10q10k10q10k.net

What changed in ST JOE Co's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of ST JOE Co's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+428 added−413 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-22)

Top changes in ST JOE Co's 2023 10-K

428 paragraphs added · 413 removed · 341 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

29 edited+12 added−6 removed17 unchanged
Biggest changeProjects depend on uncertain demand. Extraordinary events such as the emergence of new COVID-19 variants or hurricanes may dramatically change demand and pricing for products and services. 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.
Biggest changeHospitality 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.
We also offer discounted gym memberships, a 401(k) retirement savings plan with Company match, paid vacation and holidays, jury pay, bereavement leave, an employee referral bonus program and a tuition reimbursement program. From time to time we provide team members with health care screenings and vaccinations on our properties.
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.
A portion of our land is within The Bay-Walton Sector Plan (“Sector Plan”), that entitles, or gives legal rights, for us to develop over 170,000 residential dwelling units, over 22 million square feet of retail, commercial and industrial space and over 3,000 hotel rooms on lands within Florida’s Bay and Walton counties.
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.
Investments, which include investments in joint ventures and limited partnerships, are funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. Actual investments may vary from planned capital investments for various reasons. We do not anticipate immediate benefits from investments.
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 also have additional entitlements, or legal rights, to develop acreage outside of the Sector Plan. Approximately 86% of our real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf of Mexico. Strategy St.
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’s most recent Annual Report on Form 10-K (“Form 10-K”), Quarterly Reports on Form 10-Q (“Form 10-Q”), Current Reports on Form 8-K (“Form 8-K”), and amendments to those reports may be viewed or downloaded electronically, free of charge, from our website at www.joe.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the U.S.
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.
The results of focus groups help us to continuously improve our human capital strategies and find ways to foster engagement and growth for our team members. Diversity and Inclusion We believe that a diverse and inclusive workplace is key to our success, and that it is our responsibility to advance racial and social equity.
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 Table of Contents 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 maintain environmental and safety compliance programs for our facilities and timberlands to monitor compliance with these laws and regulations. Enactment of new 4 Table of Contents 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.
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.
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. 5 Table of Contents Community Engagement We are actively engaged in and committed to supporting the communities we serve.
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.
Instead, investments in joint ventures in which we are not the primary beneficiary, or a voting interest entity where we do not have a majority voting interest or control, but have significant influence are unconsolidated and accounted for by the equity method.
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.
Our employees also enjoy discounts at our Company-owned properties and amenities, as well as our “TicketsatWork” benefit, which offers exclusive discounts, special offers and access to preferred seating and tickets to top attractions, theme parks, shows, sporting events, movie tickets, hotels and more.
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 of February 20, 2023, approximately 22% of our workforce identify as racially diverse and approximately 47% of our workforce, including 50% of our executive management team, is comprised of female employees. Health and Safety The health and safety of our team members is a top priority, and we are committed to providing a safe and injury-free workplace.
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.
Our process of defining sustainability priorities focuses on the simultaneous improvement of the environmental, social and financial position of the Company, and our strong leadership and governance practices that strive to integrate sustainability into our business strategy and corporate culture. The majority of acreage we own is located in Northwest Florida and is managed in our forestry operations.
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.
Our forestry business competes with numerous public and privately held timber companies in our region. There can be no assurance we will be able to compete successfully against competitors or that competitive pressures will not have a material adverse effect on our business, results of operations, cash flows and financial condition. Regulation St.
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 Table of Contents Regulations St.
Investments in Joint Ventures and Limited Partnerships As part of our core business strategy, we have created a meaningful portion of our business through joint ventures and limited partnerships over the past several years.
Segment Information included in Item 15 of this Form 10-K. 3 Table of Contents 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 3 Table of Contents real estate and other business activities, which we believe allows us to complement our growth strategy, leverage industry expertise and diversify our business. These entities are beginning to produce substantial revenue.
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.
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.
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.
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.
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.
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 .
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.
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.
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.
We distribute cash in excess of expected operating needs to shareholders through cash dividends and common stock repurchases, as approved by the Board of Directors (the “Board”). A quarterly cash dividend of $0.10 and $0.08 was paid in each quarter of 2022 and 2021, respectively, and $0.07 was paid in December 2020.
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”).
We are a real estate development, asset management and operating company. We own 169,000 acres of land in Northwest Florida.
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.
Joint Ventures included in Item 15 of this Form 10-K for additional information. 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.
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.
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.
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.
During the year ended December 31, 2022, we repurchased 576,963 shares of common stock for an aggregate purchase price of $20.0 million. During the year ended December 31, 2021, we did not repurchase shares of 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.
Joe Company, we believe our employees are our greatest asset. We strive to attract, retain and develop the highest quality talent.
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.
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.
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.
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.
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.
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.
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.
Removed
As of December 31, 2022, 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.
Added
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.
Removed
However, in the case of our unconsolidated joint ventures, the revenue generated by these entities is not included in our revenue.
Added
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.
Removed
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.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations , as well as Note 19.
Removed
As of February 20, 2023, we employed 55 professionals in our corporate offices who oversee operations, as well as 625 full-time employees and 89 part-time and seasonal employees in our day-to-day operations. ​ Recruitment and Retention Success depends upon our ability to attract and retain skilled employees.
Added
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.
Removed
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. Additional information regarding our sustainability efforts is available in the Stewardship section of our website at https://www.joe.com/stewardship.
Added
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.
Removed
Securities and Exchange Commission (“SEC”). In addition, you may review any materials we file with the SEC on the SEC’s website at www.sec.gov. To obtain information on the operation of the Public Reference room, you may call the SEC at 1-800-SEC-0330.
Added
We face significant competition for these employees from the industries in which we operate as well as from other industries.
Added
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.
Added
We carry out prescribed burns annually, which helps restore natural ecosystems, improves wildlife habitats and reduces wildfire hazards.
Added
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.
Added
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.
Added
Securities and Exchange Commission (“SEC”) , unless expressly noted. 6 Table of Contents Information St.
Added
Any information posted on or linked from our website is not incorporated by reference into this Form 10-K.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+17 added−10 removed108 unchanged
Biggest changeCustomers 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.
Biggest changeThese 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.
This time lag subjects us to greater risks relating to, among other things: ● fluctuations in the general economy; ● our ability to obtain construction or permanent financing on favorable commercial terms, if at all; ● our ability to achieve projected rental rates; ● the pace that we will be able to lease to new tenants; ● higher than estimated construction costs (including labor and material costs); and 8 Table of Contents ● 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.
This time lag subjects us to greater risks relating to, among other things: ● fluctuations in the general economy; 8 Table of Contents ● 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.
In addition, the real estate market is subject to downturns, and our business is especially sensitive to economic conditions in Northwest Florida, where our developments are located, and, more broadly, the Southeast region of the U.S., which in the past has produced a high percentage of customers for our products.
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.
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.
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.
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.
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.
We are subject to various geographic risks. ● Growth of Northwest Florida . We are focused on developing real estate and expanding operations in Northwest Florida. Our success will be dependent on strong migration and population expansion in Northwest Florida.
We are subject to various geographic risks. ● Growth of Northwest Florida . We are focused on developing real estate and expanding operations in Northwest Florida. Our success will be dependent on 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 transportation hubs, roads, rail, pipeline, medical facilities and schools and to attract families and companies offering high-quality and high salary jobs.
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.
Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-Q, 8-K and other reports filed with the SEC.
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.
Our residential segment is highly dependent on homebuilders. We are highly dependent on homebuilders to be the primary customers for our homesites and to provide construction services in our residential developments. The homebuilder customers that have already committed to purchase homesites from us may decide to reduce, delay or cancel their existing commitments to purchase homesites in our developments.
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.
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, 17 Table of Contents 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.
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.
In addition, local governments that fail to keep their plans current may be prohibited by law from amending their plans to allow for new development. If any one or more of these factors were to occur, we may be unable to develop our real estate projects successfully or within the expected timeframes.
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. 15 Table of Contents 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.
These economic and market conditions, combined with rising inflation and lack of labor availability, may also place a number of our key customers under financial stress, which may adversely affect our occupancy rates and our profitability, which, in turn, may have a material adverse effect on our business, results of operations, cash flows and financial condition.
These economic and market conditions, combined with rising inflation and lack of labor availability, may also place a number of our key 12 Table of Contents 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.
These changes, or changes in other environmental laws or their interpretation thereof, new enforcement of laws, the identification of new facts or the failure of other parties to perform remediation at our current or former facilities may lead to new or greater liabilities that may materially adversely affect our business, results of operations, cash flows or financial condition. ● Accounting Standards .
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 Table of Contents adversely affect our business, results of operations, cash flows or financial condition. ● Accounting Standards .
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 10 Table of Contents operating results, particularly relating to the impact of our land sales, to vary significantly from quarter-to-quarter and year-to-year.
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.
An epidemic, pandemic (such as the COVID-19 pandemic) or similar serious public health issue, and the measures undertaken by governmental authorities to address it, could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period, and thereby, and/or along with any associated economic and/or social instability or distress, have a material adverse impact on our results of operations, cash flows and financial condition.
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.
Numerous factors may have a significant effect on the price of our common stock, including low trading volumes; announcements of fluctuations in our operating results; other announcements concerning our Company or business, including acquisitions or litigation announcements; changes in market conditions in Northwest Florida or the real estate or real estate development industry in general; economic and/or political factors unrelated to our performance; impacts of the COVID-19 pandemic; comments by public figures or other third parties (including blogs, articles, message boards and social and other media); changes in recommendations or earnings estimates by securities analysts; novel and unforeseen trading strategies adopted by retail investors or other market participants and less volume and reduced shares outstanding due to execution of the Stock Repurchase Program that would reduce our “public float”.
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”.
As a result of these and other future changes in tax laws, we may incur additional costs, including taxes and penalties for historical periods, which may have a material and adverse effect on our business, results of operations, cash flows or financial condition. ● QOZ Program . As part of the U.S.
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 . ● QOZ Program . As part of the U.S.
Our commercial segment is also exposed to operational risks with respect to our senior living communities.
