Revenue rises but profit slips at The St. Joe Company (NYSE: JOE)
The St. Joe Company reported Q1 2026 total revenue of $99,044k, up from $94,197k a year earlier, driven by higher hospitality revenue of $44,686k and real estate revenue of $39,699k, partly offset by lower leasing revenue of $14,659k.
Net income attributable to the Company was $13,934k versus $17,461k, and diluted earnings per share were $0.24 compared with $0.30. Operating income rose to $18,176k, but equity in income from unconsolidated joint ventures fell to $3,525k from $10,159k, reducing total other income.
Cash provided by operating activities increased to $42,241k from $29,016k, while cash and cash equivalents were $136,280k and total debt, net, was $380,417k as of March 31, 2026. Total assets were $1,517,748k and total stockholders’ equity was $765,873k.
Positive
- None.
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- None.
Key Figures
Key Terms
variable interest entity financial
equity method of accounting financial
cash flow hedges financial
Secured Overnight Financing Rate financial
club initiation fees financial
HUD-insured loan financial
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
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(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
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Title of Each Class | | Trading Symbol(s) | | Name of Exchange on Which Registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☑ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☑ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☑ | Accelerated filer | ☐ | |
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Non-accelerated filer | ☐ | Smaller reporting company | |
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| | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES
As of April 27, 2026, there were
Table of Contents
THE ST. JOE COMPANY
INDEX
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| Page No. |
PART I - FINANCIAL INFORMATION | |
Item 1. Financial Statements (Unaudited) | 3 |
Condensed Consolidated Balance Sheets - March 31, 2026 and December 31, 2025 | 3 |
Condensed Consolidated Statements of Income - Three Months Ended March 31, 2026 and 2025 | 5 |
Condensed Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2026 and 2025 | 6 |
Condensed Consolidated Statements of Equity - Three Months Ended March 31, 2026 and 2025 | 7 |
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2026 and 2025 | 8 |
Notes to the Condensed Consolidated Financial Statements | 10 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 44 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 69 |
Item 4. Controls and Procedures | 70 |
PART II - OTHER INFORMATION | |
Item 1. Legal Proceedings | 70 |
Item 1A. Risk Factors | 70 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 70 |
Item 3. Defaults Upon Senior Securities | 71 |
Item 4. Mine Safety Disclosures | 71 |
Item 5. Other Information | 71 |
Item 6. Exhibits | 71 |
SIGNATURES | 72 |
2
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE ST. JOE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
ASSETS |
| | |
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Investment in real estate, net | | $ | | | $ | |
Investment in unconsolidated joint ventures | | | | | | |
Cash and cash equivalents | |
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Other assets | |
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Property and equipment, net of accumulated depreciation of $ | |
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Investments held by special purpose entities | |
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Total assets | | $ | | | $ | |
LIABILITIES AND EQUITY | |
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Liabilities: | |
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Debt, net | | $ | | | $ | |
Accounts payable and other liabilities | |
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Deferred revenue | | | | | | |
Deferred tax liabilities, net | |
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Senior Notes held by special purpose entity | |
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Total liabilities | |
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Commitments and contingencies (Note 17) | | | | | | |
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Equity: | |
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Common stock, | |
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Retained earnings | |
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Accumulated other comprehensive income | |
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Treasury stock at cost, | | | ( | | | — |
Total stockholders’ equity | |
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Non-controlling interest | |
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Total equity | |
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Total liabilities and equity | | $ | | | $ | |
See accompanying notes to the condensed consolidated financial statements.
3
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THE ST. JOE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
The following presents the portion of the condensed consolidated balances attributable to the Company’s consolidated joint ventures (“JV”), which as of March 31, 2026 and December 31, 2025, include the Pier Park North JV (“Pier Park North JV”), Pier Park Crossings LLC (“Pier Park Crossings JV”), Origins Crossings, LLC (“Watersound Origins Crossings JV”), SJWCSL, LLC (“Watercrest JV”), Pier Park Crossings Phase II LLC (“Pier Park Crossings Phase II JV”), Mexico Beach Crossings, LLC (“Mexico Beach Crossings JV”), Pier Park Resort Hotel, LLC (“Pier Park Resort Hotel JV”), the 30A Greenway Hotel, LLC (“The Lodge 30A JV”), Panama City Timber Finance Company, LLC and Northwest Florida Timber Finance, LLC. See Note 2. Summary of Significant Accounting Policies. Basis of Presentation and Principles of Consolidation and Note 4. Joint Ventures for additional information. The following assets may only be used to settle obligations of the consolidated JVs and the following liabilities are only obligations of the consolidated JVs and do not have recourse to the general credit of the Company, except for covenants and guarantees discussed in Note 8. Debt, Net.
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| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
ASSETS |
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Investment in real estate, net | | $ | | | $ | |
Cash and cash equivalents | |
| | |
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Other assets | |
| | |
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Property and equipment, net | | | | | | |
Investments held by special purpose entities | |
| | |
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Total assets | | $ | | | $ | |
LIABILITIES | |
| | |
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Debt, net | | $ | | | $ | |
Accounts payable and other liabilities | |
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Deferred revenue | | | | | | |
Senior Notes held by special purpose entity | |
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Total liabilities | | $ | | | $ | |
See accompanying notes to the condensed consolidated financial statements.
4
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THE ST. JOE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands except per share amounts)
(Unaudited)
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Revenue: | | | | | | |
Real estate revenue | | $ | | | $ | |
Hospitality revenue | |
| | |
| |
Leasing revenue | |
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Total revenue | |
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Expenses: | |
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Cost of real estate revenue (a) | |
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Cost of hospitality revenue (a) | |
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Cost of leasing revenue (a) | |
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Corporate and other operating expenses (a) | |
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Depreciation, depletion and amortization | |
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Total expenses | |
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Operating income | |
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Other income (expense): | |
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Investment income, net | |
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Interest expense | |
| ( | |
| ( |
Equity in income from unconsolidated joint ventures | | | | | | |
Other expense, net | |
| ( | |
| ( |
Total other (expense) income, net | |
| ( | |
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Income before income taxes | |
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Income tax expense | |
| ( | |
| ( |
Net income | |
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Net loss attributable to non-controlling interest | |
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Net income attributable to the Company | | $ | | | $ | |
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NET INCOME PER SHARE ATTRIBUTABLE TO THE COMPANY | |
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Basic | | $ | | | $ | |
Diluted | | $ | | | $ | |
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WEIGHTED AVERAGE SHARES OUTSTANDING | | | | | | |
Basic | |
| | |
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Diluted | |
| | |
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| (a) |
See accompanying notes to the condensed consolidated financial statements.
5
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THE ST. JOE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Net income: | | $ | | | $ | |
Other comprehensive income (loss): | |
| | |
| |
Interest rate swap | | | | | | ( |
Interest rate swap - unconsolidated joint venture | | | — | | | ( |
Reclassification of net realized gain included in earnings | |
| ( | |
| ( |
Total before income taxes | |
| ( | |
| ( |
Income tax benefit | |
| | |
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Total other comprehensive loss, net of tax | |
| ( | |
| ( |
Total comprehensive income, net of tax | | | | | | |
Total comprehensive loss attributable to non-controlling interest | | | | | | |
Total comprehensive income attributable to the Company | | $ | | | $ | |
See accompanying notes to the condensed consolidated financial statements.
6
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THE ST. JOE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | | | | | Accumulated Other | | | | | | | | | | |||
| | Outstanding | | | | | | Retained | | | Comprehensive | | | Treasury | | | Non-controlling | | | |
| | Shares | | | Amount | | | Earnings | | | Income (Loss) | | | Stock | | | Interest | | | Total |
Balance at December 31, 2025 |
| | | $ | | | $ | | | $ | | | $ | — | | $ | | | $ | |
Capital contributions from non-controlling interest |
| — | |
| — | |
| — | |
| — | |
| — | |
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Capital distributions to non-controlling interest |
| — | |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( |
Issuance of restricted stock | | | | | — | | | — | | | — | | | — | | | — | | | — |
Repurchase of restricted stock withheld for taxes | | ( | | | — | | | — | | | — | | | ( | | | — | | | ( |
Stock based compensation expense |
| — | |
| | |
| — | |
| — | |
| — | |
| — | |
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Repurchase of common stock, including excise tax |
| ( | |
| — | |
| — | |
| — | |
| ( | |
| — | |
| ( |
Dividends ($ | | — | | | — | | | ( | | | — | | | — | | | — | | | ( |
Other comprehensive loss, net of tax |
| — | |
| — | |
| — | |
| ( | |
| — | |
| ( | |
| ( |
Net income (loss) |
| — | |
| — | |
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| — | |
| — | |
| ( | |
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Balance at March 31, 2026 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | | | | | Accumulated Other | | | | | | | | | | |||
| | Outstanding | | | | | | Retained | | | Comprehensive | | | Treasury | | | Non-controlling | | | |
| | Shares | | | Amount | | | Earnings | | | Income (Loss) | | | Stock | | | Interest | | | Total |
Balance at December 31, 2024 | | | | $ | | | $ | | | $ | | | $ | — | | $ | | | $ | |
Capital distributions to non-controlling interest | | — | | | — | | | — | | | — | | | — | | | ( | | | ( |
Issuance of restricted stock | | | | | — | | | — | | | — | | | — | | | — | | | — |
Stock based compensation expense | | — | | | | | | — | | | — | | | — | | | — | | | |
Repurchase of common stock, including excise tax | | ( | | | — | | | — | | | — | | | ( | | | — | | | ( |
Dividends ($ | | — | | | — | | | ( | | | — | | | — | | | — | | | ( |
Other comprehensive loss, net of tax | | — | | | — | | | — | | | ( | | | — | | | ( | | | ( |
Net income (loss) | | — | | | — | | | | | | — | | | — | | | ( | | | |
Balance at March 31, 2025 | | | | $ | | | $ | | | $ | | | $ | ( | | $ | | | $ | |
See accompanying notes to the condensed consolidated financial statements.
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THE ST. JOE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Cash flows from operating activities: | | | | | | |
Net income | | $ | | | $ | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | |
| |
Depreciation, depletion and amortization | |
| | |
| |
Stock based compensation | |
| | |
| |
Equity in income from unconsolidated joint ventures | | | ( | | | ( |
Distribution of earnings from unconsolidated joint ventures | | | | | | |
Deferred income tax | |
| ( | |
| ( |
Cost of real estate sold | |
| | |
| |
Expenditures for and acquisition of real estate to be sold | |
| ( | |
| ( |
Accretion income and other | |
| ( | |
| ( |
Amortization of debt issuance costs | | | | | | |
Loss on disposal of property and equipment | | | | | | |
Loss on extinguishment of debt | | | | | | |
Changes in operating assets and liabilities: | |
| | |
| |
Other assets | |
| | |
| |
Deferred revenue | | | | | | |
Accounts payable and other liabilities | |
| | |
| |
Net cash provided by operating activities | |
| | |
| |
Cash flows from investing activities: | |
| | |
| |
Expenditures for operating property | |
| ( | |
| ( |
Expenditures for property and equipment | |
| ( | |
| ( |
Proceeds from the disposition of assets | |
| | |
| |
Capital contributions to unconsolidated joint ventures | | | ( | | | ( |
Maturities of assets held by special purpose entities | |
| | |
| |
Net cash used in investing activities | |
| ( | |
| ( |
Cash flows from financing activities: | |
| | |
| |
Capital contributions from non-controlling interest | |
| | |
| — |
Capital distributions to non-controlling interest | |
| ( | |
| ( |
Repurchase of common stock, including excise tax | |
| ( | |
| ( |
Payments for taxes withheld on vested restricted stock awards | | | ( | | | — |
Dividends paid | | | ( | | | ( |
Borrowings on debt | |
| — | |
| |
Principal payments for debt | |
| ( | |
| ( |
Principal payments for finance leases | | | ( | | | ( |
Debt issuance costs | |
| — | |
| ( |
Net cash used in financing activities | |
| ( | |
| ( |
Net increase in cash, cash equivalents and restricted cash | |
| | |
| |
Cash, cash equivalents and restricted cash at beginning of the period | |
| | |
| |
Cash, cash equivalents and restricted cash at end of the period | | $ | | | $ | |
See accompanying notes to the condensed consolidated financial statements.
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THE ST. JOE COMPANY
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
(Dollars in thousands)
(Unaudited)
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the amounts shown in the condensed consolidated statements of cash flows.
| | | | | | |
| | | | | | |
| | March 31, | | March 31, | ||
| | 2026 | | 2025 | ||
Cash and cash equivalents | | $ | |
| $ | |
Restricted cash included in other assets | |
| | |
| |
Total cash, cash equivalents and restricted cash shown in the accompanying condensed consolidated statements of cash flows |
| $ | |
| $ | |
Restricted cash includes amounts reserved as a requirement of financing, development for certain of the Company’s projects or long-term mitigation bank management.
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | | 2026 | | 2025 | |
Cash paid during the period for: | | | | | | |
Interest, net of interest rate swap | | $ | | | $ | |
Federal income taxes, net | | $ | | | $ | |
State income taxes, net | | $ | | | $ | |
| | | | | | |
Non-cash investing and financing activities: | |
| | |
| |
Right-of-use assets obtained in exchange for new or modified finance lease liabilities, net of terminations | | $ | | | $ | |
Right-of-use assets obtained in exchange for new or modified operating lease liabilities, net of terminations | | $ | ( | | $ | |
Transfers of expenditures for operating property to property and equipment | | $ | | | $ | |
(Decrease) increase in expenditures for operating properties and property and equipment financed through accounts payable | | $ | ( | | $ | |
Unrealized gain (loss) on cash flow hedges | | $ | | | $ | ( |
Excise tax payable on repurchase of common stock | | $ | | | $ | |
Issuance of restricted stock | | $ | | | $ | |
See accompanying notes to the condensed consolidated financial statements.
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THE ST. JOE COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, unless otherwise stated)
(Unaudited)
1. Nature of Operations
The St. Joe Company together with its consolidated subsidiaries (“St. Joe” or the “Company”) is a diversified Florida real estate development, asset management and operating company with all of its real estate assets and operations in Northwest Florida. Approximately
The Company conducts primarily all of its business in the following
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statements are not included herein. The unaudited interim condensed consolidated financial statements include the accounts of the Company and all of its majority-owned and controlled subsidiaries, voting interest entities where the Company has a majority voting interest or control and variable interest entities where the Company deems itself the primary beneficiary. Investments in JVs in which the Company is not the primary beneficiary, or a voting interest entity where the Company does not have a majority voting interest or control, but has significant influence are unconsolidated and accounted for by the equity method of accounting. All significant intercompany transactions and balances have been eliminated in consolidation. The December 31, 2025 condensed consolidated balance sheet amounts have been derived from the Company’s December 31, 2025 audited consolidated financial statements. Certain prior period amounts in the accompanying condensed consolidated financial statements have been reclassified to conform to the current year presentation. The reclassifications had no effect on the Company’s previously reported total assets and liabilities, equity or net income. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026.
A variable interest entity (“VIE”) is an entity in which a controlling financial interest may be achieved through arrangements that do not involve voting interests. A VIE is required to be consolidated by its primary beneficiary, which is the entity that possesses the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to the VIE. The Company consolidates VIEs when it is the primary beneficiary of the VIE. The Company continues to evaluate whether it is the primary beneficiary as needed when assessing reconsideration events. See Note 4. Joint Ventures for additional information.
The unaudited interim condensed consolidated financial statements reflect all normal recurring adjustments that in the opinion of management are necessary for fair presentation of the information contained herein. The unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company adheres to the same accounting policies in preparation of its unaudited interim condensed consolidated financial statements as the Company’s December 31, 2025 annual financial statements, except for any recently adopted accounting pronouncements. As required under GAAP, interim accounting for certain expenses, including income taxes, are based on full year assumptions. For interim financial reporting purposes, income taxes are recorded based upon estimated annual income tax rates.
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Concentration of Risks and Uncertainties
All of the Company’s real estate assets are concentrated in Northwest Florida. Uncertain economic conditions could have an adverse impact on the Company’s operations and asset values.
While macroeconomic factors such as uncertainty over tariffs, inflation, geopolitical conflicts, elevated interest rates and higher insurance costs for consumers and overall consumer confidence, among other things, continued to produce economic headwinds and impacted buyer sentiment in many parts of the country, the Company’s segments continued to generate positive financial results through the first three months of 2026. The Company believes this is primarily due to the continued growth of Northwest Florida as a result of net migration, which the Company attributes to the region’s high quality of life, natural beauty and outstanding amenities.
Elevated interest rates, market conditions in home states, and higher insurance costs have negatively impacted or delayed the ability of some buyers to obtain financing or sell their existing homes in their home states. The negative impact has been partially offset by the net migration into the Company’s markets and the number of cash buyers. In addition, the Company has not experienced an increase in cancellation rates as homebuilders have continued to perform on their contractual obligations with the Company.
The Company’s operations may be affected by seasonal fluctuations. The revenues and earnings from the Company’s business segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic transactions. In addition, homesite prices vary significantly by community, which further impacts period over period results. Therefore, there may be reporting periods in which the Company has no, or significantly less, revenue from residential or commercial real estate sales. The Company may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved assets that may delay revenue and profits.
Hospitality revenues are typically higher in the second and third quarters, and vary depending on the timing of holidays and school breaks. Commercial real estate sales tend to be non-recurring. Projects depend on uncertain demand. Extraordinary events such as hurricanes may dramatically change demand and pricing for products and services.
Given the Company’s diverse portfolio of residential holdings, the mix of sales and pricing from different communities may impact revenue and margins period over period.
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, other receivables and investments held by special purpose entity or entities (“SPE”). The Company deposits and invests cash with local, regional and national financial institutions, and as of March 31, 2026, these balances exceeded the amount of F.D.I.C. insurance provided on such deposits. In addition, as of March 31, 2026, the Company had $
Earnings Per Share
Basic earnings per share is calculated by dividing net income attributable to the Company by the basic weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income attributable to the Company by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares. The treasury stock method is used to determine the effect on diluted earnings. For the three months ended March 31, 2026 and 2025, the Company had
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The computation of basic and diluted earnings per share are as follows:
| | | | | | | |
| | | Three Months Ended March 31, | ||||
| | | 2026 | | 2025 | ||
| | | (Dollars in thousands except per share amounts) | ||||
Income | | | | | | | |
Net income attributable to the Company | | | $ | | | $ | |
| | | | | | | |
Shares | | | | | | | |
Weighted average shares outstanding - basic | | | | | | | |
Incremental shares from restricted stock | | | | | | | |
Weighted average shares outstanding - diluted | | | | | | | |
| | | | | | | |
Net income per share attributable to the Company | | | | | | | |
Basic income per share | | | $ | | | $ | |
Diluted income per share | | | $ | | | $ | |
Recently Adopted Accounting Pronouncements
There have been no recently adopted accounting pronouncements, which would have a material effect on the Company’s financial condition, results of operations and cash flows other than those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Recently Issued Accounting Pronouncements
Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement - Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) that requires additional disclosure in the notes to the financial statements information about specific costs and expense categories, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and selling expenses, as well as qualitative descriptions for certain other expenses. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”) that clarifies the effective date of ASU 2024-03.This guidance will be effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The guidance should be applied either prospectively for periods after the effective date or retrospectively to all prior periods presented. The Company is currently evaluating the impact that the adoption of this guidance will have on its financial condition, results of operations, cash flows and related disclosures.
