Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Feb. 25, 2019	Jun. 30, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	ST JOE CO
Trading Symbol	JOE
Entity Central Index Key	0000745308
Current Fiscal Year End Date	--12-31
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 351.9
Entity Common Stock, Shares Outstanding		60,200,534

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Investment in real estate, net	$ 350,994	$ 332,624
Cash and cash equivalents	195,155	192,083
Investments - debt securities	8,958	76,245
Investments - equity securities	36,132
Investments - equity securities		35,023
Restricted investments	3,432	4,469
Income tax receivable	3,914	8,371
Claim settlement receivable	2,679	5,280
Other assets	50,283	47,133
Property and equipment, net of accumulated depreciation of $60,271 and $60,697 at December 31, 2018 and December 31, 2017, respectively	12,031	11,776
Investments held by special purpose entities	207,384	207,989
Total assets	870,962	920,993
Liabilities:
Debt, net	69,374	55,630
Other liabilities	47,387	47,259
Deferred tax liabilities, net	44,315	48,983
Senior Notes held by special purpose entity	176,775	176,537
Total liabilities	337,851	328,409
Equity:
Common stock, no par value; 180,000,000 shares authorized; 60,672,034 and 65,897,866 issued and outstanding at December 31, 2018 and December 31, 2017, respectively	331,395	424,694
Retained earnings	187,450	154,324
Accumulated other comprehensive loss	(674)	(1,461)
Total stockholders' equity	518,171	577,557
Non-controlling interest	14,940	15,027
Total equity	533,111	592,584
Total liabilities and equity	$ 870,962	$ 920,993

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED BALANCE SHEETS
Property and equipment, Accumulated depreciation	$ 60,271	$ 60,697
Common stock, par value	$ 0	$ 0
Common stock, shares authorized (in shares)	180,000,000	180,000,000
Common stock, issued (in shares)	60,672,034	65,897,866
Common stock, outstanding (in shares)	60,672,034	65,897,866

CONSOLIDATED BALANCE SHEETS - VIEs - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Investment in real estate	$ 350,994	$ 332,624
Cash and cash equivalents	195,155	192,083
Other assets	50,283	47,133
Investments held by special purpose entities	207,384	207,989
Total assets	870,962	920,993
LIABILITIES
Debt, net	69,374	55,630
Other liabilities	47,387	47,259
Senior Notes held by special purpose entity	176,775	176,537
Total liabilities	337,851	328,409
Variable Interest Entities
ASSETS
Investment in real estate	70,124	58,441
Cash and cash equivalents	2,113	5,084
Other assets	16,165	11,889
Investments held by special purpose entities	207,384	207,989
Total assets	295,786	283,403
LIABILITIES
Debt, net	60,262	46,783
Other liabilities	5,773	4,357
Senior Notes held by special purpose entity	176,775	176,537
Total liabilities	$ 242,810	$ 227,677

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue:
Leasing revenue	$ 13,727	$ 12,940	$ 12,230
Total revenue	110,276	100,038	96,862
Expenses:
Cost of leasing revenue	4,700	4,548	4,487
Other operating and corporate expenses	20,557	20,382	23,019
Depreciation, depletion and amortization	8,998	8,885	8,571
Total expenses	80,872	96,461	93,784
Operating income	29,404	3,577	3,078
Other income (expense):
Investment income, net	12,150	35,410	17,776
Interest expense	(11,840)	(12,145)	(12,295)
Claim settlement			12,548
Sale of vacation rental management, net		9,800
Other income, net	1,152	4,713	1,504
Total other income, net	1,462	37,778	19,533
Income before income taxes	30,866	41,355	22,611
Income tax benefit (expense)	736	17,881	(7,147)
Net income	31,602	59,236	15,464
Net loss attributable to non-controlling interest	767	342	431
Net income attributable to the Company	$ 32,369	$ 59,578	$ 15,895
Basic and Diluted
Weighted average shares outstanding (in shares)	62,725,954	70,548,411	74,457,541
Net income per share attributable to the Company (in dollars per share)	$ 0.52	$ 0.84	$ 0.21
Real estate
Revenue:
Revenue	$ 52,183	$ 27,717	$ 23,397
Expenses:
Cost of revenue	13,442	15,370	8,036
Hospitality
Revenue:
Revenue	38,736	53,217	55,644
Expenses:
Cost of revenue	32,465	46,467	48,850
Timber
Revenue:
Revenue	5,630	6,164	5,591
Expenses:
Cost of revenue	$ 710	$ 809	$ 821

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Net income:

$ 31,602

$ 59,236

$ 15,464

Other comprehensive income (loss):

Reclassification of net realized loss (gain) included in earnings

1,061

(10,750)

(795)

Reclassification into retained earnings

^[1]

932

Reclassification of other-than-temporary impairment loss included in earnings

2,330

2,288

Total before income taxes

1,472

(6,456)

5,196

Income tax (expense) benefit

^[2]

(685)

2,488

(2,003)

Total other comprehensive income (loss), net of tax

787

(3,968)

3,193

Total comprehensive income, net of tax

32,389

55,268

18,657

Unrestricted available-for-sale, Debt securities

Other comprehensive income (loss):

Net unrealized (loss) gain on investments

(2,845)

Unrestricted available-for-sale, Debt and equity securities

Other comprehensive income (loss):

Net unrealized (loss) gain on investments

2,015

5,997

Restricted

Other comprehensive income (loss):

Net unrealized (loss) gain on investments

$ (6)

$ (9)

$ (6)

