202(cid:20)
March 28, 2024
Dear Fellow Owners,
Steve Jobs famously remarked, ‘‘To me, ideas are worth nothing unless executed. They are just a multiplier. Execution
is worth millions.’’ Since beginning our journey together in 2016 we have been consistently executing a business
strategy of growing recurring revenue streams, diversifying our assets, partnering, and creating efficient operations and
land use.
Snapshot of Progress
2023 is a good snapshot of our progress, with our operations achieving a Company record for a single year revenue in
hospitality and leasing. In fact, our hospitality revenue in 2023 exceeded the Company’s total revenue in 2016, even
though 2023 was not a full year of operations for five newly completed hotels.
As our region grows, we have been diversifying our portfolio of assets to capture a broader range of business activity,
including high end boutique hotels, select service flag hotels, multimillion-dollar custom home communities,
workforce housing, builder communities, senior and independent
rental multi-family
communities, self-storage, flex space, and many other diverse assets. We now have sixteen joint ventures. We reduced
corporate expenses as a percentage of consolidated revenue from 24% in 2016 to 6% in 2023, highlighting our ability
to grow and scale the business efficiently. We have been generating more revenue per acre of land with average sales of
approximately 1,056 acres per year since 2016, not including unconsolidated joint ventures. At the end of 2023, we
owned 168,432 acres so we have many decades of land to execute our business strategy and grow the Company. We
have come a long way from the business strategy before 2016, when the Company sold tens of thousands of acres of
bulk land every year to generate revenue.
living communities,
While we have grown recurring revenue in our commercial and hospitality segments to Company records, we have also
grown our residential segment. In 2023, we set a new volume record for residential homesite and home sales with 1,704.
For context of the growth, we sold a total of 106 homesites in 2016.
We have been diversifying our portfolio of assets with related and complimentary assets that create a virtuous circle. For
example, the growth of our hospitality segment exposes more visitors to and help grow our residential communities,
which create more customers for and help grow our commercial leasing portfolio, which creates more shopping and
entertainment opportunities that attract more visitors. While this virtuous circle is occurring, it is simultaneously
increasing the value of our assets, especially our adjoining undeveloped landholdings.
Proven Results
Our results demonstrate our ability to profitably grow the Company by consistently executing our business strategy.
Since 2016, our consolidated revenue and unconsolidated joint venture revenue have grown from $97 million to
$740 million, at a compound annual growth rate of 34%; our net income has grown from $16 million to $78 million, at
a compound annual growth rate of 25%; our earnings per share have grown from $0.21 to $1.33, at a compound annual
growth rate of 30%. Our earnings before interest, taxes, depreciation, and amortization have grown from $26 million to
$160 million, at a compound annual growth rate of 30%1. While we are proud of what we have achieved, what matters
most is what comes next, and we enter this next phase with confidence – driven by our proven ability to execute.
The Future
As we have been growing, we have also been simultaneously preparing for the future. Over the last several years, we
have submitted and received approval by Bay and Walton Counties for nine separate Detailed Specific Area Plans
(DSAPs), which are the second and final step in implementing the Bay Walton Sector Plan with specific development
plans. Approval of these DSAPs allows us to proceed with engineering, permitting and development of these areas.
1
For a reconciliation of EBITDA, a non-GAAP metric, to net income, the most comparable GAAP metric, see the earnings presentations
included on the investor relations section of our website at www.ir.joe.com.
These approved DSAP’s represent tens of thousands of additional residential homesites with the potential for many new
communities offering a wide range of lifestyles, amenities, and price points as well as new commercial town centers and
hospitality opportunities that we will be pursuing in the coming years and decades.
In the residential segment, our focus centers on continued growth of Latitude Margaritaville Watersound. As of the end
of 2023, we had completed and sold 1,004 homes with another 609 under contract, which is remarkable progress
considering the sales center opened in April of 2021. We are well on our way toward the original 3,500 planned homes.
In 2023, we received approval for a new DSAP immediately west of Latitude for an additional 5,250 homes. Over time,
we intend to pursue more DSAPs to accommodate the future growth of Latitude. In addition, with the success of the
Watersound Origins community, we are particularly focused on the areas west and east of Origins as the next two new
scalable communities, including adjacent to ‘‘The Third’’ golf course, currently in development. Other future
residential areas include additional phases of Breakfast Point East and new communities in West Bay.
In the commercial and hospitality segments, the commercial areas of Watersound Town Center, Watersound West Bay
Center, and the FSU/TMH Medical Campus highlight our key areas of focus. The first phase of the medical campus is
scheduled to open in 2024 with a 79,000 square foot medical office building offering cardiology, orthopedics, urgent
care, and an outpatient surgery center. The surrounding area represents an opportunity to increase our leasing and hotel
portfolio. And, more importantly, we believe the campus will raise the quantity and quality of health care in our region.
Just these three areas of focus have the potential to double our existing leasing portfolio.
With the potential anchor of Top Golf sports entertainment complex, we are also focused on Pier Park East, which we
are planning as an entertainment district with commercial, multi-family, and hotels. As the Publix Sports Park continues
to grow in popularity attracting amateur sports tournaments from all over the country and with the prospect for a new
indoor multi-sports facility planned by the tourist development authorities, we are planning additional hotels and a new
commercial town center that will connect the sports complex with the growing Breakfast Point East residential
community. With the success of the Point South Marina in Port St. Joe, we believe that there is an opportunity for a new
waterfront hotel and commercial center next to the marina. We have also started the planning process for a potential new
waterfront project that could include new Watersound Club amenities, a hotel, and custom homesites at our East Lake
Powell property.
This is just a glimpse of some of our plans, which will be executed based on market demand and measured financial
returns. We are diligently evaluating many other concepts and locations. As our region continues to grow with more
migration of full-time residents and visitors from all over the country, we will not have a shortage of potential
opportunities. We have been positioning our Company for multigenerational growth from day one.
Our People and Our Culture
Finally, I want to thank all our employees. It continues to be an honor to be on this journey with each of them. We are
in the trenches together every day navigating opportunities and challenges as we execute our business strategy.
Successful execution is not possible without having the right culture. Our culture is one of thinking and acting like
owners, trust, transparency, and humility. We strive to maintain that culture every day, which helps us to recruit and
retain the best talent that fits our culture.
We believe our future is bright, and we have just started to scratch the surface.
With respect,
Jorge Gonzalez
President and Chief Executive Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
(cid:1409)
(cid:1407)
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, 2023
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)
Title of Each Class
Common Stock, no par value
(850) 231-6400
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
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 (cid:1407) NO (cid:1408)
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 (cid:1407) NO (cid:1408)
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 (cid:1408) NO (cid:1407)
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 (cid:59) NO (cid:1407)
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
(cid:1408)
(cid:1407)
Accelerated filer
Smaller reporting company
Emerging Growth Company
(cid:1407)
(cid:1407)
(cid:1407)
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. (cid:1407)
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. (cid:1408)
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. (cid:1407)
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). (cid:1407)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES (cid:1407) NO (cid:1408)
The aggregate market value of the registrant’s Common Stock held by non-affiliates based on the closing price on June 30, 2023, was approximately $1.7 billion.
As of February 19, 2024, there were 58,372,040 shares of common stock, no par value, issued of which 58,372,040 were outstanding.
Documents Incorporated By Reference
Portions of the Registrant’s definitive proxy statement for its 2024 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, 2023, 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 1C. Cybersecurity
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
7
20
20
21
22
22
23
24
24
56
56
56
57
58
58
59
59
59
59
59
60
62
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. As of December 31, 2023, we owned 168,000 acres of land in Northwest Florida, compared to
169,000 acres and 170,000 acres as of December 31, 2022 and 2021, respectively. A portion of our land is within The
Bay-Walton Sector Plan (“Sector Plan”), that entitles, or gives legal rights, for us to originally 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 87% 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.
Capital is invested to achieve risk-adjusted rates of return and support future business initiatives that create value.
New projects are planned for stand-alone profitably and to benefit other enterprise activities. Investments, which include
investments in joint ventures (“JVs”) and limited partnerships, are funded with cash proceeds from completed projects,
existing cash, owned-land, partner capital and financing arrangements. Actual investments may vary from planned
capital investments for various reasons. We do not anticipate immediate benefits from investments. We may choose to
operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay
revenue and profits. We continue to maintain low fixed expenses, low corporate debt and high liquidity for sustainability
in 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 cash dividend of $0.10 per share on our common
stock was paid in each of the first and second quarters of 2023 and $0.12 per share on our common stock was paid in
each of the third and fourth quarters of 2023. A quarterly cash dividend of $0.10 and $0.08 per share on our common
stock was paid in each quarter of 2022 and 2021, respectively. During the year ended December 31, 2023, we did not
repurchase shares of our common stock. During the year ended December 31, 2022, we repurchased 576,963 shares of
our common stock for an aggregate purchase price of $20.0 million. As of December 31, 2023, we have a total of $80.0
million available for the repurchase of shares pursuant to our Stock Repurchase Program (the “Stock Repurchase
Program”). See Item 5. Market for the Registrant’s Common Equity, 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.
3
Investments in Joint Ventures and Limited Partnerships
As part of our core business strategy, we have created a meaningful portion of our business through JVs and limited
partnerships over the past several years. We enter into these arrangements for the purposes of developing real estate and
other business activities, which we believe allows us to complement our growth strategy, leverage industry expertise and
diversify our business.
These entities produce meaningful revenue. However, in the case of our unconsolidated JVs, the revenue generated
by these entities is not included in our revenue. Instead, investments in JVs in which we are not the primary beneficiary,
or a voting interest entity where we do not have a majority voting interest or control, but have significant influence are
unconsolidated and accounted for by the equity method. Equity method investments are recorded initially at cost and
adjusted subsequently to recognize the investor’s share of earnings, losses and changes in capital of the investee which
are included in investment in unconsolidated joint ventures in the accompanying consolidated balance sheets and equity
in income (loss) from unconsolidated joint ventures in the accompanying consolidated statements of income. See Note 4.
Joint Ventures included in Item 15 of this Form 10-K for additional information.
Additionally, we have determined that as of December 31, 2023, our unconsolidated LMWS, LLC JV (the “Latitude
Margaritaville Watersound JV”) has met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X.
The Latitude Margaritaville Watersound JV did not meet the significant subsidiary test under Rule 1-02(w) of Regulation S-
X as of December 31, 2022 or as of December 31, 2021. The separate financial statements of the Latitude Margaritaville
Watersound JV, as required pursuant to Rule 3-09 of Regulation S-X, are filed as Exhibit 99.1 in Item 15 of this Form 10-
K.
Seasonality and Market Variability
St. Joe’s operations may be affected by seasonal fluctuations. The revenues and earnings from our business
segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic
transactions. In addition, homesite prices vary significantly by community, which further impacts period over period
results. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or
commercial real estate sales. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell
improved rather than unimproved land that may delay revenue and profits.
Hospitality revenues are typically higher in the second and third quarters, and vary depending on the timing of
holidays and school breaks. Commercial real estate sales tend to be non-recurring. Projects depend on uncertain demand.
Extraordinary events such as hurricanes or public health emergencies may dramatically change demand and pricing for
products and services.
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. In addition to the strong competition we face in our residential and commercial segments, highly competitive
companies participate in the hospitality business. Our ability to remain competitive and to attract new and repeat guests,
customers and club members depends on our success in distinguishing the quality and value of our products and services
from those offered by others. We compete based on location, price and amenities. 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. 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.
4
Regulations
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 19, 2024, we employed 810 full-time employees and 168 part-time and
seasonal employees.
Recruitment and Retention
Success depends upon our ability to attract and retain skilled employees. As such, we are committed to recruiting
top talent and offer competitive benefits, wages and a rewarding work environment.
We have a demonstrated history of investing in our workforce by offering competitive salaries and wages, which we
continuously evaluate based on the business environment and labor market. We have consistently made enhancements in
wages in order to attract talent to support our growth strategy and enhance the customer experience. At times, we rely on
the J-1 and H-2B visa programs to bring workers to the United States (“U.S.”) to fill seasonal staffing needs of our
hospitality operations and ensure that we have the appropriate workforce in place. These programs allow students
participating in internship programs to expand their cultural experience outside of their home country through
employment opportunities within the hospitality environment.
In addition to competitive wages, we offer our employees and eligible family members a comprehensive and
valuable benefits program. Our suite of benefits offered to all full-time employees include group health plans, which
include medical, dental, vision, life and disability benefits with Company sharing of premiums for certain coverages. We
also offer a 401(k) retirement savings plan with Company match, paid vacation and holidays, jury pay, bereavement
leave, an employee referral bonus program, tuition reimbursement program and discounted gym memberships. 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 other exclusive discounts and special
offers which may include access to preferred seating and tickets to top attractions, theme parks, shows, sporting events,
movie tickets, hotels and more.
As well as being a tool for improving our human capital management strategies, we evaluate employee engagement
and satisfaction annually. We focus on our employees’ opinions and collect data through focus groups. Our executive
team reviews feedback from our team and, based on the response, action plans are developed to focus on areas of
opportunity throughout the course of the year. We are pleased to report that our most recent annual engagement results
were favorable overall and have shown that our employees are proud to work for the Company. The results of focus
groups help us to continuously improve our human capital strategies and find ways to foster engagement and growth for
our team members.
5
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 19, 2024, approximately 32% of our workforce identify as racially diverse and approximately 47%
of our workforce, including 50% of our executive management team, is comprised of female employees.
Health and Safety
The health and safety of our team members is a top priority. We are committed to providing a safe and injury-free
workplace. We continually invest in programs designed to improve physical, mental and social well-being, and provide
access to a variety of innovative, flexible and convenient health and wellness programs.
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 addition, our developments positively impact the communities in
which they are located, including by creating jobs in the Northwest Florida region and improving the overall quality of
life in the area.
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, including the sustainable
development of Northwest Florida. Our process of defining sustainability priorities focuses on the simultaneous
improvement of the environmental, social and financial position of the Company, and our strong leadership and
governance practices that strive to integrate sustainability into our business strategy and corporate culture.
The acreage we own is located in Northwest Florida and the majority is managed in our forestry operations under
our commercial segment. 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,
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. Additionally, we are engaged in the
operation of two mitigation banks, which pursuant to mitigation plans approved by the applicable state and federal
authorities, produce mitigation credits that are marketed and sold to developers of land in the Bay County, Florida and
Walton County, Florida areas for the purpose of enabling the developers to obtain certain regulatory permits.
Additional information regarding our sustainability efforts is available in the Stewardship section of our website at
https://www.joe.com/stewardship. The content of the Stewardship section of our website is not incorporated by reference
into this Form 10-K or in any other report or document filed with the U.S. Securities and Exchange Commission (“SEC”),
unless expressly noted.
6
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 SEC. In addition, you may review any materials we file with the SEC on the
SEC’s website at www.sec.gov. 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, market conditions and interest rates. Estimates are used to
assess, among other things, capital allocation decisions. Actual results or events may differ materially from estimates and
those indicated in our forward-looking statements as a result of various important factors. Such factors include, but are
not limited to, those discussed below.
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 Form 10-Q, Form 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
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.
7
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, 2023, we had approximately $1,018.6 million of real estate
investments, $66.4 million of investment in unconsolidated joint ventures and $66.0 million of property and equipment,
net recorded on our books at depreciated cost basis subject to impairment testing. If market conditions were to
deteriorate, our estimate of undiscounted future cash flows may fall below their carrying value and we may be required
to take impairments, which would have an adverse effect on our results of operations and financial condition. Existing
and planned operations utilize estimates of revenue, costs, profits, growth, and real estate market values.
We face significant competition across our business units. We compete with local, regional and national real estate
leasing and development companies and homebuilders, some of which may have greater financial, marketing, sales and
other resources than we do. Hospitality operations are subject to significant competition from other hospitality providers
and lodging alternatives. Our ability to remain competitive and to attract new and repeat guests, customers and club
members depends on our success in distinguishing the quality and value of our products and services from those offered
by others. Competition from real estate leasing and development companies and homebuilders may adversely affect our
ability to attract tenants and lease our commercial, multi-family and senior living properties, attract purchasers and sell
residential homesites and commercial real estate and attract and retain experienced real estate leasing and development
personnel. Labor markets in the industries in which we operate are also competitive, which have led to increased labor
costs in recent years. We must attract, train and retain a large number of qualified employees while controlling related
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. 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,
changes in fiscal monetary policy 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 and assets are
located, and, more broadly, the Southeast region of the U.S., which in the past has produced a high percentage of
customers for our products. If market conditions experience volatility or worsen, tenant and other customers’ demand
may materially decline. For example, over the past several years, we have faced macroeconomic headwinds caused by,
among other things, inflation, elevated interest rates, higher insurance costs, supply chain disruptions, financial
institution disruptions and geopolitical conflicts, which impacted buyer sentiment. While demand across our segments
remained strong despite these challenges, our business was impacted from the aforementioned macroeconomic factors,
including insurance costs, supply chain disruptions, financial institution disruptions, cost increases and elevated interest
rates, which, for example, have extended homesite and home deliveries in certain residential communities and increased
operating costs. Although these delays generally have not resulted in increased cancellation rates, and therefore only
impacted the timing of revenue recognition of our homesites, if conditions worsen or demand declines, we could
experience cancellations that could adversely impact our business.
We and the real estate industry in general may be adversely affected during periods of high inflation, primarily
because of higher construction and operating costs.
Our leasing projects are subject to a variety of risks that could impact returns. Our business strategy includes the
development and leasing of multi-family and senior living properties, management of commercial properties and
commercial assets for sale. These commercial developments may not be as successful as estimated due to leasing related
risks, including the risk that we may not be able to lease new properties or obtain lease rates that are consistent with our
projections, as well as the risks generally associated with real estate development. Additionally, development of leasing
projects involves the risk associated with the significant time lag between commencement and completion of the project.
This time lag subjects us to greater risks relating to, among other things:
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fluctuations in the general economy;
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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 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. Certain of these JVs may be material to our business. For example, for the year ended December 31, 2023,
our equity in income from the unconsolidated Latitude Margaritaville Watersound JV accounted for over 20% of our
pre-tax income.
Our partners may take actions contrary to our instructions or requests, or contrary to our policies or objectives. We
may not have exclusive control over the development, financing, management and other aspects of the partnership,
which may prevent us from taking actions that are in our best interest but opposed by our partner. Our partners may
experience financial difficulties, become bankrupt or fail to fund their share of capital contributions, which may delay
construction or development of property or increase our financial commitment to the partnership. Our partners may take
actions that subject us to liabilities in excess of, or other than, those contemplated. We may disagree with our partners
about decisions affecting the partnership, which may result in litigation or arbitration that increases our expenses,
distracts our officers and directors and disrupts the day-to-day operations of the property or business, which may delay
important decisions until the dispute is resolved. Actions by our partners may subject the JV to liabilities or have other
adverse consequences, including if the market reputation of a partner deteriorates. If a JV agreement is terminated or
dissolved, we may not continue to own or operate the interests or investments of the JV or may need to purchase such
interests or investments at a premium to the market price to continue ownership. In addition, we may not have sufficient
resources, experience and/or skills to manage our existing JVs or locate additional desirable partners.
Our real estate investments are generally illiquid. Real estate and timber holdings are relatively illiquid. It may be
difficult for us to sell such assets if the need or desire arises, which may limit our ability to make rapid adjustments to
the size and content of our property assets. Illiquid assets typically experience greater price volatility, as a ready market
does not exist and therefore can be more difficult to value. In addition, validating third party pricing for illiquid assets
may be more subjective than more liquid assets. As a result, if we are required to liquidate all or a portion of our real
estate or timber assets quickly, we may realize significantly less than the value at which we have previously recorded our
assets. This impact may also be exacerbated in periods of general economic instability and capital markets volatility.
We may invest in new business endeavors or product lines, which are inherently risky and could disrupt our
ongoing business and present risks not originally contemplated. In recent years, we have invested, and in the future
may invest, in new business endeavors and product lines. New endeavors may involve new risks and uncertainties and
may amplify existing risks, including additional competition, distraction of management from current operations,
greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with
operating in new businesses or product lines, inadequate return on capital and potential impairment of tangible and
intangible assets. New ventures are inherently risky and may not be successful. In addition, we may face difficulty
integrating new businesses or product lines, assimilating new facilities and personnel and harmonizing diverse
businesses and methods of operation. If any of our business endeavors are unsuccessful and we fail to realize the
expected benefits of any new investment or product line or are unable to successfully integrate new businesses or
product lines, our business, results of operations, cash flows and financial condition could be adversely affected.
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We face risks associated with short-term U.S. Treasury Bills. We hold significant cash balances that are invested in
a variety of short-term U.S. Treasury Bills, 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 U.S. Treasury Bills 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 any future investments in
investments – debt securities (“Securities”). The market value of such potential future investments will be subject to
change from period-to-period, especially in light of the financial institution disruptions and geopolitical conflicts which
have caused market volatility. Our Securities have historically included investments in U.S. Treasury Bills classified as
investments – debt securities. 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 any future investment, which may result in a loss.
Our investments are supervised and directed by Fairholme Capital Management, L.L.C. (“FCM”, an investment
advisor registered with the SEC) 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:
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general market conditions;
construction delays or cost overruns, which may increase project development costs;
labor costs and shortages of skilled labor, particularly as a result of the recent low unemployment rate in the
U.S. and Florida especially;
supply chain disruptions and material shortages;
claims for construction defects after property has been developed, including claims by purchasers and property
owners’ associations, and claims for construction defects arising from third party contractors;
the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues;
an inability to obtain required governmental permits and authorizations;
an inability to secure tenants necessary to support commercial, multi-family or senior living projects;
compliance with building codes and other local regulations;
unavailability of raw materials when needed, which may result in project delays, stoppages or interruptions,
which may make the project less profitable;
insufficient infrastructure capacity or availability (e.g., water, sewer and roads) to serve the needs of our
projects;
instability in the financial industry may reduce the availability of financing;
delay or inability to acquire property, rights of way or easements, which may result in delays or increased costs;
and
(cid:120) 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, have experienced, and may continue to
experience worldwide supply chain disruptions and cost increases due to a multitude of factors, including inflation,
elevated interest rates, higher insurance costs, labor shortages and geopolitical conflicts, such as the conflict between
Russia and Ukraine, the conflict in the Gaza Strip and the general unrest in the Middle East. Materials, parts and labor
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costs have increased in recent years, sometimes significantly and over a short period of time. In addition, material time
delays or increases in construction costs resulting from the aforementioned factors may impact our ability to realize
anticipated returns on such projects, impact the timing of revenue recognition, lead to cancellations and otherwise
materially adversely affect our business, results of operations, cash flows and financial condition. Nonetheless, should
we experience increased cancellations as a result of such macroeconomic factors, our business could be adversely
impacted.
Further, with regard to our residential segment, revenues from homesite sales can fluctuate period-to-period due to
variations in the mix of sales from different communities, as well as other variations in product mix. Given these
fluctuations in product mix, revenues from our residential segment may significantly vary from period to period.
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.
Mortgage financing issues, including lack of supply of mortgage loans, tightened lending requirements and
increases in interest rates, may reduce demand for our products. Purchasers of our real estate products may obtain
mortgage loans to finance a substantial portion of the purchase price or may need to obtain mortgage loans to finance the
construction costs of homes to be built on homesites purchased from us. Homebuilder customers depend on retail
purchasers who rely on mortgage financing. Increases in interest rates increase the costs of owning a home and may
adversely affect the purchasing power of consumers and lower demand for residential real estate. In addition to
residential real estate, increased interest rates and restrictions in the availability of credit may also negatively impact
sales or development of our commercial properties or other land we offer for sale. While over the past couple years,
elevated interest rates negatively impacted buyers’ ability to obtain financing and the housing market generally, to date
we have not experienced material declines in customer demand for our homesites. However, in the event financing
challenges reduce demand from homebuilders to purchase homesites, then our sales, results of operations, cash flows
and financial condition may be negatively affected.
Our residential segment is highly dependent on homebuilders and are subject to the risk of homebuilder
concentration. 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. We also rely on a concentrated number of homebuilders for a significant portion of our residential homesite
sales. 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:
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reduced travel (including from airline disruptions, business reduction or elimination of typical travel in efforts
to be conservative in uncertain financial times or adverse economic conditions), which we may be susceptible
to given that the travel tourism on which our hospitality segment relies can entail a relatively high cost of
participation and is based on discretionary consumer spending;
increased labor costs and shortages of skilled labor;
inclement weather conditions;
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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
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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 insurance coverage on our properties may be inadequate or our insurances costs may increase. We maintain
insurance on our properties, including property, liability, fire, flood and extended coverage. However, we do not insure
our timber assets. Additionally, our insurance for hurricanes has limitations per named storm and is subject to
deductibles. We use our discretion when determining amounts, coverage limits and deductibles for insurance. These
terms are determined based on retaining an acceptable level of risk at a reasonable cost. This may result in insurance
coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current
replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental
considerations and other factors also may make it unfeasible to use insurance proceeds to replace a facility after it has
been damaged or destroyed. Under such circumstances, we may not receive insurance proceeds or the insurance
proceeds we receive may not fully cover business interruptions or losses and our earnings, liquidity, or capital resources
may be adversely affected.
Homeowner property insurance companies doing business in Florida have reacted to previous hurricanes by
increasing premiums, requiring higher deductibles, reducing limits, restricting coverage, imposing exclusions, refusing
to insure certain property owners, and in some instances, ceasing insurance operations in the state. It is uncertain what
effect these actions may have on future property insurance availability and rates in the state. The high costs of property
insurance premiums in Florida may deter potential customers from purchasing a homesite in one of our developments or
make Northwest Florida less attractive to new employers that can create high quality jobs needed to increase growth in
the region, either of which may have a material adverse effect on our business, results of operations, cash flows and
financial condition. Florida’s state-owned property insurance company, Citizens Property Insurance Corp., underwrites
homeowner property insurance. If there were to be a catastrophic hurricane or series of hurricanes to hit Florida, the
exposure of the state government to property insurance claims may place extreme stress on state finances.
Our insurance policies are generally renewed on an annual basis and, depending on factors such as market
conditions, the premiums, terms, policy limits and/or deductibles can vary substantially. We can give no assurance that
we will be able to maintain adequate insurance in the future at rates or on other terms we consider commercially
reasonable. To offset negative insurance market trends, we may decide to self-insure additional risks. In the even that we
decide to self-insure, if we experience a greater number of self-insured losses than we anticipate, our financial
performance could be adversely affected. If we lose our ability to, or decide not to, self-insure these risks, our insurance
cost could materially increase and we may find it difficult to obtain adequate levels of insurance coverage.
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.
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
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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 exposed to operational risks with respect to our senior living communities. We are
exposed to various federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations,
and standards; state regulations regarding senior living resident agreements, which typically require a written resident
agreement with each resident; the availability and increases in cost of general and professional liability insurance
coverage; state regulation and rights of residents related to entrance fees; and the availability and increases in the cost of
labor.
Our financial results may vary significantly period over period. The revenues and earnings from our business
segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic
transactions. In addition, homesite prices vary significantly by community, which further impacts period over period
results. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or
commercial real estate sales. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell
improved rather than unimproved land that may delay revenue and profits.
Hospitality operations are affected by seasonal fluctuations. Hospitality revenues are typically higher in the second
and third quarters, and vary depending on the timing of holidays and school breaks. Commercial real estate sales tend to
be non-recurring. Projects depend on uncertain demand. Extraordinary events such as hurricanes or public health
emergencies may dramatically change demand and pricing for products and services.
We are subject to various geographic risks.
(cid:120) Growth of Northwest Florida. We are focused on developing real estate and expanding operations in
Northwest Florida. Our success will be dependent on continued 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 or existing 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.
(cid:120) 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.
(cid:120) 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. To the extent that such natural disasters and climate conditions occur, our
projects could be damaged or destroyed, which may result in losses exceeding our insurance coverage.
Natural disasters and climate conditions can also lead to increased competition for subcontracts, which can
delay construction activities even after an event has concluded. 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
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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 and on our ability to obtain
flood or other hazard insurance coverage. Manmade disasters or disruptions, such as oil spills, acts of
terrorism, power outages and communications failures may simultaneously disrupt our operations.
We are dependent on third party service providers for certain services. We rely on various third parties to conduct
the day-to-day operations of certain residential, hospitality, multi-family, senior living and other commercial properties.
Failure of such third parties to adequately perform their contracted services may negatively impact our ability to retain
customers. As a result, any such failure may negatively impact our results of operations, cash flows and financial
condition.
Public health emergencies could adversely affect our business. An epidemic, pandemic or similar serious public
health issue, and the measures undertaken by governmental authorities to address it, could significantly disrupt or
prevent us from operating our business in the ordinary course for an extended period, and thereby, and/or along with any
associated economic and/or social instability or distress, have a material adverse impact on our results of operations,
cash flows and financial condition.
In addition to impacting general economic conditions, a public health emergency may exacerbate factors that impact
our operations, including supply chain disruptions, labor shortages and rising commodity and product costs, which may
continue after the public health emergency has subsided. Any continued impact could also amplify the other risks and
uncertainties. The ultimate extent to which a public health emergency could impact our business is highly uncertain and
cannot be predicted with any degree of confidence.
RISKS RELATED TO OUR EXISTING OWNERSHIP STRUCTURE
Our largest shareholder controls approximately 38.9% 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
FCM. As of December 31, 2023, clients of FCM, including Mr. Berkowitz, beneficially owned approximately 38.9% 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 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.