Our commercial segment is exposed to operational risks with respect to our senior living communities.
We are not registered as an “investment company” under the Investment Company Act of 1940 and we intend to invest our assets in a manner such that we are not required to register as an investment company.
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.
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. 18 Table of Contents We may provide a guarantee of the debt in connection with our JVs.
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.
Management may fail in estimating and most efficiently allocating cash in excess of operational and strategic investment needs, including to shareholders by dividends and the repurchase of common stock. Management may also fail to accurately forecast financial results, and, as a result, actual results may vary greatly from management estimates.
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 Table of Contents Management may also fail to accurately forecast financial results, and, as a result, actual results may vary greatly from management estimates.
Demand for our products and services is sensitive to changes in economic conditions over which we have no control, including the level of employment, consumer confidence, consumer income, consumer discretionary spending, consumer preferences, inflation, the availability of financing and interest rate levels.
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.
Our ability to successfully implement our business strategy will depend on our ability to attract and retain skilled employees. The labor markets in the industries in which we operate are competitive. We must attract, train and retain a large number of qualified employees while controlling related labor costs.
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.
We are subject to various existing government regulations. ● Development and Land Use Requirements . Approval to develop real property entails an extensive entitlements process involving multiple and overlapping regulatory jurisdictions and often requiring discretionary action by local government. This process is often political, uncertain and may require 14 Table of Contents significant exactions in order to secure approvals.
We are subject to various existing government regulations. ● Development and Land Use Requirements . Approval to develop real property entails an extensive entitlements process involving multiple and overlapping regulatory jurisdictions and often requiring discretionary action by local government. This process is often political, uncertain and may require significant exactions in order to secure approvals.
Such forward-looking statements 6 Table of Contents 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.
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.
Past and present real property, particularly properties used in connection with our previous transportation 15 Table of Contents 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.
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.
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 7 Table of Contents labor costs.
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.
Mortgage rates may also be adversely impacted by rising interest rates, which may continue to increase as a result of the government’s response to inflation.
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.
Tighter labor markets may make it even more difficult for us to hire and retain qualified employees and control labor costs. Our ability to attract qualified employees and control labor costs is subject to numerous external factors, including prevailing wage rates, employee preferences, employment law and regulation, labor relations and immigration policy.
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 Table of Contents policy.
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.
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.
While the IRS has issued final regulations which address some of the uncertainties under the QOZ Program, because 16 Table of Contents the QOZ Program is relatively new, a number of open questions remain.
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.
The following factors, among others, are common to the hospitality industry, and may reduce the revenues generated by our hotel properties, food and beverage operations, golf courses, beach clubs, marinas and other entertainment assets: ● reduced travel (including from travel-related health concerns, airline disruptions or adverse economic conditions), which we may be susceptible to given that the travel tourism on which our hospitality segment relies can entail a relatively high cost of participation and is based on discretionary consumer spending; ● increased labor costs and shortages of skilled labor; ● inclement weather conditions; ● changes in desirability of geographic regions in which our properties are located; ● significant competition from other hospitality providers and lodging or entertainment alternatives; ● our relationships with and the performance of third-party managers; ● increases in operating costs, including increases in the cost of property insurance, utilities and real estate and personal property taxes, due to inflation and other factors that may not be offset by increased prices; and ● natural or man-made disasters.
The following factors, among others, are common to the hospitality industry, and may reduce the revenues generated by our hotel properties, food and beverage operations, golf courses, beach clubs, marinas and other entertainment assets: ● reduced travel (including from 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; 11 Table of Contents ● changes in desirability of geographic regions in which our properties are located; ● significant competition from other hospitality providers and lodging or entertainment alternatives; ● our relationships with and the performance of third-party managers; ● increases in operating costs, including increases in the cost of property insurance, utilities and real estate and personal property taxes, due to inflation and other factors that may not be offset by increased prices; and ● natural or man-made disasters.
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.
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.
While demand across our segments remained strong despite these challenges, our business, and residential segment in particular, was impacted from the aforementioned macroeconomic factors, including supply chain disruptions, cost increases and rising interest rates, which, for example, have extended homesite and home deliveries in certain residential communities and increased operating costs.
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.
Materials, parts and labor costs have increased in recent years, sometimes significantly and over a short period of time.
Materials, parts and labor 10 Table of Contents costs have increased in recent years, sometimes significantly and over a short period of time.
Hospitality revenues are typically higher in the second and third quarters, and vary depending on the timing of holidays and school breaks. Commercial real estate sales tend to be non-recurring. Projects depend on uncertain demand. Extraordinary events such as the emergence of new COVID-19 variants or hurricanes may dramatically change demand and pricing for products and services.
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 currently maintain, and in the future may seek additional strategic partnerships, including the formation of joint ventures (“JVs”), to develop real estate or to pursue other business activities, capitalize on the potential of our residential, hospitality and commercial opportunities and maximize the value of our assets.
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.
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.
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.
Florida’s state-owned property insurance company, Citizens Property Insurance Corp., underwrites homeowner property insurance. If there were to be a catastrophic hurricane or series of hurricanes to hit Florida, the exposure of the state government to property insurance claims may place extreme stress on state finances. We are dependent on third party service providers for certain services.
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.
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.
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. 9 Table of Contents We face risks associated with short-term U.S.
In addition to impacting general economic conditions, a public health emergency such as the COVID-19 pandemic may exacerbate factors that impact our operations, including supply chain disruptions, labor shortages and rising commodity and product costs, which may continue after the public health emergency has subsided.
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.
Credit-related impairment losses can negatively affect earnings. Investments in securities and funds are not insured against loss of principal. Under certain circumstances we may be required to redeem all or part of an investment, which may result in a loss.
Our 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.
We have exposure to credit risk associated with our short-term securities and these instruments are subject to price fluctuations as a result of changes in the financial market’s assessment of issuer credit quality, increases in delinquency and default rates, changes in prevailing interest rates and other economic factors.
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.
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 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.
Our failure to maintain the security of the data, including via the penetration of our network security and the misappropriation of confidential and personal information, may result in business disruption, damage to our reputation, fines, penalties, regulatory proceedings and other severe financial and business implications. We are subject to risks related to corporate social responsibility and reputation.
Our 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.
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.
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.
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.
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. 14 Table of Contents 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.
In 2022, we paid quarterly cash dividends of $0.10 per share on our common stock and we currently expect to continue to pay quarterly dividends.
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.
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.
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.
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.
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.
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. 12 Table of Contents ● Hurricanes . Florida is particularly susceptible to the occurrence of hurricanes.
If Northwest Florida experiences an extended period of slow growth, or even net out-migration, our business, results of operations, cash flows and financial condition will likely be materially adversely affected. ● Hurricanes . Florida is particularly susceptible to the occurrence of hurricanes. Depending on where any particular hurricane makes landfall, our developments in Northwest Florida may experience catastrophic damage.
To the extent the IRS issues additional interpretive guidance that renders ineligible certain categories of projects that are currently expected to qualify, we may be unable to fully realize the benefits of the QOZ Program as anticipated, which may impact our investments. ● NOLs . We have significant state net operating loss carryforwards (“NOLs”).
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.
Any of these factors may increase our costs or limit or reduce the prices we are able to charge for our hospitality products or services, or otherwise affect our ability to maintain existing properties, develop new properties or add amenities to our existing properties. Our commercial segment is subject to risks associated with the financial condition of our commercial tenants.
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.
If market conditions experience volatility or worsen, tenant and other customers’ demand may materially decline. For example, throughout 2022, we faced macroeconomic headwinds caused by, among other things, inflation, rising interest rates, supply chain disruptions, geopolitical conflicts and the continuing recovery from the COVID-19 pandemic, which impacted buyer sentiment.
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.
If our corporate headquarters facility is damaged or destroyed, we may have difficulty performing certain corporate and operational functions. We maintain property and business interruption insurance, subject to certain deductibles. ● Climate Conditions .
Such damage may materially delay sales or lessen demand for our residential or commercial real estate and lessen demand for our hospitality and leasing operations. If our corporate headquarters facility is damaged or destroyed, we may have difficulty performing certain corporate and operational functions. We maintain property and business interruption insurance, subject to certain deductibles. ● Climate Conditions .
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.
Our business strategy includes the development and leasing of multi-family and senior living properties, management of commercial properties and commercial assets for sale.
Our investments are supervised and directed by Fairholme Capital Management, L.L.C. pursuant to the terms of an Investment Management Agreement, as amended, (the “Investment Management Agreement”). See Note 5.
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.
As of December 31, 2022, we had approximately $996.3 million of real estate investments, $50.0 million of investment in unconsolidated joint ventures and $39.6 million of property and equipment, net recorded on our books that may be subject to impairment.
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.
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. 11 Table of Contents 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.
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.
The construction and building industry, similar to many other industries, are experiencing worldwide supply chain disruptions and cost increases due to a multitude of factors, including inflation, rising interest rates, geopolitical conflicts, such as the conflict between Russia and Ukraine, the continuing recovery from COVID-19 and labor shortages.
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.
He is the Manager of, and controls entities that own and control, Fairholme Holdings, LLC (“Fairholme”), which wholly owns Fairholme Capital Management, L.L.C. (“FCM”, an investment advisor registered with the SEC). As of December 31, 2022, clients of FCM, including Mr. Berkowitz, beneficially owned approximately 41.6% of our common 13 Table of Contents stock.
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.
In addition, we may decide not to make future stock repurchases at the same rate or at all, as a result of, among other factors, the excise tax on stock repurchases, which was recently introduced by the Inflation Reduction Act of 2022. We may continue to experience significant volatility in the market price of our common stock .
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 .
Investments included in Item 15 of this Form 10-K for additional information. 9 Table of Contents RISKS RELATED TO THE OPERATION OF OUR BUSINESS SEGMENTS We are exposed to risks associated with commercial and residential real estate development and construction.
RISKS RELATED TO THE OPERATION OF OUR BUSINESS SEGMENTS We are exposed to risks associated with commercial and residential real estate development and construction.
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.
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.
