8

    

$

1.7

2017

 

 9

    

49

    

$

79,494

    

$

3.9

    

$

1.1

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Forestry

The table below sets forth the results of operations of our forestry segment:

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

 

 

In millions

Revenue:

 

 

  

 

 

  

 

 

  

Timber revenue

 

$

3.9

 

$

5.5

 

$

6.0

Real estate revenue - other rural land revenue

 

 

11.7

 

 

1.8

 

 

1.7

Leasing revenue

 

 

0.8

 

 

0.8

 

 

0.7

Total revenue

 

 

16.4

 

 

8.1

 

 

8.4

Expenses:

 

 

  

 

 

  

 

 

  

Cost of timber revenue

 

 

0.7

 

 

0.7

 

 

0.8

Cost of real estate revenue - other rural land revenue

 

 

0.4

 

 

0.4

 

 

0.1

Other operating expenses

 

 

0.4

 

 

0.4

 

 

0.4

Depreciation and depletion

 

 

0.3

 

 

0.5

 

 

0.6

Total expenses

 

 

1.8

 

 

2.0

 

 

1.9

Operating income

 

 

14.6

 

 

6.1

 

 

6.5

Other income, net

 

 

 —

 

 

0.1

 

 

0.1

Income before equity in loss from unconsolidated affiliates and income taxes

 

$

14.6

 

$

6.2

 

$

6.6

The total tons sold and relative percentages of total tons sold by major type of timber revenue are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

 

2019

    

2018

    

2017

 

Pine pulpwood

 

129,000

 

58.6

%  

219,000

 

66.8

%  

275,000

 

75.6

%

Pine sawtimber

 

35,000

 

15.9

%  

85,000

 

25.9

%  

67,000

 

18.4

%

Pine grade logs

 

21,000

 

9.6

%  

23,000

 

7.0

%  

19,000

 

5.2

%

Other

 

35,000

 

15.9

%  

1,000

 

0.3

%  

3,000

 

0.8

%

Total

 

220,000

 

100.0

%  

328,000

 

100.0

%  

364,000

 

100.0

%

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018

Timber revenue decreased by $1.6 million, or 29.1%, during 2019, as compared to 2018. The decrease is primarily due to a decrease in the amount of tons sold, along with price decreases and product mix changes caused by Hurricane Michael’s significant market impact since landfall in October 2018. gain on sale. See Note 7. Hurricane Michael 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. There were 220,000 tons soldinformation.

Other income, net during 2019, as compared to 328,000 tons sold during 2018. The average price per ton sold decreased to $14.71 in 2019, as compared to $15.25 in 2018. Timber gross margin decreased during 2019 to 82.1%, as compared to 87.3% during2021, includes $3.6 million received from the same period in 2018, due to decreases in sales price and volume changes in product mix.

During 2019, we sold approximately 1,498 acresFlorida Division of rural and timber landEmergency Management’s TRBG program for $11.7 million, resulting in a gross profit marginrecovery of 96.6%, as compared to approximately 181 acres of rural and timber land sold in 2018 for $1.8 million, resulting in a gross profit margin of 77.8%. Rural land sales for 2019 included $9.9 millionlost income related to non-strategic land locatedtimber crop that was destroyed as a result of Hurricane Michael. See Note 18. Other Income, Net included in Leon County, Florida, with a gross profitItem 15 of $9.7 million due to a low historical basis.this Form 10-K for additional information.

Leasing revenue consists primarily of hunting leases, which is recognized as income over the term of each lease.​

Other operating expenses include salaries and benefits, property taxes, professional fees and other administrative expenses.

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Liquidity and Capital Resources

As of December 31, 2019,2022, we had cash and cash equivalents and U.S. Treasury Bills classified as investments – debt securities of $185.7$78.3 million, compared to $195.2$159.1 million as of December 31, 2018. Our2021. In addition to cash and cash equivalents, we consider our investments classified as Securities, as being generally available to meet our liquidity needs. Securities are not as liquid as cash and cash equivalents, but they are generally convertible into cash within a relatively short period of December 31, 2019 included commercial paper of $138.2 million, $21.0 million of money market funds and $7.0 million of short term U.S. Treasury Bills. As of December 31, 2019, we had investments – debt securities in corporate debt securities of $0.1 million and investments – equity securities in preferred stock investments of $9.7 million.time. See Note 5. Investments included in Item 15 of this Form 10‑K10-K for additional information regarding our investments.

We believe that our current cash position, financing arrangements and cash generated from operations will provide us with sufficient liquidity to satisfy our anticipated working capital needs, expected capital expenditures, principal and interest payments on our long termlong-term debt, capital contributions to JVs, Latitude Margaritaville Watersound JV note commitment, authorized stock repurchases and authorized stock repurchasesdividends for the next twelve months. See Part II. Item 1A. Risk Factors.

During 2019,2022, we incurredinvested a total of $114.3$356.7 million forin capital expenditures, which includes $28.6$92.2 million related to the acquisition and development infor our residential real estate communities, $67.3segment, $93.0 million for our commercial leasing and sales segment, $15.9$171.1 million related tofor our hospitality segment and $2.5$0.4 million related primarily to our forestry segment andfor corporate expenditures. Our 2020 capital expenditures budget exceeds our 2019 expenditures, as projects move into construction and new projects commence. We anticipate that these future capital commitments will be funded through cash generated from operations, new and existing financing arrangements, cash on hand and cash equivalents, cash generatedequivalents. As of December 31, 2022, we had a total of $118.1 million primarily in construction and development related contractual obligations, of which a portion will be funded through committed or new financing arrangements. Capital expenditures and contractual obligations exclude amounts related to unconsolidated joint ventures. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

As of December 31, 2022 and 2021, we had various loans outstanding totaling $391.4 million and $227.5 million, respectively, with maturities from operations.May 2023 through March 2064. As of December 31, 2022, the weighted average

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effective interest rate of total outstanding debt was 5.1%, of which 60.4% of the debt outstanding includes fixed or swapped interest rates, and the average remaining life of debt outstanding was 13.8 years. As of December 31, 2022, the weighted average rate on our variable rate loans was 6.7%. See Item 7A. Quantitative and Qualitative Disclosures about Market Risk for additional information regarding London Interbank Offered Rate (“LIBOR”) related risks. Also, see Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

Our indebtedness consists of various loans on real and leasehold property. These loans are typically secured by various interests in the property such as assignment of rents, leases, deposits, permits, plans, specifications, fees, agreements, approvals, contracts, licenses, construction contracts, development contracts, service contracts, franchise agreements, the borrower’s assets, improvements, and security interests in the rents, personal property, management agreements, construction agreements, improvements, accounts, profits, leases, accounts and fixtures (collectively, “Security Interests”). The specific Security Interests vary from loan to loan.

In October 2015, the Pier Park North JV entered into a $48.2 million loan (the “PPN JV Loan”). As of December 31, 20192022 and 2018, $45.52021, $42.6 million and $46.4$43.6 million, respectively, was outstanding on the PPN JV Loan. The PPN JV Loanloan accrues interest at a rate of 4.1% per annum and matures in November 2025. In connection with the PPN JV Loan,loan, we entered into a limited guarantee in favor of the lender, based on our percentage ownership of the JV. In addition, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation by the Pier Park North JV; any voluntary transfer or encumbrance of the property in violation of the due-on-sale clause in the security instrument; upon commencement of voluntary bankruptcy or insolvency proceedings andor upon breach of covenants in the security instrument. See Note 12. 10. Debt, Net included in Item 15 of this Form 10‑K10-K for additional information.

In May 2018, the Pier Park Crossings JV entered into a $36.6 million loan, insured by the U.S. Department of Housing and Urban Development (“HUD”), to finance the construction of apartments in Panama City Beach, Florida (the “PPC JV Loan”). As of December 31, 20192022 and December 31, 2018, $34.62021, $35.2 million and $15.4$35.7 million, respectively, was outstanding on the PPC JV Loan. The PPC JV Loan accruesloan bears interest at a rate of 4.0% per annum3.1% and matures in June 2060. The PPC JV Loan may not be prepaid prior to July 1, 2020. From July 1, 2020 through June 30, 2030,loan includes a prepayment premium is due to the lender of 1.0%2% - 10.0% of10% for any additional principal prepaid.that is prepaid through August 31, 2031. The PPC JV Loanloan is secured by the Pier Park Crossings JV’s real property and the assignment of rents and leases.certain other Security Interests. See Note 12. 10. Debt, Net included in Item 15 of this Form 10‑K10-K for additional information.

In May 2019, the Watersound Origins Crossings JV entered into a $37.9 million loan (the “Watersound Origins Crossings JV Loan”). In January 2022, the Watersound Origins Crossings JV entered into a modification that increased the principal amount of the loan to $44.0 million, modified the interest rate from 5.0% to the Secured Overnight Financing Rate (“SOFR”) plus 2.8%, with a floor of 3.3%, and provides for payments of interest only with a final balloon payment at maturity in May 2024. As of December 31, 2019, $2.92022 and 2021, $44.0 million and $37.9 million, respectively, was outstanding on the Watersound Origins Crossings JV Loan. The Watersound Origins Crossings JV Loan bears interest at a rate of 5.0% and matures in May 2024. The Watersound Origins Crossings JV Loanloan is secured by the real property assignment of rents and the security interest in the rents and personal property.certain other Security Interests. In connection with the Watersound Origins Crossings JV Loan,loan, we executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Watersound Origins Crossings JV Loan. As guarantor, our liability has been reduced to 25% of the outstanding principal amount, based on meeting certain debt service coverage and loan to value requirements. In addition, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation or failure to abide by other certain obligations on the part of such guarantor. We are the sole guarantor and will receive a monthly fee related to the guarantee from our JV partner based on the JV partner’s ownership percentage. See Note 12. 10. Debt, Net included in Item 15 of this Form 10‑K10-K for additional information. In January 2023, we began the process to refinance the Watersound Origins Crossings JV Loan with a loan commitment to be insured by HUD.

In June 2019, the Watercrest JV entered into a $22.5 million loan (the “Watercrest JV Loan”). As of December 31, 2019, there2022 and 2021, $21.0 million and $20.1 million, respectively, was no principal balance outstanding on the Watercrest JV Loan. The Watercrest JV Loanloan bears interest at a rate of LIBOR plus 2.2% and matures in June 2047. The Watercrest JV Loanloan is secured by the real property assignment of rents, leases and deposits and the security interest in the rents and personal property.certain other Security Interests. In connection with the Watercrest JV Loan,loan, we executed a guarantee in favor of the lender to guarantee the payment and

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performance of the borrower under the Watercrest JV Loan. We are the sole guarantor and will receive a quarterly fee related to the guarantee from our JV partner based on the JV partner’s ownership percentage. WeThe Watercrest JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR. The interest rate swap iswas effective June 1, 2021 and matures on June 1, 2024 and fixed the variable

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Table of Contents

rate debt on the notional amount of related debt of $20.0 million to a rate of 4.37%4.4%. In April 2022, the swap was terminated resulting in a gain of $0.1 million, included in interest expense on the consolidated statements of income for the year ended December 31, 2022. See Item 7A. QuantitativeNote 6. Financial Instruments and Qualitative Disclosures about Market Risk for additional information regarding LIBOR related risks. Also seeFair ValueMeasurements and Note 12. 10. Debt, Net included in Item 15 of this Form 10‑K10-K for additional information.

In August 2019, a wholly ownedwholly-owned subsidiary of ours entered into a $5.5 million loan, which is guaranteed by us (the “Beckrich Building III Loan”). As of December 31, 2019, there2022 and 2021, $5.0 million and $5.2 million, respectively, was no principal balance outstanding on the Beckrich Building III Loan. The Beckrich Building III Loanloan bears interest at a rate of LIBOR plus 1.7% and matures in August 2029. The Beckrich Building III Loanloan is secured by the real property assignment of leases, rents and profits and the security interest in the rents and personal property. In connection with the Beckrich Building III Loan, we executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Beckrich Building III Loan. certain other Security Interests. See Note 12. 10. Debt, Net included in Item 15 of this Form 10‑K10-K for additional information.

In October 2019, the Pier Park Crossings Phase II JV entered into a $17.5 million loan (the “PPC II JV Loan”). As of December 31, 2019, there2022 and 2021, $22.6 million and $17.4 million, respectively, was no principal balance outstanding on the PPC II JV Loan. TheIn April 2022, the Pier Park Crossings Phase II JV refinanced the PPC II JV Loan that increased the principal amount of the loan, which had a balance of $17.3 million at the time of the refinance, to $22.9 million, fixed the interest rate to 2.7% and provides for monthly payments of principal and interest through maturity in May 2057. The refinanced loan terms include a prepayment premium due to the lender of 1% - 10% for any principal that is prepaid through May 31, 2032. The refinanced loan is insured by HUD and is secured by the real property and certain other Security Interests. During 2022, we incurred $0.2 million of additional loan cost, related to the refinance. As a result of the refinance, the year ended December 31, 2022 includes a $0.1 million loss on early extinguishment of debt related to unamortized debt issuance costs, included within other income, net on the consolidated statements of income. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In March 2020, a wholly-owned subsidiary of ours entered into a $15.3 million loan, which is guaranteed by us (the “Airport Hotel Loan”). As of both December 31, 2022 and 2021, $14.6 million was outstanding on the Airport Hotel Loan. The loan bears interest at LIBOR plus 2.0%, with a floor of 3.0%, and matures in October 2024March 2025. The loan is secured by the real property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In April 2020, the Pier Park Resort Hotel JV entered into a loan with an initial amount of $52.5 million up to a maximum of $60.0 million through additional earn-out requests (the “Pier Park Resort Hotel JV Loan”). As of December 31, 2022 and 2021, $45.2 million and $14.7 million, respectively, was outstanding on the Pier Park Resort Hotel JV Loan. The loan matures in April 2027 and bears interest at a rate of LIBOR plus 2.25%2.2% during construction and LIBOR plus 2.10% after completion2.0% upon hotel opening. In December 2022, the Pier Park Resort Hotel Loan was amended, effective February 10, 2023, to bear interest at a rate of construction and final draw.SOFR plus 2.1%. The PPC II JV Loanloan is secured by the real property assignment of rents and leases and the security interest in the rents, leases and personal property.certain other Security Interests. In connection with the PPC IIloan, as guarantors, we and our JV Loan, we executedpartner entered into a guarantee based on each partner’s ownership interest in favor of the lender, to guarantee the payment and performance of the borrowerborrower. As guarantor, our liability under the PPC IIloan will be released upon reaching and maintaining certain debt service coverage for twelve months. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants or warranties to be performed on the part of such guarantor. The Pier Park Resort Hotel JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR. The interest rate swap was effective December 10, 2022 and matures on April 12, 2027 and fixed the variable rate on the notional amount of related debt of $42.0 million to a rate of 3.2%. See Note 6. Financial Instruments and Fair Value Measurements and Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In November 2020, a wholly-owned subsidiary of ours entered into a $16.8 million loan, which is guaranteed by us (the “Breakfast Point Hotel Loan”). As of December 31, 2022 and 2021, $16.4 million and $11.8 million, respectively, was outstanding on the Breakfast Point Hotel Loan. The loan matures in November 2042. In November 2022, the Breakfast Point Hotel loan was amended to fix the interest rate to 6.0% through November 2027 and the 1-year constant maturity Treasury rate plus 3.3% from December 2027 through November 2042, with a minimum rate of 6.0% throughout the term of the loan. The amendment also includes a prepayment premium due to the lender of 1% - 3% of the outstanding principal balance for any additional principal that is prepaid through November 2027. The loan is

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secured by the real property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In November 2020, a wholly-owned subsidiary of ours entered into a $5.8 million loan, which is guaranteed by us (the “Self-Storage Facility Loan”). As of both December 31, 2022 and 2021, $4.7 million was outstanding on the Self-Storage Facility Loan. The loan matures in November 2025 and bears interest at a rate of LIBOR plus 2.4%, with a floor of 2.9%. The loan is secured by the real property and certain other Security Interests. Our liability as guarantor under the loan shall not exceed $2.9 million, plus any additional fees, upon reaching and maintaining certain debt service coverage. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In January 2021, The Lodge 30A JV entered into a $15.0 million loan (the “Lodge 30A JV Loan”). As of December 31, 2022 and 2021, $13.3 million and $7.5 million, respectively, was outstanding on the Lodge 30A JV Loan. We areThe loan bears interest at a rate of 3.8% and matures in January 2028. The loan is secured by the solereal property and certain other Security Interests. In connection with the loan, we, wholly-owned subsidiaries of ours and our JV partner entered into a joint and several payment and performance guarantee in favor of the lender. Upon reaching a certain debt service coverage ratio for a minimum of twenty-four months, our liability as guarantor will be reduced to 75% of the outstanding principal amount for a twelve-month period. The debt service coverage ratio will be tested annually thereafter and will be reduced to 50% in year four and 25% in year five. We receive a monthly fee related to the guarantee from our JV partner based on the JV partner’s ownership percentage. See Note 12. 10. Debt, Netincluded in Item 15 of this Form 10‑K10-K for additional information.

In March 2021, a wholly-owned subsidiary of ours entered into a $26.8 million loan, which is guaranteed by us (the “North Bay Landing Loan”). As of December 31, 2022 and 2021, $18.2 million and $1.3 million, respectively, was outstanding on the North Bay Landing Loan. The loan bears interest at a rate of LIBOR plus 2.5%, with a floor of 3.2%. Upon reaching a certain debt service coverage ratio, the loan will bear interest at a rate of LIBOR plus 2.3%, with a floor of 3.0%. The loan matures in September 2024 and includes an option for an extension of the maturity date by eighteen months, subject to certain conditions. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan will be reduced to 50% of the outstanding principal amount upon satisfaction of final advance conditions and reduced to 25% of the outstanding principal amount upon reaching and maintaining a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation or failure to abide by other certain obligations on the part of such guarantor. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In June 2021, a wholly-owned subsidiary of ours entered into a $28.0 million loan, which is guaranteed by us (the “Watersound Camp Creek Loan”). As of December 31, 2022 and 2021, $13.1 million and $3.4 million, respectively, was outstanding on the Watersound Camp Creek Loan. The loan bears interest at a rate of LIBOR plus 2.1%, with a floor of 2.6%, and matures in December 2047. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan will be reduced to 50% of the outstanding principal amount upon the project reaching and maintaining a trailing six months of operations with a certain debt service coverage ratio and reduced to 25% of the outstanding principal amount upon reaching and maintaining a trailing twelve months of operations with a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants, warranties or other certain obligations to be performed on the part of such guarantor. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In August 2021, a wholly-owned subsidiary of ours entered into a $12.0 million loan, which is guaranteed by us (the “Watersound Town Center Grocery Loan”). As of December 31, 2022 and 2021, $11.4 million and $0.6 million, respectively, was outstanding on the Watersound Town Center Grocery Loan. The loan bears interest at LIBOR plus 2.0%, with a floor of 2.2%, and matures in August 2031. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan will be reduced to 50% of the outstanding principal amount upon satisfaction of final advance conditions, issuance of the certificate of occupancy for the project and receipt of the initial base rent payment and reduced to 25% of the outstanding principal amount upon reaching a certain debt service coverage ratio and the project maintaining 93% occupancy for ninety consecutive days. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

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In October 2021, a wholly-owned subsidiary of ours entered into a $21.2 million loan, which is guaranteed by us (the “Hotel Indigo Loan”). As of December 31, 2022, $10.4 million was outstanding on the Hotel Indigo Loan. As of December 31, 2021, there was no principal balance outstanding on the Hotel Indigo Loan. In June 2022, the Hotel Indigo Loan was amended to revise the interest rate to SOFR plus 2.7%, with a floor of 2.7%, through October 2023 and SOFR plus 2.5%, with a floor of 2.5%, from November 2023 through maturity. The loan matures in October 2028 and includes an option for an extension of the maturity date by sixty months, subject to certain conditions. The loan is secured by the leasehold property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In January 2022, the Mexico Beach Crossings JV entered into a $43.5 million loan, insured by HUD (the “Mexico Beach Crossings JV Loan”). As of December 31, 2022, $23.4 million was outstanding on the Mexico Beach Crossings JV Loan. The loan bears interest at a rate of 3.0% and matures in March 2064. The loan may not be prepaid prior to April 1, 2024 and if any additional principal is prepaid from April 1, 2024 through March 31, 2034 a premium is due to the lender of 1% - 10%. The loan is secured by the real property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In July 2022, a wholly-owned subsidiary of ours entered into a $13.7 million loan, which is guaranteed by us (the “Topsail Hotel Loan”). As of December 31, 2022, $5.2 million was outstanding on the Topsail Hotel Loan. The loan bears interest at a rate of SOFR plus 2.1%, with a floor of 3.0% and matures in July 2027. The loan is secured by the real property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

In December 2022, a wholly-owned subsidiary of ours entered into a $37.0 million loan, which is guaranteed by us (“The Pearl Hotel Loan”). As of December 31, 2022, $37.0 million was outstanding on The Pearl Hotel Loan. The loan bears interest at a rate of 6.3% and matures in December 2032. The loan includes a prepayment fee due to the lender of 1% - 5% of the outstanding principal balance if the loan is refinanced with another financial institution through December 2027. The loan is secured by the real property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.

CDD bonds financed the construction of infrastructure improvements in some of our communities. The principal and interest payments on the bonds are paid by assessments on the properties benefited by the improvements financed by the bonds. We have recorded a liability for CDD debt that is associated with platted property, which is the point at which it becomes fixed orand determinable. Additionally, we have recorded a liability for the balance of the CDD debt that is associated with unplatted property if it is probable and reasonably estimable that we will ultimately be responsible for repayment. We have recorded CDD related debt of $7.0$4.1 million as of December 31, 2019.2022. Total outstanding CDD debt related to our land holdings was $17.7$12.8 million atas of December 31, 2019,2022, which is comprised of $14.7$10.7 million at the SouthWood $2.6community, $2.0 million at the existing Pier Park retail center and $0.4$0.1 million at the Wild Heron.Heron residential community. We pay interest on this total outstanding CDD debt.

As of December 31, 2022, our unconsolidated Watersound Fountains Independent Living JV, Latitude Margaritaville Watersound JV, Pier Park TPS JV, Pier Park RI JV, Busy Bee JV and Electric Cart Watersound JV had various loans outstanding, some of which we have entered into guarantees. See Note 4. Joint Ventures and Note 20. Commitments and Contingencies included in Item 15 of this Form 10-K for additional information.

In June 2020, we, as lender, entered into a $10.0 million secured revolving promissory note with the unconsolidated Latitude Margaritaville Watersound JV, as borrower (the “Latitude JV Note”). As of December 31, 2022, there was no principal balance outstanding on the Latitude JV Note. As of December 31, 2021, $7.1 million was outstanding on the Latitude JV Note. The Latitude JV Note was provided by us to finance the development of the pod-level, non-spine infrastructure. Future advances, if any, will be repaid by the JV as each home is sold by the JV, with the aggregate unpaid principal and all accrued and unpaid interest due at maturity in June 2025. The note is secured by a mortgage and security interest in and on the real property and improvements located on the real property of the JV. See Note 4. Joint Ventures and Note 8. Other Assets included in Item 15 of this Form 10-K for additional information.

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During the yearsyear ended December 31, 2019 and 2018,2022, we repurchased a total of 1,263,159 and 5,238,566576,963 shares respectively, of our common stock outstanding at an average purchase price of $34.81, per share, for an aggregate purchase price of $20.8 million and $93.4 million, respectively, including costs.$20.0 million. During the year ended December 31, 2021, we did not repurchase shares of our common stock outstanding. See Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 16. 15. Stockholders’ Equity included in Item 15 of this Form 10‑K10-K for additional information regarding common stock repurchases related to the Stock Repurchase Program and treasury stock retirement during 20192022.

As part of timberland sales in 2008, we have recorded a retained interest with respect to notes contributed to bankruptcy-remote qualified special purpose entities of $8.2 million for the installment notes monetized through December 31, 2022. This balance represents the present value of future cash flows to be received over the life of the installment notes, using management’s best estimates of underlying assumptions, including credit risk and 2018.interest rates as of the date of the monetization, plus the accretion of investment income based on an effective yield, which is recognized over the term of the notes, less actual cash receipts. See Note 8. Other Assets included in Item 15 of this Form 10-K for additional information.

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TableAs part of Contentscertain sales of timberlands in 2008 and 2014, we generated significant tax gains. The installment note’s structure allowed us to defer the resulting federal tax liability of $20.4 million until 2023 - 2024 and $37.8 million until 2029, respectively, the maturity dates for the installment notes. We have a deferred tax liability related to the gains in connection with these sales.

As of December 31, 2022 and 2021, we were required to provide surety bonds that guarantee completion and maintenance of certain infrastructure in certain development projects and mitigation banks, as well as other financial guarantees of $38.1 million and $36.9 million, respectively, as well as standby letters of credit in the amount of $17.3 million and $12.9 million, respectively, which may potentially result in a liability to us if certain obligations are not met.

In conducting our operations, we routinely hold customers’ assets in escrow pending completion of real estate transactions, and are responsible for the proper disposition of these balances for our customers. These amounts are maintained in segregated bank accounts and have not been included in the accompanying consolidated balance sheets, consistent with U.S. generally accepted accounting principles (“GAAP”) and industry practice. The cash deposit accounts and offsetting liability balances for escrow deposits in connection with our title insurance agencies for real estate transactions were $8.0 million and $9.3 million as of December 31, 2022 and 2021, respectively, these escrow funds are not available for regular operations.

Summary of Cash Flows

A summary of our cash flows from operating, investing and financing activities are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

    

​

Year Ended December 31, 

​

​

 

2022

    

2021

    

2020

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

2019

    

2018

    

2017

 

In millions

​

​

​

In millions

Net cash provided by operating activities

 

$

30.4

 

$

41.4

 

$

53.7

​

​

$

48.2

​

$

111.8

​

$

37.3

Net cash (used in) provided by investing activities

 

 

(29.3)

 

 

44.1

 

 

44.4

Net cash used in financing activities

 

 

(10.5)

 

 

(79.9)

 

 

(149.2)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(9.4)

 

 

5.6

 

 

(51.1)

Net cash used in investing activities

​

​

 

(189.8)

​

 

(196.1)

​

 

(175.3)

Net cash provided by financing activities

​

​

 

112.5

​

 

48.6

​

 

59.4

Net decrease in cash, cash equivalents and restricted cash

​

​

 

(29.1)

​

 

(35.7)

​

 

(78.6)

Cash, cash equivalents and restricted cash at beginning of the year

 

 

198.1

 

 

192.5

 

 

243.6

​

​

 

74.4

​

 

110.1

​

 

188.7

Cash, cash equivalents and restricted cash at end of the year

 

$

188.7

 

$

198.1

 

$

192.5

​

​

$

45.3

​

$

74.4

​

$

110.1

​

Cash Flows from Operating Activities

Cash flows fromprovided by operating activities include costsincludes net income, adjustments for non-cash items, changes in operating assets and liabilities and expenditures related to assets ultimately planned to be sold, including residential real estate development and related amenities, sales of timberlands or undeveloped and developed land and land developed by the commercial leasingsegment. Adjustments for non-cash items primarily include depreciation, depletion and sales segment.amortization,

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unrealized loss on investments, net, equity in (income) loss from unconsolidated joint ventures, net of distributions, deferred income tax expense, cost of real estate sold and gain on contributions to unconsolidated joint ventures. Net cash provided by operations was $30.4$48.2 million in 2019,2022, as compared to $41.4$111.8 million in 2018. Net2021. During 2022 net income was $70.2 million, compared to $73.7 million in 2021. The decrease in net cash provided by operations included $23.1 millionoperating activities was primarily due to expenditures for and acquisition of a one-time receiptreal estate to be sold, cost of RiverTown impact feesreal estate sold, equity in (income) loss from unconsolidated joint ventures, net of distributions, gain on insurance for damage to property and equipment, net and the changes in deferred income tax expense and deferred revenue, partially offset by the changes in other assets during 2018.the year.

Cash Flows from Investing Activities

Cash flows (used in) provided byused in investing activities primarily includeincludes capital expenditures for operating property and property and equipment used in our operations, and purchases of investments, capital contributions to unconsolidated joint ventures and payments for interest in unconsolidated joint venture, partially offset by proceeds from insurance claims, sales and maturities of investments, proceedscapital distributions from insurance claims,unconsolidated joint ventures and maturities of assets held by special purpose entities and proceeds from the disposition of assets.entities. During 2019,2022, net cash used in investing activities was $29.3$189.8 million, which included purchases of investments of $5.9 million and capital expenditures for operating property and propertyequipment, purchases of investments of U.S. Treasury Bills of $97.1 million and equipment,capital contributions to unconsolidated joint ventures of $2.5 million, partially offset by salesproceeds from insurance claims of investments of $30.8$9.8 million, maturities of investments of $7.0$92.0 million, proceeds from insurance claims of $12.1 million, maturities of assets held by special purpose entities of $0.8 million and proceeds from the disposition of assets of $0.1 million. During 2018, net cash provided by investing activities was $44.1 million, which included sales of investments of $75.8$54.3 million, maturitiescapital distributions from unconsolidated joint ventures of investments of $10.0 million, proceeds from the disposition of assets of $5.0$12.0 million and maturities of assets held by special purpose entities of $0.8 million. During 2021, net cash used in investing activities was $196.1 million, partially offset by purchases of investments of $22.1 million andwhich included capital expenditures for operating property and propertyequipment, purchases of investments of U.S. Treasury Bills of $157.9 million, capital contributions to unconsolidated joint ventures of $9.4 million and equipment.payments for interest in unconsolidated joint venture of $0.5 million, partially offset by proceeds from insurance claims of $4.9 million, maturities of investments of $117.0 million, sales of investments of $1.5 million, capital distributions from unconsolidated joint ventures of $1.0 million and maturities of assets held by special purpose entities of $0.8 million.

Capital expenditures for operating property and property and equipment were $74.2$259.1 million and $25.4$153.5 million during 20192022 and 2018,2021, respectively, which were primarily for our commercial leasing and sales and hospitality segments.segments, including the acquisition of The Pearl Hotel in 2022. See Note 3. Investment in Real Estate, Net included in Item 15 of this Form 10-K for additional information regarding the acquisition.

Cash Flows from Financing Activities

Net cash used inprovided by financing activities was $10.5 million and $79.9$112.5 million for 2019 and 2018, respectively.2022, compared to $48.6 million in 2021. Net cash used inprovided by financing activities during 20192022 included the repurchasecapital contributions from non-controlling interest of common stock$3.8 million and borrowings on debt of $20.8$184.5 million, partially offset by capital distributions to non-controlling interest of $2.4 million, additional ownership interest acquired in WindmarkPier Park North JV of $11.6$7.7 million, repurchase of common shares of $20.0 million, dividends paid of $23.5 million, principal payments for debt of $1.6$20.2 million, principal payments for finance leases of $0.1 million and debt issuance costs of $1.2 million,$1.9 million. Net cash provided by financing activities during 2021 included capital contribution to unconsolidated affiliatefrom non-controlling interest of $1.1$3.2 million and borrowings on debt of $69.3 million, partially offset by capital distribution to non-controlling interest of $0.6$1.3 million, partially offset by borrowingsdividends paid of $18.8 million, principal payments on debt of $23.9 million and capital contribution from non-controlling interest of $2.5 million. Net cash used in financing activities during 2018 included the repurchase of our common stock of $93.4$2.3 million, principal payments for debtfinance leases of $1.4$0.1 million and debt issuance costs of $1.1 million, capital contribution to unconsolidated affiliate of $1.1 million and capital distribution to non-controlling interest of $0.4 million, partially offset by borrowings on debt of $16.6 million and capital contribution from non-controlling interest of $0.9$1.4 million.

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Off-Balance Sheet Arrangements

As of December 31, 2019 and 2018, we had various loans outstanding for which we have entered into guarantees and are required to comply with financial covenants. See Note 12. Debt, Net included in Item 15 of this Form 10‑K for additional information.

In January 2019, our unconsolidated Pier Park TPS JV, entered into a $14.4 million loan (the “Pier Park TPS JV Loan”). As of December 31, 2019, $6.8 million was outstanding on the Pier Park TPS JV Loan. The Pier Park TPS JV Loan bears interest at LIBOR plus 2.5% and matures in January 2026. The Pier Park TPS JV Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. In connection with the Pier Park TPS JV Loan, as guarantor we, a wholly owned subsidiary of ours and our JV partner entered into a joint and several guarantee in favor of the lender, to guarantee the payment and performance of the borrower. As guarantor our liability under the Pier Park TPS JV Loan will be automatically reduced to 50.0%, or a further 25.0% of the outstanding principal balance upon reaching and maintaining certain debt service coverage. See Note 22. Commitments and Contingencies included in Item 15 of this Form 10‑K for additional information.

In November 2019, our unconsolidated Busy Bee JV, entered into a $5.4 million construction loan maturing in November 2035 (the “Busy Bee JV Construction Loan”) and a $1.2 million equipment loan maturing in November 2027 (the “Busy Bee JV Equipment Loan”). As of December 31, 2019, $1.4 million was outstanding on the Busy Bee JV Construction Loan and less than $0.1 million was outstanding on the Busy Bee JV Equipment Loan. The loans bear interest at LIBOR plus 1.5%. The loans are secured by the real and personal property, assignment of rents and leases and a security interest in the construction contract and management agreement. In connection with the Busy Bee JV Construction Loan and the Busy Bee JV Equipment Loan, as guarantor we, a wholly owned subsidiary of ours and our JV partner entered into a joint and several guarantee in favor of the lender, to guarantee the payment and performance of the borrower through substantial completion. As guarantor, our liability under the loans upon substantial completion will be reduced to 50.0% for a twelve month period. Subsequent to that time, our guarantee will be released upon request. Upon release of our guarantee, our JV partner will be the sole guarantor and will receive a fee related to the guarantee from us based on our ownership percentage. See Note 22. Commitments and Contingencies included in Item 15 of this Form 10‑K for additional information.

We have assessed the need to record a liability for the guarantees related to our unconsolidated JVs and did not record an obligation as of December 31, 2019.

As part of a timberland sale in 2007 and 2008, we have recorded a retained interest with respect to notes contributed to bankruptcy-remote qualified special purpose entities of $12.2 million for the installment notes monetized through December 31, 2019. This balance represents the present value of future cash flows to be received over the life of the installment notes, using management’s best estimates of underlying assumptions, including credit risk and interest rates as of the date of the monetization, plus the accretion of investment income based on an effective yield, which is recognized over the term of the notes, less actual cash receipts.

At December 31, 2019, we were required to provide surety bonds that guarantee completion of certain infrastructure in certain development projects and mitigation banks of $10.7 million, which may potentially result in a liability to us if certain obligations are not met.

In conducting our operations, we routinely hold customers’ assets in escrow pending completion of real estate transactions, and are responsible for the proper disposition of these balances for our customers. These amounts are maintained in segregated bank accounts and have not been included in the accompanying consolidated balance sheets, consistent with U.S. generally accepted accounting principles (“GAAP”) and industry practice. The cash deposit accounts and offsetting liability balances for escrow deposits in connection with our title agency real estate transactions were $4.3 million and $1.6 million as of December 31, 2019 and 2018, respectively, these escrow funds are not available for regular operations.

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Contractual Obligations at December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payments due by Calendar Period

 

    

 

 

    

Less Than  

    

 

 

    

 

 

    

More Than   

 

 

Total

 

1 Year  

 

1-3 Years

 

3-5 Years

 

5 Years

 

 

In millions

Debt (1)

 

$

94.5

 

$

2.0

 

$

4.5

 

$

7.4

 

$

80.6

Interest related to debt, including Community Development District debt (1) (2)

 

 

49.3

 

 

3.7

 

 

7.3

 

 

6.9

 

 

31.4

Contractual obligations (3)

 

 

98.8

 

 

48.7

 

 

50.0

 

 

0.1

 

 

 —

Other long term liabilities (4)

 

 

71.5

 

 

 —

 

 

13.3

 

 

20.4

 

 

37.8

Finance lease obligations

 

 

0.3

 

 

0.1

 

 

0.1

 

 

0.1

 

 

 —

Operating lease obligations

 

 

0.9

 

 

0.2

 

 

0.3

 

 

0.1

 

 

0.3

Senior Notes held by special purpose entity (5)

 

 

180.0

 

 

 —

 

 

 —

 

 

 —

 

 

180.0

Interest related to Senior Notes held by special purpose entity (5)

 

 

81.1

 

 

8.6

 

 

17.1

 

 

17.1

 

 

38.3

Total contractual obligations

 

$

576.4

 

$

63.3

 

$

92.6

 

$

52.1

 

$

368.4

(1)

These amounts do not include additional CDD obligations associated with unplatted properties that are not yet fixed or determinable or that are not yet probable or reasonably estimable.

(2)

Interest related to debt represents interest payments due on fixed-rate loans and estimated interest payments on variable-rate loans outstanding at December 31, 2019. Interest payments on variable-rate loans are estimated using the interest rate as of December 31, 2019.

(3)

These aggregate amounts include individual contracts in excess of $0.1 million.

(4)

Other long term liabilities include certain of our deferred federal tax liabilities related to our installment note monetization transactions.

(5)

Senior Notes held by a consolidated special purpose entity. There is no recourse against us on the Senior Notes, as recourse is limited to proceeds from the installment note (the “Timber Note”) and the underlying letter of credit held by the special purpose entity. See Note 6. Financial Instruments and Fair Value Measurements included in Item 15 of this Form 10‑K for further discussion.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We base these estimates on historical experience, available current market information and on various other assumptions that management believes are reasonable under the circumstances. Additionally, we evaluate the results of these estimates on an on-going basis. Management’s estimates

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form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and our accounting estimates are subject to change.

Investment in Real Estate, Net and Cost of Real Estate Revenue. Costs associated with a specific real estate project are capitalized during the development period. These development costs include land and common development costs (such as roads, structures, utilities and amenities). We capitalize costs directly associated with development and construction of identified real estate projects. Indirect costs that clearly relate to a specific project under development, such as project administration, may also be capitalized. We capitalize interest (up to total interest expense) based on the amount of underlying expenditures and real estate taxes, on real estate projects under development.may also be capitalized.

Real estate development costs also include land and common development costs (such as roads, utilities and amenities), capitalized property taxes, capitalized interest and certain indirect costs. A portion of real estate development costs and estimates for costs to complete are allocated to each unit based on the relative sales value of each unit as compared to the estimated sales value of the total project. These estimates are reevaluated at least annually, and more

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frequently if warranted by market conditions, changes in the project’s scope or other factors, with any adjustments being allocated prospectively to the remaining property or units.

The capitalization period relating to direct and indirect project costs is the period in which activities necessary to ready a property for its intended use are in progress. The period begins when such activities commence, typically when we begin the site work foror construction on land already owned, and ends when the asset is substantially complete and ready for its intended use. Determination of when construction of a project is substantially complete and ready for its intended use requires judgment. We determine when the capitalization period begins and ends through communication with project and other managers responsible for the tracking and oversight of individual projects. In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed. If we determine not to complete a project, any previously capitalized costs that are not recoverable are expensed in the period in which the determination is made and recovery is not deemed probable.

Our investments in real estate are carried at cost, net of depreciation and timber depletion, unless circumstances indicate that the carrying value of the assets may not be recoverable. If we determine that an impairment exists due to the inability to recover an asset’s carrying value, an impairment charge is recorded to the extent that the carrying value exceeds estimated fair value. If such assets were held for sale, the provision for loss would be recorded to the extent that the carrying value exceeds estimated fair value less costs to sell.

Long-Lived Assets. Long-lived assets include our investments in land holdings, operating and development propertyproperties, investment in unconsolidated JV’s and property and equipment. Our investments in land holdings, operating and development properties and property and equipment are carried at cost, net of depreciation and timber depletion. We review our long-lived assets for impairment quarterly to determine whether events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As part of our review for impairment of long-lived assets, we review the long-lived asset’s carrying value, current period actual financial results as compared to prior period and forecastforecasted results contained in our business plan and any other events or changes in circumstances to identify whether an indicator of potential impairment may exist. Some of the events or changes in circumstances that are considered as indicators of potential impairment include:

·

●

a prolonged decrease in the fair value to below cost or demand for the properties;

·

●

a change in the expected use or development plans for the properties;

·

●

a material change in strategy that would affect the fair value of our properties;

·

●

continuing operating or cash flow losses for an operating property;

·

●

an accumulation of costs in excess of the projected costs for development or operating property; and

·

●

any other adverse change that may affect the fair value of the property.

We use varying methods to determine if an impairment exists, such as (i) considering indicators of potential impairment, (ii) analyzing expected future cash flows and comparing the expected future undiscounted cash flows of the property to its carrying value or (iii) determining market resale values.

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The accounting estimate related to real estate impairment evaluation is susceptible to change due to the use of assumptions about future sales proceeds and future expenditures. For projects under development or construction, an estimate of future cash flows on an undiscounted basis is performed using estimated future expenditures necessary to maintain the existing project and using management’s best estimates about future sales prices and planned holding periods. Based on our investment return criteria for evaluating our projects under development or undeveloped land, management’s assumptions used in the projection of undiscounted cash flows include:

·

●

the projected pace of sales of homesites based on estimated market conditions and our development plans;

·

●

estimated pricing and projected price appreciation over time;

·

●

the amount and trajectory of price appreciation over the estimated selling period;

·

●

the length of the estimated development and selling periods, which can differ depending on the size of the development and the number of phases to be developed;

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·

●

the amount of remaining development costs, including the extent of infrastructure or amenities included in such development costs;

·

●

holding costs to be incurred over the selling period;

·

●

for bulk land sales of undeveloped and developed parcels, future pricing is based upon estimated developed homesite pricing less estimated development costs and estimated developer profit;

·

●

for commercial, multi-family, self-storage and multi-familysenior living development property, future pricing is based on sales of comparable property in similar markets; and

·

●

whether liquidity is available to fund continued development.

For operating properties, an estimate of undiscounted cash flows requires management to make similar assumptions about the use and eventual disposition of such properties. Some of the significant assumptions that are used to develop the undiscounted cash flows include:

·

●

for investments in hotels, other rental units and vacation rental homes, use of average occupancy and room rates, revenue from food and beverage and other amenity operations, operating expenses and capital expenditures, and eventual disposition of such properties as hotels, private residence vacation units or condominiums, based on current prices for similar units appreciated to the expected sale date;

·

●

for investments in commercial, multi-family, self-storage, senior living or retail property, use of future occupancy and rental rates, operating expenses and capital expenditures and the amount of proceeds to be realized upon eventual disposition of such property at a terminal capitalization rate; and

·

●

for investments in club, assets,marina and retail assets, use of revenue from membership dues, future golf rounds and greens fees, boat slip rentals and boat storage fees, merchandise and other hospitality assets,operations, operating expenses and capital expenditures, and the amount of proceeds to be realized upon eventual disposition of such properties at a multiple of terminal year cash flows.

Homesites substantially completed and ready for sale are measured at the lower of carrying value or fair value less costs to sell. Management identifies homesites as being substantially completed and ready for sale when the properties are being actively marketed with intent to sell such properties in the near term and under current market conditions. Other homesites, which management does not intend to sell in the near term under current market conditions, are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of such property.

Other properties that management does not intend to sell in the near term under current market conditions and has the ability to hold are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of the property. Typically, assets are carried based on historical cost basis, which in some cases may exceed fair value if sold in the near term. The results of impairment analysis for development and operating properties are particularly dependent on the estimated holding and selling period for each asset group.