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We have not requested approval or guidance from the SEC with respect to our Investment Company Act
determinations, including, in particular: our treatment of any subsidiary as majority-owned; the compliance of any
subsidiary with any exemption under the Investment Company Act, including any subsidiary’s determinations with
respect to the consistency of its assets or operations with the requirements thereof or whether our interests in one or more
subsidiaries constitute investment securities for purposes of the 40% test. If the SEC were to disagree with our treatment
of one or more subsidiaries as being majority-owned, exempted from the Investment Company Act, with our
determination that one or more of our other holdings do not constitute investment securities for purposes of the 40% test,
or with our determinations as to the nature of the business in which we engage or the manner in which we hold ourselves
out, we and/or one or more of our subsidiaries would need to adjust our operating strategies or assets in order for us to
continue to pass the 40% test (as described above) or register as an investment company, either of which may have a
material adverse effect on us. Moreover, we may be required to adjust our operating strategy and holdings, or to effect
sales of our assets in a manner that, or at a time or price at which, we would not otherwise choose, if there are changes in
the laws or rules governing our Investment Company Act status or that of our subsidiaries, or if the SEC or its staff
provides more specific or different guidance regarding the application of relevant provisions of, and rules under, the
Investment Company Act.
If the SEC or a court of competent jurisdiction were to find that we were required, but failed, to register as an
investment company in violation of the Investment Company Act, we would have to cease business activities, we would
breach representations and warranties and/or be in default as to certain of our contracts and obligations, civil or criminal
actions may be brought against us, certain of our contracts would be unenforceable unless a court were to require
enforcement and a court may appoint a receiver to take control of us and liquidate our business, any or all of which
would have a material adverse effect on our business.
We are subject to various existing government regulations.
(cid:120) 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.
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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
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.
(cid:120) Environmental Regulation. Current or past operations are subject to extensive and evolving federal, state
and local environmental laws and other regulations. The provisions and enforcement of these
environmental laws and regulations may become more stringent in the future, including as a result of
attention from environmental advocacy groups. Violations of these laws and regulations can result in,
among other things, civil penalties, 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.
(cid:120) 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 elevated interest rates, which may continue to increase
as a result of the government’s response to inflation. If borrowing standards are tightened and/or the federal
government were to reduce or eliminate these mortgage loan programs (including due to any failure of
lawmakers to agree on a budget or appropriation legislation to fund relevant programs or operations) or if
mortgage rates continue to increase generally, it would likely make it more difficult for potential
purchasers of our products, including our homebuilder customers to obtain acceptable financing, which
may have a negative effect on demand in our communities.
(cid:120) Climate Regulation. Potential impacts of climate change have begun to influence governmental authorities,
consumer behavior patterns and the general business environment of the U.S., including, but not limited to,
energy-efficiency measures, water use measures and land-use practices. The implementation of these
policies may require us to invest additional capital in our properties or it may restrict the availability of
land we are able to develop. These changes, or changes in other environmental laws or their interpretation
thereof, new enforcement of laws, the identification of new facts or the failure of other parties to perform
remediation at our current or former facilities may lead to new or greater liabilities that may materially
16
adversely affect our business, results of operations, cash flows or financial condition.
(cid:120) Accounting Standards. Uncertainties posed by various initiatives of accounting standard-setting by the
Financial Accounting Standards Board (“FASB”) and the SEC, which create and interpret applicable
accounting standards for U.S. companies, may change the financial accounting and reporting standards or
their interpretation and application of these standards that govern the preparation of our financial
statements. These changes and others may have a material impact on how we record and report our
financial condition and results of operations. In some cases, we may be required to apply a new or revised
standard retroactively, resulting in potentially material restatements of prior period financial statements.
Changes to U.S. tax laws may materially affect us.
(cid:120)
Income Tax. Tax laws are dynamic and subject to change as new laws are passed and new interpretations
of the law are issued or applied. In many cases, the application of existing, newly enacted or amended tax
laws may be uncertain and subject to differing interpretations. Changes in the tax laws, or in the
interpretation or enforcement of existing tax laws, could increase our state and federal tax rates and subject
our business to audits, inquiries and legal challenges from taxing authorities. As a result of changes in tax
laws, we may incur additional costs, including taxes and penalties for historical periods, which may have a
material and adverse effect on our business, results of operations, cash flows or financial condition.
(cid:120) QOZ Program. As part of the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”), Congress established
the Qualified Opportunity Zone program (the “QOZ Program”), which provides preferential tax treatment
to taxpayers who invest eligible capital gains into qualified opportunity funds (“QOFs”). QOFs are self-
certifying entities that invest their capital in economically distressed communities that have been
designated as qualified opportunity zones (“QOZs”) by the Internal Revenue Service (“IRS”) and Treasury.
We have positioned ourselves to take advantage of the tax benefits offered by the QOZ Program. While the
IRS has issued final regulations which address some of the uncertainties under the QOZ Program, because
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.
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 depends 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
17
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
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, including certain
technology systems from third-party vendors which we use to operate our business which are not under our control. 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 or state-sponsored actors, and cyber terrorists, has
generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world
have increased. In particular, there has been a spike in cybersecurity attacks as work-from-home measures have led
businesses to increase reliance on virtual environments and communications systems, which have been subject to
increasing third-party vulnerabilities and security risks. Additionally, to the extent artificial intelligence capabilities
improve and are increasingly adopted, they may be used to identify vulnerabilities and craft increasingly sophisticated
cybersecurity attacks. Attachments crafted with artificial intelligence tools could directly attack information systems
with greater speed and/or efficiency than a human threat actor or create more effective phishing emails. Vulnerabilities
may also be introduced from the use of artificial intelligence by us, our customers, suppliers and other business partners
and third-party providers. Use of artificial intelligence by our employees, whether authorized or unauthorized, increases
the risk that our intellectual property and other proprietary information will be unintentionally disclosed.
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, increase in costs, damage to our reputation,
material legal claims, 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.
18
In addition, companies across many industries are facing increasing scrutiny from lawmakers, regulators, investors,
customers, employees and other stakeholders related to their environmental, social, and governance (“ESG”) practices,
including those related to the environment, climate, diversity and inclusion, human rights and governance transparency.
Various jurisdictions are developing climate-related laws or regulations that could cause us to incur additional direct
costs for compliance, as well as indirect costs resulting from our customers, suppliers, or additional compliance costs
that are passed on to us. Additionally, investor advocacy groups, including ESG-focused investor advocacy groups,
certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG
practices and in recent years have placed increasing importance on the implications and social cost of their investments.
Legal and regulatory requirements, as well as stakeholder expectations, on ESG practices and disclosures are subject to
change, can be unpredictable, and may be difficult and expensive for us to comply with. Further, there is an increasing
number of state-level anti-ESG initiatives in the U.S. that may conflict with other regulatory requirements or various
stakeholders’ expectations. If we fail, or are perceived to be failing, to meet evolving legal and regulatory requirements
or the expectations of our stakeholders, which are evolving, we may be subject to enforcement actions, required to pay
fines, investors may sell their shares, 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
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 10. 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 10. 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 and Note 10. Debt, Net
included in Item 15 of this Form 10-K for additional information. In addition, we typically refinance our outstanding
debt prior to or in connection with its maturity. If we are unable to refinance our debt on favorable terms, our interest
expense may increase. A refinancing of our debt could also require us to comply with more onerous covenants and
further restrict our business operations. Any of these circumstances could adversely impact our financial position and
results of operations.
19
We cannot assure you that we will not make changes to our existing capital allocation plan, including whether
we will continue to pay dividends at the current rate or at all. In 2023, we paid cash dividends of $0.10 per share on our
common stock in the first and second quarters and $0.12 per share on our common stock in the third and fourth quarters,
and we currently 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. In
addition, we may decide not to make future stock repurchases at the same rate or at all.
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, the real estate or real estate
development industry or hospitality operations in general; economic and/or political factors unrelated to our
performance; comments by public figures or other third parties (including blogs, articles, message boards and social and
other media); changes in recommendations or earnings estimates by securities analysts; novel and unforeseen trading
strategies adopted by retail investors or other market participants and less volume and reduced shares outstanding due to
execution of the Stock Repurchase Program that would reduce our “public float”. The market price of our common stock
on the New York Stock Exchange (“NYSE”) has been volatile, which may be unrelated or disproportionate to operating
performance. Continued volatility in the market price of our common stock may cause shareholders to lose some or all
of their investment in our common stock. Institutional investors might not be interested in owning our common stock.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
We maintain a data security plan designed to provide a documented and formalized information security policy to
detect, identify, classify and mitigate cybersecurity and other data security threats. This cybersecurity program is based
in-part on, and its effectiveness is measured using, the Payment Card Industry Data Security Standard (“PCI DSS”) and
is included in our overall enterprise risk management program.
In furtherance of detecting, identifying, classifying and mitigating cybersecurity and other data security threats, we
also:
(cid:120)
assess baseline configuration standards to meet the intent and effectiveness for overall safety
and security (both logically and physically) of critical system components;
(cid:120)
track asset inventory for relevant system components;
(cid:120) maintain network connection arrangement documents;
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
limit access rights to system components to authorized personnel, with end-users being
granted access in accordance with stated access rights;
deploy anti-virus solutions on applicable system components, which are enabled for automatic
updates and configured for conducting periodic scans as necessary;
provision and harden critical system resources;
use internal and external vulnerability scanning procedures, along with network layer and anti-
hacking tests;
facilitate requests for validation of baseline configurations for purposes of regulatory compliance
assessments and audits; and
(cid:120)
provide cybersecurity training for employees.
20
Conducting our businesses involves the collection, storage, use, disclosure, processing, transfer, and other handling
of a wide variety of information, including personally identifiable information, for various purposes in our businesses.
Like other comparable-sized companies that process a wide variety of information, our information technology systems,
networks and infrastructure and technology have been, and may in the future be, vulnerable to cybersecurity attacks and
other data security threats. These types of attacks are constantly evolving, may be difficult to detect quickly, and often
are not recognized until after they have been launched against a target. For more information about these and other
cybersecurity risks faced by us, see Part 1. Item 1A. Risk Factors.
Our Board has ultimate oversight for risks relating to our data security plan. In addition, the Board has delegated
primary responsibility to the Audit Committee for assessing and managing data privacy and cybersecurity risks,
reviewing data security and cybersecurity policies and processes with respect to data privacy and cybersecurity risk
assessment and management, reviewing steps management has taken to monitor and control such risks, and regular
inquires with our management team, internal auditors and independent auditors in connection therewith. The Audit
Committee is also responsible for overseeing our investigation of, and response to, any cybersecurity attacks or threats.
We also have a dedicated team of employees overseeing our data security plan and initiatives, led by our Vice
President of Information Systems (who has over twenty years’ experience working in cyber and information security
roles with large companies), and works directly in consultation with internal and external advisors in connection with
these efforts.
We have developed a procedure by which the Board and management are informed about and monitor the
prevention, detection, mitigation and remediation of cybersecurity incidents. Our Incident Response Team, comprised of
representatives of different departments within the Company, including the Vice President of Information Systems,
works to identify cybersecurity-related incidents, and reports such incidents, along with any pertinent recommendations
to update cybersecurity policies and procedures, to our management team. Our management team regularly reports to the
Audit Committee, and more frequently as needed on such matters. The Audit Committee and management also provide
an annual report to the Board on pertinent cybersecurity matters.
Item 2. Properties
St. Joe owns 168,000 acres in Northwest Florida. A portion of our land is within the Sector Plan, that entitles, or
gives legal rights, for us to originally 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 87%
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 and related encumbrances, see “Item 1. Business” and
“Schedule III (Consolidated) - Real Estate and Accumulated Depreciation” included in Item 15 of this Form 10-K for
further information. In addition to the properties we own, we have investments in unconsolidated JVs that own
properties such as the Latitude Margaritaville Watersound JV that includes the Latitude Margaritaville Watersound
community.
In our residential segment, we develop communities into homesites for sale to homebuilders and on a limited basis
to retail customers. As of December 31, 2023, we had completed homesites and homesites under development,
engineering or in conceptual planning in nineteen separate communities. These include the Watersound Origins,
Watersound Origins West, Watersound Camp Creek, Breakfast Point East, Titus Park, Ward Creek, College Station,
Park Place, Salt Creek at Mexico Beach, WindMark Beach, SouthWood, and other Northwest Florida communities.
In our hospitality segment, we own a beach club, club amenities and three golf courses that are situated in or near
our residential communities. We own the WaterColor Inn, The Pearl Hotel, Camp Creek Inn, Hilton Garden Inn Panama
City Airport, Homewood Suites by Hilton Panama City Beach, Home2 Suites by Hilton Santa Rosa Beach, and the
WaterSound Inn, along with nearby retail and commercial space. With our JV partners, we own The Lodge 30A and
21
Embassy Suites by Hilton Panama City Beach Resort. We own additional properties in Panama City Beach, Florida that
we operate as rental property. We own two marinas. We also own Hotel Indigo Panama City Marina and Harrison’s
Kitchen & Bar, both on leased land in downtown Panama City. We are in the process of constructing The Third, an 18-
hole golf course, in Bay County, Florida.
In our commercial segment, we own, or jointly own, the properties used in our operations and have properties under
construction that will be used in our operations, which include multi-family, senior living, self-storage, retail, office,
industrial and commercial property. These commercial properties are located in Beckrich Office Park, where we are
headquartered, North Bay Landing, WindMark Beach, VentureCrossings, Watersound Town Center, West Bay Town
Center, Florida State University (“FSU”)/Tallahassee Memorial Hospital (“TMH”) Medical Campus and other
Northwest Florida locations. In addition, with our JV partners we own Pier Park North, Pier Park Crossings, Pier Park
Crossings Phase II, Watersound Origins Crossings, Mexico Beach Crossings and Watercrest Senior Living.
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.
22
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
On February 19, 2024, we had approximately 760 registered holders of record of our common stock. Our common
stock is listed on the NYSE under the symbol “JOE.”
During each of the first and second quarters of 2023, a cash dividend of $0.10 per share on our common stock was
paid and during each of the third and fourth quarters of 2023, a cash dividend of $0.12 per share on our common stock
was paid ($0.44 per share in the aggregate). During 2022, we paid quarterly cash dividends of $0.10 per share on our
common stock ($0.40 per share in the aggregate). During 2021, we paid quarterly cash dividends of $0.08 per share on
our common stock ($0.32 per share in the aggregate). While we expect to continue to pay quarterly dividends, the
declaration and payment of any future dividends will be at the discretion of our Board after taking into account various
factors, including without limitation, our financial condition, earnings, capital requirements of our business, the terms of
any credit agreements or indentures to which we may be a party to at the time, legal requirements, industry practice, and
other factors that our Board deems relevant. Past payments of dividends should not be construed as a guarantee of
payment or declaration of future dividends in the same amount or at all. See Part I. Item 1A. Risk Factors – General
Risks – We cannot assure you that we will not make changes to our existing capital allocation plan, including whether
we will continue to pay dividends at the current rate or at all.
The following performance graph compares our cumulative shareholder returns for the period from December 31,
2018 through December 31, 2023, assuming $100 was invested on December 31, 2018, 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), Howard Hughes Holdings, Inc. (HHH), 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 uses an equal weighting for each of the stocks within the peer group. The
stock price performance shown below is not necessarily indicative of future price performance.
23
The St. Joe Company
S&P SmallCap 600 Index
Custom Real Estate Peer Group
Stock Repurchase Program
12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023
100 $ 150.57 $ 323.10 $ 398.91 $ 298.92 $ 469.65
$
100 $ 120.86 $ 132.43 $ 165.89 $ 137.00 $ 156.02
$
97.39 $ 113.57
100 $ 123.04 $
$
90.97 $ 121.68 $
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, 2023, we had a total authority of $80.0
million available for purchase of shares of our common stock outstanding. We may repurchase our common stock in
open market purchases from time to time, in privately negotiated transactions or otherwise, pursuant to Rule 10b-18
under the Exchange Act. The timing and amount of any additional shares to be repurchased will depend upon a variety
of factors. 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 during the
fourth quarter of 2023.
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
24
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. As part of our core business strategy, we have created a
meaningful portion of our business through JVs and limited partnerships over the past several years. We enter into these
arrangements for the purposes of developing real estate and other business activities, which we believe allows us to
complement our growth strategy, leverage industry expertise and diversify our business. We may also partner with or
explore the sale of 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 87% 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. We may also choose to operate rather than lease assets, lease rather than
sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
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.
Highlights for the year ended December 31, 2023 compared to the year ended December 31, 2022 include:
(cid:120) Revenue increased by 54.3% to $389.2 million from $252.3 million.
(cid:120) Operating income increased by 47.7% to $90.7 million from $61.4 million.
(cid:120) Net income attributable to the Company increased by 9.6% to $77.7 million from $70.9 million. (Prior year
net income attributable to the Company includes approximately $16.2 million after-tax gain on one
unconsolidated joint venture and approximately $7.3 million after-tax gain on insurance recoveries.)
Market Conditions
Throughout 2023, we continued to generate positive financial results. While macroeconomic factors such as
inflation, elevated interest rates, higher insurance costs, supply chain disruptions, labor shortages, financial institution
disruptions and geopolitical conflicts, among other things, continued to produce economic headwinds and impacted
buyer sentiment, demand across our segments remains strong. We believe this is primarily the result of the continued
growth of Northwest Florida, which we attribute to the region’s high quality of life, natural beauty and outstanding
amenities, as well as the evolving flexibility in the workplace.
Despite the strong demand across our segments, we also continue to feel the impact from the aforementioned
macroeconomic factors, including supply chain disruptions which have extended the time to complete residential,
hospitality and commercial projects. In addition, inflation, higher insurance costs and elevated interest rates, have
25
increased operating costs and loan rates, as compared to prior periods. While elevated interest rates have negatively
impacted buyers’ ability to obtain financing and the housing market generally, the impact has been offset by the net
migration into our markets, limited housing supply relative to demand and the number of cash buyers. Market conditions
have not caused an increase in cancellation rates as homebuilders have continued to perform on their contractual
obligations with us.
Given our diverse portfolio of residential holdings, the mix of sales and pricing from different communities may
impact revenue and margins period over period, as discussed in more detail below.
Further discussion of the potential impacts on our business from the current macroeconomic environment are
discussed in Part I. Item 1A. Risk Factors.
Reportable Segments
We conduct primarily all of our business in the following three reportable segments: 1) residential, 2) hospitality
and 3) commercial.
The following table sets forth the relative contribution of these reportable segments to our consolidated operating
revenue:
Year Ended December 31,
2022
2021
2023
Segment Operating Revenue
Residential
Hospitality
Commercial
Other
Consolidated operating revenue
40.0 %
39.7 %
19.1 %
1.2 %
100.0 %
36.8 %
38.6 %
23.5 %
1.1 %
100.0 %
54.3 %
27.9 %
17.1 %
0.7 %
100.0 %
For more information regarding our reportable segments, see Note 19. Segment Information included in Item 15 of
this Form 10-K.
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 residential segment generates revenue from sales of developed 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. Revenue is recognized at the point in time when a sale is closed and title
and control has been transferred to the buyer. The residential segment also generates revenue from the sale of tap and
impact fee credits, marketing fees and other fees on certain transactions. 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. The
residential segment incurs cost from direct costs (e.g., development and construction costs), selling costs and other
indirect costs.
Our residential segment includes the Watersound Origins, Watersound Origins West, Watersound Camp Creek,
Breakfast Point East, Titus Park, Ward Creek, College Station, Park Place, Salt Creek at Mexico Beach, WindMark
Beach and SouthWood communities, which are large scale, multi-phase communities with current development activity,
sales activity or future phases. Homesites in these communities are developed based on market demand and sold
primarily to homebuilders and on a limited basis to retail customers.
26
The East Lake Creek, East Lake Powell, Lake Powell, Teachee, West Bay Creek and West Laird communities have
phases of homesites in preliminary planning or permitting. Homesites in these communities will be developed based on
market demand and sold primarily to homebuilders and on a limited basis to retail customers.
The SummerCamp Beach community has homesites available for sale and along with the RiverCamps community,
both have additional lands for future development.
The Latitude Margaritaville Watersound community is a planned 55+ active adult residential community in Bay
County, Florida. The community is located near the Intracoastal Waterway with convenient access to the Northwest
Florida Beaches International Airport. The community is being developed through our unconsolidated 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. As of December 31, 2023, the unconsolidated Latitude Margaritaville Watersound JV had 609 homes
under contract, which are expected to result in a sales value of approximately $318.5 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:
Residential Homesite Pipeline (a)
Additional
Entitlements with
Concept Plan
Community/Project
Location
Breakfast Point East (b)
Bay County, FL
Bay County, FL
College Station
East Lake Creek (b)
Bay County, FL
East Lake Powell (c)
Bay County, FL
Lake Powell (d)
Bay County, FL
Latitude Margaritaville Watersound (d) (e)
Bay County, FL
Salt Creek at Mexico Beach (b)
Bay County, FL
Salt Creek at Mexico Beach Townhomes (b) Bay County, FL
Bay County, FL
Park Place
RiverCamps (c)
Bay County, FL
SouthWood (f)
Leon County, FL
SummerCamp Beach (b)
Franklin County, FL
Teachee (d)
Bay County, FL
Bay County, FL
Titus Park
Ward Creek (d)
Bay County, FL
Watersound Camp Creek (f)
Walton County, FL
Watersound Origins (f)
Walton County, FL
Watersound Origins West (d)
Walton County, FL
West Bay Creek (d)
Bay County, FL
West Laird (d)
Bay County, FL
WindMark Beach (f)
Gulf County, FL
Total Homesites
Platted or
Under
Development
31
—
—
—
—
1,367
—
—
34
—
7
27
—
128
444
74
253
99
—
—
94
2,558
Engineering
or Permitting
266
58
—
—
—
386
92
36
—
—
80
—
—
144
316
—
—
158
—
1,068
549
3,153
104
265
200
360
1,352
743
275
82
191
149
920
260
1,750
560
601
—
—
1,694
5,250
1,117
317
16,190
Total
401
323
200
360
1,352
2,496
367
118
225
149
1,007
287
1,750
832
1,361
74
253
1,951
5,250
2,185
960
21,901
(a) The number of homesites are preliminary and are subject to change. Includes homesites platted or currently in concept planning,
engineering, permitting or development. We have significant additional entitlements for future residential homesites on our land
holdings.
(b) Planned Unit Development (“PUD”).
(c) Development Agreement (“DA”).
(d) Detailed Specific Area Plan (“DSAP”).
(e) The unconsolidated Latitude Margaritaville Watersound JV builds and sells homes in this community.
(f) Development of Regional Impact (“DRI”).
In addition to the communities listed above, we have a number of other residential project concepts in various stages
of planning and evaluation.
27
As of December 31, 2023, we had nineteen different homebuilders within our residential communities. As of
December 31, 2023, we had 1,486 residential homesites under contract, which are expected to result in revenue of
approximately $132.5 million, plus residuals, at closing of the homesites over the next several years. By comparison, as
of December 31, 2022, we had 2,197 residential homesites under contract, with an expected revenue of approximately
$176.3 million, plus residuals. The change in homesites under contract is due to increased homesite transactions during
2023 and the amount of remaining homesites in current phases of residential communities. The number of homesites
under contract is subject to change based on homesite closings and new sales activity. Homesite prices vary significantly
by community and often sell in concentrated transactions that may impact quarterly results. As of December 31, 2023, in
addition to the 1,486 homesites under contract in other residential communities, our unconsolidated Latitude
Margaritaville Watersound JV had 609 homes under contract, which together with the 1,486 homesites are expected to
result in a sales value of approximately $451.0 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 from membership sales, golf courses, lodging
at our hotels, short-term vacation rentals, management of The Pearl Hotel (prior to acquisition in December 2022), food
and beverage operations, merchandise sales, marina operations (including boat slip rentals, boat storage fees and fuel
sales), 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. The hospitality segment incurs costs from the services and goods provided, personnel costs,
maintenance of the facilities and holding costs of the assets. 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 10. Debt, Net included in Item 15 of this Form 10-K.
Watersound Club provides club members and guests of some of our hotels access to our member facilities, which
include Camp Creek golf course and amenities, Shark’s Tooth golf course and tennis center, Watersound Beach Club
and a 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 a private beach club
located on Scenic Highway 30A, with 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, tennis center, a full club
house, a pro shop, as well as two food and beverage outlets. Camp Creek includes an 18-hole golf course, a full club
house, health and wellness center, three 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. We are in the process of constructing The
Third, an 18-hole golf course, planned to be added to our Watersound Club operations.
Watersound Origins amenities include an executive golf course, resort-style pool, fitness center and two tennis
courts located in the community. Access to these amenities is reserved to Watersound Origins and Watersound Origins
West members consisting of the communities’ residents. The golf course is available for public play.
We own and operate the award-winning WaterColor Inn (which includes the Fish Out of Water restaurant) and The
Pearl Hotel (which includes the Havana Beach Bar & Grill restaurant); the Camp Creek Inn, the Hilton Garden Inn
Panama City Airport, the Homewood Suites by Hilton Panama City Beach, the Hotel Indigo Panama City Marina, the
Home2 Suites by Hilton Santa Rosa Beach, the WaterSound Inn and two gulf-front vacation rental houses. With our JV
partners, we own and operate The Lodge 30A and the Embassy Suites by Hilton Panama City Beach Resort. We also
operate the WaterColor Beach Club, which includes food and beverage operations and other hospitality related activities,
such as beach chair rentals.
28
We are in the process of constructing a Residence Inn by Marriott, with our JV partner, in Panama City Beach,
Florida. Once complete, the hotel will be operated by our JV partner and will be included within our commercial
segment.
Our hotel portfolio by property is as follows:
Location
Completed Planned Total
Rooms (a)
Operational
Camp Creek Inn (b)
Walton County, FL
WaterColor Inn (c)
Walton County, FL
The Pearl Hotel (d)
Walton County, FL
Walton County, FL
WaterSound Inn
The Lodge 30A (e) (f)
Walton County, FL
Home2 Suites by Hilton Santa Rosa Beach (b)
Walton County, FL
Embassy Suites by Hilton Panama City Beach Resort (f) (g)
Bay County, FL
Bay County, FL
Hilton Garden Inn Panama City Airport
Homewood Suites by Hilton Panama City Beach (h)
Bay County, FL
Hotel Indigo Panama City Marina (b)
Bay County, FL
TownePlace Suites by Marriott Panama City Beach Pier Park (i) Bay County, FL
Total operational rooms
Under Development/Construction
Residence Inn by Marriott, Panama City Beach, Florida (j)
Bay County, FL
Total rooms under development/construction
Total rooms
75
67
55
11
85
107
255
143
131
124
124
1,177
—
—
—
—
—
—
—
—
—
—
—
—
75
67
55
11
85
107
255
143
131
124
124
1,177
—
—
1,177
121
121
121
121
121
1,298
(a) Includes hotels currently in operation or under development and construction. We have significant additional entitlements for
future hotel projects on our land holdings.
(b) The hotel opened in June 2023.
(c) Seven additional suites were completed in June 2022.
(d) We acquired the hotel in December 2022. The hotel was previously owned by a third party, but operated by our hospitality
segment.
(e) The hotel opened in February 2023.
(f) Property is related to a consolidated JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional
information.
(g) The hotel opened in April 2023.
(h) The hotel opened in March 2022.
(i) The hotel is operated by our JV partner. Pier Park TPS, LLC, (the “Pier Park TPS JV”) is unconsolidated and is accounted for
under the equity method of accounting, which is included within our commercial segment. See Note 4. Joint Ventures included in
Item 15 of this Form 10-K for additional information.
(j) The hotel is under development with our JV partner. Once complete, the hotel will be operated by our JV partner. The Pier Park
RI JV (Pier Park RI, LLC, the “Pier Park RI JV”) is unconsolidated and is accounted for under the equity method of accounting,
which is included within our commercial segment. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for
additional information.
We own and operate two marinas, the Point South Marina Bay Point in Bay County, Florida and Point South Marina
Port St. Joe in Gulf County, Florida. We are planning new marinas along the Intracoastal Waterway. The Point South
Marina Bay Point reopened in the third quarter of 2022 and the Point South Marina Port St. Joe reopened in the fourth
quarter of 2022 after completion of reconstruction due to damage from Hurricane Michael.
We also own and operate retail stores, two standalone restaurants and other entertainment assets.
In addition to the properties listed above, we have a number of hospitality projects in various stages of planning.
29
Commercial Segment
Our commercial segment includes leasing of commercial property, multi-family, senior living, self-storage and other
assets. The commercial segment 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 are currently developing the Watersound Town Center in Walton County, Florida and
Watersound West Bay Center in Bay County, Florida. These lifestyle centers are complementary to our Watersound
Origins and Latitude Margaritaville Watersound residential communities. In conjunction with FSU and TMH, we are in
the process of developing an 87-acre medical campus in Panama City Beach, Florida. 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 lease land for various other uses. The commercial segment
manages our timber holdings in Northwest Florida which includes growing and selling pulpwood, sawtimber and other
products.
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 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 loans as described in Note 10. Debt, Net included in
Item 15 of this Form 10-K.
Total units and percentage leased for multi-family and senior living communities by location are as follows:
December 31, 2023
December 31, 2022
December 31, 2021
Percentage
Leased
Units Units
of Units
Planned Completed Leased Completed
Units
Location
Percentage
Leased
Percentage
Leased
Units
Units of Units
Completed Leased Completed
Units
Units of Units
Completed Leased Completed
Bay County, FL
Bay County, FL
Multi-family
Pier Park Crossings
(a) (b)
Pier Park Crossings
Phase II (a) (b)
Watersound Origins
Crossings (a) (b)
Sea Sound (c)
North Bay Landing
(b) (d)
Mexico Beach
Crossings (a) (b) (e)
Origins Crossings
Townhomes (b) (f)
WindMark Beach (g) Gulf County, FL
Total multi-family units
Bay County, FL
Bay County, FL
Walton County, FL
Senior living communities
Watercrest (a)
Watersound
Fountains (h)
Total senior living units
Total units
240
240
226
94 %
240
228
95 %
240
234
98 %
120
120
118
98 %
120
115
96 %
120
113
Walton County, FL
Bay County, FL
217
N/A
217
N/A
193
N/A
89 %
N/A %
217
N/A
199
N/A
92 %
N/A %
217
214
207
203
94 %
95 %
95 %
240
240
222
93 %
120
94
78 %
—
—
N/A %
216
216
76
35 %
—
—
N/A %
—
—
N/A %
64
31
1,128
64
31
1,128
46
12
893
72 %
39 %
79 %
48
12
757
33
10
679
69 %
83 %
90 %
—
31
822
—
31
788
N/A %
100 %
96% %
Walton County, FL
107
107
106
99 %
107
88
82 %
107
47
44 %
Walton County, FL
148
255
1,383
—
107
1,235
—
106
999
N/A %
99 %
81 %
—
107
864
—
88
767
N/A %
82 %
89 %
—
107
929
—
47
835
N/A %
44 %
90 %
(a) Property is related to a consolidated JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional
information.
