The St. Joe Company
Annual Report 2021

Plain-text annual report

(cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) The (cid:3)(cid:3) 2021 Company (cid:3) (cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:3)(cid:3) The St. Joe Company 130 Richard Jackson Boulevard Suite 200 Panama City Beach, Florida 32407 March 31, 2022 Dear Fellow Owners, Our operations had a good year in 2021. Our revenue increased by 66%, our net income increased by 65%, and our cash provided by operating activities increased by 200%. We had a record year in the number of homesite sales, club membership sales, and we executed more commercial leases in one year than we have in a long time. Our commercial leasing portfolio, apartments and hotels have high occupancies. In addition to what we transacted in 2021, we continued to grow our pipeline of new projects that represents opportunities for future revenue growth. 2021 was not an accident and there are no overnight successes. Since 2016, we have been on an upward trajectory as we lay a foundation to grow and move the Company forward. We have been consistently executing a business strategy of growing recurring revenue streams, diversifying, and partnering. Each year, we seek to refine and improve the execution. In addition, we have shown that we can grow and scale up our operations efficiently. For example, revenue has grown every year while our corporate expenses remained flat. From 2016 to 2021, our corporate expenses as a percentage of revenue, decreased from 24% to 9%. This is important because it is an indicator of how we can continue to scale up and grow the Company while maintaining efficient operations, which translates to putting more money in the Company’s and our shareholders’ pockets. A Tipping Point We have seen other real estate cycles before in this part of Florida. However, this cycle feels different in ways that may be not obvious unless one looks at it carefully. Past cycles felt somewhat hollow with very high peaks and very low valleys. A major reason why they felt hollow is that past cycles were primarily driven by speculators - essentially capital looking for a place to land trying to time the cycle for short term profits. Like a game of musical chairs, when the music stopped, the speculators and their money left with little to no residual benefit to the area. The current cycle does not feel that way. It feels more substantive because it is not being driven by speculators purchasing homesites or vacation rentals to flip. Instead, it is being driven by individuals and families moving to live here full time. The other way it feels different is where people are coming from. Historically, this area attracted visitors and residents from a few metro markets in the Southeastern U.S. like Atlanta. We are still seeing residents and visitors from those traditional metro markets, but we are now seeing residents and visitors from many other parts of the country. As an example, in 2021, we had buyers from 25 states at the Watersound Origins community, our primary resident community in Walton County. The buyers came from California, Oregon, Texas, Illinois, Michigan, New York, New Jersey, Minnesota, and Connecticut among others and they included a mixture of families, empty nesters, and retirees. As another example, since we started executing contracts at Latitude in the middle part of 2021, it has attracted buyers from 38 different states. Both communities are primary residential communities and neither allow short-term vacation rentals. We are seeing similar trends in our other communities in the area, in our apartments, and even in our private membership club. Based on what we are seeing, we believe this part of Florida is experiencing a tipping point. I love meeting people, especially those new to our area. When I do, I always like to hear their story, especially how they found us. I recently met a business owner who moved his family from California in late 2020 and purchased a home in the Watersound Origins community. They vacationed at the Watercolor Inn several years before and liked the area, so when they decided to move out of California, they chose to move to our area. They love living here full time and I’m meeting more and more people with a similar story. He said the Watersound Origins community is one of the best planned communities he has ever seen and when he and his family go for walks on the nature trails, it feels like they are in a movie. They also joined our private membership club – Watersound Club. Not long after they moved here, his in-laws, who are retired and live in Indiana, decided to purchase a new home at Latitude to be closer to their grandchildren. We are seeing this type of story repeatedly and they are examples of how a region is discovered, gains momentum, and grows. People from all over the country are discovering the high quality of life offered in Northwest Florida, which in addition to the beaches, natural amenities, mild climate, and low taxes, also includes a family-friendly atmosphere. Multi-Generational Growth If these trends continue, our Company is like few companies have been anywhere to enjoy growth for many generations to come. When growth has occurred in other regions of Florida and of the country, the land ownership pattern in those regions were fragmented, preventing any one Company from benefitting disproportionality from that growth. With over 170,000 acres, we are the dominant landowner in our region, which when combined with the entitlements or “development rights” that we obtained with the Bay Walton Sector Plan, our demonstrated ability to execute and scale up efficiently, we believe the opportunities for further growth are significant. Because of our focus on diversification, we now have residential communities, apartments, senior living, commercial operations, and hospitality assets covering a broad range of product types, price points, and lifestyles. So as growth continues and increases in this region, we have opportunities to grow the Company in many ways with multiple revenue streams. We plan on continuing to diversify such as we have done recently with businesses like a title agency, insurance agency, golf cart dealership, self-storage facility, etc. There are several things around the corner that we believe will contribute to and accelerate the continued growth of the area. Tyndall AFB recently started deploying the nearly $5B Congress initially appropriated to redevelop what the Air Force and Department of Defense called the “air force base of the future.” More appropriations are expected so the investments, technology, and jobs that will be made and created at Tyndall AFB are going to create future opportunities for the eastern part of our land holdings, especially with respect to a need for a wide range of housing types. We are also in the middle of planning the medical health care campus in Panama City Beach in collaboration with Tallahassee Memorial Hospital and their relationship with the Florida State University College of Medicine. The goal of the campus is to create synergy between research, education, and clinical delivery under one umbrella brand called FSU Health. In addition to expanding the medical services and benefitting all residents of the region, we believe the campus also has the potential to be an economic development engine in and of itself, especially with the amount of public investment that is planned to be made in the life sciences in the coming years. It is a bold idea, and bold ideas are not easy, but bold ideas are what help to move the needle and help to make things happen. We are hopeful to break ground on the first phase of the campus this year. Building A Lasting Culture Lastly, I want to mention the importance of culture in an organization because the results we have been achieving over the last few years would not be possible if we did not have the right culture. At JOE, we value a culture of thinking and acting like owners, trust, transparency, and humility. We have an open-door policy and recognize that good ideas can come from anywhere within the organization. We treat people in accordance with the Golden Rule and with respect and kindness. We start by treating our team and our co-workers in this manner, which then translates to our customers, guests, members, vendors, and other external constituents. Culture is not something that shows up as a direct line item on an income statement or balance sheet or in a 10- Q or 10-K, but it is as important to an organization as anything else. In fact, I would venture to say that culture is “the secret sauce” to successful companies. During these challenging labor market conditions, culture is not a luxury, but a necessity to attract and retain the best people. I am very proud of our team and am honored to be a part of this journey with them. Our directors, employees, and shareholders are aligned, and we are all pulling from the same side of the rope. We have just started to scratch the surface. With respect, Jorge Gonzalez President and CEO UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 For the transition period from to . Commission file number: 1-10466 The St. Joe Company (Exact name of registrant as specified in its charter) Florida (State or other jurisdiction of incorporation or organization) 130 Richard Jackson Boulevard, Suite 200 Panama City Beach, Florida (Address of principal executive offices) 59-0432511 (I.R.S. Employer Identification No.) 32407 (Zip Code) (850) 231-6400 (Registrant’s telephone number, including area code) Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, no par value Trading Symbol(s) JOE Name of Exchange on Which Registered New York Stock Exchange Securities Registered Pursuant to Section 12(g) of the Act: NONE 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  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-2 of the Exchange Act. Large accelerated filer Non-accelerated filer ☑ ☐ Accelerated filer Smaller reporting company Emerging Growth Company ☐ ☐ ☐ 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. ☑ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-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, 2021, was approximately $1.5 billion. As of February 21, 2022, there were 58,882,549 shares of common stock, no par value, issued of which 58,882,549 were outstanding. Documents Incorporated By Reference Portions of the Registrant’s definitive proxy statement for its 2022 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, 2021, are hereby incorporated by reference in Part III of this Annual Report on Form 10-K. THE ST. JOE COMPANY INDEX Page No. PART I Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Properties Item 3. Legal Proceedings Item 4. Mine Safety Disclosures PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6. Reserved Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures about Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections PART III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions and Director Independence Item 14. Principal Accounting Fees and Services PART IV Item 15. Exhibits, Financial Statement Schedules SIGNATURES 3 6 18 19 19 19 20 21 21 49 50 50 50 52 52 53 53 53 53 53 54 56 2 Item 1. Business PART I As used throughout this Annual Report on Form 10-K, the terms “St. Joe,” the “Company,” “we,” “our,” or “us” include The St. Joe Company, its consolidated subsidiaries and consolidated joint ventures unless the context indicates otherwise. Description St. Joe was incorporated in the State of Florida in 1936. We are a real estate development, asset management and operating company. We own 170,000 acres of land in Northwest Florida. The Bay-Walton Sector Plan (“Sector Plan”), that originally included 110,500 acres of our land, 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. Strategy St. Joe believes its long-term, owner-oriented capital and management allows us to optimize the value of Northwest Florida real 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. In 2021, the majority of our revenue was generated from sales, activities and operations on approximately 2% of our land. 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 are funded with cash proceeds from existing projects, existing cash, land contributions, partner capital and project specific financing. Actual investments may vary from planned capital investments for various reasons. We do not anticipate immediate benefits from investments. We continue to maintain low fixed expenses, low corporate debt and high liquidity for sustainability in all environments. We distribute cash in excess of expected operating needs to shareholders through cash dividends and common stock repurchases, as approved by the Board of Directors (the “Board”). A quarterly cash dividend of $0.08 was paid in each quarter of 2021 and $0.07 was paid in December 2020. During the year ended December 31, 2021, we did not repurchase shares of common stock. During the year ended December 31, 2020, we repurchased 532,034 shares of common stock for an aggregate purchase price of $8.8 million. As of December 31, 2021, we have a total of $77.4 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, Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 15. Stockholders’ Equity included in Item 15 of this Form 10-K. Reportable Segments St. Joe operations are reported in three segments: (1) residential, (2) hospitality and (3) commercial. For financial information about our reportable segments, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as Note 19. Segment Information included in Item 15 of this Form 10-K. Seasonality and Market Variability St. Joe’s operations may be affected by seasonal fluctuations. Hospitality revenues have historically been lower in the first and fourth quarters and are normally higher in the second and third quarters, but may vary year-to-year with the 3 timing of holidays and extraordinary events such as the COVID-19 pandemic. Homesites sell in sporadic transactions in various communities that may impact quarterly results. Commercial sales may vary from period-to-period. Competition St. Joe competes with local, regional and national real estate related companies; some of which may have greater financial, marketing, sales and other resources than us. Competition may adversely affect our ability to attract tenants to lease our commercial, multi-family and senior living properties or to attract purchasers of our residential and commercial real estate. 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. 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 competitors or that competitive pressures will not have a material adverse effect on our business, results of operations, cash flows and financial condition. Regulation St. 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 laws or regulations, or changes in existing laws or regulations or the interpretation and enforcement of these laws or regulations, might require significant expenditures. Human 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 21, 2022, we employed 54 professionals in our corporate offices who oversee operations, as well as 528 full-time employees and 80 part-time and seasonal employees in our day-to-day operations. 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. This program allows 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 4 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 a tool for improving our human capital management strategies, we periodically evaluate employee engagement and satisfaction. 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. We are pleased to report that our most recent 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 21, 2022, approximately 31% of our workforce identify as racially diverse and approximately 49% 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 are committed to provide 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. 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 places 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 2021, our team members provided over 1,500 volunteer hours within our communities. 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 stakeholders and the communities we serve. 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 leading by example and protecting the best of Florida by working closely with environmental agencies, community leaders and leading environmental and conservation organizations. Our sustainable forest management practices take many forms, including eradication of invasive plant species, restoring wetlands, 5 thinning forests, replanting trees and conducting 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 Stewardship section of our website at https://www.joe.com/stewardship. Information St. Joe’s most recent Annual Report on Form 10-K (“Form 10-K”), Quarterly Reports on Form 10-Q (“Form 10- Q”), Current Reports on Form 8-K (“Form 8-K”), and amendments to those reports may be viewed or downloaded electronically, free of charge, from our 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. 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. St. Joe will 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 Form 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 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 and market conditions. 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. Forward-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 Form 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 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 We may not be able to successfully implement our business strategy. Our business strategy consists of developing our residential real estate and expanding the scope of our hospitality assets and services, our commercial portfolio of 6 income producing properties and our other ventures to build recurring revenues and enhance enterprise value, while always maintaining 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, 2021, we had approximately $690.1 million of real estate investments, $52.0 million of investment in unconsolidated joint ventures and $31.1 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 and multi-family 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. We must attract, train and retain a large number of qualified employees while controlling related 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. 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. Investment in new business endeavors or product lines 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, such as the Powder Room Shooting Range and Training Center (“The Powder Room”) or Watersound Self-Storage, which are part of our hospitality segment and commercial segment, respectively. These 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. These 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 our 7 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 may not yield anticipated 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 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 in 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. 8 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, mostly 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 and investments – equity securities (collectively, “Securities”). The market value of these investments is subject to change from period-to-period, especially in light of the ongoing COVID-19 pandemic which has caused elevated levels of market volatility. Our Securities currently include investments in U.S. Treasury Bills and preferred stock of two issuers that are non-investment grade. Credit related impairment losses can negatively affect earnings. Investments in securities and funds are not insured against loss of principal. Under certain circumstances we may be required to redeem all or part of an investment, which may result in a 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. 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 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 and multi-family 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 due to a multitude of factors, including COVID-19 and labor shortages. Materials, parts and labor have also increased in cost over the past year or more, sometimes significantly and over a short period of time. As a result, we may be unable to complete projects on time or within budget. Material time delays or increases in construction costs resulting 9 from supply chain disruptions or labor shortages may impact our ability to realize anticipated returns on such projects and otherwise materially adversely affect our business, results of operations, cash flows and financial condition. 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 operating results, particularly relating to the impact of our land sales, to vary significantly from quarter-to-quarter and year-to-year. Our real estate development and construction activities may also be adversely impacted by inflation, which can increase the cost of materials and labor. In addition, inflation is often accompanied by higher interest rates. While we already own most of the land we develop and generally have been able to pass through cost increases to our customers, if we are unable to continuing passing through cost increase or raise homesite prices enough to keep up with the rate of inflation, our profit margins could be adversely affected. Our residential 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 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. 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); 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 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. Our commercial segment is subject to risks associated with the financial condition of our commercial 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 may have a material adverse effect on our business, results of operations, cash flows and financial condition. 10 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 community. 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, the COVID-19 pandemic has, and will likely continue to, exacerbate factors that impact our operations, including supply chain disruptions, labor shortages and rising commodity and product costs. Despite our positive financial results during the COVID-19 pandemic, the magnitude and duration of the COVID-19 pandemic remains unknown, and we could experience material declines within each of our reportable segments in the future compared to the historical norms. Moreover, we can provide no assurance as to whether the COVID-19 public health effort will be intensified to such an extent, particularly in response to any resurgence in infections, whether due to the spread of any variants of the virus or otherwise, that our operations will not be adversely impacted. Due to the unprecedented nature of COVID-19 and the myriad of responses thereto, we cannot identify all of the risks we face from the pandemic and its resulting impacts. Even after the pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession that has occurred or may occur. The pandemic could also amplify other risks and uncertainties described in this 2021 Form 10-K, including supply chain disruptions, labor shortages and rising commodity and product costs. The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain. 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. 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. 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. Our business is highly seasonal. The revenues from our business segments may vary from period-to-period. Homebuilders tend to buy multiple homesites in sporadic transactions. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or commercial real estate sales. 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 11 be non-recurring. Projects depend on uncertain demand. Extraordinary events such as the COVID-19 pandemic or Hurricane Michael 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.  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, and are continuing to assess claims under such policies related to the impact from Hurricane Michael; 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.  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 12 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 currently 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 42.6% of our common stock, which may limit our minority shareholders’ ability to influence 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, 2021, clients of FCM, including Mr. Berkowitz, beneficially owned approximately 42.6% of our common 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 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. 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 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. 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 (the “Investment Company Act”). We are not registered as an “investment company” under the Investment Company Act of 1940 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 on an unconsolidated basis we will not have more than 40% of total assets (excluding U.S. government securities and cash items) in investment securities or that we will meet and maintain another exemption from registration. As a result, we may be unable to make some potentially profitable investments, unable to sell assets we would otherwise want to sell or forced to sell investments in investment securities before we would otherwise want to do so. 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 13 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. We are subject to various existing government regulations.  Development 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 local government. 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 Community Planning Act and local land development regulations. Compliance with the State of Florida planning requirements and 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. 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 Community 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 properties are subject to federal, state and local environmental regulations and restrictions that may 14 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, some 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.  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. Violations of these laws and regulations can result in, among other things, civil penalties, remediation expenses, natural resource damages, personal injury damages, potential injunctions, cease and desist 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. Past and present real property, particularly properties used in connection with our previous transportation 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. We may be subject to risks 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 are expected 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 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 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, 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. 15 Changes to U.S. tax laws may materially 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 (such as the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and recent COVID-19 related legislation) 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. As a result, we may incur additional costs, including taxes and penalties for historical periods, that may have a material and adverse effect on our business, results of operations, cash flows or financial condition.  QOZ Program. As part of 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 investments.  NOLs. We have significant state net operating loss carryforwards (“NOLs”). 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. See Note 13. Income Taxes included in Item 15 of this Form 10-K for additional information. We may be subject to periodic litigation and other regulatory proceedings. We may be involved in lawsuits and regulatory actions relating to business agreements, operations, assets, liabilities, or our position as 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. Land use approval processes 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 Risks 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 qualified 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 aforementioned factors may have a material adverse impact on our business, results of operations, cash flows and financial condition. In addition, our hospitality operations 16 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 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. Risks associated with cybersecurity. We are reliant on computers and digital technology. We collect digital information on all aspects of operations. Hospitality related businesses, in particular, require the collection and retention of 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. The integrity and protection of our customer, employee and other company data, is critical to us. We make efforts to maintain the security and integrity of these networks and related systems. We have implemented various measures to manage the risk of a security breach or disruption. 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, 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. Further, the risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. 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, 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, 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 or financial condition could be adversely 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 17 in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity. Our financing arrangements contain restrictions and limitations. Our financing arrangements contain customary representations and warranties, as well as customary affirmative and negative covenants that restrict some of our activities. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. Our ability to comply with the covenants and restrictions contained in our 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. We may provide a guarantee of the debt in connection with our JVs. In certain instances, these guarantees provide for the full payment and performance of the borrower. See Note 11. Debt, Net and Note 20. 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. We 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 increases in interest rates applicable to some of 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. We cannot assure you that we will continue to pay dividends at the current rate or at all. In the fourth quarter of 2021, we paid a cash dividend of $0.08 per share on our common stock and 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 party at the time, legal requirements, industry practice, and other factors that our Board deems relevant. 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. 18 Item 2. Properties St. Joe owns 170,000 acres in Northwest Florida. The Sector Plan, that originally included 110,500 acres of our land, 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 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, 2021, we had completed homesites and homesites under development, engineering or in conceptual planning in 17 separate communities. These include Watersound Origins, Breakfast Point East, Watersound Camp Creek, WindMark Beach, SouthWood, Titus Park, College Station, Park Place, Ward Creek, Mexico Beach and other Northwest Florida locations. 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, Hilton Garden Inn Panama City Airport 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”), Homewood Suites by Hilton hotel, 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. Hotel Indigo and a standalone restaurant are under construction on leased land in downtown Panama City. In our commercial segment, we own the properties 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 II (the “Pier Park Crossings II JV”), Watersound Origins Crossings (the “Watersound Origins Crossings JV”), Watercrest Senior Living (the “Watercrest JV”), WindMark Beach, VentureCrossings, Watersound Town Center, West Bay Town Center 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. 19 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities On February 21, 2022, we had approximately 805 registered holders of record of our common stock. Our common stock is listed on the NYSE under the symbol “JOE.” During 2021 we paid quarterly cash dividends of $0.08 per share on our common stock ($0.32 per share in the aggregate) and we expect to continue to pay quarterly dividends. In the fourth quarter of 2020, we paid a cash dividend of $0.07 per share on our common stock. We did not pay cash dividends in 2019. 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. See Item 1A. Risk Factors – General Risks – We cannot assure you that 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, 2016 through December 31, 2021, assuming $100 was invested on December 31, 2016, in our common stock, in the S&P SmallCap 600 Index, and a custom real estate peer group (the “Custom Real Estate Peer Group”). The Custom Real Estate Group is composed of Alexander & Baldwin Inc. (ALEX), 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). Total returns shown assume that dividends are reinvested. Total return for the Custom Real Estate Peer Group use 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. The St. Joe Company S&P SmallCap 600 Index Custom Real Estate Peer Group 12/31/2016 100 $ 100 $ 100 $ 12/31/2017 $ 95.00 $ 113.23 $ 107.65 12/31/2018 $ 69.32 $ 103.63 76.47 $ 12/31/2019 $ 104.37 $ 127.24 93.69 $ 12/31/2020 $ 223.94 $ 141.60 65.83 $ 12/31/2021 $ 276.44 $ 179.58 87.28 $ 20 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 program has no expiration date. As of December 31, 2021, we had a total authority of $77.4 million available for purchase of shares of our common stock. 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. Repurchases may be commenced or suspended at any time or from time to time without prior notice. The program 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 it will cause our common stock to be delisted from NYSE or cause us to stop being subject to the periodic reporting requirements of the Exchange Act. There were no stock repurchases in 2021. Item 6. Reserved 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 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 “Risk Factors” in this 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 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. We intend to use existing assets for residential, hospitality and commercial 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. We may partner with or explore the sale of discrete assets when we and/or others can better deploy resources. We seek to enhance the value of our owned real estate assets by developing residential, commercial and hospitality projects to meet market demand. 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. We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to focus on our core business activity of real estate development, asset management and operations. We continue to develop a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject to delays caused by factors beyond our control. Our real estate investment strategy focuses on projects that meet long-term risk-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. 21 2021 highlights include:  Revenue for 2021 increased by 66.3% to $267.0 million, compared to $160.5 million in 2020.  Net income for 2021 increased by 65.0% to $74.5 million, compared to $45.2 million in 2020.  Net cash provided by operating activities for 2021 increased by 199.7% to $111.8 million, compared to $37.3 million in 2020. Market Conditions In 2021, the U.S. economy was in the process of recovery from the severe impacts of the initial onset of the COVID-19 pandemic in early 2020, and while the economic recovery following containment and mitigation measures of COVID-19 is still ongoing, demand across our segments remains strong. We believe this is primarily the result of the continued growth in 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 our positive financial results during the COVID-19 pandemic, the magnitude and duration of the COVID-19 pandemic remains unknown, and we could experience material declines within each of our reportable segments in 2022 and beyond compared to the historical norms. We have taken measures and may be required to take additional measures in the future, in response to the pandemic, including temporary closures of our hotels, retail outlets, beach clubs and food and beverage operations, implementing cost reduction measures and “work from home” policies. We will continue to monitor the potential impacts and evaluate each new project day-by-day and phase-by-phase and take prudent measures and respond as needed based on market conditions. Further discussion of the potential impacts on our business from the COVID-19 pandemic are discussed in Part I. Item 1A. Risk Factors. Reportable Segments We conduct primarily all of our business in the following three reportable segments: 1) residential, 2) hospitality and 3) commercial. Prior to the first quarter of 2020, commercial leasing and sales, as well as forestry were treated as individual reportable segments. Commencing in the first quarter of 2020, due to organizational changes, our previously titled “commercial leasing and sales” and “forestry” segments are reported as one segment and retitled to“ commercial.” This change is consistent with our belief that the decision making and management of the assets in these segments are being made as one group. All prior year segment information has been reclassified to conform to the current presentation. Also, commencing in the first quarter of 2020, our previously titled “residential real estate” segment was retitled to“ residential.” The change had no effect on the consolidated balance sheets, statements of income, statements of comprehensive income or statements of cash flows for the periods presented. The following table sets forth the relative contribution of these reportable segments to our consolidated operating revenue: Year Ended December 31, 2020 2021 2019 Segment Operating Revenue Residential Hospitality Commercial Other Consolidated operating revenue 54.6 % 27.9 % 16.7 % 0.8 % 32.7 % 46.6 % 36.0 % 29.5 % 30.6 % 22.8 % 0.7 % 1.1 % 100.0 % 100.0 % 100.0 % For more information regarding our reportable segments, see Note 19. Segment Information included in Item 15 of this Form 10-K. 22 Residential Segment Our residential segment typically plans and develops residential communities of various sizes across a wide range of price points and sells homesites to homebuilders or retail consumers. Our residential segment also evaluates opportunities to enter into JV agreements for specific communities such as Latitude Margaritaville Watersound. The Watersound Origins, Watersound Camp Creek, Breakfast Point East, Titus Park, Ward Creek, Watersound Origins West, College Station, Park Place, Mexico Beach, WindMark Beach and SouthWood communities 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 limited basis to retail customers. The SummerCamp Beach and RiverCamps communities have homesites available for sale and lands for future development. The WaterColor community is substantially developed, with remaining homesites available for sale. The Latitude Margaritaville Watersound community is a planned 55+ active adult residential community in Bay County, Florida. The community is located near the Intracoastal Waterway with convenient access to the Northwest Florida Beaches International Airport. The community is being developed through an unconsolidated JV (the “Latitude Margaritaville Watersound JV”) with our partner Minto Communities USA, a homebuilder and community developer, and is estimated to include approximately 3,500 residential homes, which will be developed in smaller increments of discrete neighborhoods. During 2021, the unconsolidated Latitude Margaritaville Watersound JV entered into 435 sales contracts and completed 47 home sale transactions. As of December 31, 2021, the unconsolidated Latitude Margaritaville Watersound JV had 388 homes under contract, which are expected to result in a sales value of approximately $171.0 million at closing of the homes. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. The residential homesite pipeline by community/project are as follows: Community/Project Location Breakfast Point East (b) College Station East Lake Creek (b) East Lake Powell (c) Latitude Margaritaville Watersound (d) (e) Mexico Beach (b) Mexico Beach Townhomes (b) Park Place RiverCamps (c) SouthWood (f) SummerCamp Beach (b) Titus Park Watersound Origins West (d) Watersound Camp Creek (f) Watersound Origins (f) Ward Creek (d) WaterColor Park District West Laird (d) WindMark Beach (f) Total Homesites Bay County, FL Bay County, FL Bay County, FL Bay County, FL Bay County, FL Bay County, FL Bay County, FL Bay County, FL Bay County, FL Leon County, FL Franklin County, FL Bay County, FL Walton County, FL Walton County, FL Walton County, FL Bay County, FL Walton County, FL Bay County, FL Gulf County, FL Platted or Under Development 229 36 — — 1,091 32 42 136 15 29 63 303 115 128 248 355 3 — 249 3,074 Residential Homesite Pipeline (a) Additional Engineering or Entitlements with Permitting Concept Plan Total 173 58 — — 340 60 36 — — 172 — 144 — — 409 594 — — — 1,986 318 243 200 360 2,022 275 82 191 149 994 271 650 5,781 — — 651 — 2,390 866 15,443 720 337 200 360 3,453 367 160 327 164 1,195 334 1,097 5,896 128 657 1,600 3 2,390 1,115 20,503 (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. 23 (b) Planned Unit Development (“PUD”). (c) Development Agreement (“DA”). (d) Detailed Specific Area Plan (“DSAP”). (e) The unconsolidated Latitude Margaritaville Watersound JV plans to build and sell homes in this community. (f) Development of Regional Impact (“DRI”). In addition to the communities listed above, we have a number of residential projects in various stages of planning. As of December 31, 2021, we had 2,000 residential homesites under contract with thirteen different homebuilders, which are expected to result in revenue of approximately $158.9 million at closing of the homesites over the next several years. By comparison, as of December 31, 2020, we had 1,269 residential homesites under contract, with an expected revenue of approximately $115.0 million. The increase in homesites under contract is due to the development of additional homesites and increased homebuilder contracts for residential homesites. The number of homesites under contract are subject to change based on homesite closings and homebuilder interest in each community. As of December 31, 2021, in addition to the 2,000 homesites in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 388 homes under contract, which together with the 2,000 homesites are expected to result in a sales value of approximately $329.9 million at closing of the homesites and homes. Hospitality Segment Our hospitality segment features a private membership club (the “Watersound Club”), hotel operations, food and beverage operations, golf courses, beach clubs, retail outlets, gulf-front vacation rentals, management services, marinas and other entertainment assets. The hospitality segment generates revenue and incurs costs from membership sales, membership reservations, golf courses, lodging, short-term vacation rentals, management of The Pearl Hotel, 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 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 opportunities. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 11. Debt, Net included in Item 15 of this Form 10-K. Watersound Club provides club members and guests in some of our hotels access to our member facilities, which include the Camp Creek golf course, Shark’s Tooth golf course, WaterSound Beach Club and our 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 an 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. Watersound Origins includes an executive golf course, resort-style pool, fitness center, two tennis courts and a private dock 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. Watersound Club has a private beach club, located 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 includes an 18-hole golf course, a full club house, a pro shop, as well as two food and beverage operations. In addition to the golf course, Watersound Club’s tennis center is located in the Wild Heron community near the Shark’s Tooth golf course. Camp Creek is an 18-hole golf course located adjacent to the new Camp Creek residential community and near the Watersound Origins residential community. In the fourth quarter of 2019, we commenced construction on new club amenities adjacent to the Camp Creek golf course. Amenities are planned to include a health and wellness center, restaurants, a tennis and pickle ball center, a resort-style pool complex with separate adult pool, a golf teaching academy, pro shop and multi-sport fields. Once complete, these amenities will be available to Watersound Club members and guests of some of our hotels. 24 We own and operate the award-winning WaterColor Inn, (which includes the Fish Out of Water restaurant), the Hilton Garden Inn Panama City Airport, 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 (i) lodging, (ii) operation of the WaterColor Beach Club, (iii) management of The Pearl Hotel, (iv) short-term vacation rentals, (v) food and beverage operations and (vi) merchandise sales. Lodging 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 and expenses consist primarily of internal administrative costs. Lodging and short-term vacation rentals generate revenue from rental fees and incur expenses 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. 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. We are in the process of constructing seven additional suites at WaterColor Inn; an Embassy Suites by Hilton hotel, with our JV partner, in the Pier Park area of Panama City Beach, Florida; a Homewood Suites by Hilton adjacent to the new Panama City Beach Sports Complex in Panama City Beach, Florida; the waterfront Hotel Indigo and standalone restaurant 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 and restaurant. Our hotel portfolio by property is as follows: Location Rooms (a) Completed Planned Total Operational Walton County, FL WaterColor Inn (b) Walton County, FL WaterSound Inn Bay County, FL Hilton Garden Inn Panama City Airport (c) TownePlace Suites by Marriott Panama City Beach Pier Park (d) Bay County, FL Total operational rooms Managed The Pearl Hotel (e) Total managed rooms Under Development/Construction Embassy Suites by Hilton Panama City Beach (f) Homewood Suites by Hilton Panama City Beach Hotel Indigo Home2 Suites by Hilton Santa Rosa Beach The Lodge 30A (f) Camp Creek Inn Total rooms under development/construction Total rooms Walton County, FL Bay County, FL Bay County, FL Bay County, FL Walton County, FL Walton County, FL Walton County, FL 60 11 143 124 338 55 55 — — — — — — — 393 7 — — — 7 — — 255 131 124 107 85 75 777 784 67 11 143 124 345 55 55 255 131 124 107 85 75 777 1,177 (a) Includes hotels currently in operation, under management or under development and construction. We have significant additional entitlements for future hotel projects on our land holdings. (b) Planned additional rooms are currently under construction. (c) The hotel opened in July 2021. (d) The hotel is operated by our JV partner and opened in May 2020. The Pier Park TPS JV is unconsolidated and is accounted for under the equity method of accounting, which is included within our commercial segment. (e) The hotel is owned by a third party, but is operated by us. 25 (f) Under development with JV partners. We own and operate two marinas consisting of the Bay Point Marina and Port St. Joe Marina. 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. At present, we are reconstructing the marinas and expect a portion to open in spring 2022. See Note 7. Hurricane Michael included in Item 15 of this Form 10-K for additional information. We own and operate the WaterColor retail store that generates 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. We own and operate The Powder Room in Panama City Beach, Florida. The approximately 17,000 square feet facility was completed in December 2020 and includes a retail store with firearms and ammunition, as well as training and educational space and 14 shooting lanes. The Powder Room generates revenue from service fees and merchandise sales, which are recognized at the point of sale, and incurs expenses from the cost of services and goods provided, personnel costs and facility costs. In addition to the properties listed above, we have a number of hospitality projects in various stages of planning. Commercial Segment Our commercial segment includes leasing of commercial property, multi-family, senior living, self-storage and other assets. The commercial segment also oversees the planning, development, entitlement, management and sale of our commercial and rural land holdings for a variety of uses, including a broad range of retail, office, hotel, senior living, multi-family, self-storage and industrial properties. 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 commercial parcels. We 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 hunting, rock quarrying and other uses. The commercial segment also manages our timber holdings in Northwest Florida which includes growing and selling pulpwood, sawtimber and other products, such as fill dirt. As of December 31, 2021, we had an estimated 2.0 million tons of marketable pulpwood and 2.8 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 2022. 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 segment also generates revenue from the sale of developed and undeveloped land, timber holdings or land with limited development and/or entitlements and the sale of commercial operating properties. Real estate sales in our commercial 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 our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 11. Debt, Net included in Item 15 of this Form 10-K. The commercial segment’s portfolio of leasable properties continues to expand and diversify. Through wholly- owned subsidiaries and consolidated and unconsolidated joint ventures we are in the process of constructing 390 multi- family units and 148 senior living units, in addition to the 791 multi-family units and 107 senior living units that have recently been completed. 26 Total units and percentage leased/occupied for multi-family and senior living communities by location are as follows: December 31, 2021 December 31, 2020 December 31, 2019 Units Units Units Percentage Leased of Units Units Units Percentage Leased of Units Units Units Percentage Leased of Units Location Planned Completed Leased Completed Completed Leased Completed Completed Leased Completed Bay County, FL Multi-family Pier Park Crossings Bay County, FL Pier Park Crossings Phase II Watersound Origins Crossings (a) Sea Sound (b) North Bay Landing (c) Origins Crossings Townhomes (d) Total multi-family units Bay County, FL Walton County, FL Bay County, FL Walton County, FL Senior living communities Watercrest (e) Watersound Fountains (f) Total senior living units Total units Walton County, FL Walton County, FL 240 120 217 300 240 64 1,181 107 148 255 1,436 240 120 217 214 — — 791 107 — 107 898 234 113 207 203 — — 757 47 — 47 804 98% 94% 95% 95% N/A N/A 96% 44% N/A 44% 90% 240 120 18 — — — 378 107 — 107 485 237 55 — — — — 292 — — — 292 99% 46% 0% N/A N/A N/A 77% N/A N/A N/A 60% 216 216 100% — — — — — 216 — — — 216 — — — — — 216 — — — 216 N/A N/A N/A N/A N/A 100% N/A N/A N/A 100% (a) Construction was completed in the fourth quarter of 2021. (b) Construction of three apartment buildings was completed as of the end of the fourth quarter of 2021. The Sea Sound Apartments JV is unconsolidated and is accounted for under the equity method of accounting. (c) Construction began in the fourth quarter of 2020 and is ongoing. (d) Vertical construction began in the third quarter of 2021 and is ongoing. (e) Construction was completed in the fourth quarter of 2020. (f) 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, which was developed in two phases, includes 360 completed apartment units in Panama City Beach, Florida. Watersound Origins Crossings, includes 217 completed apartment units adjacent to the Watersound Town Center. Watercrest, includes 107 completed senior living units in Santa Rosa Beach, Florida. In addition to Pier Park Crossings, Watersound Origins Crossings and Watercrest, we have three multi-family communities and one senior living community under construction. Sea Sound apartments, an unconsolidated JV (the “Sea Sound Apartments JV”) planned for 300 units, with 214 units completed as of December 31, 2021, is located in Panama City Beach, Florida near the Breakfast Point residential communities. North Bay Landing apartments, planned for 240 units, is located in Panama City, Florida. Origins Crossings Townhomes, planned for 64 units, is located near the Watersound Town Center. Watersound Fountains, an unconsolidated JV, (the “Watersound Fountains Independent Living JV’) planned for 148 independent living units, is located near the Watersound Origins residential community. Our leasing portfolio consists of approximately 985,000 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 124-room TownePlace Suites by Marriott operated by our JV partner (Pier Park TPS, LLC the “Pier Park TPS JV”) and a Busy Bee branded fuel station and convenience store operated by our JV partner (SJBB, LLC the “Busy Bee JV”), both located in Panama City Beach, Florida. 27 The total net rentable square feet and percentage leased of leasing properties by location are as follows: Location Bay County, FL Bay County, FL Bay County, FL Walton County, FL Pier Park North JV VentureCrossings Beckrich Office Park (a) (b) Watersound Self-Storage (c) WindMark Beach Town Center (a) (d) Gulf County, FL Watersound Town Center (e) WaterColor Town Center (a) Cedar Grove Commerce Park Port St. Joe Commercial Beach Commerce Park (a) SummerCamp Commercial South Walton Commerce Park (f) WaterSound Gatehouse (a) WaterColor Crossings 395 Office building Pier Park outparcel Topsail West Commercial Bank building Bank building WaterColor HOA Office RiverCamps SouthWood Town Center (g) Walton County, FL Walton County, FL Bay County, FL Gulf County, FL Bay County, FL Franklin County, FL Walton County, FL Walton County, FL Walton County, FL Walton County, FL Bay County, FL Walton County, FL Bay County, FL Gulf County, FL Walton County, FL Bay County, FL Leon County, FL 100 % N/A % Percentage Leased Percentage Leased Percentage Leased December 31, 2021 Net Rentable Square Feet* 320,310 303,605 81,065 67,694 44,748 24,764 22,199 19,389 16,964 14,800 13,000 11,570 10,271 7,135 6,700 5,565 3,500 3,346 3,346 2,520 2,112 N/A 984,603 December 31, 2020 Net Rentable Square Feet* 95 % 320,310 88 % 303,605 85 % 86,296 50 % N/A 67 % 44,748 100 % 6,496 100 % 23,121 100 % 19,449 100 % 16,964 100 % 17,450 0 % 13,000 88 % 11,570 100 % 10,271 7,135 100 % 6,700 100 % 5,565 100 % 3,500 100 % 3,346 100 % 3,346 100 % 2,520 100 % 2,112 100 % N/A N/A % 87 % 907,504 December 31, 2019 Net Rentable Square Feet* 92 % 320,310 86 % 303,605 80 % 68,398 N/A 47 % 48,960 N/A 79 % 20,033 90 % N/A 100 % 15,524 76 % 14,700 0 % 13,000 88 % 11,534 87 % 11,515 7,135 100 % 6,700 100 % 5,565 100 % N/A 100 % N/A 100 % N/A 100 % 1,244 100 % 100 % N/A N/A % 34,230 85 % 882,453 95 % 80 % 100 % N/A % 48 % N/A % 96 % N/A % 100 % 100 % 0 % 82 % 89 % 100 % 100 % 100 % N/A % N/A % N/A % 100 % N/A % 80 % 86 %  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. In addition to net rentable square feet there is also space that we occupy or that serves as common area. Included in net rentable square feet as of December 31, 2021 and 2020, is 1,500 square feet leased to a consolidated JV. (a) (b) (c) Construction was completed in the third quarter of 2021. (d) (e) Construction of an 18,268 square foot building was completed in the third quarter of 2021. (f) (g) Included in net rentable square feet as of December 31, 2021 and 2020, is 1,364 square feet leased to a consolidated JV. In January 2020, we sold the SouthWood Town Center. Included in net rentable square feet as of December 31, 2021, 2020 and 2019, is 13,808 square feet of unfinished space. We have other commercial projects under development and construction. This includes a Publix supermarket totaling approximately 50,000 square feet, in-line space totaling approximately 12,000 square feet and a build-to-suit project totaling approximately 3,350 square feet. We have commenced development of Watersound West Bay Center, a lifestyle shopping center adjacent to Latitude Margaritaville Watersound in Panama City Beach, Florida. Watersound West Bay Center has potential to include approximately 350,000 square feet of leasable space at build out, featuring a mix of retail, restaurant, office and medical space. In January 2022, we entered into a JV to develop a new 216-unit apartment community in Mexico Beach, Florida. In addition to the properties listed above, we have a number of projects in various stages of planning, including additional commercial buildings and apartment communities. 28 Results of Operations Consolidated Results The following table sets forth a comparison of the results of our operations: $ Revenue: Real estate revenue Hospitality revenue Leasing revenue Timber revenue Total revenue Expenses: Cost of real estate revenue Cost of hospitality revenue Cost of leasing revenue Cost of timber revenue Corporate and other operating expenses Depreciation, depletion and amortization Total expenses Operating income Other income (expense): Investment income, net Interest expense Gain on contribution to unconsolidated joint ventures Other income, net Total other income, net Income before equity in loss from unconsolidated joint ventures and income taxes Equity in loss from unconsolidated joint ventures Income tax expense Net income $ 2021 Year Ended December 31, 2020 In millions 2019 158.6 75.3 27.1 6.0 267.0 60.7 58.3 11.6 0.7 23.0 18.2 172.5 94.5 7.2 (15.9) 3.6 10.2 5.1 99.6 (0.9) (25.0) 73.7 $ $ 87.6 47.8 18.8 6.3 160.5 35.8 35.2 5.9 0.8 22.9 12.8 113.4 47.1 5.0 (13.6) 20.0 1.3 12.7 59.8 (0.6) (13.7) 45.5 $ $ 61.5 46.1 15.6 3.9 127.1 24.3 34.5 4.7 0.6 21.4 10.3 95.8 31.3 10.7 (12.3) 2.3 4.2 4.9 36.2 (0.1) (9.4) 26.7 Results of operations in this Form 10-K generally discusses 2021 and 2020 items and comparisons. For a detailed discussion of results of operations and comparisons for 2020 and 2019, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Form 10-K for the year ended December 31, 2020 filed with the SEC on February 24, 2021. 