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3. Investment in Real Estate, Net
Investment in real estate, net, excluding unconsolidated JVs, by property type and segment includes the following:
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
Development property: |
| | |
| | |
Residential | | $ | | | $ | |
Hospitality | |
| | |
| |
Commercial | |
| | |
| |
Other | |
| | |
| |
Total development property | |
| | |
| |
| | | | | | |
Operating property: | |
| | |
| |
Residential | |
| | |
| |
Hospitality | |
| | |
| |
Commercial | |
| | |
| |
Other | |
| | |
| |
Total operating property | |
| | |
| |
Less: Accumulated depreciation | |
| | |
| |
Total operating property, net | |
| | |
| |
Investment in real estate, net | | $ | | | $ | |
Investment in real estate, net is carried at cost, net of depreciation and timber depletion, unless circumstances indicate that the carrying value of the assets may not be recoverable.
Development property consists of land the Company is developing or intends to develop for sale, lease or future operations and includes direct costs associated with the land, as well as development, construction and indirect costs. Residential development property includes existing and planned residential homesites and related infrastructure, as well as completed townhomes. Hospitality development property consists of land, as well as development costs related to improvements to existing properties and design costs for other hospitality assets. Commercial development property primarily consists of land and construction and development costs for planned commercial, multi-family and industrial uses. Other development property includes mitigation banks and office building construction and development costs for the Company’s real estate brokerage, title insurance agency and insurance agency businesses. Development property in the hospitality and commercial segments will be reclassified as operating property as it is placed into service.
Operating property includes property that the Company uses for operations and activities. Residential operating property consists primarily of residential utility assets. Hospitality operating property primarily consists of existing hotels, resorts, clubs, marinas and other operations. Commercial operating property includes property used for retail, office, self-storage, light industrial, multi-family, commercial rental and timber purposes. Other operating property includes property used in the Company’s real estate brokerage, title insurance agency and insurance agency businesses. Operating property may be sold in the future as part of the Company’s principal real estate business. As of March 31, 2026 and December 31, 2025, operating property, net related to operating leases was $
4. Joint Ventures
The Company enters into JVs, from time to time, for the purpose of developing real estate and other business activities in which the Company may or may not have a controlling financial interest. GAAP requires consolidation of voting interest entities where the Company has a majority voting interest or control and VIEs in which an enterprise has a controlling financial interest and is the primary beneficiary. A controlling financial interest will have both of the following characteristics: (i) the power to direct the VIE activities that most significantly impact economic performance and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company examines specific criteria and uses judgment when determining whether the Company is the
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primary beneficiary and must consolidate a VIE. The Company continues to evaluate whether it is the primary beneficiary as needed when assessing reconsideration events. Investments in JVs in which the Company is not the primary beneficiary, or a voting interest entity where the Company does not have a majority voting interest or control, but has significant influence are unconsolidated and accounted for by the equity method of accounting.
The timing of cash flows for additional required capital contributions related to the Company’s JVs varies by agreement. Some of the Company’s consolidated and unconsolidated JVs have entered into financing agreements where the Company or its JV partners have provided guarantees. See Note 8. Debt, Net and Note 17. Commitments and Contingencies for additional information. The Company provides land, mitigation bank credits, impact and other fees, property for lease and services to certain unconsolidated JVs and incurs expenses for leasing management services from the Company’s unconsolidated Watersound Management, LLC (“Watersound Management JV”), see Note 18. Related Party Transactions for additional information.
Consolidated Joint Ventures
Mexico Beach Crossings JV
Mexico Beach Crossings JV was formed in 2022, when the Company entered into a JV agreement to develop, manage and lease a
The Lodge 30A JV
The Lodge 30A JV was formed in 2020, when the Company entered into a JV agreement to develop and operate an
Pier Park Resort Hotel JV
Pier Park Resort Hotel JV was formed in 2020, when the Company entered into a JV agreement to develop and operate a
Pier Park Crossings Phase II JV
Pier Park Crossings Phase II JV was formed in 2019, when the Company entered into a JV agreement to develop, manage and lease a
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Watercrest JV
Watercrest JV was formed in 2019, when the Company entered into a JV agreement to develop and operate a
Watersound Origins Crossings JV
Watersound Origins Crossings JV was formed in 2019, when the Company entered into a JV agreement to develop, manage and lease a
Pier Park Crossings JV
Pier Park Crossings JV was formed in 2017, when the Company entered into a JV agreement to develop, manage and lease a
Pier Park North JV
During 2012, the Company entered into a JV agreement with a partner to develop a retail center at Pier Park North. As of March 31, 2026 and December 31, 2025, the Company owned a
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Unconsolidated Joint Ventures
Investment in unconsolidated joint ventures includes the Company’s investment accounted for using the equity method. The following table presents details of the Company’s investment in unconsolidated joint ventures and total outstanding debt of unconsolidated JVs:
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
Investment in unconsolidated joint ventures |
| | |
| | |
Latitude Margaritaville Watersound JV (a) | | $ | | | $ | |
Watersound Fountains Independent Living JV | | | | | | |
Pier Park TPS JV (b) | |
| — | |
| — |
Pier Park RI JV | | | | | | |
Busy Bee JV | |
| | |
| |
Electric Cart Watersound JV | | | | | | |
Watersound Management JV | | | | | | |
Total investment in unconsolidated joint ventures | | $ | | | $ | |
| |
| | |
| |
Outstanding debt principal of unconsolidated JVs | | | | | | |
Latitude Margaritaville Watersound JV (c) | | $ | — | | $ | — |
Watersound Fountains Independent Living JV (c) | | | | | | |
Pier Park TPS JV (c) | | | | | | |
Pier Park RI JV | | | | | | |
Busy Bee JV | | | | | | |
Electric Cart Watersound JV (c) | | | | | | |
Total outstanding debt principal of unconsolidated JVs | | $ | | | $ | |
| (a) | As of both March 31, 2026 and December 31, 2025, the Company’s investment in unconsolidated joint ventures includes intra-entity profit elimination of $ |
| (b) | As of March 31, 2026 and December 31, 2025, the Company’s investment in the unconsolidated joint venture was below |
| (c) | See Note 17. Commitments and Contingencies for additional information related to outstanding debt. |
The Company had approximately $
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The following table presents details of the Company’s equity in income (loss) from unconsolidated JVs:
| | | | | | | |
| | | Three Months Ended March 31, | ||||
| | | 2026 | | 2025 | ||
Equity in income (loss) from unconsolidated joint ventures | | | | | | | |
Latitude Margaritaville Watersound JV (a) | | | $ | | | $ | |
Watersound Fountains Independent Living JV (b) | | | | ( | | | ( |
Pier Park TPS JV | | | | ( | | | ( |
Pier Park RI JV (c) | | | | ( | | | ( |
Busy Bee JV (d) | | | | ( | | | ( |
Electric Cart Watersound JV | | | | ( | | | ( |
Watersound Management JV | | | | | | | |
Total equity in income from unconsolidated joint ventures | | | $ | | | $ | |
| (a) | During the three months ended March 31, 2026 and 2025, the Latitude Margaritaville Watersound JV completed |
| (b) | The community is under lease-up. |
| (c) | The three months ended March 31, 2025, include start-up, depreciation and interest expenses for the project. |
| (d) | Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV. |
Summarized balance sheets for the Company’s unconsolidated JVs are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 | ||||||||||||||||||||||
| | Latitude Margaritaville Watersound JV | | Watersound Fountains Independent Living JV | | Pier Park TPS JV | | Pier Park RI JV | | Busy Bee JV | | Electric Cart Watersound JV | | Watersound Management JV | | Total | ||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | |
Investment in real estate, net | | $ | | (a) | $ | | | $ | | | $ | | | $ | | | $ | | | $ | — | | $ | |
Cash and cash equivalents | | | | | | | | | | | | | | | | | | | | | | | | |
Other assets | | | | | | | | | | | | | | | | | | | | | — | | | |
Total assets | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES AND EQUITY | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Debt, net | | $ | — | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | — | | $ | |
Accounts payable and other liabilities | | | | | | | | | | | | | | | | | | | | | — | | | |
Equity (deficit) | | | | | | | | | ( | (b) | | | | | | | | | | | | | | |
Total liabilities and equity | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
| (a) | Investment in real estate, net includes the initial land contributed to the Latitude Margaritaville Watersound JV at the Company’s historical cost basis and additional completed infrastructure improvements. |
| (b) | Deficit includes cash distributions and non-cash depreciation and amortization expense. As of March 31, 2026, the Company and JV partner each contributed assets valued at $ |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2025 | ||||||||||||||||||||||
| | Latitude Margaritaville Watersound JV | | Watersound Fountains Independent Living JV | | Pier Park TPS JV | | Pier Park RI JV | | Busy Bee JV | | Electric Cart Watersound JV | | Watersound Management JV | | Total | ||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | |
Investment in real estate, net | | $ | | (a) | $ | | | $ | | | $ | | | $ | | | $ | | | $ | — | | $ | |
Cash and cash equivalents | | | | | | | | | | | | | | | | | | | | | | | | |
Other assets | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES AND EQUITY | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Debt, net | | $ | — | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | — | | $ | |
Accounts payable and other liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
Equity (deficit) | | | | | | | | | ( | | | | | | | | | | | | | | | |
Total liabilities and equity | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
| (a) | Investment in real estate includes the initial land contributed to the Latitude Margaritaville Watersound JV at the Company’s historical cost basis and additional completed infrastructure improvements. |
Summarized statements of operations for the Company’s unconsolidated JVs are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2026 | ||||||||||||||||||||||
| | Latitude Margaritaville Watersound JV (a) | | Watersound Fountains Independent Living JV (b) | | Pier Park TPS JV | | Pier Park RI JV | | Busy Bee JV | | Electric Cart Watersound JV | | Watersound Management JV | | | Total | |||||||
Total revenue | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue (c) | | | | | | | | | | | | | | | | | | | | | | | | |
Other operating expenses (c) | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | |
Depreciation and amortization (d) | | | | | | | | | | | | | | | | | | | | | — | | | |
Total expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | | | | ( | | | ( | | | ( | | | ( | | | | | | | | | |
Other (expense) income: | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | — | | | ( | | | ( | | | ( | | | ( | | | ( | | | — | | | ( |
Other income (expense), net | | | | | | | | | | | | — | | | ( | (e) | | | | | — | | | |
Total other income (expense), net | | | | | | ( | | | ( | | | ( | | | ( | | | ( | | | — | | | ( |
Net income (loss) | | $ | | | $ | ( | | $ | ( | | $ | ( | | $ | ( | | $ | ( | | $ | | | $ | |
| (a) | The Latitude Margaritaville Watersound JV completed |
| (b) | The community is under lease-up. |
| (c) | Excluding depreciation and amortization, shown separately above. |
| (d) | Depreciation is a non-cash, GAAP expense, which is amortized over an asset’s useful life. |
| (e) | Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV. |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2025 | ||||||||||||||||||||||
| | Latitude Margaritaville Watersound JV (a) | | Watersound Fountains Independent Living JV (b) | | Pier Park TPS JV | | Pier Park RI JV (c) | | Busy Bee JV | | Electric Cart Watersound JV | | Watersound Management JV | | Total | ||||||||
Total revenue | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue (d) | | | | | | | | | | | | | | | | | | | | | | | | |
Other operating expenses (d) | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | |
Depreciation and amortization (e) | | | | | | | | | | | | | | | | | | | | | — | | | |
Total expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | | | | ( | | | ( | | | ( | | | ( | | | | | | | | | |
Other (expense) income: | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | — | | | ( | | | ( | | | ( | | | ( | | | ( | | | — | | | ( |
Other income (expense), net | | | | | | | | | — | | | ( | | | ( | (f) | | | | | — | | | ( |
Total other income (expense), net | | | | | | ( | | | ( | | | ( | | | ( | | | ( | | | — | | | ( |
Net income (loss) | | $ | | | $ | ( | | $ | ( | | $ | ( | | $ | ( | | $ | ( | | $ | | | $ | |
| (a) | The Latitude Margaritaville Watersound JV completed |
| (b) | The community is under lease-up. |
| (c) | Activity includes start-up, depreciation and interest expenses for the project. |
| (d) | Excluding depreciation and amortization, shown separately above. |
| (e) | Depreciation is a non-cash, GAAP expense, which is amortized over an asset’s useful life. |
| (f) | Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV. |
Latitude Margaritaville Watersound JV
LMWS, LLC (“Latitude Margaritaville Watersound JV”) was formed in 2019, when the Company entered into a JV agreement to develop a 55+ active adult residential community in Bay County, Florida. As of March 31, 2026, the Latitude Margaritaville Watersound JV had
In December 2025, the Company sold an additional
As of March 31, 2026 and December 31, 2025, the Company’s investment in the unconsolidated Latitude Margaritaville Watersound JV was $
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less distributions and intra-entity profit elimination of the additional land sale. As of March 31, 2026, the Company completed $
Watersound Fountains Independent Living JV
WOSL, LLC (“Watersound Fountains Independent Living JV”) was formed in 2021. The Company entered into a JV agreement to develop and manage a
Pier Park TPS JV
Pier Park TPS, LLC (“Pier Park TPS JV”) was formed in 2018. The Company entered into a JV agreement to develop and operate a
Pier Park RI JV
Pier Park RI, LLC (“Pier Park RI JV”) was formed in 2022. The Company entered into a JV agreement to develop and operate a
In 2025, the JV refinanced into a $
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Busy Bee JV
SJBB, LLC (“Busy Bee JV”) was formed in 2019, when the Company entered into a JV agreement to develop and manage a Busy Bee branded fuel station and convenience store, which includes a Starbucks, in Panama City Beach, Florida. As of March 31, 2026 and December 31, 2025, the Company owned a
In 2019, the JV entered into a $
Electric Cart Watersound JV
SJECC, LLC (“Electric Cart Watersound JV”) was formed in 2022, when the Company entered into a JV agreement to develop, manage and operate a golf cart and low speed vehicle “LSV” business at the new Watersound West Bay Center adjacent to the Latitude Margaritaville Watersound residential community in Bay County, Florida. As of March 31, 2026 and December 31, 2025, the Company owned a
As of both March 31, 2026 and December 31, 2025, the Electric Cart Watersound JV had $
Watersound Management JV
Watersound Management, LLC was formed in 2021, when the Company entered into a JV agreement to lease, manage and operate multi-family housing developments for which the JV is the exclusive renting and management agent. All activity of Watersound Management JV is related to multi-family housing developments owned by the Company or by consolidated JVs of the Company. As of March 31, 2026 and December 31, 2025, the Company owned a
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being managed through a board of managers, with each JV partner having equal voting rights. The Company has determined that Watersound Management JV is a voting interest entity, but that the Company does not have a majority voting interest. The Company’s investment in Watersound Management JV is accounted for using the equity method. See Note 18. Related Party Transactions for additional information.
5. Financial Instruments and Fair Value Measurements
Fair Value Measurements
The financial instruments measured at fair value on a recurring basis are as follows:
| | | | | | | | | | | | |
| | March 31, 2026 | ||||||||||
| | | | | | | | | | | Total Fair | |
| | Level 1 | | Level 2 | | Level 3 | | Value | ||||
Cash equivalents: |
| | |
| | |
| | |
| | |
Money market funds | | $ | | | $ | — | | $ | — | | $ | |
U.S. Treasury Bills | | | | | | — | | | — | | | |
| | $ | | | $ | — | | $ | — | | $ | |
| | | | | | | | | | | | |
| | December 31, 2025 | ||||||||||
| | | | | | | | | | | Total Fair | |
| | Level 1 | | Level 2 | | Level 3 | | Value | ||||
Cash equivalents: |
| | |
| | |
| | |
| | |
Money market funds | | $ | | | $ | — | | $ | — | | $ | |
U.S. Treasury Bills | | | | | | — | | | — | | | |
| | $ | | | $ | — | | $ | — | | $ | |
Money market funds and U.S. Treasury Bills are measured based on quoted market prices in an active market and categorized within Level 1 of the fair value hierarchy. Money market funds and short-term U.S. Treasury Bills with a maturity date of 90 days or less from the date of purchase are classified as cash equivalents in the Company’s condensed consolidated balance sheets.
Assets and liabilities measured at fair value on a recurring basis related to interest rate swap agreements designated as cash flow hedges are as follows:
| | | | | | | | | | | | | | | | | | | |
| | | | | | Fixed | | Notional | | | | | | | | Fair | | Location in | |
| | Effective | | Maturity | | Interest | | Amount as of | | Derivative Asset Fair Value | | Value | | Consolidated | |||||
Description | | Date | | Date | | Rate | | March 31, 2026 | | March 31, 2026 | | December 31, 2025 | | Level | | Balance Sheets | |||
| | | | | | | | | In Millions | | In Thousands | | | | | ||||
Pier Park Resort Hotel JV Loan (a) | | December 2022 | | April 2027 | | | $ | | | $ | | | $ | | | 2 | | Other assets | |
Pier Park TPS JV Loan (b) | | January 2021 | | January 2026 | | | $ | N/A | | $ | N/A | | $ | | | 2 | | Accounts payable and other liabilities | |
| (a) | See Note 8. Debt, Net for additional information. |
| (b) | Interest rate swap was entered into by the Pier Park TPS JV, which is unconsolidated and accounted for using the equity method. The derivative asset has been recorded at the Company’s proportionate share of its estimated fair value. The Company’s proportionate share of the gain or loss on the derivative instrument is reported as a component of other comprehensive loss and reclassified into equity in income from unconsolidated joint ventures in the period during which the hedged transaction affects earnings. The interest rate swap matured in January 2026. See Note 4. Joint Ventures and Note 17. Commitments and Contingencies for additional information. |
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The following is a summary of the effect of derivative instruments on the Company’s condensed consolidated statements of income and condensed consolidated statements of comprehensive income:
| | | | | | | |
| | | Three Months Ended March 31, | ||||
| | | 2026 | | 2025 | ||
Amount of net gain (loss) recognized in other comprehensive loss | | | $ | | | $ | ( |
Amount of net gain reclassified into interest expense | | | $ | ( | | $ | ( |
Amount of net gain reclassified into equity in income from unconsolidated joint ventures | | | $ | ( | | $ | ( |
As of March 31, 2026, based on current value, the Company expects to reclassify $
Investment in Unconsolidated Joint Ventures
The Company evaluates its investment in unconsolidated JVs for impairment during each reporting period. A series of operating losses of an investee or other factors may indicate that a decrease in the value of the Company’s investment in the unconsolidated JV has occurred. The amount of impairment recognized is the excess of the investment’s carrying value over its estimated fair value. The fair value of the Company’s investment in unconsolidated JVs is determined primarily using a discounted cash flow model to value the underlying net assets or cash flows of the respective JV. The fair value of investment in unconsolidated JVs required to be assessed for impairment is determined using Level 3 inputs in the fair value hierarchy.