30
(b) The community is managed by our unconsolidated JV, Watersound Management, LLC (“Watersound Management JV”). The
Watersound Management JV is unconsolidated and is accounted for under the equity method of accounting. See Note 4. Joint
Ventures included in Item 15 of this Form 10-K for additional information.
(c) Construction of the 300-unit multi-family community was completed in the first quarter of 2022. In November 2022, FDSJ
Eventide, LLC (the “Sea Sound JV”) sold its assets to a third party. The Sea Sound JV is unconsolidated and is accounted for
under the equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional
information.
(d) Construction was completed in the second quarter of 2023.
(e) Construction was completed in the fourth quarter of 2023.
(f) Construction was completed in the first quarter of 2023.
(g) Renovation of 19 units for long-term rental use was completed in the second half of 2023. As of December 31, 2022, we were in
the process of converting 19 units for long-term rental use, which were not available for lease due to renovation. The year ended
December 31, 2021 included 19 units for short-term lease in a vacation rental program.
(h) Construction began in the second quarter of 2021 and is ongoing. Once complete, the senior living community will be operated
by our JV partner. WOSL, LLC, (the “Watersound Fountains Independent Living JV”) is unconsolidated and is accounted for
under the equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional
information.
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 and Origins Crossings
Townhomes includes 64 completed units near the Watersound Town Center. North Bay Landing includes 240 completed
apartment units in Panama City, Florida. Mexico Beach Crossings includes 216 completed apartment units in Mexico
Beach, Florida. The WindMark Beach community includes 31 completed long-term rental units in Port St. Joe, Florida.
Watercrest includes 107 completed senior living units in Santa Rosa Beach, Florida. In addition, we have a senior living
community under construction, through our unconsolidated Watersound Fountains Independent Living JV. Watersound
Fountains, planned for 148 independent living units, is located near the Watersound Town Center and the Watersound
Origins residential community. We have additional multi-family communities in various stages of planning.
Our leasing portfolio consists of approximately 1,082,000 square feet of leasable space for mixed-use, retail,
industrial, office, self-storage and medical uses. Through separate unconsolidated JVs, other commercial properties that
are operated by our JV partners include a 124-room TownePlace Suites by Marriott (Pier Park TPS JV), a Busy Bee
branded fuel station and convenience store, which includes a Starbucks, (SJBB, LLC, the “Busy Bee JV”) and a golf cart
sales and service facility (SJECC, LLC, the “Electric Cart Watersound JV”), all located in Bay County, Florida.
The total net rentable square feet and percentage leased of leasing properties are as follows:
December 31, 2023
December 31, 2022
Net
Rentable
Square
Feet*
Net
Rentable
Square
Feet*
Percentage
Leased
Percentage
Leased
December 31, 2021
Net
Rentable
Square
Feet*
Percentage
Leased
Location
Bay County, FL
Bay County, FL
Walton County, FL
Bay County, FL
Walton County, FL
Pier Park North (a)
VentureCrossings
Watersound Town Center (b) (c)
Beckrich Office Park (c) (d)
Watersound Self-Storage (e)
WindMark Beach Town Center (c) (f) Gulf County, FL
WaterColor Town Center (c)
Cedar Grove Commerce Park
Port St. Joe Commercial
Beach Commerce Park (c)
South Walton Commerce Park (g)
WaterSound Gatehouse (c)
Walton County, FL
Bay County, FL
Gulf County, FL
Bay County, FL
Walton County, FL
Walton County, FL
Other (h)
SummerCamp Commercial (i)
Bay, Gulf and
Walton Counties, FL
Franklin County, FL
320,310
303,605
137,921
78,322
67,694
44,748
22,199
19,389
16,964
14,800
11,570
10,271
34,224
N/A
1,082,017
31
100 %
98 %
83 %
93 %
92 %
71 %
100 %
100 %
100 %
100 %
100 %
100 %
320,310
303,605
89,662
78,294
67,694
44,748
22,199
19,389
16,964
14,800
11,570
10,271
97 % 320,310
96 % 303,605
99 % 24,764
99 % 81,065
87 % 67,694
71 % 44,748
100 % 22,199
100 % 19,389
100 % 16,964
100 % 14,800
100 % 11,570
100 % 10,271
34,224
100 %
N/A %
N/A
95 % 1,033,730
100 %
34,224
N/A % 13,000
95 % 984,603
95 %
88 %
100 %
85 %
50 %
67 %
100 %
100 %
100 %
100 %
88 %
100 %
100 %
0 %
87 %
(cid:13) Net Rentable Square Feet is designated as the current square feet available for lease as specified in the applicable lease
agreements plus management’s estimate of space available for lease based on construction drawings.
(a) Property is related to a consolidated JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional
information.
(b) Construction of additional leasing space was completed in 2023 and 2022. Includes net rentable square feet of 6,752 within our
residential segment. Included in net rentable square feet as of December 31, 2023, is 2,137 square feet leased to a consolidated
JV.
(c) In addition to net rentable square feet there is also space that we occupy or that serves as common area.
(d) Included in net rentable square feet as of December 31, 2023, 2022 and 2021, is 1,500 square feet leased to a consolidated JV.
(e) Construction was completed in the third quarter of 2021.
(f)
Included in net rentable square feet as of December 31, 2023, 2022 and 2021, is 13,808 square feet of unfinished space.
(g) Included in net rentable square feet as of December 31, 2022 and 2021, is 1,364 square feet leased to a consolidated JV.
(h) Includes various other properties, each with less than 10,000 net rentable square feet.
(i) As of December 31, 2022, the space was no longer available for lease. The property was impaired in 2011 and has no cost basis
as of December 31, 2023, 2022 and 2021.
We have commercial projects under development and construction as detailed in the table below. In addition to
these properties, we have other commercial buildings and sites in various stages of planning and development.
Watersound Town Center
Watersound West Bay Center Bay County, FL
FSU/TMH Medical Campus Bay County, FL
Location
Walton County, FL
Completed Net
Rentable
Square Feet
Percentage
Leased
December 31, 2023
Square Feet
Under
Construction
137,921
—
—
137,921
83 %
N/A %
N/A %
83 %
16,020
3,346
78,670
98,036
Additional
Planned
Square Feet
246,059
496,654
241,330
984,043
Total
Square
Feet*
400,000
500,000
320,000
1,220,000
(cid:13)
Total square feet are based on current estimates and are subject to change.
32
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
Total revenue
Expenses:
Cost of real estate revenue
Cost of hospitality revenue
Cost of leasing revenue
Corporate and other operating expenses
Depreciation, depletion and amortization
Total expenses
Operating income
Other income (expense):
Investment income, net
Interest expense
Gain on contributions to unconsolidated joint ventures
Equity in income (loss) from unconsolidated joint ventures
Other income, net
Total other income, net
Income before income taxes
Income tax expense
Net income
2023
Year Ended December 31,
2022
In millions
2021
186.0
152.4
50.8
389.2
88.0
122.2
25.8
23.8
38.7
298.5
90.7
13.3
(30.6)
0.7
22.7
3.2
9.3
100.0
(26.0)
74.0
$
$
115.9
97.2
39.2
252.3
50.8
77.5
17.6
22.1
22.9
190.9
61.4
9.9
(18.4)
2.7
26.0
13.0
33.2
94.6
(24.4)
70.2
$
$
164.6
75.3
27.1
267.0
61.4
58.3
11.6
23.0
18.2
172.5
94.5
7.2
(15.9)
3.6
(0.9)
10.2
4.2
98.7
(25.0)
73.7
$
$
Results of operations in this Form 10-K generally discusses 2023 and 2022 items and comparisons. For a detailed
discussion of results of operations and comparisons for 2022 and 2021, see Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations, included in our Form 10(cid:4137)K for the year ended December 31,
2022 filed with the SEC on February 22, 2023.
33
Real Estate Revenue and Gross Profit
The following table sets forth a comparison of our total consolidated real estate revenue and gross profit:
Revenue:
$
Residential real estate revenue
Commercial and rural real estate
revenue
Timber revenue
Other revenue
Real estate revenue
$
Gross profit:
2023
% (a)
2022
Dollars in millions
% (a)
2021
% (a)
155.7
83.7 % $
92.8
80.1 % $
144.7
87.9 %
21.3
4.9
4.1
186.0
11.5 %
2.6 %
2.2 %
100.0 % $
13.7
6.7
2.7
115.9
11.8 %
5.8 %
2.3 %
100.0 % $
12.0
6.0
1.9
164.6
7.3 %
3.6 %
1.2 %
100.0 %
Residential real estate
$
Commercial and rural real estate
Timber
Other
Gross profit
$
77.8
14.7
4.1
1.4
98.0
50.0 % $
69.0 %
83.7 %
34.1 %
52.7 % $
48.7
9.7
5.9
0.8
65.1
52.5 % $
70.8 %
88.1 %
29.6 %
56.2 % $
87.9
9.5
5.3
0.5
103.2
60.7 %
79.2 %
88.3 %
26.3 %
62.7 %
(a) Calculated percentage of total real estate revenue and the respective gross margin percentage.
Residential Real Estate Revenue and Gross Profit. During 2023, residential real estate revenue increased $62.9
million, or 67.8%, to $155.7 million, as compared to $92.8 million in 2022. During 2023, residential real estate gross
profit increased $29.1 million, to $77.8 million (or gross margin of 50.0%), as compared to $48.7 million, (or gross
margin of 52.5%) in 2022. During 2023, we sold 1,063 homesites and had unimproved residential land sales of $0.6
million, compared to 752 homesites and unimproved residential land sales of $1.1 million during 2022. During 2023 and
2022 the average base revenue, excluding homesite residuals, per homesite sold was approximately $107,000 and
$98,000, respectively, due to the mix of sales from different communities. The current period homesite sales also include
the sale of 100 entitled but undeveloped homesites sold within the SouthWood community, compared to 42 in the prior
period, which reduced the average price per homesite. The revenue, gross profit and margin for each period was
impacted by the difference in pricing among the communities, the difference in the cost of the homesite development
and the volume of sales within each of the communities. The number of homesites sold varied in each period due to the
timing of homebuilder contractual closing obligations in our residential communities.
Commercial and Rural Real Estate Revenue and Gross Profit. During 2023, we had twenty-eight commercial and
rural real estate sales totaling approximately 474 acres for $21.0 million and land improvement services of $0.3 million,
together resulting in a gross profit of $14.7 million (or gross margin of 69.0%). During 2022, we had twenty-nine
commercial and rural real estate sales totaling approximately 283 acres for $12.7 million and land improvement services
of $1.0 million, together resulting in a gross profit of $9.7 million (or gross margin of 70.8%). 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 the property sold.
Sales of rural and timber land typically have a lower cost basis than residential and commercial real estate sales. In
addition, our cost basis in residential and commercial real estate can vary depending on the amount of development or
other costs incurred on the property.
Timber Revenue and Gross Profit. Timber revenue decreased $1.8 million, or 26.9%, to $4.9 million during 2023, as
compared to $6.7 million in 2022. The decrease was primarily due to a decrease in prices and tons of wood products sold
in the current period. There were 259,000 tons of wood products sold at an average price per ton of $16.56 during 2023,
34
as compared to 275,000 tons of wood products sold at an average price per ton of $22.71, during 2022. Timber gross
margin was 83.7% during 2023, compared to 88.1% during 2022. The decrease was primarily due to lower prices and
less tons sold in the current period.
Other Revenue. Other revenue primarily consists of mitigation bank credit sales and title insurance business
revenue.
Hospitality Revenue and Gross Profit
Hospitality revenue
Gross profit
Gross margin
Year Ended December 31,
2022
2023
2021
$
$
$
152.4
30.2
$
19.8 %
In millions
$
97.2
19.7
$
20.3 %
75.3
17.0
22.6 %
Hospitality revenue increased $55.2 million, or 56.8% to $152.4 million during 2023, as compared to $97.2 million
in 2022. The increase in hospitality revenue was primarily related to the continued increase of club members and
opening of new Camp Creek amenities in April 2023, as well as an increase in lodging revenue. The increase in lodging
revenue was related to The Pearl Hotel, which we acquired in December 2022; Embassy Suites by Hilton Panama City
Beach Resort, which opened in April 2023; The Lodge 30A, which opened in February 2023; Home2 Suites by Hilton
Santa Rosa Beach, Hotel Indigo Panama City Marina and Camp Creek Inn, which opened in June 2023; Homewood
Suites by Hilton Panama City Beach, which opened in March 2022; and new WaterColor Inn suites, which opened in
June 2022. The increase in hospitality revenue was also due to the opening of a standalone restaurant and marinas in
2022. As of December 31, 2023, Watersound Club had 3,317 members, compared with 2,604 members as of
December 31, 2022, an increase of 713 members. As of December 31, 2023, we had 1,053 operational hotel rooms,
compared with 407 operational hotel rooms as of December 31, 2022, an increase of 646 rooms (both periods exclude
124 rooms related to an unconsolidated JV). Hospitality had a gross margin of 19.8% during 2023, compared to 20.3%
during 2022. The decrease in gross margin was primarily due to the opening costs associated with opening five new
hotels in 2023.
Leasing Revenue and Gross Profit
Leasing revenue
Gross profit
Gross margin
$
$
2023
Year Ended December 31,
2022
In millions
$
39.2
$
50.8
21.6
25.0
$
$
55.1 %
49.2 %
2021
27.1
15.5
57.2 %
Leasing revenue increased $11.6 million, or 29.6%, to $50.8 million during 2023, as compared to $39.2 million in
2022. The increase was primarily due to new multi-family, senior living and marina leases, as well as other new leases.
Leasing gross margin decreased to 49.2% during 2023, as compared to 55.1% during 2022, primarily due to increased
operating costs, as well as start-up and lease-up expenses in the current period.
35
Corporate and Other Operating Expenses
Employee costs
Property taxes and insurance
Professional fees
Marketing and owner association costs
Occupancy, repairs and maintenance
Other miscellaneous
Total corporate and other operating expenses
Year Ended December 31,
2023
2022
In millions
2021
$
$
10.4 $
6.4
4.0
1.0
0.4
1.6
23.8 $
9.6 $ 10.4
5.4
5.5
3.2
3.7
1.6
1.1
0.7
0.7
1.7
1.5
22.1 $ 23.0
Corporate and other operating expenses increased $1.7 million to $23.8 million during 2023, as compared to $22.1
million in 2022. The increase was primarily due to employee costs related to restricted stock awards, property taxes and
professional fees. See Note 15. Stockholders’ Equity included in Item 15 of this Form 10-K for additional information
related to the issuance of common stock for employee compensation.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization expense increased $15.8 million during 2023, as compared to 2022,
primarily due to new hospitality and commercial assets placed in service. Depreciation is a non-cash, generally accepted
accounting principles (“GAAP”) expense which is amortized over an asset’s useful life, while maintenance and repair
expenses are period costs and expensed as incurred. See Note 2. Significant Account Policies included in Item 15 of this
Form 10-K for additional information.
Investment Income, Net
Investment income, net primarily includes (i) interest and dividends earned and accretion of the net discount (ii) net
unrealized gain or loss related to investments – equity securities, (iii) interest income earned on the time deposit held by
a special purpose entity and (iv) interest earned on notes receivable and other receivables as detailed in the table below:
2023
Year Ended December 31,
2022
In millions
2021
Interest, dividend and accretion income
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
$
$
2.9 $
—
8.0
2.4
13.3 $
0.8 $
—
8.0
1.1
9.9 $
0.1
(1.9)
8.1
0.9
7.2
Investment income, net increased $3.4 million to $13.3 million during 2023, as compared to $9.9 million in 2022.
The increase was primarily due to higher interest rates earned on our investments and cash equivalents in the current
period. The increase was also due to interest earned on the unimproved land contribution to our unconsolidated Latitude
Margaritaville Watersound JV related to increased home sale transactions in the community in the current period. See
Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Interest Expense
Interest expense primarily includes interest incurred on project financing, the Senior Notes issued by Northwest
Florida Timber Finance, LLC, 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:
36
2023
Year Ended December 31,
2022
In millions
2021
Interest incurred for project financing and other interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes
issued by special purpose entity
Total interest expense
$
21.8 $
9.6 $
7.1
8.8
30.6 $
8.8
18.4 $
8.8
15.9
$
Interest expense increased $12.2 million, or 66.3%, to $30.6 million in 2023, as compared to $18.4 million in 2022,
related to the increase in project financing and higher interest rates. See Note 10. Debt, Net included in Item 15 of this
Form 10-K for additional information regarding project financing.
Gain on Contributions to Unconsolidated Joint Ventures
Gain on contributions to unconsolidated joint ventures includes gain on land, impact fees and additional
infrastructure improvements contributed to our unconsolidated JVs as detailed in the table below. See Note 4. Joint
Ventures included in Item 15 of this Form 10-K for additional information.
Latitude Margaritaville Watersound JV (a)
Watersound Fountains Independent Living JV (b)
Pier Park RI JV (c)
Electric Cart Watersound JV (d)
Gain on Contributions to Unconsolidated Joint Ventures
$
$
2023
2021
$
Year Ended December 31,
2022
In millions
0.9
—
1.4
0.4
2.7 $
0.7
—
—
—
0.7 $
$
0.5
3.1
—
—
3.6
(a) Includes a gain of $0.7 million, $0.9 million and $0.5 million in 2023, 2022 and 2021, respectively, on additional infrastructure
improvements contributed.
(b) Includes a gain of $3.1 million in 2021 on land contributed.
(c) Includes a gain of $1.4 million in 2022 on land and impact fees contributed.
(d) Includes a gain of $0.4 million in 2022 on land contributed.
Equity in Income (Loss) from Unconsolidated Joint Ventures
Equity in income (loss) from unconsolidated joint ventures includes our proportionate share of earnings or losses of
unconsolidated JVs accounted for by the equity method as detailed in the table below. See Note 4. Joint Ventures
included in Item 15 of this Form 10-K for additional information.
2023
Year Ended December 31,
2022
In millions
2021
Latitude Margaritaville Watersound JV (a)
Sea Sound JV (b)
Watersound Fountains Independent Living JV (c)
Pier Park TPS JV
Busy Bee JV
Electric Cart Watersound JV (d)
Watersound Management JV
Total equity in income (loss) from unconsolidated joint ventures
$
$
23.6 $
—
(0.7)
(0.4)
—
0.1
0.1
22.7 $
3.9 $
21.7
(0.2)
—
0.5
—
0.1
26.0 $
(1.9)
—
—
0.6
0.4
—
—
(0.9)
(a) During 2023 and 2022, the Latitude Margaritaville Watersound JV completed 641 and 316 home sale transactions, respectively.
The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021.
(b) In November 2022, the Sea Sound JV sold its assets to an unrelated third party for $92.5 million, resulting in a total gain on sale
of $36.1 million. The year ended December 31, 2022, includes our proportionate share of the gain on sale of $21.7 million. As a
result of the sale, the Sea Sound JV no longer has activity from operations.
37
(c) The project is under construction.
(d) JV was formed in February 2022. The permanent sales and service facility located in the Watersound West Bay Center was
completed in the fourth quarter of 2023.
Other Income, Net
Other income (expense), net primarily includes income from our retained interest investments, gain on insurance
recoveries, 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 recoveries
Loss from hurricane damage
Miscellaneous income, net
Other income, net
Year Ended December 31,
2023
2022
2021
In millions
2.6 $
—
—
0.6
3.2 $
1.7 $
9.8
—
1.5
13.0 $
1.5
4.9
(0.1)
3.9
10.2
$
$
Other income, net decreased $9.8 million to $3.2 million during 2023, as compared to $13.0 million in 2022.
Accretion income from retained interest investments increased $0.9 million during 2023 due to an agreement by all
parties for an optional prepayment of the related bonds, in full, in August 2023, prior to the installment notes’ scheduled
maturity in 2024. See Note 8. Other Assets included in Item 15 of this Form 10-K for additional information. The year
ended December 31, 2022 includes a gain on insurance recovery of $9.7 million related to Hurricane Michael. In
November 2022, we closed out the insurance claim related to Hurricane Michael and therefore will not receive
additional proceeds in future periods.
Miscellaneous income, net during 2023, includes $1.1 million of income 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. Miscellaneous income, net during 2023 also
includes $0.6 million of expense for cleanup of damaged timber as a result of Hurricane Michael. Miscellaneous income,
net during 2023 and 2022 includes income of $0.4 million and $1.0 million, respectively, related to gain on retained
interest investment. Miscellaneous income, net during 2022 includes $2.6 million received from the Pier Park CDD for
repayment of subordinated notes. Miscellaneous income, net during 2022 also includes expense of $1.1 million for
design costs no longer pursued and $0.6 million for a homeowner’s association special assessment. See Note 18. Other
Income, Net included in Item 15 of this Form 10-K for additional information.
Income Tax Expense
Income tax expense was $26.0 million in 2023, compared to $24.4 million in 2022. Our effective tax rate was 25.1%
in 2023, as compared to 25.6% in 2022.
Our effective rate for 2023 and 2022, differed from the federal statutory rate of 21.0% primarily due to state income
taxes, tax credits and other permanent items. See Note 13. Income Taxes included in Item 15 of this Form 10-K for
additional information.
38
Segment Results
Residential
The table below sets forth the consolidated results of operations of our residential segment:
Revenue:
Real estate revenue
Residential real estate revenue
Other revenue
Total real estate revenue
Leasing revenue
Total revenue
Expenses:
Cost of real estate and other revenue
Other operating expenses
Depreciation, depletion and amortization
Total expenses
Operating income
Other income (expense):
Investment income, net
Interest expense
Gain on contributions to unconsolidated joint ventures
Equity in income (loss) from unconsolidated joint ventures
Other income (expense), net
Total other income (expense), net
Income before income taxes
2023
Year Ended December 31,
2022
In millions
2021
$
$
145.6
10.1
155.7
0.1
155.8
77.9
4.5
0.2
82.6
73.2
1.7
(0.4)
0.7
23.6
0.2
25.8
99.0
$
$
85.1
7.7
92.8
0.1
92.9
44.1
3.9
0.2
48.2
44.7
1.1
(0.5)
0.9
3.9
(0.5)
4.9
49.6
$
$
137.8
6.9
144.7
0.2
144.9
56.8
4.8
0.2
61.8
83.1
0.8
(0.6)
0.5
(1.9)
0.1
(1.1)
82.0
The following tables set forth our consolidated residential real estate revenue and cost of revenue activity:
Consolidated
Homesites (a)
Land sales
Total consolidated
Unconsolidated
Homes (b)
Total consolidated and
unconsolidated
Units
Sold
Year Ended December 31, 2023
Cost of
Revenue
Revenue
Gross
Profit
Gross
Margin
Dollars in millions
1,063 $
N/A
1,063 $
145.0
0.6
145.6
$
$
73.5 $
0.1
73.6 $
71.5
0.5
72.0
49.3 %
83.3 %
49.5 %
641
1,704
(a) Includes 100 entitled but undeveloped homesites sold within the SouthWood community.
(b) Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for under the
equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
39
Consolidated
Homesites (a)
Land sale
Total consolidated
Unconsolidated
Homes (b)
Total consolidated and
unconsolidated
Units
Sold
Year Ended December 31, 2022
Cost of
Revenue
Revenue
Gross
Profit
Gross
Margin
Dollars in millions
752 $
N/A
752 $
$
84.0
1.1
85.1 $
41.0 $
—
41.0 $
43.0
1.1
44.1
51.2 %
100.0 %
51.8 %
316
1,068
(a) Includes 42 entitled but undeveloped homesites sold within the SouthWood community.
(b) Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for under the
equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Units
Sold
Year Ended December 31, 2021
Cost of
Revenue
Revenue
Gross
Profit
Gross
Margin
Dollars in millions
Consolidated
Homesites (a)
Homes
Land sale
Total consolidated
Unconsolidated
Homes (b)
Total consolidated and
unconsolidated
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 55 entitled but undeveloped homesites sold within the SouthWood community.
(b) Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for under the
equity method of accounting. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. The
Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022
The following discussion sets forth details of the consolidated results of operations of our residential segment.
Homesites. Revenue from homesite sales increased $61.0 million, or 72.6%, during 2023, as compared to 2022,
primarily due to the mix and number of homesites sold per community and the timing of homebuilder contractual
closing obligations in our residential communities. During 2023 and 2022, the average base revenue, excluding homesite
residuals, per homesite sold was approximately $107,000 and $98,000, respectively, due to the mix of sales from
different communities. The current period homesite sales also include the sale of 100 entitled but undeveloped homesites
sold within the SouthWood community, compared to 42 in the prior period, which reduced the average price per
homesite. Revenue includes estimated homesite residuals of $24.0 million and $5.8 million, during 2023 and 2022,
respectively. Gross margin decreased to 49.3% during 2023, as compared to 51.2% during 2022, primarily due to the
cost, mix and number of homesites sold from different communities during each period. Gross margin may vary each
period depending on the location of homesite sales.
40
Land sales. During 2023, we had unimproved residential land sales for $0.6 million, resulting in a gross margin of
approximately 83.3%. During 2022, we had unimproved residential land sales for $1.1 million, with de minimis cost of
revenue.
Other revenue includes tap and impact fee credits sold and marketing fees. Other revenue includes estimated fees
related to homebuilder homesite sales of $5.0 million and $1.9 million during 2023 and 2022, respectively. The increase
in estimated homesite residuals and fees related to homebuilder homesite sales was due to the mix and number of
homesites sold per community in the current period.
Leasing revenue includes long-term leases of residential assets.
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 and unimproved land
contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the
community. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. Interest
expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 10. Debt, Net
included in Item 15 of this Form 10-K for additional information.
Gain on contributions to unconsolidated joint ventures during 2023 and 2022, includes a gain of $0.7 million and
$0.9 million, respectively, on additional infrastructure improvements contributed to our unconsolidated Latitude
Margaritaville Watersound JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional
information.
Equity in income (loss) from unconsolidated joint ventures includes our proportionate share of earnings or losses of
an unconsolidated JV accounted for by the equity method. Equity in income (loss) from unconsolidated joint ventures
increased $19.7 million during 2023, compared to 2022. The increase was due to the completion of 641 home sale
transactions by the Latitude Margaritaville Watersound JV during 2023, compared to 316 home sale transactions during
2022. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Other income (expense), net for 2022 includes $1.0 million of design costs no longer pursued.
41
Hospitality
The table below sets forth the consolidated results of operations of our hospitality segment:
Revenue:
Hospitality revenue
Leasing revenue
Total revenue
Expenses:
Cost of hospitality revenue
Cost of leasing revenue
Other operating expenses
Depreciation, depletion and amortization
Total expenses
Operating income
Other income (expense):
Investment income, net
Interest expense
Other (expense) income, net
Total other (expense) income, net
(Loss) income before income taxes
2023
Year Ended December 31,
2022
In millions
2021
$
$
152.4
2.1
154.5
122.2
2.6
1.8
22.1
148.7
5.8
0.3
(9.6)
(0.1)
(9.4)
(3.6)
$
$
96.7
0.5
97.2
76.9
0.9
1.2
9.4
88.4
8.8
—
(1.7)
1.8
0.1
8.9
$
$
74.5
0.1
74.6
57.5
—
1.0
7.0
65.5
9.1
—
(0.5)
0.6
0.1
9.2
The following table sets forth details of our hospitality segment consolidated revenue and gross profit:
Year Ended December 31, 2023
Gross
Gross
Margin
Profit
Revenue
Year Ended December 31, 2022
Gross
Gross
Profit
Margin Revenue
In millions
Revenue
Year Ended December 31, 2021
Gross
Profit
Gross
Margin
Clubs (a)
Hotels
Other
Total
$ 54.0 $ 15.5 28.7 % $
14.4 %
12.4
19.2 %
2.3
86.4
12.0
$ 152.4 $ 30.2 19.8 % $
40.7 $
46.0
10.0
96.7 $
12.4 30.5 % $
15.9 %
1.0 %
7.3
0.1
19.8 20.5 % $
31.9 $
35.5
7.1
74.5 $
9.3 29.2 %
18.3 %
6.5
1.2 16.9 %
17.0 22.8 %
(a) Includes the Camp Creek Inn due to its proximity and guest access to Watersound Club amenities. The hotel opened in June
2023.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
Revenue from our clubs increased $13.3 million, or 32.7%, during 2023, as compared to 2022. The increase in
revenue in the current period was due to increases in the number of club members and membership revenue, as well as
the opening of new Camp Creek amenities in April 2023 and Camp Creek Inn in June 2023. As of December 31, 2023,
Watersound Club had 3,317 members, compared with 2,604 members as of December 31, 2022, an increase of 713
members. Our clubs gross margin was 28.7% during 2023, compared to 30.5% during 2022. The decrease in gross
margin was primarily due to the opening costs associated with the opening of new assets in the current period.
Revenue from our hotel operations increased $40.4 million, or 87.8%, during 2023, as compared to 2022. The
increase was primarily due to an increase in lodging revenue from The Pearl Hotel, which we acquired in December
2022; Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; The Lodge 30A, which
opened in February 2023; Home2 Suites by Hilton Santa Rosa Beach and Hotel Indigo Panama City Marina, which both
opened in June 2023; Homewood Suites by Hilton Panama City Beach, which opened in March 2022; and new
WaterColor Inn suites, which opened in June 2022. Our hotels had a gross margin of 14.4% during 2023, as compared to
42
15.9% during 2022. The decrease in gross margin was due to the opening costs associated with the opening of new
hotels in the current period.
