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Dynamic quotes 
OFFON

THE ST. JOE COMPANY

(JOE)
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ST JOE CO Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

10/27/2021 | 04:54pm EST
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the accompanying unaudited
condensed consolidated financial statements and related notes in Item 1 and with
the audited consolidated financial statements and the related notes included in
our annual report on Form 10-K. The statements in this discussion regarding
industry outlook, our expectations regarding our future performance, liquidity
and capital resources and other non-historical statements in this discussion are
forward-looking statements. These forward-looking statements are subject to
risks and uncertainties, including the risks and uncertainties described in
"Forward-Looking Statements" below and "Risk Factors" on page 4 of our annual
report on Form 10-K. Our actual results may differ materially from those
contained in or implied by any forward-looking statements. We assume no
obligation to revise or publicly release any revision to any forward-looking
statements contained in this quarterly report on Form 10-Q, unless required
by
law.

Business Overview

St. Joe is a real estate development, asset management and operating company
with all of its real estate assets and operations in Northwest Florida. We
intend to use existing assets for residential, hospitality and commercial
ventures. We have significant residential and commercial land-use entitlements.
We actively seek higher and better uses for our real estate assets through a
range of development activities. We may partner with or explore the sale of
discrete assets when we and/or others can better deploy resources. We seek to
enhance the value of our owned real estate assets by developing residential,
commercial and hospitality projects to meet market demand. Approximately 86% of
our real estate is located in Florida's Bay, Gulf, and Walton counties.
Approximately 90% of our real estate land holdings are located within fifteen
miles of the Gulf of Mexico.

We believe our present capital structure, liquidity and land provide us with
years of opportunities to increase recurring revenue and long-term value for our
shareholders. We intend to focus on our core business activity of real estate
development, asset management and operations. We continue to develop a broad
range of asset types that we believe will provide acceptable rates of return,
grow recurring revenues and support future business. Capital commitments will be
funded with cash proceeds from completed projects, existing cash, owned-land,
partner capital and financing arrangements. We do not anticipate immediate
benefits from investments. Timing of projects may be subject to delays caused by
factors beyond our control.

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

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COVID-19 Pandemic Update
Our business and results of operations improved in the first nine months of 2021
relative to the same period of 2020 as a result of several positive trends,
including the global response to the COVID-19 outbreak, which was declared a
pandemic in March 2020. While the economic recovery following containment and
mitigation measures of COVID-19 is still ongoing, demand across our segments
remains strong. We believe this is primarily the result of the continued growth
in Northwest Florida, which we attribute to the region's high quality of life,
natural beauty and world class amenities, as well as the evolving flexibility in
the workplace.

Despite our positive results during the COVID-19 pandemic, the magnitude and
duration of the COVID-19 pandemic remains unknown, and we could experience
material declines within each of our reportable segments in 2021 and beyond
compared to the historical norms. We have taken measures and may be required to
take additional measures in the future, in response to the pandemic. For
example, beginning in mid-March 2020, in response to federal, state and local
orders and guidelines, we took a number of protective measures, including
temporarily closing the WaterColor Inn, WaterSound Inn and The Pearl Hotel for
overnight guests, closing retail outlets and beach clubs, closing or limiting
restaurant activities at our food and beverage operations to pick up only (and
in certain locations, local delivery), implementing cost reduction measures and
"work from home" policies. Our hospitality assets gradually reopened in May
2020, but could be ordered to close again. We will continue to monitor the
potential impacts and evaluate each new project day-by-day and phase-by-phase
and take prudent measures and respond as needed based on market conditions.

For further discussion of the potential impacts on our business from the COVID-19 pandemic, see Part I, Item 1A. Risk Factors within our 2020 Annual Report.

Reportable Segments

We conduct primarily all of our business in the following three reportable segments: (1) residential, (2) hospitality and (3) commercial.

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



                                       Three Months Ended September 30,         Nine Months Ended September 30,
                                           2021                  2020              2021                  2020
Segment Operating Revenue
Residential                                     41.0 %                38.9 %            45.1 %                34.7 %
Hospitality                                     40.7 %                39.9 %            34.3 %                36.0 %
Commercial                                      17.7 %                20.7 %            19.9 %                27.7 %
Other                                            0.6 %                 0.5 %             0.7 %                 1.6 %
Consolidated operating revenue                 100.0 %               100.0
%           100.0 %               100.0 %




For more information regarding our reportable segments, see Note 17. Segment
Information of our condensed consolidated financial statements included in
this
quarterly report.

Residential Segment

Our residential real estate segment typically plans and develops residential
communities of various sizes across a wide range of price points and sells
homesites to homebuilders or retail consumers. Our residential real estate
segment also evaluates opportunities to develop and build attached and detached
homes for rent or sale to retail consumers, as well as opportunities to enter
into JV agreements for specific communities such as Latitude Margaritaville
Watersound.

The Watersound Origins, Watersound Camp Creek, Breakfast Point East, Titus Park,
Ward Creek, Watersound Origins West, College Station, Park Place, Mexico Beach,
WindMark Beach and SouthWood communities are large scale, multi-phase
communities with current development activity, sales activity or future phases.
Homesites in these

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communities are developed based on market demand and sold primarily to homebuilders and retail customers on a limited basis.


The SummerCamp Beach and RiverCamps communities have homesites available for
sale and lands for future development. The WaterColor and Wild Heron communities
are substantially developed, with remaining homesites available for sale.

The Latitude Margaritaville Watersound community is a planned 55+ active adult
residential community under development and construction in Bay County, Florida.
The community is located near the Intracoastal Waterway with convenient access
to the Northwest Florida Beaches International Airport. The community is being
developed through an unconsolidated JV with our partner Minto Communities USA, a
homebuilder and community developer, and is estimated to include approximately
3,500 residential homes, which will be developed in smaller increments of
discrete neighborhoods. As of September 30, 2021, the unconsolidated Latitude
Margaritaville Watersound JV had 299 homes under contract, which are expected to
result in a sales value of approximately $121.5 million at closing of the homes.

The residential homesite pipeline by community/project is as follows:

Residential Homesite Pipeline (a)

                                                                                                   Additional
                                                              Platted or       Engineering or   Entitlements with
Community/Project                  Location                Under Development     Permitting       Concept Plan        Total
Breakfast Point East (b)           Bay County, FL                        235              173                 318          726
College Station                    Bay County, FL                         71               83                 235          389
East Lake Creek (b)                Bay County, FL                          -                -                 200          200
East Lake Powell (c)               Bay County, FL                          -                -                 360          360
Latitude Margaritaville
Watersound (d) (e)                 Bay County, FL                        629              344               2,527        3,500
Mexico Beach (b)                   Bay County, FL                         32               60                 275          367
Mexico Beach Townhomes (b)         Bay County, FL                         42               36                  82          160
Park Place                         Bay County, FL                         49              106                 191          346
RiverCamps (c)                     Bay County, FL                         26                -                 149          175
SouthWood (f)                      Leon County, FL                        39              172                 994        1,205
SummerCamp Beach (b)               Franklin County, FL                    86                -                 271          357
Titus Park                         Bay County, FL                        315              144                 650        1,109
Watersound Origins West (d)        Walton County, FL                     115                -               5,781        5,896
Watersound Camp Creek (f)          Walton County, FL                     202                -                   -          202
Watersound Origins (f)             Walton County, FL                     247              475                   -          722
Watersound Origins Townhomes (f)   Walton County, FL                      64                -                   -           64
Ward Creek (d)                     Bay County, FL                        355              238               1,007        1,600
WaterColor Park District           Walton County, FL                       4                -                   -            4
Wild Heron                         Bay County, FL                          2                -                   -            2
WindMark Beach (f)                 Gulf County, FL                       312                -                 966        1,278
Total Homesites                                                        2,825            1,831              14,006       18,662

The number of homesites are preliminary and are subject to change. Includes (a) 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 plans to build and

sell homes in this community.

(f) Development of Regional Impact ("DRI").

As of September 30, 2021, we had 1,661 residential homesites under contract with
16 different local, regional and national homebuilders, which are expected to
result in revenue of approximately $160.7 million at closing of the homesites,
which are expected over the next several years. As of September 30, 2020, we had
1,401 residential homesites under contract, which were expected to result in
revenue of approximately $119.3 million. The increase in homesites under
contract is due to the development of additional homesites and increased
homebuilder contracts for

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residential homesites. The number of homesites under contract are subject to
change based on homesite closings and homebuilder interest in each community. As
of September 30, 2021, in addition to the 1,661 homesites in other residential
communities, our unconsolidated Latitude Margaritaville Watersound JV had 299
homes under contract, which together with the 1,661 homesites are expected to
result in a sales value of approximately $282.2 million at closing of the
homesites and homes.

Hospitality Segment


Our hospitality segment features a private membership club, ("Watersound Club",
formerly referred to as The Clubs by JOE), hotel operations, food and beverage
operations, golf courses, beach clubs, retail outlets, gulf-front vacation
rentals, management services, marinas and other entertainment assets. The
hospitality segment generates revenue and incurs costs from membership sales,
membership reservations, golf courses, the WaterColor Inn, Hilton Garden Inn
Panama City Airport and WaterSound Inn, short-term vacation rentals, management
of The Pearl Hotel, food and beverage operations, merchandise sales, marina
operations, charter flights, other resort and entertainment activities and beach
clubs, which includes operation of the WaterColor Beach Club. Hospitality
revenue is generally recognized at the point in time services are provided and
represent a single performance obligation with a fixed transaction price.
Hospitality revenue recognized over time includes non-refundable club membership
initiation fees, club membership dues, management fees and other membership
fees. From time to time, we may explore the sale of certain hospitality
properties, the development of new hospitality properties, as well as new
entertainment and management opportunities. Some of our JV assets and other
assets incur interest and financing expenses related to the loans as described
in Note 10. Debt, Net.

Watersound Club provides club members and guests in some of our hotels access to
our member facilities, which include the Camp Creek golf course, Shark's Tooth
golf course, Watersound Beach Club and our Pilatus PC-12 NG aircraft ("N850J").
Watersound Club offers different types of club memberships, each with different
access rights and associated fee structures. Watersound Club is focused on
creating a world class membership experience combined with the luxurious aspects
of a destination resort. Club operations include our golf courses, beach club
and facilities that generate revenue from membership sales, membership
reservations, daily play at the golf courses, merchandise sales, charter flights
and food and beverage sales and incur expenses from the services provided,
maintenance of the golf courses, aircraft, beach club and facilities and
personnel costs. Watersound Origins includes a six-hole golf course,
resort-style pool, fitness center, two tennis courts and private lake dock
located in the community. Access to amenities are reserved to Watersound Origins
members consisting of the community residents. The golf course is available for
public play.

Watersound Club has a private beach club located in Watersound, Florida, which
includes over one mile of Gulf of Mexico frontage, two resort-style pools, two
restaurants, three bars, kid's room and a recreation area. Shark's Tooth
includes an 18-hole golf course, a full club house, a pro shop, as well as two
food and beverage operations. In addition to the golf course, Watersound Club's
tennis center is located in the Wild Heron community near the Shark's Tooth golf
course. Camp Creek is an 18-hole golf course located near the Watersound Origins
residential community and the new Camp Creek residential community. In the
fourth quarter of 2019, we commenced construction on new club amenities adjacent
to the Camp Creek golf course. Amenities are planned to include a health and
wellness center, restaurants, a tennis and pickle ball center, a resort-style
pool complex with separate adult pool, a golf teaching academy, pro shop and
multi-sport fields. Once complete, these amenities will be available to
Watersound Club members and guests at some of our hotels.