Fair Value of Financial Instruments
The carrying value of the Company’s cash and cash equivalents, restricted cash, receivables, other assets, accounts payable and other liabilities approximate fair value due to the short-term nature of these instruments.
The Company uses the following methods and assumptions in estimating fair value for financial instruments:
| ● | The fair value of the investments held by SPE - time deposit is based on the present value of future cash flows at the current market rate. |
| ● | The fair value of the investments held by SPE - U.S. Treasury Bills are measured based on quoted market prices in an active market. |
| ● | The fair value of debt is based on discounted future expected cash flows based on current market rates for financial instruments with similar risks, terms and maturities. |
| ● | The fair value of the senior notes held by SPE is based on the present value of future cash flows at the current market rate. |
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The carrying amount and estimated fair value, measured on a nonrecurring basis, of the Company’s financial instruments were as follows:
| | | | | | | | | | | | | | | | |
| | March 31, 2026 | | December 31, 2025 | ||||||||||||
| | Carrying | | Estimated | | | | Carrying | | Estimated | | | ||||
| | value | | Fair value | | Level | | value | | Fair value | | Level | ||||
Investments held by SPEs: | |
| | |
| |
| | |
| | |
| |
| |
Time deposit | | $ | | | $ | |
| 3 | | $ | | | $ | |
| 3 |
U.S. Treasury Bills | | $ | | | $ | |
| 1 | | $ | | | $ | |
| 1 |
| |
| | | | |
| | |
| | |
| |
| |
Senior Notes held by SPE | | $ | | | $ | |
| 3 | | $ | | | $ | |
| 3 |
| | | | | | | | | | | | | | | | |
Debt | | | | | | | | | | | | | | | | |
Fixed-rate debt | | $ | | | $ | | | 2 | | $ | | | $ | | | 2 |
Variable-rate debt | | | | | | | | 2 | | | | | | | | 2 |
Total debt | | $ | | | $ | | | | | $ | | | $ | | | |
Investments and Senior Notes Held by Special Purpose Entities
In connection with a real estate sale in 2014, the Company received consideration including a $
6. Leases
The Company as Lessor
Leasing revenue consists of rental revenue from multi-family, senior living prior to the sale of the Watercrest JV’s senior living community property in September 2025, self-storage, retail, office and commercial property, marinas, cell towers and other assets, which is recognized as earned, using the straight-line method over the life of each lease. Variable lease payments primarily include property taxes, insurance, utilities and common area maintenance or payments based on a percentage of sales over specified levels and senior living services. The Company’s leases have remaining lease terms up to the year 2072, some of which include options to terminate or extend.
The components of leasing revenue are as follows:
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Leasing revenue | | | | | | |
Lease payments | | $ | | | $ | |
Variable lease payments | | | | | | |
Total leasing revenue | | $ | | | $ | |
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Minimum future base rental revenue on non-cancelable leases subsequent to March 31, 2026, for the years ending December 31 are:
| | | |
2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | | | |
Thereafter | | | |
| | $ | |
The Company as Lessee
As of March 31, 2026, the Company leased certain office and other equipment under finance leases and had operating leases for property and equipment used in corporate, hospitality and commercial operations with remaining lease terms up to the year 2081. Operating leases also include property for hospitality employee housing. Certain leases include options to purchase, terminate or renew for one or more years, which are included in the lease term used to establish right-of-use assets and lease liabilities when it is reasonably certain that the option will be exercised. The Company uses its incremental borrowing rate to determine the present value of the lease payments since the rate implicit in each lease is not readily determinable. The Company recognizes short-term (twelve months or less) lease payments in profit or loss on a straight-line basis over the term of the lease and variable lease payments in the period in which the obligation for those payments is incurred. Cash paid for amounts included in the measurement of lease liabilities included operating cash flows from operating leases of $
The components of lease expense are as follows:
| | | | | | |
| | | | | | |
| Three Months Ended March 31, | |||||
| 2026 | | 2025 | | ||
Lease cost | | | | | | |
Finance lease cost: | | | | | | |
Amortization of right-of-use assets | $ | | | $ | | |
Interest on lease liability |
| | |
| | |
Operating lease cost |
| | |
| | |
Variable and short-term lease cost |
| | |
| | |
Total lease cost | $ | | | $ | | |
| | | | | | |
Other information | | | | | | |
Weighted-average remaining lease term - finance lease (in years) | | | | | ||
Weighted-average remaining lease term - operating leases (in years) | | | | | ||
Weighted-average discount rate - finance lease | | | % | | | % |
Weighted-average discount rate - operating leases | | | % | | | % |
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The aggregate payments of finance and operating lease liabilities subsequent to March 31, 2026, for the years ending December 31 are:
| | | | | | |
| | Finance Leases | | Operating Leases | ||
2026 | | $ | | | $ | |
2027 | |
| | |
| |
2028 | |
| | |
| |
2029 | |
| | |
| |
2030 | | | — | | | |
Total | | | | | | |
Less imputed interest | | | ( | | | ( |
Total lease liabilities | | $ | | | $ | |
7. Other Assets
Other assets consist of the following:
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
Accounts receivable, net | | $ | | | $ | |
Homesite sales receivable | | | | | | |
Inventory | | | | | | |
Prepaid expenses | |
| | |
| |
Straight-line rent | |
| | |
| |
Operating lease right-of-use assets | | | | | | |
Restricted cash | | | | | | |
Other assets | |
| | |
| |
Accrued interest receivable for Senior Notes held by SPE | |
| | |
| |
Total other assets | | $ | | | $ | |
Accounts Receivable, Net
Accounts receivable, net primarily include leasing receivables, membership fees, hospitality receivables and other receivables. Accounts receivable, net had opening balances of $
At each reporting period, accounts receivable in the scope of Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments—Credit Losses (“Topic 326”) are pooled by type and judgements are made based on historical losses and expected credit losses based on economic trends to determine the allowance for credit losses primarily using the aging method. Actual losses could differ from those estimates. Write-offs are recorded when the Company concludes that all or a portion of the receivable is no longer collectible. As of March 31, 2026 and December 31, 2025, accounts receivable, net were presented net of allowance for credit losses and net of allowance for lease related receivables of $
Homesite Sales Receivable
Homesite sales receivable from contracts with customers include estimated homesite residuals and certain estimated fees that are recognized as revenue at the time of sale to homebuilders, subject to constraints. Any change in
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circumstances from the estimated amounts will be updated at each reporting period. The receivable will be collected as the homebuilders build the homes and sell to retail consumers, which can occur over multiple years.
The following table presents the changes in homesite sales receivable:
| | | | | | |
| | March 31, | | March 31, | ||
| | 2026 | | 2025 | ||
Balance at beginning of period | | $ | | | $ | |
Increases due to revenue recognized for homesites sold | | | | | | |
Decreases due to amounts received | | | ( | | | ( |
Balance at end of period | | $ | | | $ | |
Prepaid Expenses
Prepaid expenses as of March 31, 2026 and December 31, 2025, include commercial leasing related prepaid expenses of $
Restricted Cash
Restricted cash as of March 31, 2026 and December 31, 2025, includes cash and escrow deposits primarily related to requirements for financing, development for certain of the Company’s projects or long-term mitigation bank management.
Other Assets
Other assets as of both March 31, 2026 and December 31, 2025, include $
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8. Debt, Net
Debt consists of the following:
| | | | | | | | | | | | | |
| | | | | | Effective Rate | | | | | |||
| | | | | | March 31, | | March 31, | | December 31, | |||
| | Maturity Date | | Interest Rate Terms | | 2026 | | 2026 | | 2025 | |||
Watersound Origins Crossings JV Loan (insured by HUD) | | April 2058 | | Fixed | | | % | | $ | | | $ | |
Pier Park Resort Hotel JV Loan | | April 2027 | | SOFR plus | | | % | | | | | | |
Mexico Beach Crossings JV Loan (insured by HUD) | | March 2064 | | Fixed | | | % | | | | | | |
PPN JV Loan | | October 2035 | | Fixed | | | % | | | | | | |
PPC JV Loan (insured by HUD) | | June 2060 | | Fixed | | | % | | | | | | |
Pearl Hotel Loan | | December 2032 | | Fixed | | | % | | | | | | |
North Bay Landing Loan (insured by HUD) | | March 2060 | | Fixed | | | % | | | | | | |
Watersound Camp Creek Loan | | December 2047 | | SOFR plus | | | % | | | | | | |
PPC II JV Loan (insured by HUD) | | May 2057 | | Fixed | | | % | | | | | | |
Hotel Indigo Loan | | October 2028 | | SOFR plus | | | % | | | | | | |
Breakfast Point Hotel Loan | | November 2042 | | Fixed (b) | | | % | | | | | | |
Lodge 30A JV Loan | | January 2028 | | Fixed | | | % | | | | | | |
Topsail Hotel Loan | | July 2027 | | SOFR plus | | | % | | | | | | |
Community Development District debt | | May 2028-May 2039 | | Fixed | | % | |
| | | | | |
Watersound Town Center Grocery Loan | | August 2031 | | SOFR plus | | | % | | | | | | |
Airport Hotel Loan | | February 2030 | | SOFR plus | | | % | | | | | | |
Beckrich Building III Loan (c) | | N/A | | N/A | | N/A | | | | — | | | |
Total principal outstanding | | | | | | | | | | | | | |
Unamortized discount and debt issuance costs | | | | | | | | ( | | | ( | ||
Total debt, net | | | | | | | | | $ | | | $ | |
| (a) | The Pier Park Resort Hotel JV entered into an interest rate swap that matures in April 2027 and fixed the variable rate on the notional amount of related debt, initially at $ |
| (b) | The Breakfast Point Hotel Loan interest rate is fixed through November 2027 and in December 2027 the rate will adjust to the 1-year constant maturity Treasury rate plus |
| (c) | In the first quarter of 2026, the loan was paid in full. |
The Company’s indebtedness consists of various loans on real and leasehold property. These loans are typically secured by various interests in the property such as assignment of rents, leases, deposits, permits, plans, specifications, fees, agreements, approvals, contracts, licenses, construction contracts, development contracts, service contracts, franchise agreements, the borrower’s assets, improvements, and security interests in the rents, personal property, management agreements, construction agreements, improvements, accounts, profits, leases and fixtures (collectively, “Security Interests”). The specific Security Interests vary from loan to loan. As of March 31, 2026, the weighted average effective interest rate of total outstanding debt was
In 2023, the Watersound Origins Crossings JV refinanced into a $
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due to the lender of
In 2020, the Pier Park Resort Hotel JV entered into a loan with an initial amount of $
In 2022, the Mexico Beach Crossings JV entered into a $
In September 2025, the Pier Park North JV refinanced into a $
In 2018, the Pier Park Crossings JV entered into a $
In 2022, a wholly-owned subsidiary of the Company entered into a $
In February 2025, a wholly-owned subsidiary of the Company refinanced into a $
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In 2021, a wholly-owned subsidiary of the Company entered into a $
In 2022, the Pier Park Crossings Phase II JV refinanced into a $
In 2021, a wholly-owned subsidiary of the Company entered into a $
In 2020, a wholly-owned subsidiary of the Company entered into a $
In 2021, The Lodge 30A JV entered into a $
In 2022, a wholly-owned subsidiary of the Company entered into a $
Community Development District (“CDD”) bonds financed the construction of infrastructure improvements at some of the Company’s projects. The principal and interest payments on the bonds are paid by assessments on the properties benefited by the improvements financed by the bonds. CDD debt is secured by certain real estate or other collateral. The Company has recorded a liability for CDD debt that is associated with platted property, which is the point at which it becomes fixed and determinable. Additionally, the Company has recorded a liability for the portion of the CDD debt that is associated with unplatted property if it is probable and reasonably estimable that the Company will ultimately be responsible for repayment. The Company’s total CDD debt assigned to property it owns was $
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In 2021, a wholly-owned subsidiary of the Company entered into a $
In 2020, a wholly-owned subsidiary of the Company entered into a $
In 2019, a wholly-owned subsidiary of the Company entered into a $
The Company’s financing agreements are subject to various customary debt covenants and as of both March 31, 2026 and December 31, 2025, the Company was in compliance with the financial debt covenants.
As of March 31, 2026, property, receivables and inventory that were pledged as collateral related to the Company’s debt agreements, had an approximate carrying amount of $
The aggregate maturities of debt subsequent to March 31, 2026, for the years ending December 31 are:
| | | |
2026 | | $ | |
2027 | | | |
2028 | |
| |
2029 | |
| |
2030 | |
| |
Thereafter | |
| |
| | $ | |
9. Accounts Payable and Other Liabilities
Accounts payable and other liabilities consist of the following:
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
Accounts payable | | $ | | | $ | |
Income tax payable | | | | | | |
Finance lease liabilities | | | | | | |
Operating lease liabilities | | | | | | |
Accrued compensation | |
| | |
| |
Other accrued liabilities | |
| | |
| |
Club membership deposits | |
| | |
| |
Advance deposits | |
| | |
| |
Accrued interest expense for Senior Notes held by SPE | |
| | |
| |
Total accounts payable and other liabilities | | $ | | | $ | |
Accounts payable as of March 31, 2026 and December 31, 2025, primarily include payables and retainage related to the Company’s development and construction projects.
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Other accrued liabilities include $
Advance deposits consist of deposits received on hotel rooms and related hospitality activities. Advance deposits are recorded as accounts payable and other liabilities in the condensed consolidated balance sheets without regard to whether they are refundable and are recognized as income at the time the service is provided for the related deposit.
10. Deferred Revenue
As of March 31, 2026 and December 31, 2025, deferred revenue includes club initiation fees of $
Club initiation fees are recognized as revenue over the estimated average duration of membership, which is evaluated periodically. The following table presents the changes in club initiation fees related to contracts with customers:
| | | | | | |
| | March 31, | | March 31, | ||
| | 2026 | | 2025 | ||
Balance at beginning of period | | $ | | | $ | |
New club memberships | | | | | | |
Revenue from amounts included in contract liability opening balance | | | ( | | | ( |
Revenue from current period new memberships | | | ( | | | ( |
Balance at end of period | | $ | | | $ | |
Remaining performance obligations represent contracted revenue that has not been recognized related to club initiation fees. As of March 31, 2026, remaining performance obligations were $
Other deferred revenue as of both March 31, 2026 and December 31, 2025, includes $
11. Income Taxes
Income tax expense (benefit) attributable to income from operations differed from the amount computed by applying the statutory federal income tax rate of
| | | | | | | | | | | | |
| | Three Months Ended March 31, | | |||||||||
| | 2026 | | | 2025 | | ||||||
U.S. federal statutory tax rate |
| $ | | | | % | | $ | | | | % |
State and local income taxes, net of federal income tax effect (a) | |
| | | | % | |
| | | | % |
Nontaxable or nondeductible and other items | |
| ( | | ( | % | |
| | | | % |
Total income tax expense |
| $ | | | | % | | $ | | | | % |
| (a) | State taxes in Florida make up all of the tax effect in this category. |
As of March 31, 2026 and December 31, 2025, the Company had income tax payable of $
In general, a valuation allowance is recorded if, based on all available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of the Company’s
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deferred tax assets is dependent upon the Company generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards. As of both March 31, 2026 and December 31, 2025, the Company did
Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company regularly assesses the likelihood of adverse outcomes resulting from potential examinations to determine the adequacy of its provision for income taxes and applies a “more-likely-than-not” in determining the financial statement recognition and measurement of a tax position taken or expected to be taken in the tax returns. The Company has not identified any material unrecognized tax benefits as of March 31, 2026 or December 31, 2025.
12. Accumulated Other Comprehensive Income
Following is a summary of the changes in the balances of accumulated other comprehensive income, which is presented net of tax:
| | | | | | | |
| |
| Unrealized | | | ||
| | | Gain (Loss) on | | | | |
| |
| Cash Flow | | | | |
| | | Hedges | | Total | ||
Accumulated other comprehensive income as of December 31, 2025 | | | $ | | | $ | |
Other comprehensive income before reclassifications | | | | | | | |
Amounts reclassified from accumulated other comprehensive income | | | | ( | | | ( |
Other comprehensive loss | | | | ( | | | ( |
Less: Other comprehensive loss attributable to non-controlling interest | | | | | | | |
Accumulated other comprehensive income as of March 31, 2026 | | | $ | | | $ | |
Following is a summary of the tax effects allocated to other comprehensive income (loss):
| | | | | | | | | |
| | Three Months Ended March 31, 2026 | |||||||
| | Before- | | Tax (Expense) | | Net-of- | |||
| | Tax Amount | | Benefit | | Tax Amount | |||
Interest rate swap | | $ | | | $ | ( | | $ | |
Reclassification adjustment for net (gain) loss included in earnings | |
| ( | |
| | |
| ( |
Net unrealized (loss) gain | |
| ( | |
| | |
| ( |
Other comprehensive (loss) income | | $ | ( | | $ | | | $ | ( |
| | | | | | | | | |
| | Three Months Ended March 31, 2025 | |||||||
| | Before- | | Tax | | Net-of- | |||
| | Tax Amount | | Benefit | | Tax Amount | |||
Interest rate swap | | $ | ( | | $ | | | $ | ( |
Interest rate swap - unconsolidated joint venture | | | ( | | | — | | | ( |
Reclassification adjustment for net (gain) loss included in earnings | |
| ( | |
| | |
| ( |
Net unrealized (loss) gain | |
| ( | |
| | |
| ( |
Other comprehensive (loss) income | | $ | ( | | $ | | | $ | ( |
13. Stockholders’ Equity
Dividends
During the three months ended March 31, 2026 and 2025, the Company paid dividends of $
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Stock Repurchase Program
The Company’s Board of Directors (the “Board”) approved a stock repurchase program (the “Stock Repurchase Program”) pursuant to which the Company is authorized to repurchase shares of its common stock. The program has no expiration date.