As of December 31, 2023, we had 1,053 operational hotel rooms, compared with 407 operational hotel rooms as of
December 31, 2022, an increase of 646 rooms (both periods exclude 124 rooms related to an unconsolidated JV).
Revenue from other hospitality operations increased $2.0 million, or 20.0%, during 2023, as compared to 2022. The
increase in other hospitality revenue was primarily related to revenue from a new standalone restaurant, which opened in
August 2022, Point South Marina Bay Point, which reopened in the third quarter of 2022 and Point South Marina Port
St. Joe, which reopened in the fourth quarter of 2022. Our other hospitality operations had a gross margin of 19.2%
during 2023, compared to 1.0% during 2022. The increase in gross margin was due to new assets being operational in
the current period.
Leasing revenue includes marina boat slip and dry storage rentals.
Other operating expenses include salaries and benefits, professional fees and other administrative expenses.
The increase of $12.7 million in depreciation, depletion and amortization expense during 2023, as compared to
2022, was primarily due to new properties placed in service.
Interest expense primarily includes interest incurred from our hospitality project financing. The increase of $7.9
million in interest expense during 2023, as compared to 2022, was primarily due to an increase in project financing and
higher interest rates. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.
Other (expense) income, net for 2022, includes $2.6 million received from the Pier Park CDD for repayment of
subordinated notes, partially offset by $0.6 million of expense for a homeowner’s association special assessment.
43
Commercial
The table below sets forth the consolidated results of operations of our commercial segment:
2023
Year Ended December 31,
2022
In millions
2021
Revenue:
Leasing revenue
Commercial leasing revenue
Multi-family leasing revenue
Senior living leasing revenue
Total leasing revenue
Real estate revenue
Commercial and rural real estate revenue
Timber revenue
Total real estate revenue
Hospitality revenue
Total revenue
Expenses:
Cost of leasing revenue
Cost of real estate revenue
Cost of hospitality revenue
Other operating expenses
Depreciation, depletion and amortization
Total expenses
Operating income
Other (expense) income:
$
21.5 $
19.4
7.3
48.2
19.6 $
14.2
4.7
38.5
21.3
4.9
26.2
—
74.4
22.9
7.4
—
4.3
16.1
50.7
23.7
13.7
6.7
20.4
0.5
59.4
16.4
4.8
0.6
4.2
13.0
39.0
20.4
Interest expense
Gain on contributions to unconsolidated joint ventures
Equity in (loss) income from unconsolidated joint ventures
Other income (expense), net
Total other (expense) income, net
Income before income taxes
(11.7)
—
(0.9)
0.1
(12.5)
11.2 $
(7.3)
1.8
22.1
(0.7)
15.9
36.3 $
$
15.8
9.0
2.0
26.8
12.0
6.0
18.0
0.7
45.5
11.4
3.2
0.8
3.9
10.7
30.0
15.5
(5.9)
3.1
1.0
3.7
1.9
17.4
The following table sets forth details of our commercial segment consolidated revenue and gross profit (deficit):
Leasing
Commercial leasing
Multi-family leasing
Senior living leasing
Total leasing
Real estate
Commercial and rural real
estate
Timber
Total real estate
Hospitality
Total
Year Ended December 31, 2023
Gross
Revenue Profit
Gross
Margin
Year Ended December 31, 2022
Gross
Profit
Gross
Margin
Revenue (Deficit)
In millions
Year Ended December 31, 2021
Gross
Profit
Revenue (Deficit)
Gross
Margin
$ 21.5 $ 13.2
10.3
1.8
25.3
19.4
7.3
48.2
61.4 % $ 19.6 $ 12.7
53.1 %
8.8
24.7 %
0.6
52.5 %
22.1
14.2
4.7
38.5
68.4 %
64.8 % $ 15.8 $ 10.8
62.0 %
5.6
62.2 %
12.8 %
(1.0) (50.0)%
57.4 %
57.5 %
15.4
9.0
2.0
26.8
21.3
4.9
26.2
—
14.7
4.1
18.8
69.0 %
83.7 %
71.8 %
— N/A %
13.7
6.7
20.4
0.5
70.8 %
9.7
88.1 %
5.9
76.5 %
15.6
(0.1) (20.0) %
12.0
6.0
18.0
0.7
79.2 %
9.5
88.3 %
5.3
14.8
82.2 %
(0.1) (14.3)%
66.2 %
63.3 % $ 45.5 $ 30.1
$ 74.4 $ 44.1
59.3 % $ 59.4 $ 37.6
44
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
The following discussion sets forth details of the consolidated results of operations of our commercial segment.
Total leasing revenue increased $9.7 million, or 25.2% during 2023, as compared to 2022. The increase was
primarily due to new multi-family and senior living leases as well as other new leases. Total leasing gross margin during
2023 was 52.5%, as compared to 57.4% during 2022. The decrease in leasing gross margin was primarily due to
increased operating costs, as well as start-up and lease-up expenses in the current period. As of December 31, 2023, we
had net rentable square feet of approximately 1,082,000, of which approximately 1,029,000 square feet were under lease.
As of December 31, 2022, we had net rentable square feet of approximately 1,034,000, of which approximately 987,000
square feet were under lease. As of December 31, 2023, our consolidated entities had 1,235 multi-family and senior
living units completed, of which 999 were leased, compared to 864 multi-family and senior living units completed, of
which 767 were leased as of December 31, 2022.
Commercial and rural real estate revenue related to sales for the three years ended December 31, 2023 includes the
following:
Period
2023
2022
2021
Number of
Sales
Acres Sold
Average Price
on Sales
Revenue
Per Acre
In millions (except for average price per acre)
Gross Profit
28
29
22
474 $
283 $
577 $
44,304 $
44,876 $
20,797 $
21.0 $
12.7 $
12.0 $
14.5
9.3
9.5
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 2023, we had twenty-eight commercial and rural real estate sales of
approximately 474 acres for $21.0 million and land improvement services of $0.3 million, together resulting in a gross
margin of approximately 69.0%. During 2022, we had twenty-nine commercial and rural real estate sales of
approximately 283 acres for $12.7 million and land improvement services of $1.0 million, together resulting in a gross
margin of approximately 70.8%.
Timber revenue decreased by $1.8 million, or 26.9%, to $4.9 million during 2023, as compared to $6.7 million in
2022. The decrease was primarily due to a decrease in prices and tons of wood products sold in the current period. There
were 259,000 tons of wood products sold during 2023, as compared to 275,000 tons of wood products sold during 2022.
The average price of wood product sold decreased to $16.56 per ton during 2023, as compared to $22.71 per ton during
2022. Timber gross margin was 83.7% during 2023, as compared to 88.1% during 2022. The decrease was primarily due
to the lower prices and less tons sold in the current period.
Hospitality revenue includes some of our short-term vacation rentals.
Other operating expenses include salaries and benefits, property taxes, CDD assessments, professional fees,
marketing, project administration and other administrative expenses.
The increase of $3.1 million in depreciation, depletion and amortization expense during 2023, as compared to 2022,
was primarily due to new properties placed in service.
Interest expense primarily includes interest incurred from our commercial project financing and CDD debt. The
increase of $4.4 million in interest expense during 2023, as compared to 2022, was primarily due to an increase in
project financing and higher interest rates. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional
information.
45
Gain on contributions to unconsolidated joint ventures for 2022, includes a gain of $1.4 million on land contributed
to our unconsolidated Pier Park RI JV and a gain of $0.4 million on land contributed to our unconsolidated Electric Cart
Watersound JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Equity in (loss) income from unconsolidated joint ventures includes our proportionate share of earnings or losses of
unconsolidated JVs accounted for by the equity method. Equity in (loss) income from unconsolidated joint ventures
during 2023 had a loss of $0.9 million, primarily related to start-up expenses for the Watersound Fountains Independent
Living JV. In November 2022, the Sea Sound JV sold its assets to an unrelated third party for $92.5 million, resulting in
a total gain on sale of $36.1 million. Equity in (loss) income during 2022 included $21.7 million related to our
proportionate share of the gain on sale. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional
information.
Liquidity and Capital Resources
As of December 31, 2023, we had cash and cash equivalents of $86.1 million, compared to cash and cash
equivalents and U.S. Treasury Bills classified as investments – debt securities of $78.3 million as of December 31, 2022.
Although we do not currently hold any Securities, we did hold Securities as of December 31, 2022. See Note 5.
Investments included in Item 15 of this Form 10-K for additional information regarding our previous 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 I. Item 1A.
Risk Factors.
During 2023, we invested a total of $217.8 million in capital expenditures, which includes $74.4 million for our
residential segment, $70.1 million for our commercial segment, $72.3 million for our hospitality segment and $1.0
million for corporate expenditures. The $217.8 million in capital expenditures included $209.8 million for new operating
assets or for residential development and $8.0 million for sustaining capital on existing operating properties. We
anticipate that future capital commitments will be funded through cash generated from operations, new financing
arrangements, cash on hand and cash equivalents. As of December 31, 2023, we had a total of $48.6 million primarily in
construction and development related contractual obligations. Capital expenditures and contractual obligations exclude
amounts related to unconsolidated JVs. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional
information.
As of December 31, 2023 and 2022, we had various loans outstanding totaling $459.2 million and $391.4 million,
respectively, with maturities from May 2024 through March 2064. As of December 31, 2023, the weighted average
effective interest rate of total outstanding debt was 5.3%, of which 66.2% of the debt outstanding includes fixed or
swapped interest rates, and the average remaining life of debt outstanding was 17.2 years. As of December 31, 2023, the
weighted average rate on our variable rate loans, excluding the swapped portion, was 7.6%. See Note 10. Debt, Net
included in Item 15 of this Form 10-K for additional information.
Our indebtedness consists of various loans on real and leasehold property. These loans are typically secured by
various interests in the property such as assignment of rents, leases, deposits, permits, plans, specifications, fees,
agreements, approvals, contracts, licenses, construction contracts, development contracts, service contracts, franchise
agreements, the borrower’s assets, improvements, and security interests in the rents, personal property, management
agreements, construction agreements, improvements, accounts, profits, leases and fixtures (collectively, “Security
Interests”). The specific Security Interests vary from loan to loan.
In 2015, the Pier Park North JV (the “Pier Park North JV”) entered into a $48.2 million loan (the “PPN JV Loan”).
As of December 31, 2023 and 2022, $41.5 million and $42.6 million, respectively, was outstanding on the PPN JV Loan.
The loan accrues interest at a rate of 4.1% per annum and matures in November 2025. In connection with the loan, we
entered into a limited guarantee in favor of the lender, based on our percentage ownership of the JV. In addition, the
46
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 10. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2018, Pier Park Crossings LLC (the “Pier Park Crossings JV”) entered into a $36.6 million loan, insured by the
U.S. Department of Housing and Urban Development (“HUD”) (the “PPC JV Loan”). As of December 31, 2023 and
2022, $34.7 million and $35.2 million, respectively, was outstanding on the PPC JV Loan. The loan bears interest at a
rate of 3.1% and matures in June 2060. The loan includes a prepayment premium due to the lender of 2% - 9% for any
additional principal that is prepaid through August 31, 2031. The loan is secured by the real property and certain other
Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2019, Origins Crossings, LLC (the “Watersound Origins Crossings JV”) entered into a $44.0 million loan, as
amended (the “Watersound Origins Crossings JV Loan”). In March 2023, the Watersound Origins Crossings JV
refinanced the Watersound Origins Crossings JV Loan that increased the principal amount of the loan, which had a
balance of $44.0 million at the time of the refinance, to $52.9 million, fixed the interest rate to 5.0% and provides for
monthly payments of principal and interest through maturity in April 2058. The refinanced loan terms include a
prepayment premium due to the lender of 1% - 10% for any principal that is prepaid through April 2033. As of
December 31, 2023 and 2022, $52.5 million and $44.0 million, respectively, was outstanding on the Watersound Origins
Crossings JV Loan. The refinanced loan is insured by HUD and secured by the real property and certain other Security
Interests. We incurred $0.9 million of additional loan cost due to the refinance. As a result of the refinance, 2023
includes a $0.1 million loss on early extinguishment of debt related to unamortized debt issuance costs, included within
other income, net on the consolidated statements of income. See Note 10. Debt, Net included in Item 15 of this
Form 10-K for additional information.
In 2019, SJWCSL, LLC (the “Watercrest JV”) entered into a $22.5 million loan (the “Watercrest JV Loan”). As of
December 31, 2023 and 2022, $20.1 million and $21.0 million, respectively, was outstanding on the Watercrest JV
Loan. The loan bears interest at a rate of the Secured Overnight Financing Rate (“SOFR”) plus 2.2% and matures in June
2047. Effective July 1, 2023, the benchmark interest rate index based on the London Interbank Offered Rate (“LIBOR”)
transitioned to SOFR. The loan is secured by the real property and certain other Security Interests. In connection with the
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. See Note 10. Debt, Net included in Item 15 of this Form 10-K for
additional information.
In 2019, a wholly-owned subsidiary of ours entered into a $5.5 million loan, which is guaranteed by us (the
“Beckrich Building III Loan”). As of both December 31, 2023 and 2022, $5.0 million was outstanding on the Beckrich
Building III Loan. The loan bears interest at a rate of SOFR plus 1.8% and matures in August 2029. Effective July 1,
2023, the benchmark interest rate index based on LIBOR transitioned to SOFR. The loan is secured by the real property
and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional
information.
In 2019, Pier Park Crossings Phase II LLC (the “Pier Park Crossings Phase II JV”) entered into a $22.9 million loan,
insured by HUD, as amended (the “PPC II JV Loan”). As of December 31, 2023 and 2022, $22.2 million and $22.6
million, respectively, was outstanding on the PPC II JV Loan. The loan bears interest at a rate of 2.7% and matures in
May 2057. The loan includes a prepayment premium due to the lender of 1% - 9% for any principal that is prepaid
through May 2032. The loan is secured by the real property and certain other Security Interests. See Note 10. Debt, Net
included in Item 15 of this Form 10-K for additional information.
In 2020, a wholly-owned subsidiary of ours entered into a $15.3 million loan, which is guaranteed by us (the
“Airport Hotel Loan”). As of December 31, 2023 and 2022, $13.0 million and $14.6 million, respectively, was
outstanding on the Airport Hotel Loan. The loan bears interest at SOFR plus 2.1%, with a floor of 3.0%, and matures in
March 2025. Effective July 1, 2023, the benchmark interest rate index based on LIBOR transitioned to SOFR. The loan
47
is secured by the real property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this
Form 10-K for additional information.
In 2020, Pier Park Resort Hotel, LLC (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, 2023 and 2022, $51.9 million and $45.2 million, respectively, was outstanding on the Pier
Park Resort Hotel JV Loan. The loan matures in April 2027 and bears interest at a rate of SOFR plus 2.1%. The loan is
secured by the real property and certain other Security Interests. In connection with the loan, as guarantors, 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 loan will be released upon reaching and
maintaining certain debt service coverage for twelve months. In addition, the guarantee can become full recourse in the
case of the failure of the guarantor to abide by or perform any of the covenants or warranties to be performed on the part
of such guarantor. The Pier Park Resort Hotel JV entered into an interest rate swap to hedge cash flows tied to changes
in the underlying floating interest rate tied to SOFR. The interest rate swap matures in April 2027 and fixed the variable
rate on the notional amount of related debt, initially at $42.0 million, amortizing to $38.7 million at swap maturity, to a
rate of 3.2%. See Note 6. Financial Instruments and Fair Value Measurements and Note 10. Debt, Net included in
Item 15 of this Form 10-K for additional information.
In 2020, a wholly-owned subsidiary of ours entered into a $16.8 million loan, which is guaranteed by us (the
“Breakfast Point Hotel Loan”). As of December 31, 2023 and 2022, $15.9 million and $16.4 million, respectively, was
outstanding on the Breakfast Point Hotel Loan. The loan matures in November 2042 and bears interest at a rate of 6.0%
through November 2027 and the 1-year constant maturity Treasury rate plus 3.3% from December 2027 through
November 2042, with a minimum rate of 6.0% throughout the term of the loan. The loan includes a prepayment
premium due to the lender of 1% - 2% of the outstanding principal balance for any additional principal that is prepaid
through November 2027. The loan is secured by the real property and certain other Security Interests. See Note 10. Debt,
Net included in Item 15 of this Form 10-K for additional information.
In 2020, a wholly-owned subsidiary of ours entered into a $5.8 million loan, which is guaranteed by us (the “Self-
Storage Facility Loan”). As of both December 31, 2023 and 2022, $4.7 million was outstanding on the Self-Storage
Facility Loan. The loan matures in November 2025 and bears interest at a rate of SOFR plus 2.5%, with a floor of 2.9%.
Effective July 1, 2023, the benchmark interest rate index based on LIBOR transitioned to SOFR. The loan is secured by
the real property and certain other Security Interests. Our liability as guarantor under the loan shall not exceed $2.9
million, plus any additional fees, with the project maintaining a certain debt service coverage. See Note 10. Debt, Net
included in Item 15 of this Form 10-K for additional information.
In January 2021, 30A Greenway Hotel, LLC (“The Lodge 30A JV”) entered into a $15.0 million loan (the “Lodge
30A JV Loan”). As of December 31, 2023 and 2022, $14.7 million and $13.3 million, respectively, was outstanding on
the Lodge 30A JV Loan. The loan bears interest at a rate of 3.8% and matures in January 2028. The loan is secured by
the real property and certain other Security Interests. In connection with the loan, we, wholly-owned subsidiaries of ours
and our JV partner entered into a joint and several payment and performance guarantee in favor of the lender. Upon
reaching a certain debt service coverage ratio for a minimum of twenty-four months, our liability as guarantor will be
reduced to 75% of the outstanding principal amount for a twelve-month period. The debt service coverage ratio will be
tested annually thereafter and will be reduced to 50% in year four and 25% in year five. We receive a monthly fee
related to the guarantee from our JV partner based on the JV partner’s ownership percentage. See Note 10. 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, which is guaranteed by us (the
“North Bay Landing Loan”). As of December 31, 2023 and 2022, $26.8 million and $18.2 million, respectively, was
outstanding on the North Bay Landing Loan. The loan bears interest at a rate of SOFR plus 2.6%, with a floor of 3.3%.
Upon reaching a certain debt service coverage ratio, the loan will bear interest at a rate of SOFR plus 2.4%, with a floor
of 3.1%. Effective July 1, 2023, the benchmark interest rate index based on LIBOR transitioned to SOFR. The loan
matures in September 2024 and includes an option for an extension of the maturity date by eighteen months, subject to
certain conditions. The loan is secured by the real property and certain other Security Interests. As guarantor, our
48
liability under the loan has been reduced to 50% of the outstanding principal amount upon satisfaction of final advance
conditions and will be further reduced to 25% of the outstanding principal amount upon reaching and maintaining a
certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of any fraud or
intentional misrepresentation or failure to abide by other certain obligations on the part of such guarantor. See Note 10.
Debt, Net included in Item 15 of this Form 10-K for additional information. In May 2023, we began the process to make
available the option to refinance the North Bay Landing Loan by seeking a loan commitment to be insured by HUD.
In June 2021, a wholly-owned subsidiary of ours entered into a $28.0 million loan, which is guaranteed by us (the
“Watersound Camp Creek Loan”). As of December 31, 2023 and 2022, $28.0 million and $13.1 million, respectively,
was outstanding on the Watersound Camp Creek Loan. The loan matures in December 2047. In February 2023, the loan
was amended, which modified the interest rate from LIBOR plus 2.1%, with a floor of 2.6%, to SOFR plus 2.1%, with a
floor of 2.6%. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability
under the loan will be reduced to 50% of the outstanding principal amount upon the project reaching and maintaining a
trailing six months of operations with a certain debt service coverage ratio and reduced to 25% of the outstanding
principal amount upon reaching and maintaining a trailing twelve months of operations with a certain debt service
coverage ratio. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by
or perform any of the covenants, warranties or other certain obligations to be performed on the part of such guarantor.
See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.
In August 2021, a wholly-owned subsidiary of ours entered into a $12.0 million loan, which is guaranteed by us (the
“Watersound Town Center Grocery Loan”). As of December 31, 2023 and 2022, $10.5 million and $11.4 million,
respectively, was outstanding on the Watersound Town Center Grocery Loan. The loan bears interest at SOFR plus
2.1%, with a floor of 2.3%, and matures in August 2031. Effective July 1, 2023, the benchmark interest rate index based
on LIBOR transitioned to SOFR. The loan is secured by the real property and certain other Security Interests. As
guarantor, our liability under the loan has been reduced to 50% of the outstanding principal amount and will be further
reduced to 25% of the outstanding principal amount upon reaching a certain debt service coverage ratio and the project
maintaining 93% occupancy for ninety consecutive days. See Note 10. Debt, Net included in Item 15 of this Form 10-K
for additional information.
In October 2021, a wholly-owned subsidiary of ours entered into a $21.2 million loan, which is guaranteed by us
(the “Hotel Indigo Loan”). As of December 31, 2023 and 2022, $20.7 million and $10.4 million, respectively, was
outstanding on the Hotel Indigo Loan. The loan bears interest a rate of SOFR plus 2.5%, with a floor of 2.5%. The loan
matures in October 2028 and includes an option for an extension of the maturity date by sixty months, subject to certain
conditions. The loan is secured by the leasehold property and certain other Security Interests. See Note 10. Debt, Net
included in Item 15 of this Form 10-K for additional information.
In January 2022, Mexico Beach Crossings, LLC (the “Mexico Beach Crossings JV”) entered into a $43.5 million
loan, insured by HUD (the “Mexico Beach Crossings JV Loan”). As of December 31, 2023 and 2022, $42.4 million and
$23.4 million, respectively, was outstanding on the Mexico Beach Crossings JV Loan. The loan bears interest at a rate of
3.0% and matures in March 2064. The loan may not be prepaid prior to April 2024 and if any additional principal is
prepaid from April 2024 through March 2034 a premium is due to the lender of 1% - 10%. The loan is secured by the
real property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for
additional information.
In July 2022, a wholly-owned subsidiary of ours entered into a $13.7 million loan, which is guaranteed by us (the
“Topsail Hotel Loan”). As of December 31, 2023 and 2022, $12.3 million and $5.2 million, respectively, was
outstanding on the Topsail Hotel Loan. The loan bears interest at a rate of SOFR plus 2.1%, with a floor of 3.0% and
matures in July 2027. The loan is secured by the real property and certain other Security Interests. See Note 10. Debt,
Net included in Item 15 of this Form 10-K for additional information.
In December 2022, a wholly-owned subsidiary of ours entered into a $37.0 million loan, which is guaranteed by us
(“The Pearl Hotel Loan”). As of December 31, 2023 and 2022, $35.5 million and $37.0 million, respectively, was
outstanding on The Pearl Hotel Loan. The loan bears interest at a rate of 6.3% and matures in December 2032. The loan
49
includes a prepayment fee due to the lender of 1% - 4% of the outstanding principal balance if the loan is refinanced
with another financial institution through December 2027. The loan is secured by the real property and certain other
Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.
CDD bonds financed the construction of infrastructure improvements in some of our communities. The principal
and interest payments on the bonds are paid by assessments on the properties benefited by the improvements financed by
the bonds. We have recorded a liability for CDD debt that is associated with platted property, which is the point at which
it becomes fixed 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 $3.0 million as of December 31, 2023. Total outstanding CDD debt
related to our land holdings was $10.7 million as of December 31, 2023, which is comprised of $8.7 million at the
SouthWood community, $1.9 million at the existing Pier Park retail center and less than $0.1 million at the Wild Heron
residential community. We pay interest on this total outstanding CDD debt.
As of December 31, 2023, our unconsolidated Latitude Margaritaville Watersound JV, Watersound Fountains
Independent Living JV, Pier Park TPS JV, Pier Park RI JV, Busy Bee JV and Electric Cart Watersound JV had various
loans outstanding, some of which we have entered into guarantees. See Note 4. Joint Ventures and Note 20.
Commitments and Contingencies included in Item 15 of this Form 10-K for additional information.
In 2020, we, as lender, entered into a $10.0 million secured revolving promissory note with the unconsolidated
Latitude Margaritaville Watersound JV, as borrower (the “Latitude JV Note”). As of both December 31, 2023 and 2022,
there was no principal balance outstanding on the Latitude JV Note. The note was provided by us to finance the
development of the pod-level, non-spine infrastructure. Future advances, if any, will be repaid by the JV as each home is
sold by the JV, with the aggregate unpaid principal and all accrued and unpaid interest due at maturity in June 2025. The
note is secured by a mortgage and security interest in and on the real property and improvements located on the real
property of the JV. See Note 4. Joint Ventures and Note 20. Commitments and Contingencies included in Item 15 of this
Form 10-K for additional information.
During the year ended December 31, 2023, we did not repurchase shares of our common stock outstanding. During
the year ended December 31, 2022, we repurchased 576,963 shares of our common stock outstanding at an average
purchase price of $34.81, per share, for an aggregate purchase price of $20.0 million. 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 the Stock Repurchase
Program and treasury stock retirement during 2022.
As part of a certain sale of timberlands in 2014, we generated significant tax gains. The installment note’s structure
allowed us to defer the resulting federal and state tax liability of $45.6 million until 2029, the maturity date for the
installment note. We have a deferred tax liability related to the gain in connection with the sale.
As of December 31, 2023 and 2022, 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 $40.0 million and $38.1 million, respectively, as well as standby letters of credit in the amount of $0.2
million and $17.3 million, respectively, which may potentially result in a liability to us if certain obligations are not met.
In conducting our operations, we routinely hold customers’ assets in escrow pending completion of real estate
transactions, and are responsible for the proper disposition of these balances for our customers. These amounts are
maintained in segregated bank accounts and have not been included in the accompanying consolidated balance sheets,
consistent with U.S. GAAP and industry practice. The cash deposit accounts and offsetting liability balances for escrow
deposits in connection with our title insurance agencies for real estate transactions were $10.0 million and $8.0 million
as of December 31, 2023 and 2022, respectively. These escrow funds are not available for regular operations.
50
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 financing activities
Net increase (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,
2023
2022
2021
In millions
$
$
103.8 $
(99.1)
40.8
45.5
45.3
90.8 $
48.2 $
(189.8)
112.5
(29.1)
74.4
45.3 $
111.8
(196.1)
48.6
(35.7)
110.1
74.4
Net 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 developed and
undeveloped land. Adjustments for non-cash items primarily include depreciation, depletion and amortization,
unrealized loss on investments, net, equity in (income) loss from unconsolidated joint ventures, net of distributions,
deferred income tax, cost of real estate sold and gain on contributions to unconsolidated joint ventures. Net cash
provided by operations was $103.8 million in 2023, as compared to $48.2 million in 2022. During 2023 net income was
$74.1 million, compared to $70.2 million in 2022. The increase in net cash provided by operating activities was
primarily due to the changes in net income, expenditures for and acquisition of real estate to be sold, depreciation,
depletion and amortization, and gain on insurance for damage to property and equipment, net, partially offset by the
changes in cost of real estate sold and other assets during the year.
Cash Flows from Investing Activities
Net cash flows used in investing activities primarily includes capital expenditures for operating property and
property and equipment used in our operations, purchases of investments and capital contributions to unconsolidated
joint ventures, partially offset by proceeds from insurance claims, sales and maturities of investments, capital
distributions from unconsolidated joint ventures and maturities of assets held by special purpose entities. During 2023,
net cash used in investing activities was $99.1 million, which included capital expenditures for operating property and
equipment, purchases of investments of U.S. Treasury Bills of $37.4 million and capital contributions to unconsolidated
joint ventures of $2.3 million, partially offset by maturities of investments of $79.0 million, capital distributions from
unconsolidated joint ventures of $0.7 million and maturities of assets held by special purpose entities of $0.8 million.
During 2022, net cash used in investing activities was $189.8 million, which included capital expenditures for operating
property and equipment, purchases of investments of U.S. Treasury Bills of $97.1 million and capital contributions to
unconsolidated joint ventures of $2.5 million, partially offset by proceeds from insurance claims of $9.8 million,
maturities of investments of $92.0 million, sales of investments of $54.3 million, capital distributions from
unconsolidated joint ventures of $12.0 million and maturities of assets held by special purpose entities of $0.8 million.
Capital expenditures for operating property and property and equipment were $139.9 million and $259.1 million
during 2023 and 2022, respectively, which were primarily for our commercial and hospitality segments, including the
acquisition of The Pearl Hotel in 2022. See Note 3. Investment in Real Estate, Net included in Item 15 of this Form 10-K
for additional information regarding the acquisition.
Cash Flows from Financing Activities
Net cash provided by financing activities was $40.8 million for 2023, compared to $112.5 million in 2022. Net cash
provided by financing activities during 2023 included capital contributions from non-controlling interest of $1.4 million
and borrowings on debt of $121.8 million, partially offset by capital distributions to non-controlling interest of $2.2
51
million, dividends paid of $25.7 million, principal payments for debt of $53.5 million, principal payments for finance
leases of $0.1 million and debt issuance costs of $0.9 million. Net cash provided by financing activities during 2022
included capital contributions from non-controlling interest of $3.8 million and borrowings on debt of $184.5 million,
partially offset by capital distributions to non-controlling interest of $2.4 million, additional ownership interest acquired
in Pier Park North JV of $7.7 million, repurchase of common shares of $20.0 million, dividends paid of $23.5 million,
principal payments for debt of $20.2 million, principal payments for finance leases of $0.1 million and debt issuance
costs of $1.9 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, Net and Cost of Real Estate Revenue. Costs associated with a specific real estate project
are capitalized during the development period. These development costs include land and common development costs
(such as roads, structures, utilities and amenities). We capitalize costs directly associated with development and
construction of identified real estate projects. Indirect costs that clearly relate to a specific project under development,
such as project administration, 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,
we review the long-lived asset’s carrying value, current period actual financial results as compared to prior period and
forecasted results contained in our business plan and any other events or changes in circumstances to identify whether an
52
indicator of potential impairment may exist. Some of the events or changes in circumstances that are considered as
indicators of potential impairment include:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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
(cid:120) 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:
(cid:120)
(cid:120)
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
53
(cid:120)
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.