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If a property is considered impaired, the impairment charge is determined by the amount the property’s carrying value exceeds its fair value. We use varying methods to determine fair value, such as (i) analyzing expected future cash flows, (ii) determining resale values in a given market, (iii) applying a capitalization rate to net operating income using prevailing rates in a given market or (iv) applying a multiplemultiplier to revenue using prevailing rates in a given market. The fair value of a property may be derived either from discounting projected cash flows at an appropriate discount rate, through appraisals of the underlying property, or a combination thereof.

We classify the assets and liabilities of a long-lived asset as held-for-sale when management approves and commits to a formal plan of sale and it is probable that a sale will be completed. The carrying value of the assets held-for-sale is then recorded at the lower of their carrying value or fair value less costs to sell.

Income Taxes. In preparing our consolidated financial statements, significant management judgment is required to estimate our income taxes. Our estimates are based on our interpretation of federal and state tax laws. We estimate our actual current tax due and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. The temporary differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Adjustments may be required by a change in assessment of our deferred tax assets and liabilities, changes due to audit adjustments by federal and state tax authorities and changes in tax laws. To the extent adjustments are required in any given period, we will include the adjustments in the deferred tax assets and liabilities in our consolidated financial statements. We record a valuation allowance against our deferred tax assets as needed based upon our analysis of the timing and reversal of future taxable amounts and our historyhistorical and future expectations of taxable income.

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In general, a valuation allowance is recorded, if based on all the available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assetassets will not be realized. Realization of our deferred tax assets is dependent upon us generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from net loss carryforwards.

As of December 31, 20192022 and 2018,2021, we had a state net operating loss carryforwardNOL of $341.4$121.1 million and $357.0$229.3 million, respectively,respectively. As of December 31, 2022 and no2021, we had $3.4 million and $3.1 million of federal net operating loss carryforwards.NOLs. The federal NOLs are applicable to a specific QOF entity and do not expire. The majority of state net operating losses are available to offset future taxable income through 2036 and will begin expiring in 2029. In the third quarter of 2018, we reassessed our need for a valuation allowance by evaluating all available evidence, including but not limited to historical and projected pre-tax profits. Based on this assessment we determined that we had the ability to fully realize the future benefit of our net operating loss carryforward and released the valuation allowance in full, resulting in a $5.0 million tax benefit.2031. As of both December 31, 2017,2022 and 2021, we had a valuation allowance of $5.0 million.$0.3 million against certain state NOLs. As of December 31, 2017,2022 and 2021, we had a federal income tax receivablepayable of $8.4$3.5 million related toand $0.7 million, respectively, included within other liabilities on the reclassification of a U.S. federal alternative minimum tax (“AMT”) credit carryforward following the enactment of the Tax Act in December 2017, which is refundable to us in the years 2018 through 2021. During the year ended December 31, 2018, the U.S. federal AMT credit receivable decreased $4.5 million to $3.9 million due to the utilization in 2018. During the year ended December 31, 2019 the U.S. federal AMT credit receivable decreased $1.1 million to $2.8 million due to the expected utilization in 2019.consolidated balance sheets.

Recently Adopted Accounting Pronouncements

LeasesThere are no recently adopted accounting pronouncements which would have a material effect on our financial condition, results of operations and cash flows.

Recently Issued Accounting Pronouncements

Reference Rate Reform

In February 2016,March 2020, the FASB issued ASU 2016‑02, Leases (2020-04, Reference Rate Reform (“Topic 842)848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2016-02”2020-04”), that amendedprovides temporary optional guidance to ease the existingpotential burden in accounting standards for lease accounting, including requiring lesseesor recognizing the effects of reference rate reform on financial reporting. This guidance provides expedients and exceptions for applying GAAP to recognize both financecontract modifications and operating leases with terms of more than 12 months on the balance sheet.hedging relationships affected by reference rate reform if certain criteria are met. The accounting applied by a lessoramendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is largely unchanged by this amendment. This amendment also required certain quantitative and qualitative disclosures about leasing arrangements.expected to be discontinued due to reference rate reform. In January 2018,2021, the FASB issued ASU 2018‑01,2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”) which provided anclarifies the original guidance that certain optional transition practical expedientexpedients and exceptions in contract modifications and hedge accounting apply to not evaluate underderivatives that are affected by the new lease standard, existing or expired land easements that were not previously accounted for as leases.discounting transition. In July 2018,December 2022, the FASB issued ASU 2018-10 that provided clarifications and improvements to ASU 2016-02. In July 2018, the FASB issued ASU 2018-11 that provided entities with an additional and optional transition method to apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. In December 2018, the FASB issued ASU 2018-20 that provided an accounting policy election for certain narrow-scope improvements for lessors. In March 2019, the FASB issued ASU 2019-01 that provided clarifications and improvements to ASU 2016-02. During our evaluation of ASU 2016-02, as amended, (“Topic 842”) the following practical expedients and accounting policies with respect to Topic 842 have been elected and/or adopted effective January 1, 2019:

·

We, as lessee and as lessor, did not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases or (iii) initial direct costs for any expired or existing leases.

·

We, as lessee, did not apply the recognition requirements of Topic 842 to short-term (twelve months or less) leases. Instead, we, as lessee, recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

·

We, as lessor, did not separate nonlease components from lease components and, instead, are accounting for each separate lease component and the nonlease components associated with that lease as a single component if the nonlease components otherwise would be accounted for under ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”). The primary reason for this election is related to instances where common area maintenance is, or may be, a component of base rent within a lease agreement.

We adopted the new guidance, including amendments, as of January 1, 2019 and elected to implement Topic 842 retrospectively using the cumulative-effect adjustment transition method as2022-06, Reference Rate Reform (Topic 848) - Deferral of the dateSunset Date of adoption. As a result, prior periods have not been restated. As ofTopic 848 (“ASU 2022-06”) that extends the date of adoption, a cumulative-effect adjustment was not necessary and we recognized an operating lease right-of use assets of $0.4 million and corresponding operating lease liabilities of $0.4 million based on the present value of minimum rental payments relatedtemporary reference rate reform guidance under Topic 848 from December 31, 2022 to leases for which we are the lessee. The

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operating lease right-of-use assets and corresponding operating lease liabilities are included within other assets and other liabilities, respectively, on the consolidated balance sheets. There were no adjustments related to the leases for which we are the lessor. The adoption of this guidance did not materially impact results of operations or cash flows.

Codification Updates

In July 2019, the FASB issued ASU 2019-07, Codification Updates to SEC Sections—Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates that aligns SEC paragraphs in the codification with changes made in the above-referenced SEC rules to simplify disclosures, modernize the reporting and disclosureof information by registered investment companies and other items.December 31, 2024. This new guidance was effective upon issuance and did nothave a materialmay be applied prospectively through December 31, 2024, as reference

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rate activities occur. In 2022, some of our debt agreements that referenced LIBOR were amended to an alternative rate, ASU 2020-04 was applied at the time of these modifications and there was no impact on our financial condition, results of operations and cash flows.

Recently Issued Accounting Pronouncements

Financial Instruments - Credit Losses

In June 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses(Topic 326) (“ASU 2016-13”), that requires a financial asset measured at amortized cost There is no current additional impact to be presented at the net amount expected to be collected and requires that credit lossesus from available-for-sale debt securities be presented as an allowance for credit loss. In November 2018, the FASB issued ASU 2018-19, which clarifies that impairment of receivables from operating leases should be accounted for using lease guidance. In April 2019, the FASB issued ASU 2019-04, which clarifies and improves ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In November 2019, the FASB issued ASU 2019-11, which provides codification improvements to ASU 2016-13. This new guidance will be effective for us on January 1, 2020 and implemented using a cumulative-effect adjustment to retained earnings as of the date of adoption. We have evaluated the impact of the adoption of this guidance and as a result of this evaluation, determined itwe will not have a material impact on our financial condition, results of operations and cash flows.

Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (“ASU 2019-12”) which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes (“Topic 740”). The amendment also improves consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This new guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations and cash flows.

Investments – Equity Securities, Investments-Equity Method and Joint Ventures and Derivatives and Hedging

In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force)  which clarifies the interaction between the accounting standard on recognition and measurement of financial instruments in Topic 321, Investments – Equity Securities and Topic 323, Investments - Equity Method and Joint Ventures.  The new guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluatingconsider the impact that the adoption of this guidance will have on our financial condition, results of operations and cash flows.

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Forward-Looking Statements

This annual report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements include, among other things, information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, strategies, prospects and objectives. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue" or other similar expressions concerning matters thatflows if there are not historical facts. Specifically, this annual report contains forward-looking statements regarding:

·

our expectations concerning our future business strategy, including maintaining more than sufficient enterprise liquidity;

·

our intention to use our land holdings, our cash and cash equivalents and our investments to increase recurring revenue while creating long-term value for our shareholders;

·

our expectations regarding investments that we believe will contribute towards increasing our future growth, particularly in real estate projects that provide recurring revenue;

·

our 2020 capital expenditures budget and the timing of benefits of these investments;

·

our assessment and expectations regarding the demographics and corresponding market demand and growth of Northwest Florida;

·

our assessment and expectations regarding the impact of Hurricane Michael, including the amount and timing of insurance proceeds and ability to recover additional losses;

·

our expectations regarding the amount and timing of revenue we expect to realize upon closing over the life of the residential homesites under contract;

·

our expectations regarding homesite sales and timing of sales for new developments;

·

our beliefs regarding opportunities to develop, improve or acquire a broad range of asset types that will generate recurring revenue;

·

our plan to focus on investing in residential communities that have the potential for long term, scalable and repeatable revenue;

·

our expectation to continue to be a developer of completed residential homesites for sale to builders and retail homesites for sale to consumers in our communities;

·

our intention to form additional JVs with third parties for the development of commercial real estate and residential real estate projects;

·

our plan to expand the scope and scale of our hospitality assets and services in order to enhance the value and contribution those assets provide;

·

our expectations regarding our assisted living communities;

·

our intention to continue to work collaboratively with public and private partners on strategic infrastructure and economic development initiatives that will help to attract quality job creators and help to diversify the Northwest Florida economy;

·

our expectations regarding opportunities near the Northwest Florida Beaches International Airport and our other land holdings in Northwest Florida;

·

our belief that by entering into partnerships, JVs or other collaborations and alliances with best of class operators, we can efficiently utilize our land assets while reducing our capital requirements;

·

our expectation to continue a cost and investment discipline to ensure low fixed expenses and bottom line performance;

·

our plan to continue to maintain a high degree of liquidity while seeking opportunities to invest our cash in ways that we believe will increase shareholder value, including investments in Securities, share repurchases, real estate and other strategic investments;

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·

our expectation regarding our liquidity or ability to satisfy our working capital needs, expected capital expenditures and principal and interest payments on our long term debt;

·

our estimates and assumptions regarding the installment notes and the Timber Note;

·

our estimated impact of new accounting pronouncements; and

·

our expectation regarding the impact of pending litigation, claims, other disputes or governmental proceedings, on our cash flows, financial condition or results of operations.

These forward-looking statements reflect our current views about future events and are subjectadditional modifications to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, those risk factors and disclosures set forth in this Form 10‑K and subsequent Form 10‑Qs and other current reports, and the following:existing agreements.

·

any changes in our strategic objectives or our ability to successfully implement such strategic objectives, including development of our real estate, expanding our portfolio of income producing commercial and residential properties and expanding the scope of our hospitality assets and services;

·

any potential negative impact of our longer-term property development strategy, including losses and negative cash flows for an extended period of time if we continue with the self-development of our entitlements;

·

our ability and the ability of our investment advisor to identify and acquire suitable investments for our investment portfolio that meet our risk and return criteria;

·

significant decreases in the market value of our investments in Securities or any other investments;

·

our ability to capitalize on strategic opportunities presented by a population growth in Florida, particularly Northwest Florida;

·

our ability to accurately predict market demand for the range of potential residential and commercial uses of our real estate holdings in Northwest Florida;

·

volatility in the consistency and pace of our residential real estate revenue;

·

economic or other conditions that affect the future prospects for the Southeastern region of the U.S. and the demand for our products, including a slowing of the population growth in Florida, inflation, or unemployment rates or declines in consumer confidence or the demand for, or the prices of, housing;

·

any downturns in real estate markets in Florida or across the nation;

·

any reduction in the supply of mortgage loans or tightening of credit markets;

·

our dependence on the real estate industry and the cyclical nature of our real estate operations;

·

the impact of natural or man-made disasters or weather conditions, including hurricanes, fires and other severe weather conditions, on our business, including the impact of Hurricane Michael;

·

our ability to fully recover under claims for losses related to Hurricane Michael;

·

our ability to successfully and timely obtain land use entitlements and construction financing, maintain compliance with state law requirements and address issues that arise in connection with the use and development of our land, including the permits required;

·

changes in laws, regulations or the regulatory environment affecting the development of real estate;

·

our ability to effectively deploy and invest our assets, including our Securities;

·

our ability to effectively manage our real estate assets, as well as the ability of our JV partners to effectively manage the day-to-day activities of our JV projects;

·

our ability to close and realize the expected revenue of the residential homesites currently under contract;

·

our ability to successfully and timely complete homesite construction in our new developments;

·

our ability to effectively manage risks associated with the hospitality industry;

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·

our ability to attract and work effectively with strategic partners;

·

our ability to successfully enter into previously announced potential JVs;

·

our ability to realize the anticipated benefits of our acquisitions, JVs, investments in leasable spaces and operations and share repurchases;

·

our ability to carry out the Stock Repurchase Program in accordance with applicable securities laws;

·

our ability to fully realize benefits of the federal QOZ Program;

·

the impact of the Tax Act and other changes in federal or state tax laws on our business and financial condition;

·

increases in operating costs, including costs related to real estate taxes, owner association fees, construction materials, labor and insurance and our ability to manage our cost structure;

·

the sufficiency of our current cash position, anticipated cash flows from cash equivalents and short term investments and cash generated from operations to satisfy our anticipated working capital needs, capital expenditures and principal and interest payments;

·

our ability to anticipate the impact of pending environmental litigation matters or governmental proceedings on our financial condition or results of operations;

·

the expense, management distraction and possible liability associated with litigation, claims, other disputes or governmental proceedings;

·

Fairholme’s ability to influence major corporate decisions affecting the Company;

·

potential liability under environmental or construction laws, or other laws or regulations;

·

the impact if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting; the impact if the SEC were to disagree with our Investment Company Act determinations;

·

our ability to retain key personnel and recruit staff effectively; and

·

our ability to successfully estimate the impact of certain accounting and tax matters that arise from the installment notes and the Timber Note;

·

our ability to satisfy our current debt obligations and to obtain additional financing in the future;

·

uncertainty about the future of LIBOR may adversely affect our business and financial results; and

·

the obligations associated with being a public company require significant resources and management attention.

Item 7A.    Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks primarily from interest rate risk fluctuations. We have investments in certain preferred stockU.S. Treasury Bills that have fixed interest rates for which changes in interest rates generally affect the fair value of the investment, and are recorded inbut not the consolidated statements of income.earnings or cash flows. A hypothetical 100 basis point increase in interest rates would result in a decrease of approximately $0.3$0.1 million in the market value of these investments as of December 31, 2019. In addition,2022. Any realized gain or loss resulting from such interest rate changes would only occur if we sold the investments prior to maturity or if a decline in their value is determined to be related to credit loss.

We have exposure to credit risk associated with our investmentsSecurities and these instruments are subject to price fluctuations as a result of changes in certain preferred stock are non-investment grade, whichthe financial market’s assessment of issuer credit quality, increases in delinquency and default rates, changes in prevailing interest rates and other economic factors. A downgrade of the U.S. government’s credit rating may affect their fair value.also decrease the value of our Securities. As of December 31, 2022, all of our total Securities were rated AA or better.

Our cash and cash equivalents are invested in commercial paper, money market instruments and short term U.S. Treasury Bills.instruments. Changes in interest rates related to these investments would not significantly impact our results of operations. The amount of interest earned on one of our retained interest investments is based on LIBOR. A 100 basis point change in the interest rate may result in an insignificant change in interest earned on the investment.

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interest expense on some of our project financing is based on LIBOR and SOFR. Based on the outstanding balance of these loans as of December 31, 2022, a hypothetical 100 basis point increase in the applicable rate would result in an increase to our annual interest expense of $2.0 million.

The United Kingdom's Financial Conduct Authority, which regulates LIBOR, has publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates and will cease publication of U.S. dollar LIBOR as of June 30, 2023, and U.S. regulators have issued supervisory guidance encouraging banks to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate by December 31, 2021. Accordingly, LIBOR is expected to be discontinued after 2021.in the near future. Many of our current debt agreements have an interest rate tied to LIBOR. Most ofLIBOR, but these agreements provide for an alternative base rate in the event that LIBOR is discontinued, but not all do so.discontinued. There can be no assurances as to what alternative base rates may be and whether such base rate will be more or less favorable than LIBOR and any other unforeseen impacts of the potential discontinuation of LIBOR. We intend to continue monitoring the developments with respect to the potential phasing out of LIBOR after 2021 and work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR.condition.

Increases in interest rates, reductions in mortgage availability or the tax benefits of mortgage financing or residential ownership may negatively impact our real estate business and would also increase the costs of our development projects. Similarly, a downturn in economic conditions in Northwest Florida would reduce discretionary income and decrease demand for our hospitality segment operations.

Item 8.    Financial Statements and Supplementary Data

The Financial Statements, related notes and the ReportsReport of Independent Registered Public Accounting FirmsFirm are included in Part IV, Item 15 of this Form 10‑K10-K and incorporated by reference.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.    Controls and Procedures

(a)

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in

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Rules 13a‑15(e)13a-15(e) and 15d‑15(e)15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

(b)

Changes in Internal Control Over Financial Reporting. During the quarter ended December 31, 2019,2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(c)

Management’s Annual Report on Internal Control Over Financial Reporting.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a‑15(f)13a-15(f) and 15d‑15(f)15d-15(f) under the Exchange Act. The Company’sOur internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’sOur internal control over financial reporting includes those policies and procedures that:

(i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii)(ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

(iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

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Management assessed the effectiveness of the Company’sour internal control over financial reporting as of December 31, 2019.2022. In making this assessment, management used the criteria described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our assessment and those criteria, management concluded that our internal control over financial reporting was effective as of December 31, 2019.2022. Management reviewed the results of their assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of December 31, 20192022 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their attestation report as follows.

(d)

Report of Independent Registered Public Accounting Firm.

Board of Directors and Stockholders

The St. Joe Company

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of The St. Joe Company (a Florida corporation) and subsidiaries (the “Company”) as of December 31, 2019,2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), theconsolidatedfinancial statements of the Company as of and for the year ended December 31, 2019,2022, and our report dated February 26, 202022, 2023, expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s

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Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Grant Thornton LLP

Tampa, Florida

February 26, 202022, 2023

​

Item 9B.    Other Information

None.

Item 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

​

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PART III

Item 10.    Directors, Executive Officers and Corporate Governance

We have adopted a Code of Business Conduct and Ethics that applies to our Chief Executive Officerdirectors and Chief Financial Officer.executive officers. The Code of Business Conduct and Ethics is located on our internet web site at www.joe.com under “Investor Relations-Corporate Governance.” We intend to provide disclosure of any amendments or waivers of our Code of Business Conduct and Ethics for our executive officers or directors on our website within four business days following the date of the amendment or waiver.

The items required by Part III, Item 10 are incorporated herein by reference from the Registrant’s Proxy Statement for our 20202023 Annual Meeting of Shareholders to be filed on or before April 29, 2020.May 1, 2023.

Item 11.    Executive Compensation

Information concerning executive compensation will be included in the Registrant’s Proxy Statement for our 20202023 Annual Meeting of Shareholders to be filed on or before April 29, 2020May 1, 2023 and is incorporated by reference in this Part III.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information concerning the security ownership of certain beneficial owners and of management will be set forth under the caption “Security Ownership of Certain Beneficial Owners, Directors and Executive Officers” in the Registrant’s Proxy Statement for our 20202023 Annual Meeting of Shareholders to be filed on or before April 29, 2020May 1, 2023 and is incorporated by reference in this Part III.

Item 13.    Certain Relationships and Related Transactions and Director Independence

Information concerning certain relationships and related transactions during 20192022 and director independence will be set forth under the captions “Certain Relationships and Related Transactions” and “Director Independence” in the Registrant’s Proxy Statement for our 20202023 Annual Meeting of Shareholders to be filed on or before April 29, 2020May 1, 2023 and is incorporated by reference in this Part III.

Item 14.    Principal Accounting Fees and Services

Information concerning our independent registered public accounting firm will be presented under the caption “Audit Committee Information” in the Registrant’s Proxy Statement for our 20202023 Annual Meeting of Shareholders to be filed on or before April 29, 2020May 1, 2023 and is incorporated by reference in this Part III.

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Table of Contents

PART IV

Item 15.    Exhibits, Financial Statement Schedules

(a)(1) Financial Statements

(a)(1) Financial Statements

The financial statements listed in the accompanying Index to Financial Statements and Financial Statement Schedules and ReportsReport of Independent Registered Public Accounting FirmsFirm are filed as part of this Report.Form 10-K.

(2)Financial Statement ScheduleSchedules

The financial statement schedules listed in the accompanying Index to Financial Statements and Financial Statement Schedules are filed as part of this Report.Form 10-K.

(3) Exhibits

(3)Exhibits

The exhibits listed on the accompanying Index to Exhibits are filed or incorporated by reference as part of this Report.Form 10-K.

​

Exhibit Index to Exhibits

​

​

​

Exhibit
Number

Description

​

​

Exhibit
Number

Description

2.1

Purchase and Sale Agreement, dated December 31, 2013, by and between The St. Joe Company and Mattamy (Jacksonville) Partnership d/b/a Mattamy Homes, (incorporated by reference to Exhibit 10.55 to the registrant’s Current Report on Form 8‑K filed on January 6, 2014).

2.1a

Amendment to Agreement for Sale and Purchase executed on March 19, 2014, by and between The St. Joe Company and Mattamy (Jacksonville) Partnership d/b/a Mattamy Homes (incorporated by reference to Exhibit 10.57 to the registrant’s Current Report on Form 8‑K filed on March 25, 2014).

​

3.1

​

Restated and Amended Articles of Incorporation of the registrant, (incorporated by reference to Exhibit 3.1 to the registrant’s Quarterly Report on Form 10‑Q10-Q for the quarter ended June 30, 2010).

​

​

​

3.2

​

Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8‑K8-K filed on March 4, 2011)November 15, 2022).

​

​

​

4.1

​

Indenture, dated April 10, 2014, between Northwest Florida Timber Finance, LLC and Wilmington Trust, National Association (incorporated by reference to Exhibit 4.1 to the registrant’s Quarterly Report on Form 10‑Q10-Q for the quarter ended June 30, 2014).

​

​

​

4.2

​

Form of 4.750% Senior Secured Note due 2029 (incorporated by reference to Exhibit 4.1 to the registrant’s Quarterly Report on Form 10‑Q10-Q for the quarter ended June 30, 2014).

​

​

​

4.3**

​

Description of the Common Stock Registered Under Section 12 of the Securities Exchange Act of 1934.1934 (incorporated by reference to Exhibit 4.3 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2019).

​

​

​

10.1†

​

Form of Indemnification Agreement for Directors and Officers (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8‑K8-K filed on February 13, 2009).

​

​

​

10.2†

​

Form of Director Restricted Stock Award (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019).

​

​

​

10.3†

​

Form of Restricted Stock Award (Executive Officers) (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022).

​

​

​

10.4†

​

Form of Restricted Stock Award (CEO) (incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022).

​

​

​

10.5

​

Master Airport Access Agreement dated November 22, 2010 by and between the registrant and the Panama City-Bay County Airport and Industrial District (the “Airport District”) (including as attachments the Land Donation Agreement dated August 22, 2006, by and between the registrant and the Airport District, and the Special Warranty Deed dated November 29, 2007, granted by St. Joe Timberland Company of Delaware, LLC to the Airport District) (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8‑K8-K filed on November 30, 2010).

​

​

​

10.2210.6†

​

2015 Performance and Equity Incentive Plan (incorporated by reference to Exhibit 10.22a to the registrant’s Annual Report on Form 10‑K10-K for the year ended December 31, 2015).

​

​

​

6657

Table of Contents

​

​

​

Exhibit
Number

Description

10.7

Exhibit
Number

Description

10.49

​

Investment Management Agreement dated August 23, 2019, by and between The St. Joe Company and Fairholme Capital Management, L.L.C. (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).

​

​

​

10.52†10.8

​

First Amendment to Investment Management Agreement dated February 23, 2021, by and between The St. Joe Company and Fairholme Capital Management, L.L.C. (incorporated by reference to Exhibit 10.6 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2020).

​

​

​

10.9†

​

Employment Agreement, dated October 1, 2013, between Marek Bakun and The St. Joe Company (incorporated by reference to Exhibit 10.52 to the registrant’s Current Report on Form 8‑K8-K filed on October 3, 2013).

​

​

​

10.56†10.10

​

Form of Employment Agreement between Executive and The St. Joe Company (incorporated by reference to Exhibit 10.56 to the registrant’s Annual Report on Form 10‑K for the year ended December 31, 2013).

10.58

Form of Note Purchase Agreement (incorporated by reference to Exhibit 10.58 to the registrant’s Current Report on Form 8‑K8-K filed on April 9, 2014).

​

​

​

10.6010.11

​

Separate Guaranty of Retained Liability Matters, dated October 19, 2015, among the St. Joe Company, Don M. Casto, III and Kensington Gardens Builders Corporation, in favor of Keybank National Association (incorporated by reference to Exhibit 10.60 to the registrant’s Quarterly Report on Form 10‑Q10-Q for the quarter ended September 30, 2015).

​

​

​

10.62†21.1**

​

Summary of Compensation Program for Non-Employee Directors (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10‑Q for the quarter ended September 30, 2017).

10.63†

Separation Agreement dated October 17, 2019 between Susan Mermer and The St. Joe Company (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on October 23, 2019).

21.1**

Subsidiaries of The St. Joe Company.

​

​

​

23.1**

​

Consent of Grant Thornton LLP, independent registered public accounting firm for the registrant.

​

​

​

23.231.1**

​

Consent of KPMG LLP, independent registered public accounting firm for the registrant.

31.1**

Certification by Chief Executive Officer.

��​

​

​

31.2**

​

Certification by Chief Financial Officer.

​

​

​

32.1*

​

Certification by Chief Executive Officer.

​

​

​

32.2*

​

Certification by Chief Financial Officer.

​

​

​

101**

​

The following information from the registrant’s Annual Report on Form 10‑K10-K for the year ended December 31, 2019,2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statement of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) Notes to the Consolidated Financial Statements.

104

​

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Furnished herewith.

**Filed herewith.

†Management contract or compensatory plan or arrangement.

​

6758

Table of Contents

SIGNATURES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

​

​

​

​

​

THE ST. JOE COMPANY

​

​

​

Date:

February 26, 202022, 2023

/s/ Jorge Gonzalez

​

​

Jorge Gonzalez

​

​

President, Chief Executive Officer and Director

​

​

(Duly Authorized Officer)

​

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

​

​

​

​

​

​

​

Title

​

Date

​

​

Title​

​

Date

​

/s/ Jorge Gonzalez

​

President, Chief Executive Officer and Director

​

February 26, 202022, 2023

Jorge Gonzalez

​

(Principal Executive Officer)

​

​

​

​

​

​

​

/s/ Marek Bakun

​

Executive Vice President and Chief Financial Officer

​

February 26, 202022, 2023

Marek Bakun

​

(Principal Financial Officer and Principal Accounting Officer)

​

​

​

​

​

​

​

/s/ Bruce R. Berkowitz

​

Chairman of the Board

​

February 26, 202022, 2023

Bruce R. Berkowitz

​

​

​

​

​

​

​

​

​

/s/ Cesar L. Alvarez

​

Director

​

February 26, 202022, 2023

Cesar L. Alvarez

​

​

​

​

​

​

​

​

​

/s/ Howard S. Frank

​

Director

​

February 26, 202022, 2023

Howard S. Frank

​

​

​

​

​

​

​

​

/s/ James S. Hunt

Director

February 26, 2020

James S. Hunt

​

/s/ Thomas P. Murphy, Jr.

​

Director

​

February 26, 202022, 2023

Thomas P. Murphy, Jr.

​

​

​

​

​

​

​

​

​

​

​

​

​

6859

Table of Contents

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

​

​

​

Page No.

Report of Independent Registered Public Accounting Firm – Grant Thornton LLP (PCAOB ID 248)

F 2

Report of Independent Registered Public Accounting Firm – KPMG LLPConsolidated Balance Sheets

F 3

Consolidated Balance SheetsStatements of Income

F 45

Consolidated Statements of Comprehensive Income

F 6

Consolidated StatementsStatement of Comprehensive IncomeChanges in Stockholders’ Equity

F 7

Consolidated StatementStatements of Changes in Stockholders’ EquityCash Flows

F 8

Consolidated Statements of Cash Flows

F  9

Notes to Consolidated Financial Statements

F 1110

Schedule III (Consolidated) — Consolidated Real Estate and Accumulated Depreciation

F 5359

Schedule IV (Consolidated) — Consolidated Mortgage Loans on Real Estate

F 5561

​

​

F 1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

The St. Joe Company

Opinion on the Financial Statementsfinancial statements

We have audited the accompanying consolidated balance sheets of The St. Joe Company (a Florida corporation) and subsidiaries (the “Company”) as of December 31, 20192022 and 2018,2021, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the twothree years in the period ended December 31, 2019,2022, and the related notes and financial statement schedules included under Item 15(a) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Companyas of December 31, 20192022 and December 31,2018,2021, and the results of itsoperations and itscash flows for each of the twothree years in the period ended December 31, 2019,2022, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2019,2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 26, 202022, 2023, expressed an unqualified opinion.

Basis for Opinionopinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Grant Thornton LLP

We have served as the Company’s auditor since 2018.

Tampa, Florida

February 26, 202022, 2023

​

F 2

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

The St. Joe Company:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows of The St. Joe Company and subsidiaries (the Company) for the year ended December 31, 2017, and the related notes and financial statement schedules III to IV (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations of the Company and its cash flows for the year ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ KPMG

We served as the Company’s auditor from 1990 to 2018.

Jacksonville, Florida

March 1, 2018

​

F  3

Table of Contents

THE ST. JOE COMPANY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

December 31, 

 

December 31, 

 

    

2019

    

2018

ASSETS

 

 

  

 

 

  

Investment in real estate, net

 

$

430,776

 

$

350,994

Investment in unconsolidated joint ventures

 

 

5,084

 

 

1,105

Cash and cash equivalents

 

 

185,716

 

 

195,155

Investments - debt securities

 

 

53

 

 

8,958

Investments - equity securities

 

 

9,746

 

 

36,132

Other assets

 

 

52,069

 

 

59,203

Property and equipment, net of accumulated depreciation of $63,223 and $60,271 at December 31, 2019 and December 31, 2018, respectively

 

 

19,018

 

 

12,031

Investments held by special purpose entities

 

 

206,771

 

 

207,384

Total assets

 

$

909,233

 

$

870,962

LIABILITIES AND EQUITY

 

 

  

 

 

  

Liabilities:

 

 

  

 

 

  

Debt, net

 

$

92,529

 

$

69,374

Other liabilities

 

 

57,200

 

 

47,387

Deferred tax liabilities, net

 

 

52,808

 

 

44,315

Senior Notes held by special purpose entity

 

 

177,026

 

 

176,775

Total liabilities

 

 

379,563

 

 

337,851

 

 

 

 

 

 

 

Commitments and contingencies (Note 22)

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

  

 

 

  

Common stock, no par value; 180,000,000 shares authorized; 59,414,583 and 60,672,034 issued and outstanding at December 31, 2019 and December 31, 2018, respectively

 

 

305,631

 

 

331,395

Retained earnings

 

 

214,225

 

 

187,450

Accumulated other comprehensive loss

 

 

(335)

 

 

(674)

Total stockholders’ equity

 

 

519,521

 

 

518,171

Non-controlling interest

 

 

10,149

 

 

14,940

Total equity

 

 

529,670

 

 

533,111

Total liabilities and equity

 

$

909,233

 

$

870,962

​

​

​

​

​

​

​

​

​

December 31, 

​

December 31, 

​

    

2022

    

2021

ASSETS

 

​

  

 

​

  

Investment in real estate, net

​

$

996,261

​

$

690,113

Investment in unconsolidated joint ventures

​

​

50,025

​

​

52,027

Cash and cash equivalents

​

 

37,747

​

 

70,162

Investments - debt securities

​

​

40,576

​

​

88,956

Other assets

​

 

61,729

​

 

70,235

Property and equipment, net

​

 

39,638

​

 

31,145

Investments held by special purpose entities

​

 

204,863

​

 

205,513

Total assets

​

$

1,430,839

​

$

1,208,151

LIABILITIES AND EQUITY

​

 

  

​

 

  

Liabilities:

​

 

  

​

 

  

Debt, net

​

$

385,860

​

$

223,034

Other liabilities

​

 

94,371

​

 

67,985

Deferred revenue

​

​

38,936

​

​

36,207

Deferred tax liabilities, net

​

 

82,706

​

 

77,259

Senior Notes held by special purpose entity

​

 

177,857

​

 

177,566

Total liabilities

​

 

779,730

​

 

582,051

​

​

​

​

​

​

​

Commitments and contingencies (Note 20)

​

​

​

​

​

​

​

​

​

​

​

​

​

Equity:

​

 

  

​

 

  

Common stock, no par value; 180,000,000 shares authorized; 58,335,541 and 58,882,549 issued and outstanding at December 31, 2022 and December 31, 2021

​

 

270,028

​

 

296,873

Retained earnings

​

 

358,344

​

 

310,925

Accumulated other comprehensive income (loss)

​

 

2,430

​

 

(389)

Total stockholders’ equity

​

 

630,802

​

 

607,409

Non-controlling interest

​

 

20,307

​

 

18,691

Total equity

​

 

651,109

​

 

626,100

Total liabilities and equity

​

$

1,430,839

​

$

1,208,151

​

See notes to the consolidated financial statements.

​

F 43

Table of Contents

THE ST. JOE COMPANY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

The following presents the portion of the consolidated balances attributable to the Company’s consolidated variable interest entities,JVs, which as of December 31, 20192022 and 2018,2021, include the Pier Park North JV, Pier Park Crossings JV, Watersound Origins Crossings JV, Watercrest JV, Watersound Closings & Escrow, LLC (the “Watersound Closings JV”), Pier Park Crossings Phase II JV, Pier Park Resort Hotel JV, The Lodge 30A JV, Panama City Timber Finance Company, LLC and Northwest Florida Timber Finance, LLC as discussed inLLC. As of December 31, 2022, consolidated balances attributable to the Company’s consolidated joint ventures also include the Mexico Beach Crossings JV. See Note 2. Significant Accounting Policies. Basis of Presentation and Principles of Consolidation. As of December 31, 2019, the consolidated balances attributable to the Company’s consolidated variable interest entities also include Watersound Origins Crossings JV, Watercrest JV, Reliant Title and Closing Services, LLC (“Reliant Title JV”) and Pier Park Crossings Phase II JV. As of December 31, 2018, consolidated balances attributable to the Company’s consolidated variable interest entities also include Windmark JV, LLC (“Windmark JV”), see Note 4. Real Estate4. Joint Venturesfor additional information. The following assets may only be used to settle obligations of the consolidated variable interest entitiesJVs and the following liabilities are only obligations of the variable interest entitiesconsolidated JVs and do not have recourse to the general credit of the Company, except for covenants and guarantees discussed in Note 12. 10. Debt, Net.

 

 

 

 

 

 

 

 

    

December 31, 

    

December 31, 

 

 

2019

 

2018

ASSETS

 

 

  

 

 

  

Investment in real estate

 

$

96,001

 

$

70,124

Cash and cash equivalents

 

 

3,483

 

 

2,113

Other assets

 

 

12,766

 

 

16,165

Investments held by special purpose entities

 

 

206,771

 

 

207,384

Total assets

 

$

319,021

 

$

295,786

LIABILITIES

 

 

  

 

 

  

Debt, net

 

$

81,071

 

$

60,262

Other liabilities

 

 

3,471

 

 

5,773

Senior Notes held by special purpose entity

 

 

177,026

 

 

176,775

Total liabilities

 

$

261,568

 

$

242,810

​

​

​

​

​

​

​

​

​

    

December 31, 

    

December 31, 

​

​

2022

​

2021

ASSETS

 

​

  

 

​

  

Investment in real estate, net

​

$

272,395

​

$

206,565

Cash and cash equivalents

​

 

7,353

​

 

10,564

Other assets

​

 

16,804

​

 

8,873

Property and equipment, net

​

​

7,219

​

​

8,519

Investments held by special purpose entities

​

 

204,863

​

 

205,513

Total assets

​

$

508,634

​

$

440,034

LIABILITIES

​

 

  

​

 

  

Debt, net

​

$

243,447

​

$

173,531

Other liabilities

​

 

18,834

​

 

17,602

Deferred revenue

​

​

234

​

​

234

Senior Notes held by special purpose entity

​

 

177,857

​

 

177,566

Total liabilities

​

$

440,372

​

$

368,933

​

See notes to the consolidated financial statements.

​

F 54

Table of Contents

THE ST. JOE COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

 

2018

 

2017

Revenue:

 

 

  

    

 

  

    

 

  

Real estate revenue

 

$

61,488

 

$

52,183

 

$

27,717

Hospitality revenue

 

 

46,112

 

 

38,736

 

 

53,217

Leasing revenue

 

 

15,581

 

 

13,727

 

 

12,940

Timber revenue

 

 

3,904

 

 

5,630

 

 

6,164

Total revenue

 

 

127,085

 

 

110,276

 

 

100,038

Expenses:

 

 

  

 

 

  

 

 

  

Cost of real estate revenue

 

 

24,282

 

 

13,442

 

 

15,370

Cost of hospitality revenue

 

 

34,505

 

 

32,465

 

 

46,467

Cost of leasing revenue

 

 

4,650

 

 

4,700

 

 

4,548

Cost of timber revenue

 

 

649

 

 

710

 

 

809

Other operating and corporate expenses

 

 

21,389

 

 

20,557

 

 

20,382

Depreciation, depletion and amortization

 

 

10,287

 

 

8,998

 

 

8,885

Total expenses

 

 

95,762

 

 

80,872

 

 

96,461

Operating income

 

 

31,323

 

 

29,404

 

 

3,577

Other income (expense):

 

 

  

 

 

  

 

 

  

Investment income, net

 

 

10,714

 

 

12,150

 

 

35,410

Interest expense

 

 

(12,302)

 

 

(11,840)

 

 

(12,145)

Sale of vacation rental management, net

 

 

 —

 

 

 —

 

 

9,800

Other income, net

 

 

6,450

 

 

1,152

 

 

4,713

Total other income, net

 

 

4,862

 

 

1,462

 

 

37,778

Income before equity in loss from unconsolidated affiliates and income taxes

 

 

36,185

 

 

30,866

 

 

41,355

Equity in loss from unconsolidated affiliates

 

 

(77)

 

 

 —

 

 

 —

Income tax (expense) benefit

 

 

(9,447)

 

 

736

 

 

17,881

Net income

 

 

26,661

 

 

31,602

 

 

59,236

Net loss attributable to non-controlling interest

 

 

114

 

 

767

 

 

342

Net income attributable to the Company

 

$

26,775

 

$

32,369

 

$

59,578

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE

 

 

  

 

 

  

 

 

  

Basic and Diluted

 

 

  

 

 

  

 

 

  

Weighted average shares outstanding

 

 

59,994,527

 

 

62,725,954

 

 

70,548,411

Net income per share attributable to the Company

 

$

0.45

 

$

0.52

 

$

0.84

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

​

2021

​

2020

Revenue:

​

​

  

    

​

  

    

​

  

Real estate revenue

​

$

109,159

​

$

158,629

​

$

87,627

Hospitality revenue

​

 

97,260

​

 

75,265

​

 

47,778

Leasing revenue

​

 

39,196

​

 

27,081

​

 

18,819

Timber revenue

​

 

6,706

​

 

6,021

​

 

6,331

Total revenue

​

 

252,321

​

 

266,996

​

 

160,555

Expenses:

​

 

  

​

 

  

​

 

  

Cost of real estate revenue

​

 

50,009

​

 

60,703

​

 

35,794

Cost of hospitality revenue

​

 

77,518

​

 

58,314

​

 

35,239

Cost of leasing revenue

​

 

17,589

​

 

11,620

​

 

5,934

Cost of timber revenue

​

 

782

​

 

677

​

 

809

Corporate and other operating expenses

​

 

22,068

​

 

23,023

​

 

22,906

Depreciation, depletion and amortization

​

 

22,888

​

 

18,202

​

 

12,788

Total expenses

​

 

190,854

​

 

172,539

​

 

113,470

Operating income

​

 

61,467

​

 

94,457

​

 

47,085

Other income (expense):

​

 

  

​

 

  

​

 

  

Investment income, net

​

 

9,862

​

 

7,254

​

 

4,983

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, net

​

 

12,947

​

 

10,181

​

 

1,329

Total other income, net

​

 

33,150

​

 

4,274

​

 

12,065

Income before income taxes

​

 

94,617

​

 

98,731

​

 

59,150

Income tax expense

​

 

(24,389)

​

 

(24,982)

​

 

(13,670)

Net income

​

 

70,228

​

 

73,749

​

 

45,480

Net loss (income) attributable to non-controlling interest

​

 

699

​

 

804

​

 

(277)

Net income attributable to the Company

​

$

70,927

​

$

74,553

​

$

45,203

​

​

​

​

​

​

​

​

​

​

NET INCOME PER SHARE ATTRIBUTABLE TO THE COMPANY

​

 

  

​

 

  

​

 

  

Basic

​

$

1.21

​

$

1.27

​

$

0.77

Diluted

​

$

1.21

​

$

1.27

​

$

0.77

​

​

​

​

​

​

​

​

​

​

WEIGHTED AVERAGE SHARES OUTSTANDING

​

​

​

​

​

​

​

​

​

Basic

​

 

58,720,050

​

 

58,882,549

​

 

59,009,865

Diluted

​

​

58,721,338

​

​

58,882,549

​

​

59,009,865

​

See notes to the consolidated financial statements.