During the three months ended March 31, 2026, the Company repurchased
Issuance of Common Stock for Employee Compensation
In 2026, the Company granted
In 2025, the Company granted
In 2024, the Company granted
In March 2023, the Company granted
In February 2023, the Company granted
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In 2022, the Company granted
During 2025, 2024, 2023 and 2022, the Company granted
During the three months ended March 31, 2026, the Company repurchased
Following is a summary of non-vested restricted share activity:
| | | | | | | | | | |
| | Three Months Ended March 31, 2026 | | Three Months Ended March 31, 2025 | ||||||
| | | | | Weighted Average | | | | | Weighted Average |
| | | | | Grant Date | | | | | Grant Date |
| | Number of | | | Fair Value | | Number of | | | Fair Value |
Non-Vested Restricted Shares | | Shares | | | Per Share | | Shares | | | Per Share |
Balance at beginning of period | | | | $ | | | | | $ | |
Granted | | | | $ | | | | | $ | |
Vested | | ( | | $ | | | ( | | $ | |
Forfeited | | — | | $ | — | | — | | $ | — |
Balance at end of period | | | | $ | | | | | $ | |
Stock based compensation cost is measured at the grant date based on the fair value of the award and is typically recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Forfeitures are accounted for as they occur. During each of the three months ended March 31, 2026 and 2025, the Company recorded expense of $
As of March 31, 2026 and December 31, 2025, unrecognized compensation costs, related to non-vested restricted stock awards were $
14. Revenue Recognition
Revenue consists primarily of real estate sales, hospitality operations and leasing operations. Other revenue consists of real estate brokerage, title insurance agency and insurance agency business revenue (collectively, “Business Services”) and mitigation bank credit sales revenue. Taxes collected from customers and remitted to governmental
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authorities (e.g., sales tax) are excluded from revenue, cost of revenue and expenses. The following represents revenue disaggregated by segment, good or service and timing:
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2026 | |||||||||||||
| | Residential | | Hospitality | | Commercial | | Other | | Total | |||||
Revenue by Major Good/Service: | | | | | | | | | | | | | | | |
Real estate revenue | | $ | | | $ | | | $ | | | $ | | | $ | |
Hospitality revenue | | | — | | | | | | — | | | — | | | |
Leasing revenue | | | — | | | | | | | | | | | | |
Total revenue | | $ | | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | |
Timing of Revenue Recognition: | | | | | | | | | | | | | | | |
Recognized at a point in time | | $ | | | $ | | | $ | | | $ | | | $ | |
Recognized over time | | | — | | | | | | — | | | — | | | |
Over lease term | | | — | | | | | | | | | | | | |
Total revenue | | $ | | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2025 | |||||||||||||
| | Residential | | Hospitality | | Commercial | | Other | | Total | |||||
Revenue by Major Good/Service: | | | | | | | | | | | | | | | |
Real estate revenue | | $ | | | $ | — | | $ | | | $ | | | $ | |
Hospitality revenue | | | — | | | | | | — | | | — | | | |
Leasing revenue | | | | | | | | | | | | | | | |
Total revenue | | $ | | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | |
Timing of Revenue Recognition: | | | | | | | | | | | | | | | |
Recognized at a point in time | | $ | | | $ | | | $ | | | $ | | | $ | |
Recognized over time | | | — | | | | | | — | | | — | | | |
Over lease term | | | | | | | | | | | | | | | |
Total revenue | | $ | | | $ | | | $ | | | $ | | | $ | |
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15. Other (Expense) Income, Net
Other income (expense), net consists of the following:
| | | | | | |
| | March 31, | ||||
| | 2026 | | 2025 | ||
Investment income, net |
| | |
| | |
Interest, dividend and accretion income | | $ | | | $ | |
Interest income from investments in SPEs | |
| | |
| |
Interest earned on notes receivable and other interest | |
| | |
| |
Total investment income, net | |
| | |
| |
Interest expense | |
| | |
| |
Interest incurred for project financing and other interest expense | |
| ( | |
| ( |
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE | |
| ( | |
| ( |
Total interest expense | |
| ( | |
| ( |
Equity in income from unconsolidated joint ventures | | | | | | |
Other expense, net | |
| | |
| |
Loss on disposition of assets | | | ( | | | ( |
Miscellaneous expense, net | |
| ( | |
| ( |
Other expense, net | |
| ( | |
| ( |
Total other (expense) income, net | | $ | ( | | $ | |
Investment Income, Net
Interest, dividend and accretion income includes interest income accrued or received on the Company’s cash, cash equivalents and other investments.
Interest income from investments in SPEs primarily includes interest earned on the investments held by Panama City Timber Finance Company, LLC, which is used to pay the interest expense for Senior Notes held by Northwest Florida Timber Finance, LLC. See Note 5. Financial Instruments and Fair Value Measurements for additional information.
Interest earned on the Company’s notes receivable and other interest includes interest earned on notes receivable and on the Company’s unimproved land contribution to the unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. See Note 4. Joint Ventures for additional information.
Interest Expense
Interest expense includes interest incurred related to the Company’s project financing, Senior Notes issued by Northwest Florida Timber Finance, LLC, CDD debt and finance leases. Interest expense also includes amortization of debt discount and premium and debt issuance costs. Discount and issuance costs for the Senior Notes issued by Northwest Florida Timber Finance, LLC, are amortized based on the effective interest method at an effective rate of
During the three months ended March 31, 2026 and 2025, the Company did
Equity in Income from Unconsolidated Joint Ventures
Equity in income from unconsolidated joint ventures includes the Company’s proportionate share of earnings or losses of unconsolidated JVs accounted for using the equity method. Equity in income from unconsolidated joint ventures includes income related to the Latitude Margaritaville Watersound JV of $
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Other Expense, Net
Other expense, net primarily includes loss on disposal of assets and other income and expense items.
16. Segment Information
The Company conducts primarily all of its business in the following
The accounting policies of the segments are set forth in Note 2 to the Company’s consolidated financial statements contained in Item 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Total revenue represents sales to unaffiliated customers, as reported in the Company’s condensed consolidated statements of income. All significant intercompany transactions have been eliminated in consolidation. The Company uses total segment revenue, gross profit and income before income taxes and non-controlling interest and other qualitative measures for purposes of making decisions about allocating resources to each segment and assessing each segment’s performance, which the Company believes represents current performance measures.
The Company’s President, Chief Executive Officer and Chairman of the Board is the Chief Operating Decision maker (the “CODM”). For the residential, hospitality and commercial segments, the CODM uses segment revenue, gross profit and income before income taxes and non-controlling interest to allocate resources (including employees, property, and financial or capital resources) for each segment predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a monthly basis for the profit measures when making decisions about allocating capital and personnel to the segments. The CODM also uses segment revenue and gross profit for evaluating product pricing and segment income before income taxes and non-controlling interest to assess the performance for each segment by comparing the results and return on assets of each segment with one another and in the compensation of certain employees.
The Company does not allocate income taxes or certain unusual items to segments. In addition, the hospitality and commercial segments have significant non-cash depreciation and amortization in reported profit or loss.
The caption entitled “Other” consists of Business Services revenue and cost of revenue; mitigation bank credit sales revenue and cost of revenue; corporate operating expenses; corporate depreciation and amortization and corporate other income and expense items.
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Information by business segment is as follows:
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Operating revenue: |
| | |
| | |
Residential | | $ | | | $ | |
Hospitality | |
| | |
| |
Commercial (a) | |
| | |
| |
Other (b) | |
| | |
| |
Consolidated operating revenue | | $ | | | $ | |
| | | | | | |
Cost of revenue: | |
| | |
| |
Cost of residential revenue (c) | | $ | | | $ | |
Cost of hospitality revenue (c) | |
| | |
| |
Cost of commercial revenue (a) (c) | |
| | |
| |
Cost of other revenue (b) (c) | |
| | |
| |
Consolidated cost of revenue (c) | | $ | | | $ | |
| | | | | | |
Gross profit: | | | | | | |
Residential | | $ | | | $ | |
Hospitality | | | | | | |
Commercial (a) | | | | | | |
Other (b) | | | | | | |
Consolidated gross profit | | $ | | | $ | |
| | | | | | |
Corporate and other operating expenses: | |
| | |
| |
Residential (c) | | $ | | | $ | |
Hospitality (c) | |
| | |
| |
Commercial (c) | |
| | |
| |
Other (b) (c) | |
| | |
| |
Consolidated corporate and other operating expenses (c) | | $ | | | $ | |
| | | | | | |
Depreciation, depletion and amortization: | |
| | |
| |
Residential | | $ | | | $ | |
Hospitality | |
| | |
| |
Commercial | |
| | |
| |
Other | |
| | |
| |
Consolidated depreciation, depletion and amortization | | $ | | | $ | |
| | | | | | |
Investment income, net: | |
| | |
| |
Residential | | $ | | | $ | |
Hospitality | | | | | | |
Commercial | | | | | | |
Other (d) | |
| | |
| |
Consolidated investment income, net | | $ | | | $ | |
| | | | | | |
Interest expense: | |
| | |
| |
Residential | | $ | | | $ | |
Hospitality | | | | | | |
Commercial | |
| | |
| |
Other (e) | |
| | |
| |
Consolidated interest expense | | $ | | | $ | |
| | | | | | |
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| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Equity in income (loss) from unconsolidated joint ventures: | | | | | | |
Residential (f) | | $ | | | $ | |
Commercial (g) | | | ( | | | ( |
Consolidated equity in income from unconsolidated joint ventures | | $ | | | $ | |
| | | | | | |
Other income (expense), net: | | | | | | |
Residential | | $ | | | $ | |
Hospitality | | | ( | | | ( |
Commercial | | | ( | | | ( |
Other | | | ( | | | |
Other expense, net | | $ | ( | | $ | ( |
| | | | | | |
Income (loss) before income taxes: | |
| | |
| |
Residential (f) | | $ | | | $ | |
Hospitality | |
| | |
| ( |
Commercial (a) (g) | |
| | |
| |
Other (b) (d) (e) | |
| ( | |
| ( |
Consolidated income before income taxes | | $ | | | $ | |
| | | | | | |
Capital expenditures: | |
| | |
| |
Residential | | $ | | | $ | |
Hospitality | |
| | |
| |
Commercial | |
| | |
| |
Other | |
| | |
| |
Total capital expenditures | | $ | | | $ | |
| (a) | In September 2025, the Watercrest JV sold its senior living community property and ceased operating activities. See Note 4. Joint Ventures for additional information. |
| (b) | The three months ended March 31, 2026, include activity for the Company’s real estate brokerage business, which began operations in the second quarter of 2025. |
| (c) | Excluding depreciation, depletion and amortization, shown separately above. |
| (d) | Includes interest income from investments in SPE of $ |
| (e) | Includes interest expense from investments in SPE of $ |
| (f) | Equity in income from unconsolidated joint ventures includes $ |
| (g) | The three months ended March 31, 2026 and 2025, include $ |
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| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
Investment in unconsolidated joint ventures: | | | | | | |
Residential | | $ | | | $ | |
Commercial | | | | | | |
Total investment in unconsolidated joint ventures | | $ | | | $ | |
| | | | | | |
Total assets: |
| | |
| | |
Residential | | $ | | | $ | |
Hospitality | |
| | |
| |
Commercial | |
| | |
| |
Other | |
| | |
| |
Total assets | | $ | | | $ | |
17. Commitments and Contingencies
The Company establishes an accrued liability when it is both probable that a material loss has been incurred and the amount of the loss can be reasonably estimated. The Company will evaluate the range of reasonably estimated losses and record an accrued liability based on what it believes to be the minimum amount in the range, unless it believes an amount within the range is a better estimate than any other amount. In such cases, there may be an exposure to loss in excess of the amounts accrued. The Company evaluates quarterly whether further developments could affect the amount of the accrued liability previously established or would make a loss contingency both probable and reasonably estimable.
The Company also provides disclosure when it believes it is reasonably possible that a material loss will be incurred or when it believes it is reasonably possible that the amount of a loss will exceed the recorded liability. The Company reviews loss contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made. This estimated range of possible losses is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate.
The Company is subject to a variety of litigation, claims, other disputes and governmental proceedings that arise from time to time in the ordinary course of its business, including litigation related to its prior development activities. The Company cannot make assurances that it will be successful in defending these matters. Based on current knowledge, the Company does not believe that loss contingencies arising from pending litigation, claims, other disputes and governmental proceedings, including those described herein, will have a material adverse effect on the consolidated financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in these matters, an adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period.
The Company is subject to costs arising out of environmental laws and regulations, which include obligations to remove or limit the effects on the environment of the disposal or release of certain wastes or substances at various sites, including sites which have been previously sold. It is the Company’s policy to accrue and charge against earnings environmental cleanup costs when it is probable that a liability has been incurred and a range of loss can be reasonably estimated. As assessments and cleanups proceed, these accruals are reviewed and adjusted, if necessary, as additional information becomes available. The Company is in the process of assessing certain properties in regard to the effects, if any, on the environment from the disposal or release of wastes or substances. Management is unable to quantify future rehabilitation costs at this time or provide a reasonably estimated range of loss.
Other litigation, claims and disputes, including environmental matters, are pending against the Company. The Company did
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liabilities related to pending claims and litigation and may revise its previous estimates, which could materially affect the Company’s results of operations for any particular reporting period.
The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage, including its timber assets.
As of March 31, 2026 and December 31, 2025, the Company was required to provide surety bonds that guarantee completion and maintenance of certain infrastructure in certain development projects and mitigation banks, as well as other financial guarantees of $
As of March 31, 2026, the Company had a total of $
In 2019, the Company’s unconsolidated Pier Park TPS JV, entered into a $
In April 2026, the Pier Park TPS JV amended the Pier Park TPS JV Loan, which decreased the principal balance to $
In 2020, the Company’s unconsolidated Latitude Margaritaville Watersound JV, entered into a $
In 2021, the Company’s unconsolidated Watersound Fountains Independent Living JV, entered into a $
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the occurrence of certain events. The Company, as the guarantor, receives a quarterly fee related to the guarantee from its JV partners based on the JV partners’ ownership percentage. As of March 31, 2026 and December 31, 2025, $
In 2022, the Company’s unconsolidated Electric Cart Watersound JV, entered into a $
The Company has assessed the need to record a liability for the guarantees related to the Company’s unconsolidated JVs and did not record an obligation as of both March 31, 2026 and December 31, 2025. As of both March 31, 2026 and December 31, 2025, allowance for credit losses related to the contingent aspect of these guarantees, based on historical experience and economic trends, was $
As part of a certain sale of forestry land in 2014, the Company generated significant tax gains. The installment note’s structure allowed the Company to defer the resulting federal and state tax liability of $
18. Related Party Transactions
The Company provides land, mitigation bank credits, impact and other fees, property for lease and services to certain unconsolidated JVs. The Company recognized revenue related to these transactions of $
The Watersound Management JV provides leasing management services for the Company’s multi-family communities. The Company incurred expense related to these transactions of $
The Company incurred land development and planning costs reimbursements to the Latitude Margaritaville Watersound JV of $
19. Subsequent Events
On
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying 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 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” beginning on page 7 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 diversified real estate development, asset management and operating company with all of its real estate assets and operations in Northwest Florida. We intend to use existing assets for residential, hospitality and commercial ventures. We have significant residential and commercial land-use entitlements. We actively seek higher and better uses for our real estate assets through a range of development activities. As part of our core business strategy, we have created a meaningful portion of our business through JVs. We enter into these arrangements for the purposes of developing real estate and other business activities, which we believe allows us to complement our growth strategy, leverage industry expertise and diversify our business. We may partner with or explore the sale of discrete assets, such as our sale of a senior living community property in September 2025, in order to optimize resource allocation and maximize value. See Note 4. Joint Ventures for additional information. We seek to continue to enhance the value of our owned real estate assets by developing residential, hospitality and commercial projects to meet market demand. Approximately 87% of our real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf.
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 continue to focus on our core business activity of real estate development, asset management and operations by developing long-term, scalable residential communities, growing our hospitality offerings and expanding our portfolio of income producing commercial properties. In addition, we operate a real estate brokerage, title insurance agency and insurance agency business. 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. These investments are made with a long-term value creation perspective. Timing of projects may be subject to delays caused by factors beyond our control. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Our real estate investment strategy focuses on projects that meet long-term risk-adjusted return criteria. Our practice is to only incur such expenditures when our analysis indicates that a project will generate a return equal to or greater than the threshold return over its life.
Highlights for the first quarter of 2026 compared to the first quarter of 2025 include:
| ● | Quarterly revenue increased by 5.2% to $99.1 million during the three months ended March 31, 2026, from $94.2 million in the same period in 2025, our highest first quarter revenue outside of the one-off timberland sale in 2014. |
| ● | Hospitality revenue increased by 12.9% to a first quarter record of $44.7 million during the three months ended March 31, 2026, from $39.6 million in the same period in 2025. |
| ● | Real estate revenue increased by 3.7% to $39.7 million during the three months ended March 31, 2026, from $38.3 million in the same period in 2025. |
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| ● | Quarterly operating income increased by 7.7% to $18.2 million during the three months ended March 31, 2026, from $16.9 million in the same period in 2025. Equity in income from unconsolidated joint ventures decreased by $6.7 million during the three months ended March 31, 2026, primarily due to lower home closing volume related to the Latitude Margaritaville Watersound unconsolidated JV. |
| ● | We placed 1,380 homesites under contract in the first quarter of 2026 bringing total homesites under contract to 3,204 as of March 31, 2026, as compared to 952 homesites under contract as of March 31, 2025. |
Market Conditions
While macroeconomic factors such as uncertainty over tariffs, inflation, geopolitical conflicts, elevated interest rates and higher insurance costs for consumers and overall consumer confidence, among other things, continued to produce economic headwinds and impacted buyer sentiment in many parts of the country, our segments continued to generate positive financial results through the first quarter of 2026. We believe this is primarily due to the continued growth of Northwest Florida as a result of net migration, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities.
Elevated interest rates, market conditions in home states, and higher insurance costs have negatively impacted or delayed the ability of some buyers to obtain financing or sell their existing homes in their home states. The negative impact has been partially offset by the net migration into our markets and the number of cash buyers. In addition, we have not experienced an increase in cancellation rates as homebuilders have continued to perform on their contractual obligations with us.
Given our diverse portfolio of residential holdings, the mix of sales and pricing from different communities may impact revenue and margins period over period, as discussed in more detail below.
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 March 31, | | | |||||
| | 2026 | | 2025 |
| | |||
Segment Operating Revenue |
| |
| |
| | |||
Residential |
| 28.6 | % | 35.0 | % | | |||
Hospitality |
| 49.5 | % | 43.0 | % | | |||
Commercial |
| 17.6 | % | 20.7 | % | | |||
Other |
| 4.3 | % | 1.3 | % | | |||
Consolidated operating revenue |
| 100.0 | % | 100.0 | % | | |||
For more information regarding our reportable segments see Note 16. Segment Information.
Residential Segment
Our residential segment primarily plans and develops residential communities of various sizes across a wide range of price points and sells homesites to homebuilders or retail consumers. Our residential segment also evaluates opportunities to enter into JV agreements for specific communities such as Latitude Margaritaville Watersound.
The residential segment generates revenue from sales of homesites, homes and other residential land and certain homesite residuals from homebuilder sales that provide us a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold. Revenue is recognized at the point in time when a sale is closed and title and control have been transferred to the buyer. The residential segment also generates revenue from the sale of tap and
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impact fee credits, marketing fees and other fees on certain transactions. Certain homesite residuals and other revenue related to homebuilder homesite sales are recognized in revenue at the point in time of the closing of the sale. The residential segment incurs costs from direct costs (e.g., development and construction costs), selling costs and other indirect costs. Cost of real estate revenue excludes depreciation, depletion and amortization expense.