Homesites substantially completed and ready for sale are measured at the lower of carrying value or fair value less
costs to sell. Management identifies homesites as being substantially completed and ready for sale when the properties
are being actively marketed with intent to sell such properties in the near term and under current market conditions.
Other homesites, which management does not intend to sell in the near term under current market conditions, are
evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of such
property.
Other properties that management does not intend to sell in the near term under current market conditions and has
the ability to hold are evaluated for impairment based on management’s best estimate of the long-term use and eventual
disposition of the property. Typically, assets are carried based on historical cost basis, which in some cases may exceed
fair value if sold in the near term. The results of impairment analysis for development and operating properties are
particularly dependent on the estimated holding and selling period for each asset group.
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 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.
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, 2023 and 2022, we had $11.0 million and $3.4 million, respectively, of federal net operating
loss carryforwards (“NOLs”). The federal NOLs are specific to our QOF entity and do not expire. As of
December 31, 2023 and 2022, we had state net NOLs of $12.9 million and $121.1 million, respectively. The majority of
these state NOLs are available to offset future taxable income through 2042 and will begin expiring in 2025. As of both
December 31, 2023 and 2022, we had a valuation allowance of $0.3 million against approximately $7.2 million of
certain state NOLs. As of December 31, 2023 and 2022, we had income tax payable of $9.2 million and $3.5 million,
respectively, included within accounts payable and other liabilities on the consolidated balance sheets. See Note 13.
Income Taxes included in Item 15 of this Form 10-K for additional information.
54
Recently Adopted 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 provided temporary optional guidance to ease the
potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. This
guidance provided expedients and exceptions for applying GAAP to contract modifications and hedging relationships
affected by reference rate reform if certain criteria were met. The amendments applied only to contracts and hedging
relationships that referenced LIBOR or another reference rate that was 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
clarified 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. In December 2022, the FASB issued ASU
2022-06, Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”) that extended
the temporary reference rate reform guidance under Topic 848 from December 31, 2022 to December 31, 2024. This
new guidance was effective upon issuance and could be applied prospectively through December 31, 2024, as reference
rate activities occurred. In 2022 and the first half of 2023, some of our debt agreements that referenced LIBOR were
amended to an alternative rate and on July 1, 2023, the remainder of our debt agreements that referenced a benchmark
interest rate index based on LIBOR automatically transitioned to SOFR. Topic 848 was applied at the time of these
modifications and there was no impact on our financial condition, results of operations and cash flows.
Leases Common Control Arrangements
In March 2023, the FASB issued ASU 2023-01, Leases (“Topic 842”): Common Control Arrangements (“ASU
2023-01”) that improved accounting guidance for arrangements between entities under common control. The new
guidance required that leasehold improvements associated with common control leases be amortized by the lessee over
the useful life of the leasehold improvements to the common control group, as long as the lessee controls the use of the
underlying asset through a lease. When the lessee no longer controls the use of the underlying asset, the leasehold
improvements are accounted for as a transfer between entities under common control through an adjustment to equity.
We adopted this guidance as of December 31, 2023 and will apply the guidance prospectively to all new leasehold
improvements recognized on or after adoption. As of December 31, 2023, there were no leasehold improvements
associated with common control leases. The adoption of this guidance had no impact on our financial condition, results
of operations and cash flows.
Recently Issued Accounting Pronouncements
Business Combinations – Joint Venture Formations
In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-
60): Recognition and Initial Measurement (“ASU 2023-05”) that requires a JV to apply a new basis of accounting upon
formation by recognizing and initially measuring its assets and liabilities at fair value. This guidance will be effective
prospectively for all JVs with a formation date on or after January 1, 2025, with early adoption permitted. A JV formed
before January 1, 2025 may elect to apply the guidance retrospectively if sufficient information is available. We are
currently evaluating the impact that the adoption of this guidance will have on our financial condition, results of
operations, cash flows and related disclosures.
Segment Reporting
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (“Topic 280”) – Improvements to
Reportable Segment Disclosures (“ASU 2023-07”) that requires an entity disclose, on an annual and interim basis,
significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included
within each reported measure of segment profit or loss. This guidance also requires that an entity disclose an amount and
description of other segment items, provide all annual disclosures currently required by Topic 280 in interim periods and
55
disclose the title and position of the CODM and how the CODM uses the reported measure of segment profit or loss in
assessing segment performance and deciding how to allocate resources. This guidance will be effective for fiscal years
beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with
early adoption permitted. The guidance should be applied retrospectively to all prior periods presented. We are currently
evaluating the impact that the adoption of this guidance will have on our financial condition, results of operations, cash
flows and related disclosures.
Income Taxes
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax
Disclosures (“ASU 2023-09”) that increases transparency about income tax information by requiring consistent
categories and greater disaggregation of information in the rate reconciliation and income taxes paid, disaggregated by
jurisdiction. This guidance will be effective for annual periods beginning after December 15, 2024, with early adoption
permitted. We are currently evaluating the impact that the adoption of this guidance will have on our financial condition,
results of operations, cash flows and related disclosures.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks primarily from interest rate fluctuations. We have investments in short-term 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 $0.1 million in the market value of these investments as of December 31, 2023. 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 historically been exposed, and in the future may again be exposed, to credit risk associated with 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 Securities.
Some of our cash and cash equivalents are invested in money market instruments. Changes in interest rates related
to these investments would not significantly impact our results of operations.
We are subject to interest rate risk on our variable-rate debt and utilize derivative financial instruments to reduce our
exposure to market risks from changes in interest rates on certain loans. We have entered into interest rate swap
agreements designated as cash flow hedges to manage the interest rate risk associated with some of our variable rate
debt, with changes in the fair value recorded to accumulated other comprehensive income. As of December 31, 2023, we
had variable-rate debt outstanding totaling $196.7 million, of which $41.5 million was swapped to a fixed interest rate.
As of December 31, 2023, the weighted average interest rate on our variable rate loans, excluding the swapped portion,
based on SOFR was 7.6%. Based on the outstanding balance of these loans as of December 31, 2023, a hypothetical 100
basis point increase in the applicable rate would result in an increase to our annual interest expense of $1.6 million. See
Note 6. Financial Instruments and Fair Value Measurements and Note 10. Debt, Net included in Item 15 of this
Form 10-K for additional information.
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.
56
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, 2023, 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;
(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, 2023. 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, 2023. Management reviewed the results of their assessment with our Audit Committee.
The effectiveness of our internal control over financial reporting as of December 31, 2023 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, 2023, 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, 2023, 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,
2023, and our report dated February 21, 2024, expressed an unqualified opinion on those financial statements.
57
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
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 21, 2024
Item 9B. Other Information
During the fourth quarter of 2023, none of our directors or executive officers adopted, modified or terminated any
contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the
affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement”.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
58
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 2024 Annual Meeting of Shareholders to be filed on or before April 29, 2024.
Item 11. Executive Compensation
Information concerning executive compensation will be included in the Registrant’s Proxy Statement for our 2024
Annual Meeting of Shareholders to be filed on or before April 29, 2024 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 2024 Annual Meeting of Shareholders to be filed on or before April 29, 2024 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 2023 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 2024 Annual Meeting of Shareholders to be filed on or before April 29, 2024 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 2024 Annual Meeting of Shareholders to be
filed on or before April 29, 2024 and is incorporated by reference in this Part III.
59
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.
The financial statements of LMWS, LLC JV required by Rule 3-09 of Regulation S-X are provided as Exhibit 99.1
to this report.
(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†
10.3†
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 November 15, 2022).
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 Restricted Stock Award (Executive Officers) (incorporated by reference to Exhibit 10.1 to the
registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022).
Form of Restricted Stock Award (CEO) (incorporated by reference to Exhibit 10.2 to the registrant’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2022).
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).
60
Exhibit
Number Description
10.6†
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).
10.7
10.8
10.9†
10.10
10.11
21.1**
23.1**
23.2**
31.1**
31.2**
32.1*
32.2*
97**
99.1**
101**
104
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).
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).
Subsidiaries of The St. Joe Company.
Consent of Grant Thornton LLP, independent registered public accounting firm for the registrant.
Consent of independent auditors regarding opinion in exhibit 99.1.
Certification by Chief Executive Officer.
Certification by Chief Financial Officer.
Certification by Chief Executive Officer.
Certification by Chief Financial Officer.
Clawback Policy
Financial Statements of the LMWS, LLC joint venture as of December 31, 2023 and 2022 and for the years
ended December 31, 2023, 2022 and 2021.
The following information from the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2023, 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.
61
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 21, 2024
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 21, 2024
Executive Vice President and Chief Financial
Officer
(Principal Financial Officer and Principal
Accounting Officer)
February 21, 2024
Chairman of the Board
February 21, 2024
Director
Director
Director
February 21, 2024
February 21, 2024
February 21, 2024
62
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 59
F 61
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, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2023, 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, 2023, 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 21, 2024, 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 21, 2024
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
Accounts payable and other liabilities
Deferred revenue
Deferred tax liabilities, net
Senior Notes held by special purpose entity
Total liabilities
Commitments and contingencies (Note 20)
December 31,
2023
December 31,
2022
$
$
$
1,018,618 $
66,356
86,068
—
82,243
66,049
204,196
1,523,530 $
996,261
50,025
37,747
40,576
61,729
39,638
204,863
1,430,839
453,640 $
58,573
62,836
71,829
178,162
825,040
385,860
94,371
38,936
82,706
177,857
779,730
Equity:
Common stock, no par value; 180,000,000 shares authorized; 58,372,040 and
58,335,541 issued and outstanding at December 31, 2023 and December 31,
2022, respectively
Retained earnings
Accumulated other comprehensive income
Total stockholders’ equity
Non-controlling interest
Total equity
Total liabilities and equity
270,848
410,371
1,843
683,062
15,428
698,490
1,523,530 $
270,028
358,344
2,430
630,802
20,307
651,109
1,430,839
$
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 JVs,
which as of December 31, 2023 and 2022, include the Pier Park North JV, Pier Park Crossings JV, Watersound Origins
Crossings JV, Watercrest JV, Watersound Closings & Escrow, LLC (the “Watersound Closings JV”), Pier Park
Crossings Phase II JV, Mexico Beach Crossings JV, Pier Park Resort Hotel JV, The Lodge 30A JV, Panama City
Timber Finance Company, LLC and Northwest Florida Timber Finance, LLC. See Note 2. Significant Accounting
Policies. Basis of Presentation and Principles of Consolidation and Note 4. Joint Ventures for additional information.
The following assets may only be used to settle obligations of the consolidated JVs and the following liabilities are only
obligations of the consolidated JVs and do not have recourse to the general credit of the Company, except for covenants
and guarantees discussed in Note 10. Debt, Net.
ASSETS
Investment in real estate, net
Cash and cash equivalents
Other assets
Property and equipment, net
Investments held by special purpose entities
Total assets
LIABILITIES
Debt, net
Accounts payable and other liabilities
Deferred revenue
Senior Notes held by special purpose entity
Total liabilities
See notes to the consolidated financial statements.
December 31,
2023
December 31,
2022
$
$
$
$
264,837 $
4,851
15,596
22,241
204,196
511,721
$
272,395
7,353
16,804
7,219
204,863
508,634
275,757
8,384
307
178,162
462,610
$
$
243,447
18,834
234
177,857
440,372
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
Total revenue
Expenses:
Cost of real estate revenue
Cost of hospitality revenue
Cost of leasing revenue
Corporate and other operating expenses
Depreciation, depletion and amortization
Total expenses
Operating income
Other income (expense):
Investment income, net
Interest expense
Gain on contributions to unconsolidated joint ventures
Equity in income (loss) from unconsolidated joint ventures
Other income, net
Total other income, net
Income before income taxes
Income tax expense
Net income
Net loss attributable to non-controlling interest
Net income attributable to the Company
NET INCOME PER SHARE ATTRIBUTABLE TO THE
COMPANY
Basic
Diluted
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic
Diluted
Year Ended December 31,
2023
2022
2021
$
186,008 $
152,441
50,836
389,285
115,865 $
97,260
39,196
252,321
164,650
75,265
27,081
266,996
87,966
122,185
25,828
23,797
38,776
298,552
90,733
13,282
(30,618)
718
22,701
3,245
9,328
100,061
(26,009)
74,052
3,660
77,712 $
50,791
77,518
17,589
22,068
22,888
190,854
61,467
9,862
(18,383)
2,738
25,986
12,947
33,150
94,617
(24,389)
70,228
699
70,927 $
61,380
58,314
11,620
23,023
18,202
172,539
94,457
7,254
(15,854)
3,558
(865)
10,181
4,274
98,731
(24,982)
73,749
804
74,553
1.33 $
1.33 $
1.21 $
1.21 $
1.27
1.27
$
$
$
58,312,878
58,324,254
58,720,050
58,721,338
58,882,549
58,882,549
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 income (loss):
Net unrealized gain (loss) on available-for-sale investments
Interest rate swaps
Interest rate swap - unconsolidated joint venture
Reclassification of net realized (gain) loss included in earnings
Total before income taxes
Income tax benefit (expense)
Total other comprehensive (loss) income, 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,
2022
$ 70,228
2021
$ 73,749
2023
$ 74,052
244
250
80
(1,767)
(1,193)
199
(994)
73,058
4,067
$ 77,125
(235)
4,633
621
140
5,159
(957)
4,202
74,430
(684)
$ 73,746
(16)
848
213
405
1,450
(367)
1,083
74,832
804
$ 75,636
See notes to the consolidated financial statements.
F 6
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THE ST. JOE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended December 31,
2022
2023
2021
$
74,052
$
70,228
$
73,749
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 on sale of investments
Unrealized loss on investments, net
Equity in (income) loss from unconsolidated joint ventures, net of distributions
Deferred income tax
Cost of real estate sold
Expenditures for and acquisition of real estate to be sold
Accretion income and other
Loss on disposal of property and equipment
Gain on contributions to unconsolidated joint ventures
Gain on insurance for damage to property and equipment, net
Loss on extinguishment of debt
Changes in operating assets and liabilities:
Other assets
Deferred revenue
Accounts payable and other liabilities
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
Maturities of investments - debt securities
Sales of investments - debt securities
Sales of investments - equity securities
Sales of restricted investments
Capital contributions to unconsolidated joint ventures
Capital distributions 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:
38,776
820
—
—
(12,913)
(10,677)
82,610
(77,796)
(2,513)
16
(718)
—
133
(9,178)
11,149
10,088
103,849
(133,783)
(6,182)
71
—
(37,407)
79,000
—
—
—
(2,305)
676
—
787
(99,143)
22,888
364
—
26
(2,758)
4,490
46,384
(97,535)
(1,274)
181
(2,738)
(9,835)
130
15,317
2,684
(331)
48,221
(251,809)
(7,348)
49
9,835
(97,133)
92,000
53,901
424
—
(2,505)
12,025
—
785
(189,776)
Capital contributions from non-controlling interest
Capital distributions to non-controlling interest
Additional ownership interest acquired in Pier Park North JV
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 financing activities
Net increase (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
1,430
(2,242)
—
—
(25,664)
121,839
(53,491)
(153)
(958)
40,761
45,467
45,303
90,770 $
3,823
(2,433)
(7,695)
(19,972)
(23,497)
184,476
(20,228)
(121)
(1,895)
112,458
(29,097)
74,400
45,303
$
$
See notes to consolidated financial statements.
F 8
18,202
—
(17)
1,872
1,298
15,977
55,933
(47,318)
(810)
270
(3,558)
(4,853)
—
(6,372)
8,568
(1,144)
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
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
$ 86,068 $ 37,747 $ 70,162
4,238
4,702
7,556
$ 90,770 $ 45,303 $ 74,400
Restricted cash includes amounts reserved as a requirement of financing, development, or advance draws on
construction loans for certain of the Company’s projects.
Year Ended December 31,
2022
2023
2021
Year Ended December 31,
2022
2023
2021
Cash paid during the period for:
Interest, net of amounts capitalized
Federal income taxes
State income taxes
Non-cash investing and financing activities:
Non-cash contributions to unconsolidated joint ventures
Decrease in Community Development District debt, net
Transfers of expenditures for operating property to property and equipment
(Decrease) increase in expenditures for operating properties and property and
equipment financed through accounts payable
Unrealized (loss) gain on cash flow hedges
$ 29,602 $ 17,152 $ 13,621
$ 26,400 $ 16,361 $ 11,070
—
$
4,518 $
750 $
(1,844) $
$
$
(539) $
$ 35,812 $
(6,136)
(4,044) $
(311) $
(900)
9,594 $ 12,012
$ (30,325) $ 13,205 $ 19,223
$
1,481
5,243 $
(215) $
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
87% 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. See Note 19. Segment Information.
References to the number of acres, hotel rooms and suites, 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, voting interest entities where the Company has a majority voting interest or control and variable
interest entities where the Company deems itself the primary beneficiary. Investments in JVs in which the Company is
not the primary beneficiary, or a voting interest entity where the Company does not have a majority voting interest or
control, but has significant influence are unconsolidated and accounted for by the equity method. All significant
intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts in the
accompanying consolidated financial statements have been reclassified to conform to the current year presentation.
Commencing in the fourth quarter of 2023, due to timber revenue representing less than 2% of total consolidated
revenue for the year ended December 31, 2023, revenue previously reported as “Timber revenue” has been reclassified
to “Real estate revenue” on the consolidated statements of income. 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. The Company continues to
evaluate whether it is the primary beneficiary as needed when assessing reconsideration events. 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
impairment assessments, investments, accruals, deferred income taxes, allowance for credit losses and revenue
recognition. Actual results could differ from those estimates.
Investment in Real Estate, Net
The Company capitalizes costs directly associated with development and construction of identified real estate
projects. These costs include land and common development costs (such as roads, structures, utilities and amenities).
F 10
The Company may also capitalize 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, net is carried at cost, net of depreciation and timber depletion, unless circumstances
indicate that the carrying value of the assets may not be recoverable. If the Company determines that an impairment
exists due to the inability to recover an asset’s carrying value, an impairment charge is recorded to the extent that the
carrying value exceeds estimated fair value. If such assets were held for sale, the provision for loss would be recorded to
the extent that the carrying value exceeds estimated fair value less costs to sell.
Depreciation for operating property is computed on the straight-line method over the estimated economic 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
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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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;
F 11
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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
(cid:120) 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:
(cid:120)
(cid:120)
(cid:120)
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
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.
F 12
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.
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 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 (loss) income.
Realized gains and losses on investments are determined using the specific identification method. The amortized cost of
F 13
debt securities are adjusted for amortization of premiums and accretion of discounts to maturity computed under the
effective interest method. Such amortization and accretion are 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.
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 (loss) income and is reclassified into earnings in the same period during which the
hedged transaction affects earnings. Cash flows from derivatives are classified in the consolidated statements of cash
flows in the same category as the item being hedged. The Company accounts for the changes in fair value of derivatives
that do not qualify for hedge accounting treatment directly in earnings.
Receivables
The Company’s receivables primarily include homesite sales receivable, a revolving promissory note with an
unconsolidated JV, leasing receivables, membership fees, hospitality receivables and other receivables. At each reporting
period, receivables in the scope of Financial Instruments—Credit Losses (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. 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.
F 14
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
Leases - The Company as Lessee
Estimated Useful
Life (in years)
15 - 30
5 - 10
3 - 10
5 - 10
5 - 10
Finance lease right-of-use assets are included within property and equipment, net 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 accounts payable and 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. Right-of-use assets
and liabilities are recognized at lease commencement date based on the present value of future minimum lease payments
over the lease term. 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 does not separate lease
components from non-lease components, which are presented as a single component when allocating contract
consideration. 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.
Deferred Revenue
Deferred revenue consists of amounts received related to incomplete performance obligations. Deferred revenue
primarily includes club initiation fees, which are recognized as revenue over the estimated average duration of
membership, which is evaluated periodically. Deferred revenue also includes land sales that are recognized as revenue
once the Company has transferred control to the customer and all revenue recognition criteria are met.
Advertising Costs
Advertising costs are expensed as services are incurred. Advertising costs of $3.8 million, $2.4 million and $2.0
million for the years ended December 31, 2023, 2022 and 2021, respectively, are included within cost of revenue and
corporate and other operating expenses in the consolidated statements of income.
Income Taxes
The Company’s provision for income taxes includes the current tax owed on the current period earnings, as well as
deferred income taxes, which reflects the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Changes in existing tax laws and rates, their related
F 15
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 income with respect to available-for-sale debt securities.
Concentration of Risks and Uncertainties
All of the Company’s real estate assets are concentrated in Northwest Florida. Uncertain economic conditions could
have an adverse impact on the Company’s operations and asset values.
Throughout 2023, the Company continued to generate positive financial results. While macroeconomic factors such
as inflation, elevated interest rates, higher insurance costs, supply chain disruptions, labor shortages, financial institution
disruptions and geopolitical conflicts, among other things, continued to produce economic headwinds and impacted
buyer sentiment, demand across the Company’s segments remains strong. The Company believes this is primarily the
result of the continued growth of Northwest Florida, which the Company attributes to the region’s high quality of life,
natural beauty and outstanding amenities, as well as the evolving flexibility in the workplace.
Despite the strong demand across the Company’s segments, the Company also continues to feel the impact from the
aforementioned macroeconomic factors, including supply chain disruptions which have extended the time to complete
residential, hospitality and commercial projects. In addition, inflation, higher insurance costs and elevated interest rates,
have increased operating costs and loan rates, as compared to prior years. While elevated interest rates have negatively
impacted buyers’ ability to obtain financing and the housing market generally, the impact has been offset by the net
migration into the Company’s markets, limited housing supply relative to demand and the number of cash buyers.
Market conditions have not caused an increase in cancellation rates as homebuilders have continued to perform on their
contractual obligations with the Company.
Given the Company’s diverse portfolio of residential holdings, the mix of sales and pricing from different
communities may impact revenue and margins period over period.
Further discussion of the potential impacts on the Company’s business from the current macroeconomic
environment are discussed in Part I. Item 1A. Risk Factors.
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash
equivalents, investments, other receivables and investments held by special purpose entity or entities (“SPE”). The
Company deposits and invests cash with local, regional and national financial institutions and as of December 31, 2023
these balances exceed the amount of FDIC insurance provided on such deposits by $18.7 million. In addition, as of
December 31, 2023, the Company had $59.8 million invested in short-term U.S. Treasury Bills and $1.4 million invested
in U.S. Treasury Money Market Funds classified as cash and cash equivalents.
Earnings Per Share
Basic earnings per share is calculated by dividing net income attributable to the Company by the basic weighted
average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net
income attributable to the Company by the weighted average number of shares of common stock outstanding for the
period, including potential dilutive common shares. The treasury stock method is used to determine the effect on diluted
earnings. For the years ended December 31, 2023 and 2022, the Company had 57,923 and 29,955, respectively, unvested
shares of restricted stock. For the years ended December 31, 2023 and 2022, 46,547 and 27,577, respectively, potentially
F 16
dilutive restricted stock units were excluded from the calculation of diluted income per share, since the effect would
have been anti-dilutive based on the application of the treasury stock method. For the year ended December 31, 2021,
there were no outstanding common stock equivalents or potential dilutive instruments, therefore, basic and diluted
weighted average shares outstanding were equal. See Note 15. Stockholders’ Equity for additional information related to
the issuance of common stock for employee compensation.
The computation of basic and diluted earnings per share are as follows:
Year Ended December 31,
2023
2022
2021
Income
Net income attributable to the Company
$
77,712 $
70,927 $
74,553
Shares
Weighted average shares outstanding - basic
Incremental shares from restricted stock
Weighted average shares outstanding - diluted
58,312,878
11,376
58,324,254
58,720,050
1,288
58,721,338
58,882,549
—
58,882,549
Net income per share attributable to the Company
Basic income per share
Diluted income per share
$
$
1.33 $
1.33 $
1.21 $
1.21 $
1.27
1.27
Revenue and Revenue Recognition
Revenue consists primarily of real estate sales, hospitality operations and leasing operations. Taxes collected from
customers and remitted to governmental authorities (e.g., sales tax) are excluded from revenue, costs and expenses.
In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with
Customers (“Topic 606”), revenue is recognized to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services
by applying the following steps; (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, parcels of
entitled or undeveloped land 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.
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 or homesites; (iv) a homesite residual on homebuilder sales that provides
the Company a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold; (v)
the sale of tap and impact fee credits; (vi) marketing fees; and (vii) other fees on certain transactions.
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 will be updated
at each reporting period. The variable consideration for homesite residuals and certain estimated fees are based on
historical experience and are recognized as revenue when it can be reasonably estimated and only to the extent it is
probable that a significant reversal in the estimated amount of cumulative revenue will not occur when uncertainties are
F 17
resolved. For the years ended December 31, 2023, 2022 and 2021, real estate revenue includes $24.0 million, $5.8
million and $4.8 million, respectively, of estimated homesite residuals and $5.0 million, $1.9 million and $2.4 million,
respectively, of estimated fees related to homebuilder homesite sales.
Timber 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.
Other real estate revenue includes title insurance business revenue which is recognized at the point in time services
are provided and represents a single performance obligation with a fixed transaction price. Other real estate revenue also
includes the sale of mitigation bank credits, which is recognized at a point in time.
Hospitality Revenue
The Company’s hospitality segment features 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 Company’s hospitality operations generate revenue from membership sales, golf courses,
lodging at the Company’s hotels, short-term vacation rentals, management of The Pearl Hotel (prior to acquisition in
December 2022), food and beverage operations, merchandise sales, marina operations that includes fuel sales, 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. Lodging at the Company’s hotels, short-term vacation rentals
owned by the Company 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. Daily play at the golf courses, food and beverage operations,
merchandise sales, marina storage and fuel sales, charter flights, other resort and entertainment activities, and other
service fees are recognized at the point of sale.
Hospitality revenue recognized over time includes non-refundable club membership initiation fees, club
membership dues, management fees and other membership fees. Non-refundable initiation fees are deferred and
recognized ratably over time, which is the estimated membership period. Club membership revenue consists of monthly
dues, which are recognized monthly over time as access is provided for the period. Revenue generated from the
Company’s management services is recognized over time as time elapses and the Company’s performance obligations
are met.
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 the marinas, which is recognized as earned, using the straight-line method over the life of each lease. Certain
leases provide for tenant occupancy during periods for which no rent is due or where minimum rent payments change
during the lease term. Accordingly, a receivable or liability is recorded representing the difference between the straight-
line rent and the rent that is contractually due from the tenant. The Company does not separate non-lease components
from lease components and, instead, accounts for each separate lease component and the non-lease components
F 18
associated with that lease as a single component if the non-lease components otherwise would be accounted for under
Topic 606. Non-lease components primarily include common area maintenance and senior living services provided
related to the Watercrest JV. Leasing revenue includes properties located in the Company’s Watersound Town Center,
Beckrich Office Park, North Bay Landing apartment community, consolidated Pier Park North JV, Pier Park Crossings
JV, Pier Park Crossings Phase II JV, Watersound Origins Crossings JV, Mexico Beach Crossings JV and Watercrest JV,
as well as the Company’s industrial parks and other properties. See Note 7. Leases for additional information related to
leases.
The following represents revenue disaggregated by segment, good or service and timing:
Revenue by Major Good/Service:
Real estate revenue
Hospitality revenue
Leasing 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
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
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, 2023
$
155,702 $
—
118
155,820 $
$
— $
152,437
2,137
154,574 $
26,180 $
4
48,253
74,437 $
4,126 $
—
328
4,454 $
186,008
152,441
50,836
389,285
$
155,702 $
—
118
155,820 $
$
117,982 $
34,455
2,137
154,574 $
26,184 $
—
48,253
74,437 $
4,126 $
—
328
4,454 $
303,994
34,455
50,836
389,285
Residential
Hospitality
Commercial
Other
Total
Year Ended December 31, 2022
$
$
$
$
92,804 $
—
82
92,886 $
— $
96,731
505
97,236 $
20,384 $
529
38,466
59,379 $
2,677 $
—
143
2,820 $
115,865
97,260
39,196
252,321
92,804 $
—
82
92,886 $
68,653 $
28,078
505
97,236 $
20,913 $
—
38,466
59,379 $
2,677 $
—
143
2,820 $
185,047
28,078
39,196
252,321
Residential
Hospitality
Commercial
Other
Total
Year Ended December 31, 2021
$
144,664 $
—
190
144,854 $
$
— $
74,538
53
74,591 $
18,023 $
727
26,807
45,557 $
1,963 $
—
31
1,994 $
164,650
75,265
27,081
266,996
$
144,664 $
—
190
144,854 $
$
55,181 $
19,357
53
74,591 $
18,750 $
—
26,807
45,557 $
1,963 $
—
31
1,994 $
220,558
19,357
27,081
266,996
F 19
Recently Adopted Accounting Pronouncements
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, that provided temporary optional guidance to ease the potential
burden in accounting for or recognizing the effects of reference rate reform on financial reporting. This guidance
provided expedients and exceptions for applying GAAP to contract modifications and hedging relationships affected by
reference rate reform if certain criteria were met. The amendments applied only to contracts and hedging relationships
that referenced LIBOR or another reference rate that was expected to be discontinued due to reference rate reform. In
January 2021, the FASB issued ASU 2021-01, which clarified 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. In December 2022, the FASB issued ASU 2022-06 that extended the temporary reference rate reform
guidance under Topic 848 from December 31, 2022 to December 31, 2024. This new guidance was effective upon
issuance and could be applied prospectively through December 31, 2024, as reference rate activities occurred. In 2022
and the first half of 2023, some of the Company’s debt agreements that referenced LIBOR were amended to an
alternative rate and on July 1, 2023, the remainder of the Company’s debt agreements that referenced a benchmark
interest rate index based on LIBOR automatically transitioned to SOFR. Topic 848 was applied at the time of these
modifications and there was no impact on the Company’s financial condition, results of operations and cash flows.