29 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, 2021: Revenue: Residential real estate revenue Commercial and rural real estate revenue Other revenue Real estate revenue Gross profit: Residential real estate Commercial and rural real estate Other Gross profit 2021 % (a) 2020 Dollars in millions % (a) 2019 % (a) $ 144.7 91.2 % $ 74.1 84.6 % $ 41.1 66.8 % 12.0 1.9 158.6 87.9 9.5 0.5 97.9 $ $ $ 7.6 % 1.2 % 100.0 % $ 60.7 % $ 79.2 % 26.3 % 61.7 % $ 11.7 1.8 87.6 44.4 6.2 1.2 51.8 13.4 % 2.0 % 100.0 % $ 59.9 % $ 53.0 % 66.7 % 59.1 % $ 19.5 0.9 61.5 21.1 15.2 0.9 37.2 31.7 % 1.5 % 100.0 % 51.3 % 77.9 % 100.0 % 60.5 % (a) Calculated percentage of total real estate revenue and the respective gross margin percentage. Residential Real Estate Revenue and Gross Profit. During 2021, residential real estate revenue increased $70.6 million, or 95.3% to $144.7 million, as compared to $74.1 million during 2020. Residential real estate gross profit increased $43.5 million, to $87.9 million (or gross margin of 60.7%), as compared to $44.4 million, (or gross margin of 59.9%) during 2020. During 2021, we sold 804 homesites, 2 homes and unimproved residential land sales of $0.1 million, compared to 509 homesites, no home sales and had unimproved residential land sales of $1.7 million during 2020. During 2021 and 2020 the average revenue, excluding homesite residuals, per homesite sold was approximately $157,000 and $124,000, respectively, due to the mix of sales from different communities. The revenue, gross profit and margin improvement 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 each period due to the timing of homebuilder contractual closing obligations and the timing of development of completed homesites in our residential communities. Commercial and Rural Real Estate Revenue and Gross Profit. During 2021, we had 22 commercial and rural real estate sales totaling approximately 577 acres for $12.0 million, resulting in a gross profit margin of approximately 79.2%. During 2020, we had 23 commercial and rural real estate sales totaling approximately 473 acres for $11.7 million, resulting in a gross profit margin of approximately 53.0%. Revenue from commercial and rural real estate can vary significantly from period-to-period depending on the proximity to developed areas and mix of real estate sold in each period, with varying compositions of retail, office, industrial and other commercial uses. Our gross margin can vary significantly from period-to-period depending on the characteristics of 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 incurred on the property. Other Revenue. Other revenue primarily consists of mitigation bank credit sales and title fee revenue. 30 Hospitality Revenue and Gross Profit Hospitality revenue Gross profit Gross margin Year Ended December 31, 2020 2021 2019 $ $ 75.3 17.0 22.6 % $ $ In millions 47.8 12.6 26.4 % $ $ 46.1 11.6 25.2 % Hospitality revenue increased $27.5 million, or 57.5%, during 2021, as compared to 2020. The increase in hospitality revenue was primarily related to higher demand in lodging and resort amenities due to increased popularity of the region and year-round travel that resulted in an influx of members and guests from new markets. The increase was also due to the impact of the COVID-19 pandemic on the prior period, which resulted in shutdowns and reduced revenue from mid-March to mid-May 2020. As of December 31, 2021, Watersound Club had 2,255 members, compared with 1,563 members as of December 31, 2020, an increase of 692 members. Gross profit during 2021 and 2020 includes $0.7 million and $1.3 million, respectively of business interruption proceeds received for the marinas related to Hurricane Michael. See Note 7. Hurricane Michael included in Item 15 of this Form 10-K for additional information. Hospitality had a gross margin during 2021 of 22.6%, compared to 26.4% during 2020. The decrease in gross margin is due to business interruption proceeds received in the prior period, as well as pre-opening expenses associated with the opening of Hilton Garden Inn Panama City Airport, onboarding of staff for future assets currently under construction and an increase in cost of labor and products in the current period. Leasing Revenue and Gross Profit Leasing revenue Gross profit Gross margin $ $ 2021 Year Ended December 31, 2020 In millions 18.8 $ 12.9 $ 68.6 % 27.1 15.5 57.2 % $ $ 2019 15.6 10.9 69.9 % Leasing revenue increased $8.3 million, or 44.1%, during 2021, as compared to 2020. The increase was primarily due to new leases at Pier Park Crossings Phase II apartments, which began leasing in the fourth quarter of 2020 and new leases at Watersound Origins Crossings apartments and Watercrest senior living community, which began leasing in the first quarter of 2021, as well as other new leases. Gross profit during 2020 includes $0.7 million of business interruption insurance proceeds received for Pier Park Crossings apartments related to Hurricane Michael. See Note 7. Hurricane Michael included in Item 15 of this Form 10-K for additional information. Leasing gross margin decreased to 57.2% during 2021, as compared to 68.6% during 2020, primarily due to start-up and lease-up expenses for new assets in the current period and business interruption proceeds received in the prior period. Timber Revenue and Gross Profit Timber revenue Gross profit Gross margin $ $ 2021 Year Ended December 31, 2020 In millions 6.3 $ 5.5 $ 87.3 % 6.0 5.3 88.3 % $ $ 2019 3.9 3.3 84.6 % Timber revenue decreased $0.3 million, or 4.8%, during 2021, as compared to 2020. The decrease was primarily due to a decrease in the sales of fill dirt and other products. The decrease was partially offset by an increase due to the 31 sales mix of different wood products and price increases in the current period. There were 273,000 tons of wood products sold during 2021, as compared to 322,000 tons of wood products sold during 2020. Corporate and Other Operating Expenses Year Ended December 31, Employee costs (a) Non-cash stock compensation costs Property taxes and insurance Professional fees Marketing and owner association costs Occupancy, repairs and maintenance Other miscellaneous Total corporate and other operating expenses 2021 10.4 — 5.4 3.2 1.6 0.7 1.7 23.0 $ $ 2020 In millions $ 2019 $ 8.9 0.1 5.0 4.0 1.2 0.8 1.4 $ 21.4 9.6 — 5.3 4.7 1.2 0.7 1.4 22.9 $ (a) Includes $1.2 million in each 2021 and 2020 and $1.1 million in 2019 of expense allocated to participants related to the 2014 pension plan termination. See Note 17. Employee Benefit Plan included in Item 15 of this Form 10-K for additional information. Corporate and other operating expenses during 2021 and 2020, were comparable. Depreciation, Depletion and Amortization Depreciation, depletion and amortization expense increased $5.4 million during 2021, as compared to 2020, primarily due to new assets placed in service. Investment Income, Net Investment income, net primarily includes (i) interest and dividends earned and accretion of the net discount, (ii) net realized gain or loss from the sale of available-for-sale investments and equity securities, (iii) net unrealized gain or loss related to investments – equity securities, (iv) interest income earned on the time deposit held by a special purpose entity and (v) interest earned on mortgage notes receivable and other receivables as detailed in the table below: Interest, dividend and accretion income Net realized gain on the sale of investments Unrealized loss on investments, net Interest income from investments in special purpose entities Interest earned on notes receivable and other interest Total investment income, net $ $ 2021 $ Year Ended December 31, 2020 In millions 1.2 $ — (4.7) 8.2 0.3 5.0 0.1 — (1.9) 8.1 0.9 7.2 $ $ 2019 7.4 0.1 (5.3) 8.2 0.3 10.7 Investment income, net increased $2.2 million to $7.2 million for 2021, as compared to $5.0 million for 2020. The decrease in interest, dividend and accretion income is primarily due the change in investments held during the period. Investment income, net during 2021 and 2020 includes unrealized losses related to preferred stock of $1.9 million and $4.7 million, respectively. 32 Interest Expense Interest expense primarily includes interest incurred on 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: Interest expense and amortization of discount and issuance costs for Senior Notes issued by special purpose entity Other interest expense Total interest expense 2021 Year Ended December 31, 2020 In millions 2019 $ $ 8.8 7.1 15.9 $ $ 8.8 4.8 13.6 $ $ 8.8 3.5 12.3 Interest expense increased $2.3 million, or 16.9%, in 2021, as compared to 2020, primarily related to the increase in project financing. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information regarding project financing. Gain on Contribution to Unconsolidated Joint Ventures Gain on contribution to unconsolidated joint ventures in 2021 and 2020 was $3.6 million and $20.0 million, respectively. The year ended December 31, 2021, includes a gain of $3.1 million on land contributed to our unconsolidated Watersound Fountains Independent Living JV. The year ended December 31, 2021, also includes a gain of $0.5 million on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. The year ended December 31, 2020, includes a gain of $15.7 million on land and additional infrastructure improvements contributed to our 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 our unconsolidated Sea Sound Apartments JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. Other Income, Net Other income, net primarily includes income from our retained interest investments, gain on insurance recovery, loss from hurricane damage and other income and expense items as detailed in the table below: Accretion income from retained interest investments Gain on insurance recovery Loss from hurricane damage Miscellaneous income, net Other income, net Year Ended December 31, 2021 2020 2019 1.5 4.9 (0.1) 3.9 10.2 In millions 1.4 $ 0.7 (1.1) 0.3 1.3 $ $ $ $ $ 1.4 5.3 (2.7) 0.2 4.2 Other income, net increased $8.9 million to $10.2 million during 2021, as compared to $1.3 million in 2020. The year ended December 31, 2021 and 2020 includes a gain on insurance recovery of $4.9 million and $0.7 million, respectively, and loss from hurricane damage of $0.1 million and $1.1 million, respectively, related to Hurricane Michael. 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. We have met all requirements related to the TRBG program as of December 31, 2021. See Note 7. Hurricane Michael and Note 18. Other Income, Net included in Item 15 of this Form 10-K for additional information for additional information. 33 Income Tax Expense We recorded income tax expense in 2021 of $25.0 million, compared to $13.7 million in 2020. Our effective tax rate was 25.1% in 2021, as compared to 23.2% in 2020. 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 Florida income tax rate, income tax credits related to our multi-family projects, the benefit of QOZ investment and other permanent differences. Our effective rate for 2020 differed from the federal statutory rate of 21.0% primarily due to state income taxes, income tax credits related to our multi-family projects and other permanent differences. See Note 13. Income Taxes included in Item 15 of this Form 10-K for additional information. Segment Results Residential The table below sets forth the consolidated results of operations of our residential segment: Revenue: Real estate revenue Hospitality revenue Leasing revenue Other revenue Total revenue Expenses: Cost of real estate and other revenue Cost of hospitality revenue Cost of leasing revenue Other operating expenses Depreciation and amortization Total expenses Operating income Other income (expense): Investment income, net Interest expense Gain on contribution to unconsolidated joint ventures Other income (expense), net Total other income (expense), net 2021 Year Ended December 31, 2020 In millions 2019 $ $ 137.8 0.7 0.4 6.9 145.8 56.8 0.8 0.1 4.9 0.4 63.0 82.8 0.8 (0.6) 0.5 0.1 0.8 $ 69.4 0.4 0.2 4.6 74.6 29.8 0.6 — 5.3 0.3 36.0 38.6 0.2 (0.7) 15.7 — 15.2 37.0 0.5 — 4.1 41.6 19.9 0.6 — 4.9 0.3 25.7 15.9 0.1 (0.7) — (0.2) (0.8) Income before equity in loss from unconsolidated joint ventures and income taxes $ 83.6 $ 53.8 $ 15.1 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. Hospitality revenue includes some of our short-term vacation rentals. Leasing revenue includes long-term leases of 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. For 2021 and 2020, real estate revenue includes estimated homesite residuals of $4.8 million and $1.9 million, respectively. For 2021 and 2020, other revenue includes estimated fees related to homebuilder homesite sales of $2.4 million and $1.9 million, respectively. Cost of real estate revenue includes direct costs (e.g., development and construction costs), selling costs and other indirect costs. 34 The following tables set forth our consolidated residential real estate revenue and cost of revenue activity: Year Ended December 31, 2021 Units Sold Revenue Cost of Revenue Dollars in millions Gross Profit Gross Margin Consolidated Homesites Homes Land sales Total consolidated Unconsolidated Homes (a) Total 804 2 N/A 806 $ $ 47 853 136.7 1.0 0.1 137.8 $ $ 52.7 0.9 — 53.6 $ $ 84.0 0.1 0.1 84.2 61.4 % 10.0 % 100.0 % 61.1 % (a) 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. Units Sold Revenue Year Ended December 31, 2020 Cost of Revenue Dollars in millions Gross Profit Gross Margin 509 N/A 509 $ $ 67.7 1.7 69.4 $ $ 27.4 0.4 27.8 $ $ 40.3 1.3 41.6 59.5 % 76.5 % 59.9 % Homesites Land sale Total Units Sold Revenue Year Ended December 31, 2019 Cost of Revenue Dollars in millions Gross Profit Gross Margin Homesites Total 379 379 $ $ 37.0 37.0 $ $ 18.6 18.6 $ $ 18.4 18.4 49.7 % 49.7 % Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020 Homesites. Revenue from homesite sales increased $69.0 million, or 101.9%, during 2021, as compared to 2020, primarily due to the mix and number of homesites sold per community, the timing of homebuilder contractual closing obligations and the timing of development of completed homesites in our residential communities. During 2021 and 2020, the average revenue, excluding homesite residuals, per homesite sold was approximately $157,000 and $124,000, respectively. The increase in average revenue per homesite sold in 2021 was due to the mix of sales from different communities. Gross margin increased to 61.4% during 2021, as compared to 59.5% during 2020, 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 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%. During 2020, we did not have any home sales. Land sales. During 2021, we had unimproved residential land sales for $0.1 million, with de minimis cost of revenue. During 2020 we had unimproved residential land sales for $1.7 million, resulting in a gross profit margin of 76.5%. 35 Other operating expenses include salaries and benefits, property taxes, marketing, professional fees, project administration, owner association and CDD assessments and other administrative expenses. Investment income, net primarily consists of interest earned on our notes receivable. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. Gain on contribution to unconsolidated joint ventures for 2021, includes a gain of $0.5 million on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. Gain on contribution 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. Hospitality The table below sets forth the consolidated results of operations of our hospitality segment: 2021 Year Ended December 31, 2020 In millions 2019 Revenue: Hospitality revenue Leasing revenue Total revenue Expenses: Cost of hospitality revenue Other operating expenses Depreciation and amortization Total expenses Operating income Other (expense) income: Interest expense Other income, net Total other income, net $ $ 74.5 0.1 74.6 57.5 0.9 7.0 65.4 9.2 (0.5) 0.6 0.1 $ 47.4 — 47.4 34.7 1.2 4.6 40.5 6.9 (0.2) 0.5 0.3 Income before equity in loss from unconsolidated joint ventures and income taxes $ 9.3 $ 7.2 $ The following table sets forth details of our hospitality segment consolidated revenue and cost of revenue: 45.6 0.1 45.7 33.9 0.8 4.6 39.3 6.4 — 0.2 0.2 6.6 Clubs Hotel operations, food and beverage operations, short- term vacation rentals and other management services Other Total Year Ended December 31, 2021 Gross Gross Margin Profit Revenue $ 31.9 $ 9.3 29.2 % $ 22.3 $ 34.1 % $ 20.9 $ 7.7 36.8 % Revenue Year Ended December 31, 2020 Gross Gross Margin Profit In millions 7.6 Year Ended December 31, 2019 Gross Gross Profit Margin Revenue 36.9 5.8 $ 74.6 $ 6.5 1.3 17.1 17.6 % 22.4 % 22.9 % $ 47.4 $ 23.2 1.9 3.8 1.3 12.7 16.4 % 23.6 68.4 % 1.2 26.8 %$ 45.7 3.0 1.1 $ 11.8 12.7 % 91.7 % 25.8 % Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 Revenue from our clubs increased $9.6 million, or 43.0%, during 2021, as compared to 2020. The increase in revenue in the current period was due to increases in the number of members and membership revenue, as well as higher 36 demand for club amenities that resulted in revenue increases from the beach club, golf and charter flights. As of December 31, 2021, Watersound Club had 2,255 members, compared with 1,563 members as of December 31, 2020, an increase of 692 members. Our clubs gross margin decreased to 29.2% during 2021, compared to 34.1% during 2020. The decrease in gross margin was due to increased support services allocation related to the growth of our club memberships, as well as onboarding of staff for future assets currently under construction and an increase in cost of labor and products. Revenue from our hotel operations, food and beverage operations, short-term vacation rentals and other management services increased $13.7 million, or 59.1%, during 2021, as compared to 2020. The increase was primarily due to increases in lodging revenue from the WaterColor Inn and Hilton Garden Inn Panama City Airport, which opened in July 2021, as well as food and beverage operations consistent with increased popularity of the region and year-round travel. The increase was also due to the impact of the COVID-19 pandemic on the prior period, which resulted in shutdowns and reduced revenue from mid-March to mid-May 2020. Gross margin increased to 17.6% during 2021, as compared to 16.4% during 2020. The increase in gross margin was due to an increase in year-round travel in the current period consistent with the growth and popularity of the region. The increase in gross margin was partially offset by pre- opening expenses associated with the opening of Hilton Garden Inn Panama City Airport, onboarding of staff for future assets currently under construction and an increase in cost of labor and products. Revenue from other hospitality operations increased $3.9 million to $5.8 million during 2021, as compared to $1.9 million in 2020. The increase in other hospitality revenue was primarily related to an increase in revenue from The Powder Room, which opened in December 2020, as well as the WaterColor retail store. Gross profit during 2021 and 2020 includes $0.7 million and $1.3 million, respectively, related to business interruption insurance proceeds received for the marinas related to Hurricane Michael, which impacted gross margin during each period. Our other hospitality operations gross margin decreased to 22.4% during 2021, compared to 68.4% during the same period in 2020, due to the business interruption proceeds received in the prior period. We did not have revenue from our marinas during 2021, 2020 or 2019, due to the impact of Hurricane Michael on the marinas. See Note 7. Hurricane Michael included in Item 15 of this Form 10-K for further discussion. Other operating expenses include salaries and benefits, professional fees, property taxes and other administrative expenses. The increase of $2.4 million in depreciation and amortization expense during 2021, as compared to the same period in 2020, was primarily due to new properties placed in service. Interest expense primarily includes interest incurred from our hospitality project financing. 37 Commercial The table below sets forth the consolidated results of operations of our commercial segment: Revenue: Leasing revenue Commercial leasing revenue Multi-family leasing revenue Senior living leasing revenue Total leasing revenue Commercial and rural real estate revenue Timber revenue Total revenue Expenses: Cost of leasing revenue Cost of commercial and rural real estate revenue Cost of timber revenue Other operating expenses Depreciation, amortization and depletion Total expenses Operating income Other (expense) income: Interest expense Gain on contribution to unconsolidated joint ventures Other income, net Total other income, net 2021 Year Ended December 31, 2020 In millions 2019 $ $ 15.8 8.8 2.0 26.6 12.0 6.0 44.6 11.3 2.5 0.7 3.9 10.5 28.9 15.7 (5.9) 3.1 3.7 0.9 $ 14.8 3.9 — 18.7 11.7 6.3 36.7 5.9 5.5 0.8 3.7 7.0 22.9 13.8 (3.8) 3.9 0.1 0.2 14.3 1.2 — 15.5 19.5 3.9 38.9 4.6 4.3 0.7 3.5 5.3 18.4 20.5 (2.7) 2.2 1.2 0.7 Income before equity in loss from unconsolidated joint ventures and income taxes $ 16.6 $ 14.0 $ 21.2 The following table sets forth details of our commercial segment consolidated revenue and cost of revenue: Year Ended December 31, 2021 Gross Gross Revenue Profit (Deficit) Margin Year Ended December 31, 2020 Gross Gross Revenue Profit (Deficit) Margin In millions Year Ended December 31, 2019 Gross Gross Profit Margin Revenue Leasing Commercial leasing Multi-family leasing Senior living leasing Total leasing Commercial and rural real estate Timber Total $ 15.8 $ 8.8 2.0 26.6 12.0 6.0 $ 44.6 $ 10.8 5.5 (1.0) 15.3 9.5 5.3 30.1 68.4 % $ 14.8 $ 62.5 % (50.0)% 57.5 % 3.9 — 18.7 10.3 69.6 % $ 76.9 % 3.0 (0.5) — % 68.4 % 12.8 14.3 $ 1.2 — 15.5 79.2 % 88.3 % 67.5 % $ 36.7 $ 11.7 6.3 6.2 5.5 24.5 53.0 % 87.3 % 66.8 % $ 19.5 3.9 38.9 $ 10.2 0.7 — 10.9 15.2 3.2 29.3 71.3 % 58.3 % — % 70.3 % 77.9 % 82.1 % 75.3 % Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 Total leasing revenue increased $7.9 million, or 42.2%, during 2021, as compared to 2020. The increase was primarily due to new leases at Pier Park Crossings Phase II apartments, which began leasing in the fourth quarter of 2020 and new leases at Watersound Origins Crossings apartments and Watercrest senior living community, which began leasing in the first quarter of 2021, as well as other new leases. Total leasing gross margin decreased during 2021 to 38 57.5%, as compared to 68.4% during 2020, primarily due to $0.7 million of business interruption proceeds received for Pier Park Crossings apartments related to Hurricane Michael in the prior period and start-up and lease-up expenses for new assets in the current period. As of December 31, 2021, we had net rentable square feet of approximately 985,000, of which approximately 857,000 square feet was under lease. As of December 31, 2020, we had net rentable square feet of approximately 908,000, of which approximately 774,000 square feet was under lease. As of December 31, 2021, we had 804 multi-family and senior living units leased, compared to 292 multi-family and senior living units leased as of December 31, 2020. Commercial and rural real estate revenue for the three years ended December 31, 2021 includes the following: Period 2021 2020 2019 Number of Sales Acres Sold Gross Profit Average Price Per Acre on Sales In millions (except for average price per acre) Revenue 22 23 25 577 473 1,605 $ $ $ 20,797 24,736 12,150 $ $ $ 12.0 11.7 19.5 $ $ $ 9.5 6.2 15.2 We believe the diversity of our commercial segment complements the growth of 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 2021, we had 22 commercial and rural real estate sales totaling approximately 577 acres for $12.0 million, resulting in a gross profit margin of approximately 79.2%. During 2020, we had 23 commercial and rural real estate sales totaling approximately 473 acres for $11.7 million, resulting in a gross profit margin of approximately 53.0%. 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 commercial properties for higher and better use. This may result in certain assets moving from the commercial segment to the hospitality segment. Timber revenue decreased by $0.3 million, or 4.8%, during 2021, as compared to 2020. The decrease was primarily due to a decrease in the sales of fill dirt and other products. The decrease was partially offset by an increase due to the sales mix of different wood products and price increases in the current period. There were 273,000 tons of wood products sold during 2021, as compared to 322,000 tons of wood products sold during 2020. The average price of wood product sold increased to $19.57 per ton during 2021, as compared to $15.32 per ton during 2020. The total tons sold and relative percentages of total tons sold by major type of wood product are as follows: Pine pulpwood Pine sawtimber Pine grade logs Other Total 2021 Year Ended December 31, 2020 2019 162,000 100,000 9,000 2,000 273,000 59.4 % 208,000 36.6 % 75,000 3.3 % 26,000 0.7 % 13,000 100.0 % 322,000 64.6 % 129,000 23.3 % 35,000 8.1 % 21,000 4.0 % 35,000 100.0 % 220,000 58.6 % 15.9 % 9.6 % 15.9 % 100.0 % Other operating expenses include salaries and benefits, property taxes, CDD assessments, professional fees, marketing, project administration and other administrative expenses. The increase of $3.5 million in depreciation, amortization and depletion expense during 2021, as compared to 2020, was primarily due to new properties placed in service. Interest expense primarily includes interest incurred from our commercial project financing and CDD debt. Gain on contribution to unconsolidated joint ventures for 2021, includes a gain of $3.1 million on land contributed to our unconsolidated Watersound Fountains Independent Living JV. Gain on contribution to unconsolidated joint 39 ventures for 2020 includes a gain of $3.9 million on land contributed to our unconsolidated Sea Sound Apartments JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. Other income, net during 2021, includes $3.6 million received from the Florida Division of Emergency Management’s TRBG program for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael. See Note 7. Hurricane Michael and Note 18. Other Income, Net included in Item 15 of this Form 10- K for additional information. Liquidity and Capital Resources As of December 31, 2021, we had cash and cash equivalents and U.S. Treasury Bills classified as investments – debt securities of $159.1 million, compared to $154.8 million as of December 31, 2020. As of December 31, 2021, we also had investments – equity securities in preferred stock investments of $0.5 million. 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 time. See Note 5. Investments included in Item 15 of this Form 10-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-term debt, capital contributions to JVs, Latitude Margaritaville Watersound JV Note commitment, authorized stock repurchases and authorized dividends for the next twelve months. See Part II. Item 1A. Risk Factors. During 2021, we incurred a total of $200.8 million in capital expenditures, which includes $52.8 million for our residential segment, $45.8 million for our commercial segment, $101.7 million for our hospitality segment and $0.5 million for corporate expenditures. Our 2022 capital expenditures budget exceeds our 2021 expenditures. 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. As of December 31, 2021, we had a total of $217.0 million in construction and development related contractual obligations, of which a portion will be funded through committed or new financing arrangements. As of December 31, 2021 and 2020, we had various loans outstanding totaling $227.5 million and $161.4 million, respectively, with maturities from May 2022 through June 2060. The weighted average rate on our variable rate loans as of December 31, 2021 was 2.6%. See Item 7A. Quantitative and Qualitative Disclosures about Market Risk for additional information regarding London Interbank Offered Rate (“LIBOR”) related risks. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. In October 2015, the Pier Park North JV entered into a $48.2 million loan (the “PPN JV Loan”). As of December 31, 2021 and 2020, $43.6 million and $44.6 million, respectively, was outstanding on the PPN JV Loan. The PPN JV Loan accrues interest at a rate of 4.1% per annum and matures in November 2025. In connection with the PPN JV 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 or upon breach of covenants in the security instrument. See Note 11. Debt, Net included in Item 15 of this Form 10-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, 2021 and 2020, $35.7 million and $36.1 million, respectively, was outstanding on the PPC JV Loan. The PPC JV Loan matures in June 2060. In August 2021, the Pier Park Crossings JV entered into a modification of the PPC JV Loan, that reduced the interest rate from 4.0% to 3.1%. The modification revised the prepayment provision to include that the PPC JV Loan may not be prepaid prior to September 1, 2022 and 40 from September 1, 2022 through August 31, 2031 a premium is due to the lender of 2% - 10% of any prepaid principal. The PPC JV Loan is secured by the Pier Park Crossings JV’s real property and the assignment of rents and leases. See Note 11. Debt, Net included in Item 15 of this Form 10-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”). As of December 31, 2021 and 2020, $37.9 million and $27.2 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 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, 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. We are the sole guarantor and receive a monthly fee related to the guarantee from our JV partner based on the JV partner’s ownership percentage. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. In June 2019, the Watercrest JV entered into a $22.5 million loan (the “Watercrest JV Loan”). As of December 31, 2021 and 2020, $20.1 million and $18.1 million, respectively, was outstanding on the Watercrest JV Loan. The Watercrest JV Loan bears interest at a rate of LIBOR plus 2.2% and matures 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, we executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Watercrest JV Loan. We are the sole guarantor and receive a quarterly fee related to the guarantee from our 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 debt on the notional amount of related debt of $20.0 million to a rate of 4.4%. See Note 6. Financial Instruments and Fair Value Measurements and Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. In August 2019, a wholly-owned subsidiary of ours entered into a $5.5 million loan (the “Beckrich Building III Loan”). As of December 31, 2021 and 2020, $5.2 million and $5.4 million, respectively, was outstanding on the Beckrich Building III Loan. The Beckrich Building III Loan bears interest at a rate of LIBOR plus 1.7% and matures 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, we executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Beckrich Building III Loan. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. In October 2019, the Pier Park Crossings II JV entered into a $17.5 million loan (the “PPC II JV Loan”). As of December 31, 2021 and 2020, $17.4 million and $15.9 million, respectively, was outstanding on the PPC II JV Loan. The PPC II JV Loan matures in October 2024 and bears interest at a rate of LIBOR plus 2.1%. 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, we executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the PPC II JV Loan. As guarantor, our liability under the PPC II JV Loan was reduced to 50% of the principal amount upon satisfaction of final advance conditions in April 2021 and will be reduced to 25% of the principal amount upon reaching and maintaining a certain debt service coverage ratio. We are the sole guarantor and receive a monthly fee related to the guarantee from our JV partner based on the JV partner’s ownership percentage. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. In January 2022, we began the process to refinance the PPC II JV Loan with a loan commitment to be insured by HUD. In March 2020, a wholly-owned subsidiary of ours entered into a $15.3 million loan (the “Airport Hotel Loan”). As of December 31, 2021 and 2020, $14.6 million and $3.5 million, respectively, was outstanding on the Airport Hotel Loan. The Airport Hotel Loan bears interest at LIBOR plus 2.0%, with a floor of 3.0%, and matures in March 2025. The Airport Hotel 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 Airport Hotel Loan, we executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Airport Hotel Loan. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. 41 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, 2021, $14.7 million was outstanding on the Pier Park Resort Hotel JV Loan. As of December 31, 2020, there was no principal balance outstanding on the Pier Park Resort Hotel JV Loan. The Pier Park Resort Hotel JV Loan matures in April 2027 and bears interest at a rate of LIBOR plus 2.2% during construction and LIBOR plus 2.0% upon hotel opening. The Pier Park Resort Hotel 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 Pier Park Resort Hotel JV Loan, as guarantor, we and our 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, our 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 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 is 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 11. 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 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”). As of December 31, 2021, $11.8 million was outstanding on the Breakfast Point Hotel Loan. As of December 31, 2020, there was no principal balance outstanding on the Breakfast Point Hotel Loan. The Breakfast Point Hotel Loan matures in November 2042 and bears interest at a rate of LIBOR plus 2.8% through November 2022, 3.3% over the 5-Year T-Bill Index from November 2022 through November 2027 and 3.3% over the 1-Year T-Bill Index from November 2027 through November 2042, with a minimum rate of 3.8% throughout the term of the loan. The Breakfast Point Hotel Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. In connection with the Breakfast Point Hotel Loan, we executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Breakfast Point Hotel Loan. See Note 11. 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 to finance the construction of a self-storage facility in Santa Rosa Beach, Florida (the “Self-Storage Facility Loan”). As of December 31, 2021, $4.7 million was outstanding on the Self-Storage Facility Loan. As of December 31, 2020, there was no principal balance outstanding on the Self-Storage Facility Loan. The Self-Storage Facility Loan matures in November 2025 and bears interest at a rate of LIBOR plus 2.4%, with a floor of 2.9%. The Self-Storage Facility Loan is secured by the real property, assignment of leases and rents and the security interest in the rents and personal property. In connection with the Self-Storage Facility Loan, we executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Self-Storage Facility Loan. Our liability as guarantor under the Self-Storage Facility Loan shall not exceed $2.9 million, plus any additional fees, upon reaching and maintaining certain debt service coverage. See Note 11. 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 to finance the construction of a boutique hotel in Seagrove Beach, Florida (the “Lodge 30A JV Hotel Loan”). As of December 31, 2021, $7.5 million was outstanding on the Lodge 30A JV Hotel Loan. The Lodge 30A JV Hotel Loan bears interest at a rate of 3.8% and matures in January 2028. The Lodge 30A JV Hotel Loan is secured by the real property, assignment of leases and rents and the security interest in the rents and personal property. In connection with the Lodge 30A JV Hotel 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% 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 11. Debt, Net included in Item 15 of this Form 10-K for additional information. In March 2021, a wholly-owned subsidiary of ours entered into a $26.8 million loan to finance the construction of apartments in Panama City, Florida (the “North Bay Landing Apartments Loan”, formerly referenced as “Star Avenue”). 42 As of December 31, 2021, $1.3 million was outstanding on the North Bay Landing Apartments Loan. The North Bay Landing Apartments 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 North Bay Landing Apartments Loan will bear interest at a rate of LIBOR plus 2.3%, with a floor of 3.0%. The North Bay Landing Apartments Loan matures in September 2024 and includes an option for an extension of the maturity date by eighteen months, subject to certain conditions. The North Bay Landing Apartments 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 North Bay Landing Apartments Loan, we executed a guarantee in favor of the lender to guarantee completion of the project and the payment and performance of the borrower under the North Bay Landing Apartments Loan. As guarantor, our liability under the North Bay Landing Apartments Loan will be reduced to 50% of the principal amount upon satisfaction of final advance conditions and reduced to 25% of the 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 11. 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 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”). As of December 31, 2021, $3.4 million was outstanding on the Watersound Camp Creek Loan. The Watersound Camp Creek Loan bears interest at a rate of LIBOR plus 2.1%, with a floor of 2.6%, and matures in December 2047. The Watersound Camp Creek 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 Camp Creek Loan, we executed a guarantee in favor of the lender to guarantee completion of the project and the payment of the borrower under the Watersound Camp Creek Loan. As guarantor, our liability under the Watersound Camp Creek Loan will be reduced to 50% of the principal amount upon the project reaching and maintaining a trailing six months operations with a certain debt service coverage ratio and reduced to 25% of the principal amount upon reaching and maintaining a trailing twelve months operations of a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of the failure of 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 11. 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 to finance the construction of the a building in the Watersound Town Center near the Watersound Origins residential community (the “Watersound Town Center Grocery Loan”). As of December 31, 2021, $0.6 million was outstanding on the Watersound Town Center Grocery Loan. The Watersound Town Center Grocery Loan bears interest at LIBOR plus 2.0%, with a floor of 2.2%, and matures in August 2031. The Watersound Town Center Grocery 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 Town Center Grocery Loan, we executed a guarantee in favor of the lender to guarantee completion of the project and the payment and performance of the borrower under the Watersound Town Center Grocery Loan. As guarantor, our liability under the Watersound Town Center Grocery Loan will be reduced to 50% of the 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 principal amount upon reaching a certain debt service coverage ratio and the project maintaining 93% occupancy for ninety consecutive days. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. In October 2021, a wholly-owned subsidiary of ours entered into a $21.2 million loan to finance the construction of a hotel in Panama City, Florida (the “Hotel Indigo Loan”). As of December 31, 2021, there was no principal balance outstanding on the Hotel Indigo Loan. The Hotel Indigo Loan bears interest at a rate of LIBOR plus 2.6%, with a floor of 2.6%, through October 2023 and LIBOR plus 2.4%, with a floor of 2.4%, from November 2023 through maturity. The Hotel Indigo Loan matures in October 2028 and includes an option for an extension of the maturity date by sixty months, subject to certain conditions. The Hotel Indigo Loan is secured by the leasehold property, assignment of rents, leases, deposits, permits, plans, fees, agreements, approvals and contracts and the security interest in the personal property and rents. In connection with the Hotel Indigo Loan, we executed a guarantee in favor of the lender to guarantee completion of the project and the payment and performance of the borrower under the Hotel Indigo Loan. See Note 11. Debt, Net included in Item 15 of this Form 10-K for additional information. 43 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 and 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 $4.9 million as of December 31, 2021. Total outstanding CDD debt related to our land holdings was $14.1 million as of December 31, 2021, which is comprised of $11.8 million at SouthWood, $2.2 million at the existing Pier Park retail center and $0.1 million at Wild Heron. We pay interest on this total outstanding CDD debt. As of December 31, 2021, our unconsolidated Watersound Fountains Independent Living JV, Sea Sound Apartments JV, Latitude Margaritaville Watersound JV, Pier Park TPS JV and Busy Bee JV had various loans outstanding, some of which we have entered into guarantees. See Note 4.Jo int 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 Margaritaville Watersound JV Note”). As of December 31, 2021 and 2020, $7.1 million and $2.7 million, respectively, was outstanding on the Latitude Margaritaville Watersound JV Note. The Latitude Margaritaville Watersound JV Note was provided by us to finance the development of the pod-level, non-spine infrastructure, which is being 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 Latitude Margaritaville Watersound JV 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 9. Other Assets included in Item 15 of this Form 10-K for additional information. During the year ended December 31, 2021, we did not repurchase shares of our common stock outstanding. During the year ended December 31, 2020, we repurchased a total of 532,034 of our common stock outstanding for an aggregate purchase price of $8.8 million, including costs. See Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 15. Stockholders’ Equity included in Item 15 of this Form 10-K for additional information regarding common stock repurchases related to the Stock Repurchase Program and treasury stock retirement during 2020. 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 $13.8 million for the installment notes monetized through December 31, 2021. 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. As part of certain sales of timberlands in 2007, 2008 and 2014, we generated significant tax gains. The installment notes structure allowed us to defer the resulting federal tax liability of $33.7 million until 2022 - 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, 2021 and 2020, 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 $36.9 million and $24.2 million, respectively, as well as standby letters of credit in the amount of $12.9 million and $6.6 million, respectively, which may potentially result in a liability to us if certain obligations are not met. In conducting our operations, we routinely hold purchasers’ 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 agencies for real estate 44 transactions were $9.3 million and $4.5 million as of December 31, 2021 and 2020, 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: Net cash provided by operating activities Net cash used in investing activities Net cash provided by (used in) financing activities Net decrease in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of the year Cash, cash equivalents and restricted cash at end of the year Cash Flows from Operating Activities Year Ended December 31, 2021 2020 2019 $ $ 111.8 (196.1) 48.6 (35.7) 110.1 74.4 In millions 37.3 $ (175.3) 59.4 (78.6) 188.7 110.1 $ $ $ 30.4 (30.4) (9.4) (9.4) 198.1 188.7 Cash flows provided by operating activities includes 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 segment. Adjustments for non-cash items primarily include depreciation, depletion and amortization, unrealized loss on investments, net, equity in loss from unconsolidated joint ventures, net of distributions, deferred income tax expense, cost of real estate sold and gain on contribution to unconsolidated joint ventures. Net cash provided by operations was $111.8 million in 2021, as compared to $37.3 million in 2020. During 2021 net income was $73.7 million, compared to $45.5 million in 2020. The increase in net cash provided by operating activities was primarily due to increased net income, the changes in cost of real estate sold and gain on contribution to unconsolidated joint ventures during the period. Cash Flows from Investing Activities Cash flows used in investing activities primarily includes capital expenditures for operating property and property and equipment used in our operations, purchases of investments, capital contribution to unconsolidated joint ventures and payments for interest in unconsolidated joint venture, partially offset by proceeds from insurance claims, sales and maturities of investments, capital distribution from unconsolidated joint ventures and maturities of assets held by special purpose entities. During 2021, net cash used in investing activities was $196.1 million, which included capital expenditures for operating property and equipment, purchases of investments of U.S. Treasury Bills of $157.9 million, capital contribution to unconsolidated joint ventures of $9.4 million and payments for interest in unconsolidated joint venture of $0.5 million, partially offset by maturities of investments of $117.0 million, proceeds from insurance claims of $4.9 million, sales of investments of $1.5 million, capital distribution from unconsolidated joint ventures of $1.0 million and maturities of assets held by special purpose entities of $0.8 million. During 2020, net cash used in investing activities was $175.3 million, which included capital expenditures for operating property and property and equipment, purchases of investments of $58.9 million and capital contribution to unconsolidated joint ventures of $10.8 million, partially offset by maturities of investments of $11.0 million, sales of investments of $3.7 million, maturities of assets held by special purpose entities of $0.8 million and proceeds from insurance claims of $0.7 million. Capital expenditures for operating property and property and equipment were $153.5 million and $121.8 million during 2021 and 2020, respectively, which were primarily for our commercial and hospitality segments. 45 Cash Flows from Financing Activities Net cash provided by financing activities was $48.6 million for 2021, compared to $59.4 million during the same period in 2020. Net cash provided by financing activities during 2021 included borrowings on debt of $69.3 million and capital contribution from non-controlling interest of $3.2 million, partially offset by dividends paid of $18.8 million, principal payments on debt of $2.3 million, debt issuance costs of $1.4 million, capital distribution to non-controlling interest of $1.3 million and principal payments for finance leases of $0.1 million. Net cash provided by financing activities during 2020 included borrowings on debt of $69.0 million and capital contribution from non-controlling interest of $7.7 million, partially offset by repurchases of common shares of $8.8 million, dividends paid of $4.1 million, principal payments for debt of $1.9 million, debt issuance costs of $1.8 million, capital distribution to non-controlling interest of $0.6 million and principal payments for finance leases of $0.1 million. 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 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 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, interest (up to total interest expense) and real estate taxes, may also be capitalized. 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 we begin the site work or construction on land already owned, and ends when the asset is substantially complete and ready for its intended use. 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 properties, 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, 46 we review the long-lived asset’s carrying value, current period actual financial results as compared to prior period and forecast 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 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 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 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. 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; 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 senior 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; 47   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, use of revenue from membership dues, future golf rounds and greens fees, boat slip rentals and boat storage fees, merchandise and other hospitality 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. 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. 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 multiple 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 historical and future expectations of taxable income. 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 assets 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, 2021 and 2020, we had a state net operating loss carryforward of $229.3 million and $304.0 million, respectively. As of December 31, 2021 and 2020, we had $3.1 million and $2.3 million of federal net operating loss carryforwards. The federal net operating loss carryforwards are applicable to a specific QOF entity of ours 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 2030. As of December 31, 2021, we had a valuation allowance of $0.3 million. As of December 31, 2020, we had a de minimis valuation allowance. As of December 31, 2021 and 2020, we had income tax payable of $0.7 million and $2.7 million, respectively, included within other liabilities on the consolidated balance sheets. Recently Adopted Accounting Pronouncements Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (“ASU 2019-12”) which simplified the accounting for income taxes by removing certain exceptions to the general 48 principles in Topic 740. The amendment also improved consistent application of and simplified GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted the new guidance as of January 1, 2021. The adoption of this guidance did not have an 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) (“ASU 2020-01”), which clarified the interaction between the accounting standard on recognition and measurement of financial instruments in Topic 321, Investments—Equity Securities (“Topic 321”) and Topic 323, Investments—Equity Method and Joint Ventures (“Topic 323”). We adopted the new guidance as of January 1, 2021. The adoption of this guidance did not have a material impact on our financial condition, results of operations and cash flows. Codification Improvements In October 2020, the FASB issued ASU 2020-10, Codification Improvements (“ASU 2020-10”) that improved consistency by including all disclosure guidance in the appropriate disclosure sections and clarified application of various provisions in the Codification. We adopted the new guidance as of January 1, 2021. The adoption of this guidance did not have an impact on our financial condition, results of operations and cash flows and did not have a material impact on the disclosures to the financial statements. Recently Issued Accounting Pronouncements Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) that provides temporary optional guidance to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The new guidance provides expedients and exceptions for applying GAAP to contract modifications and hedging relationships affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is expected to be discontinued due to reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”) which clarifies the original guidance that certain optional expedients and exceptions in contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. This new guidance was effective upon issuance and may be applied prospectively through December 31, 2022, as reference rate activities occur. There is no current impact to us from this guidance and we are evaluating the impact that the adoption of this guidance will have on our financial condition, results of operations and cash flows. 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 U.S. Treasury Bills that have fixed interest rates for which changes in interest rates generally affect the fair value of the investment, but not the earnings or cash flows. A hypothetical 100 basis point increase in interest rates would result in a decrease of $0.3 million in the market value of these investments as of December 31, 2021. 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 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. As of December 31, 2021, approximately 99% of our total Securities are rated AA or better. 49 Our cash and cash equivalents are invested in money market instruments and short-term U.S. Treasury Bills. 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. The amount of interest expense on some of our project financing is based on LIBOR. Based on the outstanding balance of these loans as of December 31, 2021, a hypothetical 100 basis point increase in the applicable rate would result in an increase to our annual interest expense of $0.7 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 in the near future. Many of our current debt agreements have an interest rate tied to LIBOR, but these agreements provide for an alternative base rate in the event that LIBOR is 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 and work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition. Item 8. Financial Statements and Supplementary Data The Financial Statements, related notes and the Report of Independent Registered Public Accounting Firm are included in Part IV, Item 15 of this Form 10-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 Rules 13a-15(e) and 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, 2021, 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 is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our 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. Our 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 our assets; 50 (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 (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. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. 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, 2021. Management reviewed the results of their assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of December 31, 2021, 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, 2021, 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, 2021, 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”), the consolidated financial statements of the Company as of and for the year ended December 31, 2021, and our report dated February 23, 2022, 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 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 51 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. 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 23, 2022 Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 52 Item 10. Directors, Executive Officers and Corporate Governance PART III We have adopted a Code of Business Conduct and Ethics that applies to our directors and 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 2022 Annual Meeting of Shareholders to be filed on or before May 2, 2022. Item 11. Executive Compensation Information concerning executive compensation will be included in the Registrant’s Proxy Statement for our 2022 Annual Meeting of Shareholders to be filed on or before May 2, 2022 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 2022 Annual Meeting of Shareholders to be filed on or before May 2, 2022 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 2021 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 2022 Annual Meeting of Shareholders to be filed on or before May 2, 2022 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 2022 Annual Meeting of Shareholders to be filed on or before May 2, 2022 and is incorporated by reference in this Part III. 53 Item 15. Exhibits, Financial Statement Schedules (a) (1) Financial Statements PART IV The financial statements listed in the accompanying Index to Financial Statements and Financial Statement Schedules and Report of Independent Registered Public Accounting Firm are filed as part of this Form 10-K. (2) Financial Statement Schedules The financial statement schedules listed in the accompanying Index to Financial Statements and Financial Statement Schedules are filed as part of this Form 10-K. (3) Exhibits The exhibits listed on the accompanying Index to Exhibits are filed or incorporated by reference as part of this Form 10-K. Exhibit Number Description Index to Exhibits 3.1 3.2 4.1 4.2 4.3 10.1† 10.2† 10.3 10.4† 10.5 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-Q for the quarter ended June 30, 2010). Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on March 4, 2011). 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-Q for the quarter ended June 30, 2014). 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-Q for the quarter ended June 30, 2014). Description of the Common Stock Registered Under Section 12 of the Securities Exchange Act of 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). Form of Indemnification Agreement for Directors and Officers (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on February 13, 2009). 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). 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-K filed on November 30, 2010). 2015 Performance and Equity Incentive Plan (incorporated by reference to Exhibit 10.22a to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2015). 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). 54 Exhibit Number 10.6 10.7† 10.8 10.9 10.10† 21.1** 23.1** 31.1** 31.2** 32.1* 32.2* 101** 104 Description 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). 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-K filed on October 3, 2013). Form of Note Purchase Agreement (incorporated by reference to Exhibit 10.58 to the registrant’s Current Report on Form 8-K filed on April 9, 2014). 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-Q for the quarter ended September 30, 2015). 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). Subsidiaries of The St. Joe Company. Consent of Grant Thornton LLP, independent registered public accounting firm for the registrant. Certification by Chief Executive Officer. Certification by Chief Financial Officer. Certification by Chief Executive Officer. Certification by Chief Financial Officer. The following information from the registrant’s Annual Report on Form 10-K for the year ended December 31, 2021, 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. 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. 