We and the real estate industry in general may be adversely affected during periods of high inflation, primarily because of higher construction and operating costs. We may invest in new business endeavors or product lines, which are inherently risky and could disrupt our ongoing business and present risks not originally contemplated.
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.
Further, with regard to our residential segment, revenues from homesite sales can fluctuate period-to-period due to variations in the mix of sales from different communities, as well as other variations in product mix. Given these fluctuations in product mix, revenues from our residential segment may significantly vary from year to year.
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.
A downgrade of the U.S. government’s credit rating may also decrease the value of our investments – debt securities (“Securities”). The market value of these investments is subject to change from period-to-period, especially in light of the continuing recovery from the COVID-19 pandemic which has caused market volatility. Our Securities currently include investments in U.S. Treasury Bills.
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.
While in 2022, rising interest rates negatively impacted buyers’ ability to obtain financing and the housing market generally, to date we have not experienced material declines in customer demand for our homesites. However, in the event financing challenges reduce demand from homebuilders to purchase homesites, then our sales, results of operations, cash flows and financial condition may be negatively affected.
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.
Risks RELATED to our existing ownership structure Our largest shareholder controls approximately 41.6% of our common stock, which may limit our minority shareholders’ ability to influence corporate matters. Mr. Bruce R. Berkowitz is the Chairman of our Board.
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.
Financial Instruments and Fair Value Measurements included in Item 15 of this Form 10-K for additional information. We cannot assure you that we will not make changes to our existing capital allocation plan, including whether we will continue to pay dividends at the current rate or at all.
Any of these circumstances could adversely impact our financial position and results of operations. 19 Table of Contents 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 occurrence of natural disasters and the threat of adverse climate changes (or perceived threat of from climate change) may also have a long-term negative effect on the attractiveness of Northwest Florida. Manmade disasters or disruptions, such as oil spills, acts of terrorism, power outages and communications failures may simultaneously disrupt our operations.
The occurrence of natural 13 Table of Contents 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.
If we fail, or are perceived to be failing, to meet the expectations of our stakeholders, which are evolving, we may suffer from reputational damage and our business or financial condition could be adversely affected. The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements, or misrepresentations.
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.
In addition, we face competition for tenants from other retail shopping centers and commercial facilities, as well as for our multi-family and senior living communities. The forestry business is also highly competitive in terms of price and quality. Wood products are subject to increasing competition from a variety of substitute products, including non-wood and engineered wood products.
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.
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.
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.
This impact may also be exacerbated in periods of general economic instability and capital markets volatility. We face risks associated with short-term liquid investments. We continue to have significant cash balances that are invested in a variety of short-term, investment-grade investments that are intended to preserve principal value and maintain a high degree of liquidity.
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.
Removed
As discussed above under “ A decline in general economic conditions, particularly in our primary market locations, could lead to reduced consumer demand for our products and services ,” our residential segment has been particularly impacted year-over-year as a variety of macroeconomic factors have caused delayed homesite and home deliveries and increased certain operating costs.
Added
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.
Removed
As a consequence, while we have not yet experienced a material increase in cancellations, it has impacted the timing of revenue we have been able to recognize. Nonetheless, should we experience increased cancellations as a result of such macroeconomic factors, our business could be adversely impacted.
Added
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.
Removed
Public health emergencies such as the COVID-19 pandemic have adversely affected, and could in the future, adversely affect our business.

… 22 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

11 edited+2 added−1 removed0 unchanged
Biggest changeThese commercial properties are located in Beckrich Office Park, where we are headquartered; Pier Park North (the “Pier Park North JV”), Pier Park Crossings (the “Pier Park Crossings JV”), Pier Park Crossings Phase II (the “Pier Park Crossings Phase II JV”), Watersound Origins Crossings (the “Watersound Origins Crossings JV”), Mexico Beach Crossings (the “Mexico Beach Crossings JV”) Watercrest Senior Living (the “Watercrest JV”), North Bay Landing, WindMark Beach, VentureCrossings, Watersound Town Center, West Bay Town Center, Florida State University (“FSU”)/Tallahassee Memorial Hospital (“TMH”) Medical Campus and other Northwest Florida locations. ​
Biggest changeThese 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.
These include the Watersound Origins, Watersound Origins West, Breakfast Point East, Watersound Camp Creek, WindMark Beach, SouthWood, Titus Park, College Station, Park Place, Ward Creek, Salt Creek at Mexico Beach and other Northwest Florida communities. In our hospitality segment, we own a beach club and three golf courses that are situated in or near our residential communities.
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.
In our commercial segment, we own, or jointly own, the properties used in our operations and have properties under construction that will be used in our operations, which include multi-family, senior living, self-storage, retail, office and commercial property.
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.
We also have additional entitlements, or legal rights, to develop acreage outside of the Sector Plan. Approximately 86% of our real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf of Mexico. Undeveloped land is managed as timberlands until designated for development.
We 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, see “Item 1.
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.
In our residential segment, we develop land in multiple residential communities into homesites for sale to homebuilders and on a limited basis to retail customers. As of December 31, 2022, we had completed homesites and homesites under development, engineering or in conceptual planning in nineteen separate communities.
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.
We own the WaterColor Inn, The Pearl Hotel, Hilton Garden Inn Panama City Airport, Homewood Suites by Hilton Panama City Beach and the WaterSound Inn, along with nearby retail and commercial space.
We 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.
Item 2. Properties St. Joe owns 169,000 acres in Northwest Florida. A portion of our land is within the Sector Plan, that entitles, or gives legal rights, for us to develop over 170,000 residential dwelling units, over 22 million square feet of retail, commercial and industrial space and over 3,000 hotel rooms on lands within Florida’s Bay and Walton counties.
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 have under construction an Embassy Suites by Hilton hotel (the “Pier Park Resort Hotel JV”), Home2 Suites by Hilton, Camp Creek Inn and The Lodge 30A hotel (“The Lodge 30A JV”). We own additional properties in Panama City Beach, Florida that we operate as rental property. We own two marinas.
With our JV partners, we own The Lodge 30A and 21 Table of Contents 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.
Business ” and “ Schedule III (Consolidated) - Real Estate and Accumulated Depreciation ” included in Item 15 of this Form 10-K for further information.
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.
We also have under construction Hotel Indigo and own Harrison’s Kitchen & Bar, a standalone restaurant which opened in 2022, both on leased land in downtown Panama City.
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.
Removed
In addition to the properties 19 Table of Contents we own, we have investments in unconsolidated joint ventures that own properties such as LMWS, LLC (the “Latitude Margaritaville Watersound JV”) that includes the Latitude Margaritaville Watersound community.
Added
Item 2. Properties St. Joe owns 168,000 acres in Northwest Florida.
Added
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 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+0 added−0 removed5 unchanged
Biggest changeOur common stock is listed on the NYSE under the symbol “JOE.” During 2022, we paid quarterly cash dividends of $0.10 per share on our common stock ($0.40 per share in the aggregate) and we expect to continue to pay quarterly dividends.
Biggest changeOur 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).
The program has no expiration date. As of December 31, 2022, 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 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.
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 2022. ​ Item 6. Reserved ​
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 ​
The Custom Real Estate Group is composed of Alexander & Baldwin Inc. (ALEX), CTO Realty Growth, Inc. (CTO), Five Point Holdings, LLC (FPH), The Howard Hughes Corporation (HHC), Maui Land & Pineapple Company, Inc. (MLP), Stratus Properties Inc. (STRS) and Tejon Ranch Co. (TRC). Total returns shown assume that dividends are reinvested.
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.
Past payments of dividends should not be construed as a guarantee of payment or declaration of future dividends in the same amount or at all. See Item 1A.
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.
The following performance graph compares our cumulative shareholder returns for the period from December 31, 2017 through December 31, 2022, assuming $100 was invested on December 31, 2017, in our common stock, in the S&P SmallCap 600 Index, and a custom real estate peer group (the “Custom Real Estate Peer Group”).
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 stock price performance shown below is not necessarily indicative of future price performance. 21 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 The St.
The stock price performance shown below is not necessarily indicative of future price performance. ​ 23 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 The St.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities On February 20, 2023, we had approximately 789 registered holders of record of our common stock.
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.
During 2021, we paid quarterly cash dividends of $0.08 per share on our common stock ($0.32 per share in the aggregate). In the fourth quarter of 2020, we paid a cash dividend of $0.07 per share on our common stock.
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).
Joe Company ​ $ 100 ​ $ 72.96 ​ $ 109.86 ​ $ 235.72 ​ $ 290.99 ​ $ 218.03 S&P SmallCap 600 Index ​ $ 100 ​ $ 91.52 ​ $ 112.37 ​ $ 125.05 ​ $ 158.59 ​ $ 133.06 Custom Real Estate Peer Group ​ $ 100 ​ $ 70.73 ​ $ 86.79 ​ $ 61.15 ​ $ 80.71 ​ $ 61.13 Stock Repurchase Program Our Board has approved the Stock Repurchase Program pursuant to which we are authorized to repurchase shares of our common stock.