We own and operate the award-winning WaterColor Inn (which includes the Fish Out
of Water restaurant), the Hilton Garden Inn Panama City Airport, the WaterSound
Inn and two gulf-front vacation rental houses. We own and operate retail and
commercial outlets near our hospitality facilities. We also operate the
award-winning The Pearl Hotel and Havana Beach Bar & Grill restaurant and the
WaterColor Beach Club, which includes food and beverage operations and other
hospitality related activities, such as beach chair rentals. Revenue is
generated from (i) the WaterColor Inn, Hilton Garden Inn Panama City Airport,
WaterSound Inn and operation of the WaterColor Beach Club, (ii) management of
The Pearl Hotel, (iii) short-term vacation rentals, (iv) food and beverage
operations and (v) merchandise sales. The WaterColor Inn, Hilton Garden Inn
Panama City Airport, WaterSound Inn and operation of the WaterColor Beach Club
generate revenue from service and/or daily rental fees and incur expenses from
the cost of services and goods provided, maintenance of the facilities and
personnel costs. Revenue generated from our management services include

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management fees. Management services expenses consist primarily of internal
administrative costs. Hotel operations and short-term vacation rentals generate
revenue from rental fees and incur expenses from the holding cost of assets we
own and standard lodging personnel, such as front desk, reservations and
marketing personnel. Our food and beverage operations generate revenue from food
and beverage sales and incur expenses from the cost of services and goods
provided and standard personnel costs. Our retail outlets generate revenue from
merchandise sales, which are recognized at the point of sale and incur expenses
from the cost of goods provided, personnel costs and facility costs.

We are in the process of constructing an Embassy Suites by Hilton hotel, with
our JV partner, in the Pier Park area of Panama City Beach, Florida; an upscale
boutique inn located adjacent to the Camp Creek golf course near the highly
desirable Scenic Highway 30A corridor; a HomeWood Suites by Hilton adjacent to
the new Panama City Beach Sports Complex in Panama City Beach, Florida; the
waterfront Hotel Indigo and standalone restaurant in Panama City, Florida's
downtown waterfront district; The Lodge 30A, with our JV partner, a boutique
hotel on Scenic Highway 30A in Seagrove Beach, Florida; and seven additional
suites at WaterColor Inn. We are also in the process of planning a Home2 Suites
by Hilton Hotel in Santa Rosa Beach, Florida. Once complete, we intend to manage
the day-to-day operations of all planned hotels and restaurants.

Our hotel portfolio by property is as follows:


                                                                                             Rooms (a)
                                                                    Location        Completed   Planned   Total
Operational
WaterColor Inn (b)                                              Walton County, FL          60         7      67
WaterSound Inn                                                  Walton County, FL          11         -      11
Hilton Garden Inn Panama City Airport (c)                       Bay County, FL            143         -     143
TownePlace Suites by Marriott Panama City Beach Pier Park (d)   Bay County, FL            124         -     124
Total operational rooms                                                                   338         7     345

Managed
The Pearl Hotel (e)                                             Walton County, FL          55         -      55
Total managed rooms                                                                        55         -      55

Under Development/Construction
Embassy Suites by Hilton Panama City Beach (f)                  Bay County, FL              -       255     255
HomeWood Suites by Hilton Panama City Beach                     Bay County,
FL              -       131     131
Hotel Indigo                                                    Bay County, FL              -       124     124
The Lodge 30A (f)                                               Walton County, FL           -        85      85
Camp Creek Inn                                                  Walton County, FL           -        75      75
Total rooms under development/construction                                 
                -       670     670
Total rooms                                                                               393       677   1,070

Includes hotels currently in operation, under management or under development (a) and construction. We have significant additional entitlements for future

hotel projects on our land holdings.

(b) Planned additional rooms are currently under construction.

(c) The hotel opened on July 8, 2021.

The hotel is operated by our JV partner and opened in May 2020. The Pier Park (d) TPS JV is unconsolidated and is accounted for under the equity method of

accounting, which is included within our Commercial segment.

(e) The hotel is owned by a third party, but is operated by us.

(f) Under development with JV partners.

We own and operate two marinas consisting of the Bay Point Marina and Port St.
Joe Marina. We are planning new marinas along the Intracoastal Waterway. Our
marinas generate revenue from boat slip rentals and fuel sales, and incur
expenses from cost of services provided, maintenance of the marina facilities
and personnel costs. At present, we are reconstructing the marinas and expect a
portion to be open by the end of 2021. See Note 7. Hurricane Michael for
additional information.

We own and operate the WaterColor retail store that generates revenue from merchandise sales, which are recognized at the point of sale, and incur expenses from the cost of goods provided, personnel costs and facility costs.


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We own and operate The Powder Room Shooting Range and Training Center ("The
Powder Room") in Panama City Beach, Florida. The approximately 17,000 square
feet facility was completed in December 2020 and includes a retail store with
firearms and ammunition, as well as training and educational space and 14
shooting lanes. The Powder Room generates revenue from service fees and
merchandise sales, which are recognized at the point of sale, and incurs
expenses from the cost of services and goods provided, personnel costs and
facility costs.

Commercial Segment


Our commercial segment includes leasing of commercial property, multi-family,
senior living and other assets. The commercial segment also oversees the
planning, development, entitlement, management and sale of our commercial and
rural land holdings for a variety of uses, including a broad range of retail,
office, hotel, senior living, multi-family, self-storage and industrial
properties. We provide development opportunities for national, regional and
local retailers and other strategic partners in Northwest Florida. We own and
manage retail shopping centers and develop commercial parcels. We have large
land holdings near the Pier Park retail center, adjacent to the Northwest
Florida Beaches International Airport, near or within business districts in the
region and along major roadways. We also lease land for hunting, rock quarrying
and other uses. The commercial segment also manages our timber holdings in
Northwest Florida which includes growing and selling pulpwood, sawtimber and
other products, such as fill dirt.

The commercial segment generates leasing revenue and incurs leasing expenses
primarily from maintenance and management of our properties, personnel costs and
asset holding costs. Our commercial segment also generates revenue from the sale
of developed and undeveloped land, timber holdings or land with limited
development and/or entitlements and the sale of commercial operating properties.
Real estate sales in our commercial segment incur costs of revenue directly
associated with the land, development, construction, timber and selling costs.
Our commercial segment generates timber revenue primarily from open market sales
of timber on site without the associated delivery costs. Some of our JV assets
and other assets incur interest and financing expenses related to the loans as
described in Note 10. Debt, Net.

The commercial segment's portfolio of leasable properties continues to expand
and diversify. Through wholly-owned subsidiaries and consolidated and
unconsolidated joint ventures we are in the process of constructing 517
apartment units and 148 senior living units, in addition to the 600 apartment
units and 107 senior living units that have recently been completed.

Pier Park Crossings, which was developed in two phases, includes 360 completed
apartment units in Panama City Beach, Florida. In addition to Pier Park
Crossings, we have three apartment communities under construction. Watersound
Origins Crossings, planned for 217 units, with 158 units completed as of
September 30, 2021, is adjacent to the Watersound Town Center in Watersound,
Florida. Sea Sound apartments, an unconsolidated JV planned for 300 units, with
82 units completed as of September 30, 2021, is located in Panama City Beach,
Florida near the Breakfast Point residential communities. North Bay Landing
apartments, planned for 240 units, is located in Panama City, Florida.
Watersound Fountains, an unconsolidated JV, planned for 148 independent living
units, is located near the Watersound Origins residential community in
Watersound, Florida.

Our leasing portfolio consists of approximately 986,000 square feet of leasable
space for mixed-use, retail, industrial, office, self-storage and medical uses.
Within the leasing portfolio, our mixed-use lease space totals approximately
149,000 square feet. It consists primarily of WaterColor Town Center, WindMark
Beach Town Center, Watersound Town Center, WaterSound Gatehouse, WaterColor
Crossings and various flex-space buildings. Our retail lease space totals
approximately 352,000 square feet. It consists primarily of Pier Park North JV
and other leasable properties. Our industrial lease space totals approximately
304,000 square feet, primarily located at VentureCrossings. Our office lease
space consists of approximately 91,000 square feet, primarily located in the
Beckrich Office Park in Panama City Beach, Florida. Our self-storage lease space
consists of approximately 68,000 square feet, which consists of Watersound
Self-Storage. Our current medical leased space consists of approximately 22,000
square feet. It consists of a medical clinic at the Watersound Town Center and
medical space at Beckrich Office Park. Through separate unconsolidated JVs,
other commercial properties include a 124 room TownePlace Suites by Marriott
operated by our JV partner and a Busy Bee branded fuel station and convenience
store operated by our JV partner, both located in Panama City Beach, Florida.

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We have other commercial projects under construction. These include a Publix
supermarket totaling approximately 50,000 square feet, in-line space totaling
approximately 12,000 square feet and a multi-tenant commercial building in the
Watersound Town Center totaling approximately 6,500 square feet. In addition to
the properties listed above, we have a number of projects in various stages of
planning, including additional commercial buildings and apartment communities.

Critical Accounting Estimates


The discussion and analysis of our financial condition and results of operations
are based upon our condensed consolidated financial statements, which have been
prepared in accordance with GAAP. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenue and expenses and related disclosures of contingent
assets and liabilities. We base these estimates on historical experience,
available current market information and on various other assumptions that
management believes are reasonable under the circumstances. Additionally, we
evaluate the results of these estimates on an on-going basis. Management's
estimates form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions and our accounting estimates are subject to change.

Critical accounting policies that we believe reflect our more significant
judgments and estimates used in the preparation of our condensed consolidated
financial statements are set forth in Item 7 of our Annual Report on Form 10-K
for the year ended December 31, 2020. There have been no significant changes in
these policies during the first nine months of 2021, however we cannot assure
you that these policies will not change in the future.

Recently Adopted and Issued Accounting Pronouncements


See Note 2. Summary of Significant Accounting Policies to our condensed
consolidated financial statements included in this report for recently issued or
adopted accounting standards, including the date of adoption and effect on our
condensed consolidated financial statements.

Seasonality and Market Variability


Our operations may be affected by seasonal fluctuations. Hospitality revenues
have historically been lower in the first quarter and are normally higher in the
second and third quarters and may vary with the timing of holidays and
extraordinary events such as the COVID-19 pandemic. Homesites sell in sporadic
transactions in various communities that may impact quarterly results.
Commercial sales may vary from period to period.