Leases Common Control Arrangements
In March 2023, the FASB issued ASU 2023-01, that improved accounting guidance for arrangements between
entities under common control. The new guidance required that leasehold improvements associated with common
control leases be amortized by the lessee over the useful life of the leasehold improvements to the common control
group, as long as the lessee controls the use of the underlying asset through a lease. When the lessee no longer controls
the use of the underlying asset, the leasehold improvements are accounted for as a transfer between entities under
common control through an adjustment to equity. The Company adopted this guidance as of December 31, 2023 and will
apply the guidance prospectively to all new leasehold improvements recognized on or after adoption. As of December
31, 2023, there were no leasehold improvements associated with common control leases. The adoption of this guidance
had no impact on the Company’s financial condition, results of operations and cash flows.
Recently Issued Accounting Pronouncements
Business Combinations – Joint Venture Formations
In August 2023, the FASB issued ASU 2023-05, that requires a JV to apply a new basis of accounting upon
formation by recognizing and initially measuring its assets and liabilities at fair value. This guidance will be effective
prospectively for all JVs with a formation date on or after January 1, 2025, with early adoption permitted. A JV formed
before January 1, 2025 may elect to apply the guidance retrospectively if sufficient information is available. The
Company is currently evaluating the impact that the adoption of this guidance will have on its financial condition, results
of operations, cash flows and related disclosures.
Segment Reporting
In November 2023, the FASB issued ASU 2023-07, that requires an entity disclose, on an annual and interim basis,
significant segment expenses that are regularly provided to the CODM and included within each reported measure of
segment profit or loss. This guidance also requires that an entity disclose an amount and description of other segment
items, provide all annual disclosures currently required by Topic 280 in interim periods and disclose the title and
position of the CODM and how the CODM uses the reported measure of segment profit or loss in assessing segment
performance and deciding how to allocate resources. This guidance will be effective for fiscal years beginning after
December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption
permitted. The guidance should be applied retrospectively to all prior periods presented. The Company is currently
F 20
evaluating the impact that the adoption of this guidance will have on its financial condition, results of operations, cash
flows and related disclosures.
Income Taxes
In December 2023, the FASB issued ASU 2023-09, that increases transparency about income tax information by
requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes
paid, disaggregated by jurisdiction. This guidance will be effective for annual periods beginning after December 15,
2024, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance
will have on its financial condition, results of operations, cash flows and related disclosures.
3. Investment in Real Estate, Net
Investment in real estate, net, 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, December 31,
2023
2022
$
141,145 $
23,633
99,719
2,924
267,421
166,304
205,409
131,133
3,618
506,464
10,905
419,095
439,671
—
869,671
118,474
751,197
$ 1,018,618 $
7,854
221,542
356,242
127
585,765
95,968
489,797
996,261
Investment in real estate, net is carried at cost, net of depreciation and timber depletion, unless circumstances
indicate that the carrying value of the assets may not be recoverable.
Development property consists of land the Company is developing or intends to develop for sale, lease or future
operations and includes direct costs associated with the land, as well as development, construction and indirect costs.
Residential development property includes existing and planned residential homesites and related infrastructure.
Hospitality development property consists of land, as well as development costs related to additional club amenities and
improvements to existing properties. 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 21
Operating property includes the following components:
Land and land improvements
Buildings and building improvements
Timber
Less: Accumulated depreciation
Total operating property, net
December 31,
December 31,
$
$
2023
206,089 $
648,655
14,927
869,671
118,474
751,197 $
2022
146,257
425,347
14,161
585,765
95,968
489,797
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. Hospitality operating property
primarily consists of existing hotels, resorts, clubs, vacation rental homes, marinas and other operations. Commercial
operating property includes property 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, 2023 and 2022, operating property, net related to operating leases was $367.3
million and $285.1 million, respectively.
In December 2022, the Company acquired The Pearl Hotel property for a purchase price of $52.0 million. The Pearl
Hotel acquisition was accounted for as an asset acquisition in accordance with ASC Topic 805 Business Combinations.
The Company allocated the purchase price based on the relative fair value of each acquired component. Costs related to
the acquisition were capitalized and included in the cost basis of the asset. The allocation of the purchase price and costs
primarily consisted of $49.3 million for the building and land included within operating property, net and $3.0 million
included within property and equipment, net. There were no in-place leases at the acquisition date. See Note 10. Debt,
Net for additional information regarding financing related to the asset acquisition.
Depreciation, depletion and amortization expense related to real estate investments was $23.0 million, $14.3 million
and $12.0 million in 2023, 2022 and 2021, 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
voting interest entities where the Company has a majority voting interest or control and VIEs in which an enterprise has
a controlling financial interest and is the primary beneficiary. A controlling financial interest will have both of the
following characteristics: (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 evaluate whether it is the primary
beneficiary as needed when assessing reconsideration events. Investments in JVs in which the Company is not the
primary beneficiary, or a voting interest entity where the Company does not have a majority voting interest or control,
but has significant influence are unconsolidated and accounted for by the equity method.
The timing of cash flows for additional required capital contributions related to the Company’s JVs varies by
agreement. Some of the Company’s consolidated and unconsolidated JVs have entered into financing agreements where
the Company or its JV partners have provided guarantees. See Note 10. Debt, Net and Note 20. Commitments and
Contingencies for additional information. The Company provides mitigation bank credits, impact fees and services to
certain unconsolidated JVs and incurs expense for leasing management services from the Watersound Management JV,
see Note 21. Related Party Transactions for additional information.
F 22
Consolidated Joint Ventures
Mexico Beach Crossings JV
The Mexico Beach Crossings JV was formed in January 2022, when the Company entered into a JV agreement to
develop, manage and lease a 216-unit apartment community in Mexico Beach, Florida. Construction of the community
was completed in the fourth quarter of 2023. The community is located on land that was contributed to the JV by the
Company. As of December 31, 2023 and 2022, 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 Mexico Beach Crossings JV is a voting interest entity and that the Company has a majority voting interest as
of December 31, 2023 and 2022.
The Lodge 30A JV
The Lodge 30A JV was formed in 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. Construction of the 85-room hotel was
completed in the first quarter of 2023. As of December 31, 2023 and 2022, the Company owned a 52.8% interest in the
consolidated JV. A wholly-owned subsidiary of the Company manages the day-to-day operations of the hotel. The
Company approves all major decisions, including project development, 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, 2023
and 2022.
Pier Park Resort Hotel JV
The Pier Park Resort Hotel JV was formed in 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. Construction of the 255-
room hotel was completed in the second quarter of 2023. As of December 31, 2023 and 2022, the Company owned a
70.0% interest in the consolidated JV. A wholly-owned subsidiary of the Company manages 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, 2023 and 2022.
Pier Park Crossings Phase II JV
The Pier Park Crossings Phase II JV was formed in 2019, when the Company entered into a JV agreement to
develop, manage and lease a 120-unit apartment community in the Pier Park area of Panama City Beach, Florida. As of
December 31, 2023 and 2022, 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 Phase II JV is a VIE and that the Company is the VIE’s primary beneficiary as of
December 31, 2023 and 2022.
Watersound Closings JV
Watersound Closings JV was formed in 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, 2023 and 2022, 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, 2023 and 2022.
F 23
Watercrest JV
The Watercrest JV was formed in 2019, when the Company entered into a JV agreement to develop and operate a
107-unit senior living community in Santa Rosa Beach, Florida. As of December 31, 2023 and 2022, 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, 2023 and 2022.
Watersound Origins Crossings JV
The Watersound Origins Crossings JV was formed in 2019, when the Company entered into a JV agreement to
develop, manage and lease a 217-unit apartment community near the entrance to the Watersound Origins residential
community. Construction of the community was completed in the fourth quarter of 2021. As of December 31, 2023 and
2022, 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 Watersound Origins
Crossings JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2023 and 2022.
Pier Park Crossings JV
The Pier Park Crossing JV was formed in 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, 2023 and 2022, 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, 2023 and 2022.
Pier Park North JV
During 2012, the Company entered into a JV agreement with a partner to develop a retail center at Pier Park North.
In November 2022, the Company purchased an additional 30% ownership interest for $7.7 million. As of
December 31, 2023 and 2022, the Company owned a 90.0% 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. 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, 2023 and 2022.
F 24
Unconsolidated Joint Ventures
Investment in unconsolidated joint ventures includes the Company’s investment accounted for using the equity
method. The following table presents detail of the Company’s investment in unconsolidated joint ventures and total
outstanding debt of unconsolidated JVs:
December 31, December 31,
2023
2022
Investment in unconsolidated joint ventures
Latitude Margaritaville Watersound JV
Sea Sound JV (a)
Watersound Fountains Independent Living JV
Pier Park TPS JV
Pier Park RI JV
Busy Bee JV
Electric Cart Watersound JV
Watersound Management JV
Total investment in unconsolidated joint ventures
Outstanding debt principal of unconsolidated JVs
Latitude Margaritaville Watersound JV (b) (c)
Watersound Fountains Independent Living JV (c)
Pier Park TPS JV (c)
Pier Park RI JV
Busy Bee JV
Electric Cart Watersound JV (c)
$
$
$
49,036 $
—
6,533
707
6,156
2,535
815
574
66,356 $
33,235
411
7,258
1,451
4,263
2,160
703
544
50,025
37,445 $
38,062
13,503
16,021
5,693
4,732
30,001
21,327
13,822
—
6,010
923
72,083
Total outstanding debt principal of unconsolidated JVs
$ 115,456 $
(a) In November 2022, the Sea Sound JV sold its assets to an unrelated third party and no longer has activity from operations.
(b) See Note 20. Commitments and Contingencies for additional information on the $10.0 million secured revolving promissory note
the Company entered into with the unconsolidated Latitude Margaritaville Watersound JV.
(c) See Note 20. Commitments and Contingencies for additional information related to outstanding debt.
The Company had approximately $16.0 million in cumulative undistributed earnings from its unconsolidated JVs
included within investment in unconsolidated joint ventures as of December 31, 2023. During 2023 and 2022, the
Company received distributions from unconsolidated JVs totaling $12.1 million and $36.1 million, respectively, which
included a distribution from the Sea Sound JV related to the sale of its assets during 2022. The Company's maximum
exposure to loss due to involvement with the unconsolidated JVs as of December 31, 2023, was $122.4 million, which
includes the carrying amounts of the investments, guarantees, promissory note receivable, other receivables and
derivative instruments.
F 25
The following table presents detail of the Company’s equity in income (loss) from unconsolidated JVs:
Year Ended December 31,
2023
2022
2021
Equity in income (loss) from unconsolidated joint ventures
Latitude Margaritaville Watersound JV (a)
Sea Sound JV (b)
Watersound Fountains Independent Living JV (c)
Pier Park TPS JV
Busy Bee JV (d)
Electric Cart Watersound JV (e)
Watersound Management JV
$ 23,627 $
(35)
(725)
(362)
(36)
112
120
3,859 $
21,705
(250)
33
538
18
83
Total equity in income (loss) from unconsolidated joint ventures
$ 22,701 $ 25,986 $
(1,861)
(15)
—
551
441
—
19
(865)
(a) The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021.
(b) In November 2022, the Sea Sound JV sold its assets to an unrelated third party for $92.5 million, resulting in a total gain on sale
of $36.1 million. The year ended December 31, 2022, includes the Company’s proportionate share of the gain on sale of $21.7
million. As a result of the sale, the Sea Sound JV no longer has activity from operations.
(c) The project is under construction.
(d) Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV.
(e) JV was formed in February 2022. The permanent sales and service facility located in the Watersound West Bay Center was
completed in the fourth quarter of 2023.
Summarized balance sheets for the Company’s unconsolidated JVs are as follows:
Latitude
Margaritaville
Watersound
JV
Watersound
Fountains
Independent
Living JV
Sea Sound
JV (b)
Pier Park
TPS JV
Pier Park
RI JV
Busy Bee
JV
Electric Cart
Watersound
JV
Watersound
Management
JV
Total
December 31, 2023
ASSETS
Investment in real
estate, net
Cash and cash
equivalents
Other assets
$
Total assets
$
149,253 (a) $
— $ 52,301 $ 13,666 $ 32,053 $
8,605 $
5,384 $
— $ 261,262
28,235
2,883
180,371 $
—
—
— $ 52,583 $ 15,002 $ 32,122 $ 11,183 $
613
1,965
719
617
44
25
215
67
902
396
6,682 $
158
30,886
—
5,953
158 $ 298,101
LIABILITIES
AND EQUITY
Debt, net
Accounts payable
and other
liabilities
Equity
Total liabilities
and equity
$
37,155 $
— $ 37,493 $ 13,408 $ 15,681 $
5,673 $
4,661 $
— $ 114,071
72,872
70,344
—
—
2,947
12,143
181
1,413
4,128
12,313
439
5,071
423
1,598
—
80,990
158 103,040
$
180,371 $
— $ 52,583 $ 15,002 $ 32,122 $ 11,183 $
6,682 $
158 $ 298,101
(a) Investment in real estate, net includes the land contributed to the Latitude Margaritaville Watersound JV at the Company’s
historical cost basis and additional completed infrastructure improvements.
(b) In November 2022, the Sea Sound JV sold its assets to an unrelated third party and no longer has activity from operations.
F 26
Latitude
Margaritaville
Watersound
JV
Watersound
Fountains
Independent
Living JV
Sea Sound
JV (b)
Pier Park
TPS JV
Pier Park
RI JV
Busy Bee
JV
Electric Cart
Watersound
JV
Watersound
Management
JV
Total
December 31, 2022
ASSETS
Investment in real
estate, net
Cash and cash
equivalents
Other assets
$
Total assets
$
126,354 (a) $
— $ 38,783 $ 15,106 $
9,858 $
7,627 $
1,875 $
— $ 199,603
10,633
3,268
140,255 $
775
327
748
363
690 $ 38,984 $ 16,629 $ 10,778 $ 10,665 $
1,081
1,957
580
340
190
11
259
234
2,368 $
98
13,943
—
6,921
98 $ 220,467
LIABILITIES
AND EQUITY
Debt, net
Accounts payable
and other
liabilities
Equity
Total liabilities
and equity
$
29,530 $
— $ 20,716 $ 13,542 $
— $
5,970 $
843 $
— $ 70,601
77,630
33,095
5
685
4,776
13,492
186
2,901
2,252
8,526
376
4,319
147
1,378
—
98
85,372
64,494
$
140,255 $
690 $ 38,984 $ 16,629 $ 10,778 $ 10,665 $
2,368 $
98 $ 220,467
(a) Investment in real estate, net includes the land contributed to the Latitude Margaritaville Watersound JV at the Company’s
historical cost basis and additional completed infrastructure improvements.
(b) In November 2022, the Sea Sound JV sold its assets to an unrelated third party and no longer has activity from operations.
Summarized statements of operations for unconsolidated JVs are as follows:
Year Ended December 31, 2023
Latitude
Margaritaville
Watersound
JV (a)
323,881 $
$
Sea Sound
JV (b)
Watersound
Fountains
Independent
Living JV (c)
Pier Park
TPS JV
Pier
Park RI
JV (d)
Busy Bee
JV
— $ 17,170 $
Electric
Cart
Watersound
JV
3,235 $
Watersound
Management
JV
1,956 $ 350,958
Total
— $
— $ 4,716 $
Total revenue
Expenses:
Cost of revenue
Other operating
expenses
Depreciation and
amortization
Total expenses
Operating income
(loss)
Other (expense) income:
Interest expense
Other income
(expense), net
Total other income
(expense), net
Net income (loss)
259,199
—
— 3,118
— 16,449
2,796
1,717 283,279
17,079
62
1,330
—
—
—
104
—
18,575
613
276,891
—
62
14 1,443
1,344 4,561
499
—
— 16,948
33
2,933
—
2,602
1,717 304,456
46,990
(62)
(1,344)
155
—
222
302
239
46,502
—
264
—
—
(4)
(906)
—
(176)
(82)
—
(1,168)
—
28
—
(115)(e)
—
—
177
264
47,254 $
—
(62) $
$
(4)
(878)
(1,348) $ (723) $
—
— $
(291)
(69) $
(82)
220 $
(991)
—
239 $ 45,511
(a) The Latitude Margaritaville Watersound JV completed 641 home sale transactions during 2023.
(b) In November 2022, the Sea Sound JV sold its assets to an unrelated third party and no longer has activity from operations.
(c) The project is under construction.
(d) The project is under construction with no income or loss for the year ended December 31, 2023.
(e) Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV.
F 27
Year Ended December 31, 2022
Latitude
Margaritaville
Watersound
JV (a)
139,297 $
$
Sea Sound
JV
5,182 $
Watersound
Fountains
Independent
Living JV (c)
Pier Park
TPS JV
— $ 5,460 $
Pier
Park RI
JV (d)
Busy Bee
JV
— $ 17,747 $
Watersound
Management
JV
1,196 $ 169,461
Total
579 $
Electric
Cart
Watersound
JV
118,468
1,883
— 3,199
— 16,954
519
1,030 142,053
12,903
32
465
—
—
—
20
—
13,420
543
131,914
1,671
3,586
— 1,449
465 4,648
459
—
— 17,413
2
541
—
4,124
1,030 159,597
7,383
1,596
(465)
812
—
334
38
166
9,864
—
47
(1,560)
36,138 (b)
—
—
(752)
17
—
—
(190)
957 (e)
(3)
—
—
—
(2,505)
37,159
47
34,578
$
7,430 $ 36,174 $
—
(465) $
(735)
77 $
—
— $ 1,101 $
767
(3)
35 $
—
34,654
166 $ 44,518
Total revenue
Expenses:
Cost of revenue
Other operating
expenses
Depreciation and
amortization
Total expenses
Operating income
(loss)
Other (expense) income:
Interest expense
Other income, net
Total other income
(expense), net
Net income (loss)
(a) The Latitude Margaritaville Watersound JV completed 316 home sale transactions during 2022.
(b) In November 2022, the Sea Sound JV sold its assets to an unrelated third party for $92.5 million, resulting in a total gain on sale
of $36.1 million. As a result of the sale, the Sea Sound JV no longer has activity from operations.
(c) The project is under construction.
(d) The project was under construction with no income or loss for the year ended December 31, 2022.
(e) Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV.
Latitude
Margaritaville
Watersound
JV (a)
Sea Sound
JV (b)
Watersound
Fountains
Independent
Living JV (c)
Pier Park
TPS JV
Pier
Park RI
JV (d)
Busy Bee
JV
Electric
Cart
Watersound
JV (f)
Watersound
Management
JV
Total
Year Ended December 31, 2021
$
18,653 $
1,012 $
— $ 6,474 $
— $ 16,365 $
— $
511 $ 43,015
14,931
439
— 2,971
— 15,064
—
473
33,878
6,802
—
—
—
—
—
—
—
6,802
396
22,129
(3,476)
359
798
214
— 1,434
— 4,405
— 2,069
—
461
— 15,525
840
—
—
—
(239)
—
—
—
(735)
11
—
—
(192)
198 (e)
—
—
—
—
—
—
473
38
2,650
43,330
(315)
—
—
(1,166)
209
—
(239)
(3,476) $
(25) $
(724)
—
— $ 1,345 $
—
— $
6
846 $
—
— $
—
38 $
(957)
(1,272)
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
Net (loss) income
$
(a) The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021 and
completed 47 home sale transactions during 2021.
(b) In November 2022, the Sea Sound JV sold its assets to an unrelated third party no longer has activity from operations.
(c) The project was under construction with no income or loss for the year ended December 31, 2021.
(d) JV was formed in May 2022.
(e) Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV.
(f) JV was formed in February 2022.
F 28
Latitude Margaritaville Watersound JV
LMWS, LLC was formed in 2019, when the Company entered into a JV agreement to develop a 55+ active adult
residential community in Bay County, Florida. Construction is underway on customer homes. The town center amenities
opened in June 2023. As of December 31, 2023, the Latitude Margaritaville Watersound JV had 609 homes under
contract and has completed 1,004 home sale transactions of the total estimated 3,500 homes planned in the community.
As of December 31, 2023 and 2022, the Company’s investment in the unconsolidated Latitude Margaritaville
Watersound JV was $49.0 million and $33.2 million, respectively, which includes the net present value of the land
contribution, cash contributions, additional completed infrastructure improvements and equity in income, less the pro-
rata return of land contribution and other distributions. During 2023 and 2022, the Company received $11.4 million and
$3.1 million, respectively, of cash distributions from the JV. As of December 31, 2023, the Company completed $8.3
million of the $9.2 million total agreed upon infrastructure improvements. The transaction price was allocated based on
the stand-alone selling prices of the land and agreed upon improvements. As of December 31, 2023 and 2022, the
Company owned a 50.0% voting interest in the JV. 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.
The Company’s Latitude Margaritaville Watersound JV has met the conditions of a significant subsidiary under
Rule 1-02(w) of Regulation S-X for the year ended December 31, 2023, but not the years ended December 31, 2022 and
2021. Therefore, separate financial statements of the Latitude Margaritaville Watersound JV, as required pursuant to
Rule 3-09 of Regulation S-X, are filed as Exhibit 99.1 of this Form 10-K. The basis difference of $18.3 million and
$24.6 million as of December 31, 2023 and 2022, respectively, is due to the Company maintaining the land and
additional completed infrastructure improvements contributed to the JV at its historical cost basis, while the JV recorded
these contributions at market value. The basis difference is being reduced with the pro-rata return of land contribution as
each home is sold by the JV. The amounts returned totaled $6.4 million, $3.1 million and $0.4 million in 2023, 2022 and
2021, respectively.
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. As of both December 31, 2023 and 2022, there was no balance
outstanding on the Latitude JV Note. Future advances, if any, will be repaid by the JV as each home is sold. 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
revolving promissory note and guaranty by the Company.
Sea Sound JV
FDSJ Eventide, LLC was formed in 2020. The Company entered into a JV agreement to develop, construct and
manage a 300-unit apartment community near the Breakfast Point residential community in Panama City Beach, Florida.
Construction of the community was completed in the first quarter of 2022. As of December 31, 2023 and 2022, the
Company owned a 60.0% interest in the JV. In November 2022, the Sea Sound JV sold its assets to a third party for
$92.5 million, resulting in a total gain on sale of $36.1 million. The Company’s proportionate share of the gain on sale of
$21.7 million is included within equity in income (loss) from unconsolidated joint ventures on the consolidated
statements of income for the year ended December 31, 2022. During 2022, the Company also received a cash
distribution of $31.6 million from the JV. As a result of the sale, the Sea Sound JV no longer has activity from
operations. The Sea Sound JV had a contingent gain related to the sale for a $0.5 million indemnity holdback liability,
which was received in October 2023. The Company has determined that Sea Sound 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 JV was accounted for using the equity
method.
F 29
Watersound Fountains Independent Living JV
WOSL, LLC was formed in 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 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, 2023 and 2022, the Company
owned a 53.8% interest in the JV. The Company’s partners are responsible for the day-to-day activities of the JV. The
Company has determined that Watersound Fountains Independent Living JV is a VIE, but that the Company is not the
primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic
performance of the JV. The Company’s investment in Watersound Fountains Independent Living JV is accounted for
using the equity method. See Note 20. Commitments and Contingencies for additional information related to debt
guaranteed by the Company.
Pier Park TPS JV
Pier Park TPS, LLC was formed in 2018. The Company entered into a JV agreement to develop and operate a 124-
room hotel in Panama City Beach, Florida. As of December 31, 2023 and 2022, the Company owned a 50.0% interest in
the JV. The Company’s partner is responsible for the day-to-day activities of the JV. The Company has determined that
Pier Park 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.
Pier Park RI JV
Pier Park RI, LLC was formed in May 2022. The Company entered into a JV agreement to develop and operate a
121-room hotel in Panama City Beach, Florida. The JV parties are working together to develop and construct the project.
The hotel is located on land that was contributed to the JV by the Company in 2022, with a fair value of $1.8 million. In
addition, as of December 31, 2023, the Company contributed cash and impact fees of $4.4 million, and the JV partner
contributed cash of $6.2 million. As of December 31, 2023 and 2022, the Company owned a 50.0% interest in the JV.
The Company’s partner is responsible for the day-to-day activities of the JV. The Company has determined that Pier
Park RI JV is a VIE, 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 RI
JV is accounted for using the equity method. In September 2022, the JV entered into a $25.0 million loan (the “Pier Park
RI JV Loan”). The Pier Park RI JV Loan bears interest at SOFR plus 2.5% and matures in August 2025. The Pier Park
RI JV Loan includes an option for a fixed rate conversion and two options to extend the maturity date by twenty-four
months each, upon satisfaction of certain terms and conditions. The loan is secured by real property and certain other
security interests. The Company’s JV partner is the sole guarantor and receives a fee related to the guarantee from the
Company based on the Company’s ownership percentage. As of December 31, 2023, $16.0 million was outstanding on
the Pier Park RI JV Loan. As of December 31, 2022, there was no principal balance outstanding on the Pier Park RI JV
Loan.
Busy Bee JV
SJBB, LLC was formed in 2019, when the Company entered into a JV agreement to construct, own and manage a
Busy Bee branded fuel station and convenience store, which includes a Starbucks, in Panama City Beach, Florida. As of
December 31, 2023 and 2022, the Company owned a 50.0% interest in the JV. The Company’s partner is responsible for
the day-to-day activities of the JV. The Company has determined that Busy Bee JV is a VIE, but that the Company is not
the primary beneficiary since it does not have the power to direct the activities that most significantly impact the
economic performance of the JV. The Company’s investment in the Busy Bee JV is accounted for using the equity
method. In 2019, the JV entered into a $5.4 million construction loan (the “Busy Bee JV Construction Loan”) and a $1.2
million equipment loan (the “Busy Bee JV Equipment Loan”). The Busy Bee JV Construction Loan and the Busy Bee
F 30
JV Equipment Loan bear interest at SOFR plus 1.6%. The Busy Bee JV Construction Loan provides for monthly
principal and interest payments with a final balloon payment at maturity in November 2035. The Busy Bee JV
Equipment Loan provides for monthly principal and interest payments through maturity in November 2027. The loans
are secured by real and personal property and certain other security interests. The Company’s JV partner is the sole
guarantor and receives a fee related to the guarantee from the Company based on the Company’s ownership percentage.
The Busy Bee JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest
rate tied to SOFR for the Busy Bee JV Construction Loan and the Busy Bee JV Equipment Loan. The Busy Bee JV
Construction Loan interest rate swap matures in November 2035 and fixed the variable rate debt, initially at $5.4 million
amortizing to $2.8 million at swap maturity, to a rate of 2.7%. The Busy Bee JV Equipment Loan interest rate swap
matures in November 2027 and fixed the variable rate debt, initially at $1.2 million to maturity, to a rate of 2.1%.
Effective July 1, 2023, the benchmark interest rate index based on LIBOR transitioned to SOFR. As of December 31,
2023 and 2022, $5.0 million and $5.1 million, respectively, was outstanding on the Busy Bee JV Construction Loan. As
of December 31, 2023 and 2022, $0.7 million and $0.9 million, respectively, was outstanding on the Busy Bee JV
Equipment Loan.
Electric Cart Watersound JV
SJECC, LLC was formed in February 2022, when the Company entered into a JV agreement to develop, construct,
lease, manage and operate a golf cart and low speed vehicle “LSV” business at the new Watersound West Bay Center
adjacent to the Latitude Margaritaville Watersound residential community in Bay County, Florida. The land was
contributed to the JV by the Company in 2022, with a fair value of $0.5 million. In addition, during 2022 the Company
contributed cash of $0.2 million and the JV partner contributed cash of $0.6 million. The JV operated out of a temporary
facility while its permanent Watersound West Bay Center location was being constructed. The Watersound West Bay
Center Facility opened in October 2023 and provides sales and service. An additional sales showroom will be located at
the Watersound Town Center near the Watersound Origins residential community on property leased to the JV by the
Company. As of December 31, 2023 and 2022, the Company owned a 51% interest in the JV. The Company’s JV
partner manages the day-to-day operations of the business. The Company has determined that Electric Cart Watersound
JV is a VIE, but that the Company is not the primary beneficiary since it does not have the power to direct the activities
that most significantly impact the economic performance of the JV. The Company’s investment in Electric Cart
Watersound JV is accounted for using the equity method. As of December 31, 2023 and 2022, the Electric Cart
Watersound JV had $2.4 million and $1.7 million, respectively, of floorplan line of credit facilities to finance its golf cart
and LSV inventory, which are secured by the JV. Borrowings under the line of credit facility bear interest at various
rates based on the number of days outstanding after an interest free period ranging from three to six months. As of
December 31, 2023 and 2022, the JV had an outstanding principal balance of $0.4 million and $0.1 million, respectively,
on these line of credit facilities. See Note 20. Commitments and Contingencies for additional information related to debt
guaranteed by the Company.
Watersound Management JV
Watersound Management, LLC was formed in 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. All activity of Watersound Management
JV is related to multi-family housing developments owned by the Company or by consolidated JVs of the Company.
During 2021 the Company and its JV partner each contributed cash of less than $0.1 million. As of December 31, 2023
and 2022, 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. See Note 21.
Related Party Transactions for additional information.