Our residential segment includes the Bayside at Ward Creek, Breakfast Point East, Breakwater at Ward Creek, College Station, Park Place, Salt Creek at Mexico Beach, Salt Grass at Ward Creek, Titus Park, Watersound Camp Creek, Watersound Origins, Watersound Origins West and WindMark Beach communities, which are large scale, multi-phase communities with current development activity, sales activity or future phases. Homesites in these communities are developed based on market demand and sold primarily to homebuilders and on a limited basis to retail customers.
The East Lake Creek, East Lake Powell, Lake Powell, Pigeon Creek, Teachee, West Bay Creek and West Laird projects have phases of homesites in preliminary planning or permitting. Homesites in these projects will be developed based on market demand.
The SummerCamp Beach community has homesites available for sale and along with the RiverCamps and SouthWood communities, have additional lands for future development.
The Latitude Margaritaville Watersound community is a 55+ active adult residential community in Bay County, Florida. The community is located near the Intracoastal Waterway with convenient access to the Northwest Florida Beaches International Airport. The community is being developed through our unconsolidated Latitude Margaritaville Watersound JV with our partner Minto Communities USA, a homebuilder and community developer, and is estimated to include approximately 3,700 residential homes, which are being developed in smaller increments of discrete neighborhoods. As of March 31, 2026, the unconsolidated Latitude Margaritaville Watersound JV had completed 2,273 home sale transactions of the total estimated 3,700 homes planned in the community and had 158 homes under contract, which are expected to result in a sales value to the JV of approximately $93.5 million at closing of the homes. See Note 4. Joint Ventures for additional information.
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The residential homesite pipeline by community/project is as follows:
| | | | | | | | | | |
| | | | Residential Homesite Pipeline (a) | ||||||
| | | | Platted or | | | | Additional | | |
| | | | Under | | Engineering | | Entitlements with | | |
Community/Project | | Location | | Development | | or Permitting | | Concept Plan | | Total |
Breakfast Point East (b) | | Bay County, FL | | 53 | | 85 | | 142 | | 280 |
College Station | | Bay County, FL | | 59 | | — | | 209 | | 268 |
East Lake Creek (b) | | Bay County, FL | | — | | 4 | | 196 | | 200 |
East Lake Powell (c) | | Bay County, FL | | — | | — | | 360 | | 360 |
Lake Powell (d) | | Bay County, FL | | — | | 327 | | 1,025 | | 1,352 |
Latitude Margaritaville Watersound (d) (e) | | Bay County, FL | | 825 | | 627 | | — | | 1,452 |
Salt Creek at Mexico Beach (b) | | Bay County, FL | | — | | 147 | | 180 | | 327 |
Park Place | | Bay County, FL | | 163 | | — | | — | | 163 |
Pigeon Creek (d) | | Bay County, FL | | — | | 340 | | 2,990 | | 3,330 |
RiverCamps (c) | | Bay County, FL | | — | | — | | 149 | | 149 |
SouthWood (f) | | Leon County, FL | | — | | — | | 920 | | 920 |
SummerCamp Beach (b) | | Franklin County, FL | | 15 | | — | | 260 | | 275 |
Teachee (d) | | Bay County, FL | | — | | 106 | | 1,644 | | 1,750 |
Titus Park | | Bay County, FL | | 40 | | 125 | | 439 | | 604 |
Bayside at Ward Creek (d) | | Bay County, FL | | 156 | | 178 | | — | | 334 |
Breakwater at Ward Creek (d) | | Bay County, FL | | — | | 95 | | — | | 95 |
Salt Grass at Ward Creek (d) | | Bay County, FL | | 108 | | 307 | | — | | 415 |
Watersound Camp Creek (f) | | Walton County, FL | | 14 | | — | | — | | 14 |
Watersound Origins (f) | | Walton County, FL | | 50 | | — | | — | | 50 |
Watersound Origins West (d) | | Walton County, FL | | 92 | | 276 | | 2,841 | | 3,209 |
West Bay Creek (d) | | Bay County, FL | | — | | — | | 5,250 | | 5,250 |
West Laird (d) | | Bay County, FL | | — | | 1,068 | | 1,117 | | 2,185 |
WindMark Beach (f) | | Gulf County, FL | | 187 | | 155 | | 329 | | 671 |
Total Homesites | | | | 1,762 | | 3,840 | | 18,051 | | 23,653 |
| (a) | The number of homesites are preliminary and are subject to change. Includes homesites platted or currently in concept planning, engineering, permitting or development. We have significant additional entitlements for future residential homesites on our land holdings. |
| (b) | Planned Unit Development (“PUD”). |
| (c) | Development Agreement (“DA”). |
| (d) | Detailed Specific Area Plan (“DSAP”). |
| (e) | The unconsolidated Latitude Margaritaville Watersound JV builds and sells homes in this community. |
| (f) | Development of Regional Impact (“DRI”). |
In addition to the communities listed above, we have a number of other residential project concepts in various stages of planning and evaluation.
As of March 31, 2026, we had eighteen different homebuilders within our residential communities. As of March 31, 2026, we had 3,204 residential homesites under contract, which include 1,326 homesites within the Pigeon Creek project, which is structured to include significant variable revenue due to its long-term nature. In addition, as of March 31, 2026, we had approximately 647 entitled but undeveloped homesites within the SouthWood community under contract. Excluding the Pigeon Creek project and SouthWood community contracts due to their scale and timing, the remaining 1,231 residential homesites under contract are expected to result in revenue of approximately $119.9 million, plus residuals, at closing of the homesites over the next several years. By comparison, as of March 31, 2025, we had 952 residential homesites under contract, with an expected revenue of approximately $94.4 million, plus residuals. The change in homesites under contract is due to homesite transactions since the end of the prior period, new contracts, and the amount of remaining homesites in current phases of the residential communities. Homesite prices vary significantly by community and often sell in concentrated transactions that may impact period over period results.
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Hospitality Segment
Our hospitality segment features a private membership club (the “Watersound Club”), hotel operations, food and beverage operations, golf courses, beach clubs, retail outlets, marinas and other entertainment offerings. The hospitality segment generates revenue from membership sales, golf courses, lodging at our hotels, food and beverage operations, merchandise sales, marina operations (including boat slip rentals, boat storage fees and fuel sales), other resort and entertainment activities and beach clubs, which include food and beverage operations of the WaterColor Beach Club. Hospitality revenue is generally recognized at the point in time services are provided and represents a single performance obligation with a fixed transaction price. Hospitality revenue recognized over time includes non-refundable club membership initiation fees, club membership dues and other membership fees. The hospitality segment incurs costs from the services and goods provided, personnel costs, maintenance of the facilities and holding costs of the assets. From time to time, we may explore the sale of certain hospitality properties, the development of new hospitality properties, as well as new entertainment and management opportunities. Our hospitality segment may also generate revenue from the sale of operating properties. Real estate sales in our hospitality segment incur costs of revenue directly associated with the land, development, construction and selling costs. Cost of hospitality revenue and cost of real estate revenue exclude depreciation, depletion and amortization expense. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 8. Debt, Net.
Watersound Club provides club members access to our member facilities, which include the Watersound Beach Club, Camp Creek golf course and amenities, Shark’s Tooth golf course and tennis center, The Third golf course and The Sporting Preserve. Watersound Club offers different types of club memberships, each with different access rights and associated fee structures. Watersound Club is focused on creating an outstanding membership experience combined with the luxurious aspects of a destination resort. Watersound Beach Club located on Scenic Highway 30A with over one mile of Gulf frontage, has two resort-style pools, two restaurants, three bars, kid’s room and a recreation area. Camp Creek includes an 18-hole golf course, a full club house, health and wellness center, three restaurants, a tennis and pickle ball center, a resort-style pool complex with separate adult pool, a golf teaching academy, pro shop and multi-sport fields. Shark’s Tooth includes an 18-hole golf course, tennis center, a full club house, a pro shop, as well as two food and beverage outlets. The Third includes an 18-hole golf course. The Sporting Preserve includes a 12-stand sporting clays course. Guests of some of our hotels also have access to certain Watersound Club amenities.
Watersound Origins amenities include a resort-style pool, fitness center, pickle ball courts and tennis courts located in the community. Access to these amenities is reserved to Watersound Origins, Watersound Origins West and Watersound Villas on the Fairway members consisting of the communities’ residents. In addition, an executive golf course located in the community is available to residents and for public play.
We own and operate the award-winning WaterColor Inn (which includes the Fish Out of Water restaurant) and The Pearl Hotel (which includes the Havana Beach Bar & Grill restaurant); the Camp Creek Inn, the Hilton Garden Inn Panama City Airport, the Homewood Suites by Hilton Panama City Beach, the Hotel Indigo Panama City Marina, the Home2 Suites by Hilton Santa Rosa Beach and the Watersound Inn. With our JV partners, we own and operate The Lodge 30A and the Embassy Suites by Hilton Panama City Beach Resort. We also operate the WaterColor Beach Club, which includes food and beverage operations and other hospitality related activities, such as beach chair rentals.
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Our hotel portfolio by property is as follows:
| | | | |
Hotel | | Location | | Rooms (a) |
Camp Creek Inn | | Walton County, FL | | 75 |
WaterColor Inn | | Walton County, FL | | 67 |
The Pearl Hotel | | Walton County, FL | | 55 |
Watersound Inn | | Walton County, FL | | 11 |
The Lodge 30A (b) | | Walton County, FL | | 85 |
Home2 Suites by Hilton Santa Rosa Beach | | Walton County, FL | | 107 |
Embassy Suites by Hilton Panama City Beach Resort (b) | | Bay County, FL | | 255 |
Hilton Garden Inn Panama City Airport | | Bay County, FL | | 143 |
Homewood Suites by Hilton Panama City Beach | | Bay County, FL | | 131 |
Hotel Indigo Panama City Marina | | Bay County, FL | | 124 |
TownePlace Suites by Marriott Panama City Beach Pier Park (c) | | Bay County, FL | | 124 |
Residence Inn Panama City Beach Pier Park (d) | | Bay County, FL | | 121 |
Total rooms | | | | 1,298 |
| (a) | Includes hotels currently in operation. We have significant additional entitlements for future hotel projects on our land holdings. |
| (b) | Property is related to a consolidated JV. See Note 4. Joint Ventures for additional information. |
| (c) | The hotel is operated by our JV partner. The Pier Park TPS JV is unconsolidated and is accounted for using the equity method, which is included within our commercial segment. See Note 4. Joint Ventures for additional information. |
| (d) | The hotel is operated by our JV partner. The Pier Park RI JV is unconsolidated and is accounted for using the equity method, which is included within our commercial segment. See Note 4. Joint Ventures for additional information. |
We own and operate two marinas, the Point South Marina Bay Point in Bay County, Florida and Point South Marina Port St. Joe in Gulf County, Florida. We are planning new marinas along the Intracoastal Waterway.
We also own and operate retail stores, two standalone restaurants and other entertainment assets.
In addition to the properties listed above, we have a number of hospitality projects in various stages of planning.
Commercial Segment
Our commercial segment includes leasing of commercial property, multi-family, self-storage and other assets, as well as senior living prior to the sale of the Watercrest JV’s senior living community property in September 2025. See Note 4. Joint Ventures for additional information. The commercial segment also oversees the planning, development, entitlement, management and sale of our commercial and forestry 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 believe the diversity of our commercial segment complements the growth of our residential and hospitality segments. We provide development opportunities for national, regional and local retailers and other strategic partners in Northwest Florida. We own and manage retail shopping centers and develop commercial parcels. We are currently developing the Watersound Town Center in Walton County, Florida and Watersound West Bay Center in Bay County, Florida. These lifestyle centers are complementary to the Watersound Origins, Watersound Origins West and Latitude Margaritaville Watersound residential communities. In conjunction with Florida State University (“FSU”) and Tallahassee Memorial Hospital (“TMH”), we are in the process of developing an 87-acre medical campus in Panama City Beach, Florida. We have large land holdings near the Pier Park retail center, adjacent to the Northwest Florida Beaches International Airport, near or within business districts in the region and along major roadways. We lease land for various other uses. The commercial segment manages our timber holdings in Northwest Florida, which includes growing and selling pulpwood, sawtimber and other products.
The commercial segment generates leasing revenue and incurs leasing expenses primarily from maintenance and management of our properties, personnel costs and asset holding costs. Our commercial segment generates revenue from the sale of developed and undeveloped land, timber holdings or land with limited development and/or entitlements and the sale of commercial operating properties. Real estate sales in our commercial segment incur costs of revenue directly associated with the land, development, construction, timber and selling costs. Our commercial segment generates timber revenue primarily from open market sales of timber on site without the associated delivery costs. Cost of leasing revenue
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and cost of real estate revenue exclude depreciation, depletion and amortization expense. Some of our JV assets and other assets incur interest and financing expenses related to loans as described in Note 8. Debt, Net.
Total units and percentage leased for multi-family and senior living communities by location are as follows:
| | | | | | | | | | | | | | | | | | |
| | | | | | March 31, 2026 | | | December 31, 2025 | | ||||||||
| | | | | | | | | | Percentage | | | | | | | Percentage | |
| | | | | | | | | | Leased | | | | | | | Leased | |
| | | | Units | | Units | | Units | | of Units | | | Units | | Units | | of Units | |
| | Location | | Planned (a) | | Completed | | Leased | | Completed | | | Completed | | Leased | | Completed | |
Multi-family | | | | | | | | | | | | | | | | | ||
Pier Park Crossings (b) | | Bay County, FL | | 240 | | 240 | | 230 | | 96 | % | | 240 | | 229 | | 95 | % |
Pier Park Crossings Phase II (b) | | Bay County, FL | | 120 | | 120 | | 113 | | 94 | % | | 120 | | 109 | | 91 | % |
Watersound Origins Crossings (b) | | Walton County, FL | | 217 | | 217 | | 208 | | 96 | % | | 217 | | 198 | | 91 | % |
North Bay Landing | | Bay County, FL | | 240 | | 240 | | 224 | | 93 | % | | 240 | | 218 | | 91 | % |
Mexico Beach Crossings (b) | | Bay County, FL | | 216 | | 216 | | 212 | | 98 | % | | 216 | | 202 | | 94 | % |
Watersound Villas on the Fairway (c) | | Walton County, FL | | N/A | | N/A | | N/A | | N/A | | | 40 | | 10 | | 25 | % |
WindMark Beach | | Gulf County, FL | | 31 | | 31 | | 21 | | 68 | % | | 31 | | 22 | | 71 | % |
Total multi-family units (d) | | 1,064 | | 1,064 | | 1,008 | | 95 | % | | 1,104 | | 988 | | 89 | % | ||
| | | | | | | | | | | | | | | | | | |
Senior living | | | | | | | | | | | | | | | | | ||
Watersound Fountains (e) | | Walton County, FL | | 148 | | 148 | | 76 | | 51 | % | | 148 | | 69 | | 47 | % |
Total senior living units | | 148 | | 148 | | 76 | | 51 | % | | 148 | | 69 | | 47 | % | ||
Total units | | 1,212 | | 1,212 | | 1,084 | | 89 | % | | 1,252 | | 1,057 | | 84 | % | ||
| (a) | We have additional multi-family communities in various stages of planning. |
| (b) | Property is related to a consolidated JV. See Note 4. Joint Ventures for additional information. |
| (c) | In January 2025, the townhomes were platted as individual units, which created the ability to sell them individually. We are no longer entering into new leases. As of March 31, 2026, the townhomes are included within our residential segment. |
| (d) | All multi-family communities are managed by our unconsolidated Watersound Management JV. The Watersound Management JV is unconsolidated and is accounted for using the equity method. See Note 4. Joint Ventures for additional information. |
| (e) | The community is under lease-up. The senior living community is operated by our JV partner. The Watersound Fountains Independent Living JV is unconsolidated and is accounted for using the equity method. See Note 4. Joint Ventures for additional information. |
As of March 31, 2026, our leasing portfolio consists of approximately 1,200,000 square feet of leasable space for mixed-use, retail, industrial, office, self-storage and medical uses. Through separate unconsolidated JVs, other commercial properties that are operated by our JV partners include a 124-room TownePlace Suites by Marriott, a 121-room Residence Inn, a Busy Bee branded fuel station and convenience store, which includes a Starbucks, and a golf cart sales and service facility, all located in Bay County, Florida.
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The total net leasable building square feet and percentage leased of leasing properties are as follows:
| | | | | | | | | | | | |
| | | | March 31, 2026 | | | December 31, 2025 | | ||||
| | | | Net | | | | | Net | | | |
| | | | Leasable | | | | | Leasable | | | |
| | | | Square | | Percentage | | | Square | | Percentage | |
| | Location | | Feet* | | Leased | | | Feet* | | Leased | |
Pier Park North (a) |
| Bay County, FL |
| 320,310 |
| 100 | % | | 320,310 |
| 100 | % |
VentureCrossings |
| Bay County, FL |
| 303,605 |
| 100 | % | | 303,605 |
| 100 | % |
Watersound Town Center (b) (c) | | Walton County, FL | | 161,108 | | 98 | % | | 149,210 | | 98 | % |
Beckrich Office Park (c) (d) |
| Bay County, FL |
| 80,675 |
| 87 | % | | 80,675 |
| 87 | % |
FSU/TMH Medical Campus | | Bay County, FL | | 78,670 | | 100 | % | | 78,670 | | 100 | % |
Watersound Self-Storage | | Walton County, FL | | 67,694 | | 94 | % | | 67,694 | | 93 | % |
WindMark Beach Town Center (c) (e) |
| Gulf County, FL |
| 44,748 |
| 57 | % | | 44,748 |
| 57 | % |
Watersound West Bay Center (f) | | Bay County, FL | | 21,369 | | 52 | % | | 3,366 | | 100 | % |
Cedar Grove Commerce Park | | Bay County, FL | | 19,389 | | 100 | % | | 19,389 | | 100 | % |
WaterColor Town Center (c) |
| Walton County, FL |
| 17,560 |
| 99 | % | | 17,560 |
| 96 | % |
Port St. Joe Commercial |
| Gulf County, FL |
| 16,964 |
| 100 | % | | 16,964 |
| 100 | % |
Beach Commerce Park (c) |
| Bay County, FL |
| 14,800 |
| 91 | % | | 14,800 |
| 100 | % |
South Walton Commerce Park | | Walton County, FL | | 11,570 | | 100 | % | | 11,570 | | 100 | % |
Watersound Gatehouse (c) |
| Walton County, FL |
| 8,921 |
| 100 | % | | 10,271 |
| 87 | % |
Other (g) | | Bay, Gulf and Walton Counties, FL | | 33,096 | | 100 | % | | 35,208 | | 100 | % |
|
| |
| 1,200,479 |
| 96 | % | | 1,174,040 |
| 96 | % |
| * | Net Leasable Square Feet is designated as the current square feet available for lease as specified in the applicable lease agreements plus management’s estimate of space available for lease based on construction drawings. |
| (a) | Property is related to a consolidated JV. See Note 4. Joint Ventures for additional information. |
| (b) | An additional building was completed in the first quarter of 2026. As of March 31, 2026 and December 31, 2025, we occupied 6,752 square feet for our Business Services, which is excluded from net leasable square feet. Included in net leasable square feet as of March 31, 2026 and December 31, 2025, is 1,200 square feet leased to an unconsolidated JV. |
| (c) | In addition to net leasable square feet, there is also space that we occupy or that serves as common area. |
| (d) | We occupied approximately 22,556 square feet as our headquarters as of both March 31, 2026 and December 31, 2025, each of which is excluded from net leasable square feet. |
| (e) | Included in net leasable square feet as of March 31, 2026 and December 31, 2025, is 5,658 square feet of unfinished space. |
| (f) | An additional building was completed in the first quarter of 2026. In addition to net leasable square feet, as of March 31, 2026 and December 31, 2025, our unconsolidated Electric Cart Watersound JV owns and operates 11,813 square feet for its golf cart sales and service facility. See Note 4. Joint Ventures for additional information. |
| (g) | Includes various other properties, each with less than 10,000 net leasable square feet. |
In addition to the leased properties above, we have ground leases in various locations of our land holdings.