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Results of Operations

Consolidated Results

The following table sets forth a comparison of the results of our operations:


                                               Three Months Ended         Nine Months Ended
                                                 September 30,             September 30,
                                                2021          2020        2021         2020

                                                               In millions
Revenue:
Real estate revenue                          $     23.5     $   18.5    $    85.6    $   41.8
Hospitality revenue                                22.3         17.0         58.0        35.2
Leasing revenue                                     7.1          4.9         19.1        14.2
Timber revenue                                      1.0          1.6          4.8         5.5
Total revenue                                      53.9         42.0        167.5        96.7
Expenses:
Cost of real estate revenue                         8.5          9.4         33.1        18.4
Cost of hospitality revenue                        16.5         11.0         43.5        26.5
Cost of leasing revenue                             3.1          2.0          8.3         4.0
Cost of timber revenue                              0.1          0.2          0.5         0.6
Other operating and corporate expenses              5.0          5.1         17.1        17.0
Depreciation, depletion and amortization            4.6          3.3       
 12.6         9.4
Total expenses                                     37.8         31.0        115.1        75.9
Operating income                                   16.1         11.0         52.4        20.8
Other income (expense):
Investment income, net                              2.3          2.4          4.8         2.8
Interest expense                                  (4.1)        (3.4)       (11.6)      (10.1)
Gain on contribution to equity method
investment                                            -            -          3.3        19.6
Other income, net                                   7.4          0.3          9.6         0.7
Total other income (expense), net                   5.6        (0.7)          6.1        13.0
Income before equity in loss from
unconsolidated affiliates and income
taxes                                              21.7         10.3         58.5        33.8
Equity in loss from unconsolidated
affiliates                                        (0.5)        (0.1)        (1.6)       (0.3)
Income tax expense                                (6.4)        (2.4)       (15.2)       (7.8)
Net income                                   $     14.8     $    7.8    $    41.7    $   25.7




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Real Estate Revenue and Gross Profit


The following table sets forth a comparison of our total real estate revenue and
gross profit:


                          Three Months Ended September 30,                

Nine Months Ended September 30,

                        2021         % (a)       2020      % (a)         2021        % (a)       2020      % (a)

                                                          Dollars in millions
Revenue:
Residential real
estate revenue        $    21.6        91.9 %   $  16.1     87.0 %     $   74.7        87.3 %   $  33.1     79.2 %
Commercial and
rural real estate
revenue                     1.6         6.8 %       2.2     11.9 %          9.8        11.4 %       7.2     17.2 %
Other revenue               0.3         1.3 %       0.2      1.1 %          1.1         1.3 %       1.5      3.6 %
Real estate
revenue               $    23.5       100.0 %   $  18.5    100.0 %     $   85.6       100.0 %   $  41.8    100.0 %

Gross profit:
Residential real
estate                $    13.5        62.5 %   $   7.6     47.2 %     $   44.2        59.2 %   $  17.1     51.7 %
Commercial and
rural real estate           1.4        87.5 %       1.4     63.6 %          8.0        81.6 %       5.0     69.4 %
Other                       0.1        33.3 %       0.1     50.0 %          0.3        27.3 %       1.3     86.7 %
Gross profit          $    15.0        63.8 %   $   9.1     49.2 %     $   52.5        61.3 %   $  23.4     56.0 %

(a) Calculated percentage of total real estate revenue and the respective gross

    margin percentage.




Residential Real Estate Revenue and Gross Profit. During the three months ended
September 30, 2021, residential real estate revenue increased $5.5 million to
$21.6 million, as compared to $16.1 million during the same period in 2020.
During the three months ended September 30, 2021, residential real estate gross
profit increased $5.9 million to $13.5 (or gross margin of 62.5%), as compared
to $7.6 million (or gross margin of 47.2%) during the same period in 2020.
During the three months ended September 30, 2021, we sold 119 homesites and had
no unimproved residential land sales, compared to 162 homesites and an
unimproved residential land sale of $0.4 million during the same period in 2020.
During the three months ended September 30, 2021 and 2020, the average revenue,
excluding homesite residuals, per homesite sold was approximately $159,000 and
$82,000, respectively, due to the mix of sales from different communities.

During the nine months ended September 30, 2021, residential real estate revenue
increased $41.6 million to $74.7 million, as compared to $33.1 million during
the same period in 2020. During the nine months ended September 30, 2021,
residential real estate gross profit increased $27.1 million to $44.2 (or gross
margin of 59.2%), as compared to $17.1 million (or gross margin of 51.7%) during
the same period in 2020. During the nine months ended September 30, 2021, we
sold 494 homesites, two homes and had unimproved residential land sales of $0.1
million, compared to 303 homesites, no home sales and had unimproved residential
land sales of $1.7 million during the same period in 2020. During the nine
months ended September 30, 2021 and 2020, the average revenue, excluding
homesite residuals, per homesite sold was approximately $125,000 and $86,000,
respectively, due to the mix of sales from different communities. The revenue,
gross profit and margin improvement for each period was impacted by the volume
of sales within each of the communities, the difference in pricing among the
communities and the difference in the cost of the homesite development. The
number of homesites sold varied each period due to the timing of homebuilder
contractual closing obligations and the timing of development of completed
homesites in our residential communities.

Commercial and Rural Real Estate Revenue and Gross Profit. During the three
months ended September 30, 2021, we had five commercial and rural real estate
sales totaling approximately 423 acres for $1.6 million, resulting in a gross
profit margin of approximately 87.5%. During the three months ended
September 30, 2020, we had seven commercial and rural real estate sales totaling
approximately 232 acres for $2.2 million, resulting in a gross profit margin of
approximately 63.6%.

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During the nine months ended September 30, 2021, we had thirteen commercial and
rural real estate sales totaling approximately 536 acres for $9.8 million,
resulting in a gross profit margin of approximately 81.6%. During the nine
months ended September 30, 2020, we had nineteen commercial and rural real
estate sales totaling approximately 433 acres for $7.2 million, resulting in a
gross profit margin of approximately 69.4%. Revenue from commercial and rural
real estate can vary significantly from period to period depending on the
proximity to developed areas and mix of real estate sold in each period, with
varying compositions of retail, office, industrial and other commercial uses.

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

Other Revenue. Other revenue primarily consists of mitigation bank credit sales, title fee and insurance business revenue.

Hospitality Revenue and Gross Profit


                                         Three Months Ended September 30,              Nine Months Ended September 30,
                                            2021                   2020                  2021                   2020

                                                                            In millions
Hospitality revenue                    $          22.3        $          17.0       $          58.0        $          35.2
Gross profit                           $           5.8        $           6.0       $          14.5        $           8.7
Gross margin                                      26.0 %                 35.3 %                25.0 %                 24.7 %




Hospitality revenue increased $5.3 million, or 31.2%, to $22.3 million during
the three months ended September 30, 2021, as compared to $17.0 million in the
same period in 2020. During the three months ended September 30, 2021, the
increase in hospitality revenue was primarily related to higher demand in
lodging and resort amenities due to increased popularity of the region that
resulted in an influx of members and guests from new markets. Our hospitality
gross margin decreased to 26.0% during the three months ended
September 30, 2021, compared to 35.3% during the same period in 2020. The
decrease in gross margin is due to increased sales incentive costs related to
the growth of our club memberships, pre-opening expenses associated with the
opening of Hilton Garden Inn Panama City Airport, onboarding of staff for future
assets currently under construction and an increase in cost of labor and
products.

Hospitality revenue increased $22.8 million, or 64.8%, to $58.0 million during
the nine months ended September 30, 2021, as compared to $35.2 million in the
same period in 2020. During the nine months ended September 30, 2021 the
increase in hospitality revenue was primarily related to higher demand in
lodging and resort amenities due to increased popularity of the region and
year-round travel that resulted in an influx of members and guests from new
markets. The increase was also due to the impact of the COVID-19 pandemic on the
prior period, which resulted in shutdowns and reduced revenue from mid-March to
mid-May 2020. As of September 30, 2021, Watersound Club had 2,158 members,
compared with 1,448 members as of September 30, 2020, an increase of 710
members. Hospitality gross margin of 25.0% during the nine months ended
September 30, 2021, was comparable to the gross margin of 24.7% during the same
period in 2020.

Leasing Revenue and Gross Profit



                                       Three Months Ended September 30,              Nine Months Ended September 30,
                                          2021                   2020                  2021                   2020

                                                                          In millions
Leasing revenue                      $           7.1        $           4.9       $          19.1        $          14.2
Gross profit                         $           4.0        $           2.9       $          10.8        $          10.2
Gross margin                                    56.3 %                 59.2 %                56.5 %                 71.8 %




Leasing revenue increased $2.2 million, or 44.9%, to $7.1 million during the
three months ended September 30, 2021, as compared to $4.9 million in the same
period in 2020. Leasing revenue increased $4.9 million, or 34.5%, to $19.1
million during the nine months ended September 30, 2021, as compared to $14.2
million in the same

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period in 2020. The increase in the periods is primarily due to new leases at
Pier Park Crossings Phase II apartments, which began leasing in the fourth
quarter of 2020 and new leases at Watersound Origins Crossings apartments and
Watercrest senior living community, which began leasing in the first quarter of
2021, as well as other new leases. Leasing gross margin decreased during the
three months ended September 30, 2021, to 56.3%, as compared to 59.2% during the
same period in 2020, primarily due to start-up and lease-up expenses for new
assets in the current period. Leasing gross margin decreased during the nine
months ended September 30, 2021 to 56.5%, as compared to 71.8% during the same
period in 2020, primarily due to start-up and lease-up expenses for new assets
in the current period and $0.7 million of business interruption proceeds
received for Pier Park Crossings apartments related to Hurricane Michael in the
prior period.

Timber Revenue and Gross Profit



                                       Three Months Ended September 30,              Nine Months Ended September 30,
                                          2021                   2020                  2021                   2020

                                                                          In millions
Timber revenue                       $           1.0        $           1.6       $           4.8        $           5.5
Gross profit                         $           0.9        $           1.4       $           4.3        $           4.9
Gross margin                                    90.0 %                 87.5 %                89.6 %                 89.1 %



Timber revenue decreased $0.6 million, or 37.5%, to $1.0 million during the
three months ended September 30, 2021, as compared to $1.6 million in the same
period in 2020. The decrease is primarily due to a decrease in the amount of
wood product tons sold, which were partially offset by price increases in the
current period, as well as a decrease in the sales of fill dirt and other
products. There were 50,000 tons of wood products sold during the three months
ended September 30, 2021, as compared to 84,000 tons of wood products sold
during the same period in 2020.

Timber revenue decreased $0.7 million, or 12.7%, to $4.8 million during the nine
months ended September 30, 2021, as compared to $5.5 million in the same period
in 2020. The decrease is primarily due to a decrease in the sales of fill dirt
and other products. The decrease was partially offset by an increase due to the
sales mix of different wood products and price increases in the current period.
There were 223,000 tons of wood products sold during the nine months ended
September 30, 2021, as compared to 275,000 tons of wood products sold during the
same period in 2020.

Other Operating and Corporate Expenses



                                                   Three Months Ended September 30,           Nine Months Ended September 30,
                                                     2021                    2020               2021                   2020

                                                                                   In millions
Employee costs                                  $           2.0         $           2.0    $           6.6        $           6.3
401(k) contribution                                           -                       -                1.2                    1.2
Property taxes and insurance                                1.4                     1.3                4.1                    3.8
Professional fees                                           0.7                     1.0                2.3                    3.2
Marketing and owner association costs                       0.3                     0.4                1.3                    0.9
Occupancy, repairs and maintenance                          0.3                     0.2                0.5                    0.6
Other miscellaneous                                         0.3                     0.2                1.1                    1.0
Total other operating and corporate expenses    $           5.0         $  
        5.1    $          17.1        $          17.0



Other operating and corporate expenses for the three and nine months ended September 30, 2021 and 2020, were comparable.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization expense increased $1.3 million and $3.2
million during the three and nine months ended September 30, 2021, respectively,
as compared to the same period in 2020, primarily due to new assets placed
in
service.