F 31
5. Investments
Available-For-Sale Investments
Investments classified as available-for-sale securities were as follows:
December 31, 2023
Gross
Gross
December 31, 2022
Gross
Gross
Amortized Unrealized Unrealized
Amortized Unrealized Unrealized
Cost
Gains
(Losses)
Fair Value Cost
Gains
(Losses)
Fair Value
Investments - debt securities:
$
U.S. Treasury Bills
— $
— $
— $
— $ 40,820 $
— $
(244) $ 40,576
During 2023 and 2022, the Company did not have any realized gains or losses from the sale of available-for-sale
securities. During 2023, there were no proceeds from the sale of available-for-sale securities. During 2023, maturities of
available-for-sale securities were $79.0 million and purchases of available-for-sale securities were $37.4 million. During
2022, proceeds from the sale of available-for-sale securities were $53.9 million, maturities of available-for-sale
securities were $92.0 million and purchases of available-for-sale securities were $97.1 million.
The following table provides the available-for-sale investments with an unrealized loss position and their related fair
values:
December 31, 2023
December 31, 2022
Less Than 12 Months
12 Months or Greater
Less Than 12 Months
Unrealized
Unrealized
Unrealized
12 Months or Greater
Unrealized
Investments - debt securities:
U.S. Treasury Bills
$
— $
— $
— $
— $ 37,578 $
244 $
— $
—
Fair Value Losses
Fair Value Losses
Fair Value Losses
Fair Value Losses
As of December 31, 2023, the Company did not have any unrealized losses. As of December 31, 2022, the
Company had $0.2 million unrealized losses related to U.S. Treasury Bills. As of December 31, 2022, 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.
Investment Management Agreement
Mr. Bruce R. Berkowitz is the Chairman of the Company’s Board. He is the Manager of, and controls entities that
own and control, Fairholme Holdings, LLC, which wholly owns FCM. Mr. Berkowitz is the Chief Investment Officer of
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, 2023, clients of FCM, including
Mr. Berkowitz, beneficially owned approximately 38.9% of the Company’s common stock. FCM and its client, The
Fairholme Fund, a series of investments originating from the Fairholme Funds, Inc., may be deemed affiliates of the
Company.
Pursuant to the terms of the Investment Management Agreement, 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.
F 32
6. Financial Instruments and Fair Value Measurements
Fair Value Measurements
The financial instruments measured at fair value on a recurring basis are as follows:
Cash equivalents:
Money market funds
U.S. Treasury Bills
Cash equivalents:
Money market funds
Investments - debt securities:
U.S. Treasury Bills
December 31, 2023
Total Fair
Level 1
Level 2
Level 3
Value
$ 1,383 $
59,802
$ 61,185 $
— $
—
— $
— $ 1,383
—
59,802
— $ 61,185
December 31, 2022
Total Fair
Level 1
Level 2
Level 3
Value
$ 19,233 $
— $
— $ 19,233
40,576
$ 59,809 $
—
— $
—
40,576
— $ 59,809
Money market funds and U.S. Treasury Bills 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.
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
Effective
Date
Maturity
Date
Notional
Fixed
Interest Amount as of
Rate
Fair
Value Consolidated
December 31, 2023 December 31, 2023 December 31, 2022 Level Balance Sheets
Derivative Asset Fair Value
Location in
Pier Park Resort Hotel JV
Loan (a)
December 2022 April 2027
3.2% $
41.5 $
3,254 $
4,609
2 Other assets
In Millions
In Thousands
Pier Park TPS JV Loan (b)
January 2021 January 2026 5.2% $
13.5 $
191 $
273
2
Investment in
unconsolidated
joint ventures
(a) See Note 10. 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 asset 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 (loss)
income and reclassified into equity in income (loss) from unconsolidated joint ventures in the period during which the hedged
transaction affects earnings. See Note 4. Joint Ventures and Note 20. Commitments and Contingencies for additional information.
F 33
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,
Amount of net gain recognized in other comprehensive income on derivatives
Amount of net (gain) loss reclassified into interest expense
Amount of net (gain) loss reclassified into equity in income (loss) from
unconsolidated joint ventures
$
$
$
2023
330 $
(1,605) $
2021
2022
5,254 $ 1,061
247
52 $
(162) $
88 $
173
As of December 31, 2023, based on current value, the Company expects to reclassify $1.6 million of derivative
instruments from accumulated other comprehensive income to earnings during the next twelve months. See Note 14.
Accumulated Other Comprehensive Income for additional information.
Investment in Unconsolidated Joint Ventures
The fair value of the Company’s investment in unconsolidated joint ventures is determined primarily using a
discounted cash flow model to value the underlying net assets or cash flows of the respective JV. The fair value of
investment in unconsolidated joint ventures 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 2023, 2022 or 2021. 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 2023, 2022 and 2021 the Company
did not record any impairment charges related to long-lived assets.
Fair Value of Financial Instruments
The carrying value of the Company’s cash and cash equivalents, restricted cash, receivables, other assets, accounts
payable and other liabilities approximate fair value due to the short-term nature of these instruments.
The Company uses the following methods and assumptions in estimating fair value for financial instruments:
(cid:120) 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.
(cid:120) The fair value of the investments held by SPE - U.S. Treasury Bills are measured based on quoted market prices
in an active market.
(cid:120) 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.
(cid:120) The fair value of the Senior Notes held by SPE is based on the present value of future cash flows at the current
market rate.
F 34
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
December 31, 2023
December 31, 2022
Carrying Estimated
Carrying Estimated
value
Fair value Level
value
Fair value Level
$ 200,000 $ 200,000
$ 3,824 $ 3,750
3 $ 200,000 $ 200,000
1 $ 4,486 $ 4,361
3
1
Senior Notes held by SPE
$ 178,162 $ 181,286
3 $ 177,857 $ 179,564
3
Debt
Fixed-rate debt
Variable-rate debt
Total debt
$ 262,484 $ 215,522
196,737
$ 459,221 $ 412,259
196,737
2 $ 194,525 $ 172,241
196,886
2
$ 391,411 $ 369,127
196,886
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, 2023, consist of a
$200.0 million time deposit that, subsequent to April 2, 2014, pays interest at 4.0% and matures in March 2029, U.S.
Treasuries of $3.8 million and cash of $0.4 million. The Senior Notes held by Northwest Florida Timber Finance, LLC
as of December 31, 2023, consist of $178.2 million, net of the $1.8 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. Leases
The Company as Lessor
Leasing revenue consists of rental revenue from multi-family, senior living, self-storage, retail, office and
commercial property, marinas, cell towers and other assets, which is recognized as earned, using the straight-line method
over the life of each lease. Variable lease payments primarily include property taxes, insurance, utilities and common
area maintenance or payments based on a percent of sales over specified levels and senior living services. The
Company’s leases have remaining lease terms up to the year 2072, 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,
2023
2022
2021
$
$
43,756 $
7,080
50,836 $
33,600 $
5,596
39,196 $
22,256
4,825
27,081
F 35
Minimum future base rental revenue on non-cancelable leases subsequent to December 31, 2023, for the years
ending December 31 are:
2024
2025
2026
2027
2028
Thereafter
The Company as Lessee
$
$
26,485
12,812
10,768
9,416
6,686
35,026
101,193
As of December 31, 2023, 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 2081. Certain leases include options to purchase, terminate or renew for one or more years,
which are included in the lease term used to establish right-of-use assets and lease liabilities when it is reasonably certain
that the option will be exercised.
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
Variable and short-term lease cost
Total lease cost
Other information
Year Ended December 31,
2023
2022
2021
$
$
149
15
439
1,940
2,543
$
$
122
15
378
1,793
2,308
$
$
114
18
308
1,476
1,916
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
2.8
1.5
5.3 %
4.9 %
3.3
2.9
5.2 %
4.8 %
3.6
3.3
4.6 %
4.9 %
The aggregate payments of finance and operating lease liabilities subsequent to December 31, 2023, for the years
ending December 31 are:
2024
2025
2026
2027
2028
Thereafter
Total
Less imputed interest
Total lease liabilities
F 36
Finance Leases Operating Leases
322
$
120
59
55
55
330
941
(148)
793
137 $
94
50
32
9
—
322
(24)
298 $
$
8. Other Assets
Other assets consist of the following:
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
Accounts Receivable, Net
December 31, December 31,
2023
20,322 $
29,862
416
4,250
12,086
2,755
858
8,756
—
2,938
82,243 $
2022
9,035
10,086
1,742
3,976
9,393
2,546
678
13,138
8,197
2,938
61,729
$
$
Accounts receivable, net primarily includes leasing receivables, membership fees, hospitality receivables and other
receivables. As of December 31, 2023 and 2022, accounts receivable includes $12.1 million and $1.8 million,
respectively, of club membership initiation fee installments receivable. As of December 31, 2023 and 2022, accounts
receivable were presented net of allowance for credit losses of $0.2 million and $0.3 million, respectively. As of
December 31, 2023, accounts receivable were presented net of allowance for lease related receivables of less than $0.1
million. As of December 31, 2022, there was no allowance for lease related receivables. During both 2023 and 2022,
allowance for credit losses related to accounts receivable, net decreased $0.1 million.
Homesite Sales Receivable
Homesite sales receivable from contracts with customers include estimated homesite residuals and certain estimated
fees that are recognized as revenue at the time of sale to homebuilders, subject to constraints. Any change in
circumstances from the estimated amounts will be updated at each reporting period. The receivable will be collected as
the homebuilders build the homes and sell to retail consumers, which can occur over multiple years. See Note 2.
Summary of Significant Accounting Policies for additional information.
The following table presents the changes in homesite sales receivable:
December 31,
December 31,
2022
2023
10,086 $
29,005
(9,229)
29,862 $
7,651
7,660
(5,225)
10,086
Balance at beginning of year
Increases due to revenue recognized for homesites sold
Decreases due to amounts received
Balance at end of year
$
$
F 37
Notes Receivable, Net
Notes receivable, net consist of the following:
December 31, December 31,
2023
2022
Various interest-bearing homebuilder notes, secured by the real estate sold — bearing
interest at a rate of 5.5%, paid in full May 2023
Interest-bearing notes with JV partner, secured by the partner's membership interest in the
JV — bearing interest at a rate of 8.0%, due May 2039
Non-interest-bearing note with a tenant for tenant improvements, due October 2025
Mortgage note, secured by certain real estate, paid in full November 2023
$
Total notes receivable, net
$
416 $
— $
1,296
359
57
—
359
68
19
1,742
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 receivable and the need for an allowance for
credit losses at each reporting period. As of both December 31, 2023 and 2022, notes receivable were presented net of
allowance for credit losses of less than $0.1 million. As of both December 31, 2023 and 2022, accrued interest receivable
related to notes receivable was $0.1 million, which is included within other assets on the consolidated balance sheets.
Prepaid Expenses
Prepaid expenses as of December 31, 2023 and 2022, include $4.4 million and $2.8 million, respectively, related to
prepaid insurance.
Other Assets
Other assets as of December 31, 2023 and 2022, include $4.7 million and $7.6 million, respectively, of restricted
cash and escrow deposits primarily related to requirements for financing and development, or advance draws on
construction loans for certain of the Company’s projects. Other assets as of December 31, 2023 and 2022, also include
$3.3 million and $4.6 million, respectively, for the fair value of derivative assets. See Note 6. Financial Instruments and
Fair Value Measurements for additional information.
Retained Interest Investments
The Company had a beneficial interest in a bankruptcy-remote qualified SPE used in the installment sale
monetization of certain sales of timberlands in 2008. During 2023, the installment notes were prepaid, in full, and the
Company received $10.6 million of remaining principal. As of December 31, 2022, the Company had beneficial or
retained interest investment related to the SPEs of $8.2 million recorded in other assets on the Company’s consolidated
balance sheets.
F 38
9. 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,
$
2023
33,627 $
50,311
46,783
7,692
7,108
145,521
80,423
65,098
951
66,049 $
2022
33,627
28,659
31,159
5,518
7,033
105,996
67,133
38,863
775
39,638
$
Depreciation expense on property and equipment was $15.7 million, $8.5 million and $6.1 million in 2023, 2022
and 2021, respectively.
F 39
10. Debt, Net
Debt consists of the following:
Watersound Origins Crossings JV Loan
(insured by HUD) (a)
Pier Park Resort Hotel JV Loan
Mexico Beach Crossings JV Loan
(insured by HUD)
PPN JV Loan
Pearl Hotel Loan
PPC JV Loan (insured by HUD)
Maturity Date
Interest Rate Terms
2023
2023
2022
Effective Rate
December 31, December 31, December 31,
April 2058
April 2027
Fixed
SOFR plus 2.1% (b)
5.0 %
4.1 %
$
52,546 $
51,888
44,015
45,209
March 2064
November 2025
December 2032
June 2060
Fixed
Fixed
Fixed
Fixed
Watersound Camp Creek Loan
December 2047
North Bay Landing Loan
PPC II JV Loan (insured by HUD)
September 2024
May 2057
Hotel Indigo Loan
Watercrest JV Loan
Breakfast Point Hotel Loan
Lodge 30A JV Loan
Airport Hotel Loan
Topsail Hotel Loan
October 2028
June 2047
November 2042
January 2028
March 2025
July 2027
Watersound Town Center Grocery Loan August 2031
August 2029
Beckrich Building III Loan
Self-Storage Facility Loan
Community Development District debt
Beach Homes Loan
Pier Park Outparcel Loan
WaterColor Crossings Loan
Total principal outstanding
Unamortized discount and debt issuance costs
Total debt, net
November 2025
May 2024-May
2039
May 2029
March 2027
February 2029
SOFR plus 2.1%,
floor 2.6% (c)
SOFR plus 2.6%,
floor 3.3% (d) (e)
Fixed
SOFR plus 2.5%,
floor 2.5% (f)
SOFR plus 2.2% (e)
Fixed (g)
Fixed
SOFR plus 2.1%,
floor 3.0% (e)
SOFR plus 2.1%,
floor 3.0%
SOFR plus 2.1%,
floor 2.3% (e)
SOFR plus 1.8% (e)
SOFR plus 2.5%,
floor 2.9% (e)
Fixed
SOFR plus 1.7% (e)
SOFR plus 1.8% (e)
SOFR plus 1.8% (e)
3.0 %
4.1 %
6.3 %
3.1 %
42,405
41,485
35,520
34,675
23,374
42,555
37,000
35,180
7.5 %
27,999
13,131
7.9 %
2.7 %
7.8 %
7.6 %
6.0 %
3.8 %
26,750
22,215
20,690
20,074
15,937
14,655
18,222
22,623
10,427
21,038
16,376
13,304
7.5 %
13,010
14,642
7.5 %
12,307
5,199
7.4 %
7.2 %
10,531
5,014
11,379
5,020
7.8 %
4,666
4,666
3.6 to 6.0 %
7.1 %
7.2 %
7.2 %
3,046
1,416
1,275
1,117
459,221
(5,581)
453,640 $
4,113
1,447
1,300
1,191
391,411
(5,551)
385,860
$
(a) In March 2023, the Watersound Origins Crossings JV Loan was refinanced. The previous loan had an interest rate of SOFR plus
2.8% and maturity date of May 2024.
(b) The Pier Park Resort Hotel JV entered into an interest rate swap that matures in April 2027 and fixed the variable rate on the
notional amount of related debt, initially at $42.0 million, amortizing to $38.7 million at swap maturity, to a rate of 3.2%. See
Note 6. Financial Instruments and Fair Value Measurements for additional information. Effective February 2023, the Pier Park
Resort Hotel JV Loan was amended from an interest rate of LIBOR plus 2.2%.
(c) In February 2023, the Watersound Camp Creek Loan was amended from an interest rate of LIBOR plus 2.1%.
(d) Upon reaching a certain debt service coverage ratio, the North Bay Landing Loan will bear interest at a rate of SOFR plus 2.4%,
with a floor of 3.1%.
(e) Effective July 1, 2023, the benchmark interest rate index based on LIBOR transitioned to SOFR.
(f) Prior to November 2023, The Hotel Indigo Loan interest rate was SOFR plus 2.7%, with a floor of 2.7%.
(g) The Breakfast Point Hotel Loan interest rate is fixed through November 2027 and in December 2027 the rate will adjust to the 1-
year constant maturity Treasury rate plus 3.3% from December 2027 through November 2042, with a minimum rate of 6.0%
throughout the term of the loan.
F 40
The Company’s indebtedness consists of various loans on real and leasehold property. These loans are typically
secured by various interests in the property such as assignment of rents, leases, deposits, permits, plans, specifications,
fees, agreements, approvals, contracts, licenses, construction contracts, development contracts, service contracts,
franchise agreements, the borrower’s assets, improvements, and security interests in the rents, personal property,
management agreements, construction agreements, improvements, accounts, profits, leases and fixtures. The specific
Security Interests vary from loan to loan. As of December 31, 2023, the weighted average effective interest rate of
outstanding debt was 5.3%, of which 66.2% of the debt outstanding includes fixed or swapped interest rates, and the
average remaining life of debt outstanding was 17.2 years.
In 2019, the Watersound Origins Crossings JV entered into a $44.0 million loan, as amended, to finance the
construction of apartments located near the entrance to the Watersound Origins residential community. In March 2023,
the Watersound Origins Crossings JV refinanced the Watersound Origins Crossings JV Loan that increased the principal
amount of the loan, which had a balance of $44.0 million at the time of the refinance, to $52.9 million, fixed the interest
rate to 5.0% and provides for monthly payments of principal and interest through maturity in April 2058. The refinanced
loan terms include a prepayment premium due to the lender of 1% - 10% for any principal that is prepaid through April
2033. The refinanced loan is insured by HUD and is secured by the real property and certain other Security Interests.
During 2023, the Company incurred $0.9 million of additional loan cost due to the refinance. As a result of the
refinance, 2023 includes a $0.1 million loss on early extinguishment of debt related to unamortized debt issuance costs,
included within other income, net on the consolidated statements of income.
In 2020, the Pier Park Resort Hotel JV entered into a loan with an initial amount of $52.5 million up to a maximum
of $60.0 million through additional earn-out requests. The Pier Park Resort Hotel JV Loan was entered into to finance
the construction of an Embassy Suites by Hilton hotel in the Pier Park area of Panama City Beach, Florida. The loan
provides for monthly principal and interest payments with a final balloon payment at maturity in April 2027. In
December 2022, the Pier Park Resort Hotel JV Loan was amended, effective February 2023, to bear interest at a rate of
SOFR plus 2.1%. The loan is secured by the real property and certain other Security Interests. In connection with the
loan, as guarantors, the Company and the Company’s JV partner entered into a guarantee based on each partner’s
ownership interest in favor of the lender, to guarantee the payment and performance of the borrower. As guarantor, the
Company’s liability under the Pier Park Resort Hotel JV Loan will be released upon reaching and maintaining certain
debt service coverage for twelve months. In addition, the guarantee can become full recourse in the case of the failure of
the guarantor to abide by or perform any of the covenants or warranties to be performed on the part of such guarantor.
The Pier Park Resort Hotel JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying
floating interest rate tied to LIBOR, which was amended to SOFR in February 2023. The interest rate swap matures in
April 2027 and fixed the variable rate on the notional amount of related debt, initially at $42.0 million, amortizing to
$38.7 million at swap maturity, to a rate of 3.2%. See Note 6. Financial Instruments and Fair Value Measurements for
additional information.
In January 2022, the Mexico Beach Crossings JV entered into a $43.5 million loan, insured by HUD, to finance the
construction of apartments in Mexico Beach, Florida. The Mexico Beach Crossings JV Loan provides for interest only
payments for the first twenty-seven months and principal and interest payments thereafter through maturity in March
2064. The loan may not be prepaid prior to April 2024 and if any additional principal is prepaid from April 2024 through
March 2034 a premium is due to the lender of 1% - 10%. The loan is secured by the real property and certain other
Security Interests.
In 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 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 December 2022, a wholly-owned subsidiary of the Company entered into a $37.0 million loan, which is
guaranteed by the Company, to finance the acquisition of a hotel located on Scenic Highway 30A. The Pearl Hotel Loan
F 41
provides for monthly principal and interest payments through maturity in December 2032. The loan includes a
prepayment fee due to the lender of 1% - 4% of the outstanding principal balance if the loan is refinanced with another
financial institution through December 2027. The loan is secured by the real property and certain other Security
Interests.
In 2018, the Pier Park Crossings JV entered into a $36.6 million loan, insured by HUD, to finance the construction
of apartments in Panama City Beach, Florida. The PPC JV Loan provides for monthly principal and interest payments
through maturity in June 2060. The loan includes a prepayment provision due to the lender of 2% - 9% for any
additional principal that is prepaid through August 2031. The loan is secured by the real property and certain other
Security Interests.
In June 2021, a wholly-owned subsidiary of the Company entered into a $28.0 million loan, which is guaranteed by
the Company, to finance the construction of Watersound Camp Creek, which includes an inn and amenity center near the
Watersound Camp Creek residential community. The Watersound Camp Creek Loan provides for monthly principal and
interest payments through maturity in December 2047. In February 2023, the Watersound Camp Creek Loan was
amended, which modified the interest rate to SOFR plus 2.1%, with a floor of 2.6%. The loan is secured by the real
property and certain other Security Interests. As guarantor, the Company’s liability under the loan will be reduced to
50% of the outstanding principal amount upon the project reaching and maintaining a trailing six months of operations
with a certain debt service coverage ratio and reduced to 25% of the outstanding principal amount upon reaching and
maintaining a trailing twelve months of operations with a certain debt service coverage ratio. In addition, the guarantee
can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants,
warranties or other certain obligations to be performed on the part of such guarantor.
In March 2021, a wholly-owned subsidiary of the Company entered into a $26.8 million loan, which is guaranteed
by the Company, to finance the construction of apartments in Panama City, Florida. The North Bay Landing Loan
provides for interest only payments and a principal balloon payment at maturity in September 2024. The loan includes an
option for an extension of the maturity date by eighteen months, subject to certain conditions, which would provide for
principal and interest payments commencing on the original maturity date with a final balloon payment at the extended
maturity date. The loan is secured by the real property and certain other Security Interests. As guarantor, the Company’s
liability under the loan has been reduced to 50% of the principal amount upon satisfaction of final advance conditions
and will be further reduced to 25% of the outstanding principal amount upon reaching and maintaining a certain debt
service coverage ratio. In addition, the guarantee can become full recourse in the case of any fraud or intentional
misrepresentation or failure to abide by other certain obligations on the part of such guarantor. In May 2023, the
Company began the process to make available the option to refinance the North Bay Landing Loan by seeking a loan
commitment to be insured by HUD.
In 2019, the Pier Park Crossings Phase II JV entered into a $22.9 million loan, insured by HUD, as amended, to
finance the construction of apartments in Panama City Beach, Florida. The PPC II JV Loan provides for monthly
payments of principal and interest through maturity in May 2057. The loan includes a prepayment premium due to the
lender of 1% - 9% for any additional principal that is prepaid through May 2032. The loan is secured by the real property
and certain other Security Interests.
In October 2021, a wholly-owned subsidiary of the Company entered into a $21.2 million loan, which is guaranteed
by the Company, to finance the construction of a hotel in Panama City, Florida. The Hotel Indigo Loan provides for
monthly principal and interest payments with a final balloon payment at maturity in October 2028. The loan includes an
option for an extension of the maturity date by sixty months, subject to certain conditions, which would provide for
continued principal and interest payments with a final balloon payment at the extended maturity date. The loan is
secured by the leasehold property and certain other Security Interests.
In 2019, the Watercrest JV entered into a $22.5 million loan to finance the construction of a senior living facility in
Santa Rosa Beach, Florida. The Watercrest JV Loan provides for monthly principal and interest payments through
maturity in June 2047. The loan is secured by the real property and certain other Security Interests. In connection with
the loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the
F 42
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.
In 2020, a wholly-owned subsidiary of the Company entered into a $16.8 million loan, which is guaranteed by the
Company, to finance the construction of a Homewood Suites by Hilton hotel in the Breakfast Point area of Panama City
Beach, Florida. The Breakfast Point Hotel Loan provides for monthly principal and interest payments through maturity
in November 2042. The loan includes a prepayment premium due to the lender of 1% - 2% of the outstanding principal
balance for any additional principal that is prepaid through November 2027. The loan is secured by the real property and
certain other Security Interests.
In January 2021, The Lodge 30A JV entered into a $15.0 million loan to finance the construction of a boutique hotel
in Seagrove Beach, Florida. The Lodge 30A JV Loan provides for monthly principal and interest payments with a final
balloon payment at maturity in January 2028. The loan is secured by the real property and certain other Security
Interests. In connection with the loan, the Company, wholly-owned subsidiaries of the Company and the Company’s JV
partner entered into a joint and several payment and performance guarantee in favor of the lender. Upon reaching a
certain debt service coverage ratio for a minimum of twenty-four months, the Company’s liability as guarantor will be
reduced to 75% of the outstanding principal amount for a twelve-month period. The debt service coverage ratio will be
tested annually thereafter and the Company’s liability will be reduced to 50% in year four and 25% in year five. The
Company receives a monthly fee related to the guarantee from its JV partner based on the JV partner’s ownership
percentage.
In 2020, a wholly-owned subsidiary of the Company entered into a $15.3 million loan, which is guaranteed by the
Company, to finance construction of the Hilton Garden Inn Panama City Airport. The Airport Hotel Loan provides for
monthly principal and interest payments with a final balloon payment at maturity in March 2025. The loan is secured by
the real property and certain other Security Interests.
In July 2022, a wholly-owned subsidiary of the Company entered into a $13.7 million loan, which is guaranteed by
the Company, to finance the construction of a hotel in Santa Rosa Beach, Florida. The Topsail Hotel Loan provides for
interest only payments for the first thirty-six months and principal and interest payments thereafter with a final balloon
payment at maturity in July 2027. The loan is secured by the real property and certain other Security Interests.
In August 2021, a wholly-owned subsidiary of the Company entered into a $12.0 million loan, which is guaranteed
by the Company, to finance the construction of a building in the Watersound Town Center near the Watersound Origins
residential community. The Watersound Town Center Grocery Loan provides for monthly principal and interest
payments with a final balloon payment at maturity in August 2031. The loan is secured by the real property and certain
other Security Interests. As guarantor, the Company’s liability under the loan has been reduced to 50% of the
outstanding principal amount and will be further reduced to 25% of the outstanding principal amount upon reaching a
certain debt service coverage ratio and the project maintaining 93% occupancy for ninety consecutive days.
In 2019, a wholly-owned subsidiary of the Company entered into a $5.5 million loan, which is guaranteed by the
Company, to finance the construction of an office building in Panama City Beach, Florida. The Beckrich Building III
Loan provides for monthly principal and interest payments with a final balloon payment at maturity in August 2029. The
loan is secured by the real property and certain other Security Interests.
In 2020, a wholly-owned subsidiary of the Company entered into a $5.8 million loan, which is guaranteed by the
Company, to finance the construction of a self-storage facility in Santa Rosa Beach, Florida. The Self-Storage Facility
Loan provides for interest only payments for the first forty-eight months and principal and interest payments thereafter
with a final balloon payment at maturity in November 2025. The loan is secured by the real property and certain other
Security Interests. The Company’s liability as guarantor under the loan shall not exceed $2.9 million, plus any additional
fees, with the project maintaining a certain debt service coverage.
CDD bonds financed the construction of infrastructure improvements at some of the Company’s projects. The
principal and interest payments on the bonds are paid by assessments on the properties benefited by the improvements
financed by the bonds. CDD debt is secured by certain real estate or other collateral. The Company has recorded a
F 43
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 $10.7 million and $12.8 million as of
December 31, 2023 and 2022, respectively. The Company pays interest on this total outstanding CDD debt.
In 2018, a wholly-owned subsidiary of the Company entered into a $1.7 million loan, which is guaranteed by the
Company, to finance the construction of two beach homes located in Panama City Beach, Florida (the “Beach Homes
Loan”). The loan provides for monthly principal and interest payments with a final balloon payment at maturity in May
2029. The loan is secured by the real property and certain other Security Interests.
In 2017, a wholly-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 loan provides
for monthly principal and interest payments with a final balloon payment at maturity in March 2027. The loan is secured
by the real property and certain other Security Interests.
In 2018, a wholly-owned subsidiary of the Company entered into a $1.9 million loan, which is guaranteed by the
Company, to finance the construction of a commercial leasing property located in Santa Rosa Beach, Florida (the
“WaterColor Crossings Loan”). The loan provides for monthly principal and interest payments with a final balloon
payment at maturity in February 2029. The loan is secured by the real property and certain other Security Interests.
The Company’s financing agreements are subject to various customary debt covenants and as both of December 31,
2023 and 2022, the Company was in compliance with the financial debt covenants.
As of December 31, 2023, property, receivables and inventory that were pledged as collateral related to the
Company’s debt agreements, including unfunded commitments, had an approximate carrying amount of $580.3 million.
These assets are included within investment in real estate, net and property and equipment, net and other assets on the
consolidated balance sheets.
The aggregate maturities of debt subsequent to December 31, 2023 are:
2024
2025
2026
2027
2028
Thereafter
$
$
36,250
65,968
8,601
69,380
35,960
243,062
459,221
F 44
11. Accounts Payable and Other Liabilities
Accounts payable and other liabilities consist of the following:
Accounts payable
Income tax payable
Finance lease liabilities
Operating lease liabilities
Accrued compensation
Other accrued liabilities
Club membership deposits
Advance deposits
Accrued interest expense for Senior Notes held by SPE
Total accounts payable and other liabilities
December 31, December 31,
2023
24,340 $
9,239
298
793
6,037
4,100
3,314
7,602
2,850
58,573 $
2022
69,864
3,470
300
678
5,731
3,641
3,422
4,415
2,850
94,371
$
$
Accounts payable as of December 31, 2023 and 2022, primarily includes payables and retainage related to the
Company’s development and construction projects.
Advance deposits consist of deposits received on hotel rooms and related hospitality activities. Advance deposits are
recorded as accounts payable and other liabilities in the consolidated balance sheets without regard to whether they are
refundable and are recognized as income at the time the service is provided for the related deposit.
12. Deferred Revenue
As of December 31, 2023 and 2022, deferred revenue includes club initiation fees of $48.7 million and $25.1
million, respectively, and other deferred revenue of $14.1 million and $13.8 million, respectively.