We have commercial projects under development and construction as detailed in the table below. In addition to these properties, we have other commercial buildings and sites in various stages of planning and development.
| | | | | | | | | | |
| | | | March 31, 2026 | ||||||
| | Location | | Completed Square Feet | | Square Feet Under Construction | | Additional Planned Square Feet | | Total Square Feet* |
Watersound Town Center (a) | | Walton County, FL | | 168,887 | | — | | 231,113 | | 400,000 |
Watersound West Bay Center (b) (c) | | Bay County, FL | | 33,182 | | 69,134 | | 397,684 | | 500,000 |
FSU/TMH Medical Campus | | Bay County, FL | | 78,670 | | — | | 241,330 | | 320,000 |
| | | | 280,739 | | 69,134 | | 870,127 | | 1,220,000 |
| * | Total square feet are based on current estimates and are subject to change. |
| (a) | We occupy 6,752 square feet of the completed space for our Business Services. There is also additional completed space we occupy. |
| (b) | Completed square feet includes 11,813 square feet owned and operated by our unconsolidated Electric Cart Watersound JV for its golf cart sales and service facility. See Note 4. Joint Ventures for additional information. |
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| (c) | Square feet under construction includes 5,509 square feet for our Business Services. |
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, 2025. There have been no significant changes in these policies during the first three months of 2026, 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. The revenues and earnings from our business segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic transactions. In addition, homesite prices vary significantly by community, which further impacts period over period results. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or commercial real estate sales. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Hospitality revenues are typically higher in the second and third quarters, and vary depending on the timing of holidays and school breaks. Commercial real estate sales tend to be non-recurring. Projects depend on uncertain demand. Extraordinary events such as hurricanes may dramatically change demand and pricing for products and services.
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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 | |||||
| March 31, | |||||
| 2026 | | 2025 | |||
| In millions | |||||
Revenue: | | |
| | | |
Real estate revenue | $ | 39.7 | | $ | 38.3 | |
Hospitality revenue |
| 44.7 | |
| 39.6 | |
Leasing revenue |
| 14.7 | |
| 16.3 | |
Total revenue |
| 99.1 | |
| 94.2 | |
Expenses: |
| | |
| | |
Cost of real estate revenue (a) |
| 21.6 | |
| 18.8 | |
Cost of hospitality revenue (a) |
| 33.8 | |
| 32.4 | |
Cost of leasing revenue (a) |
| 5.7 | |
| 7.4 | |
Corporate and other operating expenses (a) |
| 8.4 | |
| 6.6 | |
Depreciation, depletion and amortization |
| 11.4 | |
| 12.1 | |
Total expenses |
| 80.9 | |
| 77.3 | |
Operating income |
| 18.2 | |
| 16.9 | |
Other income (expense): |
| | |
| | |
Investment income, net |
| 3.3 | |
| 3.4 | |
Interest expense |
| (7.1) | |
| (7.8) | |
Equity in income from unconsolidated joint ventures | | 3.5 | | | 10.2 | |
Other expense, net |
| (0.1) | |
| (0.2) | |
Total other (expense) income, net |
| (0.4) | |
| 5.6 | |
Income before income taxes |
| 17.8 | |
| 22.5 | |
Income tax expense |
| (4.5) | |
| (5.8) | |
Net income | $ | 13.3 | | $ | 16.7 | |
| (a) | Excluding depreciation, depletion and amortization, shown separately above. |
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Real Estate Revenue and Gross Profit
The following table sets forth a comparison of our total consolidated real estate revenue and gross profit:
| | | | | | | | | | | |
| | Three Months Ended March 31, | | ||||||||
| | 2026 | | % (a) | | 2025 | | % (a) | | ||
| | Dollars in millions | | ||||||||
Revenue: |
| | |
| |
| | |
| |
|
Residential real estate revenue | | $ | 28.3 |
| 71.3 | % | $ | 32.9 |
| 85.9 | % |
Commercial, forestry and hospitality real estate revenue | |
| 6.4 |
| 16.1 | % |
| 3.2 |
| 8.4 | % |
Timber revenue | | | 0.9 | | 2.3 | % | | 1.2 | | 3.1 | % |
Other revenue | |
| 4.1 |
| 10.3 | % |
| 1.0 |
| 2.6 | % |
Real estate revenue | | $ | 39.7 |
| 100.0 | % | $ | 38.3 |
| 100.0 | % |
| | | | | | | | | | | |
Gross profit: | |
| |
| | |
| |
| | |
Residential real estate | | $ | 12.6 |
| 44.5 | % | $ | 15.0 |
| 45.6 | % |
Commercial, forestry and hospitality real estate | |
| 4.3 |
| 67.2 | % |
| 3.1 |
| 96.9 | % |
Timber | | | 0.7 | | 77.8 | % | | 1.0 | | 83.3 | % |
Other | |
| 0.5 |
| 12.2 | % |
| 0.4 |
| 40.0 | % |
Gross profit | | $ | 18.1 |
| 45.6 | % | $ | 19.5 |
| 50.9 | % |
| (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 March 31, 2026, residential real estate revenue decreased $4.6 million, or 14.0%, to $28.3 million, as compared to $32.9 million during the same period in 2025. During the three months ended March 31, 2026, residential real estate gross profit decreased $2.4 million to $12.6 million (or gross margin of 44.5%), as compared to $15.0 million (or gross margin of 45.6%) during the same period in 2025. During the three months ended March 31, 2026, we sold 168 homesites and 6 homes, compared to 249 homesites and no homes during the same period in 2025. During the three months ended March 31, 2026 and 2025, the average base revenue, excluding homesite residuals, per homesite sold was approximately $121,000 and $114,000, respectively, due to the mix of sales from different communities. The revenue, gross profit and margin for each period was impacted by the difference in pricing among the communities, the difference in the cost of the development and the volume of sales within each of the communities. The number of homesites sold varied each period due to the timing of homebuilder contractual closing obligations in our residential communities.
Commercial, Forestry and Hospitality Real Estate Revenue and Gross Profit. During the three months ended March 31, 2026, we had four commercial, forestry and hospitality real estate sales totaling approximately 115 acres for $6.4 million, resulting in a gross profit of $4.3 million (or gross margin of 67.2%). The commercial, forestry and hospitality real estate sales during the three months ended March 31, 2026, included the sale of a vacation rental property used in hospitality operations for $3.6 million, resulting in a gross margin of approximately 63.9%. During the three months ended March 31, 2025, we had two commercial and forestry real estate sales totaling approximately 133 acres for $3.2 million, resulting in a gross profit of $3.1 million (or gross margin of 96.9%).
Revenue from 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, timber and other commercial uses. Our gross margin can vary significantly from period-to-period depending on the characteristics of property sold. Sales of forestry land typically have a lower cost basis than residential, commercial and hospitality real estate sales. In addition, our cost basis in real estate can vary depending on the amount of development, construction or other costs incurred on the property.
Timber Revenue and Gross Profit. Timber revenue decreased $0.3 million, or 25.0%, to $0.9 million during the three months ended March 31, 2026, as compared to $1.2 million in the same period in 2025. There were 52,000 tons of
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wood products sold at an average price per ton of $15.95 during the three months ended March 31, 2026, as compared to 74,000 tons of wood products sold at an average price per ton of $14.61, during the same period in 2025. Timber gross margin was 77.8% during the three months ended March 31, 2026, as compared to 83.3% during the same period in 2025. The decrease in revenue and gross margin was primarily due to product mix and a decrease in tons of wood products sold in the current period.
Other Revenue. Other revenue primarily consists of our Business Services revenue and mitigation bank credit sales. Other revenue increased $3.1 million during the three months ended March 31, 2026, compared to the same period in 2025. Other gross margin was 12.2% during the three months ended March 31, 2026, as compared to 40.0% during the same period in 2025. The change in other revenue and gross margin was primarily due to our real estate brokerage business, which began operations in the second quarter of 2025.
Hospitality Revenue and Gross Profit
| | | | | | | |
| Three Months Ended March 31, | ||||||
| 2026 | | 2025 | ||||
| Dollars in millions | | |||||
Hospitality revenue | $ | 44.7 | | | $ | 39.6 | |
Gross profit | $ | 10.9 | | | $ | 7.2 | |
Gross margin |
| 24.4 | % | |
| 18.2 | % |
Hospitality revenue increased $5.1 million, or 12.9%, to $44.7 million during the three months ended March 31, 2026, as compared to $39.6 million in the same period in 2025. The increase in hospitality revenue was primarily related to membership increases and ancillary spend. The increase in revenue was also related to an increase in hotel operations in average daily rate (“ADR”), occupancy and guest incidental spend. As of March 31, 2026, Watersound Club had 3,647 members, compared with 3,498 members as of March 31, 2025, a net increase of 149 members. As of both March 31, 2026 and 2025, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs). Hospitality gross margin increased to 24.4% during the three months ended March 31, 2026, compared to 18.2% during the same period in 2025. The increase in gross margin was primarily due to the continued stabilization of the properties and the management of operating expenses.
Leasing Revenue and Gross Profit
| | | | | | | |
| Three Months Ended March 31, | ||||||
| 2026 | | 2025 | ||||
| Dollars in millions | | |||||
Leasing revenue | $ | 14.7 | | | $ | 16.3 | |
Gross profit | $ | 9.0 | | | $ | 8.9 | |
Gross margin |
| 61.2 | % | |
| 54.6 | % |
Leasing revenue decreased $1.6 million, or 9.8%, to $14.7 million during the three months ended March 31, 2026, as compared to $16.3 million in the same period in 2025. The decrease was primarily due to the sale of Watercrest JV’s senior living community property in September 2025, which ceased operating activities, and the sale of townhomes in the Watersound Villas on the Fairway community since the end of the prior period. The decrease was partially offset by additional commercial property leases. Leasing gross margin increased to 61.2% during the three months ended March 31, 2026, as compared to 54.6% during the same period in 2025. The increase in leasing gross margin was primarily due to additional leases in the current period and the sale of the Watercrest JV’s senior living community property, which operated with lower margins.
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Corporate and Other Operating Expenses
| | | | | | |
| Three Months Ended March 31, | | ||||
| 2026 | | 2025 |
| ||
| In millions | | ||||
Employee costs | $ | 4.3 | | $ | 2.8 | |
Property taxes and insurance |
| 1.6 | |
| 1.6 | |
Professional fees |
| 1.3 | |
| 1.4 | |
Marketing and owner association costs |
| 0.4 | |
| 0.3 | |
Occupancy, repairs and maintenance |
| 0.2 | |
| 0.1 | |
Other miscellaneous |
| 0.6 | |
| 0.4 | |
Total corporate and other operating expenses (a) | $ | 8.4 | | $ | 6.6 | |
| (a) | Excluding depreciation, depletion and amortization. |
Corporate and other operating expenses increased $1.8 million to $8.4 million during the three months ended March 31, 2026, as compared to $6.6 million in the same period in 2025. The increase in corporate and other operating expenses was primarily due to compensation payments made in the first quarter of 2026.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization expense decreased $0.7 million during the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to assets sold since the prior period, partially offset by new hospitality and commercial assets placed in service. Depreciation is a non-cash, GAAP expense, which is amortized over an asset’s useful life, while maintenance and repair expenses are period costs and expensed as incurred.
Investment Income, Net
Investment income, net primarily includes (i) interest, dividends and accretion income accrued or received on our cash, cash equivalents and other investments, (ii) interest income earned on the time deposit held by SPE and (iii) interest earned on notes receivable, our unimproved land contribution to the unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community and other receivables as detailed in the table below:
| | | | | | |
| Three Months Ended March 31, | | ||||
| 2026 | | 2025 |
| ||
| In millions | | ||||
Interest, dividend and accretion income | $ | 1.0 | | $ | 0.9 | |
Interest income from investments in special purpose entities |
| 2.0 | |
| 2.0 | |
Interest earned on notes receivable and other interest |
| 0.3 | |
| 0.5 | |
Total investment income, net | $ | 3.3 | | $ | 3.4 | |
Investment income, net during the three months ended March 31, 2026 and 2025, were comparable.
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Interest Expense
Interest expense primarily includes interest incurred on project financing, the Senior Notes issued by Northwest Florida Timber Finance, LLC, CDD debt and finance leases, as well as amortization of debt discount and premium and debt issuance costs as detailed in the table below:
| | | | | |
| Three Months Ended March 31, | ||||
| 2026 | | 2025 | ||
| In millions | ||||
Interest incurred for project financing and other interest expense | $ | 4.9 | | $ | 5.6 |
Interest expense and amortization of discount and issuance costs for Senior Notes issued by special purpose entity | | 2.2 | | | 2.2 |
Total interest expense | $ | 7.1 | | $ | 7.8 |
Interest expense decreased $0.7 million, or 9.0%, to $7.1 million during the three months ended March 31, 2026, as compared to $7.8 million in the same period in 2025. The decrease in interest expense is due to repayment of project financing and a decrease in interest rates from the prior period. See Note 8. Debt, Net and Note 15. Other (Expense) Income, Net for additional information regarding project financing.
Equity in Income from Unconsolidated Joint Ventures
Equity in income (loss) from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for using the equity method as detailed in the table below. See Note 4. Joint Ventures for additional information.
| | | | | |
| Three Months Ended March 31, | ||||
| 2026 | | 2025 | ||
| In millions | ||||
Latitude Margaritaville Watersound JV (a) | $ | 5.1 | | $ | 12.7 |
Watersound Fountains Independent Living JV (b) | | (0.9) | | | (1.0) |
Pier Park TPS JV | | (0.2) | | | (0.3) |
Pier Park RI JV (c) | | (0.4) | | | (1.1) |
Busy Bee JV (d) | | (0.1) | | | (0.2) |
Electric Cart Watersound JV | | — | | | — |
Watersound Management JV | | — | | | 0.1 |
Total equity in income from unconsolidated joint ventures | $ | 3.5 | | $ | 10.2 |
| (a) | During the three months ended March 31, 2026 and 2025, the Latitude Margaritaville Watersound JV completed 83 and 192 home sale transactions, respectively. |
| (b) | The community is under lease-up. |
| (c) | The three months ended March 31, 2025, include start-up, depreciation and interest expenses for the project. |
| (d) | Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV. |
Other Expense, Net
Other expense, net primarily includes other income and expense items as detailed in the table below:
| | | | | |
| Three Months Ended March 31, | ||||
| 2026 | | 2025 | ||
| In millions | ||||
Miscellaneous expense, net | $ | (0.1) | | $ | (0.2) |
Other expense, net | $ | (0.1) | | $ | (0.2) |
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Other expense, net during the three months ended March 31, 2026 and 2025, were comparable. Miscellaneous expense, net during the three months ended March 31, 2026 and 2025, primarily includes loss on early extinguishment of debt, as well as fees related to loans.
Income Tax Expense
Income tax expense was $4.5 million during the three months ended March 31, 2026, as compared to $5.8 million during the same period in 2025. Our effective tax rate was 25.3% for the three months ended March 31, 2026, as compared to 25.8% during the same period in 2025.
Our effective rate for the three months ended March 31, 2026 and 2025, differed from the federal statutory rate of 21.0% primarily due to state income taxes, nontaxable or nondeductible and other differences. See Note 11. Income Taxes for additional information.
Segment Results
Residential
The table below sets forth the consolidated results of operations of our residential segment:
| | | | | |
| Three Months Ended March 31, | ||||
| 2026 | | 2025 | ||
| In millions | ||||
Revenue: | | |
| | |
Real estate revenue | | | | | |
Residential real estate revenue | $ | 26.2 | | $ | 30.5 |
Other revenue |
| 2.1 | |
| 2.4 |
Total real estate revenue | | 28.3 | | | 32.9 |
Leasing revenue | | — | | | 0.1 |
Total revenue |
| 28.3 | |
| 33.0 |
Expenses: |
| | |
| |
Cost of real estate and other revenue (a) |
| 15.7 | |
| 17.9 |
Other operating expenses (a) |
| 1.3 | |
| 1.2 |
Depreciation, depletion and amortization |
| — | |
| 0.1 |
Total expenses |
| 17.0 | |
| 19.2 |
Operating income |
| 11.3 | |
| 13.8 |
Other income (expense): |
| | |
| |
Investment income, net | | 0.2 | | | 0.5 |
Interest expense |
| (0.1) | |
| (0.1) |
Equity in income from unconsolidated joint ventures | | 5.1 | | | 12.7 |
Other income, net |
| 0.1 | |
| 0.1 |
Total other income, net |
| 5.3 | |
| 13.2 |
Income before income taxes | $ | 16.6 | | $ | 27.0 |
| (a) | Excluding depreciation, depletion and amortization, shown separately above. |
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Three months ended March 31, 2026 compared to the three months ended March 31, 2025
The following table sets forth our consolidated residential real estate revenue and cost of revenue activity:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2026 | | Three Months Ended March 31, 2025 |
| ||||||||||||||||||||||
| | Units | | | | | Cost of | | Gross | | Gross | | Units | | | | | Cost of | | Gross | | Gross |
| ||||
| | Sold | | Revenue | | Revenue | | Profit | | Margin | | Sold | | Revenue | | Revenue | | Profit | | Margin |
| ||||||
| | Dollars in millions | | Dollars in millions | | ||||||||||||||||||||||
Consolidated | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Homesites | | 168 | | $ | 23.1 | | $ | 12.4 | | $ | 10.7 | | 46.3 | % | 249 | | $ | 30.5 | | $ | 16.6 | | $ | 13.9 | | 45.6 | % |
Homes |
| 6 | | | 3.1 | | | 2.1 | | | 1.0 | | 32.3 | % | N/A | | | — | | | — | | | — | | — | % |
Total consolidated |
| 174 | | $ | 26.2 | | $ | 14.5 | | $ | 11.7 |
| 44.7 | % | 249 | | $ | 30.5 | | $ | 16.6 | | $ | 13.9 |
| 45.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unconsolidated | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Homes (a) | | 83 | | | | | | | | | | | | | 192 | | | | | | | | | | | | |
Total consolidated and unconsolidated | | 257 | | | | | | | | | | | | | 441 | | | | | | | | | | | | |
| (a) | Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for using the equity method. See Note 4. Joint Ventures for additional information. |
The following discussion sets forth details of the consolidated results of operations of our residential segment.