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Investment Income, Net

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


                                              Three Months Ended September 30,           Nine Months Ended September 30,
                                                2021                    2020                2021                   2020

                                                                              In millions
Interest and dividend income               $             -         $             -    $              -       $            1.1
Accretion income                                         -                       -                 0.1                    0.1
Net realized loss on the sale of
investments                                              -                       -                   -                  (0.1)
Unrealized gain (loss) on investments,
net                                                    0.1                     0.3               (1.9)                  (4.6)
Interest income from investments in
special purpose entities                               2.0                     2.0                 6.1                    6.1
Interest earned on notes receivable and
other interest                                         0.2                     0.1                 0.5                    0.2
Total investment income, net               $           2.3         $           2.4    $            4.8       $            2.8




Investment income, net for the three months ended September 30, 2021 and 2020,
were comparable. Investment income, net increased $2.0 million to $4.8 million
for the nine months ended September 30, 2021, as compared to $2.8 million in the
same period in 2020. The nine months ended September 30, 2021, had interest and
dividend income of less than $0.1 million, compared to interest and dividend
income of $1.1 million during the prior period. The decrease in interest and
dividend income for the nine months ended September 30, 2021, as compared to the
same period in 2020, is primarily due to the change in investments held during
the period. The nine months ended September 30, 2021 includes unrealized losses
related to preferred stock of $1.9 million, compared to $4.6 million during
the
prior period.

Interest Expense

Interest expense primarily includes interest incurred on the Senior Notes issued by Northwest Florida Timber Finance, LLC, project financing, CDD debt and finance leases as detailed in the table below:


                                             Three Months Ended September 30,           Nine Months Ended September 30,
                                               2021                    2020               2021                   2020

                                                                             In millions
Interest expense and amortization of
discount and issuance costs for Senior
Notes issued by special purpose entity    $           2.2         $        
  2.2    $           6.6        $           6.6
Other interest expense                                1.9                     1.2                5.0                    3.5
Total interest expense                    $           4.1         $           3.4    $          11.6        $          10.1




Interest expense increased $0.7 million, or 20.6%, to $4.1 million during the
three months ended September 30, 2021, as compared to $3.4 million in the same
period in 2020. Interest expense increased $1.5 million, or 14.9%, to $11.6
million during the nine months ended September 30, 2021, as compared to $10.1
million in the same period in 2020. The increase in interest expense is
primarily related to the increase in project financing. See Note 10. Debt, Net
for additional information regarding project financing.

Gain on Contribution to Equity Method Investment

We did not have any gain on contribution to equity method investment during the
three months ended September 30, 2021 and 2020. Gain on contribution to equity
method investment during the nine months ended September 30, 2021 and 2020, was
$3.3 million and $19.6 million, respectively. The nine months ended September
30, 2021, includes a gain of $0.2 million on additional infrastructure
improvements contributed to our unconsolidated Latitude Margaritaville
Watersound JV. The nine months ended September 30, 2021, also includes a gain of
$3.1 million on land contributed to our unconsolidated Watersound Fountains
Independent Living JV. The nine months ended September 30, 2020, includes

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a gain of $15.3 million on land contributed to our unconsolidated Latitude
Margaritaville Watersound JV. The nine months ended September 30, 2020, also
includes a gain of $4.3 million on land and mitigation credits contributed to
our unconsolidated Sea Sound Apartments JV. See Note 4. Joint Ventures for
additional information.

Other Income, Net

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


                                             Three Months Ended September 30,           Nine Months Ended September 30,
                                              2021                    2020               2021                   2020

                                                                             In millions
Accretion income from retained
interest investments                      $         0.4        $              0.4    $        1.1        $              1.1
Gain on insurance recovery                          2.5                         -             3.9                         -
Loss from hurricane damage                            -                     (0.6)               -                     (1.1)
Miscellaneous income, net                           4.5                    
  0.5             4.6                       0.7
Other income, net                         $         7.4        $              0.3    $        9.6        $              0.7




Other income, net increased $7.1 million to $7.4 million during the three months
ended September 30, 2021, as compared to $0.3 million in the same period in
2020. Other income, net increased $8.9 million to $9.6 million during the nine
months ended September 30, 2021, as compared to $0.7 million in the same period
in 2020. The three and nine months ended September 30, 2021, include a gain on
insurance recovery of $2.5 million and $3.9 million, respectively, and loss from
hurricane damage of less than $0.1 million during each period related to
Hurricane Michael. The three and nine months ended September 30, 2020, did not
include any gain on insurance recovery, but includes $0.6 million and $1.1
million, respectively, of loss from hurricane damage related to Hurricane
Michael. See Note 7. Hurricane Michael for additional information. Miscellaneous
income, net during the three and nine months ended September 30, 2021, includes
$3.6 million received from the Florida Division of Emergency Management's TRBG
program for recovery of lost income related to timber crop that was destroyed as
a result of Hurricane Michael. We have met all requirements related to the TRBG
program as of September 30, 2021. See Note 7. Hurricane Michael and Note 16.
Other Income (Expense), Net for additional information.

Income Tax Expense


We recorded income tax expense of $6.4 million during the three months ended
September 30, 2021, as compared to $2.4 million during the same period in 2020.
Our effective tax rate was 29.7% for the three months ended September 30, 2021,
as compared to 23.9% during the same period in 2020.

We recorded income tax expense of $15.2 million during the nine months ended
September 30, 2021, as compared to $7.8 million during the same period in 2020.
Our effective tax rate was 26.3% for the nine months ended September 30, 2021,
as compared to 23.6% during the same period in 2020.

Our effective rate for the three and nine months ended September 30, 2021,
differed from the federal statutory rate of 21.0% primarily due to state income
taxes, the change in the 2021 Florida income tax rate from 4.458% to 3.535%, tax
credits and other permanent differences. Our effective rate for the three and
nine months ended September 30, 2020, differed from the federal statutory rate
of 21.0% primarily due to state income taxes, tax credits and other permanent
differences. See Note 12. Income Taxes for additional information.

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Segment Results

Residential

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


                                               Three Months Ended September 30,           Nine Months Ended September 30,
                                                  2021                   2020                2021                   2020

                                                                               In millions
Revenue:
Real estate revenue                         $           20.6       $           14.9    $           70.3       $           30.2
Hospitality revenue                                      0.4                    0.2                 0.6                    0.3
Leasing revenue                                          0.2                      -                 0.2                    0.1
Other revenue                                            1.0                    1.2                 4.4                    2.9
Total revenue                                           22.1                   16.3                75.5                   33.5
Expenses:
Cost of real estate and other revenue                    8.1               
    8.4                30.5                   16.0
Cost of hospitality revenue                              0.2                    0.2                 0.4                    0.5
Cost of leasing revenue                                    -                      -                 0.1                      -
Other operating expenses                                 1.1                    1.4                 3.9                    3.8
Depreciation and amortization                            0.1               
    0.1                 0.3                    0.2
Total expenses                                           9.5                   10.1                35.2                   20.5
Operating income                                        12.6                    6.2                40.3                   13.0
Other income (expense):
Investment income, net                                   0.2                    0.1                 0.5                    0.1
Interest expense                                       (0.1)                  (0.2)               (0.4)                  (0.5)
Gain on contribution to equity method
investment                                                 -                      -                 0.2                   15.3
Other income, net                                        0.2                    0.1                 0.4                    0.3
Total other income, net                                  0.3                      -                 0.7                   15.2
Income before equity in loss from
unconsolidated affiliates and income
taxes                                       $           12.9       $            6.2    $           41.0       $           28.2




Real estate revenue includes sales of homesites, homes and other residential
land and certain homesite residuals from homebuilder sales that provide us
a percentage of the sale price of the completed home if the home price exceeds a
negotiated threshold. Hospitality revenue includes some of our short-term
vacation rentals. Other revenue includes tap and impact fee credits sold and
marketing fees. Certain homesite residuals and other revenue related to
homebuilder homesite sales are recognized in revenue at the point in time of the
closing of the sale. For the three months ended September 30, 2021 real estate
revenue did not include any estimated homesite residuals. For the nine months
ended September 30, 2021 real estate revenue includes estimated homesite
residuals of $2.2 million. For the three and nine months ended
September 30, 2021 other revenue includes estimated fees related to homebuilder
homesite sales of $0.2 million and $1.5 million, respectively. For the three and
nine months ended September 30, 2020 real estate revenue includes estimated
homesite residuals of $0.4 million and $0.8 million, respectively, and other
revenue includes estimated fees related to homebuilder homesite sales of $0.7
million and $1.3 million, respectively. Cost of real estate revenue includes
direct costs (e.g., development and construction costs), selling costs and
other
indirect costs.

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Three months ended September 30, 2021 compared to the three months ended September 30, 2020

The following table sets forth our residential real estate revenue and cost of revenue activity:



                     Three Months Ended September 30, 2021                  

Three Months Ended September 30, 2020

              Unit                   Cost of      Gross     Gross        Units                    Cost of      Gross     Gross
              Sold      Revenue      Revenue     Profit     Margin        Sold      Revenue       Revenue     Profit     Margin

                                                            Dollars in millions
Homesites       119     $   20.6    $     7.4    $  13.2      64.1 %        162     $   14.5     $     7.4    $   7.1      49.0 %
Land sale       N/A            -            -          -         - %        N/A          0.4           0.4          -         - %
Total           119     $   20.6    $     7.4    $  13.2      64.1 %        162     $   14.9      $    7.8      $ 7.1      47.7 %




Homesites. Revenue from homesite sales increased $6.1 million during the three
months ended September 30, 2021, as compared to the same period in 2020,
primarily due to the mix and number of homesites sold per community, the timing
of homebuilder contractual closing obligations and the timing of development of
completed homesites in our residential communities. During the three months
ended September 30, 2021 and 2020, the average revenue, excluding homesite
residuals, per homesite sold was approximately $159,000 and $82,000,
respectively, due to the mix of sales from different communities. Gross margin
increased to 64.1% during the three months ended September 30, 2021, as compared
to 49.0% during the same period in 2020, primarily due to the mix and number of
homesites sold from different communities during each respective period. Gross
margin may vary each period depending on the location of homesite sales.

Land sales. During the three months ended September 30, 2021, we did not have
any unimproved residential land sales. During the three months ended September
30, 2020, we had an unimproved residential land sale for $0.4 million, resulting
in no gross profit margin.