​

F 65

Table of Contents

THE ST. JOE COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

Net income:

 

$

26,661

 

$

31,602

 

$

59,236

Other comprehensive income (loss):

 

 

  

 

 

  

 

 

  

Net unrealized gain (loss) on available-for-sale investments

 

 

842

 

 

(2,845)

 

 

2,015

Net unrealized gain (loss) on restricted investments

 

 

18

 

 

(6)

 

 

(9)

Interest rate swap

 

 

(336)

 

 

 —

 

 

 —

Reclassification of net realized (gain) loss included in earnings

 

 

(69)

 

 

1,061

 

 

(10,750)

Reclassification into retained earnings (1)

 

 

 —

 

 

932

 

 

 —

Reclassification of other-than-temporary impairment loss included in earnings

 

 

 —

 

 

2,330

 

 

2,288

Total before income taxes

 

 

455

 

 

1,472

 

 

(6,456)

Income tax (expense) benefit (2)

 

 

(116)

 

 

(685)

 

 

2,488

Total other comprehensive income (loss), net of tax

 

 

339

 

 

787

 

 

(3,968)

Total comprehensive income, net of tax

 

$

27,000

 

$

32,389

 

$

55,268

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

 

2022

    

2021

    

2020

Net income:

​

$

70,228

​

$

73,749

​

$

45,480

Other comprehensive income (loss):

​

 

  

​

 

  

​

 

​

Net unrealized (loss) gain on available-for-sale investments

​

 

(235)

​

 

(16)

​

 

130

Net unrealized gain on restricted investments

​

 

—

​

 

—

​

 

8

Interest rate swaps

​

​

4,633

​

​

848

​

​

(836)

Interest rate swap - unconsolidated joint venture

​

​

621

​

​

213

​

​

(821)

Reclassification of net realized loss (gain) included in earnings

​

 

140

​

 

405

​

 

(4)

Total before income taxes

​

 

5,159

​

 

1,450

​

 

(1,523)

Income tax (expense) benefit

​

 

(957)

​

 

(367)

​

 

386

Total other comprehensive income (loss), net of tax

​

 

4,202

​

 

1,083

​

 

(1,137)

Total comprehensive income, net of tax

​

​

74,430

​

​

74,832

​

​

44,343

Total comprehensive (income) loss attributable to non-controlling interest

​

​

(684)

​

​

804

​

​

(277)

Total comprehensive income attributable to the Company

​

$

73,746

​

$

75,636

​

$

44,066

​

(1)

The reclassification into retained earnings for the year ended December 31, 2018 relates to the adoption of ASU 2016-01 Financial Instruments – Overall, as amended (“ASU 2016-01”). The new guidance was effective January 1, 2018, and required equity investments to be measured at fair value with changes in fair value recognized in results of operations rather than the consolidated statements of comprehensive income.

(2)

Income tax expense for the year ended December 31, 2018 includes $0.3 million of income tax expense related to the adoption of ASU 2018-02 Income Statement – Reporting Comprehensive Income (“ASU 2018-02”). The new guidance was effective January 1, 2018, and allowed a reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the Tax Act.

​

See notes to the consolidated financial statements.

​

F 76

Table of Contents

THE ST. JOE COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

    

    

 

    

    

 

    

 

Accumulated

    

    

 

    

    

 

    

    

 

 

 

Common Stock

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

 

Retained

 

 

Comprehensive

 

 

Treasury

 

 

Non-controlling

 

 

 

 

    

Shares

    

 

Amount

    

 

Earnings

    

 

Income (Loss)

    

 

Stock

    

 

Interest

    

 

Total

Balance at December 31, 2016

 

74,342,826

 

$

572,040

 

$

94,746

 

$

2,507

 

$

 —

 

$

17,506

 

$

686,799

Capital contribution from non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

193

 

 

193

Capital distribution to non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2,330)

 

 

(2,330)

Stock based compensation expense

 

5,334

 

 

76

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

76

Repurchase of common shares

 

(8,450,294)

 

 

 —

 

 

 —

 

 

 —

 

 

(147,422)

 

 

 —

 

 

(147,422)

Retirement of treasury stock

 

 —

 

 

(147,422)

 

 

 —

 

 

 —

 

 

147,422

 

 

 —

 

 

 —

Other comprehensive loss, net of tax

 

 —

 

 

 —

 

 

 —

 

 

(3,968)

 

 

 —

 

 

 —

 

 

(3,968)

Net income

 

 —

 

 

 —

 

 

59,578

 

 

 —

 

 

 —

 

 

(342)

 

 

59,236

Balance at December 31, 2017

 

65,897,866

 

$

424,694

 

$

154,324

 

$

(1,461)

 

$

 —

 

$

15,027

 

$

592,584

Allocation of ownership interest in Pier Park Crossings JV

 

 —

 

 

(490)

 

 

 —

 

 

 —

 

 

 —

 

 

490

 

 

 —

Additional ownership interest acquired in Artisan Park, LLC

 

 —

 

 

297

 

 

 —

 

 

 —

 

 

 —

 

 

(297)

 

 

 —

Capital contribution from non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

887

 

 

887

Capital distribution to non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(400)

 

 

(400)

Stock based compensation expense

 

2,778

 

 

71

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

71

Issuance of common stock for officer compensation, net of tax withholding

 

9,956

 

 

192

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

192

Repurchase of common shares

 

(5,238,566)

 

 

 —

 

 

 —

 

 

 —

 

 

(93,369)

 

 

 —

 

 

(93,369)

Retirement of treasury stock

 

 —

 

 

(93,369)

 

 

 —

 

 

 —

 

 

93,369

 

 

 —

 

 

 —

Adoption of ASU 2014-09 Revenue From Contracts with Customers, as amended, net of tax

 

 —

 

 

 —

 

 

1,140

 

 

 —

 

 

 —

 

 

 —

 

 

1,140

Adoption of ASU 2016-01 Financial Instruments - Overall, as amended, net of tax

 

 —

 

 

 —

 

 

(696)

 

 

696

 

 

 —

 

 

 —

 

 

 —

Adoption of ASU 2018-02 Income Statement - Reporting Comprehensive Income

 

 —

 

 

 —

 

 

313

 

 

(313)

 

 

 —

 

 

 —

 

 

 —

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

404

 

 

 —

 

 

 —

 

 

404

Net income

 

 —

 

 

 —

 

 

32,369

 

 

 —

 

 

 —

 

 

(767)

 

 

31,602

Balance at December 31, 2018

 

60,672,034

 

$

331,395

 

$

187,450

 

$

(674)

 

$

 —

 

$

14,940

 

$

533,111

Allocation of ownership interest in Watercrest JV

 

 —

 

 

(1,209)

 

 

 —

 

 

 —

 

 

 —

 

 

1,209

 

 

 —

Additional ownership interest in Windmark

 

 —

 

 

(3,787)

 

 

 —

 

 

 —

 

 

 —

 

 

(7,832)

 

 

(11,619)

Capital contribution from non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

2,546

 

 

2,546

Capital distribution to non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(600)

 

 

(600)

Stock based compensation expense

 

5,708

 

 

77

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

77

Repurchase of common shares

 

(1,263,159)

 

 

 —

 

 

 —

 

 

 —

 

 

(20,845)

 

 

 —

 

 

(20,845)

Retirement of treasury stock

 

 —

 

 

(20,845)

 

 

 —

 

 

 —

 

 

20,845

 

 

 —

 

 

 —

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

339

 

 

 —

 

 

 —

 

 

339

Net income

 

 —

 

 

 —

 

 

26,775

 

 

 —

 

 

 —

 

 

(114)

 

 

26,661

Balance at December 31, 2019

 

59,414,583

 

$

305,631

 

$

214,225

 

$

(335)

 

$

 —

 

$

10,149

 

$

529,670

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

    

    

    

​

    

    

​

    

​

​

    

    

​

    

    

​

    

    

​

​

​

Common Stock

​

​

​

​

​

Accumulated Other

​

​

​

​

​

​

​

​

​

​

​

Outstanding

​

​

​

​

​

Retained

​

​

Comprehensive

​

​

Treasury

​

​

Non-controlling

​

​

​

​

    

Shares

    

​

Amount

    

​

Earnings

    

​

(Loss) Income

    

​

Stock

    

​

Interest

    

​

Total

Balance at December 31, 2019

 

59,414,583

​

$

305,631

​

$

214,225

​

$

(335)

​

$

—

​

$

10,149

​

$

529,670

Capital contributions from non-controlling interest

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

7,748

​

 

7,748

Capital distributions to non-controlling interest

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

(621)

​

 

(621)

Stock based compensation expense

 

—

​

 

45

​

 

—

​

 

—

​

 

—

​

 

—

​

 

45

Repurchase of common shares

 

(532,034)

​

 

—

​

 

—

​

 

—

​

 

(8,803)

​

 

—

​

 

(8,803)

Retirement of treasury stock

 

—

​

 

(8,803)

​

 

—

​

 

—

​

 

8,803

​

 

—

​

 

—

Dividends ($0.07 per share)

​

—

​

​

—

​

​

(4,122)

​

​

—

​

​

—

​

​

—

​

​

(4,122)

Adoption of ASU 2016-13 Financial Instruments - Credit Losses, net of tax

​

—

​

​

—

​

​

(90)

​

​

—

​

​

—

​

​

—

​

​

(90)

Other comprehensive loss, net of tax

 

—

​

 

—

​

 

—

​

 

(1,137)

​

 

—

​

 

—

​

 

(1,137)

Net income

 

—

​

 

—

​

 

45,203

​

 

—

​

 

—

​

 

277

​

 

45,480

Balance at December 31, 2020

 

58,882,549

​

$

296,873

​

$

255,216

​

$

(1,472)

​

$

—

​

$

17,553

​

$

568,170

Capital contributions from non-controlling interest

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

3,189

​

 

3,189

Capital distributions to non-controlling interest

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

(1,247)

​

 

(1,247)

Dividends ($0.32 per share)

​

—

​

​

—

​

​

(18,844)

​

​

—

​

​

—

​

​

—

​

​

(18,844)

Other comprehensive income, net of tax

 

—

​

 

—

​

 

—

​

 

1,083

​

 

—

​

 

—

​

 

1,083

Net income

 

—

​

 

—

​

 

74,553

​

 

—

​

 

—

​

 

(804)

​

 

73,749

Balance at December 31, 2021

 

58,882,549

​

$

296,873

​

$

310,925

​

$

(389)

​

$

—

​

$

18,691

​

$

626,100

Additional ownership interest acquired in Pier Park North JV

​

—

​

​

(7,237)

​

​

—

​

​

—

​

​

—

​

​

(458)

​

​

(7,695)

Capital contributions from non-controlling interest

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

3,823

​

 

3,823

Capital distributions to non-controlling interest

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

(2,433)

​

 

(2,433)

Issuance of restricted stock

​

29,955

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Stock based compensation expense

 

—

​

 

364

​

 

—

​

 

—

​

 

—

​

 

—

​

 

364

Repurchase of common shares

 

(576,963)

​

 

—

​

 

—

​

 

—

​

 

(19,972)

​

 

—

​

 

(19,972)

Retirement of treasury stock

 

—

​

 

(19,972)

​

 

—

​

 

—

​

 

19,972

​

 

—

​

 

—

Dividends ($0.40 per share)

​

—

​

​

—

​

​

(23,508)

​

​

—

​

​

—

​

​

—

​

​

(23,508)

Other comprehensive income, net of tax

 

—

​

 

—

​

 

—

​

 

2,819

​

 

—

​

 

1,383

​

 

4,202

Net income

 

—

​

 

—

​

 

70,927

​

 

—

​

 

—

​

 

(699)

​

 

70,228

Balance at December 31, 2022

 

58,335,541

​

$

270,028

​

$

358,344

​

$

2,430

​

$

—

​

$

20,307

​

$

651,109

​

See notes to consolidated financial statements.

​

F 87

Table of Contents

THE ST. JOE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

    

 

2019

 

2018

 

2017

Cash flows from operating activities:

    

 

 

  

    

 

  

    

 

  

Net income

 

 

$

26,661

 

$

31,602

 

$

59,236

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

  

 

 

  

 

 

  

Depreciation, depletion and amortization

 

 

 

10,287

 

 

8,998

 

 

8,885

Stock based compensation

 

 

 

77

 

 

263

 

 

76

(Gain) loss on sale of investments

 

 

 

(87)

 

 

973

 

 

(10,750)

Unrealized loss on investments, net

 

 

 

5,342

 

 

3,035

 

 

 —

Other-than-temporary impairment loss

 

 

 

 —

 

 

2,330

 

 

2,288

Equity in loss from unconsolidated affiliates

 

 

 

77

 

 

 —

 

 

 —

Deferred income tax expense (benefit)

 

 

 

8,378

 

 

(4,804)

 

 

(17,375)

Impairment loss on investment in real estate

 

 

 

 —

 

 

99

 

 

714

Gain on sale of vacation rental management

 

 

 

 —

 

 

 —

 

 

(9,800)

Cost of real estate sold

 

 

 

22,814

 

 

12,235

 

 

13,727

Expenditures for and acquisition of real estate to be sold

 

 

 

(40,081)

 

 

(19,819)

 

 

(8,475)

Accretion income and other

 

 

 

(1,221)

 

 

(1,919)

 

 

(3,159)

Proceeds from insurance claim - business interruption

 

 

 

1,307

 

 

 —

 

 

 —

(Gain) loss on disposal of property and equipment

 

 

 

(67)

 

 

5,223

 

 

887

Gain on land contribution to equity method investment

 

 

 

(2,317)

 

 

 —

 

 

 —

Gain on insurance for damage to property and equipment, net

 

 

 

(5,347)

 

 

 —

 

 

 —

Changes in operating assets and liabilities:

 

 

 

  

 

 

  

 

 

  

Other assets

 

 

 

(229)

 

 

(17)

 

 

(5,582)

Other liabilities

 

 

 

3,728

 

 

(1,236)

 

 

4,734

Income taxes receivable

 

 

 

1,071

 

 

4,457

 

 

18,300

Net cash provided by operating activities

 

 

 

30,393

 

 

41,420

 

 

53,706

Cash flows from investing activities:

 

 

 

  

 

 

  

 

 

  

Expenditures for operating property

 

 

 

(64,851)

 

 

(22,762)

 

 

(28,400)

Expenditures for property and equipment

 

 

 

(9,354)

 

 

(2,615)

 

 

(3,005)

Proceeds from the disposition of assets

 

 

 

72

 

 

5,000

 

 

2,518

Proceeds from insurance claims

 

 

 

12,071

 

 

 —

 

 

 —

Purchases of investments - debt securities

 

 

 

 —

 

 

(6,917)

 

 

(94,791)

Purchases of investments - equity securities

 

 

 

(5,797)

 

 

(15,105)

 

 

(21,153)

Purchases of restricted investments

 

 

 

(74)

 

 

(78)

 

 

(75)

Maturities of investments - debt securities

 

 

 

7,000

 

 

10,000

 

 

13,988

Sales of investments - debt securities

 

 

 

2,830

 

 

63,597

 

 

151,752

Sales of investments - equity securities

 

 

 

26,859

 

 

11,051

 

 

21,522

Sales of restricted investments

 

 

 

1,159

 

 

1,109

 

 

1,233

Maturities of assets held by special purpose entities

 

 

 

787

 

 

785

 

 

787

Net cash (used in) provided by investing activities

 

 

 

(29,298)

 

 

44,065

 

 

44,376

Cash flows from financing activities:

 

 

 

  

 

 

  

 

 

  

Capital contribution from non-controlling interest

 

 

 

2,546

 

 

887

 

 

193

Capital distribution to non-controlling interest

 

 

 

(600)

 

 

(400)

 

 

(2,330)

Capital contribution to unconsolidated affiliate

 

 

 

(1,116)

 

 

(1,105)

 

 

 —

Additional ownership interest in Windmark

 

 

 

(11,619)

 

 

 —

 

 

 —

Repurchase of common shares

 

 

 

(20,845)

 

 

(93,369)

 

 

(147,422)

Borrowings on debt

 

 

 

23,935

 

 

16,644

 

 

1,624

Principal payments for debt

 

 

 

(1,607)

 

 

(1,362)

 

 

(1,290)

Principal payments under finance lease obligation

 

 

 

(36)

 

 

 —

 

 

 —

Debt issuance costs

 

 

 

(1,149)

 

 

(1,158)

 

 

(20)

Net cash used in financing activities

 

 

 

(10,491)

 

 

(79,863)

 

 

(149,245)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

 

(9,396)

 

 

5,622

 

 

(51,163)

Cash, cash equivalents and restricted cash at beginning of the year

 

 

 

198,073

 

 

192,451

 

 

243,614

Cash, cash equivalents and restricted cash at end of the year

 

 

$

188,677

 

$

198,073

 

$

192,451

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

​

2022

​

2021

​

2020

Cash flows from operating activities:

    

 

​

  

    

​

  

    

​

  

Net income

​

​

$

70,228

​

$

73,749

​

$

45,480

Adjustments to reconcile net income to net cash provided by operating activities:

​

​

 

  

​

 

  

​

 

​

Depreciation, depletion and amortization

​

​

 

22,888

​

 

18,202

​

 

12,788

Stock based compensation

​

​

 

364

​

 

—

​

 

45

(Gain) loss on sale of investments

​

​

 

—

​

 

(17)

​

 

48

Unrealized loss on investments, net

​

​

​

26

​

​

1,872

​

​

4,688

Equity in (income) loss from unconsolidated joint ventures, net of distributions

​

​

​

(2,758)

​

​

1,298

​

​

666

Deferred income tax expense

​

​

 

4,490

​

 

15,977

​

 

8,524

Cost of real estate sold

​

​

 

46,384

​

 

55,933

​

 

33,366

Expenditures for and acquisition of real estate to be sold

​

​

 

(97,535)

​

 

(47,318)

​

 

(40,469)

Accretion income and other

​

​

 

(1,274)

​

 

(810)

​

 

(919)

Loss on disposal of property and equipment

​

​

​

181

​

 

270

​

 

146

Gain on contributions to unconsolidated joint ventures

​

​

​

(2,738)

​

​

(3,558)

​

​

(19,983)

Gain on insurance for damage to property and equipment, net

​

​

​

(9,835)

​

​

(4,853)

​

​

(690)

Loss on extinguishment of debt

​

​

​

130

​

​

—

​

​

—

Changes in operating assets and liabilities:

​

​

 

  

​

 

  

​

 

​

Other assets

​

​

 

15,317

​

 

(6,372)

​

 

(10,148)

Deferred revenue

​

​

​

2,684

​

​

8,568

​

​

841

Other liabilities

​

​

 

(331)

​

 

(1,144)

​

 

2,948

Net cash provided by operating activities

​

​

 

48,221

​

 

111,797

​

 

37,331

Cash flows from investing activities:

​

​

 

  

​

 

  

​

 

  

Expenditures for operating property

​

​

 

(251,809)

​

 

(149,199)

​

 

(116,085)

Expenditures for property and equipment

​

​

 

(7,348)

​

 

(4,302)

​

 

(5,689)

Proceeds from the disposition of assets

​

​

 

49

​

 

34

​

 

8

Proceeds from insurance claims

​

​

​

9,835

​

​

4,853

​

​

690

Purchases of investments - debt securities

​

​

​

(97,133)

​

​

(157,928)

​

​

(58,912)

Purchases of restricted investments

​

​

​

—

​

​

—

​

​

(24)

Maturities of investments - debt securities

​

​

​

92,000

​

​

117,000

​

​

11,000

Sales of investments - debt securities

​

​

​

53,901

​

​

36

​

​

—

Sales of investments - equity securities

​

​

 

424

​

 

325

​

 

2,502

Sales of restricted investments

​

​

​

—

​

​

1,173

​

​

1,225

Capital contributions to unconsolidated joint ventures

​

​

​

(2,505)

​

​

(9,389)

​

​

(10,815)

Capital distributions from unconsolidated joint ventures

​

​

​

12,025

​

​

1,020

​

​

—

Payments for interest in unconsolidated joint venture

​

​

​

—

​

​

(495)

​

​

—

Maturities of assets held by special purpose entities

​

​

 

785

​

 

787

​

 

787

Net cash used in investing activities

​

​

 

(189,776)

​

 

(196,085)

​

 

(175,313)

Cash flows from financing activities:

​

​

 

  

​

 

  

​

 

  

Capital contributions from non-controlling interest

​

​

 

3,823

​

 

3,189

​

 

7,748

Capital distributions to non-controlling interest

​

​

 

(2,433)

​

 

(1,247)

​

 

(621)

Additional ownership interest acquired in Pier Park North JV

​

​

​

(7,695)

​

​

—

​

​

—

Repurchase of common shares

​

​

 

(19,972)

​

 

—

​

 

(8,803)

Dividends paid

​

​

​

(23,497)

​

​

(18,844)

​

​

(4,122)

Borrowings on debt

​

​

 

184,476

​

 

69,300

​

 

69,008

Principal payments for debt

​

​

 

(20,228)

​

 

(2,327)

​

 

(1,940)

Principal payments for finance leases

​

​

​

(121)

​

​

(104)

​

​

(55)

Debt issuance costs

​

​

 

(1,895)

​

 

(1,398)

​

 

(1,791)

Net cash provided by financing activities

​

​

 

112,458

​

 

48,569

​

 

59,424

Net decrease in cash, cash equivalents and restricted cash

​

​

 

(29,097)

​

 

(35,719)

​

 

(78,558)

Cash, cash equivalents and restricted cash at beginning of the year

​

​

 

74,400

​

 

110,119

​

 

188,677

Cash, cash equivalents and restricted cash at end of the year

​

​

$

45,303

​

$

74,400

​

$

110,119

See notes to consolidated financial statements.

​

F 98

Table of Contents

THE ST. JOE COMPANY

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

(Dollars in thousands)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statementconsolidated statements of cash flows.

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

 

2019

 

2018

 

2017

Cash and cash equivalents

 

 

$

185,716

 

 

$

195,155

 

$

192,083

Restricted cash included in other assets

 

 

 

2,961

 

 

 

2,918

 

 

368

Total cash, cash equivalents and restricted cash shown in the statement of cash flows

 

 

$

188,677

 

 

$

198,073

 

$

192,451

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

 

​

2022

​

2021

 

2020

Cash and cash equivalents

​

​

 

$

37,747

 

$

70,162

​

$

106,794

Restricted cash included in other assets

​

​

​

 

7,556

​

 

4,238

​

 

3,325

Total cash, cash equivalents and restricted cash shown in the accompanying consolidated statements of cash flows

 

​

 

$

45,303

 

$

74,400

​

$

110,119

​

Restricted cash includes amounts set asidereserved as a requirement of financing and development for certain of the Company’s developments. Restricted cash as of December 31, 2017 also included letters of credit collateral.projects.

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

 

2018

 

2017

Cash paid during the period for:

    

 

  

    

 

  

    

 

  

Interest, net of amounts capitalized

 

$

11,886

 

$

11,617

 

$

11,817

Income taxes

 

$

 —

 

$

2,005

 

$

5,430

 

 

 

 

 

 

 

 

 

 

Non-cash financing and investment activities:

 

 

  

 

 

  

 

 

  

Increase in notes receivable - PCR Note

 

$

 —

 

$

 —

 

$

(5,000)

Non-cash allocation of ownership interest in JV

 

$

1,209

 

$

490

 

$

 —

Non-cash contribution to equity method investment

 

$

(2,940)

 

$

 —

 

$

 —

Increase (decrease) in Community Development District debt

 

$

1,203

 

$

(467)

 

$

174

Increase (decrease) in expenditures for operating properties and property and equipment financed through accounts payable

 

$

3,158

 

$

(1,273)

 

$

2,525

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

​

2022

​

2021

​

2020

Cash paid during the period for:

​

    

​

  

    

​

  

    

​

  

Interest, net of amounts capitalized

​

​

$

17,152

​

$

13,621

​

$

12,801

Income taxes

​

​

$

17,111

​

$

11,070

​

$

—

​

​

​

​

​

​

​

​

​

​

​

Non-cash investing and financing activities:

​

​

 

  

​

 

  

​

 

  

Non-cash capital contribution from non-controlling interest

​

​

$

—

​

$

—

​

$

2,359

Non-cash contributions to unconsolidated joint ventures

​

​

$

(4,044)

​

$

(6,136)

​

$

(23,737)

Decrease in Community Development District debt, net

​

​

$

(311)

​

$

(900)

​

$

(157)

Transfers of operating property to property and equipment

​

​

$

9,594

​

$

12,012

​

$

—

Increase in expenditures for operating properties and property and equipment financed through accounts payable

​

​

$

13,205

​

$

19,223

​

$

7,939

Unrealized gain on cash flow hedges

​

​

$

5,243

​

$

1,481

​

$

(821)

​

See notes to consolidated financial statements.

​

F 109

Table of Contents

THE ST. JOE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise stated)

1. Nature of Operations

The St. Joe Company, together with its consolidated subsidiaries, (“St. Joe” or the “Company”) is a Florida real estate development, asset management and operating company with all of its real estate assets and operations in Northwest Florida. Approximately 86% of the Company’s real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of the Company’s real estate land holdings are located within fifteen miles of the Gulf of Mexico.

The Company conducts primarily all of its business in the following fourthree reportable operating segments: 1) residential, real estate, 2) hospitality and 3) commercial leasingcommercial. See Note 19. Segment Information.

References to the number of acres, hotel rooms and salessuites, multi-family units, senior living units and 4) forestry. Commencinghomesites and any amounts derived from these values in the fourth quarter of 2018, the Company’s previously titled “resorts and leisure” segment was retitled “hospitality,” with no effect onnotes to the consolidated balance sheets,financial statements of income, statements of comprehensive income or statements of cash flows for the periods presented.are unaudited.

​

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all of its majority-owned and controlled subsidiaries, voting interest entities where the Company has a majority voting interest or control and variable interest entities where the Company deems itself the primary beneficiary. Investments in JVs and limited partnerships in which the Company is not the primary beneficiary, or a voting interest entity where the Company does not have a majority voting interest or control, but has significant influence are unconsolidated and accounted for by the equity method. All significant intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts in the accompanying consolidated financial statements have been reclassified to conform to the current yearyear’s presentation. TheseThe reclassifications had no effect on the Company’s previously reported total assets and liabilities, stockholders’ equity or net income.

A variable interest entity (“VIE”) is an entity in which a controlling financial interest may be achieved through arrangements that do not involve voting interests. A VIE is required to be consolidated by its primary beneficiary, which is the entity that possesses the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to the entity.VIE. The Company consolidates VIEs when it is the primary beneficiary of the VIE, including real estate JVs determined to be VIEs. The Company continues to assessevaluate whether it is the primary beneficiary on an ongoing basis.as needed when assessing reconsideration events. See Note 4. Real Estate Joint Ventures.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions including investment in real estate, real estate impairment assessments, investments, other-than-temporary impairment assessments, retained interest investments, accruals, and deferred income taxes.taxes, allowance for credit losses and revenue recognition. Actual results could differ from those estimates.

Investment in Real Estate, Net

The Company capitalizes costs directly associated with development and construction of identified real estate projects. These costs include land and common development costs (such as roads, structures, utilities and amenities). The Company also capitalizes those indirect costs that relate to thespecific projects under development or construction. These

F 10

Table of Contents

indirect costs include construction and development administration, legal fees, capitalized interest, and project administration, to the extent that such costs are related to a specific project. Interest is capitalizedinterest (up to total interest expense) based on the amount of underlying borrowings and real estate taxes are capitalized on real estate projects under development.taxes.

F  11

Table of Contents

Real estate development costs also include land and common development costs (such as roads, utilities and amenities), capitalized property taxes, capitalized interest and certain indirect costs. A portion of real estate development costs and estimates for costs to complete are allocated to each unit based on the relative sales value of each unit as compared to the estimated sales value of the total project. These estimates are reevaluated at least annually, and more frequently if warranted by market conditions, changes in the project’s scope or other factors, with any adjustments being allocated prospectively to the remaining property or units.

The capitalization period relating to direct and indirect project costs is the period in which activities necessary to ready a property for its intended use are in progress. The period begins when such activities commence, typically when the Company begins site work foror construction on land already owned, and ends when the asset is substantially complete and ready for its intended use. Determination of when construction of a project is substantially complete and ready for its intended use requires judgment. The Company determines when the capitalization period begins and ends through communication with project and other managers responsible for the tracking and oversight of individual projects. In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed. If the Company determines a project will not be completed, any previously capitalized costs that are not recoverable are expensed in the period in which the determination is made and recovery is not deemed probable.

Investment in real estate, net is carried at cost, net of depreciation and timber depletion, unless circumstances indicate that the carrying value of the assets may not be recoverable. If the Company determines that an impairment exists due to the inability to recover an asset’s carrying value, an impairment charge is recorded to the extent that the carrying value exceeds estimated fair value. If such assets were held for sale, the provision for loss would be recorded to the extent that the carrying value exceeds estimated fair value less costs to sell.

Depreciation for operating property is computed on the straight-line method over the estimated economic liveslife of the assets, as follows:

​

​

​

​

​

Estimated Useful

​

​

Life (in years)

Land

 

N/A

Land improvements

 

15 - 20

Buildings

 

20-4020 - 40

Building improvements

 

5-255 - 25

Timber

 

N/A

​

Building improvements are amortized on a straight-line basis over the shorter of the minimum lease term or the estimated economic life of the assets.

Long-Lived Assets

Long-lived assets include the Company’s investments in land holdings, operating and development propertyproperties and property and equipment.equipment, which are carried at cost, net of depreciation and timber depletion. The Company reviews its long-lived assets for impairment quarterly to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. As part of the Company’s review for impairment of its long-lived assets, the Company reviews the long-lived asset’s carrying value, current period actual financial results as compared to prior period and forecasted results contained in the Company’s business plan and any other events or changes in circumstances to identify whether an indicator of potential impairment may exist. Some of the events or changes in circumstances that are considered by the Company as indicators of potential impairment include:

·

●

a prolonged decrease in the fair value to below cost or demand for the Company’s properties;

·

●

a change in the expected use or development plans for the Company’s properties;

·

●

a material change in strategy that would affect the fair value of the Company’s properties;

·

●

continuing operating or cash flow loss for an operating property;

·

●

an accumulation of costs in excess of the projected costs for development or operating property; and

F 1211

Table of Contents

·

●

any other adverse change that may affect the fair value of the property.

The Company uses varying methods to determine if an impairment exists, such as (i) considering indicators of potential impairment, (ii) analyzing expected future cash flows and comparing the expected future undiscounted cash flows of the property to its carrying value or (iii) determining market resale values.

For projects under development or construction, an estimate of undiscounted future cash flows is performed using estimated future expenditures necessary to develop and maintain the existing project and using management’s best estimates about future sales prices and holding periods. The projection of undiscounted cash flows requires that management develop various assumptions including:

·

●

the projected pace of sales of homesites based on estimated market conditions and the Company’s development plans;

·

●

estimated pricing and projected price appreciation over time;

·

●

the amount and trajectory of price appreciation over the estimated selling period;

·

●

the length of the estimated development and selling periods, which can differ depending on the size of the development and the number of phases to be developed;

·

●

the amount of remaining development costs, including the extent of infrastructure or amenities included in such development costs;

·

●

holding costs to be incurred over the selling period;

·

●

for bulk land sales of undeveloped and developed parcels, future pricing is based upon estimated developed homesite pricing less estimated development costs and estimated developer profit;

·

●

for commercial, multi-family, self-storage and multi-familysenior living development property, future pricing is based on sales of comparable property in similar markets; and

·

●

whether liquidity is available to fund continued development.

For operating properties, an estimate of undiscounted cash flows also requires management to make assumptions about the use and disposition of such properties. These assumptions include:

·

●

for investments in hotels, other rental units and vacation rental homes, use of average occupancy and room rates, revenue from food and beverage and other amenity operations, operating expenses and capital expenditures, and eventual disposition of such properties as hotels, private residence vacation units or condominiums, based on current prices for similar units appreciated to the expected sale date;

·

●

for investments in commercial, multi-family, self-storage, senior living or retail property, use of future occupancy and rental rates, operating expenses and capital expenditures and the amount of proceeds to be realized upon eventual disposition of such property at a terminal capitalization rate; and,

·

●

for investments in club, marina and retail assets, retail,use of revenue from membership dues, future golf rounds and greens fees, boat slip rentals and boat storage fees, merchandise and other hospitality assets,operations, operating expenses and capital expenditures, and the amount of proceeds to be realized upon eventual disposition of such properties at a multiple of terminal year cash flows.

Homesites substantially completed and ready for sale are measured at the lower of carrying value or fair value less costs to sell. Management identifies homesites as being substantially completed and ready for sale when the properties are being actively marketed with intent to sell such properties in the near term and under current market conditions. Other homesites, which management does not intend to sell in the near term under current market conditions, are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of such property.

Other properties that management does not intend to sell in the near term under current market conditions and has the ability to hold are evaluated for impairment based on management’s best estimate of the long-term use and eventual

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disposition of the property. The results of impairment analyses for development and operating properties are particularly dependent on the estimated holding and selling period for each asset group.

If a property is considered impaired, the impairment charge is determined by the amount the property’s carrying value exceeds its fair value. The Company uses varying methods to determine fair value, such as (i) analyzing expected future cash flows, (ii) determining resale values in a given market (iii) applying a capitalization rate to net operating income using prevailing rates in a given market or (iv) applying a multiplier to revenue using prevailing rates in a given market. The fair value of a property may be derived either from discounting projected cash flows at an appropriate discount rate, through appraisals of the underlying property, or a combination thereof.

The Company classifies the assets and liabilities of a long-lived asset as held-for-sale when management approves and commits to a formal plan of sale and it is probable that a sale will be completed. The carrying value of the assets held-for-sale are then recorded at the lower of their carrying value or fair value less estimated costs to sell.

Timber Inventory

The Company estimates its standing timber inventory on an annual basis utilizing a process referred to as a “timber cruise.” Specifically, the Company conducts field measurements of the number of trees, tree height and tree diameter on a sample area equal to approximately 20% of the Company’s timber holdings each year. Inventory data is used to calculate volumes and products along with growth projections to maintain accurate data. Industry practices are used for modeling, including growth projections, volume and product classifications. A depletion rate is established annually by dividing merchantable inventory cost by standing merchantable inventory volume.

Investment in Unconsolidated Joint Ventures

The Company has entered into real estate JVs in which the Company is not the primary beneficiary and theor does not have a majority voting interest or control. The Company’s investment in these JVs areis accounted for by the equity method. The Company evaluates its investment in unconsolidated JVs for impairment during each reporting period. A series of operating losses of an investee or other factors may indicate that a decrease in the value of the Company’s investment in the unconsolidated JV has occurred that is other-than-temporary.occurred. The amount of impairment recognized is the excess of the investment’s carrying value over its estimated fair value.value.

Distributions from equity method investments are classified in the statements of cash flows using the cumulative earnings approach. Under the cumulative earnings approach, cumulative distributions received that do not exceed cumulative equity in earnings are classified as cash inflows from operating activities and cumulative distributions received in excess of cumulative equity in earnings are classified as cash inflows from investing activities. Some of the Company’s unconsolidated JVs have entered into financing agreements, where the Company or its JV partners have provided guarantees. See Note 4. Real Estate Joint Ventures and Note 22. 20. Commitments and Contingencies for additional information.

Cash and Cash Equivalents

Cash and cash equivalents can include cash on hand, bank demand accounts, money market instruments investment grade commercial paper and U.S. Treasury Bills having original maturities at acquisition date, of ninety days or less.

Investments

Investments – debt securities and restricted investments consist of available-for-sale securities recorded at fair value, which is established through external pricing services that use quoted market prices and pricing data from recently executed market transactions. Unrealized gains and temporary losses on investments, net of tax, are recorded in other comprehensive income (loss). Realized gains and losses on investments are determined using the specific identification method. The amortized cost of debt securities are adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method. Such amortization and accretion is included in investment income, net.

The Company evaluates investments classified asF 13

Table of Contents

For available-for-sale with an unrealized loss to determine if they are other-than-temporarily impaired. This evaluation is based on various factors, including the financial condition, business prospects, industry and creditworthiness of the issuer, severity and length of time the securities were in a loss position, the Company’s ability and intent to hold investments until the unrealized loss is recovered or until maturity and the amount of the unrealized loss. If a decline inwhere fair value is considered other-than-temporary, the decline is then bifurcated

F  14

Table of Contents

into itsless than cost, credit related impairment, if any, will be recognized through an allowance for credit losses and non-credit related components. The amount of the credit-related component is recognizedadjusted each period for changes in earnings, and the amount of the non-credit related component is recognized in other comprehensive income (loss), unlesscredit risk. If the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security priorbefore recovery of its amortized cost basis, any allowance for credit losses will be written off and the amortized cost basis will be written down to its anticipated recovery, in which case the decline insecurity's fair value is recognized entirelyat the reporting date with any incremental impairment reported in earnings.

Beginning on January 1, 2018, investmentsInvestments - equity securities with a readily determinable fair value are recorded at fair value, which is established through external pricing services that use quoted market prices and pricing data from recently executed market transactions. Unrealized holding gains and losses are recognized in investment income, net in the consolidated statements of income.Prior to 2018, unrealized gains and losses related to these investments were recognized in other comprehensive income (loss).

Fair Value Measurements

Fair value is an exit price, representing the amount that would be received by selling an asset or paying to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1. Quoted prices in active markets for identical assets or liabilities;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, such as internally-developed valuation models, which require the reporting entity to develop its own assumptions.

Comprehensive Income

The Company’s comprehensive income includes unrealized gains and losses on available-for-sale securities and restricted investments, which may be temporary, andinvestments. Comprehensive income also includes changes in the fair value adjustments forof effective cash flow hedges.hedges, which are subsequently reclassified into earnings in the period during which the hedged transaction affects earnings.

Derivatives and Hedging

The Company has entered into interest rate swap agreements designated as cash flow hedges to manage the interest rate risk associated with variable rate debt. For cash flow hedges that are effective, the gain or loss on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same period during which the hedged transaction affects earnings. Cash flows from derivatives are classified in the consolidated statements of cash flows in the same category as the item being hedged. The Company accounts for the changes in fair value of derivatives that do not qualify for hedge accounting treatment directly in earnings.

Receivables

The Company’s receivables primarily include receivables related to certain homesite sales, homebuilder notes, a revolving promissory note with an unconsolidated JV, leasing receivables, membership initiation fees, hospitality receivables and other receivables. The Company evaluates the carrying value of receivables atAt each reporting date. Receivable balancesperiod, receivables in the scope of Financial Instruments—Credit Losses (Topic 326) are adjusted to net realizable value based upon a review of entity specific facts or when terms are modified. Judgmentspooled by type and judgements are made with respect to the collectability of accountsbased on historical losses and expected credit losses based on historical experience and current economic trends.trends to determine the allowance for credit losses primarily using the aging method. Actual losses could differ from those estimates. AsWrite-offs are recorded when the Company concludes that all or a portion of December 31, 2019the receivable is no longer collectible and 2018,recoveries on receivables previously charged-off are credited to the allowance. The Company does not measure an allowance for doubtful accounts receivable was $0.3 millioncredit losses for accrued interest receivables and $0.2 million, respectively.

will write off uncollectible balances in a timely manner, which is within 90 days from when it is determined uncollectible.

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Table of Contents

Inventory

Inventory primarily consists of retail products, operating supplies and beverages which are reported at the lower of cost or net realizable value. Cost is determined using weighted-average cost basis or specific identification.

Property and Equipment, net

Property and equipment is stated at cost, net of accumulated depreciation. Major improvements are capitalized while maintenance and repairs are expensed in the period the cost is incurred. Depreciation is computed using the straight-line method over the estimated economic liveslife of various assets, as follows:

​

​

​

​

​

Estimated Useful

​

​

Life (in years)

Railroad and equipment

 

15-3015 - 30

Furniture and fixtures

 

5-105 - 10

Machinery and equipment

 

3-103 - 10

Office equipment

 

5-105 - 10

Autos, trucks and aircraft

 

5 -10- 10

​

Deferred Revenue

Deferred revenue consists of amounts received related to incomplete performance obligations. Deferred revenue primarily includes club initiation fees, which are recognized as revenue over the estimated average duration of membership, which is evaluated periodically. Deferred revenue also includes land sales that are recognized as revenue once the Company has transferred control to the customer and all revenue recognition criteria are met.

Advertising Costs

Advertising costs are expensed as services are incurred. Advertising costs of $2.4 million, $2.0 million and $1.6 million for the years ended December 31, 2022, 2021 and 2020, respectively, are included within cost of revenue and corporate and other operating expenses in the consolidated statements of income.

Income Taxes

The Company’s provision for income taxes includes the current tax owed on the current period earnings, as well as a deferred provision,income taxes, which reflects the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Changes in existing tax laws and rates, their related interpretations, as well as the uncertainty generated by the prospect of tax legislation in the future may affect the amounts of deferred tax liabilities or the realizability of deferred tax assets.

For tax positions the Company has taken or expectsexpected to take in athe tax return,returns, the Company applies a more likely than not assessment (i.e., there is a greater than 50 percent chance) about whether the tax position will be sustained upon examination by the appropriate tax authority with full knowledge of all relevant information. Amounts recorded for uncertain tax positions are periodically assessed, including the evaluation of new facts and circumstances, to ensure sustainability of the position. The Company records interest related to unrecognized tax benefits, if any, in interest expense and penalties in other income, net. The Company applies the aggregate portfolio method to account for income tax effects in accumulated other comprehensive lossincome (loss) with respect to available-for-sale debt securities.

Concentration of Risks and Uncertainties

TheAll of the Company’s real estate investmentsassets are concentrated in Northwest Florida. Uncertain economic conditions could have an adverse impact on the Company’s real estateoperations and asset values.

F 15

Table of Contents

Throughout 2022, the Company continued to generate positive financial results. While macroeconomic factors such as inflation, rising interest rates, supply chain disruptions, geopolitical conflicts and the continuing recovery from the COVID-19 pandemic, among other things, have created economic headwinds and impacted buyer sentiment, demand across the Company’s segments remains strong. The Company believes this is primarily the result of the continued growth of Northwest Florida, which the Company attributes to the region’s high quality of life, natural beauty and outstanding amenities, as well as the evolving flexibility in the workplace.

Despite the strong demand across the Company’s segments, the Company also continues to feel the impact from the aforementioned macroeconomic factors, including supply chain disruptions which have extended homesite and home deliveries in certain residential communities, and inflation and rising interests rates, which have increased operating costs and loan rates, as compared to prior periods. However, despite homesite and home delivery delays, the Company generally has not seen a material increase in cancellation rates, and therefore the impact relates primarily to the timing of revenue recognition. In addition, while rising interest rates have negatively impacted buyers’ ability to obtain financing and the housing market generally, homebuilders have performed on their contractual obligations with the Company.

Given our diverse portfolio of residential holdings, the mix of sales and pricing from different communities may also impact revenue and margins period over period.

Further discussion of the potential impacts on our business from the current macroeconomic environment are discussed in Part I. Item 1A. Risk Factors.

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, investments, other receivables, investments held by special purpose entity or entities (“SPE”), and investments in retained interests. The Company deposits and invests cash with local, regional and regionalnational financial institutions and as of December 31, 20192022 these balances exceed the amount of FDIC insurance provided on such deposits by $22.4$15.2 million. In addition, as of December 31, 2019,2022, the Company had $0.1$19.2 million invested in one issuer of corporate debt securities that is non-investment grade, $9.7U.S. Treasury Money Market Funds classified as cash and cash equivalents and $40.6 million invested in four issuers of preferred stock that are non-investment grade and one issuer of preferred stock that is investment grade, as well as investments of $138.2 million in short term commercial paper from twenty issuers and short term U.S. Treasury Bills of $7.0 million.classified as investments – debt securities.

Earnings Per Share

Basic and diluted earnings per share are calculated by dividing net income attributable to the Company by the basic weighted average number of common shares outstanding for the period. Diluted earnings per share are calculated by dividing net income attributable to the Company by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares. The treasury stock method is used to determine the effect on diluted earnings. For the threeyear ended December 31, 2022, the Company had 29,955 unvested shares of restricted stock. For the year ended December 31, 2022, 29,955 potentially dilutive common shares were excluded from the calculation of diluted income per share, since the effect would have been anti-dilutive based on the application of the treasury stock method. For the years ended December 31, 2019, basic2021 and diluted average shares outstanding were the same. There2020, there were no outstanding common stock equivalents asor potential dilutive instruments, therefore, basic and diluted weighted average shares outstanding were equal. See Note 15. Stockholders’ Equity for additional information related to the issuance of December 31, 2019 or 2018. Non-vested restrictedcommon stock is included in outstanding shares at the time of grant.

for employee compensation.