Homesites. Revenue from homesite sales decreased $7.4 million, or 24.3%, during the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to the mix and number of homesites sold per community and the timing of homebuilder contractual closing obligations in our residential communities. During the three months ended March 31, 2026 and 2025, the average base revenue, excluding homesite residuals, per homesite sold was approximately $121,000 and $114,000, respectively, due to the mix of sales from different communities. Revenue includes estimated homesite residuals of $1.7 million and $1.1 million during the three months ended March 31, 2026 and 2025, respectively. The increase in estimated homesite residuals was due to the mix and number of homesites sold in specific communities during the current period. Gross margin was 46.3% during the three months ended March 31, 2026, comparable to the same period in 2025. Gross margin may vary each period depending on the location of homesite sales.
Homes. During the three months ended March 31, 2026, we sold six completed townhomes within our Watersound Villas on the Fairway community for a total of $3.1 million, resulting in a gross margin of 32.3%. During the three months ended March 31, 2025, we did not have any home sales.
Other revenue includes tap and impact fee credits sold, marketing fees and other fees. Other revenue includes estimated fees related to homebuilder homesite sales of $0.6 million and $0.5 million, during the three months ended March 31, 2026 and 2025, respectively.
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 the unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. Investment income, net decreased $0.3 million during the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to fewer home sales transacted in the community during the current period. See Note 4. Joint Ventures for additional information. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 8. Debt, Net for additional information.
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Equity in income from unconsolidated joint ventures includes our proportionate share of earnings or losses of an unconsolidated JV accounted for using the equity method. Equity in income from unconsolidated joint ventures decreased $7.6 million during the three months ended March 31, 2026, as compared to the same period in 2025. The decrease was primarily due to the decreased volume of home sale transactions and a lower average sales price, partially offset by higher average margin per home sold during the current period related to our unconsolidated Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV completed 83 home sale transactions during the three months ended March 31, 2026, compared to 192 home sale transactions during the same period in 2025. See Note 4. Joint Ventures for additional information.
Hospitality
The table below sets forth the consolidated results of operations of our hospitality segment:
| | | | | |
| Three Months Ended March 31, | ||||
| 2026 | | 2025 | ||
| In millions | ||||
Revenue: | | |
| | |
Hospitality revenue | $ | 44.7 | | $ | 39.6 |
Leasing revenue | | 0.8 | | | 0.9 |
Real estate revenue | | 3.6 | | | — |
Total revenue | | 49.1 | | | 40.5 |
Expenses: |
| | |
| |
Cost of hospitality revenue (a) |
| 33.8 | |
| 32.4 |
Cost of leasing revenue (a) |
| 0.5 | |
| 0.5 |
Cost of real estate revenue (a) | | 1.3 | | | — |
Other operating expenses (a) |
| 0.6 | |
| 0.4 |
Depreciation, depletion and amortization |
| 7.0 | |
| 7.1 |
Total expenses |
| 43.2 | |
| 40.4 |
Operating income |
| 5.9 | |
| 0.1 |
Other income (expense): |
| | |
| |
Investment income, net | | 0.1 | | | — |
Interest expense | | (2.3) | | | (2.7) |
Other expense, net |
| — | |
| (0.1) |
Total other expense, net |
| (2.2) | |
| (2.8) |
Income (loss) before income taxes | $ | 3.7 | | $ | (2.7) |
| (a) | Excluding depreciation, depletion and amortization, shown separately above. |
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
The following table sets forth details of our hospitality segment consolidated revenue and gross profit (deficit):
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2026 | | | Three Months Ended March 31, 2025 |
| ||||||||||||
| | | | | Gross | | Gross | | | | | | Gross | | Gross | | ||
| | Revenue | | Profit | | Margin | | | Revenue | | Profit (Deficit) | | Margin |
| ||||
| | Dollars in millions | ||||||||||||||||
Clubs (a) | | $ | 22.8 | | $ | 9.1 |
| 39.9 | % | | $ | 19.6 | | $ | 7.5 |
| 38.3 | % |
Hotels | | | 19.5 | | | 1.6 | | 8.2 | % | | | 17.8 | | | (0.2) | | (1.1) | % |
Other | | | 2.4 | | | 0.2 | | 8.3 | % | | | 2.2 | | | (0.1) | | (4.5) | % |
Total | | $ | 44.7 | | $ | 10.9 |
| 24.4 | % | | $ | 39.6 | | $ | 7.2 |
| 18.2 | % |
| (a) | Includes the Camp Creek Inn due to its proximity and guest access to Watersound Club amenities. |
Revenue from our clubs increased $3.2 million, or 16.3%, during the three months ended March 31, 2026, as compared to the same period in 2025. The increase in revenue was due to an increase in membership dues, membership
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ancillary spend and Camp Creek Inn lodging and ancillary spend. As of March 31, 2026, Watersound Club had 3,647 members, compared with 3,498 members as of March 31, 2025, a net increase of 149 members. Our clubs gross margin was 39.9% during the three months ended March 31, 2026, compared to 38.3% during the same period in 2025. The increase in gross margin was primarily due to stabilization of the Camp Creek Inn and management of operating expenses.
Revenue from our hotel operations increased $1.7 million, or 9.6%, during the three months ended March 31, 2026, as compared to the same period in 2025. The increase was primarily related to an increase in ADR, occupancy, as well as guest incidental spend. Our hotels gross margin was 8.2% for the three months ended March 31, 2026, compared to a negative gross margin of 1.1% during the same period in 2025. The increase in gross margin was primarily due to stabilization of the properties and management of operating expenses.
As of both March 31, 2026 and 2025, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs).
Revenue from other hospitality operations increased $0.2 million, or 9.1%, during the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to increased revenue from our standalone restaurants and marina operations. Our other hospitality operations gross margin was 8.3% during the three months ended March 31, 2026, compared to a negative gross margin of 4.5% during the same period in 2025. The increase in gross margin was due to management of operating expenses.
Leasing revenue includes marina boat slip and dry storage rentals, as well as leases of other hospitality assets.
Real estate revenue during the three months ended March 31, 2026, includes the sale of a vacation rental property for $3.6 million, resulting in a gross profit of $2.3 million (or gross margin of 63.9%).
Other operating expenses include salaries and benefits, professional fees, repairs and maintenance and other administrative expenses.
Interest expense primarily includes interest incurred from our hospitality project financing. The decrease of $0.4 million in interest expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to repayment of project financing and a decrease in interest rates from the prior period. See Note 8. Debt, Net for additional information.
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Commercial
The table below sets forth the consolidated results of operations of our commercial segment:
| | | | | |
| Three Months Ended March 31, | ||||
| 2026 | | 2025 | ||
| In millions | ||||
Revenue: | | |
| | |
Leasing revenue | | | | | |
Commercial leasing revenue | $ | 8.2 | | $ | 7.3 |
Multi-family leasing revenue | | 5.6 | | | 5.8 |
Senior living leasing revenue | | — | | | 2.0 |
Total leasing revenue | | 13.8 | | | 15.1 |
Real estate revenue | | | | | |
Commercial and forestry real estate revenue |
| 2.8 | |
| 3.2 |
Timber revenue | | 0.9 | | | 1.2 |
Total real estate revenue | | 3.7 | | | 4.4 |
Total revenue |
| 17.5 | |
| 19.5 |
Expenses: |
| | |
| |
Cost of leasing revenue (a) |
| 5.2 | |
| 6.7 |
Cost of real estate revenue (a) |
| 0.9 | |
| 0.3 |
Other operating expenses (a) |
| 1.3 | |
| 1.1 |
Depreciation, depletion and amortization |
| 4.2 | |
| 4.8 |
Total expenses |
| 11.6 | |
| 12.9 |
Operating income |
| 5.9 | |
| 6.6 |
Other (expense) income: | | | | | |
Interest expense |
| (2.5) | |
| (2.8) |
Equity in loss from unconsolidated joint ventures | | (1.5) | | | (2.5) |
Other expense, net |
| (0.2) | |
| (0.3) |
Total other expense, net |
| (4.2) | |
| (5.6) |
Income before income taxes | $ | 1.7 | | $ | 1.0 |
| (a) | Excluding depreciation, depletion and amortization, shown separately above. |
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
The following table sets forth details of our commercial segment consolidated revenue and gross profit:
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2026 | | | Three Months Ended March 31, 2025 |
| ||||||||||||
| | | | | Gross | | Gross | | | | | | Gross | | Gross | | ||
| | Revenue | | Profit | | Margin | | | Revenue | | Profit | | Margin |
| ||||
| | Dollars in millions | ||||||||||||||||
Leasing | | | | | | | | | | | | | | | | | | |
Commercial leasing | | $ | 8.2 | | $ | 6.0 |
| 73.2 | % | | $ | 7.3 | | $ | 4.8 |
| 65.8 | % |
Multi-family leasing | | | 5.6 | | | 2.6 |
| 46.4 | % | | | 5.8 | | | 2.9 |
| 50.0 | % |
Senior living leasing | | | — | | | — | | — | % | | | 2.0 | | | 0.7 | | 35.0 | % |
Total leasing | | | 13.8 | | | 8.6 | | 62.3 | % | | | 15.1 | | | 8.4 | | 55.6 | % |
Real estate | | | | | | | | | | | | | | | | | | |
Commercial and forestry real estate | | | 2.8 | | | 2.1 | | 75.0 | % | | | 3.2 | | | 3.1 | | 96.9 | % |
Timber | | | 0.9 | | | 0.7 | | 77.8 | % | | | 1.2 | | | 1.0 | | 83.3 | % |
Total real estate | | | 3.7 | | | 2.8 | | 75.7 | % | | | 4.4 | | | 4.1 | | 93.2 | % |
Total | | $ | 17.5 | | $ | 11.4 |
| 65.1 | % | | $ | 19.5 | | $ | 12.5 |
| 64.1 | % |
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The following discussion sets forth details of the consolidated results of operations of our commercial segment.
Total leasing revenue decreased $1.3 million, or 8.6%, during the three months ended March 31, 2026, as compared to the same period in 2025. The decrease was primarily due to the sale of Watercrest JV’s senior living community property in September 2025, which ceased operating activities, and the sale of townhomes in the Watersound Villas on the Fairway community since the end of the prior period, partially offset by additional commercial property leases. Total leasing gross margin during the three months ended March 31, 2026 was 62.3%, as compared to 55.6% during the same period in 2025. The increase in leasing gross margin was primarily due to additional leases in the current period and the sale of the Watercrest JV’s senior living community property, which operated with lower margins. As of March 31, 2026, we had net leasable square feet of approximately 1,200,000, of which approximately 1,150,000 square feet were under lease. As of March 31, 2025, we had net leasable square feet of approximately 1,180,000, of which approximately 1,114,000 square feet were under lease. As of March 31, 2026 and 2025, our consolidated entities had 1,064 and 1,235 multi-family and senior living units, respectively, of which 1,008 were leased as of March 31, 2026, compared to 1,087 leased as of March 31, 2025 (excludes 148 senior living units for the unconsolidated Watersound Fountains Independent Living JV). The number of multi-family and senior living units decreased during the three months ended March 31, 2026, due to assets sold since the end of the prior period. See Note 4. Joint Ventures for additional information.
Commercial and forestry real estate revenue can vary depending on the proximity to developed areas and the mix and characteristics of commercial and forestry real estate sold in each period, with varying compositions of retail, office, industrial, timber and other commercial uses. During the three months ended March 31, 2026, we had three commercial and forestry real estate sales of approximately 115 acres for $2.8 million, resulting in a gross margin of approximately 75.0%. During the three months ended March 31, 2025, we had two commercial and forestry real estate sales of approximately 133 acres for $3.2 million, resulting in a gross margin of approximately 96.9%.
Timber revenue decreased $0.3 million, or 25.0%, to $0.9 million during the three months ended March 31, 2026, as compared to $1.2 million during the same period in 2025. There were 52,000 tons of wood products sold at an average price per ton of $15.95 during the three months ended March 31, 2026, as compared to 74,000 tons of wood products sold at an average price per ton of $14.61, during the same period in 2025. Timber gross margin was 77.8% during the three months ended March 31, 2026, as compared to 83.3% during the same period in 2025. The decrease in revenue and gross margin was primarily due to product mix and a decrease in tons of wood products sold in the current period.
Other operating expenses include salaries and benefits, property taxes, CDD assessments, professional fees, marketing, project administration and other administrative expenses.
The decrease of $0.6 million in depreciation, depletion and amortization expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to assets sold since the prior period, partially offset by new assets placed in service in the current period.
Interest expense primarily includes interest incurred from our commercial project financing and CDD debt. The decrease of $0.3 million in interest expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to repayment of project financing and a decrease in interest rates from the prior period. See Note 8. Debt, Net for additional information.
Equity in loss from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for using the equity method. Equity in loss from unconsolidated joint ventures for the Pier Park RI JV was $0.4 million during the three months ended March 31, 2026, as compared to $1.1 million for the same period in 2025. The three months ended March 31, 2025, include start-up, depreciation and interest expenses related to the Pier Park RI JV. Equity in loss from unconsolidated joint ventures for the Watersound Fountains Independent Living JV was $0.9 million during the three months ended March 31, 2026, as compared to $1.0 million for the same period in 2025. The community is under lease-up. See Note 4. Joint Ventures for additional information.
Other expense, net primarily includes loss on early extinguishment of debt, as well as fees related to loans. See Note 8. Debt, Net for additional information.
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Liquidity and Capital Resources
As of March 31, 2026, we had cash and cash equivalents of $136.3 million, compared to $129.6 million as of December 31, 2025.
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, authorized stock repurchases and authorized dividends for the next twelve months.
During the three months ended March 31, 2026, we invested a total of $20.7 million for capital expenditures, which includes $11.4 million for our residential segment, $2.7 million for our hospitality segment, $5.9 million for our commercial segment and $0.7 million for corporate and other expenditures. We anticipate that future capital commitments will be funded through cash generated from operations, cash and cash equivalents on hand and new financing arrangements. As of March 31, 2026, we had a total of $31.8 million primarily in construction and development related contractual obligations. Capital expenditures and contractual obligations exclude amounts related to unconsolidated JVs. See Note 4. Joint Ventures for additional information.
As of March 31, 2026 and December 31, 2025, we had various loans outstanding totaling $385.1 million and $396.0 million, respectively, with maturities from April 2027 through March 2064. As of March 31, 2026, the weighted average effective interest rate of total outstanding debt was 4.7%, of which 82.7% includes fixed or swapped interest rates, and the average remaining life was 19.7 years. As of March 31, 2026, the weighted average rate on our variable rate loans, excluding the swapped portion, was 5.9%. See Note 8. Debt, Net for additional information.
In 2018, the Pier Park Crossings JV entered into a $36.6 million loan, insured by HUD, as amended. As of March 31, 2026 and December 31, 2025, $33.5 million and $33.6 million, respectively, was outstanding on the PPC JV Loan. The loan bears interest at a rate of 3.1% and matures in June 2060. The loan includes a prepayment premium due to the lender of 2% - 7% for any additional principal that is prepaid through August 2031. The loan is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In 2020, a wholly-owned subsidiary of ours entered into a $15.3 million loan, as amended, which is guaranteed by us. As of March 31, 2026 and December 31, 2025, $1.1 million and $3.2 million, respectively, was outstanding on the Airport Hotel Loan. The loan bears interest at SOFR plus 2.1%, with a floor of 3.0% and matures in February 2030. The loan is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In 2020, the Pier Park Resort Hotel JV entered into a loan with an initial amount of $52.5 million up to a maximum of $60.0 million through additional earn-out requests. As of March 31, 2026 and December 31, 2025, $49.5 million and $49.8 million, respectively, was outstanding on the Pier Park Resort Hotel JV Loan. The loan matures in April 2027 and bears interest at a rate of SOFR plus 2.1%. The loan is secured by the real property and certain other Security Interests. In connection with the loan, as guarantors, we and our JV partner entered into a guarantee based on each partner’s ownership interest in favor of the lender, to guarantee the payment and performance of the borrower. As guarantor, our liability under the loan can be released upon reaching and maintaining certain debt service coverage. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants or warranties to be performed on the part of such guarantor. The Pier Park Resort Hotel JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to SOFR. The interest rate swap matures in April 2027 and fixed the variable rate on the notional amount of related debt, initially at $42.0 million, amortizing to $38.7 million at swap maturity, to a rate of 3.2%. See Note 5. Financial Instruments and Fair Value Measurements and Note 8. Debt, Net for additional information.
In 2020, a wholly-owned subsidiary of ours entered into a $16.8 million loan, which is guaranteed by us. As of March 31, 2026 and December 31, 2025, $14.8 million and $15.0 million, respectively, was outstanding on the Breakfast Point Hotel Loan. The loan matures in November 2042 and bears interest at a rate of 6.0% through November 2027 and the 1-year constant maturity Treasury rate plus 3.3% from December 2027 through November 2042, with a minimum rate of 6.0% throughout the term of the loan. The loan includes a prepayment premium due to the lender of 1% of the
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outstanding principal balance for any additional principal that is prepaid through November 2027. The loan is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In 2021, The Lodge 30A JV entered into a $15.0 million loan. As of March 31, 2026 and December 31, 2025, $13.4 million and $13.6 million, respectively, was outstanding on the Lodge 30A JV Loan. The loan bears interest at a rate of 3.8% and matures in January 2028. The loan is secured by the real property and certain other Security Interests. In connection with the loan, we, wholly-owned subsidiaries of ours and our JV partner entered into a joint and several payment and performance guarantee in favor of the lender. Upon reaching a certain debt service coverage ratio for a minimum of twenty-four months, our liability as guarantor can be reduced to 75% of the outstanding principal amount for a twelve-month period. The debt service coverage ratio will be tested annually thereafter and can 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 8. Debt, Net for additional information.
In 2021, a wholly-owned subsidiary of ours entered into a $28.0 million loan, which is guaranteed by us. As of March 31, 2026 and December 31, 2025, $26.7 million and $26.8 million, respectively, was outstanding on the Watersound Camp Creek Loan. The loan matures in December 2047 and bears interest at a rate of SOFR plus 2.1%, with a floor of 2.6%. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan will be reduced to 50% of the outstanding principal amount upon the project reaching and maintaining a trailing six months of operations with a certain debt service coverage ratio and reduced to 25% of the outstanding principal amount upon reaching and maintaining a trailing twelve months of operations with a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of the failure of 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 8. Debt, Net for additional information.