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

Investment income, net primarily consists of interest earned on our notes receivable. Interest expense consists of interest incurred on our portion of the total outstanding CDD debt.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020


The following table sets forth our residential real estate revenue and cost of
revenue activity:


                         Nine Months Ended September 30, 2021                          Nine Months Ended September 30, 2020
               Units                    Cost of       Gross      Gross        Units                    Cost of      Gross      Gross
                Sold       Revenue      Revenue      Profit      Margin        Sold       Revenue      Revenue      Profit     Margin

                                                                Dollars in millions
Homesites         494     $    69.2    $    27.5    $    41.7      60.3 %        303     $    28.5    $    14.3    $   14.2      49.8 %
Homes               2           1.0          0.9          0.1      10.0 %          -             -            -           -         - %
Land sales        N/A           0.1            -          0.1     100.0 %        N/A           1.7          0.4         1.3      76.5 %
Total             496     $    70.3    $    28.4    $    41.9      59.6 %        303     $    30.2    $    14.7    $   15.5      51.3 %




Homesites. Revenue from homesite sales increased $40.7 million during the nine
months ended September 30, 2021, as compared to the same period in 2020,
primarily due to the mix and number of homesites sold per community, the timing
of homebuilder contractual closing obligations and the timing of development of
completed homesites in our residential communities. During the nine months ended
September 30, 2021 and 2020, the average revenue, excluding homesite residuals,
per homesite sold was approximately $125,000 and $86,000, respectively, due to
the mix of sales from different communities. Gross margin increased to 60.3%
during the nine months ended September 30, 2021, as compared to 49.8% during the
same period in 2020, primarily due to the mix and number of

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homesites sold from different communities during each respective period. Gross margin may vary each period depending on the location of homesite sales.


Homes. During the nine months ended September 30, 2021, we sold two completed
homes within our RiverCamps community for a total of $1.0 million, resulting in
a gross profit margin of 10.0%. During the nine months ended September 30, 2020,
we did not have any home sales.

Land sales. During the nine months ended September 30, 2021, we had unimproved
residential land sales for $0.1 million, with de minimis cost of revenue. During
the nine months ended September 30, 2020, we had unimproved residential land
sales for $1.7 million, resulting in a gross profit margin of 76.5%.

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

Investment income, net primarily consists of interest earned on our notes receivable. Interest expense consists of interest incurred on our portion of the total outstanding CDD debt.

Gain on contribution to equity method investment for the nine months ended
September 30, 2021, includes a gain of $0.2 million on additional infrastructure
improvements contributed to our unconsolidated Latitude Margaritaville
Watersound JV. Gain on contribution to equity method investment for the nine
months ended September 30, 2020, includes a gain of $15.3 million on land
contributed to our unconsolidated Latitude Margaritaville Watersound JV. See
Note 4. Joint Ventures for additional information.

Hospitality


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


                                               Three Months Ended September 30,           Nine Months Ended September 30,
                                                  2021                   2020                2021                   2020

                                                                               In millions
Revenue:
Hospitality revenue                         $           22.0       $           16.8    $           57.4       $           34.8
Expenses:
Cost of hospitality revenue                             16.3                   10.8                42.9                   26.1
Other operating expenses                                 0.2                    0.3                 0.5                    0.7
Depreciation and amortization                            1.7                    1.2                 4.4                    3.5
Total expenses                                          18.2                   12.3                47.8                   30.3
Operating income                                         3.8                    4.5                 9.6                    4.5
Other (expense) income:
Interest expense                                       (0.2)                  (0.1)               (0.3)                  (0.1)
Other income, net                                        0.6                    0.5                 0.6                    0.7
Other income, net                                        0.4                    0.4                 0.3                    0.6
Income before equity in loss from
unconsolidated affiliates and income
taxes                                       $            4.2       $            4.9    $            9.9       $            5.1




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Three months ended September 30, 2021 compared to the three months ended September 30, 2020


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


                                   Three Months Ended September 30, 2021                Three Months Ended September 30, 2020
                                                   Gross            Gross                               Gross            Gross
                                 Revenue          Profit            Margin            Revenue          Profit            Margin

                                                                           In millions
Clubs                          $       8.2      $       2.0              24.4 %     $       6.8      $       3.0              44.1 %
Hotel operations, food and
beverage operations,
short-term vacation rentals
and other management
services                              12.3              3.1              25.2 %             9.3              2.8              30.1 %
Other                                  1.5              0.5              33.3 %             0.7              0.2              28.6 %
Total                          $      22.0      $       5.6              25.5 %     $      16.8      $       6.0              35.7 %




Revenue from our clubs increased $1.4 million, or 20.6%, during the three months
ended September 30, 2021, compared to the same period in 2020. The increase in
revenue in the current period was due to increases in the number of members and
membership revenue, as well as higher demand for club amenities that resulted in
revenue increases from the beach club, golf and charter flights. Our clubs gross
margin decreased to 24.4% during the three months ended September 30, 2021,
compared to 44.1% during the same period in 2020. The decrease in gross margin
was due to increased support services allocation and sales incentive costs
related to the growth of our club memberships, as well as an increase in cost of
labor and products related to the re-opening of club outlets closed during the
third quarter of 2020 due to COVID-19.

Revenue from our hotel operations, food and beverage operations, short-term
vacation rentals and other management services increased $3.0 million, or 32.3%,
during the three months ended September 30, 2021, as compared to the same period
in 2020. The increase is primarily due to increases in lodging revenue from the
Hilton Garden Inn Panama City Airport, which opened in July 2021 and the
WaterColor Inn, as well as food and beverage operations consistent with
increased popularity of the region. The three months ended September 30, 2021,
had a gross margin of 25.2%, compared to 30.1% during the same period in 2020.
The decrease in gross margin is due to pre-opening expenses associated with the
opening of Hilton Garden Inn Panama City Airport, onboarding of staff for future
assets currently under construction and an increase in cost of labor and
products.

Revenue from other hospitality operations increased $0.8 million during the
three months ended September 30, 2021, as compared to the same period in 2020.
The increase in other hospitality revenue was primarily related to an increase
in revenue from The Powder Room, which opened in December 2020, as well as the
WaterColor retail store. Other hospitality gross margin increased during the
three months ended September 30, 2021, to 33.3%, as compared to 28.6% during the
same period in 2020, due to $0.2 million of business interruption proceeds
received in the current period for the marinas related to Hurricane Michael. We
did not have revenue from our marinas during the three months ended September
30, 2021 and 2020, due to the impact of Hurricane Michael on the marinas. See
Note 7. Hurricane Michael for additional information.

Our hospitality segment had a gross margin of 25.5% during the three months
ended September 30, 2021, as compared to 35.7% during the same period in 2020.
The decrease in gross margin is due to increased sales incentive costs related
to the growth of our club memberships, pre-opening expenses associated with the
opening of Hilton Garden Inn Panama City Airport, onboarding of staff for future
assets currently under construction and an increase in cost of labor and
products.

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


The increase of $0.5 million in depreciation and amortization expense during the
three months ended September 30, 2021, as compared to the same period in 2020,
was primarily due to new properties placed in service.

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Interest expense primarily includes interest incurred from our hospitality project financing.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020


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


                                  Nine Months Ended September 30, 2021                Nine Months Ended September 30, 2020
                                                 Gross          Gross                                Gross             Gross
                                 Revenue        Profit          Margin             Revenue           Profit           Margin

                                                                            In millions
Clubs                          $      23.1    $       6.5            28.1 %     $        16.0     $        6.3              39.4 %
Hotel operations, food and
beverage operations,
short-term vacation rentals
and other management
services                              29.9            6.7            22.4 %              17.5              2.1              12.0 %
Other                                  4.4            1.3            29.5 %               1.3              0.3              23.1 %
Total                          $      57.4    $      14.5            25.3 %     $        34.8     $        8.7              25.0 %




Revenue from our clubs increased $7.1 million, or 44.4%, during the nine months
ended September 30, 2021 compared to the same period in 2020. The increase in
revenue in the current period was due to increases in the number of members and
membership revenue, as well as higher demand for club amenities that resulted in
revenue increases from the beach club, golf and charter flights. As of
September 30, 2021, Watersound Club had 2,158 members, compared with 1,448
members as of September 30, 2020 an increase of 710 members. Our clubs gross
margin decreased to 28.1% during the nine months ended September 30, 2021,
compared to 39.4% during the same period in 2020. The decrease in gross margin
was due to increased support services allocation and sales incentive costs
related to the growth of our club memberships, as well as an increase in cost of
labor and products related to the re-opening of club outlets closed during 2020
due to COVID-19.

Revenue from our hotel operations, food and beverage operations, short-term
vacation rentals and other management services increased $12.4 million, or
70.9%, during the nine months ended September 30, 2021, as compared to the same
period in 2020. The increase is primarily due to increases in lodging revenue
from the WaterColor Inn and Hilton Garden Inn Panama City Airport, which opened
in July 2021, as well as food and beverage operations consistent with increased
popularity of the region and year-round travel. The increase was also due to the
impact of the COVID-19 pandemic on the prior period, which resulted in shutdowns
and reduced revenue from mid-March to mid-May 2020. The nine months ended
September 30, 2021 had a gross margin of 22.4%, compared to 12.0% during the
same period in 2020. The increase in gross margin is due to an increase in
year-round travel in the current period consistent with the growth and
popularity of the region. The increase in gross margin was partially offset by
pre-opening expenses associated with the opening of Hilton Garden Inn Panama
City Airport, onboarding of staff for future assets currently under construction
and an increase in cost of labor and products.

Revenue from other hospitality operations increased $3.1 million during the nine
months ended September 30, 2021, as compared to the same period in 2020. The
increase in other hospitality revenue was primarily related to an increase in
revenue from The Powder Room, which opened in December 2020, as well as the
WaterColor retail store. Our other hospitality operations gross margin increased
to 29.5% during the nine months ended September 30, 2021, compared to 23.1%
during the same period in 2020, due to $0.6 million of business interruption
proceeds received in the current period for the marinas related to Hurricane
Michael. We did not have revenue from our marinas during the nine months ended
September 30, 2021 and 2020, due to the impact of Hurricane Michael on the
marinas. See Note 7. Hurricane Michael for additional information.

Our hospitality segment gross margin of 25.0% during the nine months ended September 30, 2021, was comparable to the gross margin of 24.7% during the same period in 2020.

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


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The increase of $0.9 million in depreciation and amortization expense during the
nine months ended September 30, 2021, as compared to the same period in 2020,
was primarily due to new properties placed in service.

Interest expense primarily includes interest incurred from our hospitality project financing.