Joe Company ​ $ 100 ​ $ 150.57 ​ $ 323.10 ​ $ 398.91 ​ $ 298.92 ​ $ 469.65 S&P SmallCap 600 Index ​ $ 100 ​ $ 120.86 ​ $ 132.43 ​ $ 165.89 ​ $ 137.00 ​ $ 156.02 Custom Real Estate Peer Group ​ $ 100 ​ $ 123.04 ​ $ 90.97 ​ $ 121.68 ​ $ 97.39 ​ $ 113.57 Stock Repurchase Program Our Board has approved the Stock Repurchase Program pursuant to which we are authorized to repurchase shares of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

211 edited+52 added−50 removed62 unchanged
Biggest changeIncome Taxes included in Item 15 of this Form 10-K for additional information. 35 Table of Contents Segment Results Residential The table below sets forth the consolidated results of operations of our residential segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 2020 ​ ​ In millions Revenue: ​ ​ ​ Real estate revenue ​ $ 85.1 ​ $ 137.8 ​ $ 69.4 Leasing revenue ​ ​ 0.1 ​ ​ 0.2 ​ ​ 0.2 Other revenue ​ 7.7 ​ 6.9 ​ 4.6 Total revenue ​ 92.9 ​ 144.9 ​ 74.2 Expenses: ​ ​ ​ Cost of real estate and other revenue ​ 44.1 ​ 56.8 ​ 29.8 Other operating expenses ​ 4.0 ​ 4.9 ​ 5.3 Depreciation, depletion and amortization ​ 0.2 ​ 0.2 ​ 0.2 Total expenses ​ 48.3 ​ 61.9 ​ 35.3 Operating income ​ 44.6 ​ 83.0 ​ 38.9 Other income (expense): ​ ​ ​ Investment income, net ​ ​ 1.1 ​ ​ 0.8 ​ ​ 0.2 Interest expense ​ (0.5) ​ (0.6) ​ (0.6) Gain on contributions to unconsolidated joint ventures ​ ​ 0.9 ​ ​ 0.5 ​ ​ 15.7 Equity in income (loss) from unconsolidated joint ventures ​ ​ 3.9 ​ ​ (1.9) ​ ​ (0.5) Other (expense) income, net ​ (0.5) ​ 0.1 ​ — Total other income (expense), net ​ 4.9 ​ (1.1) ​ 14.8 Income before income taxes ​ $ 49.5 ​ $ 81.9 ​ $ 53.7 ​ Real estate revenue includes sales of homesites, homes and other residential land and certain homesite residuals from homebuilder sales that provide us a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold.
Biggest changeIncome Taxes included in Item 15 of this Form 10-K for additional information. 38 Table of Contents Segment Results Residential The table below sets forth the consolidated results of operations of our residential segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ In millions Revenue: ​ ​ ​ Real estate revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate revenue ​ $ 145.6 ​ $ 85.1 ​ $ 137.8 Other revenue ​ 10.1 ​ 7.7 ​ 6.9 Total real estate revenue ​ ​ 155.7 ​ ​ 92.8 ​ ​ 144.7 Leasing revenue ​ ​ 0.1 ​ ​ 0.1 ​ ​ 0.2 Total revenue ​ 155.8 ​ 92.9 ​ 144.9 Expenses: ​ ​ ​ Cost of real estate and other revenue ​ 77.9 ​ 44.1 ​ 56.8 Other operating expenses ​ 4.5 ​ 3.9 ​ 4.8 Depreciation, depletion and amortization ​ 0.2 ​ 0.2 ​ 0.2 Total expenses ​ 82.6 ​ 48.2 ​ 61.8 Operating income ​ 73.2 ​ 44.7 ​ 83.1 Other income (expense): ​ ​ ​ Investment income, net ​ ​ 1.7 ​ ​ 1.1 ​ ​ 0.8 Interest expense ​ (0.4) ​ (0.5) ​ (0.6) Gain on contributions to unconsolidated joint ventures ​ ​ 0.7 ​ ​ 0.9 ​ ​ 0.5 Equity in income (loss) from unconsolidated joint ventures ​ ​ 23.6 ​ ​ 3.9 ​ ​ (1.9) Other income (expense), net ​ 0.2 ​ (0.5) ​ 0.1 Total other income (expense), net ​ 25.8 ​ 4.9 ​ (1.1) Income before income taxes ​ $ 99.0 ​ $ 49.6 ​ $ 82.0 ​ The following tables set forth our consolidated residential real estate revenue and cost of revenue activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ Units ​ ​ Cost of Gross Gross ​ ​ ​ Sold ​ Revenue ​ Revenue ​ Profit ​ Margin ​ ​ ​ Dollars in millions ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Homesites (a) ​ 1,063 ​ $ 145.0 ​ $ 73.5 ​ $ 71.5 ​ 49.3 % Land sales N/A ​ ​ 0.6 ​ ​ 0.1 ​ ​ 0.5 ​ 83.3 % Total consolidated 1,063 ​ $ 145.6 ​ $ 73.6 ​ $ 72.0 49.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unconsolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Homes (b) ​ 641 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total consolidated and unconsolidated ​ 1,704 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Includes 100 entitled but undeveloped homesites sold within the SouthWood community.
Our commercial segment generates timber revenue primarily from open market sales of timber on site without the associated delivery costs. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 10. Debt, Net included in Item 15 of this Form 10-K.
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.
(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.
(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.
These loans are typically secured by various interests in the property such as assignment of rents, leases, deposits, permits, plans, specifications, fees, agreements, approvals, contracts, licenses, construction contracts, development contracts, service contracts, franchise agreements, the borrower’s assets, improvements, and security interests in the rents, personal property, management agreements, construction agreements, improvements, accounts, profits, leases, accounts and fixtures (collectively, “Security Interests”).
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 loan may not be prepaid prior to April 1, 2024 and if any additional principal is prepaid from April 1, 2024 through March 31, 2034 a premium is due to the lender of 1% - 10%. The loan is secured by the real property and certain other Security Interests. See Note 10.
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.
The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021. ​ Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 The following discussion sets forth details of the consolidated results of operations of our residential segment. Homesites.
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.
Our commercial segment also generates revenue from the sale of developed and undeveloped land, timber holdings or land with limited development and/or entitlements and the sale of commercial operating properties. Real estate sales in our commercial segment incur costs of revenue directly associated with the land, development, construction, timber and selling costs.
Our commercial segment generates 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.
Some of the significant assumptions that are used to develop the undiscounted cash flows include: ● for investments in hotels, other rental units and vacation rental homes, use of average occupancy and room rates, revenue from food and beverage and other amenity operations, operating expenses and capital expenditures, and eventual disposition of such properties as hotels, private residence vacation units or condominiums, based on current prices for similar units appreciated to the expected sale date; ● for investments in commercial, multi-family, self-storage, senior living or retail property, use of future occupancy and rental rates, operating expenses and capital expenditures and the amount of proceeds to be realized upon eventual disposition of such property at a terminal capitalization rate; and ● for investments in club, 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.
Some of the significant assumptions that are used to develop the undiscounted cash flows include: ● for investments in hotels, other rental units and vacation rental homes, use of average occupancy and room rates, revenue from food and beverage and other amenity operations, operating expenses and capital expenditures, and eventual disposition of such properties as hotels, private residence vacation units or condominiums, based on current prices for similar units appreciated to the expected sale date; ● for investments in commercial, multi-family, self-storage, senior living or retail property, use of future occupancy and rental rates, operating expenses and capital expenditures and the amount of proceeds to be realized upon eventual disposition of such property at a terminal capitalization rate; and 53 Table of Contents ● 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.
Joint Ventures included in Item 15 of this Form 10-K for additional information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2021 ​ ​ Units ​ ​ Cost of Gross Gross ​ ​ ​ Sold ​ Revenue ​ Revenue ​ Profit ​ Margin ​ ​ ​ Dollars in millions ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Homesites (a) 804 ​ $ 136.7 ​ $ 52.7 ​ $ 84.0 ​ 61.4 % Homes 2 ​ ​ 1.0 ​ ​ 0.9 ​ ​ 0.1 ​ 10.0 % Land sale N/A ​ ​ 0.1 ​ ​ — ​ ​ 0.1 ​ 100.0 % Total consolidated 806 ​ $ 137.8 ​ $ 53.6 ​ $ 84.2 61.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unconsolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Homes (b) ​ 47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total consolidated and unconsolidated ​ 853 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Includes 55 units sold as undeveloped homesites within the SouthWood community.
Joint Ventures included in Item 15 of this Form 10-K for additional information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2021 ​ ​ Units ​ ​ Cost of Gross Gross ​ ​ Sold ​ Revenue ​ Revenue ​ Profit ​ Margin ​ ​ Dollars in millions ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Homesites (a) ​ 804 ​ $ 136.7 ​ $ 52.7 ​ $ 84.0 ​ 61.4 % Homes ​ 2 ​ ​ 1.0 ​ ​ 0.9 ​ ​ 0.1 ​ 10.0 % Land sale ​ N/A ​ ​ 0.1 ​ ​ — ​ ​ 0.1 ​ 100.0 % Total consolidated ​ 806 ​ $ 137.8 ​ $ 53.6 ​ $ 84.2 61.1 % Unconsolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Homes (b) ​ 47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total consolidated and unconsolidated ​ 853 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Includes 55 entitled but undeveloped homesites sold within the SouthWood community.
We seek to enhance the value of our owned real estate assets by developing residential, commercial and hospitality projects to meet market demand. Approximately 86% of our real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf of Mexico.
We 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.
In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”) which clarifies the original guidance that certain optional expedients and exceptions in contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.
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.
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 22 Table of Contents 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.
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.
Additionally, we evaluate the results of these estimates on an on-going basis. Management’s estimates 49 Table of Contents 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.
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.
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.
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.
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 indicator of potential impairment may exist.
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 Table of Contents indicator of potential impairment may exist.
See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information. In 2018, the Pier Park Crossings JV entered into a $36.6 million loan, insured by the U.S. Department of Housing and Urban Development (“HUD”) (the “PPC JV Loan”).
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”).
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 extends the temporary reference rate reform guidance under Topic 848 from December 31, 2022 to December 31, 2024.
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.
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 mortgage notes receivable and other receivables as detailed in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 2020 ​ ​ In millions Interest, dividend and accretion income ​ $ 0.8 ​ $ 0.1 ​ $ 1.2 Unrealized loss on investments, net ​ ​ — ​ ​ (1.9) ​ ​ (4.7) Interest income from investments in special purpose entities ​ 8.0 ​ 8.1 ​ 8.2 Interest earned on notes receivable and other interest ​ 1.1 ​ 0.9 ​ 0.3 Total investment income, net ​ $ 9.9 ​ $ 7.2 ​ $ 5.0 ​ Investment income, net increased $2.7 million to $9.9 million during 2022, as compared to $7.2 million in 2021.