F 16

Table of Contents

The computation of basic and diluted earnings per share are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

​

2022

​

2021

​

2020

​

​

​

​

​

​

​

​

​

​

​

Income

​

​

​

​

​

​

​

​

​

​

Net income attributable to the Company

​

​

$

70,927

​

$

74,553

​

$

45,203

​

​

​

​

​

​

​

​

​

​

​

Shares

​

​

​

​

​

​

​

​

​

​

Weighted average shares outstanding - basic

​

​

​

58,720,050

​

​

58,882,549

​

​

59,009,865

Incremental shares from restricted stock

​

​

​

1,288

​

​

—

​

​

—

Weighted average shares outstanding - diluted

​

​

​

58,721,338

​

​

58,882,549

​

​

59,009,865

​

​

​

​

​

​

​

​

​

​

​

Net income per share attributable to the Company

​

​

​

​

​

​

​

​

​

​

Basic income per share

​

​

$

1.21

​

$

1.27

​

$

0.77

Diluted income per share

​

​

$

1.21

​

$

1.27

​

$

0.77

​

Revenue and Revenue Recognition

Revenue consists primarily of real estate sales, hospitality operations, leasing operations, and timber sales. Taxes collected from customers and remitted to governmental authorities (e.g., sales tax) are excluded from revenue, costs and expenses.

In accordance with Accounting Standards Codification (“ASC”) Topic 606,Revenue from Contracts with Customers (“Topic 606”), revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by applying the following steps; (1)(i) identifying the contract(s) with a customer, (2)(ii) identifying the performance obligations in the contract, (3)(iii) determining the transaction price, (4)(iv) allocating the transaction price to the performance obligations in the contract and (5)(v) recognizing revenue when (or as) the Company satisfies a performance obligation. The adoption of Topic 606 as of January 1, 2018 impacted the Company’s residential real estate segment as detailed below and had a de minimis impact on the hospitality segment, but did not impact the commercial leasing and sales or forestry segments. Lease related revenue is excluded from Topic 606. The following summary details the Company’s revenue and the related timing of revenue recognition by segment.recognition.

Real Estate Revenue

Revenue from real estate sales, including homesites, homes, commercial properties, operating properties and rural or timberland,land, is recognized at the point in time when a sale is closed and title and control has been transferred to the buyer. If a performance obligation is not yet substantially complete when title transfers to the buyer, the revenue associated with the incomplete performance obligation is deferred until completed.

Residential real estate revenue includes (i) the sale of developed homesites; (ii) the sale of completed homes (iii) the sale of parcels of entitled or undeveloped land;land or homesites; (iv) a homesite residual on homebuilder sales that provides the Company a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold; (v) the sale of tap and impact fee credits; (vi) marketing feesfees; (vii) title insurance business revenue and (viii) other fees on certain transactions.

Effective January 1, 2018,Title insurance business revenue is recognized at the point in time services are provided and represent a single performance obligation with the adoption of Topic 606, estimateda fixed transaction price. Estimated homesite residuals and certain estimated fees are recognized as revenue at the point in time of sale to homebuilders, subject to constraints, and anyconstraints. Any change in material circumstances from the estimated amounts arewill be updated at each reporting period. The variable consideration for homesite residuals and certain estimated fees are based on historical experience and are recognized as revenue when it can be reasonably estimated and only to the extent it is probable that a significant reversal in the estimated amount of cumulative revenue will not occur when uncertainties are resolved. For the years ended December 31, 20192022, 2021 and 2018,2020, real estate

F 17

Table of Contents

revenue includes $2.5$5.8 million, $4.8 million and $1.0$1.9 million, respectively, of estimated homesite residuals and $2.3$1.9 million, $2.4 million and $1.1$1.9 million, respectively, of certain estimated fees related to homebuilder homesite sales. Prior to 2018, these homesite residuals and fees were recognized in revenue when consideration was received by the Company in periods subsequent to the initial recognition of revenue for the sale of the homesite.

Hospitality Revenue

The Company’s hospitality segment generatesoperations generate revenue from membership sales, membership reservations, golf courses, the WaterColor Inn and WaterSound Inn,lodging, short-term vacation rentals, management of The Pearl Hotel (prior to acquisition in December 2022), food and beverage operations, merchandise sales, marina operations, charter flights, other resort and entertainment activities and beach clubs, which includes operation of the WaterColor Beach Club. Hospitality revenue is generally recognized at the point in time services are provided and represent a single performance obligation with a fixed transaction price. Hospitality revenue recognized over time includes non-refundable club membership initiation fees, club membership dues, management fees and managementother membership fees.

Clubs – Club operations include the Company’s golf courses, beach club and facilities that generate revenue from membership sales, membership reservations, daily play at the golf courses, merchandise sales, charter flights and food and beverage sales. Daily play at the golf courses, merchandise sales, charter flights and food and beveragesbeverage sales are recognized at the point of sale. Club membership revenue consists of monthly dues, which are recognized monthly at the point inover time as access is provided for the period, membership reservations that are recognized at the point in time when certain performance

F  17

Table of Contents

obligations are met and non-refundableperiod. Non-refundable initiation fees that are deferred and recognized ratably over time, which is the estimated membership period.period. Membership reservations are recognized at the point in time when certain performance obligations are met.

Hotel Operations, Certain Food and Beverage Operations, Short-Term Vacation Rentals and Other Management Services – Hotel operations, certain food and beverage operations, short-term vacation rentals and other management services generate revenue from (1)(i) lodging at the WaterColor Inn, WaterSound Inn andCompany’s hotels, (ii) operation of the WaterColor Beach Club, (2)(iii) management of The Pearl Hotel (3)(prior to December 2022), (iv) short-term vacation rentals, and (4)(v) food and beverage operations. The WaterColor Inn, WaterSound Innoperations and (vi) merchandise sales. Lodging at the Company’s hotels and operation of the WaterColor Beach Club generate revenue from service and/or daily rental fees, recognized at the point in time services are provided.  provided. Revenue generated from the Company’s management services areis recognized over time as time elapses and the Company’s performance obligations are met.  As discussed further in Note 8. Sale of Vacation Rental Management,met. The short-term vacation rentals owned by the Company sold its short term vacationgenerate revenue from rental management business in December 2017. Followingfees, which are recognized at the December 2017 sale, the Company no longer manages third party vacation rentals, but continues to manage rental properties the Company owns.point of sale. The Company’s food and beverage operations and retail outlets generate revenue from food and beverage sales which are recognized at the point of sale.

Retail – The Company owns and operates retail outlets near its hospitality facilities that include the WaterColor store and four additional retail outlets. The Company’s retail outlets generate revenue from merchandise sales, which are recognized at the point of sale.

Other Hospitality Operations – Other hospitality operations include retail stores, marinas, two standalone restaurants and other entertainment assets. Other hospitality operations generate revenue from merchandise sales, fuel sales, other service fees and food and beverage sales, which are recognized at the point of sale.

Leasing Revenue

Leasing revenue is excluded from Topic 606 and consists of long term rental revenue from multi-family, senior living, self-storage, retail, office and commercial property, cell towersproperty; rural land and other assets,assets; as well as boat slip rentals and boat storage fees at the marinas, which is recognized as earned, using the straight-line method over the life of each lease. Certain leases provide for tenant occupancy during periods for which no rent is due or where minimum rent payments change during the lease term. Accordingly, a receivable or liability is recorded representing the difference between the straight-line rent and the rent that is contractually due from the tenant. The Company does not separate non-lease components from lease components and, instead, accounts for each separate lease component and the non-lease components associated with that lease as a single component if the non-lease components otherwise would be accounted for under Topic 606. Non-lease components primarily include common area maintenance and senior living services provided related to the Watercrest JV. Leasing revenue includes properties located in the Company’s Beckrich Office Park, Watersound Town Center, consolidated Pier Park North JV, and Pier Park Crossings JV, Pier Park Crossings Phase II JV, Watersound Origins Crossings JV and Watercrest JV, as well as the Company’s industrial park, VentureCrossingsparks and other properties.

Leasing revenue within the forestry segment consists primarily of hunting leases, which is recognized as income over the term of each lease. The Company’s marinas generate revenue from boat slip rentals recognized over the term of the lease. See Note 9. 7. Leases for additional information related to leases.

F 18

Table of ContentsForestry Product

Timber Revenue

Revenue from the sale of the Company’s forestry products is primarily from open market sales of timber on site without the associated delivery costs and is derived from either pay-as-cut sales contracts or timber bid sales.

Under a pay-as-cut sales contract, the risk of loss and title to the specified timber transfers to the buyer when cut by the buyer, and the buyer or some other third party is responsible for all logging and hauling costs, if any. Revenue is recognized at the point in time when risk of loss and title to the specified timber are transferred.

Timber bid sales are agreements in which the buyer agrees to purchase and harvest specified timber (i.e., mature pulpwood and/or sawlogs) on a tract of land over the term of the contract. Unlike a pay-as-cut sales contract, risk of loss and title to the trees transfer to the buyer when the contract is signed and revenue is recognized at that point in time accordingly. The buyer pays the full purchase price when the contract is signed and the Company does not have any additional performance obligations.

F  18

Table of Contents

The following represents revenue disaggregated by segment, good or service and timing:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2019

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

Leasing

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

 

Hospitality

 

 

and Sales

 

 

Forestry

 

 

Other

 

 

Total

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2022

​

​

Residential

​

Hospitality

​

Commercial

​

Other

​

Total

Revenue by Major Good/Service:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Real estate revenue

 

$

41,055

 

$

 —

 

$

7,799

 

$

11,678

 

$

956

 

$

61,488

​

$

92,804

​

$

—

​

$

13,678

​

$

2,677

​

$

109,159

Hospitality revenue

 

 

496

 

 

45,616

 

 

 —

 

 

 —

 

 

 —

 

 

46,112

​

​

—

​

​

96,731

​

​

529

​

​

—

​

​

97,260

Leasing revenue

 

 

35

 

 

104

 

 

14,659

 

 

783

 

 

 —

 

 

15,581

​

​

82

​

​

505

​

​

38,466

​

​

143

​

​

39,196

Timber revenue

 

 

 —

 

 

 —

 

 

 —

 

 

3,904

 

 

 —

 

 

3,904

​

​

—

​

​

—

​

​

6,706

​

​

—

​

​

6,706

Total revenue

 

$

41,586

 

$

45,720

 

$

22,458

 

$

16,365

 

$

956

 

$

127,085

​

$

92,886

​

$

97,236

​

$

59,379

​

$

2,820

​

$

252,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Timing of Revenue Recognition:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Recognized at a point in time

 

$

41,551

 

$

42,864

 

$

7,799

 

$

15,582

 

$

956

 

$

108,752

​

$

92,804

​

$

68,653

​

$

20,913

​

$

2,677

​

$

185,047

Recognized over time

 

 

 —

 

 

2,752

 

 

 —

 

 

 —

 

 

 —

 

 

2,752

​

​

—

​

​

28,078

​

​

—

​

​

—

​

​

28,078

Over lease term

 

 

35

 

 

104

 

 

14,659

 

 

783

 

 

 —

 

 

15,581

​

​

82

​

​

505

​

​

38,466

​

​

143

​

​

39,196

Total revenue

 

$

41,586

 

$

45,720

 

$

22,458

 

$

16,365

 

$

956

 

$

127,085

​

$

92,886

​

$

97,236

​

$

59,379

​

$

2,820

​

$

252,321

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

Leasing

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

 

Hospitality

 

 

and Sales

 

 

Forestry

 

 

Other

 

 

Total

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2021

​

​

Residential

​

Hospitality

​

Commercial

​

Other

​

Total

Revenue by Major Good/Service:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Real estate revenue (a)

 

$

42,761

 

$

 —

 

$

4,801

 

$

1,807

 

$

2,814

 

$

52,183

Real estate revenue

​

$

144,664

​

$

—

​

$

12,002

​

$

1,963

​

$

158,629

Hospitality revenue

 

 

397

 

 

38,339

 

 

 —

 

 

 —

 

 

 —

 

 

38,736

​

​

—

​

​

74,538

​

​

727

​

​

—

​

​

75,265

Leasing revenue

 

 

 —

 

 

1,237

 

 

11,684

 

 

806

 

 

 —

 

 

13,727

​

​

190

​

​

53

​

​

26,807

​

​

31

​

​

27,081

Timber revenue

 

 

108

 

 

 —

 

 

 —

 

 

5,522

 

 

 —

 

 

5,630

​

​

—

​

​

—

​

​

6,021

​

​

—

​

​

6,021

Total revenue

 

$

43,266

 

$

39,576

 

$

16,485

 

$

8,135

 

$

2,814

 

$

110,276

​

$

144,854

​

$

74,591

​

$

45,557

​

$

1,994

​

$

266,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Timing of Revenue Recognition:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Recognized at a point in time

 

$

43,266

 

$

36,303

 

$

4,801

 

$

7,329

 

$

2,814

 

$

94,513

​

$

144,664

​

$

55,181

​

$

18,750

​

$

1,963

​

$

220,558

Recognized over time

 

 

 —

 

 

2,036

 

 

 —

 

 

 —

 

 

 —

 

 

2,036

​

​

—

​

​

19,357

​

​

—

​

​

—

​

​

19,357

Over lease term

 

 

 —

 

 

1,237

 

 

11,684

 

 

806

 

 

 —

 

 

13,727

​

​

190

​

​

53

​

​

26,807

​

​

31

​

​

27,081

Total revenue

 

$

43,266

 

$

39,576

 

$

16,485

 

$

8,135

 

$

2,814

 

$

110,276

​

$

144,854

​

$

74,591

​

$

45,557

​

$

1,994

​

$

266,996

​

F 19

(a)

Residential real estate revenue includes revenue of $23.1 million in 2018 for a one-time receipt of RiverTown impact fees related to the 2014 RiverTown transaction. See Note 19. RiverTown Impact Fees.

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2020

​

​

Residential

​

Hospitality

​

Commercial

​

Other

​

Total

Revenue by Major Good/Service:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Real estate revenue

​

$

74,137

​

$

—

​

$

11,689

​

$

1,801

​

$

87,627

Hospitality revenue

​

​

—

​

​

47,366

​

​

412

​

​

—

​

​

47,778

Leasing revenue

​

​

166

​

​

8

​

​

18,645

​

​

—

​

​

18,819

Timber revenue

​

​

—

​

​

—

​

​

6,331

​

​

—

​

​

6,331

Total revenue

​

$

74,303

​

$

47,374

​

$

37,077

​

$

1,801

​

$

160,555

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Timing of Revenue Recognition:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Recognized at a point in time

​

$

74,137

​

$

36,262

​

$

18,432

​

$

1,801

​

$

130,632

Recognized over time

​

​

—

​

​

11,104

​

​

—

​

​

—

​

​

11,104

Over lease term

​

​

166

​

​

8

​

​

18,645

​

​

—

​

​

18,819

Total revenue

​

$

74,303

​

$

47,374

​

$

37,077

​

$

1,801

​

$

160,555

​

Recently Adopted Accounting Pronouncements

LeasesThere are no recently adopted accounting pronouncements which would have a material effect on the Company’s financial condition, results of operations and cash flows.

Recently Issued Accounting Pronouncements

Reference Rate Reform

In February 2016,March 2020, the FASB issued ASU 2016‑022020-04, that amendsprovides temporary optional guidance to ease the existingpotential burden in accounting standards for lease accounting, including requiring lesseesor recognizing the effects of reference rate reform on financial reporting. This guidance provides expedients and exceptions for applying GAAP to recognize both financecontract modifications and operating leases with terms of more than 12 months on the balance sheet.hedging relationships affected by reference rate reform if certain criteria are met. The accounting applied by a lessoramendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is largely unchanged by this amendment. This amendment also required certain quantitative and qualitative disclosures about leasing arrangements.expected to be discontinued due to reference rate reform. In January 2018,2021, the FASB issued ASU 2018‑01,2021-01, which provided anclarifies the original guidance that certain optional transition practical expedientexpedients and exceptions in contract modifications and hedge accounting apply to not evaluate underderivatives that are affected by the new lease standard, existing or expired land easements that were not previously accounted for as leases.discounting transition. In July 2018,December 2022, the FASB issued ASU 2018-102022-06 that provided clarifications and improvementsextends the temporary reference rate reform guidance under Topic 848 from December 31, 2022 to ASU 2016-02. In July 2018, the FASB issued ASU 2018-11 that provided entities with an additional and optional transition method to apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the

F  19

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period of adoption. In December 2018, the FASB issued ASU 2018-20 that provided an accounting policy election for certain narrow-scope improvements for lessors. In March 2019, the FASB issued ASU 2019-01 that provided clarifications and improvements to ASU 2016-02. During the Company’s evaluation of ASU 2016-02, as amended, the following practical expedients and accounting policies with respect to Topic 842 have been elected and/or adopted effective January 1, 2019:

·

The Company, as lessee and as lessor, did not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases or (iii) initial direct costs for any expired or existing leases.

·

The Company, as lessee, did not apply the recognition requirements of Topic 842 to short-term (twelve months or less) leases. Instead, the Company, as lessee, recognizes the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

·

The Company, as lessor, did not separate nonlease components from lease components and, instead, are accounting for each separate lease component and the nonlease components associated with that lease as a single component if the nonlease components otherwise would be accounted for under ASC Topic 606. The primary reason for this election is related to instances where common area maintenance is, or may be, a component of base rent within a lease agreement.

The Company adopted the new guidance, including amendments, as of January 1, 2019 and has elected to implement ASC 842 retrospectively using the cumulative-effect adjustment transition method as of the date of adoption. As a result, prior periods have not been restated. As of the date of adoption, a cumulative-effect adjustment was not necessary and the Company recognized an operating lease right-of use assets of $0.4 million and corresponding operating lease liabilities of $0.4 million based on the present value of minimum rental payments related to leases for which the Company is the lessee. The operating lease right-of-use assets and corresponding operating lease liabilities are included within other assets and other liabilities, respectively, on the consolidated balance sheets. There were no adjustments related to the leases for which the Company is the lessor. The adoption of this guidance did not materially impact results of operations or cash flows.

Codification Updates

In July 2019, the FASB issued ASU 2019-07, Codification Updates to SEC Sections—Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates, that aligns SEC paragraphs in the codification with changes made in the above-referenced SEC rules to simplify disclosures, modernize the reporting and disclosureof information by registered investment companies and other items.31, 2024. This new guidance was effective upon issuance and did nothave a materialmay be applied prospectively through December 31, 2024, as reference rate activities occur. In 2022, some of the Company’s debt agreements that referenced LIBOR were amended to an alternative rate, ASU 2020-04 was applied at the time of these modifications and there was no impact on the Company’s financial condition, results of operations and cash flows.

Recently Issued Accounting Pronouncements

Financial Instruments - Credit Losses

In June 2016, the FASB issued ASU 2016‑13 that requires a financial asset measured at amortized cost See Note 10. Debt, Net for additional information. There is no current additional impact to be presented at the net amount expected to be collected and requires that credit losses from available-for-sale debt securities be presented as an allowance for credit loss. In November 2018, the FASB issued ASU 2018-19, which clarifies that impairment of receivables from operating leases should be accounted for using lease guidance. In April 2019, the FASB issued ASU 2019-04, which clarifies and improves ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In November 2019, the FASB issued ASU 2019-11, which provides codification improvements to ASU 2016-13. This new guidance will be effective for the Company January 1, 2020 and implemented using a cumulative-effect adjustment to retained earnings as of the date of adoption. The Company has evaluated the impact of the adoption offrom this guidance and as a result of this evaluation, determined itthe Company will not have a material impact on its financial condition, results of operations and cash flows.

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Table of Contents

Income Taxes

In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendment also improves consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This new guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its financial condition, results of operations and cash flows.

Investments – Equity Securities, Investments-Equity Method and Joint Ventures and Derivatives and Hedging

In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force)  which clarifies the interaction between the accounting standard on recognition and measurement of financial instruments in Topic 321, Investments – Equity Securities and Topic 323, Investments - Equity Method and Joint Ventures.  The new guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluatingconsider the impact that the adoption of this guidance will have on its financial condition, results of operations and cash flows.flows if there are additional modifications to existing agreements.

​

​

F 20

Table of Contents

3. Investment in Real Estate, Net

RealInvestment in real estate, net, excluding unconsolidated JVs, by property type and segment includes the following:

 

 

 

 

 

 

 

 

    

December 31,

    

December 31,

 

 

2019

 

2018

Development property:

 

 

  

 

 

  

Residential real estate

 

$

115,384

 

$

105,323

Hospitality

 

 

12,229

 

 

3,726

Commercial leasing and sales

 

 

101,446

 

 

73,128

Forestry

 

 

1,880

 

 

2,144

Corporate

 

 

2,631

 

 

2,497

Total development property

 

 

233,570

 

 

186,818

 

 

 

 

 

 

 

Operating property:

 

 

  

 

 

  

Residential real estate

 

 

11,985

 

 

11,985

Hospitality

 

 

94,838

 

 

88,405

Commercial leasing and sales

 

 

143,400

 

 

111,471

Forestry

 

 

21,189

 

 

19,765

Other

 

 

50

 

 

50

Total operating property

 

 

271,462

 

 

231,676

Less: Accumulated depreciation

 

 

74,256

 

 

67,500

Total operating property, net

 

 

197,206

 

 

164,176

Investment in real estate, net

 

$

430,776

 

$

350,994

​

​

​

​

​

​

​

​

​

    

December 31, 

    

December 31, 

​

​

2022

​

2021

Development property:

 

​

  

 

​

  

Residential

​

$

171,504

​

$

122,404

Hospitality

​

 

200,209

​

 

137,089

Commercial

​

 

131,133

​

 

85,931

Other

​

 

3,618

​

 

3,232

Total development property

​

 

506,464

​

 

348,656

​

​

​

​

​

​

​

Operating property:

​

 

  

​

 

  

Residential

​

 

7,854

​

 

7,854

Hospitality

​

 

221,542

​

 

124,449

Commercial

​

 

356,242

​

 

296,193

Other

​

 

127

​

 

127

Total operating property

​

 

585,765

​

 

428,623

Less: Accumulated depreciation

​

 

95,968

​

 

87,166

Total operating property, net

​

 

489,797

​

 

341,457

Investment in real estate, net

​

$

996,261

​

$

690,113

​

Investment in real estate, net is carried at cost, net of depreciation and timber depletion, unless circumstances indicate that the carrying value of the assets may not be recoverable.

Development property consists of land the Company is developing or intends to develop for sale, lease or future operations and includes direct costs associated with the land, as well as development, and construction costs and indirect costs. Residential real estatedevelopment property includes existing and planned residential communities such as Watersound Origins, SouthWood, WindMark Beach, as well as other communities.homesites and related infrastructure. Hospitality development property consists of land, improvements and construction costs,and development costs and improvements primarily related to the Camp Creek Lifestyle Village amenity center, a new hotel in Pier Parkuncompleted hotels, resorts and a new hotel near the Northwest Florida Beaches International Airport, as well as other properties.club amenities. Commercial leasing and sales development property primarily consists of land and construction costs and development costs for planned commercial, multi-family assisted living and industrial uses, including the Watercrest JV, Watersound Origins Crossings JV, Pier Park Crossings JV, Pier Park Crossings Phase II JV, Beckrich Office Park, land holdings near the Northwest Florida Beaches

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Table of Contents

International Airport and Port of Port St. Joe as well as other properties.uses. Development property in the hospitality and commercial leasing and sales segments will be reclassified as operating property as it is placed into service.

Operating property includes the following components:

 

 

 

 

 

 

 

 

    

 

December 31,

    

 

December 31,

 

 

 

2019

 

 

2018

Land and land improvements

 

$

83,995

 

$

75,663

Buildings and building improvements

 

 

174,712

 

 

144,730

Timber

 

 

12,755

 

 

11,283

 

 

 

271,462

 

 

231,676

Less: Accumulated depreciation

 

 

74,256

 

 

67,500

Total operating property, net

 

$

197,206

 

$

164,176

​

​

​

​

​

​

​

​

​

    

​

December 31,

    

​

December 31,

​

​

​

2022

​

​

2021

Land and land improvements

​

$

146,257

​

$

111,698

Buildings and building improvements

​

 

425,347

​

 

303,335

Timber

​

 

14,161

​

 

13,590

​

​

 

585,765

​

 

428,623

Less: Accumulated depreciation

​

 

95,968

​

 

87,166

Total operating property, net

​

$

489,797

​

$

341,457

​

Operating property includes property that the Company uses for operations and activities. Residential real estate operating property consists primarily of residential utility assets and certain rental properties. The hospitalityHospitality operating property includes the WaterColor Inn, WaterSound Inn, golf courses, a beach club,primarily consists of existing hotels, resorts, clubs, vacation rental homes, marinas and certain vacation rental properties.other operations. Commercial leasing and sales operating property includes property developed or purchased by the Company and used for retail, office, self-storage, light industrial, multi-family, andsenior living, commercial rental, purposes, including property in the Pier Park North JV, VentureCrossings, Pier Park Crossings JVvacation rental and Beckrich Office Park as well as other properties. Forestry operating property includes the Company’s timberlands.timber purposes. Operating property may be sold in the future as part of the Company’s principal real estate business. As of December 31, 2022 and 2021, operating property, net related to operating leases was $285.1 million and $230.0 million, respectively.

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Table of Contents

In December 2022, the Company acquired The Pearl Hotel property for a purchase price of $52.0 million. The Pearl Hotel acquisition was accounted for as an asset acquisition in accordance with ASC Topic 805 Business Combinations. The Company allocated the purchase price based on the relative fair value of each acquired component. Costs related to the acquisition were capitalized and included in the cost basis of the asset. The allocation of the purchase price and costs primarily consisted of $49.3 million for the building and land included within operating property, net and $3.0 million included within property and equipment, net. There were no in-place leases at the acquisition date. See Note 10. Debt, Net for additional information regarding financing related to the asset acquisition.

Depreciation expense related to real estate investments was $6.8$13.9 million, $6.0$11.7 million and $6.2$8.3 million in 2019, 20182022, 2021 and 2017,2020, respectively. Depletion and amortization expense related to the Company’s timber operations was $0.4 million, $0.3 million in 2019 and $0.5$0.4 million in each 20182022, 2021 and 2017.2020, respectively.

4. Real Estate Joint Ventures

The Company enters into real estate JVs, from time to time, for the purpose of developing real estate and other business activities in which the Company may or may not have a controlling financial interest. GAAP requires consolidation of voting interest entities where the Company has a majority voting interest or control and VIEs in which an enterprise has a controlling financial interest and is the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a)(i) the power to direct the VIE activities that most significantly impact economic performance and (b)(ii) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company examines specific criteria and uses judgment when determining whether the Company is the primary beneficiary and must consolidate a VIE. The Company continues to assessevaluate whether it is the primary beneficiary on an ongoing basis.as needed when assessing reconsideration events. Investments in JVs and limited partnerships in which the Company is not the primary beneficiary, or a voting interest entity where the Company does not have a majority voting interest or control, but has significant influence are unconsolidated and accounted for by the equity method.

The timing of cash flows for additional required capital contributions related to the Company’s JVs varies by agreement. Some of the Company’s consolidated and unconsolidated JVs have entered into financing agreements where the Company or its JV partners have provided guarantees. See Note 12. 8. Other Assets, Note 10. Debt, Net and Note 22. 20. Commitments and Contingencies for additional information.

Consolidated Joint Ventures

Pier ParkMexico Beach Crossings Phase II JV

Pier ParkMexico Beach Crossings Phase II JV was createdformed in October 2019,January 2022, when the Company entered into a JV agreement to develop, manage and lease apartments in Mexico Beach, Florida. The JV parties are working together to develop and construct the 216-unit apartment community. The community is located on land that was contributed to the JV by the Company. As of December 31, 2022, the Company owned a 75.0% interest in the consolidated JV. The Company’s partner is currently responsible for the construction activities of the JV, but once operational, Watersound Management, LLC (“Watersound Management JV”), the Company’s unconsolidated JV, will be responsible for the day-to-day activities of the community. The Company approves all major decisions, including project development, annual budgets and financing. The Company determined Mexico Beach Crossings JV is a voting interest entity and that the Company has a majority voting interest as of December 31, 2022.

The Lodge 30A JV

The Lodge 30A JV was formed in July 2020, when the Company entered into a JV agreement to develop and operate a boutique hotel on Scenic County Highway 30A in Seagrove Beach, Florida. The JV parties are working together to develop and construct the 85-room hotel. As of December 31, 2022 and 2021, the Company owned a 52.8% interest in the consolidated JV. The Company’s partner is currently responsible for the construction activities of the JV, but once operational, a wholly-owned subsidiary of the Company will manage the day-to-day operations of the hotel. The Company has significant involvement in the project design and development and approves all major decisions,

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Table of Contents

including annual budgets and financing. The Company determined The Lodge 30A JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2022 and 2021.

Pier Park Resort Hotel JV

Pier Park Resort Hotel JV was formed in April 2020, when the Company entered into a JV agreement to develop and operate an Embassy Suites by Hilton hotel in the Pier Park area of Panama City Beach, Florida. The JV parties are working together to develop and construct the 255-room hotel. As of December 31, 2022 and 2021, the Company owned a 120 unit70.0% interest in the consolidated JV. The Company’s partner is currently responsible for the construction activities of the JV, but once operational, a wholly-owned subsidiary of the Company will manage the day-to-day operations of the hotel. The Company has significant involvement in the project design and development, annual budgets and financing. The Company determined Pier Park Resort Hotel JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2022 and 2021.

Pier Park Crossings Phase II JV

Pier Park Crossings Phase II JV was formed in 2019, when the Company entered into a JV agreement to develop, manage and lease a 120-unit apartment community. The community is located on land in the Pier Park area thatof Panama City Beach, Florida. Construction of the community was contributed to the JV by the Company.completed in December 2020. As of December 31, 2019,2022 and 2021, the Company owned a 75.0% interest in the consolidated JV. The Company’s partnerunconsolidated Watersound Management JV is responsible for the day-to-day activities of the JV. However, thecommunity. The Company has significant involvement in the design of the development and approves all major decisions, including project

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Table of Contents

development, annual budgets and financing. The Company determined Pier Park Crossings Phase II JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2019.2022 and 2021.

Reliant TitleWatersound Closings JV

Reliant TitleWatersound Closings JV was createdformed in October 2019, when the Company entered into a JV agreement to own, operate and manage a real estate title insurance agency business. As of December 31, 2019,2022 and 2021, the Company owned a 66.0%58.0% interest in the consolidated JV. A wholly ownedwholly-owned subsidiary of the Company is the managing member of Reliant TitleWatersound Closings JV and is responsible for the day-to-day activities of the JV.business. As the manager of the JV, as well as the majority member, the Company has the power to direct all of the activities of the JV that most significantly impact economic performance.performance. The Company determined Reliant TitleWatersound Closings JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2019.2022 and 2021.

Watercrest JV

Watercrest JV was createdformed in May 2019, when the Company entered into a JV agreement to develop and operate a new assisted107-unit senior living and memory care community in Santa Rosa Beach, Florida. The JV parties are working together to develop and construct a 107 unit community. TheConstruction of the community will be located on land that was contributed tocompleted in the JV by the Company.fourth quarter of 2020. As of December 31, 2019,2022 and 2021, the Company owned an 87.0% interest in the consolidated JV. TheA wholly-owned subsidiary of the Company’s JV partner is responsible for the day-to-day activities of the JV.community. However, the Company has significant involvement in the design of the development and approves all major decisions, including project development, annual budgets and financing. The Company determined Watercrest JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2019.2022 and 2021.

Watersound Origins Crossings JV

Watersound Origins Crossings JV was createdformed in January 2019, when the Company entered into a JV agreement to develop, manage and lease apartments in Watersound, Florida. The JV parties are working together to develop and construct a 217 unit apartment community. The community will be located on land near the entrance to the Watersound Origins residential community. Construction of the 217-unit apartment community which was contributed tocompleted in the JV by the Company.fourth quarter of 2021. As of December 31, 2019,2022 and 2021, the Company owned a 75.0% interest in the consolidated JV. The Company’s partnerunconsolidated Watersound Management JV is responsible for the day-to-day activities of the JV. However, thecommunity. The Company has significant involvement in the design of the development and approves all major decisions, including project development, annual budgets and financing. The Company determined Watersound Origins Crossings JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2019.2022 and 2021.

F 23

Table of Contents

Pier Park Crossings JV

In AprilPier Park Crossings JV was formed in 2017, when the Company entered into a JV agreement to develop, manage and lease apartments in Panama City Beach, Florida. The JV parties are working together to construct the remaining 24 units of the 240 unita 240-unit apartment community. The community is located on land in the Pier Park area that was contributed to the JV by the Company.of Panama City Beach, Florida. As of December 31, 20192022 and 20182021 the Company owned a 75.0% interest in the consolidated JV. The Company’s partnerunconsolidated Watersound Management JV is responsible for the day-to-day activities of the JV. However, thecommunity. The Company has significant involvement in the design of the development and approves all major decisions, including project development, annual budgets and financing. The Company determined Pier Park Crossings JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 20192022 and 2018.2021.

Pier Park North JV

During 2012, the Company entered into a JV agreement with a partner to develop a retail center at Pier Park North. In November 2022, the Company purchased an additional 30% ownership interest for $7.7 million. As of December 31, 20192022 and 2018,2021, the Company owned a 90.0% and 60.0%, respectively, interest in the consolidated JV. TheA wholly-owned subsidiary of the Company’s JV s partner is responsible for the day-to-day activities of the JV. However, theretail center. The Company has significant involvement in the design of the development and approves all major decisions, including project development, annual budgets and financing. The Company determined the Pier Park North JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 20192022 and 2018.

F  23

Table of Contents

Windmark JV

As of December 31, 2018, the Company owned a 49.0% interest in Windmark JV. A wholly owned subsidiary of the Company was the managing member of Windmark JV and ran its day-to-day operations. Windmark JV owned and its members made major decisions related to the management and development of the WindMark Beach project. The Company determined Windmark JV was a VIE and that the Company was the VIE’s primary beneficiary as of December 31, 2018. During 2019, the Windmark JV distributed property to the two other JV members and a wholly owned subsidiary of the Company purchased the property from the two other members for a total consideration of $11.6 million and, as a result, the Company now owns 100.0% of the WindMark project.2021.

Unconsolidated Joint Ventures

Investment in unconsolidated joint ventures includes the Company’s investment accounted for using the equity method. The following table presents detail of the Company’s investment in unconsolidated joint ventures and total outstanding debt of unconsolidated JVs:

​

​

​

​

​

​

​

​

​

    

December 31, 

    

December 31, 

​

​

2022

​

2021

Investment in unconsolidated joint ventures

 

​

  

 

​

  

Latitude Margaritaville Watersound JV

​

$

33,235

​

$

30,040

Sea Sound JV (a)

​

​

411

​

​

10,333

Watersound Fountains Independent Living JV

​

​

7,258

​

​

7,508

Pier Park TPS JV

​

 

1,451

​

 

1,961

Pier Park RI JV (b)

​

​

4,263

​

​

—

Busy Bee JV

​

 

2,160

​

 

1,621

Electric Cart Watersound JV (c)

​

​

703

​

​

—

Watersound Management JV

​

​

544

​

​

564

Total investment in unconsolidated joint ventures

​

$

50,025

​

$

52,027

​

​

 

  

​

 

  

Outstanding debt of unconsolidated JVs

​

​

​

​

​

​

Latitude Margaritaville Watersound JV (d) (e)

​

$

30,001

​

$

7,147

Sea Sound JV (a)

​

​

—

​

​

35,047

Watersound Fountains Independent Living JV (e)

​

​

21,327

​

​

66

Pier Park TPS JV (e)

​

​

13,822

​

​

14,124

Busy Bee JV

​

​

6,010

​

​

6,317

Electric Cart Watersound JV (e)

​

​

923

​

​

—

Total outstanding debt of unconsolidated JVs

​

$

72,083

​

$

62,701

 

 

 

 

 

 

 

 

    

December 31, 

    

December 31, 

 

 

2019

 

2018

Investment in unconsolidated joint ventures

 

 

  

 

 

  

Latitude Margaritaville Watersound JV (a)

 

$

791

 

$

 —

Pier Park TPS JV

 

 

3,083

 

 

1,105

Busy Bee JV (b)

 

 

1,210

 

 

 —

Total investment in unconsolidated joint ventures

 

$

5,084

 

$

1,105

 

 

 

  

 

 

  

Outstanding debt of unconsolidated JVs

 

 

 

 

 

 

Pier Park TPS JV

 

$

6,791

 

$

 —

Busy Bee JV

 

 

1,451

 

 

 —

Total outstanding debt of unconsolidated JVs (c)

 

$

8,242

 

$

 —

(a)

(a)

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. The Company’s proportionate share of the gain on sale of $21.7 million is included within equity in income (loss) from unconsolidated joint ventures on the consolidated statements of income for the year ended December 31, 2022.
(b)

JV was formed in June 2019.

May 2022.

(c)

(b)

JV was formed in July 2019.

February 2022.

F 24

Table of Contents

(d)

(c)

See Note 22. 8. Other Assets for additional information on the $10.0 million secured revolving promissory note the Company entered into with the unconsolidated Latitude Margaritaville Watersound JV.

(e)See Note 20. Commitments and Contingencies for additional information.

​

The Company's maximum exposure to loss due to involvement with the unconsolidated JVs as of December 31, 2022, was $87.8 million, which includes the carrying amounts of the investments, guarantees, promissory note receivable, other receivables, contribution requirements and derivative instruments.

The following table presents detail of the Company’s equity in lossincome (loss) from unconsolidated affiliates:JVs:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

​

2022

​

2021

​

2020

Equity in income (loss) from unconsolidated joint ventures

​

​

​

​

​

​

​

​

​

​

Latitude Margaritaville Watersound JV (a)

​

​

$

3,859

​

$

(1,861)

​

$

(524)

Sea Sound JV (b)

​

​

​

21,705

​

​

(15)

​

​

—

Watersound Fountains Independent Living JV (c)

​

​

​

(250)

​

​

—

​

​

—

Pier Park TPS JV

​

​

​

33

​

​

551

​

​

(112)

Busy Bee JV

​

​

​

538

​

​

441

​

​

(30)

Electric Cart Watersound JV (d)

​

​

​

18

​

​

—

​

​

—

Watersound Management JV (e)

​

​

​

83

​

​

19

​

​

—

Total equity in income (loss) from unconsolidated joint ventures

​

​

$

25,986

​

$

(865)

​

$

(666)

 

 

 

 

 

 

Year Ended December 31, 2019

Equity in loss from unconsolidated affiliates

 

 

 

Latitude Margaritaville Watersound JV

 

$

71

Pier Park TPS JV

 

 

 6

Total equity in loss from unconsolidated affiliates

 

$

77

(a)The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021.
(b)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. The year ended December 31, 2022, includes the Company’s proportionate share of the gain on sale of $21.7 million. As a result of the sale, the Sea Sound JV will no longer have activity from operations.
(c)JV was formed in April 2021.
(d)JV was formed in February 2022.
(e)JV was formed in June 2021.

Summarized balance sheets for unconsolidated JVs are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

​

Latitude Margaritaville Watersound JV

​

Sea Sound JV (b)

​

Watersound Fountains Independent Living JV

​

Pier Park TPS JV

​

Pier Park RI JV

​

Busy Bee JV

​

Electric Cart Watersound JV

​

Watersound Management JV

​

Total

ASSETS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Investment in real estate, net

​

$

125,231

(a)

$

—

​

$

38,783

​

$

15,106

​

$

9,858

​

$

7,627

​

$

1,875

​

$

—

​

$

198,480

Cash and cash equivalents

​

​

10,633

​

​

327

​

​

190

​

​

775

​

​

580

​

​

1,081

​

​

259

​

​

98

​

​

13,943

Other assets

​

​

3,267

​

​

363

​

​

11

​

​

748

​

​

340

​

​

1,957

​

​

234

​

​

—

​

​

6,920

Total assets

​

$

139,131

​

$

690

​

$

38,984

​

$

16,629

​

$

10,778

​

$

10,665

​

$

2,368

​

$

98

​

$

219,343

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

LIABILITIES AND EQUITY

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

Debt, net

​

$

29,530

​

$

—

​

$

20,716

​

$

13,542

​

$

—

​

$

5,970

​

$

843

​

$

—

​

$

70,601

Other liabilities

​

​

76,506

​

​

5

​

​

4,776

​

​

186

​

​

2,252

​

​

376

​

​

147

​

​

—

​

​

84,248

Equity

​

​

33,095

​

​

685

​

​

13,492

​

​

2,901

​

​

8,526

​

​

4,319

​

​

1,378

​

​

98

​

​

64,494

Total liabilities and equity

​

$

139,131

​

$

690

​

$

38,984

​

$

16,629

​

$

10,778

​

$

10,665

​

$

2,368

​

$

98

​

$

219,343

(a)Investment in real estate, net includes the land contributed to the Latitude Margaritaville Watersound JV at the Company’s historical cost basis and additional completed infrastructure improvements.

F 25

Table of Contents

(b)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. As a result of the sale, the Sea Sound JV will no longer have activity from operations.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2021

​

​

Latitude Margaritaville Watersound JV

​

Sea Sound JV (b)

​

Watersound Fountains Independent Living JV

​

Pier Park TPS JV

​

Pier Park RI JV (c)

​

Busy Bee JV

​

Electric Cart Watersound JV (d)

​

Watersound Management JV

​

Total

ASSETS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Investment in real estate, net

​

$

54,034

(a)

$

53,775

​

$

17,003

​

$

16,561

​

$

—

​

$

8,005

​

$

—

​

$

—

​

$

149,378

Cash and cash equivalents

​

​

12,541

​

​

760

​

​

240

​

​

1,913

​

​

—

​

​

855

​

​

—

​

​

138

​

​

16,447

Other assets

​

​

1,761

​

​

210

​

​

187

​

​

433

​

​

—

​

​

1,044

​

​

—

​

​

—

​

​

3,635

Total assets

​

$

68,336

​

$

54,745

​

$

17,430

​

$

18,907

​

$

—

​

$

9,904

​

$

—

​

$

138

​

$

169,460

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

LIABILITIES AND EQUITY

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

Debt, net

​

$

7,147

​

$

34,834

​

$

66

​

$

13,839

​

$

—

​

$

6,256

​

$

—

​

$

—

​

$

62,142

Other liabilities

​

​

36,419

​

​

2,653

​

​

3,408

​

​

1,147

​

​

—

​

​

405

​

​

—

​

​

—

​

​

44,032

Equity

​

​

24,770

​

​

17,258

​

​

13,956

​

​

3,921

​

​

—

​

​

3,243

​

​

—

​

​

138

​

​

63,286

Total liabilities and equity

​

$

68,336

​

$

54,745

​

$

17,430

​

$

18,907

​

$

—

​

$

9,904

​

$

—

​

$

138

​

$

169,460

(a)Investment in real estate, net includes the land contributed to the Latitude Margaritaville Watersound JV at the Company’s historical cost basis and additional completed infrastructure improvements.
(b)In November 2022, the Sea Sound JV sold its assets to an unrelated third party and will no longer have activity from operations.
(c)JV was formed in May 2022.
(d)JV was formed in February 2022.