Commercial


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


                                               Three Months Ended September 30,           Nine Months Ended September 30,
                                                  2021                   2020                2021                   2020

                                                                               In millions
Revenue:
Leasing revenue
Commercial leasing revenue                  $            4.1       $            3.9    $           11.6       $           11.2
Apartment leasing revenue                                2.3                    1.0                 6.0                    2.9
Senior living leasing revenue                            0.6                      -                 1.2                      -
Total leasing revenue                                    7.0                    4.9                18.8                   14.1
Commercial and rural real estate revenue                 1.6               
    2.2                 9.8                    7.2
Timber revenue                                           1.0                    1.6                 4.8                    5.5
Total revenue                                            9.6                    8.7                33.4                   26.8
Expenses:
Cost of leasing revenue                                  2.9                    2.0                 8.1                    4.0
Cost of commercial and rural real estate
revenue                                                  0.2                    0.8                 1.8                    2.2
Cost of timber revenue                                   0.1                    0.2                 0.5                    0.6
Other operating expenses                                 1.1                    1.0                 3.0                    2.7
Depreciation, amortization and depletion                 2.8               
    1.8                 7.6                    5.1
Total expenses                                           7.1                    5.8                21.0                   14.6
Operating income                                         2.5                    2.9                12.4                   12.2
Other (expense) income:
Interest expense                                       (1.6)                  (0.9)               (4.2)                  (2.8)
Gain on contribution to equity method
investment                                                 -                      -                 3.1                    3.9
Other income, net                                        3.6                      -                 3.6                    0.1
Total other income (expense), net                        2.0                  (0.9)                 2.5                    1.2
Income before equity in loss from
unconsolidated affiliates and income
taxes                                       $            4.5       $            2.0    $           14.9       $           13.4



Three months ended September 30, 2021 compared to the three months ended September 30, 2020


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


                                          Three Months Ended September 30, 2021                   Three Months Ended September 30, 2020
                                                         Gross                Gross                              Gross            Gross
                                     Revenue        Profit (Deficit)         Margin             Revenue         Profit            Margin

                                                                                  In millions
Leasing
Commercial leasing                 $       4.1     $              2.9              70.7 %     $       3.9     $       2.4               61.5 %
Apartments leasing                         2.3                    1.4              60.9 %             1.0             0.5               50.0 %
Senior living leasing                      0.6                  (0.2)            (33.3) %               -               -                  - %
Total leasing                              7.0                    4.1              58.6 %             4.9             2.9               59.2 %
Commercial and rural real estate           1.6                    1.4      
       87.5 %             2.2             1.4               63.6 %
Timber                                     1.0                    0.9              90.0 %             1.6             1.4               87.5 %
Total                              $       9.6     $              6.4              66.7 %     $       8.7     $       5.7               65.5 %




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Total leasing revenue increased $2.1 million, or 42.9%, during the three months
ended September 30, 2021, as compared to the same period in 2020. The increase
is primarily due to new leases at Pier Park Crossings Phase II apartments, which
began leasing in the fourth quarter of 2020 and new leases at Watersound Origins
Crossings apartments and Watercrest senior living community, which began leasing
in the first quarter of 2021. Leasing gross margin decreased during the three
months ended September 30, 2021, to 58.6%, as compared to 59.2% during the same
period in 2020, primarily due to start-up and lease-up expenses for new assets
in the current period.

During the three months ended September 30, 2021, we had five commercial and
rural real estate sales of approximately 423 acres for $1.6 million, resulting
in a gross profit margin of approximately 87.5%. During the three months ended
September 30, 2020, we had seven commercial and rural real estate sales totaling
approximately 232 acres for $2.2 million, resulting in a gross profit margin of
approximately 63.6%.

Timber revenue decreased $0.6 million, or 37.5%, to $1.0 million during the
three months ended September 30, 2021, as compared to $1.6 million during the
same period in 2020. The decrease is primarily due to a decrease in the amount
of wood product tons sold, which were partially offset by price increases in the
current period, as well as a decrease in the sales of fill dirt and other
products. There were 50,000 tons of wood products sold during the three months
ended September 30, 2021, as compared to 84,000 tons of wood products sold
during the same period in 2020. The average price of wood product sold increased
to $17.32 per ton during the three months ended September 30, 2021, as compared
to $14.99 per ton during the same period in 2020.

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


The increase of $1.0 million in depreciation, amortization and depletion expense
during the three months ended September 30, 2021, as compared to the same period
in 2020, was primarily due to new properties placed in service.

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


Other income, net during the three months ended September 30, 2021, includes
$3.6 million received from the Florida Division of Emergency Management's TRBG
program for recovery of lost income related to timber crop that was destroyed as
a result of Hurricane Michael. See Note 7. Hurricane Michael and Note 16. Other
Income (Expense), Net for additional information.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020


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


                                         Nine Months Ended September 30, 2021                 Nine Months Ended September 30, 2020
                                                        Gross              Gross                             Gross          Gross
                                     Revenue       Profit (Deficit)        Margin            Revenue        Profit          Margin

                                                                                In millions
Leasing
Commercial leasing                 $      11.6    $              7.9            68.1 %     $      11.2    $       7.5            67.0 %
Apartments leasing                         6.0                   3.9            65.0 %             2.9            2.6            89.7 %
Senior living leasing                      1.2                 (1.1)          (91.7) %               -              -               - %
Total leasing                             18.8                  10.7            56.9 %            14.1           10.1            71.6 %
Commercial and rural real estate           9.8                   8.0       
    81.6 %             7.2            5.0            69.4 %
Timber                                     4.8                   4.3            89.6 %             5.5            4.9            89.1 %
Total                              $      33.4    $             23.0            68.9 %     $      26.8    $      20.0            74.6 %




Total leasing revenue increased $4.7 million, or 33.3%, during the nine months
ended September 30, 2021, as compared to the same period in 2020. The increase
is primarily due to new leases at Pier Park Crossings Phase II apartments, which
began leasing in the fourth quarter of 2020 and new leases at Watersound Origins
Crossings apartments and Watercrest senior living community, which began leasing
in the first quarter of 2021, as well as other

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new leases. Leasing gross margin decreased during the nine months ended
September 30, 2021 to 56.9%, as compared to 71.6% during the same period in
2020, primarily due to $0.7 million of business interruption proceeds received
for Pier Park Crossings apartments related to Hurricane Michael in the prior
period and start-up and lease-up expenses for new assets in the current period.
As of September 30, 2021, we had net rentable square feet of approximately
986,000, of which approximately 821,000 square feet was under lease. As of
September 30, 2020, we had net rentable square feet of approximately 904,000, of
which approximately 758,000 square feet was under lease.

The diversity of our commercial segment complements the growth of our
residential and hospitality segments. Commercial and rural real estate revenue
can vary depending on the proximity to developed areas and the mix and
characteristics of commercial and rural real estate sold in each period, with
varying compositions of retail, office, industrial and other commercial uses.
During the nine months ended September 30, 2021, we had thirteen commercial and
rural real estate sales of approximately 536 acres for $9.8 million, resulting
in a gross profit margin of approximately 81.6%. During the nine months ended
September 30, 2020, we had nineteen commercial and rural real estate sales
totaling approximately 433 acres for $7.2 million, resulting in a gross profit
margin of approximately 69.4%. Commercial and rural real estate revenue for the
nine months ended September 30, 2020, included $1.8 million related to the sale
of the SouthWood Town Center. As our focus continues to evolve more towards
recurring revenue from leasing operations, we expect to have limited commercial
and rural real estate sales. Further, we may continue to transform and operate
commercial properties for higher and better use. This may result in certain
assets moving from the commercial segment to the hospitality segment.

Timber revenue decreased $0.7 million, or 12.7%, to $4.8 million during the nine
months ended September 30, 2021, as compared to $5.5 million during the same
period in 2020. The decrease is primarily due to a decrease in the sales of fill
dirt and other products. The decrease was partially offset by an increase due to
the sales mix of different wood products and price increases in the current
period. There were 223,000 tons of wood products sold during the nine months
ended September 30, 2021, as compared to 275,000 tons of wood products sold
during the same period in 2020. The average price of wood product sold increased
to $19.28 per ton during the nine months ended September 30, 2021, as compared
to $15.35 per ton during the same period in 2020.

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


The increase of $2.5 million in depreciation, amortization and depletion expense
during the nine months ended September 30, 2021, as compared to the same period
in 2020, was primarily due to new properties placed in service.

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

Gain on contribution to equity method investment for the nine months ended
September 30, 2021, includes a gain of $3.1 million on land contributed to our
unconsolidated Watersound Fountains Independent Living JV. Gain on contribution
to equity method investment for the nine months ended September 30, 2020,
includes a gain of $3.9 million on land contributed to our unconsolidated Sea
Sound Apartments JV. See Note 4. Joint Ventures for additional information.

Other income, net during the nine months ended September 30, 2021, includes $3.6
million received from the Florida Division of Emergency Management's TRBG
program for recovery of lost income related to timber crop that was destroyed as
a result of Hurricane Michael. See Note 7. Hurricane Michael and Note 16. Other
Income (Expense), Net for additional information.



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The total net rentable square feet and percentage leased of leasing properties
by location are as follows:


                                                               September 30, 2021          December 31, 2020
                                                               Net                         Net
                                                             Rentable                    Rentable
                                                              Square    

Percentage Square Percentage

                                           Location           Feet*        Leased         Feet*        Leased
Pier Park North JV                    Bay County, FL          320,310            95 %     320,310            92 %
VentureCrossings                      Bay County, FL          303,605            88 %     303,605            86 %
Beckrich Office Park (a) (b)          Bay County, FL           81,065            84 %      86,296            80 %
Watersound Self-Storage (c)           Walton County, FL        67,694            12 %         N/A           N/A %
WindMark Beach Town Center (a) (d)    Gulf County, FL          44,496      
     49 %      44,748            47 %
Watersound Town Center (e)            Walton County, FL        24,764           100 %       6,496           100 %
WaterColor Town Center (a)            Walton County, FL        22,199           100 %      23,121            79 %
Cedar Grove Commerce Park             Bay County, FL           19,389            90 %      19,449            90 %
Port St. Joe Commercial               Gulf County, FL          16,964           100 %      16,964           100 %
Beach Commerce Park (a)               Bay County, FL           16,450           100 %      17,450            76 %
SummerCamp Commercial                 Franklin County, FL      13,000             0 %      13,000             0 %
South Walton Commerce Park (f)        Walton County, FL        11,570      
     88 %      11,570            88 %
WaterSound Gatehouse (a)              Walton County, FL        10,271           100 %      10,271            87 %
WaterColor Crossings                  Walton County, FL         7,135           100 %       7,135           100 %
395 Office building                   Walton County, FL         6,700           100 %       6,700           100 %
Pier Park outparcel                   Bay County, FL            5,565           100 %       5,565           100 %
Topsail West Commercial               Walton County, FL         3,500           100 %       3,500           100 %
Bank building                         Bay County, FL            3,346           100 %       3,346           100 %
Bank building                         Gulf County, FL           3,346           100 %       3,346           100 %
WaterColor HOA Office                 Walton County, FL         2,520           100 %       2,520           100 %
RiverCamps                            Bay County, FL            2,112           100 %       2,112           100 %
                                                              986,001            83 %     907,504            85 %

Net Rentable Square Feet is designated as the current square feet available for * lease as specified in the applicable lease agreements plus management's

estimate of space available for lease based on construction drawings.

(a) In addition to net rentable square feet there is also space that we occupy or

that serves as common area.

(b) Included in net rentable square feet as of September 30, 2021 and December

31, 2020, is 1,500 square feet leased to a consolidated JV.

(c) Construction was completed in the third quarter of 2021.

(d) Included in net rentable square feet as of September 30, 2021 and

December 31, 2020, is 13,808 square feet of unfinished space.

(e) Construction of an 18,268 square foot building was completed in the third

quarter of 2021.

(f) Included in net rentable square feet as of September 30, 2021 and December

31, 2020, is 1,364 square feet leased to a consolidated JV.