In 2021, a wholly-owned subsidiary of ours entered into a $12.0 million loan, which is guaranteed by us. As of March 31, 2026 and December 31, 2025, $2.4 million and $4.7 million, respectively, was outstanding on the Watersound Town Center Grocery Loan. The loan bears interest at SOFR plus 2.1%, with a floor of 2.3%, and matures in August 2031. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan is 25% of the outstanding principal amount. See Note 8. Debt, Net for additional information.
In 2021, a wholly-owned subsidiary of ours entered into a $21.2 million loan, which is guaranteed by us. As of March 31, 2026 and December 31, 2025, $18.8 million and $19.0 million, respectively, was outstanding on the Hotel Indigo Loan. The loan bears interest at a rate of SOFR plus 2.5%, with a floor of 2.5%. The loan matures in October 2028 and includes an option for an extension of the maturity date by sixty months, subject to certain conditions. The loan is secured by the leasehold property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In 2022, the Mexico Beach Crossings JV entered into a $43.5 million loan, insured by HUD. As of March 31, 2026 and December 31, 2025, $42.4 million and $42.5 million, respectively, was outstanding on the Mexico Beach Crossings JV Loan. The loan bears interest at a rate of 3.0% and matures in March 2064. The loan includes a prepayment premium due to the lender of 1% - 8% for any principal that is prepaid through March 2034. The loan is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In 2022, the Pier Park Crossings Phase II JV refinanced into a $22.9 million loan, insured by HUD. As of March 31, 2026 and December 31, 2025, $21.3 million and $21.4 million, respectively, was outstanding on the PPC II JV Loan. The PPC II JV Loan bears interest at a rate of 2.7% and matures in May 2057. The loan includes a prepayment premium due to the lender of 1% - 7% for any principal that is prepaid through May 2032. The loan is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In 2022, a wholly-owned subsidiary of ours entered into a $13.7 million loan, which is guaranteed by us. As of March 31, 2026 and December 31, 2025, $7.9 million and $11.2 million, respectively, was outstanding on the Topsail Hotel Loan. The loan bears interest at a rate of SOFR plus 2.1%, with a floor of 3.0% and matures in July 2027. The loan is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
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In 2022, a wholly-owned subsidiary of ours entered into a $37.0 million loan, which is guaranteed by us. As of March 31, 2026 and December 31, 2025, $32.2 million and $32.6 million, respectively, was outstanding on The Pearl Hotel Loan. The loan bears interest at a rate of 6.3% and matures in December 2032. The loan includes a prepayment fee due to the lender of 1% - 2% of the outstanding principal balance if the loan is refinanced with another financial institution through December 2027. The loan is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In 2023, the Watersound Origins Crossings JV refinanced into a $52.9 million loan, insured by HUD. As of March 31, 2026 and December 31, 2025, $51.2 million and $51.3 million, respectively, was outstanding on the Watersound Origins Crossings JV Loan. The loan bears interest at a rate of 5.0% and matures in April 2058. The loan includes a prepayment premium due to the lender of 1% - 8% for any principal that is prepaid through April 2033. The loan is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In February 2025, a wholly-owned subsidiary of ours refinanced into a $27.8 million loan. As of both March 31, 2026 and December 31, 2025, $27.6 million was outstanding on the North Bay Landing Loan. The loan bears interest at a rate of 5.9% and matures in March 2060. The loan includes a prepayment premium due to the lender of 1% - 9% for any principal that is prepaid through March 2035. The refinanced loan is insured by HUD and is secured by the real property and certain other Security Interests. See Note 8. Debt, Net for additional information.
In September 2025, the Pier Park North JV refinanced into a $40.0 million loan. As of March 31, 2026 and December 31, 2025, $39.8 million and $39.9 million, respectively, was outstanding on the PPN JV Loan. The loan bears interest at a rate of 6.1% and matures in October 2035. The loan may not be prepaid prior to October 2029. Commencing in October 2029 through May 2035, any principal prepaid is subject to a prepayment fee equal to the greater of (i) a prepayment ratio, as outlined in the loan agreement, or (ii) 1% of the amount prepaid. From June 2035 through maturity, the loan may be prepaid without a prepayment fee upon prior written notice. In connection with the loan, we entered into a limited guarantee in favor of the lender with respect to environmental indemnity matters and specified non-recourse carveouts outlined in the loan agreement. The loan is secured by a first lien on, and Security Interest in, a majority of the Pier Park North JV’s property. See Note 8. 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 $2.6 million as of both March 31, 2026 and December 31, 2025. Total outstanding CDD debt related to our land holdings was $9.0 million as of March 31, 2026, which is comprised of $7.4 million at the SouthWood community, $1.5 million at the existing Pier Park retail center and less than $0.1 million at the Wild Heron residential community. We pay interest on this total outstanding CDD debt.
As of March 31, 2026, our unconsolidated Latitude Margaritaville Watersound JV, Watersound Fountains Independent Living JV, Pier Park TPS JV, Pier Park RI JV, Busy Bee JV and Electric Cart Watersound JV had various loans outstanding, some of which we have entered into guarantees. See Note 4. Joint Ventures and Note 17. Commitments and Contingencies for additional information.
During the three months ended March 31, 2026 and 2025, we paid dividends of $0.16 and $0.14, respectively, per share on our common stock for a total of $9.2 million and $8.2 million, respectively.
During the three months ended March 31, 2026, we repurchased 76,137 shares of our common stock outstanding at an average repurchase price of $66.32, per share, related to the Stock Repurchase Program, for an aggregate purchase price of $5.0 million, excluding the excise tax on stock repurchases in excess of issuances. During the three months ended March 31, 2026, we also repurchased 4,835 shares of our common stock outstanding at an average repurchase price of $68.85, per share, for an aggregate purchase price of $0.3 million, excluding the excise tax on stock repurchases in excess of issuances, related to shares withheld from vested restricted stock awards to satisfy employees’ minimum statutory tax withholding requirements. During the three months ended March 31, 2025, we repurchased 123,614 shares
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of our common stock outstanding at an average repurchase price of $45.99, per share, related to the Stock Repurchase Program, for an aggregate purchase price of $5.7 million, excluding the excise tax on stock repurchases in excess of issuances. See Note 13. Stockholders’ Equity for additional information regarding the Stock Repurchase Program and issuance of common stock for employee compensation.
As part of a certain sale of forestry land in 2014, we generated significant tax gains. The installment note’s structure allowed us to defer the resulting federal and state tax liability of $45.6 million until 2029, the maturity date for the installment note. We have a deferred tax liability related to the gain in connection with the sale. At the maturity date of the installment note in 2029, the $200.0 million time deposit included in investments held by special purpose entities will be used to pay the $180.0 million of principal for the Senior Notes held by special purpose entity and the remaining $20.0 million will become available to us, which can be used to pay a portion of the tax liability. See Note 5. Financial Instruments and Fair Value Measurements for additional information.
As of March 31, 2026 and December 31, 2025, we were required to provide surety bonds that guarantee completion and maintenance of certain infrastructure in certain development projects and mitigation banks, as well as other financial guarantees of $35.8 million and $14.7 million, respectively, as well as standby letters of credit in the amount of $0.4 million as of both periods, which may potentially result in a liability to us if certain obligations are not met.
As of March 31, 2026, we had a $0.5 million revolving line of credit for credit card usage, maturing in December 2049. As of March 31, 2026, we did not have an outstanding principal balance on the line of credit.
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 insurance agencies for real estate transactions were $12.9 million and $8.0 million as of March 31, 2026 and December 31, 2025, respectively. These escrow funds are not available for regular operations.
Summary of Cash Flows
A summary of our cash flows from operating, investing and financing activities are as follows:
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
| | In millions | ||||
Net cash provided by operating activities | | $ | 42.2 | | $ | 29.0 |
Net cash used in investing activities | |
| (8.9) | |
| (6.6) |
Net cash used in financing activities | |
| (25.9) | |
| (17.1) |
Net increase in cash, cash equivalents and restricted cash | |
| 7.4 | |
| 5.3 |
Cash, cash equivalents and restricted cash at beginning of the period | |
| 136.5 | |
| 96.3 |
Cash, cash equivalents and restricted cash at end of the period | | $ | 143.9 | | $ | 101.6 |
Cash Flows from Operating Activities
Net cash provided by operating activities includes net income, adjustments for non-cash items, distribution of earnings from unconsolidated joint ventures, changes in operating assets and liabilities and expenditures related to assets planned to be sold. Adjustments for non-cash items primarily include depreciation, depletion and amortization, equity in income from unconsolidated joint ventures, deferred income tax and cost of real estate sold. Net cash provided by operations was $42.2 million during the three months ended March 31, 2026, as compared to $29.0 million during the same period in 2025. Net income was $13.3 million during the three months ended March 31, 2026, as compared to $16.7 million during the same period in 2025. The increase in net cash provided by operating activities was primarily due to the changes in expenditures for and acquisition of real estate to be sold, equity in income from unconsolidated
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joint ventures, deferred revenue and accounts payable and other liabilities, partially offset by the changes in net income, distribution of earnings from unconsolidated joint ventures, deferred income tax and other assets during the period.
Cash Flows from Investing Activities
Net cash used in investing activities primarily include capital expenditures for operating property and property and equipment used in our operations and capital contributions to unconsolidated joint ventures, partially offset by proceeds from the disposition of assets and maturities of assets held by SPEs. During the three months ended March 31, 2026, net cash used in investing activities was $8.9 million, which included capital expenditures for operating property and property and equipment of $7.5 million, primarily for our commercial and hospitality segments, and capital contributions to unconsolidated joint ventures of $1.8 million, partially offset by maturities of assets held by SPEs of $0.4 million. During the three months ended March 31, 2025, net cash used in investing activities was $6.6 million, which included capital expenditures for operating property and property and equipment of $5.6 million, primarily for our commercial and hospitality segments and capital contributions to unconsolidated joint ventures of $1.5 million, partially offset by maturities of assets held by SPEs of $0.4 million and proceeds from the disposition of assets of $0.1 million.
Cash Flows from Financing Activities
Net cash used in financing activities during the three months ended March 31, 2026 was $25.9 million, compared to $17.1 million during the same period in 2025. Net cash used in financing activities during the three months ended March 31, 2026, included principal payments for debt of $10.9 million, dividends paid of $0.16 per share on our common stock of $9.2 million, repurchase of 76,137 shares of our common stock outstanding of $5.2 million, including excise tax, payments for taxes withheld on vested restricted stock awards of $0.3 million, capital distributions to non-controlling interest of $0.2 million and principal payments for finance leases of $0.1 million. Net cash used in financing activities during the three months ended March 31, 2025, included principal payments for debt of $30.4 million primarily related to the refinance of the North Bay Landing Loan, dividends paid of $0.14 per share on our common stock of $8.2 million, repurchase of 123,614 shares of our common stock outstanding of $5.7 million, including excise tax, capital distributions to non-controlling interest of $0.3 million and debt issuance costs of $0.3 million. Net cash used in financing activities during the three months ended March 31, 2025, was partially offset by borrowings on debt of $27.8 million related to the refinance of the North Bay Landing Loan.
Contractual Obligations
There were no material changes outside the ordinary course of our business in our contractual obligations during the first quarter of 2026.
Forward-Looking Statements
This quarterly report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements include, among other things, information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, strategies, prospects and objectives. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar expressions concerning matters that are not historical facts.
We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors, including: our ability to successfully implement our strategic objectives; new or increased competition across our business units; any decline in general economic conditions, particularly in our primary markets; interest rate fluctuations; inflation; higher insurance costs and our ability to obtain adequate insurance coverage for our properties; financial institution disruptions; supply chain disruptions, including as a result of conflicts; geopolitical conflicts and political uncertainty and the corresponding impact on the global economy; the imposition of tariffs and uncertainty regarding trade policies; changes in consumer sentiment and confidence that may impact demand
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across our segments; our ability to successfully execute or integrate new business endeavors and acquisitions; our ability to yield anticipated returns from our developments and projects; our ability to cooperate effectively with new builder partners; our ability to effectively manage our real estate assets, as well as the ability for us or our JV partners to effectively manage the day-to-day activities of our JV projects; our ability to complete construction and development projects within expected timeframes; the interest of prospective guests in our hotels; reductions in travel and other risks inherent to the hospitality industry; the illiquidity of all real estate assets; financial risks, including risks relating to currency fluctuations, credit risks, and fluctuations in the market value of our investment portfolio; any potential negative impact of our longer-term property development strategy, including losses and negative cash flows for an extended period of time if we continue with the self-development of granted entitlements; our dependence on homebuilders; mix of sales from different communities and the corresponding impact on sales period over period; the financial condition of our commercial tenants; regulatory and insurance risks associated with a senior living facility; any reduction in the supply of mortgage loans or tightening of credit markets; our dependence on strong migration and population expansion in our regions of development, particularly Northwest Florida; our ability to fully recover from natural disasters and severe weather conditions; the actual or perceived threat of climate change; the seasonality of our business; our dependence on certain third party providers; the decreased ability of minority shareholders to influence corporate matters, due to concentrated ownership of largest shareholder; the impact of unfavorable legal proceedings or government investigations; the impact of complex and changing laws and regulations in the areas where we operate; changes in tax rates, the adoption of new U.S. tax legislation, and exposure to additional tax liabilities; new litigation; our ability to attract and retain qualified employees, particularly in our hospitality business; our ability to protect our information technology infrastructure and defend against cyber-attacks; increased media, political, and regulatory scrutiny negatively impacting our reputation; our ability to maintain adequate internal controls; risks associated with our financing arrangements, including our compliance with certain restrictions and limitations; our ability to pay our quarterly dividend and our ability to repurchase stock under our stock repurchase program; and the other risks and uncertainties discussed in “Risk Factors” beginning on page 7 of our most recent Annual Report on Form 10-K and from time to time in our subsequent filings with the SEC. 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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks primarily from interest rate risk fluctuations. We have investments in short-term U.S. Treasury Bills classified as cash equivalents that have fixed interest rates for which changes in interest rates generally affect the fair value of the investment, but not the earnings or cash flows. A hypothetical 100 basis point increase in interest rates would result in a decrease of less than $0.1 million in the market value of these investments as of March 31, 2026. Any realized gain or loss resulting from such interest rate changes would only occur if we sold the investments prior to maturity or if a decline in their value is determined to be related to credit loss.
We have historically been exposed, and in the future may again be exposed, to credit risk associated with investments classified as available-for-sale securities (“Securities”) and these instruments are subject to price fluctuations as a result of changes in the financial market’s assessment of issuer credit quality, increases in delinquency and default rates, changes in prevailing interest rates and other economic factors. A downgrade of the U.S. government’s credit rating may also decrease the value of Securities.
Some of our cash and cash equivalents are invested in money market instruments. Changes in interest rates related to these investments would not significantly impact our results of operations.
We are subject to interest rate risk on our variable-rate debt and utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on certain loans. We have entered into interest rate swap agreements designated as cash flow hedges to manage the interest rate risk associated with some of our variable rate debt, with changes in the fair value recorded to accumulated other comprehensive income. As of March 31, 2026, we had variable-rate debt outstanding totaling $106.4 million, of which $39.6 million was swapped to a fixed interest rate. As of March 31, 2026, the weighted average interest rate on our variable rate loans, excluding the swapped portion, based on SOFR was 5.9%. Based on the outstanding balance of these loans as of March 31, 2026, a hypothetical 100 basis point increase in the applicable rate would result in an increase to our annual interest expense of $0.7 million. See Note 5. Financial Instruments and Fair Value Measurements and Note 8. Debt, Net for additional information.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting. During the quarter ended March 31, 2026, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are subject to a variety of litigation, claims, other disputes and governmental proceedings that arise from time to time in the ordinary course of our business, none of which we believe will have a material adverse effect on our consolidated financial position, results of operations or liquidity. In addition, we are subject to environmental laws and regulations, which include obligations to remove or limit the effects on the environment of the disposal or release of certain wastes or substances at various sites, including sites which have been previously sold. See Note 17. Commitments and Contingencies, for additional information.
Item 1A. Risk Factors
A description of the risk factors associated with our business is contained in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to our Risk Factors as previously reported.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Our Board has approved the Stock Repurchase Program pursuant to which we are authorized to repurchase shares of our common stock. The program has no expiration date. As of March 31, 2026, we had a total authority of $54.9 million available for repurchase of shares of our common stock outstanding. We may repurchase our common stock in open market purchases from time to time, in privately negotiated transactions or otherwise, pursuant to Rule 10b-18 under the Exchange Act. The timing and amount of any additional stock to be repurchased will depend upon a variety of factors. Repurchases may be commenced or suspended at any time or from time to time without prior notice. The program will continue until otherwise modified or terminated by our Board at any time in its sole discretion.
The following table provides information on our repurchase of common stock during the three months ended March 31, 2026:
| | | | | | | | | | | |
| | | | | | | Total Number of Shares | | Maximum Dollar Value of |
| |
| | | | | | | Purchased as Part of | | Stock that May Yet Be |
| |
| | Total Number of | | Average Price | | Publicly Announced | | Purchased Under the |
| ||
Period | | Shares Purchased (a) | | Paid per Share (a) (b) | | Plans or Programs (c) | | Plans or Programs (c) |
| ||
| | | | | | | | | In Millions |
| |
January 1-31, 2026 |
| — | | $ | — |
| — | | $ | 60.0 | |
February 1-28, 2026 |
| 4,057 | |
| 70.22 |
| — | |
| 60.0 | |
March 1-31, 2026 |
| 76,915 | |
| 66.28 |
| 76,137 | |
| 54.9 | |
Total |
| 80,972 | | $ | 66.47 |
| 76,137 | | $ | 54.9 | |
| (a) | Includes 4,835 shares repurchased from vested restricted stock awards to satisfy employees’ minimum statutory tax withholding requirements. |
| (b) | Excludes excise tax. |
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| (c) | Our Board has adopted a Stock Repurchase Program. In February 2025, the Board increased the total authorization under the Stock Repurchase Program to $100.0 million. |
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three months ended March 31, 2026,
Item 6. Exhibits
Index to Exhibits
| | |
Exhibit | | |
Number | | Description |
3.1 | | Restated and Amended Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010). |
3.2 | | Second Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on November 15, 2022). |
*10.1 | | 2025 Performance and Equity Incentive Plan Form of Restricted Stock Award. |
*31.1 | | Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. |
*31.2 | | Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. |
**32.1 | | Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
**32.2 | | Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
*101.INS | | Inline XBRL Instance Document. |
*101.SCH | | Inline XBRL Taxonomy Extension Schema Document. |
*101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
*101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
*101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. |
*101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | |
| | THE ST. JOE COMPANY |
| | (Registrant) |
| | |
| | |
Date: | April 29, 2026 | /s/ Jorge L. Gonzalez |
| | Jorge L. Gonzalez |
| | President, Chief Executive Officer and Chairman of the Board |
| | (Principal Executive Officer) |
| | |
| | |
Date: | April 29, 2026 | /s/ Marek Bakun |
| | Marek Bakun |
| | Executive Vice President and Chief Financial Officer |
| | (Principal Financial Officer and Principal Accounting Officer) |
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