​

Summarized statements of operations for unconsolidated JVs are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2022

​

​

Latitude Margaritaville Watersound JV (a)

​

Sea Sound JV

​

Watersound Fountains Independent Living JV

​

Pier Park TPS JV

​

Pier Park RI JV (c)

​

Busy Bee JV

​

Electric Cart Watersound JV

​

Watersound Management JV

​

​

Total

Total revenue

​

$

139,326

​

$

5,182

​

$

—

​

$

5,460

​

$

—

​

$

17,747

​

$

579

​

$

1,196

​

$

169,490

Expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cost of revenue

​

​

118,468

​

​

1,883

​

​

—

​

​

3,199

​

​

—

​

​

16,954

​

​

519

​

​

1,030

​

​

142,053

Other operating expenses

​

​

12,903

​

​

32

​

​

465

​

​

—

​

​

—

​

​

—

​

​

20

​

​

—

​

​

13,420

Depreciation and amortization

​

​

308

​

​

1,671

​

​

—

​

​

1,449

​

​

—

​

​

459

​

​

2

​

​

—

​

​

3,889

Total expenses

​

​

131,679

​

​

3,586

​

​

465

​

​

4,648

​

​

—

​

​

17,413

​

​

541

​

​

1,030

​

​

159,362

Operating income (loss)

​

​

7,647

​

​

1,596

​

​

(465)

​

​

812

​

​

—

​

​

334

​

​

38

​

​

166

​

​

10,128

Other (expense) income:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

(235)

​

​

(1,560)

​

​

—

​

​

(752)

​

​

—

​

​

(190)

​

​

(3)

​

​

—

​

​

(2,740)

Other income, net

​

​

18

​

​

36,138

(b)

​

—

​

​

17

​

​

—

​

​

957

(d)

​

—

​

​

—

​

​

37,130

Total other (expense) income

​

​

(217)

​

​

34,578

​

​

—

​

​

(735)

​

​

—

​

​

767

​

​

(3)

​

​

—

​

​

34,390

Net income (loss)

​

$

7,430

​

$

36,174

​

$

(465)

​

$

77

​

$

—

​

$

1,101

​

$

35

​

$

166

​

$

44,518

(a)The Latitude Margaritaville Watersound JV completed 316 home sale transactions during 2022.
(b)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. As a result of the sale, the Sea Sound JV will no longer have activity from operations.
(c)The project is under construction with no income or loss for the year ended December 31, 2022.
(d)Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV.

F 26

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2021

​

​

Latitude Margaritaville Watersound JV (a)

​

Sea Sound JV (b)

​

Watersound Fountains Independent Living JV (c)

​

Pier Park TPS JV

​

Pier Park RI JV (d)

​

Busy Bee JV

​

Electric Cart Watersound JV (f)

​

Watersound Management JV

​

Total

Total revenue

​

$

18,653

​

$

1,012

​

$

—

​

$

6,474

​

$

—

​

$

16,365

​

$

—

​

$

511

​

$

43,015

Expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cost of revenue

​

​

17,850

​

​

439

​

​

—

​

​

2,971

​

​

—

​

​

15,064

​

​

—

​

​

473

​

​

36,797

Other operating expenses

​

​

3,904

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

3,904

Depreciation and amortization

​

​

210

​

​

359

​

​

—

​

​

1,434

​

​

—

​

​

461

​

​

—

​

​

—

​

​

2,464

Total expenses

​

​

21,964

​

​

798

​

​

—

​

��

4,405

​

​

—

​

​

15,525

​

​

—

​

​

473

​

​

43,165

Operating (loss) income

​

​

(3,311)

​

​

214

​

​

—

​

​

2,069

​

​

—

​

​

840

​

​

—

​

​

38

​

​

(150)

Other (expense) income:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

(165)

​

​

(239)

​

​

—

​

​

(735)

​

​

—

​

​

(192)

​

​

—

​

​

—

​

​

(1,331)

Other income, net

​

​

—

​

​

—

​

​

—

​

​

11

​

​

—

​

​

198

(e)

​

—

​

​

—

​

​

209

Total other (expense) income

​

​

(165)

​

​

(239)

​

​

—

​

​

(724)

​

​

—

​

​

6

​

​

—

​

​

—

​

​

(1,122)

Net (loss) income

​

$

(3,476)

​

$

(25)

​

$

—

​

$

1,345

​

$

—

​

$

846

​

$

—

​

$

38

​

$

(1,272)

(a)The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021 and completed 47 home sale transactions during 2021.
(b)In November 2022, the Sea Sound JV sold its assets to an unrelated third party and will no longer have activity from operations.
(c)The project was under construction with no income or loss for the year ended December 31, 2021.
(d)JV was formed in May 2022.
(e)Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV.
(f)JV was formed in February 2022.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2020

​

​

Latitude Margaritaville Watersound JV

​

Sea Sound JV (a)

​

Watersound Fountains Independent Living JV (b)

​

Pier Park TPS JV

​

Pier Park RI JV (c)

​

Busy Bee JV

​

Electric Cart Watersound JV (d)

​

Watersound Management JV (e)

​

Total

Total revenue

​

$

—

​

$

—

​

$

—

​

$

2,338

​

$

—

​

$

5,892

​

$

—

​

$

—

​

$

8,230

Expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cost of revenue

​

​

—

​

​

—

​

​

—

​

​

1,370

​

​

—

​

​

5,467

​

​

—

​

​

—

​

​

6,837

Other operating expenses

​

​

980

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

980

Depreciation and amortization

​

​

—

​

​

—

​

​

—

​

​

951

​

​

—

​

​

228

​

​

​

​

​

​

​

​

1,179

Total expenses

​

​

980

​

​

—

​

​

—

​

​

2,321

​

​

—

​

​

5,695

​

​

—

​

​

—

​

​

8,996

Operating (loss) income

​

​

(980)

​

​

—

​

​

—

​

​

17

​

​

—

​

​

197

​

​

—

​

​

—

​

​

(766)

Other expense:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

(25)

​

​

—

​

​

—

​

​

(232)

​

​

—

​

​

(99)

​

​

—

​

​

—

​

​

(356)

Other expense, net

​

​

—

​

​

—

​

​

—

​

​

(252)

​

​

—

​

​

(146)

​

​

—

​

​

—

​

​

(398)

Total other expense

​

​

(25)

​

​

—

​

​

—

​

​

(484)

​

​

—

​

​

(245)

​

​

—

​

​

—

​

​

(754)

Net loss

​

$

(1,005)

​

$

—

​

$

—

​

$

(467)

​

$

—

​

$

(48)

​

$

—

​

$

—

​

$

(1,520)

(a)The project was under construction with no income or loss for the year ended December 31, 2020. In November 2022, the Sea Sound JV sold its assets to an unrelated third party and will no longer have activity from operations.
(b)JV was formed in April 2021.
(c)JV was formed in May 2022.
(d)JV was formed in February 2022.
(e)JV was formed in June 2021.

​

F 27

Table of Contents

Latitude Margaritaville Watersound JV

LMWS, LLC (“Latitude Margaritaville Watersound JV”) was createdformed in June 2019, when the Company entered into a JV agreement to develop a 55+ active adult residential community in Bay County, Florida. TheConstruction is underway on customer homes and town center amenities. As of December 31, 2022, the Latitude Margaritaville Watersound JV parties are working together to develop the first phasehad 677 homes under contract and completed 363 home sale transactions of the community and total estimated 3,500 homes in the sales center is currently under construction.community. The community will beis located on land that will bewas contributed to the JV by the Company. The first phase is estimatedCompany in June 2020. As part of the land contribution, the Company agreed to include approximately 3,500 residential homes which will be developed in smaller incrementsmake certain infrastructure improvements, such that the total contractual value of discrete neighborhoods. the land and its improvements total $35.0 million. As of December 31, 2019,2022 and 2021, the Company’s investment in the unconsolidated Latitude Margaritaville Watersound JV was $33.2 million and $30.0 million, respectively, which includes the net present value of the land contribution, cash contributions, additional completed infrastructure improvements and equity in income, less the pro-rata return of land contribution. The initial net present value of the land contribution of $16.6 million, was based on the Company’s best estimate of the prevailing market rates for the source of credit using an imputed interest rate of 5.8% and timing of home sales. The Company continues to have a performance obligation to provide agreed upon infrastructure improvements in the vicinity of the contributed land, which will be recognized over time as improvements are completed. As of December 31, 2022, the Company completed $6.4 million of the agreed upon infrastructure improvements. The transaction price was allocated based on the stand-alone selling prices of the land and agreed upon improvements. As of December 31, 2022 and 2021, the Company owned a 50.0% voting interest in the JV. Each JV member initially contributed and will continue to contribute an equal amount of cash towards the development and construction of the main spine infrastructure and amenities. The Company’s unimproved land contribution will beand agreed upon infrastructure improvements are being returned at an average of $10,000 per home, as each home is sold by the JV.

Per the JV agreement, the Company, will provideas lender, has provided interest-bearing financing in the form of a

F  24

Table of Contents

$10.0 million secured revolving promissory note to the Latitude Margaritaville Watersound JV, as borrower, to finance the development of the pod-level, non-spine infrastructure, whichinfrastructure. As of December 31, 2022, there was no balance outstanding on the Latitude JV Note. As of December 31, 2021, $7.1 million was outstanding on the Latitude JV Note. Future advances, if any, will be repaid by the JV as each home is sold bysold. See Note 8. Other Assets for additional information related to the JV.revolving promissory note. The day-to-day activities of the JV will beare being managed through a board of managers, with each JV partner having equal voting rights. The Company has determined that Latitude Margaritaville Watersound JV is a VIE, but that the Company is not the primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic performance of the JV. The Company’s investment in the Latitude Margaritaville Watersound JV is accounted for using the equity method. See Note 20. Commitments and Contingencies for additional information related to the guaranty by the Company.

Summarized financial informationSea Sound JV

FDSJ Eventide, LLCwas formed in January 2020. The Company entered into a JV agreement to develop, construct and manage a 300-unit apartment community near the Breakfast Point residential community in Panama City Beach, Florida. Construction of the community was completed in the first quarter of 2022. As of December 31, 2022 and 2021, the Company owned a 60.0% interest in the JV. In November 2022, the Sea Sound JV sold its assets to a third party for Latitude Margaritaville Watersound$92.5 million, resulting in a total gain on sale of $36.1 million. The Company’s proportionate share of the gain on sale of $21.7 million is included within equity in income (loss) from unconsolidated joint ventures on the consolidated statements of income for the year ended December 31, 2022. The Sea Sound JV has a contingent gain related to the sale for a $0.5 million indemnity holdback liability required through August 2023. The Company’s partner was responsible for the day-to-day activities of the JV. The Company has determined that Sea Sound JV is as follows:a VIE, but that the Company is not the primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic performance of the JV. The Company’s investment in Sea Sound JV is accounted for using the equity method. In January 2020, the JV entered into a $40.3 million loan (the “Sea Sound JV Loan”). The Sea Sound JV Loan was paid in full in November 2022. The Sea Sound JV Loan bore interest at LIBOR plus 2.2% and was to mature in January 2024. The Sea Sound JV Loan was secured by the real property and certain other security interests. The Company’s JV partner was the sole guarantor of the Sea Sound JV Loan. As of December 31, 2021, $35.0 million was outstanding on the Sea Sound JV Loan.

 

 

 

 

 

    

December 31, 

 

 

2019

BALANCE SHEETS:

 

 

  

Investment in real estate

 

$

1,116

Cash and cash equivalents

 

 

525

Total assets

 

$

1,641

 

 

 

  

Other liabilities

 

$

58

Equity

 

 

1,583

Total liabilities and equity

 

$

1,641

F 28

Table of Contents

 

 

 

 

 

 

Year Ended December 31, 2019

STATEMENT OF OPERATIONS:

 

 

 

Total expenses

 

$

142

Net loss

 

$

142

Watersound Fountains Independent Living JV

WOSL, LLC was formed in April 2021. The Company entered into a JV agreement to develop, construct and manage a 148-unit independent senior living community located near the Watersound Origins residential community. The three JV parties are working together to develop and construct the project. The community is located on land that was contributed to the JV by the Company in April 2021, with a fair value of $3.2 million. In addition, during 2021, the Company contributed cash of $4.3 million and the JV partners contributed $6.4 million. As of December 31, 2022 and 2021, the Company owned a 53.8% interest in the JV. The Company’s partners are responsible for the day-to-day activities of the JV. The Company has determined that Watersound Fountains Independent Living JV is a VIE, but that the Company is not the primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic performance of the JV. The Company’s investment in Watersound Fountains Independent Living JV is accounted for using the equity method. See Note 20. Commitments andContingencies for additional information related to debt guaranteed by the Company.

Pier Park TPS JV

Pier Park TPS, LLC was createdformed in April 2018. The Company entered into a JV agreement to develop and operate a 124 room124-room hotel in Panama City Beach, Florida. The hotel will be located on land in the Pier Park area that the Company contributed to the JV on January 14, 2019, with a fair value of $1.7 million. In addition, during 2019, the Company contributed cash of $0.2 million and mitigation bank credits of $0.1 million. As of December 31, 2018, the Company had an investment in the JV project of $1.1 million that was contributed to the JV during the first quarter of 2019. As of December 31, 20192022 and 2018,2021, the Company owned a 50.0% interest in the JV. The Company’s partner is responsible for the day-to-day activities of the JV. The Company has determined that Pier Park TPS JV is a VIE, but that the Company is not the primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic performance of the JV. The Company’s investment in Pier Park TPS JV is accounted for using the equity method. See Note 22. 20. Commitments and Contingencies for additional information related to debt guaranteed by the Company.

Pier Park RI JV

F  25

TablePier Park RI, LLC was formed in May 2022. The Company entered into a JV agreement to develop and operate a 121-room hotel in Panama City Beach, Florida. The JV parties are working together to develop and construct the project. The hotel is located on land that was contributed to the JV by the Company in September 2022, with a fair value of Contents

Summarized financial information$1.8 million. In addition, during 2022 the Company contributed cash and impact fees of $2.5 million, and the JV partner contributed cash of $4.3 million. The Company and the JV partner each have additional remaining capital contributions of $1.9 million required as part of the JV agreement. As of December 31, 2022, the Company owned a 50.0% interest in the JV. The Company’s partner is responsible for the day-to-day activities of the JV. The Company has determined that Pier Park RI JV is a VIE, Company is not the primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic performance of the JV. The Company’s investment in Pier Park TPS JV is as follows:

 

 

 

 

 

 

 

 

    

December 31, 

    

December 31, 

 

 

2019

 

2018

BALANCE SHEETS:

 

 

  

 

 

  

Investment in real estate

 

$

14,775

 

$

285

Cash and cash equivalents

 

 

51

 

 

64

Other assets

 

 

12

 

 

 —

Total assets

 

$

14,838

 

$

349

 

 

 

  

 

 

  

Debt, net

 

$

6,480

 

$

 —

Other liabilities

 

 

2,193

 

 

 3

Equity

 

 

6,165

 

 

346

Total liabilities and equity

 

$

14,838

 

$

349

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

 

2018

STATEMENT OF OPERATIONS:

 

 

 

 

 

 

Total expenses

 

$

13

 

$

 —

Net loss

 

$

13

 

$

 —

accounted for using the equity method. In September 2022, the JV entered into a $25.0 million loan (the “Pier Park RI JV Loan”). The Pier Park RI JV Loan bears interest at SOFR plus 2.5% and matures in August 2025. The Pier Park RI JV Loan includes an option for a fixed rate conversion and two options to extend the maturity date by twenty-four months each, upon satisfaction of certain terms and conditions. The loan is secured by real property and certain other security interests. The Company’s JV partner is the sole guarantor and receives a fee related to the guarantee from the Company based on the Company’s ownership percentage. As of December 31, 2022, there was no principal balance outstanding on the Pier Park RI JV Loan.

Busy Bee JV

SJBB, LLC was createdformed in July 2019, when the Company entered into a JV agreement to construct, own and manage a Busy Bee branded fuel station and convenience store in Panama City Beach, Florida. The fuel station and convenience store will be located on land that the Company contributed to the JV on July 5, 2019. The investment in the unconsolidated JV of $1.2 million as of December 31, 2019 includes $1.4 million for the fair value of land contributed by the Company, which was offset by a $0.2 million note receivable from the JV partner. The project is currently under construction with no income or loss impacting the consolidated statements of income for 2019. As of December 31, 2019,2022 and 2021, the Company owned a 50.0% interest in the JV. The Company’s partner is responsible for the day-to-day activities of the JV. The Company has determined that Busy Bee JV is a VIE, but that the Company is not the primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic performance of the JV. The Company’s investment in the Busy Bee JV is accounted for using the equity method. In November 2019, the JV entered into a $5.4 million construction loan (the “Busy Bee JV Construction Loan”) and a $1.2 million equipment loan (the “Busy Bee JV Equipment Loan”). The Busy Bee JV Construction Loan and the Busy Bee JV Equipment Loan bear

F 29

Table of Contents

interest at LIBOR plus 1.5%. The Busy Bee JV Construction Loan provides for monthly principal and interest payments with a final balloon payment at maturity in November 2035. The Busy Bee JV Equipment Loan provides for monthly principal and interest payments through maturity in November 2027. The loans are secured by real and personal property and certain other security interests. The Company’s JV partner is the sole guarantor and receives a fee related to the guarantee from the Company based on the Company’s ownership percentage. The Busy Bee JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR for the Busy Bee JV Construction Loan and the Busy Bee JV Equipment Loan. The Busy Bee JV Construction Loan interest rate swap matures on November 12, 2035 and fixed the variable rate debt, initially at $5.4 million amortizing to $2.8 million at swap maturity, to a rate of 2.7%. The Busy Bee JV Equipment Loan interest rate swap matures on November 12, 2027 and fixed the variable rate debt, initially at $1.2 million to maturity, to a rate of 2.1%. As of December 31, 2022 and 2021, $5.1 million and $5.3 million, was outstanding on the Busy Bee JV Construction Loan. As of December 31, 2022 and 2021, $0.9 million and $1.1 million, respectively, was outstanding on the Busy Bee JV Equipment Loan.

Electric Cart Watersound JV

SJECC, LLC was formed in February 2022, when the Company entered into a JV agreement to develop, construct, lease, manage and operate a golf cart and low speed vehicle “LSV” business at the new Watersound West Bay Center adjacent to the Latitude Margaritaville Watersound residential community in Bay County, Florida. This land was contributed to the JV by the Company in February 2022, with a fair value of $0.5 million. In addition, during 2022 the Company contributed cash of $0.2 million and the JV partner contributed cash of $0.6 million. The Watersound West Bay Center location is currently under development. The JV is operating from temporary facilities. An additional sales showroom will be located at the Watersound Town Center near the Watersound Origins residential community on property leased to the JV by the Company. As of December 31, 2022, the Company owned a 51% interest in the JV. The Company is currently responsible for the construction activities of the JV and the Company’s JV partner manages the day-to-day operations of the business. The Company has determined that Electric Cart Watersound JV is a VIE, but that the Company is not the primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic performance of the JV. The Company’s investment in Electric Cart Watersound JV is accounted for using the equity method. As of December 31, 2022, the Electric Cart Watersound JV had $1.7 million of floorplan line of credit facilities to finance its golf cart and LSV inventory, which are secured by the JV. Borrowings under the line of credit facility bear interest at various rates based on the number of days outstanding after an interest free period ranging from three to six months. As of December 31, 2022, the JV had an outstanding principal balance of $0.1 million on these line of credit facilities. See Note 22. 20. Commitments and Contingenciesfor additional information related to debt guaranteed by the Company.

Summarized financial information for Busy BeeWatersound Management JV is as follows:

 

 

 

 

 

    

December 31, 

 

 

2019

BALANCE SHEETS:

 

 

  

Investment in real estate

 

$

3,886

Cash and cash equivalents

 

 

36

Other assets

 

 

28

Total assets

 

$

3,950

 

 

 

  

Debt, net

 

$

1,349

Other liabilities

 

 

181

Equity

 

 

2,420

Total liabilities and equity

 

$

3,950

F  26

Table of Contents

ALP

Through November 2018,Watersound Management, LLC was formed in June 2021. During 2021, the Company waspurchased an interest in Watersound Management, LLC for $0.5 million to form a partner in ALPJV to lease, manage and beneficially owned 23.9% of ALP’s outstanding beneficial interest units,operate multi-family housing developments for which the Company had no basis.JV is the exclusive renting and management agent. In November 2018,addition, the Company receivedand its JV partner each contributed cash of less than $0.1 million. As of December 31, 2022 and 2021, the Company owned a final distribution50.0% interest in the JV. The day-to-day activities of $2.2 million, whichthe JV are being managed through a board of managers, with each JV partner having equal voting rights. The Company has determined that Watersound Management JV is recordeda voting interest entity, but that the Company does not have a majority voting interest. The Company’s investment in other income, net onWatersound Management JV is accounted for using the consolidated statementsequity method.

​

​

F 30

Table of income.Contents

5. Investments

Available-For-Sale Investments

Investments classified as available-for-sale securities were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

    

 

 

    

Gross Unrealized

    

Gross Unrealized

    

 

 

 

 

Amortized Cost

 

Gains

 

(Losses)

 

Fair Value

Investments - debt securities:

 

 

  

 

 

  

 

 

  

 

 

  

Corporate debt securities

 

$

178

 

$

 —

 

$

(125)

 

$

53

 

 

 

178

 

 

 —

 

 

(125)

 

 

53

Restricted investments:

 

 

  

 

 

  

 

 

  

 

 

  

Short-term bond

 

 

2,239

 

 

11

 

 

 —

 

 

2,250

Money market fund

 

 

114

 

 

 —

 

 

 —

 

 

114

 

 

 

2,353

 

 

11

 

 

 —

 

 

2,364

 

 

$

2,531

 

$

11

 

$

(125)

 

$

2,417

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

    

 

 

    

Gross Unrealized

    

Gross Unrealized

    

 

 

 

 

Amortized Cost

 

Gains

 

(Losses)

 

Fair Value

Investments - debt securities:

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Treasury Bills

 

$

6,936

 

$

 1

 

$

 —

 

$

6,937

Corporate debt securities

 

 

2,908

 

 

 —

 

 

(887)

 

 

2,021

 

 

 

9,844

 

 

 1

 

 

(887)

 

 

8,958

Restricted investments:

 

 

  

 

 

  

 

 

  

 

 

  

Short-term bond

 

 

3,274

 

 

 —

 

 

(9)

 

 

3,265

Money market fund

 

 

167

 

 

 —

 

 

 —

 

 

167

 

 

 

3,441

 

 

 —

 

 

(9)

 

 

3,432

 

 

$

13,285

 

$

 1

 

$

(896)

 

$

12,390

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

    

​

​

    

Gross Unrealized

    

Gross Unrealized

    

​

​

​

​

Amortized Cost

​

Gains

​

(Losses)

​

Fair Value

Investments - debt securities:

 

​

  

 

​

  

 

​

  

 

​

  

U.S. Treasury Bills

​

$

40,820

​

$

—

​

$

(244)

​

$

40,576

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2021

​

    

​

​

    

Gross Unrealized

    

Gross Unrealized

    

​

​

​

​

Amortized Cost

​

Gains

​

(Losses)

​

Fair Value

Investments - debt securities:

 

​

  

 

​

  

 

​

  

 

​

  

U.S. Treasury Bills

​

$

88,966

​

$

1

​

$

(11)

​

$

88,956

​

During 2019,2022, the Company did not have any realized gains or losses from the sale of available-for-sale securities. During 2022, proceeds from the sale of available-for-sale securities were $53.9 million, maturities of available-for-sale securities were $92.0 million and purchases of available-for-sale securities were $97.1 million. During 2021, net realized gains from the sale of available-for-sale securities were less than $0.1 million, proceeds from the sale of available-for-sale securities were $4.0$1.2 million, proceeds from the maturitymaturities of available-for-sale securities were $7.0$117.0 million and purchases of available-for-sale securities were $0.1 million.

During 2018, net realized losses from the sale of available-for-sale securities were $1.0 million, proceeds from the sale of available-for-sale securities were $64.7 million, proceeds from the maturity of available-for-sale securities were $10.0 million and purchases of available-for-sale securities were $7.0$157.9 million.

The following table provides the available-for-sale investments with an unrealized loss position and their related fair values:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

Less Than 12 Months

 

12 Months or Greater

 

 

 

 

 

Unrealized

 

 

 

 

Unrealized

 

    

Fair Value

    

Losses

    

Fair Value

    

Losses

Investments - debt securities:

 

 

  

 

 

  

 

 

  

 

 

  

Corporate debt securities

 

$

 —

 

$

 —

 

$

53

 

$

125

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

December 31, 2021

​

​

Less Than 12 Months

​

12 Months or Greater

​

Less Than 12 Months

​

12 Months or Greater

​

​

​

​

​

Unrealized

​

​

​

​

Unrealized

​

​

​

​

Unrealized

​

​

​

​

Unrealized

​

    

Fair Value

    

Losses

    

Fair Value

    

Losses

    

Fair Value

    

Losses

    

Fair Value

    

Losses

Investments - debt securities:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

U.S. Treasury Bills

​

$

37,578

​

$

244

​

$

—

​

$

—

​

$

43,959

​

$

11

​

$

—

​

$

—

F  27

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

Less Than 12 Months

 

12 Months or Greater

 

 

 

 

 

Unrealized

 

 

 

 

Unrealized

 

    

Fair Value

    

Losses

    

Fair Value

    

Losses

Investments - debt securities:

 

 

  

 

 

  

 

 

  

 

 

  

Corporate debt securities

 

$

 —

 

$

 —

 

$

1,843

 

$

887

Restricted investments:

 

 

  

 

 

  

 

 

  

 

 

  

Short-term bond

 

 

 —

 

 

 —

 

 

3,265

 

 

 9

 

 

$

 —

 

$

 —

 

$

5,108

 

$

896

​

As of December 31, 2019,2022, the Company had $0.2 million unrealized losses of $0.1 million related to corporate debt securities. The Company had unrealized losses of $0.9 million as of December 31, 2018 related to corporate debt securities and restricted investments.U.S. Treasury Bills. As of December 31, 20192021, the Company had de minimis unrealized losses related to U.S. Treasury Bills. As of December 31, 2022 and 2018,2021, the Company determined the unrealized losses related to U.S. Treasury Bills were not due to credit impairment and did not record an allowance for credit losses related to available-for-sale debt securities. In addition, the Company did not intend to sell the investments with a material unrealized loss and it is more likely than not that the Company will not be required to sell any of these securities prior to their anticipated recovery. During 2018, the Company determined that unrealized losses related to its corporate debt securities were other-than-temporary and recorded an impairment of $2.3 million for credit-related loss in investment income, net in the Company’s consolidated statements of income.

The amortized cost and estimated fair value of investments – debt securities and restricted investments classified as available-for-sale, by contractual maturity are shown in the following table. Actual maturities may differ from contractual maturities since certain borrowers have the right to call or prepay obligations.

 

 

 

 

 

 

 

 

 

December 31, 2019

 

    

Amortized Cost

    

Fair Value

Due in one year or less

 

$

178

 

$

53

Restricted investments

 

 

2,353

 

 

2,364

 

 

$

2,531

 

$

2,417

Investments – Equity Securities​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

    

Amortized Cost

    

Fair Value

Due in one year or less

​

$

40,820

​

$

40,576

As of December 31, 2019 and 2018, investments – equity securities included $9.7 million and $36.1 million, respectively, of preferred stock investments recorded at fair value. During 2019 and 2018, the Company had net unrealized losses on investments – equity securities of $5.3 million and $3.0 million respectively, which were included within investment income, net on the consolidated statements of income. Prior to 2018, unrealized gains and losses related to investments – equity securities were recognized in other comprehensive income (loss). As of January 1, 2018, the outstanding unrealized losses of $0.9 million were reclassified to retained earnings with the adoption of ASU 2016-01.​

Investment Management Agreement

Mr. Bruce R. Berkowitz is the Chairman of the Company’s Board. He is the Manager of, and controls entities that own and control, Fairholme Holdings, LLC, which wholly owns FCM. Mr. Berkowitz is the Chief Investment Officer of

F 31

Table of Contents

FCM, which has provided investment advisory services to the Company since April 2013. FCM does not receive any compensation for services as the Company’s investment advisor. As of December 31, 2019,2022, clients of FCM, including Mr. Berkowitz, beneficially owned approximately 44.30%41.6% of the Company’s common stock. FCM and its client, The Fairholme Fund, a series of investments originating from the Fairholme Funds, Inc., may be deemed affiliates of the Company.

Pursuant to the terms of the Investment Management Agreement, as amended, with the Company, FCM agreed to supervise and direct the Company’s investment accounts established by the Company in accordance with the investment guidelines and restrictions approved by the Company. The investment guidelines are set forth in the Investment Management Agreement and require that asany new securities for purchase must be issues of the date of any investment: (i) no more than 15% of the investment account may be invested in securities of any one issuer (excluding the U.S. Government), (ii) any investment in any one issuer (excluding theTreasury or U.S. Government) that exceeds 10% of the investment account, but not 15%, requires the consent of at least two members of the Investment Committee, (iii) 25% of the investment account must be held in cash and cash

F  28

Table of Contents

equivalents, (iv) the investment account is permitted to be invested in common equity securities; however, common stock investments shall be limited to exchange-traded common equities, shall not exceed 5% ownership of a single issuer and, cumulatively, the common stock held in the Company’s investment portfolio shall not exceed $100.0 million market value and (v) the aggregate market value of investments in common stock, preferred stock or other equity investments cannot exceed 25% of the market value of the Company’s investment portfolio at the time of purchase.Treasury Money Market Funds.

​

​

​

​

​

​

​

​

​

6. Financial Instruments and Fair Value Measurements

Fair Value Measurements

The financial instruments measured at fair value on a recurring basis are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

    

 

 

    

 

 

    

 

 

    

Total Fair

 

 

Level 1

 

Level 2

 

Level 3

 

Value

Cash equivalents:

 

 

  

 

 

  

 

 

  

 

 

  

Money market funds

 

$

21,043

 

$

 —

 

$

 —

 

$

21,043

Commercial paper

 

 

138,220

 

 

 —

 

 

 —

 

 

138,220

U.S. Treasury Bills

 

 

6,990

 

 

 —

 

 

 —

 

 

6,990

 

 

 

166,253

 

 

 —

 

 

 —

 

 

166,253

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments - debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

 —

 

 

53

 

 

 —

 

 

53

 

 

 

 —

 

 

53

 

 

 —

 

 

53

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments - equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 —

 

 

9,746

 

 

 —

 

 

9,746

 

 

 

 —

 

 

9,746

 

 

 —

 

 

9,746

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted investments:

 

 

  

 

 

  

 

 

  

 

 

  

Short-term bond

 

 

2,250

 

 

 —

 

 

 —

 

 

2,250

Money market fund

 

 

114

 

 

 —

 

 

 —

 

 

114

 

 

 

2,364

 

 

 —

 

 

 —

 

 

2,364

 

 

$

168,617

 

$

9,799

 

$

 —

 

$

178,416

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

    

​

​

    

​

​

    

​

​

    

Total Fair

​

​

Level 1

​

Level 2

​

Level 3

​

Value

Cash equivalents:

 

​

  

 

​

  

 

​

  

 

​

  

Money market funds

​

$

19,233

​

$

—

​

$

—

​

$

19,233

​

​

 

19,233

​

 

—

​

 

—

​

 

19,233

​

​

​

​

​

​

​

​

​

​

​

​

​

Investments - debt securities:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury Bills

​

​

40,576

​

​

—

​

​

—

​

​

40,576

​

​

​

40,576

​

​

—

​

​

—

​

​

40,576

​

​

$

59,809

​

$

—

​

$

—

​

$

59,809

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2021

​

    

​

​

    

​

​

    

​

​

    

Total Fair

​

​

Level 1

​

Level 2

​

Level 3

​

Value

Cash equivalents:

 

​

  

 

​

  

 

​

  

 

​

  

Money market funds

​

$

40,412

​

$

—

​

$

—

​

$

40,412

U.S. Treasury Bills

​

​

4,000

​

​

—

​

​

—

​

​

4,000

​

​

 

44,412

​

 

—

​

 

—

​

 

44,412

​

​

​

​

​

​

​

​

​

​

​

​

​

Investments - debt securities:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury Bills

​

​

88,956

​

​

—

​

​

—

​

​

88,956

​

​

​

88,956

​

​

—

​

​

—

​

​

88,956

​

​

​

​

​

​

​

​

​

​

​

​

​

Investments - equity securities:

​

​

​

​

​

​

​

​

​

​

​

​

Preferred stock

​

​

—

​

​

450

​

​

—

​

​

450

​

​

​

—

​

​

450

​

​

—

​

​

450

​

​

$

133,368

​

$

450

​

$

—

​

$

133,818

F  29

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

    

 

 

    

 

 

    

 

 

    

Total Fair

 

 

Level 1

 

Level 2

 

Level 3

 

Value

Cash equivalents:

 

 

  

 

 

  

 

 

  

 

 

  

Money market funds

 

$

43,346

 

$

 —

 

$

 —

 

$

43,346

Commercial paper

 

 

107,586

 

 

 —

 

 

 —

 

 

107,586

U.S. Treasury Bills

 

 

29,998

 

 

 —

 

 

 —

 

 

29,998

 

 

 

180,930

 

 

 —

 

 

 —

 

 

180,930

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments - debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury Bills

 

 

6,937

 

 

 —

 

 

 —

 

 

6,937

Corporate debt securities

 

 

 —

 

 

2,021

 

 

 —

 

 

2,021

 

 

 

6,937

 

 

2,021

 

 

 —

 

 

8,958

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments - equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

10,470

 

 

25,662

 

 

 —

 

 

36,132

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted investments:

 

 

 

 

 

 

 

 

 

 

 

 

Short-term bond

 

 

3,265

 

 

 —

 

 

 —

 

 

3,265

Money market fund

 

 

167

 

 

 —

 

 

 —

 

 

167

 

 

 

3,432

 

 

 —

 

 

 —

 

 

3,432

 

 

$

201,769

 

$

27,683

 

$

 —

 

$

229,452

​

Money market funds commercial paper,and U.S. Treasury Bills certain preferred stock investments and short-term bonds are measured based on quoted market prices in an active market and categorized within Level 1 of the fair value hierarchy. Money market funds commercial paper and short termshort-term U.S. Treasury Bills with a maturity date of 90 days or less from the date of purchase are classified as cash equivalents in the Company’s consolidated balance sheets.

The Company’s corporate debt securities and certain preferred stock investments are not traded on a nationally recognized exchange, but are traded in the U.S. over-the-counter market where there is less trading activity and the investments are measured primarily using pricing data from external pricing services that report prices observed for recently executed market transactions. For

F 32

Table of Contents

these reasons, the Company has determined that corporate debt securities and certain preferred stock investments are categorized as Level 2 financial instruments since their fair values were determined from market inputs in an inactive market.

Restricted investments are included within other assets on the consolidated balance sheetsAssets and include certain of the surplus assets that were transferred from the Company’s Pension Plan to a suspense account in the Company’s 401(k) plan in December 2014. The Company has retained the risks and rewards of ownership of these assets; therefore, the assets held in the suspense account are included in the Company’s consolidated financial statements until they are allocated to participants. As of December 31, 2019 and 2018, the assets held in the suspense account were invested in Vanguard Money Market Funds, which invest in short-term, high quality securities or short-term U.S. government securities and seek to provide current income and preserve shareholders’ principal investment and a Vanguard Short-Term Bond Fund, which invests in money market instruments and short-term high quality bonds, including asset-backed, government, and investment grade corporate securities with an expected maturity of 0‑3 years. The Vanguard Money Market Funds and Vanguard Short-Term Bond Fund are measured based on quoted market prices in an active market and categorized within Level 1 of the fair value hierarchy. The Company’s Retirement Plan Investment Committee is responsible for investing decisions and allocation decisions of the suspense account. See Note 18. Employee Benefit Plan.

F  30

Table of Contents

Liabilitiesliabilities measured at fair value on a recurring basis related to interest rate swap agreements designated as cash flow hedges are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fixed

​

Notional

​

​

​

​

​

​

​

Fair

​

Location in

​

​

Effective

​

Maturity

​

Interest

​

Amount as of

​

Derivative Asset (Liability) Fair Value

​

Value

​

Consolidated

Description

​

Date

​

Date

​

Rate

​

December 31, 2022

​

December 31, 2022

​

December 31, 2021

​

Level

​

Balance Sheets

​

​

​

​

​

​

​

​

​

In Millions

​

In Thousands

​

​

​

​

Pier Park Resort Hotel JV Loan (a)

​

12/10/2022

​

4/12/2027

​

3.2%

​

$

42.0

​

$

4,609

​

$

558

​

2

​

Other assets

Watercrest JV Loan (a) (b)

​

6/1/2021

​

6/1/2024

​

4.4%

​

$

—

​

$

—

​

$

(634)

​

2

​

Other liabilities

Pier Park TPS JV Loan (c)

​

1/14/2021

​

1/14/2026

​

5.2%

​

$

13.8

​

$

273

​

$

(436)

​

2

​

Investment in unconsolidated joint ventures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

Location in

    

 

 

    

 

 

    

 

 

    

Total Fair

 

 

Balance Sheet

 

Level 1

 

Level 2

 

Level 3

 

Value

Derivative Liabilities:

 

 

 

 

  

 

 

  

 

 

  

 

 

  

Interest rate swap

 

Other liabilities

 

$

 —

 

$

336

 

$

 —

 

$

336

 

 

 

 

$

 —

 

$

336

 

$

 —

 

$

336

(a)See Note 10. Debt, Net for additional information.
(b)In April 2022, the swap was terminated resulting in a gain of $0.1 million, included in interest expense on the consolidated statements of income for the year ended December 31, 2022.
(c)Interest rate swap was entered into by the Pier Park TPS JV, which is unconsolidated and accounted for using the equity method. The derivative asset or liability has been recorded at the Company’s proportionate share of its estimated fair value. The Company’s proportionate share of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into equity in income (loss) from unconsolidated joint ventures in the period during which the hedged transaction affects earnings. See Note 4. Joint Ventures andNote 20. Commitments and Contingencies for additional information.

​

In June 2019The following is a summary of the Company entered into an interest rate swap agreement designated as a cash flow hedge to manage the interest rate risk associated with variable rate debt. The interest rate swap is effective June 1, 2021 and matures on June 1, 2024 and fixed the variable rate debteffect of derivative instruments on the notional amountCompany’s consolidated statements of related debtincome and consolidated statements of $20.0 million. comprehensive income:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

​

2022

​

2021

​

2020

​

​

​

​

​

​

​

​

​

​

​

Amount of net gain (loss) recognized in other comprehensive income on derivatives

​

​

$

5,254

​

$

1,061

​

$

(1,657)

Amount of net loss reclassified into interest expense

​

​

$

52

​

$

247

​

$

—

Amount of net loss reclassified into equity in income (loss) from unconsolidated joint ventures

​

​

$

88

​

$

173

​

$

—

​

As of December 31, 2019, the interest rate swap was recorded at its estimated fair value,2022, based on level 2 measurements,current value, the Company expects to reclassify $0.6 million of $0.3 million and is included within other liabilities on the consolidated balance sheet. The gain or loss on the derivative instrument is reported as a component ofinstruments from accumulated other comprehensive income (loss) and reclassified intoto earnings induring the period during which the hedged transaction affects earnings. The Company did not reclassify any amounts out of other comprehensive income into interest expense during December 31, 2019.next twelve months. See Note 12. Debt, Net 14. Accumulated Other Comprehensive Income (Loss) for additional information.

Investment in Unconsolidated Joint Ventures

The Company evaluates its investment in unconsolidated JVs for impairment during each reporting period. A series of operating losses of an investee or other factors may indicate that a decrease in the value of the Company’s investment in the unconsolidated JV has occurred that is other-than-temporary. The amount of impairment recognized is the excess of the investment’s carrying value over its estimated fair value. The fair value of the Company’s investment in unconsolidated JVs is determined primarily using a discounted cash flow model to value the underlying net assets or cash flows of the respective JV. The fair value of investment in unconsolidated JVs required to be assessed for impairment is determined on a nonrecurring basis using Level 3 inputs in the fair value hierarchy. No impairment for unconsolidated JVs was recorded during 2019 and 2018.2022, 2021 or 2020. See Note 4. Real Estate Joint Ventures for additional information.

Long-lived Assets

The Company reviews its long livedlong-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The fair value of long-lived assets required to be assessed for impairment is determined on a nonrecurring basis using Level 3 inputs in the fair value hierarchy. During 20192022, 2021 and 2020 the Company did not record any impairment charges related to long-lived assets. During 2018 and 2017, the Company recorded impairment charges

F 33

Table of $0.1 million and $0.7 million, respectively, included in cost of hospitality revenue, related to non-strategic hospitality assets.Contents

Fair Value of Financial Instruments

The Company uses the following methods and assumptions in estimating fair value for financial instruments:

·

●

The fair value of the investments held by SPE - time deposit is based on the present value of future cash flows at the current market rate.

·

●

The fair value of the investments held by SPE - U.S. Treasury Bills are measured based on quoted market prices in an active market.

·

●

The fair value of debt is based on discounted future expected cash flows based on current market rates for financial instruments with similar risks, terms and maturities.

·

●

The fair value of the Senior Notes held by SPE is based on the present value of future cash flows at the current market rate.

F  31

Table of Contents

The carrying amount and estimated fair value, measured on a nonrecurring basis, of the Company’s financial instruments were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

December 31, 2018

 

    

Carrying

    

Estimated

    

 

    

Carrying

    

Estimated

    

 

 

 

value

 

Fair value

 

Level

 

value

 

Fair value

 

Level

Assets

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Investments held by SPEs:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Time deposit

 

$

200,000

 

$

200,000

 

 3

 

$

200,000

 

$

200,000

 

 3

U.S. Treasury Bills and cash

 

$

6,771

 

$

6,712

 

 1

 

$

7,384

 

$

7,092

 

 1

Liabilities

 

 

 

 

 

 

 

  

 

 

  

 

 

  

 

  

Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-rate debt

 

$

89,969

 

$

92,276

 

 2

 

$

68,146

 

$

67,126

 

 2

Variable-rate debt

 

 

4,538

 

 

4,538

 

 2

 

 

2,830

 

 

2,830

 

 2

Total debt

 

$

94,507

 

$

96,814

 

 

 

$

70,976

 

$

69,956

 

 

Senior Notes held by SPE

 

$

177,026

 

$

204,347

 

 3

 

$

176,775

 

$

193,293

 

 3

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

December 31, 2021

​

    

Carrying

    

Estimated

    

​

    

Carrying

    

Estimated

    

​

​

​

value

​

Fair value

​

Level

​

value

​

Fair value

​

Level

Investments held by SPEs:

​

 

  

​

 

  

 

  

​

 

  

​

 

  

 

  

Time deposit

​

$

200,000

​

$

200,000

 

3

​

$

200,000

​

$

200,000

 

3

U.S. Treasury Bills

​

$

4,486

​

$

4,361

 

1

​

$

5,132

​

$

5,475

 

1

​

​

 

​

​

 

​

 

  

​

 

  

​

 

  

 

  

Senior Notes held by SPE

​

$

177,857

​

$

179,564

 

3

​

$

177,566

​

$

204,802

 

3

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Debt

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fixed-rate debt

​

$

194,525

​

$

172,241

​

2

​

$

129,532

​

$

126,722

​

2

Variable-rate debt

​

​

196,886

​

​

196,886

​

2

​

​

97,942

​

​

97,942

​

2

Total debt

​

$

391,411

​

$

369,127

​

​

​

$

227,474

​

$

224,664

​

​

​

Investments and Senior Notes Held by Special Purpose Entities

In connection with a real estate sale in 2014, the Company received consideration including thea $200.0 million fifteen-year installment Timber Notenote (the “Timber Note”) issued by Panama City Timber Finance Company, LLC. The Company contributed the Timber Note and assigned its rights as a beneficiary under a letter of credit to Northwest Florida Timber Finance, LLC. Northwest Florida Timber Finance, LLC monetized the Timber Note by issuing $180.0 million aggregate principal amount of its 4.8% Senior Secured Notes due in 2029 at an issue price of 98.5% of face value to third party investors. The investments held by Panama City Timber Finance Company, LLC as of December 31, 2019,2022, consist of a $200.0 million time deposit that, subsequent to April 2, 2014, pays interest at 4.0% and matures in March 2029, U.S. Treasuries of $6.4$4.5 million and cash of $0.4 million. The Senior Notes held by Northwest Florida Timber Finance, LLC as of December 31, 20192022 consist of $177.0$177.9 million, net of the $3.0$2.1 million discount and debt issuance costs. Panama City Timber Finance Company, LLC and Northwest Florida Timber Finance, LLC are VIEs, which the Company consolidates as the primary beneficiary of each entity.