55 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. SIGNATURES Date: February 23, 2022 THE ST. JOE COMPANY /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. /s/ Jorge Gonzalez Jorge Gonzalez /s/ Marek Bakun Marek Bakun /s/ Bruce R. Berkowitz Bruce R. Berkowitz /s/ Cesar L. Alvarez Cesar L. Alvarez /s/ Howard S. Frank Howard S. Frank /s/ Thomas P. Murphy, Jr. Thomas P. Murphy, Jr. Title Date President, Chief Executive Officer and Director (Principal Executive Officer) February 23, 2022 Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) February 23, 2022 Chairman of the Board February 23, 2022 Director Director Director February 23, 2022 February 23, 2022 February 23, 2022 56 INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES Report of Independent Registered Public Accounting Firm – Grant Thornton LLP (PCAOB ID 248) Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statement of Changes in Stockholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Schedule III (Consolidated) — Real Estate and Accumulated Depreciation Schedule IV (Consolidated) — Mortgage Loans on Real Estate Page No. F 2 F 3 F 5 F 6 F 7 F 8 F 10 F 56 F 58 F 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders The St. Joe Company Opinion on the financial 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, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, 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 Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, 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, 2021, 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 23, 2022, expressed an unqualified opinion. Basis for opinion 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 regarding 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 23, 2022 F 2 THE ST. JOE COMPANY CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS Investment in real estate, net Investment in unconsolidated joint ventures Cash and cash equivalents Investments - debt securities Other assets Property and equipment, net Investments held by special purpose entities Total assets LIABILITIES AND EQUITY Liabilities: Debt, net Other liabilities Deferred tax liabilities, net Senior Notes held by special purpose entity Total liabilities Commitments and contingencies (Note 20) Equity: Common stock, no par value; 180,000,000 shares authorized; 58,882,549 issued and outstanding at December 31, 2021 and December 31, 2020 Retained earnings Accumulated other comprehensive loss Total stockholders’ equity Non-controlling interest Total equity Total liabilities and equity December 31, 2021 December 31, 2020 $ $ $ $ 690,113 52,027 70,162 88,956 70,235 31,145 205,513 1,208,151 223,034 104,192 77,259 177,566 582,051 296,873 310,925 (389) 607,409 18,691 626,100 1,208,151 $ $ $ $ 551,653 37,965 106,794 48,051 65,866 20,846 206,149 1,037,324 158,915 72,035 60,915 177,289 469,154 296,873 255,216 (1,472) 550,617 17,553 568,170 1,037,324 See notes to the consolidated financial statements. F 3 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 joint ventures, which as of December 31, 2021 and 2020, 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 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 in Note 2.Si gnificant Accounting Policies. Basis of Presentation and Principles of Consolidation. The following assets may only be used to settle obligations of the consolidated joint ventures and the following liabilities are only obligations of the joint ventures and do not have recourse to the general credit of the Company, except for covenants and guarantees discussed in Note 11. Debt, Net. ASSETS Investment in real estate Cash and cash equivalents Other assets Investments held by special purpose entities Total assets LIABILITIES Debt, net Other liabilities Senior Notes held by special purpose entity Total liabilities See notes to the consolidated financial statements. December 31, 2021 December 31, 2020 $ $ $ $ 206,565 10,564 17,392 205,513 440,034 173,531 17,836 177,566 368,933 $ $ $ $ 170,853 2,639 13,821 206,149 393,462 139,592 9,596 177,289 326,477 F 4 THE ST. JOE COMPANY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands except per share amounts) Revenue: Real estate revenue Hospitality revenue Leasing revenue Timber revenue Total revenue Expenses: Cost of real estate revenue Cost of hospitality revenue Cost of leasing revenue Cost of timber revenue Corporate and other operating expenses Depreciation, depletion and amortization Total expenses Operating income Other income (expense): Investment income, net Interest expense Gain on contribution to unconsolidated joint ventures Other income, net Total other income, net Income before equity in loss from unconsolidated joint ventures and income taxes Equity in loss from unconsolidated joint ventures Income tax expense Net income Net loss (income) attributable to non-controlling interest Net income attributable to the Company NET INCOME PER SHARE Basic and Diluted Year Ended December 31, 2021 2020 2019 $ $ 158,629 75,265 27,081 6,021 266,996 60,703 58,314 11,620 677 23,023 18,202 172,539 94,457 7,254 (15,854) 3,558 10,181 5,139 99,596 (865) (24,982) 73,749 804 74,553 $ $ 87,627 47,778 18,819 6,331 160,555 35,794 35,239 5,934 809 22,906 12,788 113,470 47,085 4,983 (13,564) 19,983 1,329 12,731 59,816 (666) (13,670) 45,480 (277) 45,203 $ $ 61,488 46,112 15,581 3,904 127,085 24,282 34,505 4,650 649 21,389 10,287 95,762 31,323 10,714 (12,302) 2,317 4,133 4,862 36,185 (77) (9,447) 26,661 114 26,775 Weighted average shares outstanding Net income per share attributable to the Company 58,882,549 1.27 $ 59,009,865 0.77 $ 59,994,527 0.45 $ See notes to the consolidated financial statements. F 5 THE ST. JOE COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) Net income: Other comprehensive (loss) income: Net unrealized (loss) gain on available-for-sale investments Net unrealized gain on restricted investments Interest rate swaps Interest rate swap - unconsolidated joint venture Reclassification of net realized loss (gain) included in earnings Total before income taxes Income tax (expense) benefit Total other comprehensive income (loss), net of tax Total comprehensive income, net of tax Total comprehensive loss (income) attributable to non-controlling interest Total comprehensive income attributable to the Company Year Ended December 31, 2020 $ 45,480 2019 $ 26,661 2021 $ 73,749 (16) — 848 213 405 1,450 (367) 1,083 74,832 804 $ 75,636 130 8 (836) (821) (4) (1,523) 386 (1,137) 44,343 (277) $ 44,066 842 18 (336) — (69) 455 (116) 339 27,000 114 $ 27,114 See notes to the consolidated financial statements. F 6 1 1 1 , 3 3 5 l a t o T — ) 9 1 6 , 1 1 ( 7 7 ) 0 0 6 ( 6 4 5 , 2 ) 5 4 8 , 0 2 ( — 9 3 3 1 6 6 , 6 2 0 7 6 , 9 2 5 5 4 ) 1 2 6 ( 8 4 7 , 7 ) 3 0 8 , 8 ( — ) 2 2 1 , 4 ( ) 0 9 ( ) 7 3 1 , 1 ( 0 8 4 , 5 4 9 0 2 , 1 ) 2 3 8 , 7 ( ) 0 0 6 ( 6 4 5 , 2 — — — — $ 9 4 1 , 0 1 ) 4 1 1 ( $ ) 1 2 6 ( 8 4 7 , 7 — — — — — — 7 7 2 0 7 1 , 8 6 5 $ 3 5 5 , 7 1 $ 9 8 1 , 3 ) 7 4 2 , 1 ( ) 4 4 8 , 8 1 ( 3 8 0 , 1 9 4 7 , 3 7 0 0 1 , 6 2 6 9 8 1 , 3 ) 7 4 2 , 1 ( — — ) 4 0 8 ( $ 1 9 6 , 8 1 $ — — — — — ) 5 4 8 , 0 2 ( 5 4 8 , 0 2 — — — — — — ) 3 0 8 , 8 ( 3 0 8 , 8 — — — — — — — — — — — — — — — — — — — 9 3 3 — — — — — — — — 5 7 7 , 6 2 ) 9 0 2 1 ( , ) 7 8 7 3 ( , — — 7 7 — — — ) 5 4 8 0 2 ( , — — — — — — — 8 0 7 5 , , ) 9 5 1 3 6 2 , 1 ( t s e r c r e t a W n i t s e r e t n i p i h s r e n w o f o n o i t a c o l l A k r a m d n i W n i t s e r e t n i p i h s r e n w o l a n o i t i d d A g n i l l o r t n o c - n o n m o r f n o i t u b i r t n o c l a t i p a C t s e r e t n i t s e r e t n i g n i l l o r t n o c - n o n o t n o i t u b i r t s i d l a t i p a C x a t f o t e n , e m o c n i e v i s n e h e r p m o c r e h t O e s n e p x e n o i t a s n e p m o c d e s a b k c o t S s e r a h s n o m m o c f o e s a h c r u p e R k c o t s y r u s a e r t f o t n e m e r i t e R e m o c n i t e N V J $ ) 5 3 3 ( $ 5 2 2 4 1 2 , $ 1 3 6 5 0 3 , $ , 3 8 5 4 1 4 , 9 5 9 1 0 2 , 1 3 r e b m e c e D t a e c n a l a B — — — — — — — $ ) 2 7 4 1 ( , — ) 7 3 1 1 ( , — — — — 3 8 0 1 , — — — — — ) 0 9 ( — ) 2 2 1 4 ( , $ 3 0 2 , 5 4 6 1 2 5 5 2 , — — ) 4 4 8 8 1 ( , — 3 5 5 , 4 7 — — 5 4 — ) 3 0 8 8 ( , — — — — — — — — — — — — ) 4 3 0 2 3 5 ( , t s e r e t n i g n i l l o r t n o c - n o n o t n o i t u b i r t s i d l a t i p a C e s n e p x e n o i t a s n e p m o c d e s a b k c o t S g n i l l o r t n o c - n o n m o r f n o i t u b i r t n o c l a t i p a C t s e r e t n i x a t f o t e n , s e s s o L t i d e r C - s t n e m u r t s n I l a i c n a n i F 3 1 - 6 1 0 2 U S A f o n o i t p o d A x a t f o t e n , s s o l e v i s n e h e r p m o c r e h t O s e r a h s n o m m o c f o e s a h c r u p e R k c o t s y r u s a e r t f o t n e m e r i t e R ) e r a h s r e p 7 0 . 0 $ ( s d n e d i v i D e m o c n i t e N $ 3 7 8 6 9 2 , $ , 9 4 5 2 8 8 , 8 5 0 2 0 2 , 1 3 r e b m e c e D t a e c n a l a B — — — — — — — — — — t s e r e t n i g n i l l o r t n o c - n o n o t n o i t u b i r t s i d l a t i p a C x a t f o t e n , e m o c n i e v i s n e h e r p m o c r e h t O ) e r a h s r e p 2 3 . 0 $ ( s d n e d i v i D g n i l l o r t n o c - n o n m o r f n o i t u b i r t n o c l a t i p a C t s e r e t n i e m o c n i t e N . s t n e m e t a t s l a i c n a n i f d e t a d i l o s n o c o t s e t o n e e S $ ) 9 8 3 ( $ 5 2 9 0 1 3 , $ 3 7 8 6 9 2 , $ , 9 4 5 2 8 8 , 8 5 1 2 0 2 , 1 3 r e b m e c e D t a e c n a l a B 7 F Y N A P M O C E O J . T S E H T Y T I U Q E ’ S R E D L O H K C O T S N I S E G N A H C F O T N E M E T A T S D E T A D I L O S N O C ) s d n a s u o h t n i s r a l l o D ( g n i l l o r t n o c - n o N t s e r e t n I y r u s a e r T k c o t S r e h t O d e t a l u m u c c A e v i s n e h e r p m o C e m o c n I ) s s o L ( d e n i a t e R i s g n n r a E k c o t S n o m m o C t n u o m A i g n d n a t s t u O s e r a h S $ 0 4 9 , 4 1 $ — $ ) 4 7 6 ( $ 0 5 4 7 8 1 , $ 5 9 3 1 3 3 , $ , 4 3 0 2 7 6 , 0 6 8 1 0 2 , 1 3 r e b m e c e D t a e c n a l a B THE ST. JOE COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Year Ended December 31, 2021 2020 2019 $ 73,749 $ 45,480 $ 26,661 18,202 — (17) 1,872 1,298 15,977 55,933 (47,318) (810) 270 (3,558) (4,853) (6,372) 7,424 — 111,797 (149,199) (4,302) 34 4,853 (157,928) — — 117,000 36 325 1,173 (9,389) 1,020 (495) 787 (196,085) 3,189 (1,247) — — (18,844) 69,300 (2,327) (104) (1,398) 48,569 (35,719) 110,119 74,400 12,788 45 48 4,688 666 8,088 33,366 (40,469) (919) 146 (19,983) (690) (12,991) 4,225 2,843 37,331 (116,085) (5,689) 8 690 (58,912) — (24) 11,000 — 2,502 1,225 (10,815) — — 787 (175,313) 7,748 (621) — (8,803) (4,122) 69,008 (1,940) (55) (1,791) 59,424 (78,558) 188,677 110,119 $ $ 10,287 77 (87) 5,342 77 8,378 22,814 (40,081) (1,221) (67) (2,317) (5,347) 1,078 3,728 1,071 30,393 (64,851) (9,354) 72 12,071 — (5,797) (74) 7,000 2,830 26,859 1,159 (1,116) — — 787 (30,414) 2,546 (600) (11,619) (20,845) — 23,935 (1,607) (36) (1,149) (9,375) (9,396) 198,073 188,677 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization Stock based compensation (Gain) loss on sale of investments Unrealized loss on investments, net Equity in loss from unconsolidated joint ventures, net of distributions Deferred income tax expense Cost of real estate sold Expenditures for and acquisition of real estate to be sold Accretion income and other Loss (gain) on disposal of property and equipment Gain on contribution to unconsolidated joint ventures Gain on insurance for damage to property and equipment, net Changes in operating assets and liabilities: Other assets Other liabilities Income taxes receivable Net cash provided by operating activities Cash flows from investing activities: Expenditures for operating property Expenditures for property and equipment Proceeds from the disposition of assets Proceeds from insurance claims Purchases of investments - debt securities Purchases of investments - equity securities Purchases of restricted investments Maturities of investments - debt securities Sales of investments - debt securities Sales of investments - equity securities Sales of restricted investments Capital contribution to unconsolidated joint ventures Capital distribution from unconsolidated joint ventures Payments for interest in unconsolidated joint venture Maturities of assets held by special purpose entities Net cash used in investing activities Cash flows from financing activities: Capital contribution from non-controlling interest Capital distribution to non-controlling interest Additional ownership interest in Windmark Repurchase of common shares Dividends paid Borrowings on debt Principal payments for debt Principal payments for finance leases Debt issuance costs Net cash provided by (used in) financing activities Net decrease in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of the year Cash, cash equivalents and restricted cash at end of the year $ See notes to consolidated financial statements. F 8 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 amounts shown in the consolidated statements of cash flows. Cash and cash equivalents Restricted cash included in other assets Total cash, cash equivalents and restricted cash shown in the accompanying consolidated statements of cash flows 2021 Year Ended December 31, 2020 $ 70,162 $ 106,794 $ 185,716 2,961 3,325 4,238 2019 $ 74,400 $ 110,119 $ 188,677 Restricted cash includes amounts reserved as a requirement of financing and development for certain of the Company’s projects. Year Ended December 31, 2020 2021 2019 Cash paid during the period for: Interest, net of amounts capitalized Income taxes $ 13,621 $ 11,070 $ 12,801 $ — $ $ 11,886 — Non-cash investing and financing activities: Non-cash allocation of ownership interest in JV Non-cash capital contribution from non-controlling interest Non-cash contribution to unconsolidated joint ventures (Decrease) increase in Community Development District debt Transfers of operating property to property and equipment Increase in expenditures for operating properties and property and equipment financed through accounts payable — $ — $ $ — $ 1,209 $ — $ $ (6,136) $ (23,737) $ (2,940) (157) $ 1,203 $ — $ 12,012 (900) $ $ — $ 2,359 $ 19,223 $ 7,939 $ 3,158 See notes to consolidated financial statements. F 9 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, 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 three reportable segments: 1) residential, 2) hospitality and 3) commercial. Prior to the first quarter of 2020, commercial leasing and sales, as well as forestry were treated as individual reportable segments. Commencing in the first quarter of 2020, due to organizational changes, the Company’s previously titled “commercial leasing and sales” and “forestry” segments are reported as one segment and retitled to “commercial.” This change is consistent with the Company’s belief that the decision making and management of the assets in these segments are being made as one group. All prior year segment information has been reclassified to conform to the current presentation. Also, commencing in the first quarter of 2020, the Company’s previously titled “residential real estate” segment was retitled to “residential.” The change had no effect on the consolidated balance sheets, statements of income, statements of comprehensive income or statements of cash flows for the periods presented. See Note 19. Segment Information. References to the number of acres, hotel rooms, multi-family units, senior living units and homesites and any amounts derived from these values in the notes to the consolidated financial statements 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 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, are 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 year presentation. Specifically, during 2021, the Company determined that, for a non-material value, it was more appropriate to reflect capital contribution to unconsolidated joint ventures as a cash outflow of investing activities rather than financing activities. The 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 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 assess whether it is the primary beneficiary on an ongoing basis. See Note 4. 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 F 10 impairment assessments, investments, retained interest investments, accruals, deferred income taxes, allowance for credit losses and revenue recognition. Actual results could differ from those estimates. Investment in Real Estate 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 indirect costs that relate to specific projects under development or construction. These indirect costs include construction and development administration, legal fees, project administration, interest (up to total interest expense) and real estate taxes. 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 or construction on land already owned, and ends when the asset is substantially complete and ready for its intended use. 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 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 life of the assets, as follows: Land Land improvements Buildings Building improvements Timber Estimated Useful Life (in years) N/A 15 - 20 20 - 40 5 - 25 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 properties and property and 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 F 11 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 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 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 any other adverse change that may affect the 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 senior 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, use of revenue from membership dues, future golf rounds and greens fees, boat slip rentals and boat storage fees, merchandise and other hospitality operations, operating F 12 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. 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 JVs in which the Company is not the primary beneficiary or does not have a majority voting interest or control. The Company’s investment in these JVs is 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. The amount of impairment recognized is the excess of the investment’s carrying value over its estimated fair 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. Joint Ventures and Note 20. Commitments and Contingencies for additional information. F 13 Cash and Cash Equivalents Cash and cash equivalents can include cash on hand, bank demand accounts, money market instruments 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 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. For available-for-sale securities where fair value is less than cost, credit related impairment, if any, will be recognized through an allowance for credit losses and adjusted each period for changes in credit risk. If the Company intends to sell the security, or more likely than not will be required to sell the security before 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 the security's fair value at the reporting date with any incremental impairment reported in earnings. Investments - 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. 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. Comprehensive income also includes changes in the fair value of effective cash flow 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 F 14 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. At each reporting period, receivables in the scope of Topic 326 are pooled by type and judgements are made based on historical losses and expected credit losses based on economic trends to determine the allowance for credit losses primarily using the aging method. Actual losses could differ from those estimates. Write-offs are recorded when the Company concludes that all or a portion of the receivable is no longer collectible and recoveries on receivables previously charged-off are credited to the allowance. The Company does not measure an allowance for credit losses for accrued interest receivables and will write-off uncollectible balances in a timely manner, which is within 90 days from when it is determined uncollectible. 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 life of various assets, as follows: Railroad and equipment Furniture and fixtures Machinery and equipment Office equipment Autos, trucks and aircraft Income Taxes Estimated Useful Life (in years) 15 - 30 5 - 10 3 - 10 5 - 10 5 - 10 The Company’s provision for income taxes includes the current tax owed on the current period earnings, as well as a deferred provision, 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 taken or expected to take in the tax 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 loss with respect to available-for-sale debt securities. F 15 Concentration of Risks and Uncertainties All of the Company’s operations and assets are concentrated in Northwest Florida. Uncertain economic conditions could have an adverse impact on the Company’s operations and asset values. The economic conditions in the U.S. have been negatively impacted by the continued threat by the COVID-19 pandemic. While demand across each of the Company’s segments remain strong, the Company’s hospitality operations have already been, and may in the future be, disrupted by the impacts of the COVID-19 pandemic and the federal, state and local government actions to address it. Despite the Company’s positive financial results during the COVID-19 pandemic, the magnitude and duration of the COVID-19 pandemic impact remains unknown and the Company could experience material declines within each of its reportable segments in the future compared to historical norms. See 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 national financial institutions and as of December 31, 2021, these balances exceed the amount of FDIC insurance provided on such deposits by $21.5 million. In addition, as of December 31, 2021, the Company had $4.0 million invested in short-term U.S. Treasury Bills classified as cash equivalents, $40.4 million invested in U.S. Treasury Money Market Funds, $89.0 million invested in U.S. Treasury Bills classified as investments – debt securities and $0.5 million invested in two issuers of preferred stock that are non-investment grade. Earnings Per Share Basic and diluted earnings per share are calculated by dividing net income attributable to the Company by the weighted average number of common shares outstanding for the period. For the three years ended December 31, 2021, the Company did not have any potential dilutive instruments, therefore, basic and diluted weighted average shares outstanding were equal. There were no outstanding common stock equivalents as of December 31, 2021 or 2020. Non- vested restricted stock is included in outstanding shares at the time of grant. 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 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; (i) identifying the contract(s) with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract and (v) recognizing revenue when (or as) the Company satisfies a performance obligation. Lease related revenue is excluded from Topic 606. The following summary details the Company’s revenue and the related timing of revenue recognition. Real Estate Revenue Revenue from real estate sales, including homesites, homes, commercial properties, operating properties and rural 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; (iv) a homesite residual on homebuilder sales that provides the Company F 16 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 fees; (vii) title business revenue and (viii) other fees on certain transactions. Title business revenue is recognized at the point in time services are provided and represent a single performance obligation with a fixed transaction price. Estimated homesite residuals and certain estimated fees are recognized as revenue at the time of sale to homebuilders, subject to constraints. Any change in material circumstances from the estimated amounts are 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, 2021, 2020 and 2019, real estate revenue includes $4.8 million, $1.9 million and $2.5 million, respectively, of estimated homesite residuals and $2.4 million, $1.9 million and $2.3 million, respectively, of estimated fees related to homebuilder homesite sales. Hospitality Revenue The Company’s hospitality operations generate revenue from membership sales, membership reservations, golf courses, lodging, short-term vacation rentals, management of The Pearl Hotel, 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 other 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 beverage sales are recognized at the point of sale. Club membership revenue consists of monthly dues, which are recognized monthly over time as access is provided for the period. Non-refundable initiation fees that are deferred and recognized ratably over time, which is the estimated membership period. Membership reservations are recognized at the point in time when certain performance obligations are met. Hotel Operations, Food and Beverage Operations, Short-Term Vacation Rentals and Other Management Services – Hotel operations, food and beverage operations, short-term vacation rentals and other management services generate revenue from (i) lodging, (ii) operation of the WaterColor Beach Club, (iii) management of The Pearl Hotel, (iv) short- term vacation rentals, (v) food and beverage operations and (vi) merchandise sales. Lodging 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. Revenue generated from the Company’s management services are recognized over time as time elapses and the Company’s performance obligations are met. The short-term vacation rentals owned by the Company generate revenue from rental fees, which are recognized at the point of sale. The Company’s food and beverage operations and retail outlets generate revenue from food and beverage sales and merchandise sales, which are recognized at the point of sale. Other Hospitality Operations – Other hospitality operations include the WaterColor retail store, marinas and The Powder Room. Other hospitality operations generate revenue from merchandise sales and service fees, which are recognized at the point of sale. Leasing Revenue Leasing revenue is excluded from Topic 606 and consists of rental revenue from multi-family, senior living, self- storage, retail, office and commercial property; rural land and other assets; as well as boat slip rentals and boat storage fees at our 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 nonlease components F 17 from lease components and, instead, accounts 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 Topic 606. Nonlease 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, Pier Park Crossings JV, Pier Park Crossings II JV, Watersound Origins Crossings JV and Watercrest JV, as well as the Company’s industrial parks and other properties. See Note 8. Leases for additional information related to leases. 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. The following represents revenue disaggregated by segment, good or service and timing: Residential Hospitality Commercial Other Total Year Ended December 31, 2021 Revenue by Major Good/Service: Real estate revenue Hospitality revenue Leasing revenue Timber revenue Total revenue Timing of Revenue Recognition: Recognized at a point in time Recognized over time Over lease term Total revenue $ 144,664 727 393 — $ 145,784 $ — $ 74,538 53 — $ 74,591 12,002 — 26,604 6,021 44,627 18,023 — 26,604 44,627 $ $ $ $ 1,963 — 31 — 1,994 1,963 — 31 1,994 $ 158,629 75,265 27,081 6,021 $ 266,996 $ 220,558 19,357 27,081 $ 266,996 $ $ $ $ 145,391 — 393 $ 145,784 $ 55,181 19,357 53 $ 74,591 F 18 Revenue by Major Good/Service: Real estate revenue Hospitality revenue Leasing revenue Timber revenue Total revenue Timing of Revenue Recognition: Recognized at a point in time Recognized over time Over lease term Total revenue Revenue by Major Good/Service: Real estate revenue Hospitality revenue Leasing revenue Timber revenue Total revenue Timing of Revenue Recognition: Recognized at a point in time Recognized over time Over lease term Total revenue Residential Hospitality Commercial Other Total Year Ended December 31, 2020 $ 74,137 412 166 — $ 74,715 $ — $ 47,366 8 — $ 47,374 $ 74,549 — 166 $ 74,715 $ 36,262 11,104 8 $ 47,374 11,689 — 18,645 6,331 36,665 18,020 — 18,645 36,665 $ $ $ $ 1,801 — — — 1,801 1,801 — — 1,801 $ 87,627 47,778 18,819 6,331 $ 160,555 $ 130,632 11,104 18,819 $ 160,555 Residential Hospitality Commercial Other Total Year Ended December 31, 2019 $ 41,055 496 35 — $ 41,586 $ — $ 45,616 104 — $ 45,720 $ 41,551 — 35 $ 41,586 $ 35,894 9,722 104 $ 45,720 19,477 — 15,442 3,904 38,823 23,381 — 15,442 38,823 $ $ $ $ 956 — — — 956 956 — — 956 $ 61,488 46,112 15,581 3,904 $ 127,085 $ 101,782 9,722 15,581 $ 127,085 $ $ $ $ $ $ Recently Adopted Accounting Pronouncements Income Taxes In December 2019, the FASB issued ASU 2019-12, which simplified the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendment also improved consistent application of and simplified GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted the new guidance as of January 1, 2021. The adoption of this guidance did not have an impact on the Company’s 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, which clarified the interaction between the accounting standard on recognition and measurement of financial instruments in Topic 321 and Topic 323. The Company adopted the new guidance as of January 1, 2021. The adoption of this guidance did not have a material impact on the Company’s financial condition, results of operations and cash flows. Codification Improvements In October 2020, the FASB issued ASU 2020-10, that improved consistency by including all disclosure guidance in the appropriate disclosure sections and clarified application of various provisions in the Codification. The Company adopted the new guidance as of January 1, 2021. The adoption of this guidance did not have an impact on the F 19 Company’s financial condition, results of operations and cash flows and did not have a material impact on the disclosures to the financial statements. Recently Issued Accounting Pronouncements Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, that provides temporary optional guidance to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The new guidance provides expedients and exceptions for applying GAAP to contract modifications and hedging relationships affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is expected to be discontinued due to reference rate reform. In January 2021, the FASB issued ASU 2021-01, which clarifies the original guidance that certain optional expedients and exceptions in contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. This new guidance was effective upon issuance and may be applied prospectively through December 31, 2022, as reference rate activities occur. There is no current impact to the Company from this guidance and the Company is evaluating the impact that the adoption of this guidance will have on its financial condition, results of operations and cash flows. 