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


                                                                         September 30, 2021                 December 31, 2020
                                                                                        Percentage                        Percentage
                                                                                          Leased                            Leased
                                                          Units      Units     Units     of Units      Units     Units     of Units
                                        Location         Planned  

Completed Leased Completed Completed Leased Completed Apartments Pier Park Crossings

                 Bay County, FL           240         

240 238 99% 240 237 99% Pier Park Crossings Phase II Bay County, FL

           120         120      120         100%         120       55          46%
Watersound Origins Crossings (a)    Walton County, FL        217         158      151          96%          18        -           0%
Sea Sound (b)                       Bay County, FL           300          82       81          99%           -        -          N/A
North Bay Landing (c)               Bay County, FL           240           -        -          N/A           -        -          N/A
Total apartment units                                      1,117         600      590          98%         378      292          77%
Senior living communities
Watercrest (d)                      Walton County, FL        107         107       36          34%         107        -          N/A
Watersound Fountains (e)            Walton County, FL        148           -        -          N/A           -        -          N/A
Total senior living units                                    255         107       36          34%         107        -          N/A
Total units                                                1,372         707      626          89%         485      292          60%

(a) Construction of the initial twelve apartment buildings was completed as of

    the end of the third quarter of 2021.


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Construction of the initial apartment building was completed as of the end of (b) the third quarter of 2021. The Sea Sound Apartments JV is unconsolidated and

is accounted for under the equity method of accounting.

(c) Construction began in the fourth quarter of 2020 and is ongoing.

(d) Construction was completed in the fourth quarter of 2020.

Construction began in the second quarter of 2021 and is ongoing. The (e) Watersound Fountains Independent Living JV is unconsolidated and is accounted

    for under the equity method of accounting.



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


                               Three Months Ended September 30,               Nine Months Ended September 30,
                                   2021                   2020                    2021                 2020
Pine pulpwood                 33,000       66.0 %     65,000    77.4 %      124,000      55.6 %   170,000    61.8 %
Pine sawtimber                16,000       32.0 %     14,000    16.7 %       89,000      39.9 %    67,000    24.4 %
Pine grade logs                1,000        2.0 %      5,000     5.9 %     
  8,000       3.6 %    25,000     9.1 %
Other                              -          - %          -       - %        2,000       0.9 %    13,000     4.7 %
Total                         50,000      100.0 %     84,000   100.0 %      223,000     100.0 %   275,000   100.0 %



Liquidity and Capital Resources


As of September 30, 2021, we had cash and cash equivalents of $27.3 million,
compared to $106.8 million as of December 31, 2020. During 2021, we transitioned
our short-term U.S. Treasury Bills classified as cash equivalents to U.S.
Treasury Bills classified as investments - debt securities. Our cash and cash
equivalents as of September 30, 2021 includes $9.4 million of U. S. Treasury
Money Market Funds. In addition to cash and cash equivalents, we consider our
investments classified as available-for-sale securities and equity securities
("Securities"), as being generally available to meet our liquidity needs.
Securities are not as liquid as cash and cash equivalents, but they are
generally convertible into cash within a relatively short period of time. As of
September 30, 2021, we had investments - debt securities in U. S. Treasury Bills
of $103.0 million and investments - equity securities in preferred stock
investments of $0.4 million. See Note 5. Investments, for additional information
regarding our investments.

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

During the nine months ended September 30, 2021, we incurred a total of $140.6
million for capital expenditures, which includes $34.7 million for our
residential segment, $34.7 million for our commercial segment, $70.9 million for
our hospitality segment and $0.3 million for corporate expenditures. As of
September 30, 2021, we had a total of $260.1 million in construction and
development related contractual obligations, of which a portion will be funded
through committed or new financing arrangements.

As of September 30, 2021 and December 31, 2020, we had various loans outstanding
totaling $198.9 million and $161.4 million, respectively, with maturities from
May 2023 through June 2060. The weighted average rate on our variable rate loans
as of September 30, 2021 was 2.5%. See Item 3. Quantitative and Qualitative
Disclosures about Market Risk for additional information regarding LIBOR related
risks. See Note 10. Debt, Net for additional information.

In October 2015, the Pier Park North JV entered into a $48.2 million loan. As of
September 30, 2021 and December 31, 2020, $43.8 million and $44.6 million,
respectively, was outstanding on the PPN JV Loan. The PPN JV Loan accrues
interest at a rate of 4.1% per annum and matures in November 2025. In connection
with the PPN JV Loan, we entered into a limited guarantee in favor of the
lender, based on our percentage ownership of the JV. In addition, the guarantee
can become full recourse in the case of any fraud or intentional
misrepresentation by the Pier Park North JV; any voluntary transfer or
encumbrance of the property in violation of the due-on-sale clause in the
security instrument; upon commencement of voluntary bankruptcy or insolvency
proceedings and upon breach of covenants in the security instrument. See Note
10. Debt, Net for additional information.

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In May 2018, the Pier Park Crossings JV entered into a $36.6 million loan,
insured by HUD, to finance the construction of apartments in Panama City Beach,
Florida. As of September 30, 2021 and December 31, 2020, $35.8 million and $36.1
million, respectively, was outstanding on the PPC JV Loan. In August 2021, the
Pier Park Crossings JV entered into a modification of the PPC JV Loan, that
reduced the interest rate from 4.0% to 3.1%. The modification revised the
prepayment provision to include that the PPC JV Loan may not be prepaid prior to
September 1, 2022 and from September 1, 2022 through August 31, 2031 a premium
is due to the lender of 2% - 10% of any prepaid principal. The PPC JV Loan is
secured by the Pier Park Crossings JV's real property and the assignment of
rents and leases. See Note 10. Debt, Net for additional information.

In May 2019, the Watersound Origins Crossings JV entered into a $37.9 million
loan. As of September 30, 2021 and December 31, 2020, $36.3 million and $27.2
million, respectively, was outstanding on the Watersound Origins Crossings JV
Loan. The Watersound Origins Crossings JV Loan bears interest at a rate of 5.0%
and matures in May 2024. The Watersound Origins Crossings JV Loan is secured by
the real property, assignment of rents and the security interest in the rents
and personal property. In connection with the Watersound Origins Crossings JV
Loan, we executed a guarantee in favor of the lender to guarantee the payment
and performance of the borrower under the Watersound Origins Crossings JV Loan.
We are the sole guarantor and receive a monthly fee related to the guarantee
from our JV partner based on the JV partner's ownership percentage. See Note 10.
Debt, Net for additional information.

In June 2019, the Watercrest JV entered into a $22.5 million loan. As of
September 30, 2021 and December 31, 2020, $19.6 million and $18.1 million,
respectively, was outstanding on the Watercrest JV Loan. The Watercrest JV Loan
bears interest at a rate of LIBOR plus 2.2% and matures in June 2047. The
Watercrest JV Loan is secured by the real property, assignment of rents, leases
and deposits and the security interest in the rents and personal property. In
connection with the Watercrest JV Loan, we executed a guarantee in favor of the
lender to guarantee the payment and performance of the borrower under the
Watercrest JV Loan. We are the sole guarantor and receive a quarterly fee
related to the guarantee from our JV partner based on the JV partner's ownership
percentage. The Watercrest JV entered into an interest rate swap to hedge cash
flows tied to changes in the underlying floating interest rate tied to LIBOR.
The interest rate swap was effective June 1, 2021 and matures on June 1, 2024
and fixed the variable rate on the notional amount of related debt of $20.0
million to a rate of 4.4%. See Note 6. Financial Instruments and Fair Value and
Note 10. Debt, Net for additional information.

In August 2019, a wholly-owned subsidiary of ours entered into a $5.5 million
loan. As of September 30, 2021 and December 31, 2020, $5.2 million and $5.4
million, respectively, was outstanding on the Beckrich Building III Loan. The
Beckrich Building III Loan bears interest at a rate of LIBOR plus 1.7% and
matures in August 2029. The Beckrich Building III Loan is secured by the real
property, assignment of leases, rents and profits and the security interest in
the rents and personal property. In connection with the Beckrich Building III
Loan, we executed a guarantee in favor of the lender to guarantee the payment
and performance of the borrower under the Beckrich Building III Loan. See Note
10. Debt, Net for additional information.

In October 2019, the Pier Park Crossings Phase II JV entered into a $17.5
million loan. As of September 30, 2021 $17.4 million and $15.9 million,
respectively, was outstanding on the PPC II JV Loan. The PPC II JV Loan matures
in October 2024 and bears interest at a rate of LIBOR plus 2.1%. The PPC II JV
Loan is secured by the real property, assignment of rents and leases and the
security interest in the rents, leases and personal property. In connection with
the PPC II JV Loan, we executed a guarantee in favor of the lender to guarantee
the payment and performance of the borrower under the PPC II JV Loan. As
guarantor, our liability under the PPC II JV Loan was reduced to 50% of the
principal amount upon satisfaction of final advance conditions in April 2021 and
will be reduced to 25% of the principal amount upon reaching and maintaining a
certain debt service coverage ratio. We are the sole guarantor and receive a
monthly fee related to the guarantee from our JV partner based on the JV
partner's ownership percentage. See Note 10. Debt, Net for additional
information.

In March 2020, a wholly-owned subsidiary of ours entered into a $15.3 million
loan. As of September 30, 2021 and December 31, 2020, $14.6 million and $3.5
million, respectively, was outstanding on the Airport Hotel Loan. The Airport
Hotel Loan bears interest at LIBOR plus 2.0%, with a floor of 3.0%, and matures
in March 2025. The Airport Hotel Loan is secured by the real property,
assignment of leases, rents and profits and the security interest in the rents
and personal property. In connection with the Airport Hotel Loan, we executed a
guarantee in favor of the lender to

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guarantee the payment and performance of the borrower under the Airport Hotel Loan. See Note 10. Debt, Net for additional information.


In April 2020, the Pier Park Resort Hotel JV entered into a loan with an initial
amount of $52.5 million up to a maximum of $60.0 million through additional
earn-out requests. As of September 30, 2021 and December 31, 2020, there was no
principal balance outstanding on the Pier Park Resort Hotel JV Loan. The Pier
Park Resort Hotel JV Loan matures in April 2027 and bears interest at a rate of
LIBOR plus 2.2% during construction and LIBOR plus 2.0% upon hotel opening. The
Pier Park Resort Hotel JV Loan is secured by the real property, assignment of
rents and leases and the security interest in the rents, leases and personal
property. In connection with the Pier Park Resort Hotel JV Loan, as guarantor,
we and our JV partner entered into a guarantee based on each partner's ownership
interest in favor of the lender, to guarantee the payment and performance of the
borrower. As guarantor, our liability under the Pier Park Resort Hotel JV Loan
will be released upon reaching and maintaining certain debt service coverage for
twelve months. In addition, the guarantee can become full recourse in the case
of the failure of guarantor to abide by or perform any of the covenants or
warranties to be performed on the part of such guarantor. The Pier Park Resort
Hotel JV entered into an interest rate swap to hedge cash flows tied to changes
in the underlying floating interest rate tied to LIBOR. The interest rate swap
is effective December 10, 2022 and matures on April 12, 2027 and fixed the
variable rate on the notional amount of related debt of $42.0 million to a rate
of 3.2%. See Note 6. Financial Instruments and Fair Value and Note 10. Debt, Net
for additional information.