7. Hurricane MichaelLeases

On October 10, 2018, Hurricane Michael made landfall in the Florida Panhandle, which resulted in widespread damage to the area. The majority of the Company’s properties incurred minimal or no damage; however the Company’s Bay Point Marina in Bay County and Port St. Joe Marina in Gulf County, as well as certain timber, commercial and multi-family leasing assets were impacted. The marinas suffered significant damage requiring long-term restoration and will remain closed during the reconstruction of significant portions of these assets, which is currently underway.

The Company maintains property and business interruption insurance, subject to certain deductibles, and is continuing to assess claims under such policies; however, the timing and amount of insurance proceeds are uncertain and may not be sufficient to cover all losses. Timing differences are likely to exist between the impairment losses, capital expenditures made to repair or restore properties and recognition and receipt of insurance proceeds reflected in the Company’s financial statements. During 2019, $1.3 million of insurance proceeds were received related to business interruption insurance, included within cost of hospitality revenue on the consolidated statements of income. Costs incurred due to business interruption, primarily at the marinas, are continuing to be evaluated. The Company does not expect revenue at these locations until the properties have been rebuilt, but will incur costs for employee retention and property maintenance.

During 2018, the Company recorded a loss on disposal of assets of $7.3 million related to the net book value of the marinas, certain forestry assets, commercial and multi-family leasing assets. During 2019, the Company recognized $5.3 million of insurance proceeds. During 2018, the Company recognized $7.2 million of insurance proceeds, of which $6.7 million was included in accounts receivable, net and were received during 2019. The loss on disposal of assets and insurance proceeds were recorded in other income, net on the consolidated statements of income.

F  32

Table of Contents

During 2018, the Company recorded timber loss expense of $0.3 million included in other income, net on the consolidated statements of income. The majority of the Company’s other timberlands had little or no damage.

During 2019 and 2018, the Company incurred costs of $2.7 million and $1.0 million, respectively for additional hurricane expense items such as repairs, clean-up costs, landscape repairs, demolition costs, professional fees, food spoilage, damaged inventory and temporary housing for employees included in other income, net on the consolidated statements of income.

The Company expects that its results of operations related to the marinas and timber assets will be impacted in the near term.

8. Sale of Vacation Rental Management

In December 2017, the Company entered into and consummated the PCR Purchase Agreement with PCR for the sale of the Company’s short term vacation rental management business. In December 2017, the Company completed the sale to PCR for approximately $9.9 million, which resulted in a net gain of $9.8 million.

9. LeasesLessor

Leasing revenue consists of rental revenue from multi-family, senior living, self-storage, retail, office and commercial property, cell towers and other assets, which is recognized as earned, using the straight-line method over the life of each lease. The Company’s leases have remaining lease terms up to the year 2036,2072, some of which include options to terminate or extend.

F 34

Table of Contents

The components of leasing revenue are as follows:follows:

 

 

 

 

 

 

Year Ended

 

 

December 31, 2019

Leasing revenue

   

 

 

Lease payments

 

$

11,637

Variable lease payments

 

 

3,944

Total leasing revenue

 

$

15,581

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

2022

​

2021

​

2020

Leasing revenue

​

​

​

​

​

​

​

​

​

Lease payments

​

$

33,600

​

$

22,256

​

$

14,710

Variable lease payments

​

​

5,596

​

​

4,825

​

​

4,109

Total leasing revenue

​

$

39,196

​

$

27,081

​

$

18,819

​

Minimum future base rental revenue on non-cancelable leases subsequent to December 31, 2019,2022, for the years ending December 31 are:

 

 

 

 

 

    

 

    

2020

 

$

14,595

2021

 

 

10,864

2022

 

 

9,896

2023

 

 

7,836

2024

 

 

6,547

Thereafter

 

 

17,762

 

 

$

67,500

​

​

​

​

​

2023

​

$

22,524

2024

​

 

12,542

2025

​

 

9,414

2026

​

 

7,676

2027

​

​

6,448

Thereafter

​

​

28,441

​

​

$

87,045

​

The Company as Lessee

As of December 31, 2019,2022, the Company leased certain office and other equipment under a finance leaseleases and had operating leases for property and equipment used in corporate, hospitality and hospitalitycommercial operations with remaining lease terms up to the year 2049.2081. Certain leases include options to purchase, terminate or renew for one or more years, which are included in the lease term used to establish right-of-use assets and lease liabilities when it is reasonably certain that the option will be exercised. Finance lease right-of-use assets are included within property, plant and equipment and operating lease right-of-use assets are included within other assets on the consolidated balance sheets, which represent the Company’s right to use an underlying asset during a lease term for leases in excess of one year. Corresponding finance lease liabilityliabilities and operating lease liabilities are included within other liabilities on the consolidated balance sheets and are related to the Company’s obligation to make lease payments for leases in excess of one year. Prior to the adoption ASU 2016-02 on

F  33

Table of Contents

January 1, 2019 lease assets and liabilities for operating leases were not recognized. The Company uses its incremental borrowing rate to determine the present value of the lease payments since the rate implicit in each lease is not readily determinable. The Company recognizes short-term (twelve months or less) lease payments in profit or loss on a straight-line basis over the term of the lease and variable lease payments in the period in which the obligation for those payments is incurred.

F 35

Table of Contents

The components of lease expense are as follows:

 

 

 

 

 

 

 

Year Ended

 

December 31, 2019

Lease cost

 

 

Finance lease cost:

 

 

Amortization of right-of-use assets

$

40

Interest on lease liability

 

 9

Operating lease cost

 

238

Short-term lease cost

 

721

Total lease cost

$

1,008

 

 

 

Other information

 

 

Weighted-average remaining lease term - finance lease (in years)

 

4.2

Weighted-average remaining lease term - operating leases (in years)

 

3.1

Weighted-average discount rate - finance lease

 

5.0%

Weighted-average discount rate - operating leases

 

5.0%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

2022

​

2021

​

2020

​

Lease cost

​

​

​

​

​

​

​

​

​

Finance lease cost:

​

​

​

​

​

​

​

​

​

Amortization of right-of-use assets

$

122

​

$

114

​

$

57

​

Interest on lease liability

 

15

​

 

18

​

 

11

​

Operating lease cost

 

378

​

 

308

​

 

289

​

Variable and short-term lease cost

 

1,793

​

 

1,476

​

 

1,016

​

Total lease cost

$

2,308

​

$

1,916

​

$

1,373

​

​

​

​

​

​

​

​

​

​

​

Other information

​

​

​

​

​

​

​

​

​

Weighted-average remaining lease term - finance lease (in years)

​

3.3

​

​

3.6

​

​

3.9

​

Weighted-average remaining lease term - operating leases (in years)

​

2.9

​

​

3.3

​

​

3.9

​

Weighted-average discount rate - finance lease

​

5.2

%

​

4.6

%

​

5.0

%

Weighted-average discount rate - operating leases

​

4.8

%

​

4.9

%

​

4.9

%

​

The aggregate payments of finance and operating lease liabilityliabilities subsequent to December 31, 2019,2022, for the years ending December 31 are:

 

 

 

2020

 

$

54

2021

 

 

54

2022

 

 

54

​

​

​

​

​

​

​

​

​

Finance Leases

​

Operating Leases

2023

 

 

54

​

$

148

​

$

329

2024

 

 

10

​

 

99

​

 

178

2025

​

 

56

​

 

55

2026

​

 

12

​

 

12

2027

​

​

4

​

​

12

Thereafter

​

​

—

​

​

257

Total

 

 

226

​

​

319

​

​

843

Less imputed interest

 

 

(22)

​

​

(19)

​

​

(165)

Total finance lease liability

 

$

204

Total lease liabilities

​

$

300

​

$

678

​

The aggregate payments of operating lease liabilities subsequent to December 31, 2019, for the years ending December 31 are:

 

 

 

 

2020

 

$

246

2021

 

 

180

2022

 

 

102

2023

 

 

63

2024

 

 

12

Thereafter

 

 

293

Total

 

 

896

Less imputed interest

 

 

(205)

Total operating lease liabilities

 

$

691

​

​

​

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Table of Contents

10.8. Other Assets

Other assets consist of the following:

 

 

 

 

 

 

 

 

    

December 31, 

    

December 31, 

 

 

2019

 

2018

Restricted investments

 

$

2,364

 

$

3,432

Accounts receivable, net

 

 

6,957

 

 

14,061

Homesite sales receivable

 

 

5,211

 

 

2,977

Claim settlement receivable

 

 

 —

 

 

2,679

Notes receivable

 

 

3,252

 

 

2,265

Income tax receivable

 

 

2,843

 

 

3,914

Prepaid expenses

 

 

6,592

 

 

6,751

Straight-line rent

 

 

3,292

 

 

3,581

Operating lease right-of-use assets

 

 

691

 

 

 —

Other assets

 

 

5,715

 

 

5,069

Retained interest investments

 

 

12,214

 

 

11,536

Accrued interest receivable for Senior Notes held by SPE

 

 

2,938

 

 

2,938

Total other assets

 

$

52,069

 

$

59,203

​

​

​

​

​

​

​

​

​

    

December 31, 

    

December 31, 

​

​

2022

​

2021

Investments - equity securities

​

$

—

​

$

450

Accounts receivable, net

​

​

9,035

​

​

13,813

Homesite sales receivable

​

​

10,086

​

​

7,651

Notes receivable, net

​

 

1,742

​

 

12,377

Inventory

​

​

3,976

​

​

2,797

Prepaid expenses

​

 

9,393

​

 

7,175

Straight-line rent

​

 

2,546

​

 

2,489

Operating lease right-of-use assets

​

​

678

​

​

732

Other assets

​

 

13,138

​

 

5,987

Retained interest investments

​

​

8,197

​

​

13,826

Accrued interest receivable for Senior Notes held by SPE

​

 

2,938

​

 

2,938

Total other assets

​

$

61,729

​

$

70,235

​

Restricted Investments – Equity Securities

The Company’s restrictedAs of December 31, 2022, the Company did not have any investments are– equity securities. As of December 31, 2021, investments – equity securities included $0.5 million of preferred stock investments recorded at fair value. During the year ended December 31, 2021, the Company recognized unrealized loss of $0.9 million on investments related to equity securities still held as of December 31, 2021. During the Company’s deferred compensation plan. As part of the Pension Plan termination in 2014,year ended December 31, 2020, the Company directedrecognized an unrealized loss of $4.6 million on investments related to equity securities still held as of December 31, 2020. These amounts were included within investment income, net on the Pension Plan to transfer the Pension Plan’s surplus assets into a suspense account in the Company’s 401(k) plan. The Company has retained the risks and rewardsconsolidated statements of ownership of these assets; therefore, the assets held in the suspense account are included in the Company’s consolidated balance sheets until they are allocated to current or future 401(k) plan participants for up to the next two years. See Note 18. Employee Benefit Plan.income.

Accounts Receivable, Net

Accounts receivable, net primarily includes leasing receivables, membership initiation fees, hospitality receivables and other receivables. As of December 31, 2018,2022 and 2021, accounts receivable were presented net of allowance for credit losses of $0.3 million and $0.4 million, respectively. As of both December 31, 2022 and 2021, accounts receivable were presented net of allowance for lease related receivables of less than $0.1 million. During 2022, allowance for credit losses related to accounts receivable, net included $6.7 million of insurance proceeds receivable from the Company’s insurance carriers for property damage related to Hurricane Michael, which were received during 2019. See Note 7. Hurricane Michael for additional information.decreased $0.1 million.

Homesite Sales Receivable

Homesite sales receivable from contracts with customers include estimated homesite residuals and certain estimated fees that are recognized as revenue at the time of sale to homebuilders, subject to constraints. Any change in circumstances from the estimated amounts will be updated at each reporting period. The receivable will be collected as the homebuilders build the homes and sell to retail consumers, which can occur over multiple years. See Note 2. Summary of Significant Accounting Policies for additional information.

The following table presents the changes in homesite sales receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increases Due To

 

 

Decreases Due to

 

 

 

 

 

 

Balance

 

 

Revenue Recognized

 

 

Amounts

 

 

Balance

 

 

 

January 1, 2019

 

 

for Homesites Sold

 

 

Received/Transferred

 

 

December 31, 2019

Homesite sales receivable

 

$

2,977

  

$

4,755

 

$

(2,521)

   

$

5,211

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

December 31, 2021

Balance at beginning of year

​

$

7,651

​

$

5,675

Increases due to revenue recognized for homesites sold

​

​

7,660

​

​

7,213

Decreases due to amounts received

​

​

(5,225)

​

​

(5,237)

Balance at end of year

​

$

10,086

​

$

7,651

F 3537

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increases Due To

 

 

Decreases Due to

 

 

 

 

 

 

Balance

 

 

Revenue Recognized

 

 

Amounts

 

 

Balance

 

 

 

January 1, 2018

 

 

for Homesites Sold

 

 

Received/Transferred

 

 

December 31, 2018

Homesite sales receivable

 

$

2,585

  

$

2,085

 

$

(1,693)

   

$

2,977

Claim Settlement Receivable

The remaining settlement amount of $2.7 million as of December 31, 2018 was received in October 2019. Interest income for the years ended December 31, 2019 and 2018 was $0.1 million and for the year ended December 31, 2017 was $0.2 million.​

Notes Receivable, Net

Notes receivable, net consist of the following:

 

 

 

 

 

 

 

 

    

December 31, 

    

December 31, 

 

 

2019

 

2018

Interest bearing homebuilder note, secured by the real estate sold — 5.5% interest rate, due June 2021

 

$

1,514

 

$

 —

Interest bearing homebuilder note, secured by the real estate sold — 5.5% interest rate, due December 2021

 

 

872

 

 

 —

Interest bearing note with a JV partner, secured by the partner's membership interest in the JV - 8.0% interest rate, due May 2039

 

 

363

 

 

 —

Interest bearing note with a JV partner, secured by the partner's membership interest in the JV - 8.0% interest rate, due July 2039

 

 

206

 

 

 —

Interest bearing homebuilder note, secured by the real estate sold — 6.3% interest rate, due March 2020

 

 

128

 

 

150

Various mortgage notes, secured by certain real estate, bearing interest at various rates

 

 

85

 

 

141

Interest bearing homebuilder note, secured by the real estate sold — 5.5% interest rate, due June 2020

 

 

84

 

 

422

Interest bearing homebuilder note, secured by the real estate sold — 5.5% interest rate, paid in December 2019

 

 

 —

 

 

749

Pier Park Community Development District notes, non-interest bearing, paid in August 2019

 

 

 —

 

 

803

Total notes receivable

 

$

3,252

 

$

2,265

​

​

​

​

​

​

​

​

​

    

December 31, 

    

December 31, 

​

​

2022

​

2021

Interest-bearing revolving promissory note with the unconsolidated Latitude Margaritaville Watersound JV, secured by the JV's real property — bearing interest at a rate of 5.0%, matures June 2025

​

$

—

​

$

7,075

Various interest-bearing homebuilder notes, secured by the real estate sold — bearing interest at a rate of 5.5%, due May 2023

​

​

1,296

​

​

4,824

Interest-bearing notes with JV partner, secured by the partner's membership interest in the JV — bearing interest at a rate of 8.0%, due May 2039

​

​

359

​

​

359

Non-interest-bearing note with a tenant for tenant improvements, due October 2025

​

​

68

​

​

76

Mortgage note, secured by certain real estate, bearing interest at a rate of 4.8% due November 2023

​

 

19

​

 

43

Total notes receivable, net

​

$

1,742

​

$

12,377

​

In June 2020, the Company entered into a $10.0 million secured revolving promissory note with the unconsolidated Latitude Margaritaville Watersound JV. The Latitude JV Note was provided to finance the development of the pod-level, non-spine infrastructure. Future advances, if any, will be repaid by the JV as each home is sold by the JV, with the aggregate unpaid principal and all accrued and unpaid interest due at maturity in June 2025. The note is secured by a mortgage and security interest in and on the real property and improvements located on the real property of the JV. See Note 4. Joint Ventures for additional information.

The Company may allow homebuilders to pay for homesites during the home construction period in the form of homebuilder notes. The Company evaluates the carrying value of all notes and the need for an allowance for doubtful notes receivablecredit losses at each reporting date. As of both December 31, 20192022 and 2018, there was no2021, notes receivable were presented net of allowance for doubtfulcredit losses of $0.1 million. As of both December 31, 2022 and 2021, accrued interest receivable related to notes receivable.receivable was $0.1 million, which is included within other assets on the consolidated balance sheets.

Other Assets

Other assets as of December 31, 2022 and 2021, include $7.3 million and $3.9 million, respectively, of escrow deposits primarily related to financing and development requirements for certain of the Company’s projects. Other assets as of December 31, 2022 and 2021, also include $4.6 million and $0.6 million, respectively, for the fair value of derivative assets. See Note 6. Financial Instruments and Fair Value Measurements for additional information.

Retained Interest Investments

The Company has a beneficial interest in certain bankruptcy-remote qualified SPEs used in the installment sale monetization of certain sales of timberlands in 2007 and 2008. The SPEs’ assets are not available to satisfy the Company’s liabilities or obligations and the liabilities of the SPEs are not the Company’s liabilities or obligations. Therefore, the SPEs’ assets and liabilities are not consolidated in the Company’s financial statements as of December 31, 20192022 and 2018.2021. The Company’s continuing involvement with the SPEs is the receipt of the net interest payments and the remaining principal of approximately $16.7$10.2 million to be received at the end of the installment notes’ fifteen yearfifteen-year maturity period, in 20222023 through 2024. During 2022, two installment notes matured and the Company received $6.9 million of remaining principal. The Company has a beneficial or retained interest investmentinvestments related to these SPEs of $12.2$8.2 million and $11.5$13.8 million as of December 31, 20192022 and 2018,2021, respectively, recorded in other assets on the Company’s consolidated balance sheets.

​

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Table of Contents

11.

9. Property and Equipment, Net

Property and equipment, net consists of the following:

 

 

 

 

 

 

 

 

    

December 31,

    

December 31,

 

 

2019

 

2018

Railroad and equipment

 

$

33,626

 

$

33,626

Furniture and fixtures

 

 

24,062

 

 

22,438

Machinery and equipment

 

 

11,100

 

 

8,964

Office equipment

 

 

5,920

 

 

5,237

Autos, trucks and aircraft

 

 

6,274

 

 

988

 

 

 

80,982

 

 

71,253

Less: Accumulated depreciation

 

 

63,223

 

 

60,271

 

 

 

17,759

 

 

10,982

Construction in progress

 

 

1,259

 

 

1,049

Total property and equipment, net

 

$

19,018

 

$

12,031

​

​

​

​

​

​

​

​

​

    

December 31,

    

December 31,

​

​

2022

​

2021

Railroad and equipment

​

$

33,627

​

$

33,627

Furniture and fixtures

​

 

28,659

​

 

25,556

Machinery and equipment

​

 

31,159

​

 

23,058

Office equipment

​

 

5,518

​

 

4,865

Autos, trucks and aircraft

​

 

7,033

​

 

6,773

​

​

 

105,996

​

 

93,879

Less: Accumulated depreciation

​

 

67,133

​

 

64,251

​

​

 

38,863

​

 

29,628

Construction in progress

​

 

775

​

 

1,517

Total property and equipment, net

​

$

39,638

​

$

31,145

​

Depreciation expense on property and equipment was $3.2$8.5 million, $2.4$6.1 million and $1.9$4.0 million in 2019, 20182022, 2021 and 2017,2020, respectively.

12.F 39

Table of Contents

10. Debt, Net

Debt consists of the following:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Maturity Date

​

Interest Rate Terms

​

Effective Rate December 31, 2022

​

​

December 31, 2022

​

​

December 31, 2021

Pier Park Resort Hotel JV Loan

​

April 2027

​

LIBOR plus 2.2% (a)

​

3.2

%

​

$

45,209

​

​

$

14,650

Watersound Origins Crossings JV Loan

​

May 2024

​

SOFR plus 2.8, floor 3.3% (b)

​

7.1

%

​

​

44,015

​

​

​

37,897

PPN JV Loan

​

November 2025

​

Fixed

​

4.1

%

​

​

42,555

​

​

​

43,582

Pearl Hotel Loan

​

December 2032

​

Fixed

​

6.3

%

​

​

37,000

​

​

​

—

PPC JV Loan (insured by HUD)

​

June 2060

​

Fixed

​

3.1

%

​

​

35,180

​

​

​

35,670

Mexico Beach Crossings JV Loan (insured by HUD)

​

March 2064

​

Fixed

​

3.0

%

​

​

23,374

​

​

​

—

PPC II JV Loan (insured by HUD) (c)

​

May 2057

​

Fixed

​

2.7

%

​

​

22,623

​

​

​

17,374

Watercrest JV Loan

​

June 2047

​

LIBOR plus 2.2% (d)

​

6.6

%

​

​

21,038

​

​

​

20,053

North Bay Landing Loan

​

September 2024

​

LIBOR plus 2.5%, floor 3.2%

​

6.8

%

​

​

18,222

​

​

​

1,342

Breakfast Point Hotel Loan

​

November 2042

​

Fixed (e)

​

6.0

%

​

​

16,376

​

​

​

11,843

Airport Hotel Loan

​

March 2025

​

LIBOR plus 2.0%, floor 3.0%

​

6.4

%

​

​

14,642

​

​

​

14,642

Lodge 30A JV Loan

​

January 2028

​

Fixed

​

3.8

%

​

​

13,304

​

​

​

7,474

Watersound Camp Creek Loan

​

December 2047

​

LIBOR plus 2.1%, floor 2.6%

​

6.5

%

​

​

13,131

​

​

​

3,437

Watersound Town Center Grocery Loan

​

August 2031

​

LIBOR plus 2.0%, floor 2.2%

​

6.3

%

​

​

11,379

​

​

​

620

Hotel Indigo Loan

​

October 2028

​

SOFR plus 2.7%, floor 2.7%

​

7.0

%

​

​

10,427

​

​

​

—

Topsail Hotel Loan

​

July 2027

​

SOFR plus 2.1%, floor 3.0%

​

6.4

%

​

​

5,199

​

​

​

—

Beckrich Building III Loan

​

August 2029

​

LIBOR plus 1.7%

​

6.1

%

​

​

5,020

​

​

​

5,188

Self-Storage Facility Loan

​

November 2025

​

LIBOR plus 2.4%, floor 2.9%

​

6.7

%

​

​

4,666

​

​

​

4,666

Community Development District debt

​

May 2023-May 2039

​

Fixed

​

3.6 to 6.0

%

​

 

4,113

​

​

​

4,909

Beach Homes Loan

​

May 2029

​

LIBOR plus 1.7%

​

6.1

%

​

 

1,447

​

​

​

1,492

Pier Park Outparcel Loan

​

March 2027

​

LIBOR plus 1.7%

​

6.1

%

​

​

1,300

​

​

​

1,370

WaterColor Crossings Loan

​

February 2029

​

LIBOR plus 1.7%

​

6.1

%

​

​

1,191

​

​

​

1,265

Total principal outstanding

​

​

​

​

​

​

​

​

​

391,411

​

​

​

227,474

Unamortized discount and debt issuance costs

​

​

​

​

​

​

​

(5,551)

​

​

​

(4,440)

Total debt, net

​

​

​

​

​

​

​

​

$

385,860

​

​

$

223,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

December 31, 2018

 

    

 

 

    

Unamortized

    

 

 

   

 

 

 

    

Unamortized

    

 

 

 

 

 

 

 

Discount and

 

 

 

 

 

 

 

 

Discount and

 

 

 

 

 

 

 

 

Debt Issuance

 

 

 

 

 

 

 

 

Debt Issuance

 

 

 

 

 

Principal

 

Costs

 

Net

 

 

Principal

 

Costs

 

Net

PPN JV Loan, due November 2025, bearing interest at 4.1%

 

$

45,514

 

$

380

 

$

45,134

  

 

$

46,423

 

$

446

 

$

45,977

PPC JV Loan, insured by HUD, due June 2060, bearing interest at 4.0%

 

 

34,610

 

 

1,087

 

 

33,523

 

 

 

15,399

 

 

1,114

 

 

14,285

Community Development District debt, secured by certain real estate or other collateral, due May 2023 through May 2039, bearing interest at 3.6% to 6.0%

 

 

6,977

 

 

 —

 

 

6,977

 

 

 

6,324

 

 

 —

 

 

6,324

Watersound Origins Crossings JV Loan, due May 2024, bearing interest at 5.0%

 

 

2,868

 

 

454

 

 

2,414

 

 

 

 —

 

 

 —

 

 

 —

Beach Homes Loan, due May 2029, bearing interest at LIBOR plus 1.7% (effective rate of 3.5% at December 31, 2019)

 

 

1,594

 

 

20

 

 

1,574

   

 

 

 —

 

 

 —

 

 

 —

Pier Park Outparcel Construction Loan, due March 2027, bearing interest at LIBOR plus 1.7% (effective rate of 3.5% at December 31, 2019)

 

 

1,535

 

 

14

 

 

1,521

   

 

 

1,585

 

 

16

 

 

1,569

WaterColor Crossings Construction Loan, due February 2029, bearing interest at LIBOR plus 1.7% (effective rate of 3.5% at December 31, 2019)

 

 

1,409

 

 

23

 

 

1,386

   

 

 

1,245

 

 

26

 

 

1,219

Total debt

 

$

94,507

 

$

1,978

 

$

92,529

   

 

$

70,976

 

$

1,602

 

$

69,374

(a)The Pier Park Resort Hotel JV entered into an interest rate swap that was effective December 10, 2022 and matures on April 12, 2027 and fixed the variable rate on the notional amount of related debt of $42.0 million to a rate of 3.2%. See Note 6. Financial Instruments and Fair Value Measurements for additional information. In December 2022, the Pier Park Resort Hotel Loan was amended, effective February 10, 2023, to bear interest at a rate of SOFR plus 2.1%.
(b)In January 2022, the Watersound Origins Crossings JV Loan interest rate was modified from a fixed rate of 5.0%. In January 2023, the Company began the process to refinance the Watersound Origins Crossings JV Loan with a loan commitment to be insured by HUD.
(c)In April 2022, the PPC II JV Loan was refinanced from a rate of LIBOR plus 2.1% and maturity date of October 2024.
(d)As of December 31, 2021, the interest rate was swapped to a fixed rate of 4.4% on the notional amount of related debt of $20.0 million. The interest rate swap was terminated in April 2022. See Note 6. Financial Instruments and Fair Value Measurements for additional information.

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(e)In November 2022, the Breakfast Point Hotel Loan interest rate was modified from a rate of LIBOR plus 2.8%, with a floor of 3.8%. The modified rate is fixed through November 2027 and in December 2027 the rate will adjust to the 1-year constant maturity Treasury rate plus 3.3% from December 2027 through November 2042, with a minimum rate of 6.0% throughout the term of the loan.

​

The Company’s indebtedness consists of various loans on real and leasehold property. These loans are typically secured by various interests in the property such as assignment of rents, leases, deposits, permits, plans, specifications, fees, agreements, approvals, contracts, licenses, construction contracts, development contracts, service contracts, franchise agreements, the borrower’s assets, improvements, and security interests in the rents, personal property, management agreements, construction agreements, improvements, accounts, profits, leases, accounts and fixtures. The specific Security Interests vary from loan to loan. As of December 31, 2022, the weighted average effective interest rate of outstanding debt was 5.1%, of which 60.4% of the debt outstanding includes fixed or swapped interest rates, and the average remaining life of debt outstanding was 13.8 years.

In OctoberApril 2020, the Pier Park Resort Hotel JV entered into a loan with an initial amount of $52.5 million up to a maximum of $60.0 million through additional earn-out requests. The Pier Park Resort Hotel JV Loan was entered into to finance the construction of an Embassy Suites by Hilton hotel in the Pier Park area of Panama City Beach, Florida. The loan provides for interest only payments for the first thirty-six months and principal and interest payments thereafter with a final balloon payment at maturity in April 2027. In December 2022, the Pier Park Resort Hotel Loan was amended, effective February 10, 2023, to bear interest at a rate of SOFR plus 2.1%. The loan is secured by the real property and certain other Security Interests. In connection with the loan, as guarantors, the Company and the Company’s JV partner entered into a guarantee based on each partner’s ownership interest in favor of the lender, to guarantee the payment and performance of the borrower. As guarantor, the Company’s liability under the Pier Park Resort Hotel JV Loan will be released upon reaching and maintaining certain debt service coverage for twelve months. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants or warranties to be performed on the part of such guarantor. The Pier Park Resort Hotel JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR. The interest rate swap was effective December 10, 2022 and matures on April 12, 2027 and fixed the variable rate on the notional amount of related debt of $42.0 million to a rate of 3.2%. See Note 6. Financial Instruments and Fair Value Measurements for additional information.

In 2019, the Watersound Origins Crossings JV entered into a $37.9 million loan to finance the construction of apartments located near the entrance to the Watersound Origins residential community. In January 2022, the Watersound Origins Crossings JV entered into a modification of the loan that increased the principal amount of the loan to $44.0 million, modified the interest rate from 5.0% to SOFR plus 2.8%, with a floor of 3.3%, and provides for payments of interest only with a final balloon payment at maturity in May 2024. The Watersound Origins Crossings JV Loan is secured by the real property and certain other Security Interests. In connection with the loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Watersound Origins Crossings JV Loan. As guarantor, the Company’s liability has been reduced to 25% of the outstanding principal amount, based on meeting certain debt service coverage and loan to value requirements. In addition, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation or failure to abide by other certain obligations on the part of such guarantor. The Company is the sole guarantor and receives a monthly fee related to the guarantee from its JV partner based on the JV partner’s ownership percentage. During 2022, the Company incurred less than $0.1 million of additional loan cost due to the loan modification. In January 2023, the Company began the process to refinance the Watersound Origins Crossings JV Loan with a loan commitment to be insured by HUD.

In 2015, the Pier Park North JV entered into a $48.2 million loan, secured by a first lien on, and security interestSecurity Interest in, a majority of the Pier Park North JV’s property. The PPN JV Loan provides for principal and interest

F  37

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payments with a final balloon payment at maturity.maturity in November 2025. In connection with the PPN JV Loan,loan, the Company entered into a limited guarantee in favor of the lender, based on its percentage ownership of the JV. In addition, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation by the Pier Park North JV; any voluntary transfer or encumbrance of the property in violation of the due-on-sale clause in the security instrument; upon commencement of voluntary bankruptcy or insolvency proceedings and upon breach of covenants in the security instrument.

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In MayDecember 2022, a wholly-owned subsidiary of the Company entered into a $37.0 million loan, which is guaranteed by the Company, to finance the acquisition of a hotel located on Scenic Highway 30A. The Pearl Hotel Loan provides for monthly principal and interest payments through maturity in December 2032. The loan includes a prepayment fee due to the lender of 1% - 5% of the outstanding principal balance if the loan is refinanced with another financial institution through December 2027. The loan is secured by the real property and certain other Security Interests.

In 2018, the Pier Park Crossings JV entered into a $36.6 million loan, insured by HUD, to finance the construction of apartments in Panama City Beach, Florida. The PPC JV Loan provides for monthly principal and interest payments through maturity in June 2060. The loan includes a prepayment provision due to the lender of 2% - 10% for any additional principal that is prepaid through August 31, 2031. The loan is secured by the real property and certain other Security Interests.

In January 2022, the Mexico Beach Crossings JV entered into a $43.5 million loan, insured by HUD, to finance the construction of apartments in Mexico Beach, Florida. The Mexico Beach Crossings JV Loan provides for interest only payments duringfor the first twenty-fourtwenty-seven months and monthly principal and interest payments thereafter through maturity in June 2060.March 2064. The PPC JV Loanloan may not be prepaid prior to JulyApril 1, 2020. From July2024 and if any additional principal is prepaid from April 1, 20202024 through June 30, 2030,March 31, 2034 a prepayment premium is due to the lender of 1.0%1% - 10.0% of any prepaid principal.10%. The PPC JV Loanloan is secured by the real property and certain other Security Interests.

In 2019, the Pier Park Crossings JV’sPhase II JV entered into a $17.5 million loan to finance the construction of apartments in Panama City Beach, Florida. In April 2022, the Pier Park Crossings Phase II JV refinanced the PPC II JV Loan that increased the principal amount of the loan, which had a balance of $17.3 million at the time of the refinance, to $22.9 million, fixed the interest rate to 2.7% and provides for monthly payments of principal and interest through maturity in May 2057. The refinanced loan terms include a prepayment premium due to the lender of 1% - 10% for any additional principal that is prepaid through May 31, 2032. The refinanced loan is insured by HUD and is secured by the real property and certain other Security Interests. During 2022, the assignmentCompany incurred $0.2 million of rentsadditional loan cost related to the refinance. As a result of the refinance, the year ended December 31, 2022 includes a $0.1 million loss on early extinguishment of debt related to unamortized debt issuance costs, included within other income, net on the consolidated statements of income.

In 2019, the Watercrest JV entered into a $22.5 million loan to finance the construction of a senior living facility in Santa Rosa Beach, Florida. The loan provides for monthly principal and leases.interest payments through maturity in June 2047. The loan is secured by the real property and certain other Security Interests. In connection with the loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Watercrest JV Loan. The Company is the sole guarantor and receives a quarterly fee related to the guarantee from its JV partner based on the JV partner’s ownership percentage. The Watercrest JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR. The interest rate swap was effective June 1, 2021 and matures on June 1, 2024 and fixed the variable rate on the notional amount of related debt of $20.0 million to a rate of 4.4%. In April 2022, the swap was terminated resulting in a gain of $0.1 million, included in interest expense on the consolidated statements of income for the year ended December 31, 2022. See Note 6. Financial Instruments and Fair Value Measurements for additional information.

In March 2021, a wholly-owned subsidiary of the Company entered into a $26.8 million loan, which is guaranteed by the Company, to finance the construction of apartments in Panama City, Florida. The North Bay Landing Loan provides for interest only payments and a principal balloon payment at maturity in September 2024. The loan includes an option for an extension of the maturity date by eighteen months, subject to certain conditions, which would provide for principal and interest payments commencing on the original maturity date with a final balloon payment at the extended maturity date. The loan is secured by the real property and certain other Security Interests. As guarantor, the Company’s liability under the North Bay Landing Loan will be reduced to 50% of the outstanding principal amount upon satisfaction of final advance conditions and reduced to 25% of the outstanding principal amount upon reaching and maintaining a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation or failure to abide by other certain obligations on the part of such guarantor.

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In November 2020, a wholly-owned subsidiary of the Company entered into a $16.8 million loan, which is guaranteed by the Company, to finance the construction of a Homewood Suites by Hilton hotel in the Breakfast Point area of Panama City Beach, Florida. The Breakfast Point Hotel Loan provides for monthly principal and interest payments through maturity in November 2042. In November 2022, the Breakfast Point Hotel loan was amended to fix the interest rate to 6.0% through November 2027 and the 1-year constant maturity Treasury rate plus 3.3% from December 2027 through November 2042, with a minimum rate of 6.0% throughout the term of the loan. The amendment also includes a prepayment premium due to the lender of 1% - 3% of the outstanding principal balance for any additional principal that is prepaid through November 2027. The loan is secured by the real property and certain other Security Interests.

In March 2020, a wholly-owned subsidiary of the Company entered into a $15.3 million loan, which is guaranteed by the Company, to finance the construction of the Hilton Garden Inn Panama City Airport. The Airport Hotel Loan provides for interest only payments for the first thirty-six months and principal and interest payments thereafter with a final balloon payment at maturity in March 2025. The loan is secured by the real property and certain other Security Interests.

In January 2021, The Lodge 30A JV entered into a $15.0 million loan to finance the construction of a boutique hotel in Seagrove Beach, Florida. The Lodge 30A JV Loan provides for interest only payments for the first twenty-four months and principal and interest payments thereafter with a final balloon payment at maturity in January 2028. The loan is secured by the real property and certain other Security Interests. In connection with the loan, the Company, wholly-owned subsidiaries of the Company and the Company’s JV partner entered into a joint and several payment and performance guarantee in favor of the lender. Upon reaching a certain debt service coverage ratio for a minimum of twenty-four months, the Company’s liability as guarantor will be reduced to 75% of the outstanding principal amount for a twelve-month period. The debt service coverage ratio will be tested annually thereafter and the Company’s liability will be reduced to 50% in year four and 25% in year five. The Company receives a monthly fee related to the guarantee from its JV partner based on the JV partner’s ownership percentage.

In June 2021, a wholly-owned subsidiary of the Company entered into a $28.0 million loan, which is guaranteed by the Company, to finance the construction of Watersound Camp Creek, which includes an inn and amenity center near the Watersound Camp Creek residential community. The Watersound Camp Creek Loan provides for principal and interest payments through maturity in December 2047. The loan is secured by the real property and certain other Security Interests. As guarantor, the Company’s liability under the loan will be reduced to 50% of the outstanding principal amount upon the project reaching and maintaining a trailing six months of operations with a certain debt service coverage ratio and reduced to 25% of the outstanding principal amount upon reaching and maintaining a trailing twelve months of operations with a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants, warranties or other certain obligations to be performed on the part of such guarantor.

In August 2021, a wholly-owned subsidiary of the Company entered into a $12.0 million loan, which is guaranteed by the Company, to finance the construction of a building in the Watersound Town Center near the Watersound Origins residential community. The Watersound Town Center Grocery Loan provides for interest only payments for the first twenty-four months and principal and interest payments thereafter with a final balloon payment at maturity in August 2031. The loan is secured by the real property and certain other Security Interests. As guarantor, the Company’s liability under the loan will be reduced to 50% of the outstanding principal amount upon satisfaction of final advance conditions, issuance of the certificate of occupancy for the project and receipt of the initial base rent payment and reduced to 25% of the outstanding principal amount upon reaching a certain debt service coverage ratio and the project maintaining 93% occupancy for ninety consecutive days.

In October 2021, a wholly-owned subsidiary of the Company entered into a $21.2 million loan, which is guaranteed by the Company, to finance the construction of a hotel in Panama City, Florida. The Hotel Indigo Loan provides for interest only payments for the first twenty-four months and principal and interest payments thereafter with a final balloon payment at maturity in October 2028. The loan includes an option for an extension of the maturity date by sixty months, subject to certain conditions, which would provide for continued principal and interest payments with a final balloon payment at the extended maturity date. In June 2022, the loan was amended to revise the interest rate to SOFR

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plus 2.7%, with a floor of 2.7%, through October 2023 and SOFR plus 2.5%, with a floor of 2.5%, from November 2023 through maturity. The loan is secured by the leasehold property and certain other Security Interests.

In July 2022, a wholly-owned subsidiary of the Company entered into a $13.7 million loan, which is guaranteed by the Company, to finance the construction of a hotel in Santa Rosa Beach, Florida. The Topsail Hotel Loan provides for interest only payments for the first thirty-six months and principal and interest payments thereafter with a final balloon payment at maturity in July 2027. The loan is secured by the real property and certain other Security Interests.

In 2019, a wholly-owned subsidiary of the Company entered into a $5.5 million loan, which is guaranteed by the Company, to finance the construction of an office building in Panama City Beach, Florida. The Beckrich Building III Loan provides for monthly principal and interest payments with a final balloon payment at maturity in August 2029. The loan is secured by the real property and certain other Security Interests.

In November 2020, a wholly-owned subsidiary of the Company entered into a $5.8 million loan, which is guaranteed by the Company, to finance the construction of a self-storage facility in Santa Rosa Beach, Florida. The Self-Storage Facility Loan provides for interest only payments for the first forty-eight months and principal and interest payments thereafter with a final balloon payment at maturity in November 2025. The loan is secured by the real property and certain other Security Interests. The Company’s liability as guarantor under the loan shall not exceed $2.9 million, plus any additional fees, upon reaching and maintaining certain debt service coverage.

CDD bonds financed the construction of infrastructure improvements at some of the Company’s projects. The principal and interest payments on the bonds are paid by assessments on the properties benefited by the improvements financed by the bonds. CDD debt is secured by certain real estate or other collateral. The Company has recorded a liability for CDD debt that is associated with platted property, which is the point at which it becomes fixed orand determinable. Additionally, the Company has recorded a liability for the portion of the CDD debt that is associated with unplatted property if it is probable and reasonably estimable that the Company will ultimately be responsible for repayment. The Company’s total CDD debt assigned to property it owns was $17.7$12.8 million and $19.9$14.1 million atas of December 31, 20192022 and 2018,2021, respectively. The Company pays interest on this total outstanding CDD debt.

In March2018, a wholly-owned subsidiary of the Company entered into a $1.7 million loan, which is guaranteed by the Company, to finance the construction of two beach homes located in Panama City Beach, Florida (the “Beach Homes Loan”). The loan provides for monthly principal and interest payments with a final balloon payment at maturity in May 2029. The loan is secured by the real property and certain other Security Interests.

In 2017, a wholly ownedwholly-owned subsidiary of the Company entered into a $1.6 million construction loan to finance the construction of a commercial leasing property located in Panama City Beach, Florida (the “Pier Park Outparcel Construction Loan”). The Pier Park Outparcel Construction Loanloan provides for monthly principal and interest payments with a final balloon payment at maturity.maturity in March 2027. The Pier Park Outparcel Construction Loanloan is secured by the real property assignment of rents and the security interest in the rents and personal property.certain other Security Interests.

In February 2018, a wholly ownedwholly-owned subsidiary of the Company entered into a $1.9 million construction loan, which is guaranteed by the Company, to finance the construction of a commercial leasing property located in Santa Rosa Beach, Florida (the “WaterColor Crossings Construction Loan”). The WaterColor Crossings Construction Loanloan provides for monthly principal and interest payments with a final balloon payment at maturity.maturity in February 2029. The WaterColor Crossings Construction Loanloan is secured by the real property assignment of rents and the security interest in the rents and personal property. In connection with the WaterColor Crossings Construction Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the WaterColor Crossings Construction Loan.certain other Security Interests.

In May 2018, a wholly owned subsidiary of the Company entered into a $1.7 million construction loan to finance the construction of two beach homes located in Panama City Beach, Florida (the “Beach Homes Loan”). The Beach Homes Loan provides for monthly principal and interest payments with a final balloon payment at maturity. The Beach Homes Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. In connection with the Beach Homes Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Beach Homes Loan.