3. Investment in Real Estate Real estate, excluding unconsolidated JVs, by property type and segment includes the following: Development property: Residential Hospitality Commercial Other Total development property Operating property: Residential Hospitality Commercial Other Total operating property Less: Accumulated depreciation Total operating property, net Investment in real estate, net December 31, 2021 December 31, 2020 $ $ 122,404 137,089 85,931 3,232 348,656 13,253 124,449 290,794 127 428,623 87,166 341,457 690,113 $ $ 116,911 51,113 123,389 2,691 294,104 13,254 103,687 216,439 129 333,509 75,960 257,549 551,653 Development property consists of land the Company is developing or intends to develop for sale or future operations and includes direct costs associated with the land, as well as development, construction and indirect costs. Residential development property includes existing and planned residential homesites and related infrastructure. Hospitality development property consists of land, improvements and construction and development costs primarily related to uncompleted hotels, resorts, club amenities and marinas. Commercial development property primarily consists of land and construction and development costs for planned commercial, multi-family and industrial uses. Development property in the hospitality and commercial segments will be reclassified as operating property as it is placed into service. F 20 Operating property includes the following components: Land and land improvements Buildings and building improvements Timber Less: Accumulated depreciation Total operating property, net December 31, 2021 111,698 303,335 13,590 428,623 87,166 341,457 $ $ $ $ December 31, 2020 97,031 223,095 13,383 333,509 75,960 257,549 Operating property includes property that the Company uses for operations and activities. Residential operating property consists primarily of residential utility assets and certain rental properties. The hospitality operating property primarily consists of existing hotels, resorts, clubs, vacation rentals and other operations. Commercial operating property includes property developed or purchased by the Company and used for retail, office, self-storage, light industrial, multi- family, senior living, commercial rental and timber purposes. Operating property may be sold in the future as part of the Company’s principal real estate business. As of December 31, 2021 and 2020, operating property, net related to operating leases was $230.0 million and $161.1 million, respectively. Depreciation expense related to real estate investments was $11.7 million, $8.3 million and $6.8 million in 2021, 2020 and 2019, respectively. Depletion and amortization expense related to the Company’s timber operations was $0.3 million, $0.4 million and $0.3 million in 2021, 2020 and 2019, respectively. 4. Joint Ventures The Company enters into 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 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: (i) the power to direct the VIE activities that most significantly impact economic performance and (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 assess whether it is the primary beneficiary on an ongoing basis. 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, are 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 9. Other Assets, Note 11. Debt, Net and Note 20. Commitments and Contingencies for additional information. Consolidated Joint Ventures The Lodge 30A JV 30A Greenway Hotel, LLC was created 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, 2021 and 2020, 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, 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, 2021 and 2020. F 21 Pier Park Resort Hotel JV Pier Park Resort Hotel, LLC was created 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, 2021 and 2020, the Company owned a 70.0% 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, 2021 and 2020. Pier Park Crossings II JV Pier Park Crossings Phase II LLC was created in October 2019, when the Company entered into a JV agreement to develop, manage and lease apartments in the Pier Park area of Panama City Beach, Florida. Construction of the 120-unit apartment community was completed in December 2020. As of December 31, 2021 and 2020, the Company owned a 75.0% interest in the consolidated JV. Watersound Management, LLC, (“Watersound Management JV”) the Company’s unconsolidated JV, is 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 Pier Park Crossings II JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2021 and 2020. Watersound Closings JV Watersound Closings & Escrow, LLC, was created 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, 2021 and 2020, the Company owned a 58.0% interest in the consolidated JV. A wholly-owned subsidiary of the Company is the managing member of Watersound Closings JV and is responsible for the day-to-day activities of the 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. The Company determined Watersound Closings JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2021 and 2020. Watercrest JV SJWCSL, LLC was created in May 2019, when the Company entered into a JV agreement to develop and operate a senior living community in Santa Rosa Beach, Florida. Construction of the 107-unit community was completed in the fourth quarter of 2020. As of December 31, 2021 and 2020, the Company owned an 87.0% interest in the consolidated JV. A wholly-owned subsidiary of the Company’s JV partner is responsible for the day-to-day activities of the community. However, the Company 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, 2021 and 2020. Watersound Origins Crossings JV Origins Crossings, LLC was created in January 2019, when the Company entered into a JV agreement to develop, manage and lease apartments near the entrance to the Watersound Origins residential community. Construction of the 217-unit apartment community was completed in the fourth quarter of 2021. As of December 31, 2021 and 2020, the Company owned a 75.0% interest in the consolidated JV. The Company’s unconsolidated Watersound Management JV is responsible for the day-to-day activities of the community. 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, 2021 and 2020. F 22 Pier Park Crossings JV Pier Park Crossings LLC was created in April 2017, when the Company entered into a JV agreement to develop, manage and lease a 240-unit apartment community in the Pier Park area of Panama City Beach, Florida. As of December 31, 2021 and 2020 the Company owned a 75.0% interest in the consolidated JV. The Company’s unconsolidated Watersound Management JV is 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 Pier Park Crossings JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2021 and 2020. 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. As of December 31, 2021 and 2020, the Company owned a 60.0% interest in the consolidated JV. A wholly-owned subsidiary of the Company’s JV s partner is responsible for the day-to-day activities of the retail center. However, the Company 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, 2021 and 2020. 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: Investment in unconsolidated joint ventures Latitude Margaritaville Watersound JV Sea Sound Apartments JV Watersound Fountains Independent Living JV (a) Pier Park TPS JV Busy Bee JV Watersound Management JV (b) Total investment in unconsolidated joint ventures Outstanding debt of unconsolidated JVs Latitude Margaritaville Watersound JV (c) Sea Sound Apartments JV Watersound Fountains Independent Living JV Pier Park TPS JV Busy Bee JV Total outstanding debt of unconsolidated JVs (d) December 31, December 31, 2021 2020 $ $ $ $ 30,040 10,333 7,508 1,961 1,621 564 52,027 7,147 35,047 66 14,124 6,317 62,701 $ $ $ $ 24,288 10,348 — 2,149 1,180 — 37,965 3,297 8,789 — 14,388 6,614 33,088 JV was formed in April 2021. JV was formed in June 2021. (a) (b) (c) See Note 9. 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. (d) See Note 20. Commitments and Contingencies for additional information. The Company's maximum exposure to loss due to involvement with the unconsolidated joint ventures as of December 31, 2021, was $69.0 million, which includes the carrying amounts of the investments, guarantees, promissory note receivable and derivative instruments. F 23 The following table presents detail of the Company’s equity in (loss) income from unconsolidated joint ventures: Equity in (loss) income from unconsolidated joint ventures Latitude Margaritaville Watersound JV Sea Sound Apartments JV (a) Pier Park TPS JV Busy Bee JV Watersound Management JV (b) Total equity in loss from unconsolidated joint ventures Year Ended December 31, 2021 2020 2019 $ $ (1,861) $ (15) 551 441 19 (865) $ (524) $ — (112) (30) — (666) $ (71) — (6) — — (77) (a) (b) JV was formed in January 2020. JV was formed in June 2021. Summarized balance sheets for the Company’s unconsolidated JVs are as follows: Latitude Margaritaville Watersound JV Sea Sound Apartments JV Watersound Fountains Independent Living JV Pier Park TPS JV Busy Bee JV Watersound Management JV Total December 31, 2021 $ 54,034 (a) $ 53,775 $ 17,003 $ 16,561 $ 8,005 $ — $ 149,378 $ $ 12,541 1,761 68,336 7,147 36,419 24,770 $ $ 760 210 54,745 34,834 2,653 17,258 $ $ 240 187 17,430 1,913 433 $ 18,907 66 3,408 13,956 $ 13,839 1,147 3,921 $ $ 855 1,044 9,904 6,256 405 3,243 $ $ 138 — 138 16,447 3,635 $ 169,460 — $ — 138 62,142 44,032 63,286 $ 68,336 $ 54,745 $ 17,430 $ 18,907 $ 9,904 $ 138 $ 169,460 ASSETS Investment in real estate Cash and cash equivalents Other assets Total assets LIABILITIES AND EQUITY Debt, net Other liabilities Equity Total liabilities and equity (a) As of December 31, 2021, investment in real estate includes the land contributed to the Latitude Margaritaville Watersound JV at the Company’s historical cost basis of $1.3 million and additional completed infrastructure improvements of $4.8 million. F 24 Latitude Margaritaville Watersound JV Sea Sound Apartments JV Watersound Fountains Independent Living JV (b) Pier Park TPS JV Busy Bee JV Watersound Management JV (c) Total December 31, 2020 $ 18,255 (a) $ 29,085 $ — $ 17,946 $ 8,466 $ — $ 73,752 $ $ 1,603 136 19,994 2,844 1,794 15,356 $ $ 15 — 29,100 8,378 3,439 17,283 $ $ 1,705 — — 483 — $ 20,134 — $ 14,090 1,745 — 4,299 — $ $ 227 717 9,410 6,532 506 2,372 $ $ — — — $ 3,550 1,336 78,638 — $ — — 31,844 7,484 39,310 $ 19,994 $ 29,100 $ — $ 20,134 $ 9,410 $ — $ 78,638 ASSETS Investment in real estate Cash and cash equivalents Other assets Total assets LIABILITIES AND EQUITY Debt, net Other liabilities Equity Total liabilities and equity (a) As of December 31, 2020, investment in real estate includes the land contributed to the Latitude Margaritaville Watersound JV at the Company’s historical cost basis of $1.3 million and additional completed infrastructure improvements of $1.8 million. JV was formed in April 2021. JV was formed in June 2021. (b) (c) Summarized statements of operations for the Company’s unconsolidated JVs are as follows: Year Ended December 31, 2021 Latitude Margaritaville Watersound JV Sea Sound Apartments JV Watersound Fountains Independent Living JV (a) Pier Park TPS JV Busy Bee JV Watersound Management JV Total $ 18,653 $ 1,012 $ — $ 6,474 $ 16,229 $ 511 $ 42,879 Total revenue Expenses: Cost of revenue Other operating expenses Depreciation and amortization Total expenses Operating (loss) income Other (expense) income: Interest expense Other income, net Total other (expense) income Net (loss) income $ 14,931 6,802 396 22,129 (3,476) 432 61 343 836 176 — 2,663 — 302 — 1,434 — 4,399 — 2,075 12,958 1,946 461 15,365 864 — — — (3,476) $ (201) — (201) (25) $ (735) 5 (730) — — — — $ 1,345 $ (192) 198 6 870 $ 473 — — 473 38 31,457 9,111 2,634 43,202 (323) (1,128) — 203 — — (925) 38 $ (1,248) (a) The project is under construction with no income or loss impacting the consolidated statement of income for the year ended December 31, 2021. F 25 Year Ended December 31, 2020 Latitude Margaritaville Watersound JV Sea Sound Apartments JV (a) Watersound Fountains Independent Living JV (b) Pier Park TPS JV Busy Bee JV Watersound Management JV (c) Total $ — $ — $ — $ 2,338 $ 5,846 $ — $ 8,184 Total revenue Expenses: Cost of revenue Other operating expenses Depreciation and amortization Total expenses Operating (loss) income — 980 25 1,005 (1,005) Other expense: Interest expense Other expense, net Total other expense Net loss — — — (1,005) $ $ — — — — — — — — — $ — — — — — 1,209 161 962 2,332 6 4,364 1,057 229 5,650 196 — — — — 5,573 2,223 1,191 8,987 (803) — — — — $ (230) — (230) (224) $ (99) (145) (244) (48) $ (329) — (145) — (474) — — $ (1,277) (a) The project is under construction with no income or loss impacting the consolidated statement of income for the year ended December 31, 2020. JV was formed in April 2021. JV was formed in June 2021. (b) (c) Year Ended December 31, 2019 Latitude Margaritaville Watersound JV Sea Sound Apartments JV (a) Watersound Fountains Independent Living JV (b) Pier Park TPS JV Busy Bee JV (c) Watersound Management JV (d) Total Total revenue Total expenses Operating loss Total other expense Net loss $ $ — $ 142 (142) — (142) $ — $ — — — — $ — $ — — — — $ — $ — — (13) (13) $ — $ — — — — $ — $ — — — — $ — 142 (142) (13) (155) JV was formed in January 2020. JV was formed in April 2021. (a) (b) (c) The project was under construction with no income or loss impacting the consolidated statement of income for the year ended December 31, 2019. JV was formed in June 2021. (d) Latitude Margaritaville Watersound JV LMWS, LLC was created in June 2019, when the Company entered into a JV agreement to develop a 55+ active adult residential community in Bay County, Florida. The JV parties are working together to develop the initial phases of the community. Construction is underway on customer homes and town center amenities. During the year ended December 31, 2021, the Latitude Margaritaville Watersound JV completed 47 home sale transactions. The community is located on land that was contributed to the JV by the Company in June 2020. As part of the land contribution, the Company agreed to make certain infrastructure improvements, such that the total contractual value of the land and its improvements total $35.0 million. As of December 31, 2021 and 2020, the Company’s investment in the unconsolidated Latitude Margaritaville Watersound JV was $30.0 million and $24.3 million, respectively, which includes the net present F 26 value of the land contribution, cash contributions, additional completed infrastructure improvements, equity in loss, return of land contribution and interest related to the revolving promissory note receivable. 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, 2021, the Company completed $4.8 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. The Latitude Margaritaville Watersound JV community is estimated to include approximately 3,500 residential homes, which will be developed in smaller increments of discrete neighborhoods. As of December 31, 2021 and 2020, the Company owned a 50.0% voting interest in the JV. Each JV member 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 and 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, as lender, has provided interest-bearing financing in the form of a $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, which is being repaid by the JV as each home is sold. See Note 9. Other Assets for additional information related to the revolving promissory note. The day-to-day activities of the JV are 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. Sea Sound Apartments JV FDSJ Eventide, LLC was created in January 2020. The Company entered into a JV agreement to develop, construct and manage a 300-unit apartment community in Panama City Beach, Florida. The JV parties are working together to develop and construct the remaining 86 units of the 300-unit apartment community. The community is located near the Breakfast Point residential communities on land that was contributed to the JV by the Company in January 2020, with a fair value of $5.1 million. In addition, during 2020, the Company contributed mitigation bank credits of $0.4 million and cash of $4.9 million and the JV partner contributed $6.9 million of cash. As of December 31, 2021 and 2020, the Company owned a 60.0% interest in the JV. The Company’s partner is responsible for the day-to-day activities of the JV. The Company has determined that Sea Sound Apartments 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 Sea Sound Apartments JV is accounted for using the equity method. In January 2020, the JV entered into a $40.3 million loan (the “Sea Sound Apartments JV Loan”). The Sea Sound Apartments JV Loan bears interest at LIBOR plus 2.2% and matures in January 2024. The Sea Sound Apartments JV Loan is secured by the real property, all assets of the borrower, assignment of leases and rents and the security interest in the rents and personal property. The Company’s JV partner is the sole guarantor of the Sea Sound Apartments JV Loan. As of December 31, 2021 and 2020, $35.0 million and $8.8 million, respectively, was outstanding on the Sea Sound Apartments JV Loan. Watersound Fountains Independent Living JV WOSL, LLC was created 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, 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 F 27 accounted for using the equity method. See Note 20. Commitments and Contingencies for additional information related to debt guaranteed by the Company. Pier Park TPS JV Pier Park TPS, LLC was created in April 2018. The Company entered into a JV agreement to develop and operate a 124-room hotel in Panama City Beach, Florida. The hotel opened in May 2020. As of December 31, 2021 and 2020, 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 20. Commitments and Contingencies for additional information related to debt guaranteed by the Company. Busy Bee JV SJBB, LLC was created 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. Construction of the fuel station and convenience store was completed in June 2020. As of December 31, 2021 and 2020, 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. See Note 20. Commitments and Contingencies for additional information related to debt guaranteed by the Company. Watersound Management JV Watersound Management, LLC was created in June 2021. During 2021, the Company purchased an interest in Watersound Management, LLC for $0.5 million to form a JV to lease, manage and operate multi-family housing developments for which the JV is the exclusive renting and management agent. In addition, the Company and its JV partner each contributed cash of less than $0.1 million. As of December 31, 2021, the Company owned a 50.0% interest in the JV. The day-to-day activities of the 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 a voting interest entity, but that the Company does not have a majority voting interest. The Company’s investment in Watersound Management JV is accounted for using the equity method. 5. Investments Available-For-Sale Investments Investments classified as available-for-sale securities were as follows: Investments - debt securities: U.S. Treasury Bills December 31, 2021 Amortized Cost Gains (Losses) Fair Value Gross Unrealized Gross Unrealized $ 88,966 $ 1 $ (11) $ 88,956 F 28 Investments - debt securities: U.S. Treasury Bills Corporate debt securities Restricted investments: Short-term bond December 31, 2020 Gross Unrealized Gross Unrealized Amortized Cost Gains (Losses) Fair Value $ $ 47,986 60 48,046 1,160 1,160 49,206 $ $ 5 — 5 11 11 16 $ $ — $ 47,991 60 — 48,051 — 1,171 — 1,171 — — $ 49,222 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 $1.2 million, maturities of available-for-sale securities were $117.0 million and purchases of available-for-sale securities were $157.9 million. During 2020, net realized gains from the sale of available-for-sale securities were $0.1 million, proceeds from the sale of available-for-sale securities were $1.2 million, proceeds from the maturity of available-for-sale securities were $11.0 million and purchases of available-for- sale securities were $58.9 million. The following table provides the available-for-sale investments with an unrealized loss position and their related fair values: December 31, 2021 December 31, 2020 Less Than 12 Months Fair Value Unrealized Losses 12 Months or Greater Unrealized Losses Fair Value Less Than 12 Months Unrealized Losses Fair Value 12 Months or Greater Unrealized Losses Fair Value Investments - debt securities: U.S. Treasury Bills $ 43,959 $ 11 $ — $ — $ — $ — $ — $ — As of December 31, 2021, the Company had de minimis unrealized losses related to U.S. Treasury Bills. As of December 31, 2020, the Company did not have unrealized losses related to investments – debt securities. As of December 31, 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 an 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. The amortized cost and estimated fair value of investments – debt securities classified as available-for-sale, by contractual maturity are shown in the following table. Due in one year or less Investment Management Agreement December 31, 2021 Amortized Cost 88,966 $ Fair Value 88,956 $ 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 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, 2021, clients of FCM, including Mr. Berkowitz, beneficially owned approximately 42.6% 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. F 29 Pursuant to the terms of the Investment Management Agreement, with the Company, FCM agreed to supervise and direct the Company’s investment accounts 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 any new securities for purchase must be issues of the U.S. Treasury or U.S. 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, 2021 Level 1 Level 2 Level 3 Total Fair Value Cash equivalents: Money market funds U.S. Treasury Bills Investments - debt securities: U.S. Treasury Bills Investments - equity securities: Preferred stock Cash equivalents: Money market funds U.S. Treasury Bills Investments - debt securities: U.S. Treasury Bills Corporate debt securities Investments - equity securities: Preferred stock Restricted investments: Short-term bond $ 40,412 4,000 44,412 $ — $ — $ 40,412 4,000 44,412 — — — — 88,956 88,956 — — — — 88,956 88,956 — — $ 133,368 450 450 450 — — 450 450 $ — $ 133,818 $ December 31, 2020 Level 1 Level 2 Level 3 Total Fair Value $ 10,973 78,991 89,964 $ — $ — $ 10,973 78,991 89,964 — — — — 47,991 — 47,991 — 60 60 — 2,623 — 2,623 — — — — — 47,991 60 48,051 2,623 2,623 1,171 1,171 $ 139,126 — — $ 2,683 — — 1,171 1,171 $ — $ 141,809 Money market funds, U.S. Treasury Bills 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 and short-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. F 30 The Company’s corporate debt securities and 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 these reasons, the Company has determined that corporate debt securities and preferred stock investments are categorized as Level 2 financial instruments since their fair values were determined from market inputs in an inactive market. As of December 31, 2020, restricted investments were included within other assets on the consolidated balance sheets and included 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 retained the risks and rewards of ownership of these assets; therefore, the assets held in the suspense account were included in the Company’s consolidated financial statements until they were allocated to participants. The final allocation of the assets occurred in March 2021. As of December 31, 2020, the assets held in the suspense account were invested in 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 Short-Term Bond Fund was 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 was responsible for investing decisions and allocation decisions of the suspense account. See Note 9. Other Assets and Note 17. Employee Benefit Plan. Assets and liabilities measured at fair value on a recurring basis related to interest rate swap agreements designated as cash flow hedges are as follows: Description Pier Park Resort Hotel JV Loan (a) Watercrest JV Loan (a) Pier Park TPS JV Loan (b) Effective Date Maturity Date Fixed Interest Rate Notional Amount as of Fair Derivative Asset (Liability) Fair Value Value December 31, 2021 December 31, 2021 December 31, 2020 Level Location in Consolidated Balance Sheets In Millions In Thousands 12/10/2022 4/12/2027 3.2% $ 4.4% $ 6/1/2024 6/1/2021 42.0 $ 20.0 $ 558 $ (634) $ (1,172) — 2 Other assets 2 Other liabilities Investment in unconsolidated joint ventures 2 1/14/2021 1/14/2026 5.2% $ 14.1 $ (436) $ (821) (a) See Note 11. Debt, Net for additional information. (b) Interest rate swap was entered into by the Pier Park TPS JV, which is unconsolidated and accounted for using the equity method. The derivative 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 loss from unconsolidated joint ventures in the period during which the hedged transaction affects earnings. See Note 4. Joint Ventures and Note 20. Commitments and Contingencies for additional information. The following is a summary of the effect of derivative instruments on the Company’s consolidated statements of income and consolidated statements of comprehensive income: Year Ended December 31, 2021 2020 2019 Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives Amount of loss reclassified into interest expense Amount of loss reclassified into equity in loss from unconsolidated joint ventures $ $ $ 1,061 $ 247 $ (1,657) $ — $ 173 $ — $ (336) — — As of December 31, 2021, based on current value, the Company expects to reclassify $0.6 million of net losses on derivative instruments from accumulated other comprehensive loss to earnings during the next twelve months. F 31 Investment in Unconsolidated Joint Ventures 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 and operations of the respective JV. The fair value of investment in unconsolidated JVs required to be assessed for impairment is determined using Level 3 inputs in the fair value hierarchy. No impairment for unconsolidated JVs was recorded during 2021, 2020 or 2019. See Note 4. Joint Ventures for additional information. Long-lived Assets The Company reviews its long 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 using Level 3 inputs in the fair value hierarchy. During 2021, 2020 and 2019 the Company did not record any impairment charges related to long-lived assets. 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. The carrying amount and estimated fair value, measured on a nonrecurring basis, of the Company’s financial instruments were as follows: Investments held by SPEs: Time deposit U.S. Treasury Bills Senior Notes held by SPE Debt Fixed-rate debt Variable-rate debt Total debt December 31, 2021 Estimated Fair value Carrying value Level December 31, 2020 Estimated Fair value Carrying value Level $ 200,000 5,132 $ $ 200,000 5,475 $ $ 177,566 $ 204,802 $ 129,532 97,942 $ 227,474 $ 126,722 97,942 $ 224,664 3 1 3 2 2 $ 200,000 5,759 $ $ 200,000 6,363 $ $ 177,289 $ 216,363 $ 114,125 47,293 $ 161,418 $ 116,509 47,293 $ 163,802 3 1 3 2 2 Investments and Senior Notes Held by Special Purpose Entities In connection with a real estate sale in 2014, the Company received consideration including a $200.0 million fifteen-year installment note (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, 2021, consist of a F 32 $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 $5.1 million and cash of $0.4 million. The Senior Notes held by Northwest Florida Timber Finance, LLC as of December 31, 2021 consist of $177.6 million, net of the $2.4 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 Michael On October 10, 2018, Hurricane Michael made landfall in the Florida Panhandle. 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 have remained closed during the reconstruction of significant portions of these assets. A portion of the marinas are expected to open in spring 2022. 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 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. The Company received business interruption proceeds related to the marinas of $0.7 million during 2021 and $1.3 million during both 2020 and 2019, which are included within cost of hospitality revenue on the consolidated statements of income. In addition, during 2020, $0.7 million of business interruption proceeds were received related to the Pier Park Crossings JV, which are included within cost of leasing revenue on the consolidated statements of income. During 2021, 2020 and 2019 the Company recognized $4.9 million, $0.7 million and $5.3 million, respectively, of gain on insurance recovery. During 2021, 2020 and 2019, the Company incurred loss from hurricane damage of $0.1 million, $1.1 million and $2.7 million, respectively. The gain on insurance recovery and loss from hurricane damage were included in other income, net on the consolidated statements of income. 8. Leases The Company as Lessor 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 2040, some of which include options to terminate or extend. The components of leasing revenue are as follows: Leasing revenue Lease payments Variable lease payments Total leasing revenue Year Ended December 31, 2021 2020 2019 $ $ 22,256 4,825 27,081 $ $ 14,710 4,109 18,819 $ $ 11,637 3,944 15,581 F 33 Minimum future base rental revenue on non-cancelable leases subsequent to December 31, 2021, for the years ending December 31 are: 2022 2023 2024 2025 2026 Thereafter The Company as Lessee $ $ 19,075 11,579 9,260 6,434 4,904 17,950 69,202 As of December 31, 2021, the Company leased certain office and other equipment under finance leases and had operating leases for property and equipment used in corporate, hospitality and commercial operations with remaining lease terms up to the year 2049. 