Club initiation fees are recognized as revenue over the estimated average duration of membership, which is
evaluated periodically. The following table presents the changes in club initiation fees related to contracts with
customers:
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,
2023
25,088 $
33,200
(6,989)
(2,557)
48,742 $
December 31,
2022
22,850
9,170
(6,040)
(892)
25,088
Remaining performance obligations represent contracted revenue that has not been recognized related to club
initiation fees. As of December 31, 2023, remaining performance obligations were $48.7 million, of which the Company
expects to recognize as revenue $10.9 million in 2024, $20.5 million in 2025 through 2026, $14.2 million in 2027
through 2028 and $3.1 million thereafter.
Other deferred revenue as of both December 31, 2023 and 2022, includes $10.9 million related to a 2006 agreement
pursuant to which the Company agreed to sell land to the Florida Department of Transportation. Revenue is recognized
when title to a specific parcel is legally transferred.
F 45
13. Income Taxes
Income tax expense consist of the following:
Current:
Federal
State
Total
Deferred:
Federal
State
Total
Income tax expense
Year Ended December 31,
2022
2023
2021
$ 32,103 $ 19,067 $ 9,005
—
9,005
4,584
36,687
832
19,899
(11,413)
735
(10,678)
12,120
3,857
15,977
$ 26,009 $ 24,389 $ 24,982
661
3,829
4,490
Total income tax expense (benefit) was allocated in the consolidated financial statements as follows:
Income tax expense
Income tax recorded in accumulated other comprehensive income
$ 26,009 $ 24,389 $ 24,982
Income tax (benefit) expense
Total income tax expense
(199)
367
$ 25,810 $ 25,346 $ 25,349
957
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, 2023, 2022 and 2021 to pre-tax income as a
result of the following:
Year Ended December 31,
2022
2023
2021
U.S. federal statutory tax rate
State and local income taxes, net of federal income
tax effect (a)
Effect of changes in tax laws or rates enacted
Energy related tax credits
Benefit of Qualified Opportunity Zone investments
Changes in valuation allowance
Nontaxable or nondeductible items
Other items
Total income tax expense
2023
Year Ended December 31,
2022
$ 21,781
21.0 % $ 20,016
2021
21.0 % $ 20,902
4,223
—
(450)
—
22
230
203
$ 26,009
4.1 %
— %
(0.4)%
— %
— %
0.2 %
0.2 %
4,495
—
(150)
—
(21)
49
—
25.1 % $ 24,389
4.7 %
— %
(0.2)%
— %
— %
0.1 %
— %
3,581
458
(186)
(195)
275
147
—
25.6 % $ 24,982
21.0 %
3.6 %
0.5 %
(0.2)%
(0.2)%
0.3 %
0.1 %
— %
25.1 %
(a) State taxes in Florida make up the majority of the tax effect in this category.
F 46
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:
Net operating loss carryforwards
Impairment losses
Deferred revenue
Capitalized costs
Reserves and accruals
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
Other
Total gross deferred tax liabilities
Net deferred tax liabilities
December 31, December 31,
2023
2022
$
2,862 $
23,867
12,594
3,272
1,432
921
44,948
(312)
44,636
5,965
26,714
9,631
2,121
1,975
2,664
49,070
(290)
48,780
31,165
36,988
45,597
2,715
116,465
21,713
36,977
70,178
2,618
131,486
$ (71,829) $ (82,706)
As of December 31, 2023 and 2022, the Company had $11.0 million and $3.4 million, respectively, of federal
NOLs. The federal NOLs are specific to the Company’s QOF entity and do not expire. As of December 31, 2023 and
2022, the Company had state NOLs of $12.9 million and $121.1 million, respectively. The majority of these state NOLs
are available to offset future taxable income through 2042 and will begin expiring in 2025. As of both December 31,
2023 and 2022, the Company’s valuation allowance was $0.3 million against approximately $7.2 million of certain state
NOLs. As of December 31, 2023 and 2022, the Company had income tax payable of $9.2 million and $3.5 million,
respectively, included within accounts payable and other liabilities on the consolidated balance sheets.
Income tax payments, net of refunds, by jurisdiction are presented below:
Year Ended December 31,
2022
2023
2021
U.S. Federal
State of Florida
State of Georgia
Total income tax payments, net
$ 26,400 $ 16,361 $ 11,070
—
—
$ 30,918 $ 17,111 $ 11,070
4,600
(82)
—
750
The Inflation Reduction Act (“IRA”) was signed into law in August 2022. The IRA extended the Internal Revenue
Code Section 45L credit, a credit for the installation of energy efficient appliances and equipment in both single family
and multi-family homes, to tax year 2032.
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.
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 47
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, 2023 or 2022.
There were no penalties required to be accrued as of December 31, 2023 and 2022. The Company records interest related
to unrecognized tax benefits, if any, in interest expense and penalties in other income, net.
The Company is currently open to examination by taxing authorities for the tax years 2020 through 2022.
14. Accumulated Other Comprehensive Income
Following is a summary of the changes in the balances of accumulated other comprehensive (loss) income, which is
presented net of tax:
Accumulated other comprehensive loss as of December 31, 2021
$
Other comprehensive (loss) income before reclassifications
Amounts reclassified from accumulated other comprehensive (loss)
income
Other comprehensive (loss) income
Less: Other comprehensive income attributable to non-controlling
interest
Accumulated other comprehensive (loss) income as of
December 31, 2022
Other comprehensive income before reclassifications
Amounts reclassified from accumulated other comprehensive (loss)
income
Other comprehensive income (loss)
Less: Other comprehensive loss attributable to non-controlling interest
Accumulated other comprehensive income as of December 31, 2023 $
Unrealized
(Loss) Gain on
Available-for-
Sale Securities
Unrealized
(Loss) Gain on
Cash Flow
Hedges
Total
(7) $
(175)
(382) $
4,272
(389)
4,097
—
(175)
105
4,377
105
4,202
—
(1,383)
(1,383)
$
(182) $
182
2,612 $
266
2,430
448
—
182
—
— $
(1,442)
(1,176)
407
1,843 $
(1,442)
(994)
407
1,843
Following is a summary of the tax effects allocated to other comprehensive (loss) income:
Year Ended December 31, 2023
Unrealized gain on available-for-sale investments
Interest rate swaps
Interest rate swap - unconsolidated joint venture
Reclassification adjustment for net gain included in earnings
Net unrealized loss
Other comprehensive loss
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 48
Before-
Tax Amount
$
Tax (Expense) Net-of-
244 $
250
80
(1,767)
(1,193)
(1,193) $
Benefit
Tax Amount
182
206
60
(1,442)
(994)
(994)
(62) $
(44)
(20)
325
199
199 $
$
Before-
Tax Amount
$
Year Ended December 31, 2022
Tax Benefit Net-of-
(235) $
4,633
621
140
5,159
5,159 $
(Expense)
60 $
Tax Amount
(175)
3,808
464
105
4,202
4,202
(825)
(157)
(35)
(957)
(957) $
$
15. Stockholders’ Equity
Dividends
During 2023, 2022 and 2021, the Company paid cash dividends of $0.44, $0.40 and $0.32, respectively, per share
on the Company’s common stock for a total of $25.7 million, $23.5 million and $18.8 million, respectively.
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, 2023, the Company did not repurchase shares of its common stock
outstanding. During the year ended December 31, 2022, the Company repurchased 576,963 shares of its common stock
outstanding at an average purchase price of $34.81, per share, for an aggregate purchase price of $20.0 million. As of
December 31, 2023, the Company had a total authority of $80.0 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 2022, the Company
retired 576,963 shares of treasury stock at a value of $20.0 million.
Issuance of Common Stock for Employee Compensation
On March 24, 2023, the Company granted 12,796 restricted stock awards to certain employees pursuant to the
Company’s 2015 Performance and Equity Incentive Plan (the “2015 Plan”). The restricted shares vest in equal annual
installments on the first, second and third annual anniversary of the grant date, subject to the recipient’s continued
employment through and on the applicable vesting date. The weighted average grant date fair value of the restricted
shares was $39.42 per share.
On February 21, 2023, the Company granted 17,943 restricted stock awards to certain employees pursuant to the
2015 Plan. The restricted shares vest in equal annual installments on the first, second and third annual anniversary of the
grant date, subject to the recipient’s continued employment through and on the applicable vesting date. On February 21,
2023, the Company also granted 5,760 restricted stock awards to an employee pursuant to the 2015 Plan. The restricted
shares vest in January 2030, subject to the recipient’s continued employment through and on the applicable vesting date.
The weighted average grant date fair value of the restricted shares was $44.30 per share.
On April 8, 2022, the Company granted 4,361 restricted stock awards to an employee pursuant to the 2015 Plan.
The restricted shares vest in January 2030, subject to the recipient’s continued employment through and on the
applicable vesting date. The weighted average grant date fair value of the restricted shares was $55.73 per share.
On February 22, 2022, the Company granted 25,594 restricted stock awards to certain employees pursuant to the
2015 Plan. The restricted shares vest in equal annual installments on the first, second and third annual anniversary of the
grant date, subject to the recipient’s continued employment through and on the applicable vesting date. During 2023,
8,531 of the restricted shares vested on the first annual anniversary. The weighted average grant date fair value of the
restricted shares was $46.73 per share.
F 49
Following is a summary of non-vested restricted share activity:
Non-Vested Restricted Shares
Balance at beginning of period
Granted
Vested
Forfeited
Balance at end of period
Year Ended December 31, 2023
Year Ended December 31, 2022
Weighted Average
Weighted Average
Number of
Shares
29,955 $
36,499 $
(8,531) $
— $
57,923 $
Grant Date
Fair Value
Per Share
Number of
Shares
Grant Date
Fair Value
Per Share
48.04
42.59
46.73
—
44.80
— $
29,955 $
— $
— $
29,955 $
—
48.04
—
—
48.04
During 2023 and 2022, the Company recorded expense of $0.8 million and $0.4 million, respectively, related to
restricted stock awards for employee compensation. During 2021, the Company did not have expense related to
restricted stock awards.
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 and
Human Capital Committee of the Board. Stock based compensation cost is measured at the grant date based on the fair
value of the award and is typically recognized as expense on a straight-line basis over the requisite service period, which
is the vesting period. Forfeitures are accounted for as they occur. As of December 31, 2023, 1,397,089 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:
Year Ended December 31,
2022
2023
2021
Stock compensation expense before tax benefit
Income tax benefit
$
$
820 $
(206)
614 $
364 $
(93)
271 $
—
—
—
In 2023, the Company granted 36,499 shares of restricted stock awards to certain of the Company’s employees
pursuant to the 2015 Plan, of which none vested during 2023. The weighted average grant date fair value of restricted
stock units during 2023 was $42.59 per share.
In 2022, the Company granted 29,955 shares of restricted stock awards to certain of the Company’s employees
pursuant to the 2015 Plan, of which 8,531 vested during 2023. The weighted average grant date fair value of restricted
stock units during 2022 was $48.04 per share. The total fair value of restricted stock units that vested during 2023 was
$0.4 million.
As of December 31, 2023 and 2022, there were 57,923 and 29,955, respectively, unvested restricted stock units
outstanding. As of December 31, 2023 and 2022, there was $1.8 million and $1.1 million, respectively, of unrecognized
compensation cost, related to non-vested restricted shares. As of December 31, 2023, unrecognized compensation costs
will be recognized over a weighted average period of 2.8 years.
F 50
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 $0.8 million, $0.7 million and $0.1
million in 2023, 2022 and 2021, respectively. As part of the Pension Plan termination in 2014, the Company also
recorded an expense of $1.2 million during 2021, related to the final allocation of the Pension Plan’s surplus assets to
401(k) plan participants.
18. Other Income, Net
Other income (expense) consists of the following:
Investment income, net
Interest, dividend and accretion income
Net realized gain 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
Year Ended December 31,
2022
2023
2021
$
2,856 $
—
—
8,012
2,414
13,282
793 $
—
(26)
8,012
1,083
9,862
157
17
(1,872)
8,078
874
7,254
Interest incurred for project financing and other interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes
issued by SPE
Total interest expense
Gain on contributions to unconsolidated joint ventures
Equity in income (loss) from unconsolidated joint ventures
Other income (expense), net
Accretion income from retained interest investments
Gain on insurance recoveries
Loss from hurricane damage
Miscellaneous income, net
Other income, net
Total other income, net
Investment Income, Net
(21,762)
(8,856)
(30,618)
718
22,701
(9,542)
(7,027)
(8,841)
(18,383)
2,738
25,986
(8,827)
(15,854)
3,558
(865)
2,594
—
—
651
3,245
9,328 $ 33,150 $
1,671
9,835
(51)
1,492
12,947
1,532
4,853
(56)
3,852
10,181
4,274
$
Interest, dividend and accretion income includes interest income accrued or received on the Company’s cash
equivalents and investments and amortization of the premium or accretion of discount related to the Company’s
available-for-sale securities, which is amortized based on an effective interest rate method over the term of the available-
for-sale securities. Net realized gain on the sale of investments includes the gains or losses recognized on the sale of
available-for-sale and equity securities prior to maturity. Unrealized loss on investments, net includes unrealized gains or
losses on investments – equity securities.
Interest income from investments in SPEs primarily includes interest earned on the investments held by Panama
City Timber Finance Company, LLC, which is used to pay the interest expense for Senior Notes held by Northwest
F 51
Florida Timber Finance, LLC. See Note 6. Financial Instruments and Fair Value Measurements for additional
information.
Interest earned on the Company’s notes receivable and other interest includes interest earned on notes receivable
and on the Company’s unimproved land contribution to the unconsolidated Latitude Margaritaville Watersound JV as
home sales are transacted in the community. See Note 4. Joint Ventures and Note 8. Other Assets for additional
information.
Interest Expense
Interest expense includes interest incurred related to the Company’s project financing, Senior Notes issued by
Northwest Florida Timber Finance, LLC, CDD debt and finance leases. Interest expense also includes amortization of
debt discount and premium and debt issuance costs. Discount and issuance costs for the Senior Notes issued by
Northwest Florida Timber Finance, LLC, are amortized based on the effective interest method at an effective rate of
4.9%. See Note 6. Financial Instruments and Fair Value Measurements for additional information.
During 2023, 2022 and 2021 the Company capitalized $2.7 million, $3.0 million and $1.0 million, respectively, in
interest related to projects under development or construction. These amounts are included within investment in real
estate, net on the Company’s consolidated balance sheets.
Gain on Contributions to Unconsolidated Joint Ventures
Gain on contributions to unconsolidated joint ventures during 2023, 2022 and 2021, include a gain of $0.7 million,
$0.9 million and $0.5 million, respectively, on additional infrastructure improvements contributed to the Company’s
unconsolidated Latitude Margaritaville Watersound JV. Gain on contributions to unconsolidated joint ventures during
2022, also include a gain of $1.4 million on land and impact fees contributed to the Company’s unconsolidated Pier Park
RI JV and a gain of $0.4 million on land contributed to the Company’s unconsolidated Electric Cart Watersound JV.
Gain on contributions to unconsolidated joint ventures during 2021, also include a gain of $3.1 million on land
contributed to the Company’s unconsolidated Watersound Fountains Independent Living JV. See Note 4. Joint Ventures
for additional information.
Equity in Income (Loss) from Unconsolidated Joint Ventures
Equity in income (loss) from unconsolidated joint ventures includes the Company’s proportionate share of earnings
or losses of unconsolidated JVs accounted for by the equity method. Equity in income (loss) from unconsolidated joint
ventures includes $23.6 million and $3.9 million of income during 2023 and 2022, respectively, and $1.9 million of loss
during 2021, related to the Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV began
completing home sale transactions in the fourth quarter of 2021. In November 2022, the Sea Sound JV sold its assets to
an unrelated third party for $92.5 million, resulting in a total gain on sale of $36.1 million. Equity in income (loss) from
unconsolidated joint ventures includes $21.7 million during 2022 related to the Company’s proportionate share of the
gain on sale. See Note 4. Joint Ventures for additional information.
Other Income, Net
Other income, net primarily includes income from the Company’s retained interest investments, gain on insurance
recoveries, loss from hurricane damage and other income and expense items. Prior to optional prepayment, in full, of the
installment notes in August 2023, the Company recorded the accretion of investment income from its retained interest
investment over the life of the retained interest using the effective yield method. See Note 8. Other Assets for additional
information. During 2022 and 2021, the Company had a gain on insurance recovery of $9.7 million and $4.9 million,
respectively, and incurred loss from hurricane damage of less than $0.1 million, during each period, related to Hurricane
Michael. In November 2022, the Company closed out the insurance claim related to Hurricane Michael.
F 52
Miscellaneous income, net during the year ended December 31, 2023 and 2021, includes $1.1 million and $3.6
million, respectively, the Company received from the Florida Division of Emergency Management’s TRBG program for
recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael. The Company did not
receive income related to the Florida Division of Emergency Management’s TRBG program during 2022. The Company
has met all requirements related to the TRBG program as of December 31, 2023. Miscellaneous income, net during 2023
and 2022, also includes income of $0.4 million and $1.0 million, respectively, related to a gain on retained interest
investment. Miscellaneous income, net during 2023, also includes $0.6 million of expense for cleanup of damaged
timber as a result of Hurricane Michael. Miscellaneous income, net also includes $2.6 million and $0.9 million in 2022
and 2021, respectively, received from the Pier Park CDD for repayment of subordinated notes, which have been fully
repaid. Miscellaneous income, net during 2022, also includes expenses of $1.1 million for design costs no longer
pursued and $0.6 million for a homeowner’s association special assessment.
19. Segment Information
The Company conducts primarily all of its business in the following three reportable segments: 1) residential, 2)
hospitality and 3) commercial. 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 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.
Information by business segment is as follows:
Year Ended December 31,
2022
2023
2021
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
F 53
$ 155,820 $ 92,886 $ 144,854
74,591
45,557
1,994
$ 389,285 $ 252,321 $ 266,996
97,236
59,379
2,820
154,574
74,437
4,454
$ 77,946 $ 44,115 $ 56,889
57,494
15,393
1,538
$ 235,979 $ 145,898 $ 131,314
77,862
21,786
2,135
124,813
30,300
2,920
$ 4,501 $ 3,901 $ 4,799
1,003
3,969
13,252
$ 23,797 $ 22,068 $ 23,023
1,179
4,239
12,749
1,820
4,321
13,155
Year Ended December 31,
2022
2023
2021
Depreciation, depletion and amortization:
Residential
Hospitality
Commercial
Other
Consolidated depreciation, depletion and amortization
Investment income, net:
Residential
Hospitality
Commercial
Other (a)
Consolidated investment income, net
Interest expense:
Residential
Hospitality
Commercial
Other (b)
Consolidated interest expense
$
156 $
211 $
179
6,966
10,662
395
$ 38,776 $ 22,888 $ 18,202
9,366
12,968
398
22,101
16,056
408
$ 1,691 $ 1,046 $
828
—
46
6,380
$ 13,282 $ 9,862 $ 7,254
265
49
11,277
—
33
8,783
$
421 $
484 $
581
488
5,949
8,836
$ 30,618 $ 18,383 $ 15,854
9,657
11,680
8,860
1,709
7,343
8,847
Gain on contributions to unconsolidated joint ventures:
Residential
Commercial (c) (d)
Consolidated gain on contributions to unconsolidated joint ventures
$
$
939 $
718 $
—
503
3,055
1,799
718 $ 2,738 $ 3,558
$ 23,627 $ 3,859 $ (1,861)
996
(865)
$ 22,701 $ 25,986 $
22,127
(926)
$
202 $
(82)
30
3,095
113
635
3,722
5,711
$ 3,245 $ 12,947 $ 10,181
(508) $
1,807
(687)
12,335
$ 98,978 $ 49,566 $ 81,989
9,275
17,403
(9,936)
$ 100,061 $ 94,617 $ 98,731
8,929
36,316
(194)
(3,635)
11,233
(6,515)
Equity in income (loss) from unconsolidated joint ventures:
Residential (e)
Commercial (f)
Consolidated equity in income (loss) from unconsolidated joint ventures
Other income (expense), net:
Residential
Hospitality
Commercial (g)
Other (h)
Other income, net
Income (loss) before income taxes:
Residential (e)
Hospitality
Commercial (c) (d) (f) (g)
Other (a) (b) (h)
Consolidated income before income taxes
F 54
Year Ended December 31,
2022
2023
2021
Capital expenditures:
Residential
Hospitality (i)
Commercial
Other
Total capital expenditures
$ 74,362 $ 92,203 $ 52,838
101,686
45,843
452
$ 217,761 $ 356,692 $ 200,819
171,056
92,992
441
72,275
70,077
1,047
Investment in unconsolidated joint ventures:
Residential
Commercial
Total investment in unconsolidated joint ventures
December 31, December 31,
2023
2022
$
$
49,036
17,320
66,356
$
$
33,236
16,789
50,025
Total assets:
Residential
Hospitality
Commercial
Other
Total assets
$
233,957 $
465,828
511,978
311,767
225,854
425,529
470,629
308,827
$ 1,523,530 $ 1,430,839
(a) Includes interest income from investments in SPEs of $8.0 million in each 2023 and 2022 and $8.1 million in 2021.
(b) Includes interest expense from Senior Notes issued by SPE of $8.9 million in 2023 and $8.8 million in each 2022 and 2021.
(c) Includes gains in 2022 of $1.4 million on land and impact fees contributed to the unconsolidated Pier Park RI JV and $0.4
million on land contributed to the unconsolidated Electric Cart Watersound JV. See Note 4. Joint Ventures and Note 18. Other
Income, Net for additional information.
(d) Includes a gain of $3.1 million in 2021 on land contributed to the unconsolidated Watersound Fountains Independent Living JV.
See Note 4. Joint Ventures and Note 18. Other Income, Net for additional information.
(e) Includes $23.6 million and $3.9 million of equity in income from unconsolidated joint ventures during 2023 and 2022,
respectively, and $1.9 million of equity in loss from unconsolidated joint ventures in 2021 related to the Latitude Margaritaville
Watersound JV. The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of
2021. See Note 4. Joint Ventures for additional information.
Includes a gain of $21.7 million in 2022 related to the sale of the Sea Sound JV assets. See Note 4. Joint Ventures and Note 18.
Other Income, Net for additional information.
(f)
(g) Includes $1.1 million and $3.6 million in 2023 and 2021, respectively, received from the Florida Division of Emergency
Management’s TRBG program. See Note 18. Other Income, Net for additional information.
(h) Includes gain on insurance recovery of $9.7 million and $4.9 million in 2022 and 2021, respectively, related to Hurricane
Michael. See Note 18. Other Income, Net for additional information.
Includes acquisition of The Pearl Hotel in 2022. See Note 3. Investment in Real Estate, Net for additional information.
(i)
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
F 55
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 a range of loss can be reasonably
estimated. As assessments and cleanups proceed, these accruals are reviewed and adjusted, if necessary, as additional
information becomes available. The Company is in the process of assessing certain properties in regard to the effects, if
any, on the environment from the disposal or release of wastes or substances. Management is unable to quantify future
rehabilitation costs above present accruals at this time or provide a reasonably estimated range of loss.
Other litigation, claims 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 as of both
December 31, 2023 and 2022, 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.
In 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 both December 31, 2023 and 2022, there was
no balance outstanding on the Latitude JV Note. The Latitude JV Note was provided by the Company to finance the
development of the pod-level, non-spine infrastructure. Future advances, if any, will be repaid by the JV as each home is
sold by the JV, with the aggregate unpaid principal and all accrued and unpaid interest due at maturity in June 2025. The
note is secured by a mortgage and security interest in and on the real property and improvements located on the real
property of the JV. See Note 4. Joint Ventures for additional information.
As of December 31, 2023 and 2022, 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 $40.0 million and $38.1 million, respectively, as well as standby letters of credit in the amount of $0.2
million and $17.3 million, respectively, which may potentially result in liability to the Company if certain obligations of
the Company are not met.
As of December 31, 2023, the Company had a total of $48.6 million primarily in construction and development
related contractual obligations.
In 2019, the Company’s unconsolidated Pier Park TPS JV, entered into a $14.4 million loan (the “Pier Park TPS JV
Loan”). The loan bears interest at SOFR plus 2.6% and provides for monthly principal and interest payments with a final
balloon payment at maturity in January 2026. The loan is secured by the real and personal property and certain other
Security Interests. In connection with the 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
F 56
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 SOFR. The interest rate swap
matures in January 2026 and fixed the variable rate on the related debt, initially at $14.4 million, to a rate of 5.2%.
Effective July 2023, the benchmark interest rate index based on LIBOR transitioned to SOFR. As of December 31, 2023
and 2022, $13.5 million and $13.8 million, respectively, was outstanding on the Pier Park TPS JV Loan. See Note 4.
Joint Ventures and Note 6. Financial Instruments and Fair Value Measurements for additional information.
In 2020, the Company’s unconsolidated Latitude Margaritaville Watersound JV, entered into a $45.0 million loan,
as amended (the “Latitude Margaritaville Watersound JV Loan”). The loan bears interest at SOFR plus 2.5%, with a
floor of 3.0%. The loan provides for monthly interest payments with a final balloon payment at maturity in December
2025, with an option to extend the maturity date by one year, subject to bank approval. The loan is secured by the real
and personal property and certain other Security Interests. In connection with the loan, the Company and the Company’s
JV partner entered into an unconditional guaranty of completion of certain homes and related improvements in favor of
the lender. As of December 31, 2023 and 2022, $37.4 million and $30.0 million, respectively, was outstanding on the
Latitude Margaritaville Watersound JV Loan. See Note 4. Joint Ventures for additional information.
In April 2021, the Company’s unconsolidated Watersound Fountains Independent Living JV, entered into a $41.9
million loan (the “Watersound Fountains JV Loan”). The loan bears interest at SOFR plus 2.1%, with a floor of 2.6%.
Effective July 2023, the benchmark interest rate index based on LIBOR transitioned to SOFR. The loan provides for
interest only payments for the first forty-eight months and principal and interest payments thereafter with a final balloon
payment at maturity in April 2026. The loan includes an option for an extension of the maturity date by twelve months,
subject to certain conditions, which would provide for continued monthly principal and interest payments with a final
balloon payment at the extended maturity date. The loan is secured by the real property and certain other Security
Interests. In connection with the loan, the Company executed a guarantee in favor of the lender to guarantee the
completion of the project and payment and performance of the borrower under the Watersound Fountains JV Loan. The
Company’s liability as guarantor under the loan will be reduced to 50% of the outstanding principal amount upon
issuance of the certificate of occupancy and other required permits 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, 2023 and 2022, $38.1 million and $21.3 million, respectively, was outstanding on the
Watersound Fountains JV Loan. See Note 4. Joint Ventures for additional information.
In September 2022, the Company’s unconsolidated Electric Cart Watersound JV, entered into a $5.4 million loan
(the “Electric Cart Watersound JV Loan”). The loan bears interest at SOFR plus 1.8%, with a floor of 2.1%. The loan
provides for interest only payments for the first twenty-four months and principal and interest payments thereafter with a
final balloon payment at maturity in September 2032. The loan is secured by the real property and certain other Security
Interests. In connection with the loan, the Company, a wholly-owned subsidiary of the Company and the Electric Cart
Watersound JV entered into a joint and several payment and performance guarantee in favor of the lender. After the
initial forty-eight months of the loan, the Company’s liability as guarantor under the loan will be reduced to 50% of the
outstanding principal balance upon reaching a certain debt service coverage and other conditions. 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. As of December 31, 2023 and 2022, $4.4 million and $0.8 million, respectively, was outstanding
on the Electric Cart Watersound JV Loan. See Note 4. Joint Ventures for additional information.
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, 2023 and 2022. As of both December 31, 2023 and 2022,
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 accounts payable and other liabilities on the consolidated
balance sheets.
F 57
As part of a certain sale of timberlands in 2014, the Company generated significant tax gains. The installment note’s
structure allowed the Company to defer the resulting federal and state tax liability of $45.6 million until 2029, the
maturity date for the installment note. The Company has a deferred tax liability related to the gain in connection with the
sale.
21. Related Party Transactions
The Company provides mitigation bank credits, impact fees and services to certain unconsolidated JVs. During the
years ended December 31, 2023, 2022 and 2021, the Company recognized $1.0 million, $1.6 million and $0.6 million,
respectively, related to revenues from these transactions. There were no receivables with these unconsolidated JVs as of
December 31, 2023 and 2022. The Watersound Management JV provides leasing management services for most of the
Company’s multi-family communities. During the years ended December 31, 2023, 2022 and 2021, the Company
incurred $2.0 million, $1.2 million and $0.5 million, respectively, related to expense from these transactions. See Note 4.
Joint Ventures for additional information.
22. Subsequent Events
On February 21, 2024, the Board declared a cash dividend of $0.12 per share on the Company’s common stock,
payable on March 27, 2024, to shareholders of record as of the close of business on March 4, 2024.
F 58
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F (cid:25)(cid:19)
THE ST. JOE COMPANY
SCHEDULE IV (CONSOLIDATED) - MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2023
(in thousands)
Description of Note Receivable (a)
Secured revolving promissory note
with unconsolidated Latitude
Margaritaville Watersound JV,
homesite development
Total(c)
Interest
Rate
Periodic
Carrying
Payment Prior Amount of Amount of
Face
Final Maturity Date Terms
Liens Mortgages Mortgages
Principal Amount
of Loans Subject
to Delinquent
Principal
or Interest
5.0%
June 2025
P&I(b)
$
$
$
—
— $
—
$
— $
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$
— $
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(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 4. Joint Ventures and Note 20.
Commitments and Contingencies for additional information related to the revolving promissory note.
(c) 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:
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
December 31, December 31, December 31,
2022
11,942 $
—
2023
1,315 $
—
2021
10,321
7,798
$
1,315
—
—
— $
10,699
—
(72)
1,315 $
6,005
128
44
11,942
$
F 61
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