In November 2020, a wholly-owned subsidiary of ours entered into a $16.8 million
construction loan to finance the construction of a HomeWood Suites by Hilton
hotel in the Breakfast Point area of Panama City Beach, Florida. As of
September 30, 2021, $8.3 million was outstanding on the Breakfast Point Hotel
Loan. As of December 31, 2020, there was no principal balance outstanding on the
Breakfast Point Hotel Loan. The Breakfast Point Hotel Loan matures in November
2042 and bears interest at a rate of LIBOR plus 2.8% through November 2022, 3.3%
over the 5-Year T-Bill Index from November 2022 through November 2027 and 3.3%
over the 1-Year T-Bill Index from November 2027 through November 2042, with a
minimum rate of 3.8% throughout the term of the loan. The Breakfast Point Hotel
Loan is secured by the real property, assignment of rents and the security
interest in the rents and personal property. In connection with the Breakfast
Point Hotel Loan, we executed a guarantee in favor of the lender to guarantee
the payment and performance of the borrower under the Breakfast Point Hotel
Loan. See Note 10. Debt, Net for additional information.

In November 2020, a wholly-owned subsidiary of ours entered into a $5.8 million
construction loan to finance the construction of a self-storage facility in
Santa Rosa Beach, Florida. As of September 30, 2021, $4.1 million was
outstanding on the Self-Storage Facility Loan. As of December 31, 2020, there
was no principal balance outstanding on the Self-Storage Facility Loan. The
Self-Storage Facility Loan matures in November 2025 and bears interest at a rate
of LIBOR plus 2.5%, with a floor of 3.0%. Upon receipt of final lien waivers and
certificate of occupancy, the Self-Storage Facility Loan will bear interest at a
rate of LIBOR plus 2.4%, with a floor of 2.9%. The Self-Storage Facility Loan is
secured by the real property, assignment of leases and rents and the security
interest in the rents and personal property. In connection with the Self-Storage
Facility Loan, we executed a guarantee in favor of the lender to guarantee the
payment and performance of the borrower under the Self-Storage Facility Loan.
Our liability as guarantor under the Self-Storage Facility Loan shall not exceed
$2.9 million, plus any additional fees, upon reaching and maintaining certain
debt service coverage. See Note 10. Debt, Net for additional information.

In January 2021, The Lodge 30A JV entered into a $15.0 million construction loan
to finance the construction of a boutique hotel in Seagrove Beach, Florida. As
of September 30, 2021, $4.5 million was outstanding on the Lodge 30A JV Hotel
Loan. The Lodge 30A JV Hotel Loan bears interest at a rate of 3.8% and matures
in January 2028. The Lodge 30A JV Hotel Loan is secured by the real property,
assignment of leases and rents and the security interest in the rents and
personal property. In connection with the Lodge 30A JV Hotel Loan, we,
wholly-owned subsidiaries of ours and our JV partner entered into a joint and
several payment and performance guarantee in favor of the lender. Upon reaching
a certain debt service coverage ratio for a minimum of twenty-four months, our
liability as guarantor will be reduced to 75% for a twelve-month period. The
debt service coverage ratio will be tested annually thereafter and will be
reduced to 50% in year four and 25% in year five. We receive a monthly fee
related to the guarantee from our JV partner based on the JV partner's ownership
percentage. See Note 10. Debt, Net for additional information.

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In March 2021, a wholly-owned subsidiary of ours entered into a $26.8 million
construction loan to finance the construction of apartments in Panama City,
Florida. As of September 30, 2021, there was no principal balance outstanding on
the North Bay Landing Apartments Loan. The North Bay Landing Apartments Loan
bears interest at a rate of LIBOR plus 2.5%, with a floor of 3.2%. Upon reaching
a certain debt service coverage ratio, the North Bay Landing Apartments Loan
will bear interest at a rate of LIBOR plus 2.3%, with a floor of 3.0%. The North
Bay Landing Apartments Loan matures in September 2024 and includes an option for
an extension of the maturity date by eighteen months, subject to certain
conditions. The North Bay Landing Apartments Loan is secured by the real
property, assignment of rents and leases and the security interest in the rents,
leases and personal property. In connection with the North Bay Landing
Apartments Loan, we executed a guarantee in favor of the lender to guarantee
completion of the project and the payment and performance of the borrower under
the North Bay Landing Apartments Loan. As guarantor, our liability under the
North Bay Landing Apartments Loan will be reduced to 50% of the principal amount
upon satisfaction of final advance conditions and reduced to 25% of the
principal amount upon reaching and maintaining a certain debt service coverage
ratio. In addition, the guarantee can become full recourse in the case of any
fraud or intentional misrepresentation or failure to abide by other certain
obligations on the part of such guarantor. See Note 10. Debt, Net for additional
information.

In June 2021, a wholly-owned subsidiary of ours entered into a $28.0 million
construction loan to finance the construction of the Camp Creek Inn and amenity
center in Watersound, Florida. As of September 30, 2021, there was no principal
balance outstanding on the Camp Creek Inn Loan. The Camp Creek Inn Loan bears
interest at a rate of LIBOR plus 2.1%, with a floor of 2.6%, and matures in
December 2047. The Camp Creek Inn Loan is secured by the real property,
assignment of rents and the security interest in the rents and personal
property. In connection with the Camp Creek Inn Loan, we executed a guarantee in
favor of the lender to guarantee completion of the project and the payment of
the borrower under the Camp Creek Inn Loan. As guarantor, our liability under
the Camp Creek Inn Loan will be reduced to 50% of the principal amount upon the
project reaching and maintaining a trailing six months operations with a certain
debt service coverage ratio and reduced to 25% of the principal amount upon
reaching and maintaining a trailing twelve months operations of a certain debt
service coverage ratio. In addition, the guarantee can become full recourse in
the case of the failure of guarantor to abide by or perform any of the
covenants, warranties or other certain obligations to be performed on the part
of such guarantor. See Note 10. Debt, Net for additional information.

In August 2021, a wholly-owned subsidiary of ours entered into a $12.0 million
construction loan to finance the construction of the Watersound Town Center in
Watersound, Florida. As of September 30, 2021, there was no principal balance
outstanding on the Watersound Town Center Grocery Loan. The Watersound Town
Center Grocery Loan bears interest at LIBOR plus 2.0%, with a floor of 2.2%, and
matures in August 2031. The Watersound Town Center Grocery Loan is secured by
the real property, assignment of rents and the security interest in the rents
and personal property. In connection with the Watersound Town Center Grocery
Loan, we executed a guarantee in favor of the lender to guarantee completion of
the project and the payment and performance of the borrower under the Watersound
Town Center Grocery Loan. As guarantor, our liability under the Watersound Town
Center Grocery Loan will be reduced to 50% of the principal amount upon
satisfaction of final advance conditions, issuance of the certificate of
occupancy for the project and receipt of the initial base rent payment and
reduced to 25% of the principal amount upon reaching a certain debt service
coverage ratio and the project maintaining 93% occupancy for ninety consecutive
days. See Note 10. Debt, Net for additional information.

CDD bonds financed the construction of infrastructure improvements in some of
our communities. The principal and interest payments on the bonds are paid by
assessments on the properties benefited by the improvements financed by the
bonds. We have recorded a liability for CDD debt that is associated with platted
property, which is the point at which it becomes fixed and determinable.
Additionally, we have recorded a liability for the balance of the CDD debt that
is associated with unplatted property if it is probable and reasonably estimable
that we will ultimately be responsible for repayment. We have recorded CDD
related debt of $5.0 million as of September 30, 2021. Total outstanding CDD
debt related to our land holdings was $14.2 million as of September 30, 2021,
which was comprised of $11.9 million at SouthWood, $2.2 million at the existing
Pier Park retail center and $0.1 million at Wild Heron. We pay interest on this
total outstanding CDD debt.

As of September 30, 2021, our unconsolidated Watersound Fountains Independent
Living JV, Sea Sound Apartments JV, Latitude Margaritaville Watersound JV, Pier
Park TPS JV and Busy Bee JV had various loans

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outstanding, some of which we have entered into guarantees. See Note 4. Joint Ventures and Note 18. Commitments and Contingencies for additional information.

In June 2020, we, as lender, entered into a $10.0 million secured revolving
promissory note with the unconsolidated Latitude Margaritaville Watersound JV,
as borrower. As of September 30, 2021 and December 31, 2020, $8.6 million and
$2.7 million, respectively, was outstanding on the Latitude Margaritaville
Watersound JV Note. The Latitude Margaritaville Watersound JV Note was provided
by us to finance the development of the pod-level, non-spine infrastructure,
which will be repaid by the JV as each home is sold by the JV, with the
aggregate unpaid principal and all accrued and unpaid interest due at maturity
in June 2025. The Latitude Margaritaville Watersound JV Note is secured by a
mortgage and security interest in and on the real property and improvements
located on the real property of the JV. See Note 4. Joint Ventures and Note 9.
Other Assets for additional information.

During the nine months ended September 30, 2021, we did not repurchase shares of
our common stock outstanding. During the nine months ended September 30, 2020,
we repurchased a total of 532,034 shares of our common stock outstanding for an
aggregate purchase price of $8.8 million including costs. See Note 14.
Stockholders' Equity for additional information regarding common stock
repurchases related to the Stock Repurchase Program.

As part of a timberland sale in 2007 and 2008, we have recorded a retained
interest with respect to notes contributed to bankruptcy-remote qualified SPEs
of $13.5 million for the installment notes monetized through September 30, 2021.
This balance represents the present value of future cash flows to be received
over the life of the installment notes, using management's best estimates of
underlying assumptions, including credit risk and interest rates as of the date
of the monetization, plus the accretion of investment income based on an
effective yield, which is recognized over the term of the notes, less actual
cash receipts.

As of September 30, 2021 and December 31, 2020, we were required to provide
surety bonds that guarantee completion of certain infrastructure in certain
development projects and mitigation banks of $24.7 million and $24.2 million,
respectively, as well as standby letters of credit in the amount of $3.3 million
and $6.6 million, respectively, which may potentially result in a liability to
us if certain obligations are not met.

In conducting our operations, we routinely hold 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 condensed consolidated balance sheets, consistent with GAAP and
industry practice. The cash deposit accounts and offsetting liability balances
for escrow deposits in connection with our title agencies for real estate
transactions were $10.3 million and $4.5 million as of September 30, 2021 and
December 31, 2020, respectively, these escrow funds are not available for
regular operations.

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Financials (USD)
Sales 2020 161 M - -
Net income 2020 45,2 M - -
Net Debt 2020 182 M - -
P/E ratio 2020 55,4x
Yield 2020 0,16%
Capitalization 2 928 M 2 928 M -
EV / Sales 2019 9,94x
EV / Sales 2020 16,7x
Nbr of Employees 511
Free-Float 93,3%
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Managers and Directors
Jorge Luis Gonzalez President, Chief Executive Officer & Director
Marek Bakun Chief Financial & Accounting Officer, Executive VP
Bruce Robert Berkowitz Chairman
Patrick W. Murphy Senior Vice President-Operations
K. Rhea Goff Chief Administrative Officer & Senior VP