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 liabilities 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. 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. The components of lease expense are as follows: Lease cost Finance lease cost: Amortization of right-of-use assets Interest on lease liability Operating lease cost Short-term lease cost Total lease cost Other information Year Ended December 31, 2021 2020 2019 $ $ 114 18 308 1,476 1,916 $ $ 57 11 289 1,016 1,373 $ $ 40 9 238 721 1,008 Weighted-average remaining lease term - finance lease (in years) Weighted-average remaining lease term - operating leases (in years) Weighted-average discount rate - finance lease Weighted-average discount rate - operating leases 3.6 3.3 4.6 % 4.9 % 3.9 3.9 5.0 % 4.9 % 4.2 3.1 5.0 % 5.0 % F 34 The aggregate payments of finance and operating lease liabilities subsequent to December 31, 2021, for the years ending December 31 are: 2022 2023 2024 2025 2026 Thereafter Total Less imputed interest Total lease liabilities 9. Other Assets Other assets consist of the following: Restricted investments Investments - equity securities Accounts receivable, net Homesite sales receivable Notes receivable, net Inventory Prepaid expenses Straight-line rent Operating lease right-of-use assets Other assets Retained interest investments Accrued interest receivable for Senior Notes held by SPE Total other assets Restricted Investments Finance Leases 133 $ 133 86 50 6 — 408 (28) 380 $ Operating Leases 261 $ 220 108 51 12 269 921 (189) 732 $ December 31, 2021 December 31, 2020 $ — $ 450 13,813 7,651 12,377 2,797 7,175 2,489 732 5,987 13,826 2,938 70,235 $ $ 1,171 2,623 10,791 5,675 10,877 2,026 7,135 3,174 808 5,743 12,905 2,938 65,866 As of December 31, 2020, the Company’s restricted investments were related to the Company’s deferred compensation plan. As part of the Pension Plan termination in 2014, the Company directed the Pension Plan to transfer the Pension Plan’s surplus assets into a suspense account in the Company’s 401(k) plan. The Company retained the risks and rewards of ownership of these assets; therefore, the assets held in the suspense account were included in the Company’s consolidated balance sheets until they were allocated to 401(k) plan participants. The final allocation of the assets occurred in March 2021. See Note 17. Employee Benefit Plan. Investments – Equity Securities As of December 31, 2021 and 2020, investments – equity securities included $0.5 million and $2.6 million, respectively, 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 year ended December 31, 2020, the Company recognized unrealized loss of $4.6 million on investments related to equity securities still held as of December 31, 2020. During the year ended December 31, 2019, the Company recognized unrealized loss of $6.3 million on investments related to equity securities still held as of F 35 December 31, 2019. These amounts were included within investment income, net on the consolidated statements of income. Accounts Receivable, Net Accounts receivable, net primarily includes leasing receivables, membership initiation fees, hospitality receivables and other receivables. As of December 31, 2021 and 2020, accounts receivable were presented net of allowance for credit losses of $0.4 million and $0.2 million, respectively. As of both December 31, 2021 and 2020, accounts receivable were presented net of allowance for lease related receivables of less than $0.1 million. During 2021, allowance for credit losses related to accounts receivable, net increased $0.2 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: Balance January 1, 2021 5,675 $ Balance January 1, 2020 5,211 $ Increases Due To Revenue Recognized for Homesites Sold 7,213 Increases Due To Revenue Recognized for Homesites Sold 3,854 $ $ $ $ Decreases Due to Amounts Received (5,237) Balance December 31, 2021 7,651 $ Decreases Due to Amounts Received (3,390) Balance December 31, 2020 5,675 $ Homesite sales receivable Homesite sales receivable Notes Receivable, Net Notes receivable, net consist of the following: 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 Various interest bearing homebuilder notes, secured by the real estate sold — bearing interest at a rate of 5.5%, due September 2022 through May 2023 Interest bearing notes with JV partners, secured by the partners' membership interest in the JVs — bearing interest at a rate of 8.0%, due May 2039 Non-interest bearing note with a tenant for tenant improvements, due October 2025 Various mortgage notes, secured by certain real estate, bearing interest at rates of 4.4% to 5.2% due December 2022 through November 2023 Total notes receivable, net December 31, 2021 December 31, 2020 $ 7,075 $ 2,714 4,824 7,544 359 76 556 — 43 12,377 63 10,877 $ $ In June 2020, the Company entered into a $10.0 million secured revolving promissory note with the unconsolidated Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV Note was provided to finance the development of the pod-level, non-spine infrastructure, which is being 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 Latitude F 36 Margaritaville Watersound JV 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 credit losses at each reporting date. As of both December 31, 2021 and 2020, notes receivable were presented net of allowance for credit losses of $0.1 million. As of December 31, 2021 and 2020, accrued interest receivable related to notes receivable was $0.1 million and $0.2 million, respectively, which is included within other assets on the consolidated balance sheets. 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, 2021 and 2020. The Company’s continuing involvement with the SPEs is the receipt of the net interest payments and the remaining principal of approximately $16.6 million to be received at the end of the installment notes’ fifteen year maturity period, in 2022 through 2024. The Company has beneficial or retained interest investments related to these SPEs of $13.8 million and $12.9 million as of December 31, 2021 and 2020, respectively, recorded in other assets on the Company’s consolidated balance sheets. 10. Property and Equipment, Net Property and equipment, net consists of the following: Railroad and equipment Furniture and fixtures Machinery and equipment Office equipment Autos, trucks and aircraft Less: Accumulated depreciation Construction in progress Total property and equipment, net December 31, December 31, 2021 33,627 25,556 23,058 4,865 6,773 93,879 64,251 29,628 1,517 31,145 $ $ 2020 33,626 22,601 13,502 4,607 6,240 80,576 60,433 20,143 703 20,846 $ $ Depreciation expense on property and equipment was $6.1 million, $4.0 million and $3.2 million in 2021, 2020 and 2019, respectively. F 37 11. Debt, Net Debt consists of the following: PPN JV Loan, due November 2025, bearing interest at 4.1% Watersound Origins Crossings JV Loan, due May 2024, bearing interest at 5.0% PPC JV Loan, insured by HUD, due June 2060, bearing interest at 3.1% as of December 31, 2021 Watercrest JV Loan, due June 2047, bearing interest at LIBOR plus 2.2% and swapped to a fixed rate of 4.4% PPC II JV Loan, due October 2024, bearing interest at LIBOR plus 2.1% (effective rate of 2.2% at December 31, 2021) Airport Hotel Loan, due March 2025, bearing interest at LIBOR plus 2.0%, with a floor rate of 3.0% (effective rate of 3.0% at December 31, 2021) Pier Park Resort Hotel JV Loan, due April 2027, bearing interest at LIBOR plus 2.2% (effective rate of 2.3% at December 31, 2021) Breakfast Point Hotel Loan, due November 2042, bearing interest at LIBOR plus 2.8%, with a floor rate of 3.8% (effective rate of 3.8% at December 31, 2021) The Lodge 30A JV Loan, due January 2028, bearing interest at 3.8% Beckrich Building III Loan, due August 2029, bearing interest at LIBOR plus 1.7% (effective rate of 1.8% at December 31, 2021) Community Development District debt, secured by certain real estate or other collateral, due May 2022 through May 2039, bearing interest at 3.6% to 6.0% Self-Storage Facility Loan, due November 2025, bearing interest at LIBOR plus 2.4%, with a floor rate of 2.9% (effective rate of 2.9% at December 31, 2021) Watersound Camp Creek Loan, due December 2047, bearing interest at LIBOR plus 2.1%, with a floor rate of 2.6% (effective rate of 2.6% at December 31, 2021) Beach Homes Loan, due May 2029, bearing interest at LIBOR plus 1.7% (effective rate of 1.8% at December 31, 2021) Pier Park Outparcel Loan, due March 2027, bearing interest at LIBOR plus 1.7% (effective rate of 1.8% at December 31, 2021) North Bay Landing Apartments Loan, due September 2024, bearing interest at LIBOR plus 2.5%, with a floor rate of 3.2% (effective rate of 3.2% at December 31, 2021) December 31, 2021 Unamortized Discount and Debt Issuance Costs Principal December 31, 2020 Unamortized Discount and Debt Issuance Costs Net Net Principal $ 43,582 $ 248 $ 43,334 $ 44,568 $ 314 $ 44,254 37,897 35,670 248 37,649 27,179 351 26,828 1,056 34,614 36,084 1,079 35,005 20,053 327 19,726 18,066 284 17,782 17,374 147 17,227 15,921 198 15,723 14,642 128 14,514 3,548 168 3,380 14,650 964 13,686 — 11,843 7,474 5,188 4,909 191 179 52 — 11,652 7,295 — — 5,136 5,421 4,909 6,294 4,666 70 4,596 — 3,437 382 3,055 — 1,492 1,370 15 10 1,477 1,545 1,360 1,458 1,342 254 1,088 — F 38 — — — 59 — — — 17 12 — — — — 5,362 6,294 — — 1,528 1,446 — WaterColor Crossings Loan, due February 2029, bearing interest at LIBOR plus 1.7% (effective rate of 1.8% at December 31, 2021) Watersound Town Center Grocery Loan, due August 2031, bearing interest at LIBOR plus 2.0%, with a floor rate of 2.2% (effective rate of 2.2% at December 31, 2021) Total debt 1,265 18 1,247 1,334 21 1,313 620 $ 227,474 $ 151 4,440 469 — $ 223,034 $ 161,418 $ — 2,503 — $ 158,915 In October 2015, the Pier Park North JV entered into a $48.2 million loan, secured by a first lien on, and security interest in, a majority of the Pier Park North JV’s property. The PPN JV Loan provides for principal and interest payments with a final balloon payment at maturity in November 2025. In connection with the PPN JV 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. In May 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. The Watersound Origins Crossings JV Loan provides for interest only payments for the first thirty-two months and principal and interest payments thereafter with a final balloon payment at 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 receives a monthly fee related to the guarantee from its JV partner based on the JV partner’s ownership percentage. In May 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. In August 2021, the Pier Park Crossings JV entered into a modification of the PPC JV Loan, that reduced the interest rate from 4.0% to 3.1% and revised the prepayment provisions. Prior to the modification, a prepayment premium was due to the lender of 1% - 9% of any prepaid principal through June 30, 2030. The modification revised the prepayment provision to include that the PPC JV Loan may not be prepaid prior to September 1, 2022 and from September 1, 2022 through August 31, 2031 a premium is due to the lender of 2% - 10% of any prepaid principal. The PPC JV Loan is secured by the Pier Park Crossings JV’s real property and the assignment of rents and leases. As of December 31 2021, the Company incurred less than $0.1 million of additional loan costs due to the PPC JV Loan modification. In June 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 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 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%. See Note 6. Financial Instruments and Fair Value Measurements for additional information. In October 2019, the Pier Park Crossings 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 monthly principal and interest payments with a final balloon payment at 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 F 39 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. As guarantor, the Company’s liability under the PPC II JV Loan was reduced to 50% of the principal amount upon satisfaction of final advance conditions in April 2021 and will be reduced to 25% of the principal amount upon reaching and maintaining a certain debt service coverage ratio. 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. In January 2022, the Company began the process to refinance the PPC II JV Loan with a loan commitment to be insured by HUD. In March 2020, a wholly-owned subsidiary of the Company entered into a $15.3 million loan 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 Airport Hotel 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 Airport Hotel Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Airport Hotel Loan. 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 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 Pier Park Resort Hotel JV 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. The Pier Park Resort Hotel 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 Pier Park Resort Hotel JV Loan, as guarantor, 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 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 is 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 November 2020, a wholly-owned subsidiary of the Company entered into a $16.8 million loan 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 interest only payments for the first twenty-four months and principal and interest payments thereafter through maturity in November 2042. The Breakfast Point Hotel Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. In connection with the Breakfast Point Hotel Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Breakfast Point Hotel Loan. 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 Hotel 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 Lodge 30A JV Hotel Loan is secured by the real property, assignment of leases and rents and the security interest in the rents and personal property. In connection with the Lodge 30A JV Hotel 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% 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. F 40 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 monthly principal and interest payments with a final balloon payment at 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. 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. The Company has recorded a liability for CDD debt that is associated with platted property, which is the point at which it becomes fixed and 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 $14.1 million and $15.8 million as of December 31, 2021 and 2020, respectively. The Company pays interest on this total outstanding CDD debt. In November 2020, a wholly-owned subsidiary of the Company entered into a $5.8 million loan 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 Self-Storage Facility Loan is secured by the real property, assignment of leases and rents and the security interest in the rents and personal property. In connection with the Self-Storage Facility Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Self-Storage Facility Loan. The Company’s liability as guarantor under the Self-Storage Facility Loan shall not exceed $2.9 million, plus any additional fees, upon reaching and maintaining certain debt service coverage. In June 2021, a wholly-owned subsidiary of the Company entered into a $28.0 million loan 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 interest only payments for the first eighteen months and principal and interest payments thereafter through maturity in December 2047. The Watersound Camp Creek 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 Camp Creek Loan, the Company executed a guarantee in favor of the lender to guarantee completion of the project and the payment of the borrower under the Watersound Camp Creek Loan. As guarantor, the Company’s liability under the Watersound Camp Creek Loan will be reduced to 50% of the principal amount upon the project reaching and maintaining a trailing six months operations with a certain debt service coverage ratio and reduced to 25% of the principal amount upon reaching and maintaining a trailing twelve months operations of a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of the failure of 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 May 2018, a wholly-owned subsidiary of the Company entered into a $1.7 million 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 in May 2029. 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 March 2017, a wholly-owned subsidiary of the Company entered into a $1.6 million loan to finance the construction of a commercial leasing property located in Panama City Beach, Florida (the “Pier Park Outparcel Loan”). The Pier Park Outparcel Loan provides for monthly principal and interest payments with a final balloon payment at maturity in March 2027. The Pier Park Outparcel Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. F 41 In March 2021, a wholly-owned subsidiary of the Company entered into a $26.8 million loan to finance the construction of apartments in Panama City, Florida. The North Bay Landing Apartments Loan provides for interest only payments and a principal balloon payment at maturity in September 2024. The North Bay Landing Apartments Loan includes an option for an extension of the maturity date by eighteen months, subject to certain conditions, that would provide for principal and interest payments commencing on the original maturity date with a final balloon payment at the extended maturity date. The North Bay Landing Apartments 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 North Bay Landing Apartments Loan, the Company executed a guarantee in favor of the lender to guarantee completion of the project and the payment and performance of the borrower under the North Bay Landing Apartments Loan. As guarantor, the Company’s liability under the North Bay Landing Apartments Loan will be reduced to 50% of the principal amount upon satisfaction of final advance conditions and reduced to 25% of the 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. In February 2018, a wholly-owned subsidiary of the Company entered into a $1.9 million loan to finance the construction of a commercial leasing property located in Santa Rosa Beach, Florida (the “WaterColor Crossings Loan”). The WaterColor Crossings Loan provides for monthly principal and interest payments with a final balloon payment at maturity in February 2029. The WaterColor Crossings Loan 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 Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the WaterColor Crossings Loan. In August 2021, a wholly-owned subsidiary of the Company entered into a $12.0 million loan 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 Watersound Town Center Grocery 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 Town Center Grocery Loan, the Company executed a guarantee in favor of the lender to guarantee completion of the project and the payment and performance of the borrower under the Watersound Town Center Grocery Loan. As guarantor, the Company’s liability under the Watersound Town Center Grocery Loan will be reduced to 50% of the 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 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 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 Hotel Indigo Loan includes an option for an extension of the maturity date by sixty months, subject to certain conditions, that would provide for continued principal and interest payments with a final balloon payment at the extended maturity date. The Hotel Indigo Loan is secured by the leasehold property, assignment of rents, leases, deposits, permits, plans, fees, agreements, approvals and contracts and the security interest in the personal property and rents. In connection with the Hotel Indigo Loan, the Company executed a guarantee in favor of the lender to guarantee completion of the project and the payment and performance of the borrower under the Hotel Indigo Loan. As of December 31, 2021, there was no principal balance and the Company had incurred $0.3 million of loan costs related to the Hotel Indigo Loan. The Company’s financing agreements are subject to various customary debt covenants and as both of December 31, 2021 and 2020, the Company was in compliance with the financial debt covenants. As of December 31, 2021, assets that were pledged as collateral related to the Company’s debt agreements, including unfunded commitments, had an approximate carrying amount of $352.8 million. These assets are included within investment in real estate, net and property and equipment, net on the consolidated balance sheets. F 42 The aggregate maturities of debt subsequent to December 31, 2021 are: 2022 2023 2024 2025 2026 Thereafter 12. Other Liabilities Other liabilities consist of the following: Accounts payable Finance lease liabilities Operating lease liabilities Accrued compensation Other accrued liabilities Deferred revenue Club initiation fees Club membership deposits Advance deposits Accrued interest expense for Senior Notes held by SPE Total other liabilities $ December 31, 2021 48,597 380 732 4,877 4,807 13,357 22,850 3,602 2,140 2,850 $ 104,192 December 31, 2021 $ $ 3,627 5,660 60,330 62,655 3,809 91,393 227,474 $ December 31, 2020 25,376 316 808 3,337 6,892 16,632 10,716 3,764 1,344 2,850 72,035 $ Accounts payable as of December 31, 2021 and 2020 includes payables for projects under development and construction, such as the Embassy Suites by Hilton hotel, the Camp Creek Inn and amenity center and the Watersound Origins residential community. Deferred revenue as of December 31, 2021 and 2020 includes $10.9 million and $11.5 million, respectively, 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. 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: Balance at beginning of year New club memberships Revenue from amounts included in contract liability opening balance Revenue from current period new memberships Balance at end of year $ December 31, 2021 December 31, 2020 6,917 $ 6,268 (2,062) (407) 10,716 10,716 16,804 (3,037) (1,633) 22,850 $ $ Remaining performance obligations represent contracted revenue that has not been recognized, which include club initiation fees. As of December 31, 2021 remaining performance obligations were $22.8 million, of which the Company expects to recognize as revenue $5.2 million in 2022, $9.0 million in 2023 through 2024, $7.2 million in 2025 through 2026 and $1.4 million thereafter. F 43 Advance deposits consist of deposits received on hotel 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. 13. Income Taxes Income tax expense consist of the following: Year Ended December 31, 2020 2021 2019 Current: Federal State Total Deferred: Federal State Total Income tax expense $ 9,005 — 9,005 $ 5,146 — 5,146 $ 1,070 — 1,070 12,120 3,857 15,977 $ 24,982 6,321 2,203 8,524 $ 13,670 5,903 2,474 8,377 $ 9,447 Total income tax expense (benefit) was allocated in the consolidated financial statements as follows: Income tax expense Income tax recorded in accumulated other comprehensive loss Income tax expense (benefit) Total income tax expense 2021 $ 24,982 Year Ended December 31, 2020 13,670 $ $ 2019 9,447 367 $ 25,349 $ (386) 13,284 $ 116 9,563 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, 2021, 2020 and 2019 to pre-tax income as a result of the following: Year Ended December 31, 2020 $ 12,385 2,203 — — (454) (161) (33) (270) $ 13,670 2021 $ 20,902 3,581 275 458 (186) (195) — 147 $ 24,982 2019 $ 7,607 1,477 — 1,006 — (561) (188) 106 $ 9,447 Tax at the statutory federal rate State income taxes (net of federal benefit) Increase in valuation allowance Change in US and State tax rates Income tax credits Benefit of Qualified Opportunity Zone investments Dividend received deduction Other permanent items Total income tax expense F 44 The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are presented below: Deferred tax assets: State net operating loss carryforwards Impairment losses Prepaid income from land sales Capital loss carryforwards Capitalized costs Reserves and accruals Unrealized losses on investments Other Total gross deferred tax assets Valuation allowance Total net deferred tax assets Deferred tax liabilities: Investment in real estate and property and equipment basis differences Deferred gain on land sales and involuntary conversions Installment sales Pension Plan assets transferred to the 401(k) plan Other Total gross deferred tax liabilities Net deferred tax liabilities December 31, 2021 December 31, 2020 $ $ 10,617 28,496 6,177 4,090 2,462 1,950 359 1,446 55,597 (305) 55,292 13,355 33,660 3,812 — 2,851 1,586 3,403 765 59,432 — 59,432 14,014 33,643 83,498 — 1,396 132,551 5,929 29,101 83,337 287 1,693 120,347 $ (77,259) $ (60,915) As of December 31, 2021 and 2020, the Company had state net operating loss carryforwards of $229.3 million and $304.0 million, respectively. As of December 31, 2021 and 2020, the Company had $3.1 million and $2.3 million, respectively, of federal net operating loss carryforwards. The federal net operating loss carryforwards are applicable to a specific QOF entity of the Company 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 2030. As of December 31, 2021 and 2020, the Company had income tax payable of $0.7 million and $2.7 million, respectively, included within other liabilities on the consolidated balance sheets. On September 14, 2021, the State of Florida announced the reduction of the 2021 corporate tax rate from 4.5% to 3.5% retroactive to the beginning of 2021. The corporate income tax rate will revert to 5.5% for tax year 2022 and years forward. The impact of this tax rate change for the year ended December 31, 2021, was a $0.5 million increase in income tax expense due to the adjustment to deferred taxes. 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 4.5%. As a result, the Company 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 carryforward in addition to other temporary differences. In general, a valuation allowance is recorded if, based on all available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets 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. As of December 31, 2021, the Company’s valuation allowance was $0.3 million. As of December 31, 2020, the Company had a de minimis valuation allowance. 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 examinations to determine the adequacy of its provision for income taxes and applies a “more likely than not” in F 45 determining the financial statement recognition and measurement of a tax position taken or expected to be taken in the tax returns. The Company has not identified any material unrecognized tax benefits as of December 31, 2021, 2020 and 2019. There were no penalties required to be accrued as of December 31, 2021 and 2020. The Company records interest related to unrecognized tax benefits, if any, in interest expense and penalties in other income, net. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. On December 27, 2020, the Taxpayer Certainty and Disaster Tax Relief Act of 2020, a part of the Consolidated Appropriations Act, 2021, was enacted also in response to the COVID-19 pandemic. On March 11, 2021, the American Rescue Plan Act of 2021 was enacted also in response to the COVID-19 pandemic. While each of these pieces of legislation resulted in changes to the federal tax law, the impact on the Company’s cash payments and effective tax rate are immaterial. The Company is currently open to examination by taxing authorities for the tax years ended December 31, 2018 through 2020. 