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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ In millions Interest, dividend and accretion income ​ $ 2.9 ​ $ 0.8 ​ $ 0.1 Unrealized loss on investments, net ​ ​ — ​ ​ — ​ ​ (1.9) Interest income from investments in special purpose entities ​ 8.0 ​ 8.0 ​ 8.1 Interest earned on notes receivable and other interest ​ 2.4 ​ 1.1 ​ 0.9 Total investment income, net ​ $ 13.3 ​ $ 9.9 ​ $ 7.2 ​ Investment income, net increased $3.4 million to $13.3 million during 2023, as compared to $9.9 million in 2022.
The property was impaired in 2011 and has no basis as of December 31, 2022 and 2021. ​ We have commercial projects under development and construction as detailed in the table below.
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, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation by the Pier Park North JV; any voluntary transfer or encumbrance of the property in violation of the due-on-sale clause in the security instrument; upon commencement of voluntary bankruptcy or insolvency proceedings or upon breach of covenants in the security instrument.
In addition, the 46 Table of Contents 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.
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.
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.
We actively seek higher and better uses for our real estate assets through a range of development activities. As part of our core business strategy, we have created a meaningful portion of our business through joint ventures and limited partnerships over the past several years.
We 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.
Other Income, Net included in Item 15 of this Form 10-K for additional information for additional information. Income Tax Expense Income tax expense was $24.4 million in 2022, compared to $25.0 million in 2021. Our effective tax rate was 25.6% in 2022, as compared to 25.1% in 2021.
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.
The Pier Park Resort Hotel JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR.
The 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.
Watersound Club provides club members and guests in some of our hotels access to our member facilities, which include Camp Creek, Shark’s Tooth golf course, 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 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.
(f) Included in net rentable square feet as of December 31, 2022, 2021 and 2020, is 1,364 square feet leased to a consolidated JV. (g) Includes various other properties, each with less than 10,000 net rentable square feet. (h) As of December 31, 2022, the space is no longer available for lease.
(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.
Cash Flows from Investing Activities Cash flows used in investing activities primarily includes capital expenditures for operating property and property and equipment used in our operations, purchases of investments, capital contributions to unconsolidated joint ventures and payments for interest in unconsolidated joint venture, partially offset by proceeds from insurance claims, sales and maturities of investments, capital distributions from unconsolidated joint ventures and maturities of assets held by special purpose entities.
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.
In December 2022, a wholly-owned subsidiary of ours entered into a $37.0 million loan, which is guaranteed by us (“The Pearl Hotel Loan”). As of December 31, 2022, $37.0 million was outstanding on The Pearl Hotel Loan. The loan bears interest at a rate of 6.3% and matures in December 2032.
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.
Joint Ventures included in Item 15 of this Form 10-K for additional information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 2020 ​ ​ In millions Latitude Margaritaville Watersound JV (a) ​ $ 0.9 ​ $ 0.5 ​ $ 15.7 Sea Sound JV (b) ​ ​ — ​ ​ — ​ ​ 4.3 Watersound Fountains Independent Living JV (c) ​ ​ — ​ ​ 3.1 ​ ​ — Pier Park RI JV (d) ​ ​ 1.4 ​ ​ — ​ ​ — Electric Cart Watersound JV (e) ​ ​ 0.4 ​ ​ — ​ ​ — Gain on Contributions to Unconsolidated Joint Ventures ​ $ 2.7 ​ $ 3.6 ​ $ 20.0 (a) Includes a gain of $0.9 million and $0.5 million in 2022 and 2021, respectively, on additional infrastructure improvements contributed.
Joint Ventures included in Item 15 of this Form 10-K for additional information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ In millions Latitude Margaritaville Watersound JV (a) ​ $ 0.7 ​ $ 0.9 ​ $ 0.5 Watersound Fountains Independent Living JV (b) ​ ​ — ​ ​ — ​ ​ 3.1 Pier Park RI JV (c) ​ ​ — ​ ​ 1.4 ​ ​ — Electric Cart Watersound JV (d) ​ ​ — ​ ​ 0.4 ​ ​ — Gain on Contributions to Unconsolidated Joint Ventures ​ $ 0.7 ​ $ 2.7 ​ $ 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.
In August 2021, a wholly-owned subsidiary of ours entered into a $12.0 million loan, which is guaranteed by us (the “Watersound Town Center Grocery Loan”). As of December 31, 2022 and 2021, $11.4 million and $0.6 million, respectively, was outstanding on the Watersound Town Center Grocery Loan.
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.
Includes homesites platted or currently in concept planning, engineering, permitting or development. We have significant additional entitlements for future residential homesites on our land holdings. (b) Planned Unit Development (“PUD”). (c) Development Agreement (“DA”). (d) Detailed Specific Area Plan (“DSAP”). (e) The unconsolidated Latitude Margaritaville Watersound JV is building and selling homes in this community.
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.
As of December 31, 2022 and 2021, $35.2 million and $35.7 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% - 10% for any additional principal that is prepaid through August 31, 2031.
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.
Debt, Net included in Item 15 of this Form 10-K for additional information. In July 2022, a wholly-owned subsidiary of ours entered into a $13.7 million loan, which is guaranteed by us (the “Topsail Hotel Loan”). As of December 31, 2022, $5.2 million was outstanding on the Topsail Hotel Loan.
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 statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Risk Factors” in this Form 10-K.
The statements in this discussion regarding industry outlook, our expectations regarding our future 24 Table of Contents 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.
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 25 Table of Contents and other entertainment assets.
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.
We have significant additional entitlements for future hotel projects on our land holdings. (b) Seven additional suites were completed in June 2022. (c) We acquired the hotel in December 2022. The hotel was previously owned by a third party, but operated by our hospitality segment. (d) The hotel opened in July 2021. (e) The hotel opened in March 2022.
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.
In conducting our operations, we routinely hold customers’ assets in escrow pending completion of real estate transactions, and are responsible for the proper disposition of these balances for our customers. These amounts are maintained in segregated bank accounts and have not been included in the accompanying consolidated balance sheets, consistent with U.S. generally accepted accounting principles (“GAAP”) and industry practice.
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.
Capital expenditures for operating property and property and equipment were $259.1 million and $153.5 million during 2022 and 2021, 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.
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.
Homesites in these communities are developed based on market demand and sold primarily to homebuilders and on a limited basis to retail customers. The East Lake Creek, East Lake Powell, Lake Powell, Teachee, West Bay Creek and West Laird communities have phases of homesites in preliminary planning.
Homesites in these communities are developed based on market demand and sold primarily to homebuilders and on a limited basis to retail customers. 26 Table of Contents 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.
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, 2021, we had net rentable square feet of approximately 985,000, of which approximately 857,000 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.
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. 31 Table of Contents Other Revenue .
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 .
As a result of the refinance, the year ended December 31, 2022 includes a $0.1 million loss on early extinguishment of debt related to unamortized debt issuance costs, included within other income, net on the consolidated statements of income. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.
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.
As of December 31, 2022 and 2021, we were required to provide surety bonds that guarantee completion and maintenance of certain infrastructure in certain development projects and mitigation banks, as well as other financial guarantees of $38.1 million and $36.9 million, respectively, as well as standby letters of credit in the amount of $17.3 million and $12.9 million, respectively, which may potentially result in a liability to us if certain obligations are not met.
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.
Interest Expense Interest expense primarily includes interest incurred on the Senior Notes issued by Northwest Florida Timber Finance, LLC, project financing, Community Development District (“CDD”) debt and finance leases, as well as amortization of debt discount and premium and debt issuance costs as detailed in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 2020 ​ ​ In millions Interest expense and amortization of discount and issuance costs for Senior Notes issued by special purpose entity ​ $ 8.8 ​ $ 8.8 ​ $ 8.8 Other interest expense ​ 9.6 ​ 7.1 ​ 4.8 Total interest expense ​ $ 18.4 ​ $ 15.9 ​ $ 13.6 33 Table of Contents ​ Interest expense increased $2.5 million, or 15.7%, to $18.4 million in 2022, as compared to $15.9 million in 2021, primarily related to the increase in project financing and higher interest rates.
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 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ In millions Interest incurred for project financing and other interest expense ​ $ 21.8 ​ $ 9.6 ​ $ 7.1 Interest expense and amortization of discount and issuance costs for Senior Notes issued by special purpose entity ​ ​ 8.8 ​ ​ 8.8 ​ ​ 8.8 Total interest expense ​ $ 30.6 ​ $ 18.4 ​ $ 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.