In May 2019, the Watersound Origins Crossings JV entered into a $37.9 million loan to finance the construction of apartments in Watersound, Florida. The Watersound Origins Crossings JV Loan provides for interest only payments for the first thirty months and principal and interest payments thereafter through maturity in May 2024. The Watersound Origins Crossings JV Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. In connection with the Watersound Origins Crossings JV Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Watersound Origins Crossings JV Loan. The Company is the sole guarantor and will receive a fee related to the guarantee from its JV partner based on the JV partner’s ownership percentage.

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In June 2019, the Watercrest JV entered into a $22.5 million loan to finance the construction of an assisted living community in Santa Rosa Beach, Florida. The Watercrest JV Loan provides for interest only payments for the first thirty-six months and principal and interest payments thereafter through maturity in June 2047. The Watercrest JV Loan is secured by the real property, assignment of rents, leases and deposits and the security interest in the rents and personal property. In connection with the Watercrest JV Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Watercrest JV Loan. The Company is the sole guarantor and will receive a fee related to the guarantee from its JV partner based on the JV partner’s ownership percentage. The Company entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR. The interest rate swap is effective June 1, 2021 and matures on June 1, 2024 and fixed the variable rate debt on the notional amount of related debt of $20.0 million to a rate of 4.37%. As of December 31, 2019, there was no principal balance and the JV incurred $0.3 million of loan costs related to the Watercrest JV Loan.

In August 2019, a wholly owned subsidiary of the Company entered into a $5.5 million loan to finance the construction of an office building in Panama City Beach, Florida. The Beckrich Building III Loan provides for interest only payments for the first twelve months and principal and interest payments thereafter through maturity in August 2029. The Beckrich Building III Loan is secured by the real property, assignment of leases, rents and profits and the security interest in the rents and personal property. In connection with the Beckrich Building III Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Beckrich Building III Loan. As of December 31, 2019, there was no principal balance and the Company incurred $0.1 million of loan costs related to the Beckrich Building III Loan.

In October 2019, the Pier Park Crossings Phase II JV entered into a $17.5 million loan to finance the construction of apartments in Panama City Beach, Florida. The PPC II JV Loan provides for interest only payments for the first twenty-four months and principal and interest payments thereafter through maturity in October 2024. The PPC II JV Loan is secured by the real property, assignment of rents and leases and the security interest in the rents, leases and personal property. In connection with the PPC II JV Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the PPC II JV Loan. The Company is the sole guarantor and will receive a fee related to the guarantee from its JV partner based on the JV partner’s ownership percentage. As of December 31, 2019, there was no principal balance and the Company incurred $0.3 million of loan costs related to the PPC II JV Loan.

The Company’s financing agreements are subject to various customary debt covenants and as both of December 31, 20192022 and 2021, the Company was in compliance with the financial debt covenants.

As of December 31, 2022, assets that were pledged as collateral related to the Company’s debt agreements, including unfunded commitments, had an approximate carrying amount of $552.1 million. These assets are included within investment in real estate, net and property and equipment, net on the consolidated balance sheets.

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The aggregate maturities of debt subsequent to December 31, 20192022 are:

 

 

 

 

 

    

December 31,

 

 

2019

2020

 

$

2,029

2021

 

 

2,242

2022

 

 

2,293

2023

 

 

2,319

2024

 

 

5,079

Thereafter

 

 

80,545

 

 

$

94,507

​

​

​

​

​

2023

​

$

6,684

2024

​

​

69,956

2025

​

 

65,911

2026

​

 

6,935

2027

​

 

54,003

Thereafter

​

 

187,922

​

​

$

391,411

​

​

​

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Table of Contents

13.11. Other Liabilities

Other liabilities consist of the following:

 

 

 

 

 

 

 

 

    

December 31, 

    

December 31, 

 

 

2019

 

2018

Accounts payable

 

$

16,207

 

$

10,148

Finance lease liability

 

 

204

 

 

 —

Operating lease liabilities

 

 

691

 

 

 —

Accrued compensation

 

 

3,151

 

 

3,112

Other accrued liabilities

 

 

3,277

 

 

2,560

Deferred revenue

 

 

18,972

 

 

17,478

Club initiation fees

 

 

6,917

 

 

5,676

Club membership deposits

 

 

3,985

 

 

4,286

Advance deposits

 

 

946

 

 

1,277

Accrued interest expense for Senior Notes held by SPE

 

 

2,850

 

 

2,850

Total other liabilities

 

$

57,200

 

$

47,387

​

​

​

​

​

​

​

​

​

    

December 31, 

    

December 31, 

​

​

2022

​

2021

Accounts payable

​

$

69,864

​

$

48,597

Income tax payable

​

​

3,470

​

​

681

Finance lease liabilities

​

​

300

​

​

380

Operating lease liabilities

​

​

678

​

​

732

Accrued compensation

​

 

5,731

​

 

4,877

Other accrued liabilities

​

 

3,641

​

 

4,126

Club membership deposits

​

 

3,422

​

 

3,602

Advance deposits

​

 

4,415

​

 

2,140

Accrued interest expense for Senior Notes held by SPE

​

 

2,850

​

 

2,850

Total other liabilities

​

$

94,371

​

$

67,985

​

Deferred revenueAccounts payable as of December 31, 20192022 and 20182021, includes $12.5payables for projects under development and construction, such as the Embassy Suites by Hilton hotel, the Camp Creek Inn and amenity center, Hotel Indigo, Watersound Town Center, Mexico Beach Crossings and the Watersound Origins, Breakfast Point East and Ward Creek residential communities. As of December 31, 2022 and 2021, accounts payable also include $27.7 million related to a 2006 agreement pursuant to which the Company agreed to sell land to the Florida Departmentand $16.0 million, respectively, of Transportation. Revenue is recognized when title to a specific parcel is legally transferred.

Club initiation feesretainage payable for projects under development and construction that are recognized as revenue over the estimated average duration of membership, which is evaluated periodically. The following table presents the changes in club initiation fees related to contracts with customers:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance

 

 

Increases Due To

 

 

Decreases Due to

 

 

Balance

 

 

 

January 1, 2019

 

 

Cash Received

 

 

Revenue Recognized

 

 

December 31, 2019

Contract liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Club initiation fees

 

$

5,676

 

$

3,083

 

$

(1,842)

 

$

6,917

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance

 

 

Increases Due To

 

 

Decreases Due to

 

 

Balance

 

 

 

January 1, 2018

 

 

Cash Received

 

 

Revenue Recognized

 

 

December 31, 2018

Contract liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Club initiation fees

 

$

5,199

 

$

1,886

 

$

(1,409)

 

$

5,676

approaching completion.

Advance deposits consist of deposits received on hotel rooms.rooms and related hospitality activities. Advance deposits are recorded as other liabilities in the consolidated balance sheets without regard to whether they are refundable and are recognized as income at the time the service is provided for the related deposit.

12. Deferred Revenue

As of December 31, 2022 and 2021, deferred revenue includes club initiation fees of $25.1 million and $22.9 million, respectively, and other deferred revenue of $13.8 million and $13.4 million, respectively.

Club initiation fees are recognized as revenue over the estimated average duration of membership, which is evaluated periodically. The following table presents the changes in club initiation fees related to contracts with customers:

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

December 31, 2021

Balance at beginning of year

​

$

22,850

​

$

10,716

New club memberships

​

​

9,170

​

​

16,804

Revenue from amounts included in contract liability opening balance

​

​

(6,040)

​

​

(3,037)

Revenue from current period new memberships

​

​

(892)

​

​

(1,633)

Balance at end of year

​

$

25,088

​

$

22,850

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Table of Contents

​

14.Remaining performance obligations represent contracted revenue that has not been recognized related to club initiation fees. As of December 31, 2022 remaining performance obligations were $25.1 million, of which the Company expects to recognize as revenue $6.0 million in 2023, $10.9 million in 2024 through 2025, $7.5 million in 2026 through 2027 and $0.7 million thereafter.

Other deferred revenue as of both December 31, 2022 and 2021 includes $10.9 million related to a 2006 agreement pursuant to which the Company agreed to sell land to the Florida Department of Transportation. Revenue is recognized when title to a specific parcel is legally transferred.

​

​

13. Income Taxes

Income tax expense (benefit) consist of the following:

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

    

2019

    

2018

    

2017

Current:

 

 

  

 

 

  

 

 

  

Federal

 

$

1,070

 

$

4,305

 

$

7,418

State

 

 

 —

 

 

 —

 

 

48

Total

 

 

1,070

 

 

4,305

 

 

7,466

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

5,903

 

 

488

 

 

(23,512)

State

 

 

2,474

 

 

(5,529)

 

 

(1,835)

Total

 

 

8,377

 

 

(5,041)

 

 

(25,347)

Income tax expense (benefit)

 

$

9,447

 

$

(736)

 

$

(17,881)

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

2022

    

2021

    

2020

Current:

 

​

  

 

​

  

 

​

  

Federal

​

$

19,067

​

$

9,005

​

$

5,146

State

​

 

832

​

 

—

​

 

—

Total

​

 

19,899

​

 

9,005

​

 

5,146

Deferred:

​

​

​

​

​

​

​

​

​

Federal

​

 

661

​

 

12,120

​

 

6,321

State

​

 

3,829

​

 

3,857

​

 

2,203

Total

​

 

4,490

​

 

15,977

​

 

8,524

Income tax expense

​

$

24,389

​

$

24,982

​

$

13,670

​

Total income tax expense (benefit) was allocated in the consolidated financial statements as follows:

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

    

2019

    

2018

    

2017

Income tax expense (benefit)

 

$

9,447

 

$

(736)

 

$

(17,881)

Income tax recorded in accumulated other comprehensive loss

 

 

  

 

 

  

 

 

  

Income tax expense (benefit)

 

 

116

 

 

685

 

 

(2,488)

Total income tax expense (benefit)

 

$

9,563

 

$

(51)

 

$

(20,369)

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

2022

    

2021

    

2020

Income tax expense

​

$

24,389

​

$

24,982

​

$

13,670

Income tax recorded in accumulated other comprehensive income (loss)

​

 

  

​

 

  

​

 

  

Income tax expense (benefit)

​

 

957

​

 

367

​

 

(386)

Total income tax expense

​

$

25,346

​

$

25,349

​

$

13,284

​

Income tax expense (benefit) attributable to income from operations differed from the amount computed by applying the statutory federal income tax rate of 21% as of December 31, 20192022, 2021 and 2018 and 35% as of December 31, 20172020 to pre-tax income or loss as a result of the following:

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

    

2019

    

2018

    

2017

Tax at the statutory federal rate

 

$

7,607

 

$

6,643

 

$

14,594

State income taxes (net of federal benefit)

 

 

1,477

 

 

1,392

 

 

1,340

Decrease in valuation allowance, net

 

 

 —

 

 

(4,993)

 

 

(142)

Decrease in uncertain tax positions

 

 

 —

 

 

(2,165)

 

 

 —

Change in US and State tax rates

 

 

1,006

 

 

(1,035)

 

 

(33,542)

Benefit of Qualified Opportunity Zone investment

 

 

(561)

 

 

 —

 

 

 —

Dividend received deduction

 

 

(188)

 

 

(322)

 

 

(530)

Other permanent items

 

 

106

 

 

(256)

 

 

399

Total income tax expense (benefit)

 

$

9,447

 

$

(736)

 

$

(17,881)

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

2022

    

2021

    

2020

Tax at the statutory federal rate

​

$

20,016

​

$

20,902

​

$

12,385

State income taxes (net of federal benefit)

​

 

4,495

​

 

3,581

​

 

2,203

(Decrease) increase in valuation allowance

​

 

(21)

​

 

275

​

 

—

Change in US and State tax rates

​

 

—

​

 

458

​

 

—

Income tax credits

​

​

(150)

​

​

(186)

​

​

(454)

Benefit of Qualified Opportunity Zone investments

​

​

—

​

​

(195)

​

​

(161)

Dividend received deduction

​

 

—

​

 

—

​

 

(33)

Other permanent items

​

 

49

​

 

147

​

 

(270)

Total income tax expense

​

$

24,389

​

$

24,982

​

$

13,670

​

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The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are presented below:

 

 

 

 

 

 

 

 

 

December 31, 

 

December 31, 

 

    

2019

    

2018

Deferred tax assets:

 

 

  

 

 

  

State net operating loss carryforwards

 

$

14,316

 

$

15,709

Impairment losses

 

 

36,751

 

 

38,907

Prepaid income from land sales

 

 

3,180

 

 

2,597

Capitalized costs

 

 

2,468

 

 

2,107

Reserves and accruals

 

 

1,672

 

 

1,789

Unrealized losses on investments

 

 

2,282

 

 

1,008

Other

 

 

765

 

 

711

Total gross deferred tax assets

 

 

61,434

 

 

62,828

Deferred tax liabilities:

 

 

 

 

 

  

Investment in real estate and property and equipment basis differences

 

 

4,000

 

 

2,358

Deferred gain on land sales and involuntary conversions

 

 

24,956

 

 

19,236

Installment sales

 

 

83,275

 

 

83,268

Pension Plan assets transferred to the 401(k) plan

 

 

580

 

 

872

Other

 

 

1,431

 

 

1,409

Total gross deferred tax liabilities

 

 

114,242

 

 

107,143

Net deferred tax liabilities

 

$

(52,808)

 

$

(44,315)

​

​

​

​

​

​

​

​

​

​

December 31, 

​

December 31, 

​

    

2022

    

2021

Deferred tax assets:

 

​

  

 

​

  

State net operating loss carryforwards

​

$

5,965

​

$

10,617

Impairment losses

​

 

26,714

​

 

28,496

Prepaid income from land sales

​

 

6,871

​

 

6,177

Capital loss carryforwards

​

​

—

​

​

4,090

Capitalized costs

​

​

2,121

​

​

2,462

Reserves and accruals

​

​

1,975

​

​

1,950

Unrealized losses on investments

​

​

—

​

​

359

Other

​

 

2,685

​

 

1,446

Total gross deferred tax assets

​

 

46,331

​

 

55,597

Valuation allowance

​

 

(290)

​

 

(305)

Total net deferred tax assets

​

 

46,041

​

 

55,292

Deferred tax liabilities:

​

 

​

​

 

  

Investment in real estate and property and equipment basis differences

​

 

21,713

​

 

14,014

Deferred gain on land sales and involuntary conversions

​

 

36,977

​

 

33,643

Installment sales

​

 

67,418

​

 

83,498

Other

​

 

2,639

​

 

1,396

Total gross deferred tax liabilities

​

 

128,747

​

 

132,551

Net deferred tax liabilities

​

$

(82,706)

​

$

(77,259)

​

As of December 31, 20192022 and 2018,2021, the Company had state net operating loss carryforwardsNOLs of $341.4$121.1 million and $357.0$229.3 million, respectively. As of December 31, 2022 and 2021, the Company had $3.4 million and $3.1 million, respectively, of federal NOLs. The federal NOLs are applicable to a specific QOF entity and no federal net operating loss carryforwards.do not expire. The majority of state net operating losses are available to offset future taxable income through 2036 and will begin expiring in 2029.2031. As of December 31, 2017,2022 and 2021, the Company had a federal income tax receivablepayable of $8.4$3.5 million related toand $0.7 million, respectively, included within other liabilities on the reclassification of a U.S. federal AMT credit carryforward following the enactment of the Tax Act in December 2017, which is refundable to the Company in the years 2018 through 2021. During the year ended December 31, 2018, the U.S. federal AMT credit receivable decreased $4.5 million to $3.9 million due to the utilization in 2018. During the year ended December 31, 2019 the U.S. federal AMT credit receivable decreased $1.1 million to $2.8 million due to the expected utilization in 2019.consolidated balance sheets.

The TaxInflation Reduction Act (“IRA”) was enactedsigned into law on December 22, 2017,August 16, 2022. The IRA extended the Internal Revenue Code Section 45L credit, a credit for the installation of energy efficient appliances and changed many aspects of U.S. corporate income taxation including reducingequipment in both single family and multi-family homes, to tax year 2032 with retroactive effect to tax year 2022. While the U.S. federal corporate tax rate from 35% to 21%year 2022 credit is the same as in years prior on a per unit basis, the credit is increased marginally for tax years beginning after December 31, 2017. The Company recognized the tax effects of the Tax Act during the year ended December 31, 2017, which included a $33.5 million income tax benefit from the reassessment of net deferred tax balances to reflect the newly enacted tax rate.

On September 12, 2019, the Florida Department of Revenue announced that the corporate income tax rate for tax years 2019, 2020, and 2021 was reduced from 5.5% to 4.458%. As a result, the Company has recorded $1.0 million of income tax expense during 2019 to adjust its deferred tax balances due to the impact on the Company’s existing Florida net operating loss carried forward in addition to other temporary differences.2023 forward.

In general, a valuation allowance is recorded if, based on theall available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assetassets will not be realized. Realization of the Company’s deferred tax assets is dependent upon the Company generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards. In 2018,As of both December 31, 2022 and 2021, the Company reassessed its need for aCompany’s valuation allowance by evaluating all available evidence, including but not limited to historical and projected pre-tax profits. Based on this assessment the Company determined it had the ability to fully realize the future benefit of its net operating loss carryforward and released the valuation allowance in full resulting in a $5.0was $0.3 million tax benefit in 2018.against certain state NOLs.

Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company regularly assesses the likelihood of adverse outcomes resulting from potential

F  42

Table of Contents

examinations to determine the adequacy of its provision for income taxes and applies a “more-likely-than-not”“more likely than not” in determining the financial statement recognition and measurement of a tax position taken or expected to be taken in athe tax return.returns. The Company has not identified any material unrecognized tax benefits as of either December 31, 2019 and 2018. The Company had approximately $2.1 million of total unrecognized tax benefits as of December 31, 2017. During 2018, the Company recognized a $2.1 million income tax benefit due to the expiration of the statute of limitations for the tax year covering the previously unrecognized tax benefits.2022 or 2021. There were no penalties required to be accrued as of December 31, 20192022 and 2018.2021. The Company records interest related to unrecognized tax benefits, if any, in interest expense and penalties in other income, net.

The Company is currently open to examination by taxing authorities for the tax years ended December 31, 20162019 through 2018. The IRS has completed a limited scope review2021.

F 47

Table of the Company’s tax returns for 2016 without adjustment.Contents

15.14. Accumulated Other Comprehensive LossIncome (Loss)

Following is a summary of the changes in the balances of accumulated other comprehensive loss,income (loss), which is presented net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (Loss) and

 

Unrealized Loss

 

 

 

 

Gain on Available-for-

 

Cash Flow

 

 

 

 

 

Sale Securities

 

Hedge

 

Total

Accumulated other comprehensive loss at December 31, 2017

 

$

(1,461)

 

$

 —

 

$

(1,461)

Other comprehensive loss before reclassifications

 

 

(2,127)

 

 

 —

 

 

(2,127)

Amounts reclassified from accumulated other comprehensive loss

 

 

2,914

 

 

 —

 

 

2,914

Other comprehensive income

 

 

787

 

 

 —

 

 

787

Accumulated other comprehensive loss at December 31, 2018

 

$

(674)

 

$

 —

 

$

(674)

Other comprehensive income (loss) before reclassifications

 

 

642

 

 

(251)

 

 

391

Amounts reclassified from accumulated other comprehensive loss

 

 

(52)

 

 

 —

 

 

(52)

Other comprehensive income (loss) 

 

 

590

 

 

(251)

 

 

339

Accumulated other comprehensive loss at December 31, 2019

 

$

(84)

 

$

(251)

 

$

(335)

​

​

​

​

​

​

​

​

​

​

​

​

​

Unrealized Gain (Loss)

 

Unrealized

​

​

​

​

on Available-for-

 

(Loss) Gain

​

​

​

​

​

Sale Securities

​

Cash Flow Hedges

​

Total

Accumulated other comprehensive income (loss) as of December 31, 2020

​

$

16

​

$

(1,488)

​

$

(1,472)

Other comprehensive (loss) income before reclassifications

​

 

(12)

​

​

792

​

​

780

Amounts reclassified from accumulated other comprehensive (loss) income

​

 

(11)

​

​

314

​

​

303

Other comprehensive (loss) income

​

 

(23)

​

​

1,106

​

​

1,083

Accumulated other comprehensive loss as of December 31, 2021

​

$

(7)

​

$

(382)

​

$

(389)

Other comprehensive (loss) income before reclassifications

​

 

(175)

​

​

4,272

​

​

4,097

Amounts reclassified from accumulated other comprehensive income

​

 

—

​

​

105

​

​

105

Other comprehensive (loss) income

​

 

(175)

​

​

4,377

​

​

4,202

Less: Other comprehensive income attributable to non-controlling interest

​

​

—

​

​

(1,383)

​

​

(1,383)

Accumulated other comprehensive (loss) income as of December 31, 2022

​

$

(182)

​

$

2,612

​

$

2,430

​

Following is a summary of the tax effects allocated to other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2019

 

    

Before-

    

Tax (Expense) or

    

Net-of-

 

 

Tax Amount

 

Benefit

 

Tax Amount

Unrealized gain on available-for-sale investments

 

$

842

 

$

(214)

 

$

628

Unrealized gain on restricted investments

 

 

18

 

 

(4)

 

 

14

Interest rate swap

 

 

(336)

 

 

85

 

 

(251)

Reclassification adjustment for net gain included in earnings

 

 

(69)

 

 

17

 

 

(52)

Net unrealized gain

 

 

455

 

 

(116)

 

 

339

Other comprehensive income

 

$

455

 

$

(116)

 

$

339

income:

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2022

​

    

Before-

    

Tax Benefit

    

Net-of-

​

​

Tax Amount

​

(Expense)

​

Tax Amount

Unrealized loss on available-for-sale investments

​

$

(235)

​

$

60

​

$

(175)

Interest rate swaps

​

​

4,633

​

​

(825)

​

​

3,808

Interest rate swap - unconsolidated joint venture

​

​

621

​

​

(157)

​

​

464

Reclassification adjustment for net loss included in earnings

​

 

140

​

 

(35)

​

 

105

Net unrealized gain

​

 

5,159

​

 

(957)

​

 

4,202

Other comprehensive income

​

$

5,159

​

$

(957)

​

$

4,202

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2021

​

    

Before-

    

Tax Benefit

    

Net-of-

​

​

Tax Amount

​

(Expense)

​

Tax Amount

Unrealized loss on available-for-sale investments

​

$

(16)

​

$

4

​

$

(12)

Interest rate swaps

​

​

848

​

​

(215)

​

​

633

Interest rate swap - unconsolidated joint venture

​

​

213

​

​

(54)

​

​

159

Reclassification adjustment for net loss included in earnings

​

 

405

​

 

(102)

​

 

303

Net unrealized gain

​

 

1,450

​

 

(367)

​

 

1,083

Other comprehensive income

​

$

1,450

​

$

(367)

​

$

1,083

​

​

​

​

​

​

​

15. Stockholders’ Equity

Dividends

During 2022, 2021 and 2020, the Company paid cash dividends of $0.40, $0.32 and $0.07, respectively, per share on the Company’s common stock for a total of $23.5 million, $18.8 million and $4.1 million, respectively.

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Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018

 

    

Before-

    

Tax Benefit or

    

Net-of-

 

 

Tax Amount

 

(Expense)

 

Tax Amount

Unrealized loss on available-for-sale investments

 

$

(2,845)

 

$

723

 

$

(2,122)

Unrealized loss on restricted investments

 

 

(6)

 

 

 2

 

 

(4)

Reclassification adjustment for net loss included in earnings

 

 

1,061

 

 

(269)

 

 

792

Reclassification adjustment for other-than-temporary impairment loss included in earnings

 

 

2,330

 

 

(592)

 

 

1,738

Reclassification into retained earnings for the adoption of ASU 2016-01 (1)

 

 

932

 

 

(236)

 

 

696

Reclassification into retained earnings for the adoption of ASU 2018-02 (2)

 

 

 —

 

 

(313)

 

 

(313)

Net unrealized gain

 

 

1,472

 

 

(685)

 

 

787

Other comprehensive income

 

$

1,472

 

$

(685)

 

$

787

(1)

The reclassification into retained earnings relates to the adoption of ASU 2016-01. The new guidance was effective January 1, 2018, and required equity investments to be measured at fair value with changes in fair value recognized in results of operations rather than the consolidated statements of comprehensive income.

(2)

The reclassification into retained earnings relates to the adoption ofASU 2018-02. The new guidance was effective January 1, 2018, and allowed a reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the Tax Act.

16. Stockholders’ Equity

Stock Repurchase Program

The Company’s Board has approved athe Stock Repurchase Program pursuant to which the Company is authorized to repurchase shares of its common stock. The Stock Repurchase Programprogram has no expiration date.

During the yearsyear ended December 31, 2019 and 2018,2022, the Company repurchased 1,263,159 and 5,238,566576,963 shares respectively, of its common stock outstanding at an average purchase price of $16.59 and $17.82,$34.81, per share, respectively, for an aggregate purchase price of $20.8 million and $93.4 million, respectively, pursuant to$20.0 million. During the year ended December 31, 2021, the Company did not repurchase shares of its Stock Repurchase Program.common stock outstanding. As of August 15, 2019,December 31, 2022, the Company had a total authority of $35.8$80.0 million available for purchase of shares of its common stock pursuant to its previously announced Stock Repurchase Program. On August 15, 2019, the Company’s Board authorized additional repurchase authority of up to $64.2 million of the Company’s shares of its common stock under the Stock Repurchase Program, bringing the total authorized repurchase authority to $100.0 million. As of December 31, 2019, the Company had a total authority of $86.2 million available for purchase of shares of its common stock pursuant to its Stock Repurchase Program.stock. The Company may repurchase its common stock in open market purchases from time to time, in privately negotiated transactions or otherwise, pursuant to Rule 10b‑1810b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).Act. The timing and amount of any additional shares to be repurchased will depend upon a variety of factors, including market and business conditions and is subject to the Company maintaining $100.0 million of cash and cash equivalents.factors. Repurchases may be commenced or suspended at any time or from time to time without prior notice. The Stock Repurchase Program will continue until otherwise modified or terminated by the Company’s Board at any time in its sole discretion.

In December 2019,2022, the Company retired 1,263,159576,963 shares of treasury stock at a value of $20.8 million. In September 2018, the Company retired 5,238,566 shares of treasury stock at a value of $93.4$20.0 million.

Issuance of Common Stock for Director’s FeesEmployee Compensation

On May 20, 2019,February 22, 2022, the Company’s Board approved granting to each non-employee director an equity grant with an aggregate fair market value of $50,000 or, at the director’s election, its cash equivalent. On July 1, 2019, 5,708 shares ofCompany granted 25,594 restricted stock were grantedawards to two of the Company’s directorscertain employees pursuant to the Board’s May 20, 2019 approval and the Company’s 2015 Performance and Equity Incentive Plan (the “2015 Plan”). ThisThe restricted stockshares will vest in equal annual installments on the datefirst, second and third annual anniversary of the Company’s 2020 Annual Meeting of Shareholders. Two non-employee directors electedgrant date, subject to receive cash in lieuthe recipient’s continued employment through and on the applicable vesting date. The weighted average grant date fair value of the stock, whichrestricted shares was paid in July 2019.

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Table of Contents

$46.73.

On May 23, 2018,April 8, 2022, the Company’s Board approved granting to each non-employee director an equity grant with an aggregate fair market value of $50,000 or, at the director’s election, its cash equivalent. On July 2, 2018, 2,778 shares of restricted stock wereCompany granted to one of the Company’s directors pursuant to the Board’s May 23, 2018 approval and the Company’s 2015 Plan. This restricted stock vested on May 20, 2019, the date of the Company’s 2019 Annual Meeting of Shareholders. Three non-employee directors elected to receive cash in lieu of the stock.

On May 25, 2017, the Company’s Board approved granting to each non-employee director an equity grant with an aggregate fair market value of $50,000 or, at the director’s election, its cash equivalent. On July 3, 2017, 5,334 shares of restricted stock were granted to two of the Company’s directors pursuant to the Board’s May 25, 2017 approval and the Company’s 2015 Plan. This restricted stock vested on May 23, 2018, the date of the Company’s 2018 Annual Meeting of Shareholders. Four non-employee directors elected to receive cash in lieu of the stock.

On May 17, 2016, the Board approved the issuance of 8,9194,361 restricted stock awards to three members of the Board as part of their 2016 compensation package andan employee pursuant to the 2015 Plan. TheseThe restricted stock awards vested 25%shares will vest in January 2030, subject to the recipient’s continued employment through and on the applicable vesting date. The weighted average grant date of issue and 25% on August 17, 2016, November 17, 2016, and February 17, 2017.

For eachfair value of the years ended December 31, 2019, 2018 and 2017,restricted shares was $55.73.

During 2022, the Company recorded expense of $0.1$0.4 million related to restricted stock awards to the Company’s directors.

Issuance of Common Stock for Officer Compensation

Pursuant to the Company’s 2015 Plan, the Company’s named executive officers (“NEOs”) were provided with the opportunity to elect to receive up to 50% of their discretionary cash incentive award for 2017 performance in shares of Company stockemployee compensation. During 2021 and four of the Company’s NEOs elected to do so. On March 15, 2018, 9,956 shares, net of shares withheld for taxes, of restricted stock were granted to four of the Company’s NEOs. The restricted stock vested immediately.

For the year ended December 31, 2018,2020 the Company recordeddid not have expense of $0.2 million related to restricted stock awards for employee compensation. During the years ended December 31, 2022, 2021 and 2020, there were no restricted shares related to the Company’s NEOs.employee compensation vested or forfeited.

17.16. Stock Based Compensation

The Company’s 2015 Performance and Equity Incentive Plan offers a stock incentive plan whereby awards arecan be granted to certain employees and non-employee directors of the Company in various forms including restricted shares of Company common stock and options to purchase Company common stock. Awards are discretionary and determined by the Compensation and Human Capital Committee of the Board. Stock based compensation cost is measured at the grant date based on the fair value of the award and is typically recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Forfeitures are accounted for as they occur. As of December 31, 2019, 1,463,5432022, 1,433,588 shares were available for awards under the 2015 Plan.

Total stock-based compensation recorded in corporate and other operating and corporate expenses on the consolidated statements of income is as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

2022

    

2021

    

2020

Stock compensation expense before tax benefit

​

$

364

​

$

—

​

$

45

Income tax benefit

​

 

(93)

​

 

—

​

 

(11)

​

​

$

271

​

$

—

​

$

34

​

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

    

2019

    

2018

    

2017

Stock compensation expense before tax benefit

 

$

77

 

$

71

 

$

76

Income tax benefit

 

 

(19)

 

 

(19)

 

 

(22)

 

 

$

58

 

$

52

 

$

54

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Table of Contents

During the years ended December 31, 2022, 2021 and 2020, the Company did not issue any common stock for director’s fees.

In 2022, the Company granted 29,955 shares of restricted stock awards to certain of the Company’s employees pursuant to the 2015 Plan, of which none vested during 2022. The weighted average grant date fair value of restricted stock units during 2022 was $48.04.

In 2019, 2018 and 2017, the Company granted 5,708 2,778 and 5,334 shares respectively, of restricted stock awards to certain of the Company’s directors as fees for services rendered under the 2015 Plan, of which 2,778, 5,334 and 2,2295,708 vested during the yearsyear ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, the Company had 5,708 unvested restricted stock units outstanding, which will vest in May 2020. The weighted average

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Table of Contents

grant date fair value of restricted stock units during 2019 2018 and 2017 were $17.52, $18.00 and $18.75, respectively. The total fair values of restricted stock units that vested were $0.1 million during each 2019, 2018 and 2017.

In 2018, the Company granted 9,956 shares, net of shares withheld for taxes, of restricted stock awards to certain of the Company’s NEO’s as their discretionary cash incentive award for 2017 performance under the 2015 Plan, of which all vested during the year ended December 31, 2018. The weighted average grant date fair value of the restricted stock units granted to the Company’s NEO’s during 2018 was $19.32.$17.52. The total fair value of restricted stock units that vested during 2020 was $0.1 million.

As of December 31, 2022, there were 29,955 unvested restricted stock units outstanding. As of December 31, 2022, there was $1.1 million of unrecognized compensation cost, related to non-vested restricted stock awards to the Company’s NEO’s that vested were $0.2 million during 2018.shares which will be recognized over a weighted average period of 3.2 years.

18.17. Employee Benefit Plan

The Company maintains a 401(k) retirement plan covering substantially all officers and employees of the Company, which permits participants to defer up to the maximum allowable amount determined by the IRS of their eligible compensation.

In 2021, the 401(k) retirement plan was amended to include a matching contribution. The plan provides for employer matching contributions of 100% up to the first 3% of eligible compensation. For contributions in excess of 3%, the plan provides for employer matching contributions of 50% up to the next 2%, but not more than 5%, of eligible compensation. The Company’s matching contributions expensed under the plan were $0.7 million and $0.1 million in 2022 and 2021, respectively. The Company also maintains a profit-sharing plan and allows for discretionary qualified non-elective and matching employer contributions.

As part of the Pension Plan termination in 2014, the Company directed the Pension Plan to transfer $7.9 million of the Pension Plan’s surplus assets into a suspense account in the Company’s 401(k) plan. The Company has retained the risks and rewards of ownership of these assets; therefore, the assets held in the suspense account arewere included in the Company’s consolidated financial statementsbalance sheet until they arewere allocated to 401(k) plan participants. AsThe final allocation of December 31, 2019 and 2018, the fair value of these assets was recordedoccurred in other assets on the Company’s consolidated balance sheets and were $2.4 million and $3.4 million, respectively.March 2021.

The Company expensesexpensed the fair value of the assets at the time the assets arewere allocated to participants, which is expected to be allocated up to the next two years.participants. During both 2019each 2021 and 2018, the Company recorded an expense of $1.1 million and during 20172020 the Company recorded an expense of $1.2 million, for the fair value of the assets, less expenses, that were allocated to participants. Any gain or loss on these assets is reflected in the Company’s consolidated statements of income and was less than a $0.1 million loss for the years ended December 31, 2019gain during each 2021 and 2018 and less than a $0.1 million gain for the year ended December 31, 2017.

19. RiverTown Impact Fees

As part of the Company’s April 2014 RiverTown transaction, the buyer, an affiliate of Mattamy (Jacksonville) Partnership d/b/a Mattamy Homes (“Mattamy”), was obligated to pay certain impact fees to the Company prior to April 2, 2019 and, depending on circumstances, potentially thereafter. In June 2018, the Company received $23.1 million from Mattamy to pay the estimated impact fees based on Mattamy’s current development plans and the impact fee schedule in effect at the time of the payment. For the year ended December 31, 2018, the impact fees of $23.1 million were included in real estate revenue in the Company’s consolidated statements of income. Mattamy may be required to pay to the Company additional impact fees based on its future development plans. Any consideration the Company may receive for additional impact fees will be based on a variety of factors outside the Company’s control or ability to estimate, including impact fee increases or decreases by St. Johns County, home sizes and the number of homes built in the project. The Company received impact fees for a total of $1.3 million, $23.7 million and $0.9 million during 2019, 2018 and 2017, respectively.

2020.

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20.18. Other Income, (Expense)Net

Other income (expense) consists of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

    

2018

    

2017

Investment income, net

 

 

  

 

 

  

 

 

  

Interest and dividend income

 

$

7,375

 

$

9,060

 

$

16,380

Accretion income

 

 

84

 

 

684

 

 

1,983

Net realized gain (loss) on the sale of investments

 

 

87

 

 

(973)

 

 

10,750

Other-than-temporary impairment loss

 

 

 —

 

 

(2,330)

 

 

(2,288)

Unrealized loss on investments, net

 

 

(5,342)

 

 

(3,035)

 

 

 —

Interest income from investments in SPEs

 

 

8,190

 

 

8,197

 

 

8,201

Interest accrued on notes receivable and other interest

 

 

320

 

 

547

 

 

384

Total investment income, net

 

 

10,714

 

 

12,150

 

 

35,410

Interest expense

 

 

  

 

 

  

 

 

  

Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE

 

 

(8,801)

 

 

(8,788)

 

 

(8,777)

Other interest expense

 

 

(3,501)

 

 

(3,052)

 

 

(3,368)

Total interest expense

 

 

(12,302)

 

 

(11,840)

 

 

(12,145)

Sale of vacation rental management, net

 

 

 —

 

 

 —

 

 

9,800

Other income (expense), net

 

 

  

 

 

  

 

 

  

Gain on land contribution to equity method investment

 

 

2,317

 

 

 —

 

 

 —

Accretion income from retained interest investments

 

 

1,325

 

 

1,232

 

 

1,100

Gain on insurance recovery

 

 

5,314

 

 

7,199

 

 

 —

Loss from hurricane damage

 

 

(2,704)

 

 

(8,628)

 

 

 —

Miscellaneous income, net

 

 

198

 

 

1,349

 

 

3,613

Other income, net

 

 

6,450

 

 

1,152

 

 

4,713

Total other income, net

 

$

4,862

 

$

1,462

 

$

37,778

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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 dividendaccretion income includes interest income accrued or received on the Company’s corporate debt securities, commercial paperinvestments and money market funds, and dividend income received from the Company’s investment in preferred stock. 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 includeincludes the gains or losses recognized on the sale of available-for-sale and equity securities prior to maturity. Other-than-temporary impairment loss includes impairments related to the Company’s corporate debt securities for the year ended December 31, 2018 and impairments related to the Company’s corporate debt securities and preferred stock investments for the year ended December 31, 2017.

Unrealized loss on investments, net includes unrealized gains or losses on investments – equity securities. Prior to 2018, unrealized gains or losses related to these investments were recorded in accumulated other comprehensive loss.

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 CDD debt, Senior Notes issued by Northwest Florida Timber Finance, LLC, project financing, CDD debt and finance leases. Borrowing costs, including theInterest expense also includes amortization of debt discount and premium and debt issuance

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Table of Contents

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 2019, 20182022, 2021 and 20172020 the Company capitalized $0.6$3.0 million, $0.2$1.0 million and less than $0.1$1.1 million, respectively, in interest related to projects under development.development or construction. These amounts are included within investment in real estate, net on the Company’s consolidated balance sheets.

SaleF 51

Table of Vacation Rental Management, NetContents

Gain on Contributions to Unconsolidated Joint Ventures

Sale of vacation rental management, netGain on contributions to unconsolidated joint ventures for the year ended December 31, 2022, includes a gain of $9.8$1.4 million fromon land and impact fees contributed to the PCR Rentals Sale inCompany’s unconsolidated Pier Park RI JV. The year ended December 2017.31, 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 8. Sale4. 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 Vacation Rental Managementearnings or losses of unconsolidated JVs accounted for further discussion.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 gain on land contributions, income from the Company’s retained interest investments, gain on insurance recovery,recoveries, loss from hurricane damage and other income and expense items.

Gain on land contribution to equity method investment for the year ended December 31, 2019 includes a gain of $0.8 million on land contributed to the Company’s unconsolidated Busy Bee JV and a gain of $1.5 million on land contributed to the Company’s unconsolidated Pier Park TPS JV. See Note 4. Real Estate Joint Ventures for additional information.

The Company records the accretion of investment income from its retained interest investmentinvestments over the life of the retained interest using the effective yield method with rates ranging from 3.7%4.8% to 11.8%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, 20192021, includes $3.6 million the company had a $5.3 million gain on insuranceCompany received from the Florida Division of Emergency Management’s TRBG program for recovery and incurred $2.7 million of loss from hurricane damage related to Hurricane Michael. The year ended December 31, 2018 includes a $7.2 million gain on insurance recovery and $8.6 million of loss from hurricane damage, which includes $7.3 million for loss on disposal of assets related to damage and $1.3 million of expenses related to Hurricane Michael. See Note 7. Hurricane Michael for additional information.

Miscellaneous income, net for the year ended December 31, 2018 primarily consists of $2.2 million oflost income related to the final distribution from the Company’s unconsolidated JV ALP, offset by $0.6 million fortimber crop that was destroyed as a homeowners’ association settlement related to oneresult of the Company’s residential communities. Miscellaneous income, net for the year ended December 31, 2017, includes an insurance settlement negotiated by the Company that resulted in proceeds of $3.5 million for reimbursement of certain attorney fees and related costs incurred by the Company.Hurricane Michael.

21.19. Segment Information

The Company currently conducts primarily all of its business in the following four operatingthree reportable segments: 1) residential, real estate, 2) hospitality and 3) commercial leasing and sales and 4) forestry.

. The Company’s reportable segments are strategic business units that offer different products and services. They are each managed separately and decisions about allocations of resources are determined by

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Table of Contents

management based on these strategic business units.

The Company uses income before equity in loss from unconsolidated affiliates, income taxes and non-controlling interest cash flows and other qualitative measures for purposes of making decisions about allocating resources to each segment and assessing each segment’s performance, which the Company believes represents current performance measures.

The accounting policies of the segments are the same as those described herein. Total revenue represents sales to unaffiliated customers, as reported in the Company’s consolidated statements of income. All significant intercompany transactions have been eliminated in consolidation. The captioncaptions entitled “Other” consists of mitigation credit, revenue, title feeinsurance and insurance business revenue and cost of revenue; corporate operating expenses; corporate depreciation and generalamortization and administrative expenses, net of investment income.

F  48

Table of Contents

corporate other income and expense items.