14. Accumulated Other Comprehensive Loss Following is a summary of the changes in the balances of accumulated other comprehensive loss, which is presented net of tax: Unrealized (Loss) Gain on Available-for- Unrealized (Loss) Gain Sale Securities Cash Flow Hedges Total Accumulated other comprehensive loss at December 31, 2019 Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss $ Other comprehensive income (loss) Accumulated other comprehensive income (loss) at December 31, 2020 $ Other comprehensive (loss) income before reclassifications Amounts reclassified from accumulated other comprehensive (loss) income Other comprehensive (loss) income Accumulated other comprehensive loss at December 31, 2021 $ (84) $ 103 (3) 100 16 $ (12) (11) (23) (7) $ Following is a summary of the tax effects allocated to other comprehensive income (loss): (251) $ (335) (1,134) (1,237) (3) — (1,137) (1,237) (1,488) $ (1,472) 780 792 314 1,106 (382) $ 303 1,083 (389) Year Ended December 31, 2021 Tax Benefit (Expense) Before- Tax Amount $ (16) $ 848 213 405 1,450 1,450 $ $ Net-of- Tax Amount (12) $ 633 159 303 1,083 1,083 4 (215) (54) (102) (367) (367) $ Unrealized loss on available-for-sale investments Interest rate swaps Interest rate swap - unconsolidated joint venture Reclassification adjustment for net loss included in earnings Net unrealized gain Other comprehensive income F 46 Unrealized gain on available-for-sale investments Unrealized gain on restricted investments Interest rate swaps Interest rate swap - unconsolidated joint venture Reclassification adjustment for net gain included in earnings Net unrealized loss Other comprehensive loss 15. Stockholders’ Equity Dividends Year Ended December 31, 2020 Tax (Expense) Benefit $ Before- Tax Amount 130 $ 8 (836) (821) (4) (1,523) (1,523) $ $ Net-of- Tax Amount 97 6 (624) (613) (3) (1,137) $ (1,137) (33) $ (2) 212 208 1 386 386 During 2021 and 2020, the Company paid cash dividends of $0.32 and $0.07, respectively, per share on the Company’s common stock for a total of $18.8 million and $4.1 million, respectively. The Company did not pay cash dividends during the year ended December 31, 2019. Stock Repurchase Program The Company’s Board approved the Stock Repurchase Program pursuant to which the Company is authorized to repurchase shares of its common stock. The program has no expiration date. During the year ended December 31, 2021, the Company did not repurchase shares of its common stock outstanding. During the year ended December 31, 2020, the Company repurchased 532,034 shares of its common stock at an average purchase price of $16.54 per share, for an aggregate purchase price of $8.8 million, pursuant to its Stock Repurchase Program. As of December 31, 2021, the Company had a total authority of $77.4 million available for purchase of shares of its common 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-18 under the Exchange Act. The timing and amount of any additional shares to be repurchased will depend upon a variety of 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 2020, the Company retired 532,034 shares of treasury stock at a value of $8.8 million. Issuance of Common Stock for Director’s Fees During the years ended December 31, 2021 and 2020, the Company did not issue any common stock for director’s fees. On May 20, 2019, 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 of restricted stock were granted to two of the Company’s directors pursuant to the Board’s May 20, 2019 approval and the Company’s 2015 Performance and Equity Incentive Plan (the “2015 Plan”). This restricted stock vested on May 19, 2020, the date of the Company’s 2020 Annual Meeting of Shareholders. Two non-employee directors elected to receive cash in lieu of the stock, which was paid in July 2019. On May 23, 2018, 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 were 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. For the year ended December 31, 2021, the Company did not have expense related to restricted stock awards to the Company’s directors. For each of the years ended December 31, 2020 and 2019, the Company recorded expense of less than $0.1 million, related to restricted stock awards to the Company’s directors. F 47 16. Stock Based Compensation The Company’s 2015 Plan offers a stock incentive plan whereby awards can 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 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. As of December 31, 2021, 1,463,543 shares were available for awards under the 2015 Plan. Total stock-based compensation recorded in corporate and other operating expenses on the consolidated statements of income is as follows: Stock compensation expense before tax benefit Income tax benefit 2021 Year Ended December 31, 2020 45 (11) 34 $ — $ — $ — $ 2019 77 (19) 58 $ $ In 2019 and 2018, the Company granted 5,708 and 2,778 shares, respectively, of restricted stock awards to certain of the Company’s directors as fees for services rendered under the 2015 Plan, of which 5,708 and 2,778 vested during the years ended December 31, 2020 and 2019, respectively. As of December 31, 2021, there were no unvested restricted stock units outstanding. The weighted average grant date fair value of restricted stock units during 2019 and 2018 were $17.52 and $18.00, respectively. The total fair values of restricted stock units that vested were $0.1 million during each 2020 and 2019. 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 $0.1 million in 2021. 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 retained the risks and rewards of ownership of these assets; therefore, the assets held in the suspense account were included in the Company’s consolidated balance sheet until they were allocated to 401(k) plan participants. The final allocation of the assets occurred in March 2021. As of December 31, 2020, the fair value of these assets totaling $1.2 million was recorded in other assets on the Company’s consolidated balance sheets. The Company expensed the fair value of the assets at the time the assets were allocated to participants. During both 2021 and 2020 the Company recorded an expense of $1.2 million and during 2019 the Company recorded an expense of $1.1 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 gain during both 2021 and 2020 and less than a $0.1 million loss during 2019. F 48 18. Other Income, Net Other income (expense) consists of the following: Investment income, net Interest, dividend and accretion income Net realized gain (loss) on the sale of investments Unrealized loss on investments, net Interest income from investments in SPEs Interest earned on notes receivable and other interest Total investment income, net Interest expense Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE Other interest expense Total interest expense Gain on contribution to unconsolidated joint ventures Other income (expense), net Accretion income from retained interest investments Gain on insurance recovery Loss from hurricane damage Miscellaneous income, net Other income, net Total other income, net Investment Income, Net Year Ended December 31, 2020 2021 2019 $ 157 17 (1,872) 8,078 874 7,254 $ 1,194 (48) (4,688) 8,180 345 4,983 $ 7,459 87 (5,342) 8,190 320 10,714 (8,827) (7,027) (15,854) 3,558 1,532 4,853 (56) 3,852 10,181 5,139 $ (8,813) (4,751) (13,564) 19,983 1,391 690 (1,123) 371 1,329 $ 12,731 (8,801) (3,501) (12,302) 2,317 1,325 5,314 (2,704) 198 4,133 4,862 $ Interest, dividend and accretion income includes interest income accrued or received on the Company’s investments and amortization of the premium or accretion of discount related to the Company’s available-for-sale securities, which is amortized based on an effective interest rate method over the term of the available-for-sale securities. Net realized gain (loss) on the sale of investments include the gains or losses recognized on the sale of available-for-sale and equity securities prior to maturity. Unrealized loss on investments, net includes unrealized gains or losses on investments – equity securities. Interest income from investments in SPEs primarily includes interest earned on the investments held by Panama City Timber Finance Company, LLC, which is used to pay the interest expense for Senior Notes held by Northwest Florida Timber Finance, LLC. Interest Expense Interest expense includes interest incurred related to the Company’s Senior Notes issued by Northwest Florida Timber Finance, LLC, project financing, CDD debt and finance leases. Interest expense also includes amortization of debt discount and premium and debt issuance costs. Discount and issuance costs for the Senior Notes issued by Northwest Florida Timber Finance, LLC, are amortized based on the effective interest method at an effective rate of 4.9%. During 2021, 2020 and 2019 the Company capitalized $1.0 million, $1.1 million and $0.6 million, respectively, in interest related to projects under development or construction. These amounts are included within investment in real estate, net on the Company’s consolidated balance sheets. F 49 Gain on Contribution to Unconsolidated Joint Ventures Gain on contribution 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. The year ended December 31, 2021, also includes a gain of $0.5 million on additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. Gain on contribution 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 Apartments JV. Gain on contribution to unconsolidated joint ventures 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 and mitigation credits contributed to the Company’s unconsolidated Pier Park TPS JV. See Note 4. Joint Ventures for additional information. Other Income, Net Other income, net primarily includes income from the Company’s retained interest investments, gain on insurance recovery, loss from hurricane damage and other income and expense items. The Company records the accretion of investment income from its retained interest investments over the life of the retained interest using the effective yield method with rates ranging from 3.7% to 11.7%. During the years ended December 31, 2021, 2020 and 2019, the Company had a gain on insurance recovery of $4.9 million, $0.7 million and $5.3 million, respectively, and incurred loss from hurricane damage of $0.1 million, $1.1 million and $2.7 million, respectively, related to Hurricane Michael. See Note 7. Hurricane Michael for additional information. Miscellaneous income, net during the year ended December 31, 2021, includes $3.6 million the Company received from the Florida Division of Emergency Management’s TRBG program for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael. The Company has met all requirements related to the TRBG program as of December 31, 2021. See Note 7. Hurricane Michael for additional information. 19. Segment Information The Company conducts primarily all of its business in the following three reportable segments: 1) residential, 2) hospitality and 3) commercial. Prior to the first quarter of 2020, commercial leasing and sales, as well as forestry were treated as individual reportable segments. See Note 1. Nature of Operations for additional information. 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 management based on these strategic business units. The Company uses income before equity in loss from unconsolidated joint ventures, income taxes and non- controlling interest 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 captions entitled “Other” consists of mitigation credit, title and insurance business revenue and cost of revenue; corporate operating expenses; corporate depreciation and amortization and corporate other income and expense items. F 50 Information by business segment is as follows: Operating revenue: Residential Hospitality Commercial Other Consolidated operating revenue Cost of revenue: Cost of residential revenue Cost of hospitality revenue Cost of commercial revenue Cost of other revenue Consolidated cost of revenue Corporate and other operating expenses: Residential Hospitality Commercial Other Consolidated corporate and other operating expenses Depreciation, depletion and amortization: Residential Hospitality Commercial Other Consolidated depreciation, depletion and amortization Investment income, net: Residential and commercial Other (a) Consolidated investment income, net Interest expense: Residential Hospitality Commercial Other (b) Consolidated interest expense Gain on contribution to unconsolidated joint ventures: Residential (c) Commercial (d) (e) (f) Other Consolidated gain on contribution to unconsolidated joint ventures F 51 Year Ended December 31, 2020 2021 2019 $ 145,784 74,591 44,627 1,994 $ 266,996 $ 74,715 47,374 36,665 1,801 $ 160,555 $ 41,586 45,720 38,823 956 $ 127,085 $ 57,842 57,494 14,440 1,538 $ 131,314 $ 30,359 34,670 12,228 519 $ 77,776 $ 20,492 33,924 9,593 77 $ 64,086 $ 4,872 919 3,980 13,252 $ 23,023 $ 5,283 1,180 3,681 12,762 $ 22,906 $ 4,873 838 3,479 12,199 $ 21,389 $ 351 6,966 10,490 395 $ 18,202 $ 318 4,638 6,987 845 $ 12,788 $ 283 4,579 5,253 172 $ 10,287 $ $ 874 6,380 7,254 $ $ 298 4,685 4,983 $ 184 10,530 $ 10,714 $ 581 488 5,949 8,836 $ 15,854 $ 683 222 3,836 8,823 $ 13,564 $ 717 30 2,739 8,816 $ 12,302 $ $ 503 3,055 — 3,558 $ 15,706 3,949 328 $ 19,983 $ $ — 2,244 73 2,317 Other income (expense), net: Residential Hospitality Commercial (g) Other (h) Other income, net Income (loss) before equity in loss from unconsolidated joint ventures and income taxes: Residential (c) Hospitality Commercial (d) (e) (f) (g) Other (h) Consolidated income before equity in loss from unconsolidated joint ventures and income taxes Equity in (loss) income from unconsolidated joint ventures: Residential Commercial Consolidated equity in loss from unconsolidated joint ventures Capital expenditures: Residential Hospitality Commercial Other Total capital expenditures Investment in unconsolidated joint ventures: Residential Commercial Total investment in unconsolidated joint ventures Total assets: Residential Hospitality Commercial Other Total assets $ 113 635 3,722 5,711 $ 10,181 $ $ (22) $ 575 51 725 1,329 $ (217) 225 1,190 2,935 4,133 $ 83,582 9,359 16,591 (9,936) $ 53,998 7,238 13,988 (15,408) $ 15,144 6,574 21,239 (6,772) $ 99,596 $ 59,816 $ 36,185 $ (1,861) $ 996 (865) $ $ (524) $ (142) (666) $ (71) (6) (77) $ 52,838 101,686 45,843 452 $ 200,819 $ 33,634 42,770 85,070 769 $ 162,243 $ 28,639 15,923 69,219 505 $ 114,286 December 31, 2021 December 31, 2020 $ $ 30,039 21,988 52,027 $ $ 24,287 13,678 37,965 $ 195,142 256,751 375,266 380,992 $ 1,208,151 $ 172,610 146,724 332,649 385,341 $ 1,037,324 Includes interest income from investments in SPEs of $8.1 million in 2021 and $8.2 million in each 2020 and 2019. (a) (b) Includes interest expense from Senior Notes issued by SPE of $8.8 million in each 2021, 2020 and 2019. (c) Includes a gain of $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. (d) Includes a gain of $3.1 million in 2021 on land contributed to the unconsolidated Watersound Fountains (e) (f) Independent Living JV. See Note 4. Joint Ventures and Note 18. Other Income, Net for additional information. Includes a gain of $3.9 million in 2020 on land contributed to the unconsolidated Sea Sound Apartments JV. See Note 4.Joi nt Ventures and Note 18. Other Income, Net for additional information. Includes a gain of $0.8 million in 2019 on land contributed to the Company’s unconsolidated Busy Bee JV and a gain of $1.4 million in 2019 on land contributed to the Company’s unconsolidated Pier Park TPS JV. See Note 4. Joint Ventures and Note 18. Other Income, Net for additional information. F 52 (g) Includes $3.6 million in 2021 received from the Florida Division of Emergency Management’s TRBG program. See Note 7. Hurricane Michael and Note 18. Other Income, Net for additional information. (h) Includes gain on insurance recovery of $4.9 million, $0.7 million and $5.3 million in 2021, 2020 and 2019, respectively, related to Hurricane Michael. In addition, includes loss from hurricane damage of $0.1 million, $1.1 million and $2.7 million 2021, 2020 and 2019, respectively, related to Hurricane Michael. See Note 7. Hurricane Michael for additional information. 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 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 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 which 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 and 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 and disputes, including environmental matters, are pending against the Company. Accrued aggregate liabilities related to the matters described above and other litigation matters were $0.4 million and $0.7 million as of December 31, 2021 and 2020, respectively. Significant judgment is required in both the determination of probability and 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. F 53 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, 2021 and 2020, $7.1 million and $2.7 million, respectively, was outstanding on the Latitude Margaritaville Watersound JV Note. The Latitude Margaritaville Watersound JV Note was provided by the Company to finance the development of the pod-level, non- spine infrastructure, which is being 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 Latitude Margaritaville Watersound JV 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 9. Other Assets for additional information. As of December 31, 2021 and 2020, 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 $36.9 million and $24.2 million, respectively, as well as standby letters of credit in the amount of $12.9 million and $6.6 million, respectively, which may potentially result in liability to the Company if certain obligations of the Company are not met. As of December 31, 2021, the Company had a total of $217.0 million 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 (the “Pier Park TPS JV Loan”). The Pier Park TPS JV 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 Loan is secured by the real and personal property and an assignment of rents and the security interest in the rents. In connection with the Pier Park TPS JV Loan, the Company, a wholly-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, 2021 and 2020, $14.1 million and $14.4 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 2019, the Company’s unconsolidated Busy Bee JV, entered into a $5.4 million 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 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 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, the Company, a wholly-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 through substantial completion, which occurred in June 2020. The Company’s liability as guarantor under the loans upon substantial completion was reduced to 50% for a twelve-month period. Subsequent to that time, the Company’s guarantee will be released upon request. Upon release of the Company’s guarantee, the JV partner will be the sole guarantor and will receive 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 was effective November 12, 2020 and 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 was effective November 12, 2020 and 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, 2021 and 2020, $5.3 million and $5.4 million, respectively, was outstanding on the Busy Bee JV Construction Loan. As of December 31, 2021 and 2020, $1.1 million and $1.2 million, respectively, was outstanding on the Busy Bee JV Equipment Loan. F 54 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 Latitude Margaritaville Watersound JV Loan bears interest at LIBOR plus 2.5%, with a floor of 3.3%. The Latitude Margaritaville Watersound JV Loan provides for monthly interest payments with a final balloon payment at maturity in November 2023. The Latitude Margaritaville Watersound JV Loan includes annual maturity extension rights for a total of three additional years, subject to bank approval. The Latitude Margaritaville Watersound JV Loan is secured by the real and personal property, assignment of rents, leases and deposits and security interest in the land development, construction contracts, plans and specifications, permits, agreements, approvals, fees and deposits. In connection with the Latitude Margaritaville Watersound JV Loan, the Company and the Company’s JV partner entered into an unconditional guaranty of completion of certain homes in favor of the lender. As of December 31, 2021, there was no principal balance outstanding on the Latitude Margaritaville Watersound JV Loan. As of December 31, 2020, $0.6 million was 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 Watersound Fountains JV Loan bears interest at LIBOR plus 2.0%, with a floor of 2.5%. The Watersound Fountains JV 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 Watersound Fountains JV Loan includes an option for an extension of the maturity date by twelve months, subject to certain conditions, that would provide for continued monthly principal and interest payments with a final balloon payment at the extended maturity date. The Watersound Fountains JV Loan is secured by the real property, assignment of rents, leases, deposits, licenses, permits, contracts and construction and development documents and the security interest in the personal property, rents and management agreement. In connection with the Watersound Fountains JV 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 under the Watersound Fountains JV Loan. The Company’s liability as guarantor under the Watersound Fountains JV Loan will be reduced to 50% of the principal amount upon issuance of the certificate of occupancy and reduced to 25% and a further 0% of the outstanding principal balance upon reaching and maintaining certain debt service coverage. 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 from its JV partners based on the JV partners’ ownership percentage. As of December 31, 2021, $0.1 million was outstanding on the Watersound Fountains JV 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, 2021 and 2020. As of both December 31, 2021 and 2020, 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 notes structure allowed the Company to defer the resulting federal tax liability of $33.7 million until 2022 - 2024 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. 21. Subsequent Events On February 23, 2022, the Board declared a cash dividend of $0.10 per share on the Company’s common stock, a 25% increase from the December 2021 dividend payment, payable on March 29, 2022, to shareholders of record as of the close of business on March 7, 2022. In addition, the Board authorized additional repurchase authority of $22.6 million under the Company’s existing Stock Repurchase Program, bringing the total repurchase authority to $100.0 million. F 55 Y N A P M O C E O J . 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f l e S h c i r k c e B V J I I V J r e h t o d n a s d n a l r e b m T i d n a s k n a b n o i t a g i t i M d n a l d e v o r p m i n u l a t o T r e h t o r e t n e C r e h t O s t n e m p o l e v e d l a i c r e m m o C ) a ( n o i t p i r c s e D l a i t n e d i s e R s t n e m p o l e v e d y t i l a t i p s o H r o l o C r e t a W y t i l a t i p s o H 6 5 F . a d i r o l F t s e w h t r o N n i d e t a c o l e r a s e i t r e p o r p e t a t s e l a e r l l A ) a ( — 4 9 4 , 8 1 4 9 9 6 , 9 0 1 7 4 4 ) 8 0 6 , 3 2 ( 2 3 0 , 5 0 5 $ $ — 2 3 0 , 5 0 5 8 5 2 , 7 6 1 ) 4 2 3 , 3 3 ( ) 3 5 3 , 1 1 ( 3 1 6 , 7 2 6 $ $ — 3 1 6 , 7 2 6 3 0 3 , 2 2 2 ) 2 3 9 , 5 5 ( ) 5 0 7 , 6 1 ( 9 7 2 , 7 7 7 , 1 3 r e b m e c e D , 1 3 r e b m e c e D 9 1 0 2 0 2 0 2 , 1 3 r e b m e c e D 1 2 0 2 $ $ , 1 3 r e b m e c e D , 1 3 r e b m e c e D , 1 3 r e b m e c e D 9 1 0 2 0 2 0 2 1 2 0 2 — 6 5 7 , 6 0 0 5 , 7 6 6 5 2 , 4 7 $ $ 8 9 2 , 8 6 5 2 , 4 7 ) 4 9 5 , 6 ( 0 6 9 , 5 7 $ $ 0 6 9 , 5 7 8 2 7 , 1 1 ) 2 2 5 ( 6 6 1 , 7 8 $ $ . n o i l l i m 5 . 5 1 7 $ y l e t a m i x o r p p a s i s e s o p r u p x a t e m o c n i l a r e d e f r o f 1 2 0 2 , 1 3 r e b m e c e D f o s a d e n w o e t a t s e l a e r f o t s o c e t a g e r g g a e h T : ) s r a l l o d f o s d n a s u o h t n i ( d e n w o e t a t s e l a e r f o n o i t a i l i c n o c e R ) A ( ) B ( . e c i v r e s n i s t e s s a e h t e c a l p o t y n a p m o C e h t o t s t s o c l a i t i n i s e d u l c n I . s t n e m r i a p m i e v i t a l u m u c s e d u l c n I ) b ( ) c ( : s e t o N r a e y e h t f o g n i n n i g e b t a e c n a l a B d e t s u j d a r o d e r i t e r s t n u o m A d l o s e t a t s e l a e r f o t s o C r a e y e h t f o d n e e h t t a e c n a l a B d e z i l a t i p a c s t n u o m A s t n e m r i a p m I : ) s r a l l o d f o s d n a s u o h t n i ( n o i t a i c e r p e d d e t a l u m u c c a f o n o i t a i l i c n o c e R ) C ( 7 5 F r a e y e h t f o g n i n n i g e b t a e c n a l a B d e t s u j d a r o d e r i t e r s t n u o m A r a e y e h t f o d n e e h t t a e c n a l a B e s n e p x e n o i t a i c e r p e D THE ST. JOE COMPANY SCHEDULE IV (CONSOLIDATED) - MORTGAGE LOANS ON REAL ESTATE DECEMBER 31, 2021 (in thousands) Interest Rate Final Maturity Date Periodic Payment Terms Face Carrying Prior Amount of Amount of Liens Mortgages Mortgages Principal Amount of Loans Subject to Delinquent Principal or Interest Description of Note Receivable (a) Secured revolving promissory note with unconsolidated Latitude Margaritaville Watersound JV, homesite development Seller financing, residential homesites Seller financing, residential homesites Seller financing, residential homesites Seller financing, residential homesites Seller financing, residential homesites Seller financing, residential homesites 5.0% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5% Various other seller financing, rural land 4.4% to 5.2% Total(e) June 2025 May 2023 November 2022 November 2022 December 2022 March 2023 September 2022 December 2022 through November 2023 $ P&I(b) P&I(c) P&I(c) P&I(c) P&I(c) P&I(c) P&I(c) $ — $ 7,147 1,175 947 882 742 723 355 — — — — — — $ 7,075 1,175 947 882 742 723 355 P&I(d) — 43 43 $ — $ 12,014 $ 11,942 $ — — — — — — — — — (a) All seller financed properties are located in Northwest Florida. (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 9.Ot her Assets for additional information related to the revolving promissory note. 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. (c) (d) Principal and interest is paid monthly. (e) 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, 2020 2019 2021 10,321 7,798 6,005 128 44 11,942 $ $ $ 2,683 9,615 1,949 — 28 10,321 $ 1,462 2,386 1,165 — — 2,683 Balance at beginning of the year Additions during the year - new mortgage loans Deductions during the year: Collections of principal Foreclosures Other Balance at the end of the year $ $ F 58 THE ST. JOE COMPANY LIST OF SUBSIDIARIES Exhibit 21.1 (Includes 100% directly owned entities, indirectly owned entities and joint venture entities of which we may be a majority, equal or minority partner) COMPANY NAME 30A Greenway Hotel, LLC Artisan Park, L.L.C. Arvida Realty, LLC Bay Parkway Multi-Family, LLC Bay Parkway Multi-Family II, LLC Bay Point Marina, LLC BP East Multi-Family, LLC Breakfast Point, LLC Breakfast Point Commercial, LLC Camp Creek Golf Club, LLC Camp Creek Residential Development, LLC Commercial Real Estate Acquisitions, LLC Commercial Real Estate Development, LLC Commercial Real Estate Holdings, LLC Crooked Creek Utility Company FDSJ Eventide, LLC Florida Timber Finance I, LLC Florida Timber Finance II, LLC Florida Timber Finance III, LLC Georgia Timber Finance I, LLC JOE PCOZ, LLC JOE QOZ Fund, Inc. JOE RI, LLC LMWS, LLC MB Multi-Family, LLC Mexico Beach Crossings, LLC N850J, LLC NatureWalk Office, LLC Northwest Florida Timber Finance, LLC OC Multi-Family, LLC Origins Crossings, LLC Origins Senior Living, LLC Panama City Beach Venture II, LLC Panama City Beach Venture III, LLC Paradise Pointe, L.L.C. Park Point Land, LLC PCIQOZ, LLC Peach Creek Aggregate Storage and Transport, LLC Pier Park Crossings, LLC Pier Park Crossings Phase II LLC Pier Park Resort Hotel, LLC Pier Park TPS, LLC Port St. Joe Marina, LLC PPSZ, LLC STATE OF ORGANIZATION FL DE FL FL FL FL FL FL FL FL FL FL FL FL FL FL DE DE DE DE FL FL FL DE FL FL FL FL DE FL FL FL FL FL FL FL FL FL FL FL DE DE FL FL Resort Real Estate Holdings, LLC RiverCamps Development, LLC Scratch Biscuit Company, LLC SJ CARTS, LLC SJ COLLEGE STATION, LLC SJ Education Leasing Services, LLC SJ PARK PLACE, LLC SJ30AH, LLC SJAH, LLC SJAP, LLC SJBB, LLC SJBB Investor, LLC SJBPWA, LLC SJIMTPS Investor, LLC SJK Investor, LLC SJLMWS, LLC SJOSL, LLC SJPPN, LLC SJPR, LLC SJSA, LLC SJSCH, LLC SJSS, LLC SJTC, LLC SJTSH, LLC SJWC, LLC SJWCSL, LLC SJWM, LLC South Walton Commerce Park, LLC Southeastern Land Ventures, LLC SouthWood Golf, LLC SouthWood Tallahassee, LLC STGC of PCB, LLC St. James Island Utility Company St. Joe Club & Resorts Vacation Rentals, LLC St. Joe Community Sales, Inc. St. Joe Corporate Services, LLC St. Joe Development, LLC St. Joe Resort Operations, LLC St. Joe-Southwood Properties, Inc. St. Joe Timberland Company of Delaware, L.L.C. St. Joe VentureCrossings Leasing, LLC SummerCamp Beach, LLC SweetTea Publishing, L.L.C. The WaterSound Company, LLC Titus Road Station, LLC Topsail Commercial Development, LLC VentureCrossings, LLC Ward Creek, LLC WaterColor Development, LLC WaterColor Inn, LLC Watercrest Santa Rosa Beach RE, LLC Watercrest Santa Rosa Beach SL, LLC Watersound Aggregate Storage & Transport, LLC FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL DE FL FL FL FL FL FL FL FL FL FL DE FL FL FL FL FL FL FL FL FL FL FL FL FL Watersound Beach and West Beach, LLC WaterSound Beach Club, LLC Watersound Closings & Escrow, LLC Watersound Club, LLC Watersound Management, LLC Watersound Insurance Company, LLC Watersound Town Center, LLC Watersound Parkway, LLC Watersound Title Agency, LLC WaterSound Trail, LLC Wild Heron PCB, LLC WindMark Beach, LLC Windmark JV, LLC WMOZ, LLC WOSL, LLC WOTH, LLC FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL Consent of Independent Registered Public Accounting Firm We have issued our reports dated February 23, 2022, with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report of The St. Joe Company on Form 10-K for the year ended December 31, 2021. We consent to the incorporation by reference of said reports in the Registration Statements of The St. Joe Company on Form S-3 (File No. 333-209264) and on Form S-8 (File No. 333-211183). Exhibit 23.1 /s/ Grant Thornton LLP Tampa, Florida February 23, 2022 Exhibit 31.1 I, Jorge Gonzalez, certify that: CERTIFICATION 1. 2. 3. 4. I have reviewed this annual report on Form 10-K for the year ended December 31, 2021 of The St. Joe Company; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) (b) (c) (d) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) (b) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: February 23, 2022 /s/ Jorge Gonzalez Jorge Gonzalez President, Chief Executive Officer and Director Exhibit 31.2 I, Marek Bakun, certify that: CERTIFICATION 1. 2. 3. 4. I have reviewed this annual report on Form 10-K for the year ended December 31, 2021 of The St. Joe Company; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) (b) (c) (d) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) (b) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: February 23, 2022 /s/ Marek Bakun Marek Bakun Executive Vice President, Chief Financial Officer and Principal Accounting Officer CERTIFICATION Pursuant to 18 USC §1350, the undersigned officer of The St. Joe Company (the “Company”) hereby certifies that the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Exhibit 32.1 Dated: February 23, 2022 /s/ Jorge Gonzalez Jorge Gonzalez President, Chief Executive Officer and Director CERTIFICATION Pursuant to 18 USC §1350, the undersigned officer of The St. Joe Company (the “Company”) hereby certifies that the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Exhibit 32.2 /s/ Marek Bakun Marek Bakun Executive Vice President, Chief Financial Officer and Principal Accounting Officer Dated: February 23, 2022 

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