Other income, net for 2022 and 2021, includes $2.6 million and $0.9 million, respectively, received from the Pier Park CDD for repayment of subordinated notes, partially offset by $0.6 million of expense for a homeowner’s association special assessment in the current period. 40 Table of Contents Commercial The table below sets forth the consolidated results of operations of our commercial segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 2020 ​ ​ In millions Revenue: ​ ​ ​ Leasing revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial leasing revenue ​ $ 19.6 ​ $ 15.8 ​ $ 14.8 Multi-family leasing revenue ​ ​ 14.2 ​ ​ 9.0 ​ ​ 3.9 Senior living leasing revenue ​ ​ 4.7 ​ ​ 2.0 ​ ​ — Total leasing revenue ​ ​ 38.5 ​ ​ 26.8 ​ ​ 18.7 Commercial and rural real estate revenue ​ 13.7 ​ 12.0 ​ 11.7 Timber revenue ​ ​ 6.7 ​ ​ 6.0 ​ ​ 6.3 Hospitality revenue ​ ​ 0.5 ​ ​ 0.7 ​ ​ 0.4 Total revenue ​ 59.4 ​ 45.5 ​ 37.1 Expenses: ​ ​ ​ Cost of leasing revenue ​ 16.4 ​ 11.4 ​ 5.9 Cost of commercial and rural real estate revenue ​ 4.0 ​ 2.5 ​ 5.5 Cost of timber revenue ​ ​ 0.8 ​ ​ 0.7 ​ ​ 0.8 Cost of hospitality revenue ​ ​ 0.6 ​ ​ 0.8 ​ ​ 0.6 Other operating expenses ​ 4.2 ​ 3.9 ​ 3.7 Depreciation, depletion and amortization ​ 13.0 ​ 10.7 ​ 7.1 Total expenses ​ 39.0 ​ 30.0 ​ 23.6 Operating income ​ 20.4 ​ 15.5 ​ 13.5 Other (expense) income: ​ ​ ​ Interest expense ​ (7.3) ​ (5.9) ​ (3.8) Gain on contributions to unconsolidated joint ventures ​ ​ 1.8 ​ ​ 3.1 ​ ​ 3.9 Equity in income (loss) from unconsolidated joint ventures ​ ​ 22.1 ​ ​ 1.0 ​ ​ (0.1) Other (expense) income, net ​ (0.7) ​ 3.7 ​ 0.1 Total other income, net ​ 15.9 ​ 1.9 ​ 0.1 Income before income taxes ​ $ 36.3 ​ $ 17.4 ​ $ 13.6 ​ The following table sets forth details of our commercial segment consolidated revenue and cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ Year Ended December 31, 2021 ​ Year Ended December 31, 2020 ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Profit ​ Gross ​ ​ ​ ​ ​ Profit ​ Gross ​ ​ ​ ​ ​ Profit ​ Gross ​ ​ ​ Revenue ​ (Deficit) ​ Margin ​ ​ Revenue ​ (Deficit) ​ Margin ​ Revenue ​ (Deficit) ​ Margin ​ ​ In millions Leasing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial leasing ​ $ 19.6 ​ $ 12.7 64.8 % ​ $ 15.8 ​ $ 10.8 68.4 % ​ $ 14.8 ​ $ 10.3 69.6 % Multi-family leasing ​ ​ 14.2 ​ ​ 8.8 62.0 % ​ ​ 9.0 ​ ​ 5.6 62.2 % ​ ​ 3.9 ​ ​ 3.0 76.9 % Senior living leasing ​ ​ 4.7 ​ ​ 0.6 ​ 12.8 % ​ ​ 2.0 ​ ​ (1.0) ​ (50.0) % ​ ​ — ​ ​ (0.5) ​ — % Total leasing ​ ​ 38.5 ​ ​ 22.1 ​ 57.4 % ​ ​ 26.8 ​ ​ 15.4 ​ 57.5 % ​ ​ 18.7 ​ ​ 12.8 ​ 68.4 % Commercial and rural real estate ​ ​ 13.7 ​ ​ 9.7 ​ 70.8 % ​ ​ 12.0 ​ ​ 9.5 ​ 79.2 % ​ ​ 11.7 ​ ​ 6.2 ​ 53.0 % Timber ​ ​ 6.7 ​ ​ 5.9 ​ 88.1 % ​ ​ 6.0 ​ ​ 5.3 ​ 88.3 % ​ ​ 6.3 ​ 5.5 87.3 % Hospitality ​ ​ 0.5 ​ ​ (0.1) ​ (20.0) % ​ ​ 0.7 ​ ​ (0.1) ​ (14.3) % ​ ​ 0.4 ​ ​ (0.2) ​ (50.0) % Total ​ $ 59.4 ​ $ 37.6 63.3 % ​ $ 45.5 ​ $ 30.1 66.2 % ​ $ 37.1 ​ $ 24.3 65.5 % ​ 41 Table of Contents Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 The following discussion sets forth details of the consolidated results of operations of our commercial segment.
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 Table of Contents Commercial The table below sets forth the consolidated results of operations of our commercial segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ In millions Revenue: ​ ​ ​ Leasing revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial leasing revenue ​ $ 21.5 ​ $ 19.6 ​ $ 15.8 Multi-family leasing revenue ​ ​ 19.4 ​ ​ 14.2 ​ ​ 9.0 Senior living leasing revenue ​ ​ 7.3 ​ ​ 4.7 ​ ​ 2.0 Total leasing revenue ​ ​ 48.2 ​ ​ 38.5 ​ ​ 26.8 Real estate revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and rural real estate revenue ​ 21.3 ​ 13.7 ​ 12.0 Timber revenue ​ ​ 4.9 ​ ​ 6.7 ​ ​ 6.0 Total real estate revenue ​ ​ 26.2 ​ ​ 20.4 ​ ​ 18.0 Hospitality revenue ​ ​ — ​ ​ 0.5 ​ ​ 0.7 Total revenue ​ 74.4 ​ 59.4 ​ 45.5 Expenses: ​ ​ ​ Cost of leasing revenue ​ 22.9 ​ 16.4 ​ 11.4 Cost of real estate revenue ​ 7.4 ​ 4.8 ​ 3.2 Cost of hospitality revenue ​ ​ — ​ ​ 0.6 ​ ​ 0.8 Other operating expenses ​ 4.3 ​ 4.2 ​ 3.9 Depreciation, depletion and amortization ​ 16.1 ​ 13.0 ​ 10.7 Total expenses ​ 50.7 ​ 39.0 ​ 30.0 Operating income ​ 23.7 ​ 20.4 ​ 15.5 Other (expense) income: ​ ​ ​ Interest expense ​ (11.7) ​ (7.3) ​ (5.9) Gain on contributions to unconsolidated joint ventures ​ ​ — ​ ​ 1.8 ​ ​ 3.1 Equity in (loss) income from unconsolidated joint ventures ​ ​ (0.9) ​ ​ 22.1 ​ ​ 1.0 Other income (expense), net ​ 0.1 ​ (0.7) ​ 3.7 Total other (expense) income, net ​ (12.5) ​ 15.9 ​ 1.9 Income before income taxes ​ $ 11.2 ​ $ 36.3 ​ $ 17.4 ​ The following table sets forth details of our commercial segment consolidated revenue and gross profit (deficit): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ Year Ended December 31, 2022 ​ Year Ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Profit ​ Gross ​ ​ ​ ​ ​ Profit ​ Gross ​ ​ ​ Revenue ​ Profit ​ Margin ​ ​ Revenue ​ (Deficit) ​ Margin ​ Revenue ​ (Deficit) ​ Margin ​ ​ In millions ​ Leasing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial leasing ​ $ 21.5 ​ $ 13.2 61.4 % ​ $ 19.6 ​ $ 12.7 64.8 % ​ $ 15.8 ​ $ 10.8 68.4 % Multi-family leasing ​ ​ 19.4 ​ ​ 10.3 53.1 % ​ ​ 14.2 ​ ​ 8.8 62.0 % ​ ​ 9.0 ​ ​ 5.6 62.2 % Senior living leasing ​ ​ 7.3 ​ ​ 1.8 ​ 24.7 % ​ ​ 4.7 ​ ​ 0.6 ​ 12.8 % ​ ​ 2.0 ​ ​ (1.0) ​ (50.0) % Total leasing ​ ​ 48.2 ​ ​ 25.3 ​ 52.5 % ​ ​ 38.5 ​ ​ 22.1 ​ 57.4 % ​ ​ 26.8 ​ ​ 15.4 ​ 57.5 % Real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and rural real estate ​ ​ 21.3 ​ ​ 14.7 ​ 69.0 % ​ ​ 13.7 ​ ​ 9.7 ​ 70.8 % ​ ​ 12.0 ​ ​ 9.5 ​ 79.2 % Timber ​ ​ 4.9 ​ ​ 4.1 ​ 83.7 % ​ ​ 6.7 ​ ​ 5.9 ​ 88.1 % ​ ​ 6.0 ​ 5.3 88.3 % Total real estate ​ ​ 26.2 ​ ​ 18.8 ​ 71.8 % ​ ​ 20.4 ​ ​ 15.6 ​ 76.5 % ​ ​ 18.0 ​ ​ 14.8 ​ 82.2 % Hospitality ​ ​ — ​ ​ — ​ N/A % ​ ​ 0.5 ​ ​ (0.1) ​ (20.0) % ​ ​ 0.7 ​ ​ (0.1) ​ (14.3) % Total ​ $ 74.4 ​ $ 44.1 59.3 % ​ $ 59.4 ​ $ 37.6 63.3 % ​ $ 45.5 ​ $ 30.1 66.2 % 44 Table of Contents ​ 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.
During 2021, net cash used in investing activities was $196.1 million, which included capital expenditures for operating property and equipment, purchases of investments of U.S.
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.
The increase of $1.2 million in interest expense during 2022, as compared to 2021, 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.
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.
The hospitality segment generates revenue and incurs costs from membership sales, membership reservations, 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, charter flights, other resort and entertainment activities and beach clubs, which includes operation of the WaterColor Beach Club.
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.
The specific Security Interests vary from loan to loan. In 2015, the Pier Park North JV entered into a $48.2 million loan (the “PPN JV Loan”). As of December 31, 2022 and 2021, $42.6 million and $43.6 million, respectively, was outstanding on the PPN JV Loan.
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.
(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. As of December 31, 2022, we had eighteen different homebuilders within our residential communities.
(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 Table of Contents As of December 31, 2023, we had nineteen different homebuilders within our residential communities.
(c) Included in net rentable square feet as of December 31, 2022, 2021 and 2020, is 1,500 square feet leased to a consolidated JV. 29 Table of Contents (d) Construction was completed in the third quarter of 2021. (e) Included in net rentable square feet as of December 31, 2022, 2021 and 2020, is 13,808 square feet of unfinished space.
(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.
See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Joint Ventures included in Item 15 of this Form 10-K for additional information.
Joe Commercial Gulf County, FL 16,964 100 % ​ 16,964 100 % ​ 16,964 100 % Beach Commerce Park (b) Bay County, FL 14,800 100 % ​ 14,800 100 % ​ 17,450 76 % South Walton Commerce Park (f) ​ Walton County, FL ​ 11,570 ​ 100 % ​ 11,570 ​ 88 % ​ 11,570 ​ 88 % WaterSound Gatehouse (b) Walton County, FL 10,271 100 % ​ 10,271 100 % ​ 10,271 87 % Other (g) ​ Bay, Gulf and Walton Counties, FL ​ 34,224 ​ 100 % ​ 34,224 ​ 100 % ​ 34,224 ​ 100 % SummerCamp Commercial (h) Franklin County, FL N/A N/A % ​ 13,000 0 % ​ 13,000 0 % ​ 1,033,730 95 % ​ 984,603 87 % ​ 907,504 85 % * Net Rentable Square Feet is designated as the current square feet available for lease as specified in the applicable lease agreements plus management’s estimate of space available for lease based on construction drawings.