Information by business segment is as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

2022

    

2021

    

2020

Operating revenue:

 

​

  

 

​

  

 

​

  

Residential

​

$

92,886

​

$

144,854

​

$

74,303

Hospitality

​

 

97,236

​

 

74,591

​

 

47,374

Commercial

​

 

59,379

​

 

45,557

​

 

37,077

Other

​

 

2,820

​

 

1,994

​

 

1,801

Consolidated operating revenue

​

$

252,321

​

$

266,996

​

$

160,555

​

​

​

​

​

​

​

​

​

​

Cost of revenue:

​

 

  

​

 

  

​

 

  

Cost of residential revenue

​

$

44,115

​

$

56,889

​

$

29,790

Cost of hospitality revenue (a)

​

 

77,862

​

 

57,494

​

 

34,670

Cost of commercial revenue (b)

​

 

21,786

​

 

15,393

​

 

12,797

Cost of other revenue

​

 

2,135

​

 

1,538

​

 

519

Consolidated cost of revenue

​

$

145,898

​

$

131,314

​

$

77,776

​

​

​

​

​

​

​

​

​

​

Corporate and other operating expenses:

​

 

  

​

 

  

​

 

  

Residential

​

$

3,994

​

$

4,883

​

$

5,272

Hospitality

​

 

1,086

​

 

919

​

 

1,180

Commercial

​

 

4,239

​

 

3,969

​

 

3,692

Other

​

 

12,749

​

 

13,252

​

 

12,762

Consolidated corporate and other operating expenses

​

$

22,068

​

$

23,023

​

$

22,906

​

​

​

​

​

​

​

​

​

​

Depreciation, depletion and amortization:

​

 

  

​

 

  

​

 

  

Residential

​

$

156

​

$

179

​

$

180

Hospitality

​

 

9,366

​

 

6,966

​

 

4,638

Commercial

​

 

12,968

​

 

10,662

​

 

7,125

Other

​

 

398

​

 

395

​

 

845

Consolidated depreciation, depletion and amortization

​

$

22,888

​

$

18,202

​

$

12,788

​

​

​

​

​

​

​

​

​

​

Investment income, net:

​

 

  

​

 

  

​

 

  

Residential and commercial

​

$

1,079

​

$

874

​

$

298

Other (c)

​

 

8,783

​

 

6,380

​

 

4,685

Consolidated investment income, net

​

$

9,862

​

$

7,254

​

$

4,983

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

    

2019

    

2018

    

2017

Operating revenue:

 

 

  

 

 

  

 

 

  

Residential real estate (a)

 

$

41,586

 

$

43,266

 

$

22,248

Hospitality

 

 

45,720

 

 

39,576

 

 

54,319

Commercial leasing and sales

 

 

22,458

 

 

16,485

 

 

14,510

Forestry revenue

 

 

16,365

 

 

8,135

 

 

8,443

Other (b)

 

 

956

 

 

2,814

 

 

518

Consolidated operating revenue

 

$

127,085

 

$

110,276

 

$

100,038

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

  

 

 

  

 

 

  

Cost of residential real estate revenue

 

$

20,492

 

$

10,215

 

$

12,971

Cost of hospitality revenue

 

 

33,924

 

 

33,385

 

 

47,300

Cost of commercial leasing and sales revenue

 

 

8,549

 

 

6,397

 

 

5,979

Cost of forestry revenue

 

 

1,044

 

 

1,097

 

 

903

Cost of other revenue

 

 

77

 

 

223

 

 

41

Consolidated cost of revenue

 

$

64,086

 

$

51,317

 

$

67,194

 

 

 

 

 

 

 

 

 

 

Other operating and corporate expenses:

 

 

  

 

 

  

 

 

  

Residential real estate

 

$

4,873

 

$

4,717

 

$

4,329

Hospitality

 

 

838

 

 

533

 

 

462

Commercial leasing and sales

 

 

3,052

 

 

3,183

 

 

3,444

Forestry

 

 

427

 

 

384

 

 

396

Other

 

 

12,199

 

 

11,740

 

 

11,751

Consolidated other operating and corporate expenses

 

$

21,389

 

$

20,557

 

$

20,382

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization:

 

 

  

 

 

  

 

 

  

Residential real estate

 

$

283

 

$

288

 

$

363

Hospitality

 

 

4,579

 

 

3,640

 

 

4,049

Commercial leasing and sales

 

 

4,939

 

 

4,411

 

 

3,729

Forestry

 

 

314

 

 

514

 

 

575

Other

 

 

172

 

 

145

 

 

169

Consolidated depreciation, depletion and amortization

 

$

10,287

 

$

8,998

 

$

8,885

 

 

 

 

 

 

 

 

 

 

Investment income, net:

 

 

  

 

 

  

 

 

  

Residential real estate and other

 

$

184

 

$

320

 

$

89

Corporate (c)

 

 

10,530

 

 

11,830

 

 

35,321

Consolidated investment income, net

 

$

10,714

 

$

12,150

 

$

35,410

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

  

 

 

  

 

 

  

Residential real estate

 

$

717

 

$

867

 

$

1,164

Commercial leasing and sales

 

 

2,739

 

 

2,180

 

 

2,200

Corporate and other (d)

 

 

8,846

 

 

8,793

 

 

8,781

Consolidated interest expense

 

$

12,302

 

$

11,840

 

$

12,145

 

 

 

 

 

 

 

 

 

 

Sale of vacation rental management, net:

 

 

  

 

 

  

 

 

  

Hospitality (e)

 

$

 —

 

$

 —

 

$

9,800

Consolidated sale of vacation rental management, net

 

$

 —

 

$

 —

 

$

9,800

 

 

 

 

 

 

 

 

 

 

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Interest expense:

​

 

  

​

 

  

​

 

  

Residential

​

$

484

​

$

581

​

$

683

Hospitality

​

​

1,709

​

​

488

​

​

222

Commercial

​

 

7,343

​

 

5,949

​

 

3,836

Other (d)

​

 

8,847

​

 

8,836

​

 

8,823

Consolidated interest expense

​

$

18,383

​

$

15,854

​

$

13,564

​

​

​

​

​

​

​

​

​

​

Gain on contributions to unconsolidated joint ventures:

​

 

  

​

 

  

​

 

  

Residential (e)

​

$

939

​

$

503

​

$

15,706

Commercial (f) (g) (h)

​

​

1,799

​

​

3,055

​

​

3,949

Other

​

​

—

​

​

—

​

​

328

Consolidated gain on contributions to unconsolidated joint ventures

​

$

2,738

​

$

3,558

​

$

19,983

​

​

​

​

​

​

​

​

​

​

Equity in income (loss) from unconsolidated joint ventures:

​

​

​

​

​

​

​

​

​

Residential (i)

​

$

3,859

​

$

(1,861)

​

$

(524)

Commercial (j)

​

​

22,127

​

​

996

​

​

(142)

Consolidated equity in income (loss) from unconsolidated joint ventures

​

$

25,986

​

$

(865)

​

$

(666)

​

​

​

​

​

​

​

​

​

​

Other (expense) income, net:

​

​

​

​

​

​

​

​

​

Residential

​

$

(508)

​

$

113

​

$

(22)

Hospitality

​

​

1,807

​

​

635

​

​

575

Commercial (k)

​

​

(687)

​

​

3,722

​

​

51

Other (l)

​

​

12,335

​

​

5,711

​

​

725

Other income, net

​

$

12,947

​

$

10,181

​

$

1,329

​

​

​

​

​

​

​

​

​

​

Income (loss) before income taxes:

​

 

  

​

 

  

​

 

  

Residential (e)

​

$

49,474

​

$

81,905

​

$

53,780

Hospitality (a)

​

 

9,021

​

 

9,359

​

 

7,238

Commercial (b) (f) (g) (h) (j) (k)

​

 

36,316

​

 

17,403

​

 

13,539

Other (c) (d) (l)

​

 

(194)

​

 

(9,936)

​

​

(15,407)

Consolidated income before income taxes

​

$

94,617

​

$

98,731

​

$

59,150

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Capital expenditures:

​

 

  

​

 

  

​

 

  

Residential

​

$

92,203

​

$

52,838

​

$

33,634

Hospitality (m)

​

 

171,056

​

 

101,686

​

 

42,770

Commercial

​

 

92,992

​

 

45,843

​

 

85,070

Other

​

 

441

​

 

452

​

 

769

Total capital expenditures

​

$

356,692

​

$

200,819

​

$

162,243

​

F 54

Income (loss) before equity in loss from unconsolidated affiliates and income taxes:

 

 

  

 

 

  

 

 

  

Residential real estate (a)

 

$

15,144

 

$

26,919

 

$

3,683

Hospitality

 

 

6,574

 

 

1,817

 

 

12,664

Commercial leasing and sales

 

 

6,632

 

 

(121)

 

 

(836)

Forestry

 

 

14,607

 

 

6,222

 

 

6,586

Other

 

 

(6,772)

 

 

(3,971)

 

 

19,258

Consolidated income before equity in loss from unconsolidated affiliates and income taxes

 

$

36,185

 

$

30,866

 

$

41,355

 

 

 

 

 

 

 

 

 

 

Equity in loss from unconsolidated affiliates

 

 

 

 

 

 

 

 

 

Residential real estate

 

$

(71)

 

$

 —

 

$

 —

Commercial leasing and sales

 

 

(6)

 

 

 —

 

 

 —

Consolidated equity in loss from unconsolidated affiliates

 

$

(77)

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

  

 

 

  

 

 

  

Residential real estate

 

$

28,639

 

$

15,865

 

$

8,407

Hospitality

 

 

15,923

 

 

7,400

 

 

4,918

Commercial leasing and sales

 

 

67,254

 

 

20,483

 

 

25,248

Forestry

 

 

1,965

 

 

1,069

 

 

1,100

Other

 

 

505

 

 

379

 

 

207

Total capital expenditures

 

$

114,286

 

$

45,196

 

$

39,880

 

 

 

 

 

 

 

 

    

December 31, 

    

December 31, 

 

 

2019

 

2018

Total assets:

 

 

  

 

 

  

Residential real estate

 

$

139,349

 

$

127,999

Hospitality

 

 

89,570

 

 

68,389

Commercial leasing and sales

 

 

232,715

 

 

182,658

Forestry

 

 

21,221

 

 

20,189

Other

 

 

426,378

 

 

471,727

Total assets

 

$

909,233

 

$

870,962

Table of Contents

​

​

​

​

​

​

​

​

    

December 31, 

    

December 31, 

​

​

2022

​

2021

Investment in unconsolidated joint ventures:

​

​

​

​

​

​

Residential

​

$

33,236

​

$

30,039

Commercial

​

​

16,789

​

​

21,988

Total investment in unconsolidated joint ventures

​

$

50,025

​

$

52,027

​

​

​

​

​

​

​

Total assets:

 

​

  

 

​

  

Residential

​

$

231,054

​

$

192,290

Hospitality

​

 

420,329

​

 

256,751

Commercial

​

 

470,629

​

 

378,118

Other

​

 

308,827

​

 

380,992

Total assets

​

$

1,430,839

​

$

1,208,151

(a)

(a)

Includes revenuebusiness interruption insurance proceeds for the marinas related to Hurricane Michael of $23.1$0.7 million and $1.3 million in 2018 2021 and 2020, respectively. See Note 18. Other Income, Net for a one-time receipt of RiverTown impact feesadditional information.

(b)Includes business interruption insurance proceeds for the Pier Park Crossings JV related to the 2014 RiverTown transaction. See Note 19. RiverTown Impact Fees.

(b)

Includes revenueHurricane Michael of $2.2$0.7 million in 2018 related to a specific sale of mitigation bank credits.

2020.

(c)

(c)

Includes interest income from investments in SPEs of $8.0 million, $8.1 million and $8.2 million in each 2019, 20182022, 2021 and 2017.

2020, respectively.

(d)

(d)

Includes interest expense from Senior Notes issued by SPE of $8.8 million in each 2019, 20182022, 2021 and 2017.

2020.

(e)

(e)

Includes a net gain of $9.8$15.7 million in 2020 on land and additional infrastructure improvements contributed to the unconsolidated Latitude Watersound Margaritaville JV. See Note 4. Joint Ventures and Note 18. Other Income, Net for additional information.

(f)Includes gains in 2022 of $1.4 million on land and impact fees contributed to the unconsolidated Pier Park RI JV and $0.4 million on land contributed to the unconsolidated Electric Cart Watersound JV. See Note 4. Joint Ventures and Note 18. Other Income, Net for additional information.
(g)Includes a gain of $3.1 million in 2021 on land contributed to the unconsolidated Watersound Fountains Independent Living JV. See Note 4. Joint Ventures and Note 18. Other Income, Net for additional information.
(h)Includes a gain of $3.9 million in 2020 on land contributed to the unconsolidated Sea Sound JV. See Note 4. Joint Ventures and Note 18. Other Income, Net for additional information.
(i)Includes the Latitude Margaritaville Watersound JV, which began completing home sale transactions in the fourth quarter of 2021. See Note 4. Joint Ventures for additional information.
(j)Includes a gain of $21.7 million in 2022 related to the sale of the Sea Sound JV assets. See Note 4. Joint Ventures and Note 18. Other Income, Net for additional information.
(k)Includes $3.6 million in 2021 received from the PCR Rentals sale in 2017.Florida Division of Emergency Management’s TRBG program. See Note 8. Sale18. Other Income, Net for additional information.
(l)Includes gain on insurance recovery of Vacation Rental Management.

$9.7 million, $4.9 million and $0.7 million in 2022, 2021 and 2020, respectively, related to Hurricane Michael. In addition, includes loss from hurricane damage of $0.1 million in both 2022 and 2021 and $1.1 million in 2020 related to Hurricane Michael. See Note 18. Other Income, Net for additional information.
(m)Includes acquisition of The Pearl Hotel. See Note 3. Investment in Real Estate, Net for additional information.

​

​

22.20. Commitments and Contingencies

The Company establishes an accrued liability when it is both probable that a material loss has been incurred and the amount of the loss can be reasonably estimated. The Company will evaluate the range of reasonably estimated losses and record an accrued liability based on what it believes to be the minimum amount in the range, unless it believes an amount within the range is a better estimate than any other amount. In such cases, there may be an exposure to loss in excess of the amounts accrued. The Company evaluates quarterly whether further developments could affect the amount of the accrued liability previously established or would make a loss contingency both probable and reasonably estimable.

The Company also provides disclosure when it believes it is reasonably possible that a material loss will be incurred or when it believes it is reasonably possible that the amount of a loss will exceed the recorded liability. The Company reviews loss contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess

F  50

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whether a reasonable estimate of the loss or range of loss can be made. This estimated range of possible losses is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as

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known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate.

The Company is subject to a variety of litigation, claims, other disputes and governmental proceedings that arise from time to time in the ordinary course of its business, including litigation related to its prior homebuilding and development activities. The Company cannot make assurances that it will be successful in defending these matters. Based on current knowledge, the Company does not believe that loss contingencies arising from pending litigation, claims, other disputes and governmental proceedings, including those described herein, will have a material adverse effect on the consolidated financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in these matters, an adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period.

The Company is subject to costs arising out of environmental laws and regulations, which include obligations to remove or limit the effects on the environment of the disposal or release of certain wastes or substances at various sites, including sites thatwhich have been previously sold. It is the Company’s policy to accrue and charge against earnings environmental cleanup costs when it is probable that a liability has been incurred orand a range of loss can be reasonably estimated. As assessments and cleanups proceed, these accruals are reviewed and adjusted, if necessary, as additional information becomes available. The Company is in the process of assessing certain properties in regard to the effects, if any, on the environment from the disposal or release of wastes or substances. Management is unable to quantify future rehabilitation costs above present accruals at this time or provide a reasonably estimated range of loss.

Other litigation, claims disputes and governmental proceedings,disputes, including environmental matters, are pending against the Company. Accrued aggregate liabilities related to the matters described above and other litigation matters were $1.5 million and $1.2$0.4 million as of both December 31, 20192022 and 2018,2021, respectively. Significant judgment is required in both the determination of probability and the determination as to whether the amount of an exposure is reasonably estimable. Due to uncertainties related to these matters, accruals are based only on the information available at that time. As additional information becomes available, management reassesses potential liabilities related to pending claims and litigation and may revise its previous estimates, which could materially affect the Company’s results of operations for any particular reporting period.

The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage, including its timber assets.

In June 2020, the Company, as lender, entered into a $10.0 million secured revolving promissory note with the unconsolidated Latitude Margaritaville Watersound JV, as borrower. As of December 31, 20192022, there was no balance outstanding on the Latitude JV Note. As of December 31, 2021, $7.1 million was outstanding on the Latitude JV Note. The Latitude JV Note was provided by the Company to finance the development of the pod-level, non-spine infrastructure. Future advances, if any, will be repaid by the JV as each home is sold by the JV, with the aggregate unpaid principal and 2018,all accrued and unpaid interest due at maturity in June 2025. The note is secured by a mortgage and security interest in and on the real property and improvements located on the real property of the JV. See Note 4. Joint Ventures and Note 8. Other Assets for additional information.

As of December 31, 2022 and 2021, the Company was required to provide surety bonds that guarantee completion and maintenance of certain infrastructure in certain development projects and mitigation banks, as well as other financial guarantees of $10.7$38.1 million and $9.4$36.9 million, respectively, as well as standby letters of credit in the amount of $17.3 million and $12.9 million, respectively, which may potentially result in liability to the Company if certain obligations of the Company are not met.

As of December 31, 2019,2022, the Company had a total of $98.8$118.1 million primarily in construction and development related contractual obligations, of which a significant portion will be funded through committed or new financing arrangements.

In January 2019, the Company’s unconsolidated Pier Park TPS JV, entered into a $14.4 million loan maturing(the “Pier Park TPS JV Loan”). The loan bears interest at LIBOR plus 2.5% and provides for monthly principal and interest payments with a final balloon payment at maturity in January 2026. The Pier Park TPS JV Loanloan is secured by the real property, assignment of rents and the security interest in the rents and personal property.property and certain

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other Security Interests. In connection with the Pier Park TPS JV Loan, as guarantorloan, the Company, a wholly ownedwholly-owned subsidiary of the Company and the Company’s JV partner entered into a joint and several payment and performance guarantee in favor of the lender. The Company’s liability as guarantor under the Pier Park TPS JV Loan has been reduced to 25% of the outstanding principal balance, which requires maintaining a certain debt service coverage. The guarantee contains customary provisions providing for full recourse upon the occurrence of certain events. The Pier Park TPS JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR. The interest rate swap was effective January 14, 2021 and matures on January 14, 2026 and fixed the variable rate on the related debt, initially at $14.4 million, to a rate of 5.2%. As of December 31, 2022 and 2021, $13.8 million and $14.1 million, respectively, was outstanding on the Pier Park TPS JV Loan. See Note 6. Financial Instruments and Fair Value Measurements for additional information.

In November 2020, the Company’s unconsolidated Latitude Margaritaville Watersound JV, entered into a $25.0 million loan (the “Latitude Margaritaville Watersound JV Loan”). The loan bears interest at LIBOR plus 2.5%, with a floor of 3.3%. The loan provides for monthly interest payments with a final balloon payment at maturity in November 2023 and includes annual maturity extension rights for a total of three additional years, subject to bank approval. In December 2022, the Latitude Margaritaville Watersound JV entered into a loan amendment to increase the principal to $45.0 million and extend the maturity date to December 2025, with an option to extend the maturity date by one year, subject to bank approval. The amendment also adjusted the interest rate to SOFR plus 2.5%, with a floor of 3.0%. The loan is secured by the real and personal property and certain other Security Interests. In connection with the loan, the Company and the Company’s JV partner entered into an unconditional guaranty of completion of certain homes and related improvements in favor of the lender. As of December 31, 2022, $30.0 million was outstanding on the Latitude Margaritaville Watersound JV Loan. As of December 31, 2021, there was no principal balance outstanding on the Latitude Margaritaville Watersound JV Loan.

In April 2021, the Company’s unconsolidated Watersound Fountains Independent Living JV, entered into a $41.9 million loan (the “Watersound Fountains JV Loan”). The loan bears interest at LIBOR plus 2.0%, with a floor of 2.5%. The loan provides for interest only payments for the first forty-eight months and principal and interest payments thereafter with a final balloon payment at maturity in April 2026. The loan includes an option for an extension of the maturity date by twelve months, subject to certain conditions, which would provide for continued monthly principal and interest payments with a final balloon payment at the extended maturity date. The loan is secured by the real property and certain other Security Interests. In connection with the loan, the Company executed a guarantee in favor of the lender to guarantee the completion of the project and payment and performance of the borrower. As guarantorborrower under the Watersound Fountains JV Loan. The Company’s liability as guarantor under the Pier Park TPS JV Loanloan will be automatically reduced to 50.0%, or50% of the outstanding principal amount upon issuance of the certificate of occupancy and reduced to 25% and a further 25.0%0% of the outstanding principal balance upon reaching and maintaining certain debt service coverage. In addition,The guarantee contains customary provisions providing for full recourse upon the occurrence of certain events. The Company is the sole guarantor and receives a quarterly fee related to the guarantee can become full recourse in the case of the failure of guarantor to abide by or perform any of the covenants or warranties to be performedfrom its JV partners based on the part of such guarantor; any sale, conveyance or transfer of the property; upon the filing or commencement of voluntary bankruptcy or insolvency proceedings; the entry of monetary judgement or assessment or the filing of any tax lien against either the borrower or guarantor; and the dissolution of the borrower or guarantor.JV partners’ ownership percentage. As of December 31, 2019, $6.82022 and 2021, $21.3 million and $0.1 million, respectively, was outstanding on the Pier Park TPSWatersound Fountains JV Loan.

F  51

Table of Contents

In November 2019,September 2022, the Company’s unconsolidated Busy BeeElectric Cart Watersound JV, entered into a $5.4 million construction loan maturing(the “Electric Cart Watersound JV Loan”). The loan bears interest at SOFR plus 1.8%, with a floor of 2.1%. The loan provides for interest only payments for the first twenty-four months and principal and interest payments thereafter with a final balloon payment at maturity in November 2035 and a $1.2 million equipmentSeptember 2032. The loan maturing in November 2027. The loans areis secured by the real property and personal property, assignment of rents and leases and a security interest in the construction contract and management agreement.certain other Security Interests. In connection with the Busy Bee JV Construction Loan and the Busy Bee JV Equipment Loan, as guarantorloan, the Company, a wholly ownedwholly-owned subsidiary of the Company and the Company’sElectric Cart Watersound JV partner entered into a joint and several payment and performance guarantee in favor of the lender, to guaranteelender. After the payment and performanceinitial forty-eight months of the borrower through substantial completion. As guarantor,loan, the Company’s liability as guarantor under the loans upon substantial completionloan will be reduced to 50.0% for a twelve month period. Subsequent to that time, the Company’s guarantee will be released upon request. Upon release50% of the Company’s guarantee, the JV partner will beoutstanding principal balance upon reaching a certain debt service coverage and other conditions. The Company is the sole guarantor and will receivereceives a quarterly fee related to the guarantee from the Companyits JV partner based on the Company’sJV partner’s ownership percentage. As of December 31, 2019, $1.42022, $0.8 million was outstanding on the Busy BeeElectric Cart Watersound JV Construction Loan and less than $0.1 million was outstanding on the Busy Bee JV Equipment Loan.

The Company has assessed the need to record a liability for the guarantees related to the Company’s unconsolidated JVs and did not record an obligation as of both December 31, 2019.2022 and 2021. As of both December 31, 2022 and 2021,

F 57

Table of Contents

allowance for credit losses related to the contingent aspect of these guarantees, based on historical experience and economic trends, was $0.1 million and is included within other liabilities on the consolidated balance sheets.

As part of certain sales of timberlands in 2007, 2008 and 2014, the Company generated significant tax gains. The installment notesnote’s structure allowed the Company to defer the resulting federal tax liability of $33.7$20.4 million until 20222023 - 20232024 and $37.8 million until 2029, respectively, the maturity dates for the installment notes. The Company has a deferred tax liability related to the gains in connection with these sales.

23. Quarterly Financial Data (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

    

December 31, 

    

September 30, 

    

June 30, 

    

March 31, 

2019

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue

 

$

42,660

 

$

32,856

 

$

35,546

 

$

16,023

Operating income (loss)

 

$

15,196

 

$

7,420

 

$

10,868

 

$

(2,161)

Net income attributable to the Company

 

$

8,688

 

$

5,717

 

$

10,373

 

$

1,997

Basic and diluted income per share attributable to the Company (1)

 

$

0.15

 

$

0.10

 

$

0.17

 

$

0.03

2018

 

 

  

 

 

  

 

 

  

 

 

  

Operating revenue (2)

 

$

16,301

 

$

23,676

 

$

50,434

 

$

19,865

Operating (loss) income (2)

 

$

(1,343)

 

$

1,944

 

$

29,344

 

$

(541)

Net (loss) income attributable to the Company

 

$

(66)

 

$

5,483

 

$

26,195

 

$

757

Basic and diluted income per share attributable to the Company (1)

 

$

 —

 

$

0.09

 

$

0.41

 

$

0.01

(1)

Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not be consistent with the per share amounts for the year.

(2)

The quarter ended June 30, 2018 includes revenue of $23.1 million in 2018 for a one-time receipt of RiverTown impact fees related to the 2014 RiverTown transaction. See Note 19. RiverTown Impact Fees.

21. Subsequent Events

On February 22, 2023, the Board declared a cash dividend of $0.10 per share on the Company’s common stock, payable on March 28, 2023, to shareholders of record as of the close of business on March 6, 2023.

​

​

​

​

​

F 5258

Table of Contents

THE ST. JOE COMPANY

SCHEDULE III (CONSOLIDATED) - REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 20192022

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Initial Cost to Company (2)

 

 

 

 

Gross Amount at December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs Capitalized 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent to 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Date of 

 

Depreciation

 

 

 

 

 

Land &

 

Buildings &

 

Acquisition or

 

Land & Land

 

Buildings and

 

 

 

 

Depreciation and

 

Construction or

 

Life

Description (1)

    

Encumbrances

    

Improvements

    

Improvements

    

Construction (3)

    

Improvements

    

Improvements

    

Total

    

Amortization

    

Acquisition

    

 (In Years)

Residential developments

 

$

2,362

 

$

45,445

 

$

13,595

 

$

68,329

 

$

121,268

 

$

6,101

 

$

127,369

 

$

4,542

 

through 2019

 

5-25

Hospitality

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

 

  

 

  

 

 

WaterColor Inn

 

 

 —

 

 

2,362

 

 

15,149

 

 

9,303

 

 

2,832

 

 

23,982

 

 

26,814

 

 

10,409

 

2002, 2013, 2018-2019

 

10 - 40

Pier Park Hospitality

 

 

2,637

 

 

 —

 

 

 —

 

 

7,139

 

 

7,139

 

 

 —

 

 

7,139

 

 

 —

 

2019

 

N/A

Clubs and golf courses

 

 

 —

 

 

34,608

 

 

20,132

 

 

3,799

 

 

39,638

 

 

18,901

 

 

58,539

 

 

22,031

 

2001 - 2007, 2018-2019

 

10 - 25

Marinas

 

 

 —

 

 

5,350

 

 

2,652

 

 

443

 

 

5,784

 

 

2,661

 

 

8,445

 

 

1,651

 

2006 - 2007, 2019

 

10 - 25

Other

 

 

1,574

 

 

 —

 

 

5,470

 

 

660

 

 

572

 

 

5,558

 

 

6,130

 

 

2,131

 

2008 - 2009, 2019

 

10 - 30

Commercial leasing and sales

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

 

  

 

  

 

 

Leasing properties:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

 

  

 

  

 

 

Pier Park North

 

 

45,134

 

 

13,711

 

 

35,243

 

 

3,115

 

 

13,711

 

 

38,358

 

 

52,069

 

 

9,364

 

2014 - 2017

 

15 - 39

Town centers

 

 

 —

 

 

713

 

 

21,887

 

 

(2,136)

 

 

789

 

 

19,675

 

 

20,464

 

 

15,974

 

2001 - 2008

 

10 - 25

VentureCrossings

 

 

 —

 

 

5,792

 

 

24,490

 

 

3,486

 

 

9,828

 

 

23,940

 

 

33,768

 

 

4,330

 

2012, 2017, 2019

 

10 - 39

Watersound Origins Crossings

 

 

2,414

 

 

21

 

 

 —

 

 

7,584

 

 

7,605

 

 

 —

 

 

7,605

 

 

 —

 

2019

 

N/A

Pier Park Crossings

 

 

33,523

 

 

6,886

 

 

22,501

 

 

4,823

 

 

11,708

 

 

22,502

 

 

34,210

 

 

317

 

2018-2019

 

20-39

Pier Park Crossings Phase II

 

 

 —

 

 

361

 

 

 —

 

 

1,820

 

 

2,181

 

 

 —

 

 

2,181

 

 

 —

 

2019

 

N/A

Watercrest

 

 

 —

 

 

894

 

 

 —

 

 

8,724

 

 

9,618

 

 

 —

 

 

9,618

 

 

 —

 

2019

 

N/A

Other

 

 

2,907

 

 

3,540

 

 

11,057

 

 

14,343

 

 

17,712

 

 

11,228

 

 

28,940

 

 

1,355

 

through 2019

 

10 - 39

Commercial developments

 

 

1,978

 

 

34,816

 

 

 —

 

 

21,175

 

 

55,991

 

 

 —

 

 

55,991

 

 

73

 

through 2019

 

5

Timberlands

 

 

 —

 

 

6,627

 

 

1,806

 

 

12,755

 

 

19,382

 

 

1,806

 

 

21,188

 

 

2,045

 

n/a

 

5 - 30

Unimproved land

 

 

 —

 

 

85

 

 

 —

 

 

4,477

 

 

4,562

 

 

 —

 

 

4,562

 

 

34

 

n/a

 

15 - 20

Total

 

$

92,529

 

$

161,211

 

$

173,982

 

$

169,839

 

$

330,320

 

$

174,712

 

$

505,032

 

$

74,256

 

  

 

  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Initial Cost to Company (b)

​

​

​

​

Gross Amount as of December 31, 2022

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Costs Capitalized 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Subsequent to 

​

​

​

​

​

​

​

​

​

​

Accumulated

​

Date of 

​

​

​

​

​

Land &

​

Buildings &

​

Acquisition or

​

Land & Land

​

Buildings and

​

​

​

​

Depreciation and

​

Construction or

Description (a)

    

Encumbrances

    

Improvements

    

Improvements

    

Construction (c)

    

Improvements

    

Improvements

    

Total*

    

Amortization (d)

    

Acquisition

Residential developments

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Bay County, FL

​

$

19

​

$

10,398

​

$

—

​

$

68,333

​

$

78,731

​

$

—

​

$

78,731

​

$

—

​

through 2022

Gulf County, FL

​

​

—

​

​

4,000

​

​

—

​

​

22,710

​

​

26,710

​

​

—

​

​

26,710

​

​

—

​

through 2022

Walton County, FL

​

​

—

​

​

—

​

​

—

​

​

56,268

​

​

56,268

​

​

—

​

​

56,268

​

​

—

​

through 2022

Franklin and Leon Counties, FL

​

​

634

​

​

8,789

​

​

—

​

​

1,007

​

​

9,796

​

​

—

​

​

9,796

​

​

—

​

through 2022

Residential operating property

​

​

—

​

​

5,953

​

​

9,447

​

​

(7,547)

​

​

5,913

​

​

1,940

​

​

7,853

​

​

2,446

​

2004 - 2007, 2011 - 2012, 2018

Hospitality

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

​

​

 

  

 

  

WaterColor Hospitality

​

 

—

​

 

1,137

​

 

19,520

​

 

11,466

​

 

2,915

​

 

29,208

​

 

32,123

​

 

12,340

 

2002, 2013, 2022

The Pearl Hotel

​

​

37,000

​

​

10,518

​

​

38,742

​

​

—

​

​

10,518

​

​

38,742

​

​

49,260

​

​

89

​

2022

Pier Park Resort Hotel JV

​

​

45,209

​

​

1,438

​

​

72,047

​

​

—

​

​

1,438

​

​

72,047

​

​

73,485

​

​

—

​

2022

The Lodge 30A JV

​

​

13,304

​

​

2,143

​

​

16,878

​

​

—

​

​

2,143

​

​

16,878

​

​

19,021

​

​

—

​

2022

Hotel Indigo/Harrison's Kitchen & Bar (e)

​

​

10,427

​

​

268

​

​

28,440

​

​

—

​

​

268

​

​

28,440

​

​

28,708

​

​

32

​

2022

Hilton Garden Inn Panama City Airport

​

​

14,642

​

​

1,693

​

​

17,100

​

​

—

​

​

1,693

​

​

17,100

​

​

18,793

​

​

806

​

2021

Homewood Suites by Hilton Panama City Beach

​

​

16,376

​

​

1,952

​

​

20,194

​

​

—

​

​

1,952

​

​

20,194

​

​

22,146

​

​

524

​

2022

Home2 Suites by Hilton Santa Rosa Beach

​

​

5,199

​

​

817

​

​

15,637

​

​

—

​

​

817

​

​

15,637

​

​

16,454

​

​

—

​

2022

Watersound Club

​

 

13,131

​

 

34,608

​

 

75,563

​

 

(330)

​

 

36,287

​

 

73,554

​

 

109,841

​

 

22,948

 

2001 - 2007, 2018 - 2022

Marinas

​

 

—

​

 

16,698

​

 

18,084

​

 

(212)

​

 

16,940

​

 

17,630

​

 

34,570

​

 

996

 

2022

Other

​

 

3,501

​

 

3,994

​

 

12,509

​

 

847

​

 

4,752

​

 

12,598

​

 

17,350

​

 

3,539

 

2008, 2010, 2016, 2019 - 2020

Commercial

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

​

​

 

  

 

  

Leasing properties:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

​

​

 

  

 

  

Pier Park North JV

​

 

42,555

​

 

13,175

​

 

35,243

​

 

4,064

​

 

13,601

​

 

38,881

​

 

52,482

​

 

14,545

 

2014 - 2017

VentureCrossings

​

 

—

​

 

7,199

​

 

29,823

​

 

(1,852)

​

 

5,717

​

 

29,453

​

 

35,170

​

 

7,746

 

2012, 2017, 2019

FSU/TMH Medical Campus

​

​

—

​

​

3,183

​

​

3,697

​

​

—

​

​

3,183

​

​

3,697

​

​

6,880

​

​

—

​

2022

Watersound Origins Crossings JV

​

​

44,015

​

​

6,853

​

​

33,912

​

​

—

​

​

6,853

​

​

33,912

​

​

40,765

​

​

1,932

​

2020 - 2021

Pier Park Crossings JV

​

​

35,180

​

​

8,456

​

​

28,662

​

​

—

​

​

8,456

​

​

28,662

​

​

37,118

​

​

3,685

​

2019 - 2020

Pier Park Crossings Phase II JV

​

​

22,623

​

​

3,567

​

​

15,586

​

​

—

​

​

3,567

​

​

15,586

​

​

19,153

​

​

1,166

​

2020

Mexico Beach Crossings

​

​

23,374

​

​

670

​

​

30,608

​

​

—

​

​

669

​

​

30,609

​

​

31,278

​

​

—

​

2022

North Bay Landing

​

​

18,222

​

​

1,924

​

​

30,102

​

​

—

​

​

1,924

​

​

30,102

​

​

32,026

​

​

156

​

2022

Origins Crossings Townhomes

​

​

—

​

​

2,425

​

​

15,953

​

​

1

​

​

2,426

​

​

15,953

​

​

18,379

​

​

298

​

2022

Watercrest JV

​

​

21,038

​

​

3,073

​

​

18,475

​

​

—

​

​

3,073

​

​

18,475

​

​

21,548

​

​

1,168

​

2020

Self-Storage

​

​

4,666

​

​

1,003

​

​

5,880

​

​

52

​

​

1,055

​

​

5,880

​

​

6,935

​

​

251

​

2021

Beckrich Office Park

​

​

5,020

​

​

2,200

​

​

13,298

​

​

360

​

​

2,223

​

​

13,635

​

​

15,858

​

​

1,563

​

2017, 2020

F 59

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​

​

​

​

​

Initial Cost to Company (b)

​

​

​

​

Gross Amount as of December 31, 2022

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Costs Capitalized 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Subsequent to 

​

​

​

​

​

​

​

​

​

​

Accumulated

​

Date of 

​

​

​

​

​

Land &

​

Buildings &

​

Acquisition or

​

Land & Land

​

Buildings and

​

​

​

​

Depreciation and

​

Construction or

Description (a)

    

Encumbrances

    

Improvements

    

Improvements

    

Construction (c)

    

Improvements

    

Improvements

    

Total*

    

Amortization (d)

    

Acquisition

Watersound Town Center

​

​

11,379

​

​

10,185

​

​

39,367

​

​

—

​

​

10,185

​

​

39,367

​

​

49,552

​

​

886

​

2020, 2021, 2022

Watersound West Bay, WindMark Beach, WaterColor and WaterSound Gatehouse Town centers

​

 

—

​

 

64

​

 

16,391

​

 

2,571

​

 

71

​

 

18,955

​

 

19,026

​

 

11,510

 

2001 - 2007, 2016, 2022

Other

​

 

2,491

​

 

4,496

​

 

16,740

​

 

517

​

 

4,930

​

 

16,823

​

 

21,753

​

 

5,089

 

through 2022

Commercial developments

​

 

1,406

​

 

32,361

​

 

—

​

 

23,309

​

 

55,670

​

 

—

​

 

55,670

​

 

35

 

through 2022

Timberlands and other unimproved land

​

 

—

​

 

6,686

​

 

1,788

​

 

15,308

​

 

21,994

​

 

1,788

​

 

23,782

​

 

2,137

 

N/A

Mitigation banks and other

​

​

—

​

​

—

​

​

—

​

​

3,745

​

​

3,663

​

​

82

​

​

3,745

​

​

81

​

through 2022

Total

​

$

391,411

​

$

211,926

​

$

679,686

​

$

200,617

​

$

406,401

​

$

685,828

​

$

1,092,229

​

$

95,968

 

  

*

(1)

Excludes unconsolidated JVs.
(a)

Substantially allAll real estate properties are located in Northwest Florida.

(b)

(2)

Includes initial costs to the Company to place the assets in service.

(c)

(3)

Includes cumulative impairments.

F  53

(d)Depreciation is computed based on the following estimated useful lives. See Note 2. Significant Accounting Policies for additional information.
(i)Land improvements 15 – 20 years
(ii)Buildings 20 – 40 years
(iii)Building improvements 5 – 25 years
(iv)Leasehold improvements 2 – 25 years (shorter of the minimum lease term or the estimated economic life)
(e)Properties are located on leased land.

Table of Contents

Notes:

(A)

(A)

The aggregate cost of real estate owned atas of December 31, 20192022 for federal income tax purposes is approximately $503.8$992.6 million.

(B)

(B)

Reconciliation of real estate owned (in thousands of dollars):

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 

​

December 31, 

​

December 31, 

​

    

2022

    

2021

    

2020

Balance at beginning of the year

​

$

777,279

​

$

627,613

​

$

505,032

Amounts capitalized

​

 

379,183

​

 

222,303

​

 

167,258

Impairments

​

 

—

​

 

—

​

 

—

Cost of real estate sold

​

 

(48,646)

​

 

(55,932)

​

 

(33,324)

Amounts retired or adjusted (a)

​

 

(15,587)

​

 

(16,705)

​

 

(11,353)

Balance at the end of the year

​

$

1,092,229

​

$

777,279

​

$

627,613

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 

 

December 31, 

 

December 31, 

 

    

2019

    

2018

    

2017

Balance at beginning of the year

 

$

418,494

 

$

404,376

 

$

381,969

Amounts capitalized

 

 

109,699

 

 

43,306

 

 

39,261

Impairments

 

 

 —

 

 

(99)

 

 

(714)

Cost of real estate sold

 

 

(23,608)

 

 

(18,928)

 

 

(14,274)

Amounts retired or adjusted

 

 

447

 

 

(10,161)

 

 

(1,866)

Balance at the end of the year

 

$

505,032

 

$

418,494

 

$

404,376

(a)		Includes transfers of operating property to property and equipment, net.

​

(C)

Reconciliation of accumulated depreciation (in thousands of dollars):

​

 

 

 

 

 

 

 

 

 

 

December 31, 

 

December 31, 

 

December 31, 

    

2019

    

2018

    

2017

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 

​

December 31, 

​

December 31, 

​

    

2022

    

2021

    

2020

Balance at beginning of the year

 

$

67,500

 

$

71,752

 

$

67,349

​

$

87,168

​

$

75,960

​

$

74,256

Depreciation expense

 

 

6,756

 

 

6,018

 

 

6,245

​

 

13,886

​

 

11,730

​

 

8,298

Amounts retired or adjusted

 

 

 —

 

 

(10,270)

 

 

(1,842)

​

 

(5,086)

​

 

(522)

​

 

(6,594)

Balance at the end of the year

 

$

74,256

 

$

67,500

 

$

71,752

​

$

95,968

​

$

87,168

​

$

75,960

​

​

​

​

F 5460

Table of Contents

THE ST. JOE COMPANY

SCHEDULE IV (CONSOLIDATED) - MORTGAGE LOANS ON REAL ESTATE

DECEMBER 31, 20192022

(in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Principal Amount

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

of Loans Subject

​

​

    

​

​

​

​

Periodic

​

​

​

​

Face

​

Carrying

​

 to Delinquent

​

​

​

Interest

​

​

​

Payment

​

Prior

​

Amount of 

​

Amount of 

​

Principal

​

Description of Note Receivable (a)

    

Rate

    

Final Maturity Date

    

Terms

​

Liens

​

Mortgages

    

Mortgages

    

or Interest

​

Secured revolving promissory note with unconsolidated Latitude Margaritaville Watersound JV, homesite development

​

5.0%

​

June 2025

​

P&I(b)

​

$

—

​

$

—

​

$

—

​

$

—

​

Seller financing, residential homesites

​

5.5%

​

May 2023

​

P&I(c)

​

​

—

​

​

814

​

​

814

​

​

—

​

Seller financing, residential homesites

​

5.5%

​

May 2023

​

P&I(c)

​

​

—

​

​

482

​

​

482

​

​

—

​

Various other seller financing, rural land

 

4.8%

​

November 2023

 

P&I(d)

​

 

—

​

 

19

​

 

19

 

​

—

​

Total(e)

 

  

 

  

 

  

​

$

—

​

$

1,315

​

$

1,315

 

$

—

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal Amount of

 

 

    

 

 

 

 

Periodic

 

 

 

Face

 

Carrying

 

 

Loans Subject to

 

 

 

 

 

 

 

Payment

 

 

 

Amount of 

 

Amount of 

 

 

Delinquent Principal 

 

Description (a)

    

Interest Rate

    

Final Maturity Date

    

Terms

    

Prior Liens

   

Mortgages

    

Mortgages

    

 

or Interest

 

Seller financing, residential homesites

 

5.5%

 

June 2021

 

P&I(b)

 

 —

   

$

1,514

 

$

1,514

 

$

 —

 

Seller financing, residential homesites

 

5.5%

 

December 2021

 

P&I(b)

 

 —

 

 

872

 

 

872

 

 

 —

 

Seller financing, residential homesites

 

5.5%

 

June 2020

 

P&I(c)

 

 —

 

 

84

 

 

84

 

 

 —

 

Seller financing, residential homesites

 

6.3%

 

March 2020

 

P&I(d)

 

 —

 

 

128

 

 

128

 

 

128

 

Various other seller financing, rural land

 

6.4% to 6.5%

 

December 2022 through November 2023

 

P&I(e)

 

 —

 

 

85

 

 

85

 

 

 —

 

Total(f)

 

  

 

  

 

  

 

  

 

$

2,683

 

$

2,683

 

$

128

 

(a)

(a)

All seller financed properties are located in Northwest Florida.

(b)

(b)

Principal and interest due at closing of each residential homesite to a third party. On the maturity date, all outstanding principal, all accrued interest and any other customary charges shall be due and payable in full. See Note 8. Other Assets for additional information related to the revolving promissory note.
(c)

Interest is paid quarterly over a twenty yeartwenty-year amortization schedule. On the maturity date, all outstanding principal, all accrued interest and any other customary charges shall be due and payable in full.

(d)

(c)

Annual principal payment of $0.1 million due and interest is paid quarterly over a twenty year amortization schedule. On the maturity date, all outstanding principal, all accrued interest and any other customary charges shall be due and payable in full.

(d)

Annual principal payment of $0.1 million due and interest is accrued over a twenty year amortization schedule. On the maturity date, all outstanding principal, all accrued interest and any other customary charges shall be due and payable in full.

(e)

Principal and interest is paid monthly.

(e)

(f)

The aggregate cost for federal income tax purposes approximates the amount of unpaid principal.

The summarized changes in the carrying amount of mortgage loans are as follows:

 

 

 

 

 

 

 

 

 

 

December 31, 

 

December 31, 

 

December 31, 

    

2019

    

2018

    

2017

​

​

​

​

​

​

​

​

​

December 31, 

​

December 31, 

​

December 31, 

​

    

2022

    

2021

    

2020

Balance at beginning of the year

 

$

1,462

 

$

2,995

 

$

242

​

$

11,942

​

$

10,321

​

$

2,683

Additions during the year - new mortgage loans

 

 

2,386

 

 

1,471

 

 

2,821

​

 

—

​

 

7,798

​

 

9,615

Deductions during the year:

 

 

  

 

 

  

 

 

  

​

 

  

​

 

  

​

 

  

Collections of principal

 

 

1,165

 

 

3,004

 

 

68

​

 

10,699

​

 

6,005

​

 

1,949

Foreclosures

 

 

 —

 

 

 —

 

 

 —

​

 

—

​

 

128

​

 

—

Other

​

​

(72)

​

​

44

​

​

28

Balance at the end of the year

 

$

2,683

 

$

1,462

 

$

2,995

​

$

1,315

​

$

11,942

​

$

10,321

​

​

​

F 5561