Joe Commercial Gulf County, FL 16,964 100 % ​ 16,964 100 % ​ 16,964 100 % Beach Commerce Park (c) Bay County, FL 14,800 100 % ​ 14,800 100 % ​ 14,800 100 % South Walton Commerce Park (g) ​ Walton County, FL ​ 11,570 ​ 100 % ​ 11,570 ​ 100 % ​ 11,570 ​ 88 % WaterSound Gatehouse (c) Walton County, FL 10,271 100 % ​ 10,271 100 % ​ 10,271 100 % Other (h) ​ Bay, Gulf and Walton Counties, FL ​ 34,224 ​ 100 % ​ 34,224 ​ 100 % ​ 34,224 ​ 100 % SummerCamp Commercial (i) Franklin County, FL N/A N/A % ​ N/A N/A % ​ 13,000 0 % ​ 1,082,017 95 % ​ 1,033,730 95 % ​ 984,603 87 % 31 Table of Contents * 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.
See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information. 46 Table of Contents In October 2021, a wholly-owned subsidiary of ours entered into a $21.2 million loan, which is guaranteed by us (the “Hotel Indigo Loan”). As of December 31, 2022, $10.4 million was outstanding on the Hotel Indigo Loan.
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.
Gain on contributions to unconsolidated joint ventures for 2020 includes a gain of $15.7 million on land and additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
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.
Once complete, the hotel will be operated by our JV partner. 26 Table of Contents Our hotel portfolio by property is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rooms (a) ​ ​ Location ​ Completed ​ Planned ​ Total Operational ​ ​ ​ ​ ​ ​ ​ ​ WaterColor Inn (b) ​ Walton County, FL ​ 67 ​ — ​ 67 The Pearl Hotel (c) ​ Walton County, FL ​ 55 ​ — ​ 55 WaterSound Inn ​ Walton County, FL ​ 11 ​ — ​ 11 Hilton Garden Inn Panama City Airport (d) ​ Bay County, FL ​ 143 ​ — ​ 143 Homewood Suites by Hilton Panama City Beach (e) ​ Bay County, FL ​ 131 ​ — ​ 131 TownePlace Suites by Marriott Panama City Beach Pier Park (f) ​ Bay County, FL ​ 124 ​ — ​ 124 Total operational rooms ​ ​ ​ 531 ​ — ​ 531 ​ ​ ​ ​ ​ ​ ​ ​ ​ Under Development/Construction ​ ​ ​ ​ ​ ​ ​ ​ Embassy Suites by Hilton Panama City Beach (g) ​ Bay County, FL ​ — ​ 255 ​ 255 Hotel Indigo ​ Bay County, FL ​ — ​ 124 ​ 124 Residence Inn by Marriott, Panama City Beach, Florida (h) ​ Bay County, FL ​ — ​ 121 ​ 121 Home2 Suites by Hilton Santa Rosa Beach ​ Walton County, FL ​ — ​ 107 ​ 107 The Lodge 30A (g) ​ Walton County, FL ​ — ​ 85 ​ 85 Camp Creek Inn ​ Walton County, FL ​ — ​ 75 ​ 75 Total rooms under development/construction ​ ​ ​ — ​ 767 ​ 767 Total rooms ​ ​ ​ 531 ​ 767 ​ 1,298 (a) Includes hotels currently in operation or under development and construction.
Our hotel portfolio by property is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rooms (a) ​ ​ Location ​ Completed ​ Planned ​ Total Operational ​ ​ ​ ​ ​ ​ ​ ​ Camp Creek Inn (b) ​ Walton County, FL ​ 75 ​ — ​ 75 WaterColor Inn (c) ​ Walton County, FL ​ 67 ​ — ​ 67 The Pearl Hotel (d) ​ Walton County, FL ​ 55 ​ — ​ 55 WaterSound Inn ​ Walton County, FL ​ 11 ​ — ​ 11 The Lodge 30A (e) (f) ​ Walton County, FL ​ 85 ​ — ​ 85 Home2 Suites by Hilton Santa Rosa Beach (b) ​ Walton County, FL ​ 107 ​ — ​ 107 Embassy Suites by Hilton Panama City Beach Resort (f) (g) ​ Bay County, FL ​ 255 ​ — ​ 255 Hilton Garden Inn Panama City Airport ​ Bay County, FL ​ 143 ​ — ​ 143 Homewood Suites by Hilton Panama City Beach (h) ​ Bay County, FL ​ 131 ​ — ​ 131 Hotel Indigo Panama City Marina (b) ​ Bay County, FL ​ 124 ​ — ​ 124 TownePlace Suites by Marriott Panama City Beach Pier Park (i) ​ Bay County, FL ​ 124 ​ — ​ 124 Total operational rooms ​ ​ ​ 1,177 ​ — ​ 1,177 ​ ​ ​ ​ ​ ​ ​ ​ ​ Under Development/Construction ​ ​ ​ ​ ​ ​ ​ ​ Residence Inn by Marriott, Panama City Beach, Florida (j) ​ Bay County, FL ​ — ​ 121 ​ 121 Total rooms under development/construction ​ ​ ​ — ​ 121 ​ 121 Total rooms ​ ​ ​ 1,177 ​ 121 ​ 1,298 (a) Includes hotels currently in operation or under development and construction.
Other Income, Net included in Item 15 of this Form 10-K for additional information. ​ Liquidity and Capital Resources As of December 31, 2022, we had cash and cash equivalents and U.S. Treasury Bills classified as investments – debt securities of $78.3 million, compared to $159.1 million as of December 31, 2021.
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.
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, the Watersound Origins Crossings JV entered into a $37.9 million loan (the “Watersound Origins Crossings JV Loan”).
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”).
Commercial and rural real estate revenue related to sales for the three years ended December 31, 2022 includes the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Average Price ​ ​ ​ ​ Gross Profit Period ​ Sales ​ Acres Sold ​ Per Acre ​ ​ Revenue ​ on Sales ​ ​ ​ ​ ​ In millions (except for average price per acre) 2022 29 283 $ 44,876 $ 12.7 $ 9.3 2021 22 577 $ 20,797 $ 12.0 $ 9.5 2020 23 473 $ 24,736 $ 11.7 $ 6.2 ​ We believe the diversity of our commercial segment complements the growth of our residential and hospitality segments.
Commercial and rural real estate revenue related to sales for the three years ended December 31, 2023 includes the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Average Price ​ ​ ​ ​ Gross Profit Period ​ Sales ​ Acres Sold ​ Per Acre ​ Revenue ​ on Sales ​ ​ ​ ​ ​ In millions (except for average price per acre) 2023 28 474 $ 44,304 $ 21.0 $ 14.5 2022 29 283 $ 44,876 $ 12.7 $ 9.3 2021 22 577 $ 20,797 $ 12.0 $ 9.5 ​ We believe the diversity of our commercial segment complements the growth of our residential and hospitality segments.
Joint Ventures included in Item 15 of this Form 10-K for additional information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ In millions Equity in income (loss) from unconsolidated joint ventures ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Latitude Margaritaville Watersound JV (a) ​ ​ $ 3.9 ​ $ (1.9) ​ $ (0.5) Sea Sound JV (b) ​ ​ ​ 21.7 ​ ​ — ​ ​ — Watersound Fountains Independent Living JV (c) ​ ​ ​ (0.2) ​ ​ — ​ ​ — Pier Park TPS JV ​ ​ ​ — ​ ​ 0.6 ​ ​ (0.1) Busy Bee JV ​ ​ ​ 0.5 ​ ​ 0.4 ​ ​ — Electric Cart Watersound JV (d) ​ ​ ​ — ​ ​ — ​ ​ — Watersound Management JV (e) ​ ​ ​ 0.1 ​ ​ — ​ ​ — Total equity in income (loss) from unconsolidated joint ventures ​ ​ $ 26.0 ​ $ (0.9) ​ $ (0.6) (a) The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021.
Joint Ventures included in Item 15 of this Form 10-K for additional information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 ​ 2022 ​ 2021 ​ In millions Latitude Margaritaville Watersound JV (a) $ 23.6 ​ $ 3.9 ​ $ (1.9) Sea Sound JV (b) ​ — ​ ​ 21.7 ​ ​ — Watersound Fountains Independent Living JV (c) ​ (0.7) ​ ​ (0.2) ​ ​ — Pier Park TPS JV ​ (0.4) ​ ​ — ​ ​ 0.6 Busy Bee JV ​ — ​ ​ 0.5 ​ ​ 0.4 Electric Cart Watersound JV (d) ​ 0.1 ​ ​ — ​ ​ — Watersound Management JV ​ 0.1 ​ ​ 0.1 ​ ​ — Total equity in income (loss) from unconsolidated joint ventures $ 22.7 ​ $ 26.0 ​ $ (0.9) (a) During 2023 and 2022, the Latitude Margaritaville Watersound JV completed 641 and 316 home sale transactions, respectively.
Miscellaneous income, net during 2021 includes $3.6 million received from the Florida Division of Emergency Management’s Florida Timber Recovery Block Grant Program (“TRBG”) for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael. See Note 18.
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.
As of December 31, 2022, we had 2,197 residential homesites under contract, which are expected to result in revenue of approximately $176.3 million, plus residuals, at closing of the homesites over the next several years. By comparison, as of December 31, 2021, we had 2,000 residential homesites under contract, with an expected revenue of approximately $158.9 million, plus residuals.
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.
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), as well as the Hilton Garden Inn Panama City Airport, the Homewood Suites by Hilton Panama City Beach, the WaterSound Inn and two gulf-front vacation rental houses.
We own and operate 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.
See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information. In January 2021, The Lodge 30A JV entered into a $15.0 million loan (the “Lodge 30A JV Loan”). As of December 31, 2022 and 2021, $13.3 million and $7.5 million, respectively, was outstanding on the Lodge 30A JV Loan.
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.
Total leasing revenue increased $11.7 million, or 43.7% during 2022, as compared to 2021. The increase was primarily due to new multi-family and senior living leases as well as other new leases. Total leasing gross margin during 2022 was 57.4%, as compared to 57.5% during 2021.
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 total net rentable square feet and percentage leased of leasing properties are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ December 31, 2021 ​ ​ December 31, 2020 ​ ​ Net ​ ​ Net ​ ​ ​ Net ​ ​ ​ ​ ​ Rentable ​ ​ ​ ​ Rentable ​ ​ ​ ​ Rentable ​ ​ ​ ​ ​ ​ Square ​ Percentage ​ ​ Square ​ Percentage ​ ​ Square ​ Percentage ​ ​ Location ​ Feet* ​ Leased ​ ​ Feet* ​ Leased ​ ​ Feet* ​ Leased Pier Park North Bay County, FL 320,310 97 % ​ 320,310 95 % ​ 320,310 92 % VentureCrossings Bay County, FL 303,605 96 % ​ 303,605 88 % ​ 303,605 86 % Watersound Town Center (a) ​ Walton County, FL ​ 89,662 ​ 99 % ​ 24,764 ​ 100 % ​ 6,496 ​ 100 % Beckrich Office Park (b) (c) Bay County, FL 78,294 99 % ​ 81,065 85 % ​ 86,296 80 % Watersound Self-Storage (d) ​ Walton County, FL ​ 67,694 ​ 87 % ​ 67,694 ​ 50 % ​ N/A ​ N/A % WindMark Beach Town Center (b) (e) Gulf County, FL 44,748 71 % ​ 44,748 67 % ​ 44,748 47 % WaterColor Town Center (b) Walton County, FL 22,199 100 % ​ 22,199 100 % ​ 23,121 79 % Cedar Grove Commerce Park ​ Bay County, FL ​ 19,389 ​ 100 % ​ 19,389 ​ 100 % ​ 19,449 ​ 90 % Port St.
The total net rentable square feet and percentage leased of leasing properties are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ December 31, 2022 ​ ​ December 31, 2021 ​ ​ Net ​ ​ Net ​ ​ ​ Net ​ ​ ​ ​ ​ Rentable ​ ​ ​ ​ Rentable ​ ​ ​ ​ Rentable ​ ​ ​ ​ ​ ​ Square ​ Percentage ​ ​ Square ​ Percentage ​ ​ Square ​ Percentage ​ ​ Location ​ Feet* ​ Leased ​ ​ Feet* ​ Leased ​ ​ Feet* ​ Leased Pier Park North (a) Bay County, FL 320,310 100 % ​ 320,310 97 % ​ 320,310 95 % VentureCrossings Bay County, FL 303,605 98 % ​ 303,605 96 % ​ 303,605 88 % Watersound Town Center (b) (c) ​ Walton County, FL ​ 137,921 ​ 83 % ​ 89,662 ​ 99 % ​ 24,764 ​ 100 % Beckrich Office Park (c) (d) Bay County, FL 78,322 93 % ​ 78,294 99 % ​ 81,065 85 % Watersound Self-Storage (e) ​ Walton County, FL ​ 67,694 ​ 92 % ​ 67,694 ​ 87 % ​ 67,694 ​ 50 % WindMark Beach Town Center (c) (f) Gulf County, FL 44,748 71 % ​ 44,748 71 % ​ 44,748 67 % WaterColor Town Center (c) Walton County, FL 22,199 100 % ​ 22,199 100 % ​ 22,199 100 % Cedar Grove Commerce Park ​ Bay County, FL ​ 19,389 ​ 100 % ​ 19,389 ​ 100 % ​ 19,389 ​ 100 % Port St.
As of both December 31, 2022 and 2021, we had a valuation allowance of $0.3 million against certain state NOLs. As of December 31, 2022 and 2021, we had income tax payable of $3.5 million and $0.7 million, respectively, included within other liabilities on the consolidated balance sheets.
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.
This guidance provides expedients and exceptions for applying GAAP to contract modifications and hedging relationships affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is expected to be discontinued due to reference rate reform.
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.
During 2022, we sold 752 homesites and had unimproved residential land sales of $1.1 million, compared to 804 homesites, two homes and had unimproved residential land sales of $0.1 million during 2021. During 2022 and 2021 the average revenue, excluding homesite residuals, per homesite sold was approximately $98,000 and $157,000, respectively, due to the mix of sales from different communities.
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.
Reportable Segments We conduct primarily all of our business in the following three reportable segments: 1) residential, 2) hospitality and 3) commercial. 23 Table of Contents The following table sets forth the relative contribution of these reportable segments to our consolidated operating revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2022 2021 2020 ​ Segment Operating Revenue ​ ​ Residential ​ 36.8 % 54.3 % 46.3 % Hospitality ​ 38.6 % 27.9 % 29.5 % Commercial ​ 23.5 % 17.1 % 23.1 % Other ​ 1.1 % 0.7 % 1.1 % Consolidated operating revenue ​ 100.0 % 100.0 % 100.0 % ​ For more information regarding our reportable segments, see Note 19.
The following table sets forth the relative contribution of these reportable segments to our consolidated operating revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2023 2022 2021 ​ Segment Operating Revenue ​ ​ Residential ​ 40.0 % 36.8 % 54.3 % Hospitality ​ 39.7 % 38.6 % 27.9 % Commercial ​ 19.1 % 23.5 % 17.1 % Other ​ 1.2 % 1.1 % 0.7 % Consolidated operating revenue ​ 100.0 % 100.0 % 100.0 % ​ For more information regarding our reportable segments, see Note 19.
As of December 31, 2022, our consolidated entities had 864 multi-family and senior living units completed, of which 767 were leased, compared to 715 multi-family and senior living units completed, of which 632 were leased as of December 31, 2021.
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.
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, 2022 and 2021, we had a state NOL of $121.1 million and $229.3 million, respectively.
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”).
Miscellaneous income, net during 2022 and 2021 includes $2.6 million and $0.9 million, respectively, received from the Pier Park CDD for repayment of subordinated notes, which have been fully repaid. Miscellaneous income, net during 2022 also includes expense of $1.1 million for design costs no longer pursued and $0.6 million for a homeowner’s association special assessment.
Miscellaneous income, net during 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.
Through separate unconsolidated JVs, other commercial properties include a 124-room TownePlace Suites by Marriott operated by our JV partner (Pier Park TPS, LLC, the “Pier Park TPS JV”), a Busy Bee branded fuel station and convenience store operated by our JV partner (SJBB, LLC, the “Busy Bee JV”) and a golf cart sales and service facility, which is under construction (SJECC, LLC, the “Electric Cart Watersound JV”), all located in Panama City Beach, Florida.
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.
As of December 31, 2022, in addition to the 2,197 homesites under contract in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 677 homes under contract, which together with the 2,197 homesites are expected to result in a sales value of approximately $514.8 million at closing of the homesites and homes.
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.
As of December 31, 2022 and 2021, $18.2 million and $1.3 million, respectively, was outstanding on the North Bay Landing Loan. The loan bears interest at a rate of LIBOR plus 2.5%, with a floor of 3.2%.
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%.
We pay interest on this total outstanding CDD debt. As of December 31, 2022, our unconsolidated Watersound Fountains Independent Living JV, Latitude Margaritaville Watersound JV, Pier Park TPS JV, Pier Park RI JV, Busy Bee JV and Electric Cart Watersound JV had various loans outstanding, some of which we have entered into guarantees. See Note 4.
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.
The increase of $2.3 million in depreciation, amortization and depletion expense during 2022, as compared to 2021, 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 $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.
Cash Flows from Financing Activities Net cash provided by financing activities was $112.5 million for 2022, compared to $48.6 million in 2021.
Cash Flows from Financing Activities Net cash provided by financing activities was $40.8 million for 2023, compared to $112.5 million in 2022.
The loan includes a prepayment fee due to the lender of 1% - 5% of the outstanding principal balance if the loan is refinanced with another financial institution through December 2027. The loan is secured by the real property and certain other Security Interests. See Note 10. Debt, Net included in Item 15 of this Form 10-K for additional information.
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.

… 233 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+4 added−5 removed1 unchanged
Biggest changeA downgrade of the U.S. government’s credit rating may also decrease the value of our Securities. As of December 31, 2022, all of our total Securities were rated AA or better. Our cash and cash equivalents are invested in money market instruments. Changes in interest rates related to these investments would not significantly impact our results of operations.
Biggest changeA 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.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to market risks primarily from interest rate risk fluctuations. We have investments in U.S. Treasury Bills that have fixed interest rates for which changes in interest rates generally affect the fair value of the investment, but not the earnings or cash flows.
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, 2022.
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.
We have exposure to credit risk associated with our Securities and these instruments are subject to price fluctuations as a result of changes in the financial market’s assessment of issuer credit quality, increases in delinquency and default rates, changes in prevailing interest rates and other economic factors.
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.
Based on the outstanding balance of these loans as of December 31, 2022, a hypothetical 100 basis point increase in the applicable rate would result in an increase to our annual interest expense of $2.0 million.
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.
Removed
The amount of interest earned on one of our retained interest investments is based on LIBOR. A 100 basis point change in the interest rate may result in an insignificant change in interest earned on the investment. The amount of interest expense on some of our project financing is based on LIBOR and SOFR.
Added
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.
Removed
The United Kingdom's Financial Conduct Authority, which regulates LIBOR, has publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates and will cease publication of U.S. dollar LIBOR as of June 30, 2023, and U.S. regulators have issued supervisory guidance encouraging banks to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate by December 31, 2021.
Added
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.
Removed
Accordingly, LIBOR is expected to be discontinued in the near future. Many of our current debt agreements have an interest rate tied to LIBOR, but these agreements provide for an alternative base rate in the event that LIBOR is discontinued.
Added
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%.
Removed
There can be no assurances as to what alternative base rates may be and whether such base rate will be more or less favorable than LIBOR and any other unforeseen impacts of the potential discontinuation of LIBOR.
Added
Debt, Net included in Item 15 of this Form 10-K for additional information.
Removed
We intend to continue monitoring the developments with respect to the potential phasing out of LIBOR and work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition.

Other JOE 10-K year-over-year comparisons