[1]	The reclassification into retained earnings relates to the adoption of ASU 2016-01. The new guidance was effective January 1, 2018, and required equity investments to be measured at fair value with changes in fair value recognized in results of operations rather than the consolidated statements of comprehensive income. See Note 2. Summary of Significant Accounting Policies.
[2]	Income tax expense for the year ended December 31, 2018 includes $0.3 million of income tax expense related to the adoption of ASU 2018-02. The new guidance was effective January 1, 2018, and allowed a reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the Tax Act. See Note 2. Summary of Significant Accounting Policies.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Treasury Stock	Non-controlling Interest	Total
Beginning Balance (in shares) at Dec. 31, 2015	75,329,557
Beginning Balance at Dec. 31, 2015	$ 892,387	$ 78,851	$ (686)	$ (305,289)	$ 8,184
Increase (Decrease) in Stockholders' Equity
Capital contribution from non-controlling interest					10,353
Capital distribution to non-controlling interest					(600)
Issuance of common stock for director's fees (in shares)	8,919
Issuance of common stock for director's fees	$ 131
Reduction in excess tax benefits on stock options	$ (369)
Repurchase of common shares (in shares)	(995,650)
Repurchase of common shares				(14,820)
Retirement of treasury stock	$ (320,109)			320,109
Other comprehensive income			3,193
Net income		15,895			(431)	$ 15,464
Ending Balance (in shares) at Dec. 31, 2016	74,342,826
Ending Balance at Dec. 31, 2016	$ 572,040	94,746	2,507		17,506
Increase (Decrease) in Stockholders' Equity
Capital contribution from non-controlling interest					193
Capital distribution to non-controlling interest					(2,330)
Issuance of common stock for director's fees (in shares)	5,334
Issuance of common stock for director's fees	$ 76
Repurchase of common shares (in shares)	(8,450,294)
Repurchase of common shares				(147,422)
Retirement of treasury stock	$ (147,422)			147,422
Other comprehensive income			(3,968)
Net income		59,578			(342)	$ 59,236
Ending Balance (in shares) at Dec. 31, 2017	65,897,866					65,897,866
Ending Balance at Dec. 31, 2017	$ 424,694	154,324	(1,461)		15,027	$ 592,584
Increase (Decrease) in Stockholders' Equity
Allocation of ownership interest in Pier Park Crossings JV	(490)				490
Additional ownership interest acquired in Artisan Park, LLC	$ 297				(297)
Capital contribution from non-controlling interest					887
Capital distribution to non-controlling interest					(400)
Issuance of common stock for director's fees (in shares)	2,778
Issuance of common stock for director's fees	$ 71
Issuance of common stock for officer compensation, net of tax withholding	$ 192
Issuance of common stock for officer compensation, net of tax withholding (in shares)	9,956
Repurchase of common shares (in shares)	(5,238,566)
Repurchase of common shares				(93,369)
Retirement of treasury stock	$ (93,369)			$ 93,369
Adoption of ASU 2018-02 Income Statement - Reporting Comprehensive Income		313	(313)
Other comprehensive income			404
Net income		32,369			(767)	$ 31,602
Ending Balance (in shares) at Dec. 31, 2018	60,672,034					60,672,034
Ending Balance at Dec. 31, 2018	$ 331,395	187,450	(674)		$ 14,940	$ 533,111
Increase (Decrease) in Stockholders' Equity
Adoption of ASU \| ASU 2014-09		1,140
Adoption of ASU \| ASU 2016-01		$ (696)	$ 696

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net income	$ 31,602	$ 59,236	$ 15,464
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	8,998	8,885	8,571
Stock based compensation	263	76	131
Loss (gain) on sale of investments	973
Loss (gain) on sale of investments		(10,750)	(795)
Unrealized loss on investments, net	3,035
Other-than-temporary impairment loss	2,330
Other-than-temporary impairment loss		2,288
Deferred income tax (benefit) expense	(4,804)	(17,375)	29,627
Impairment loss on investment in real estate	99	714	357
Loss on disposal of real estate and property and equipment	5,223	887	9
Gain on sale of vacation rental management		(9,800)
Cost of real estate sold	12,235	13,727	6,489
Expenditures for and acquisition of real estate to be sold	(19,819)	(8,475)	(8,335)
Accretion income and other	(1,919)	(3,159)	(2,792)
Changes in operating assets and liabilities:
Claim settlement receivable	2,741	2,741	(7,804)
Other assets	(2,758)	(8,398)	(3,094)
Other liabilities	(1,236)	4,734	(2,384)
Income taxes receivable	4,457	18,300	(24,782)
Net cash provided by operating activities	41,420	53,631	10,662
Cash flows from investing activities:
Expenditures for operating property	(22,762)	(28,400)	(3,226)
Expenditures for property and equipment	(2,615)	(3,005)	(1,297)
Proceeds from the disposition of assets	5,000	2,518	3
Purchases of investments - debt securities	(6,995)	(94,791)	(322,004)
Purchases of investments - equity securities	(15,105)	(21,153)	(35,783)
Maturities of investments - debt securities	10,000	13,988	185,000
Sales of investments - debt securities	64,706	152,985	197,548
Sales of investments - equity securities	11,051	21,522
Maturities of assets held by special purpose entities	785	787	787
Net cash provided by investing activities	44,065	44,451	21,028
Cash flows from financing activities:
Capital contribution from non-controlling interest	887	193	10,353
Capital distribution to non-controlling interest	(400)	(2,330)	(600)
Capital contribution to unconsolidated affiliate	(1,105)
Repurchase of common shares	(93,369)	(147,422)	(14,820)
Borrowings on debt	16,644	1,624
Principal payments for debt	(1,362)	(1,290)	(497)
Debt issuance costs	(1,158)	(20)
Net cash used in financing activities	(79,863)	(149,245)	(5,564)
Net increase (decrease) in cash, cash equivalents and restricted cash	5,622	(51,163)	26,126
Cash, cash equivalents and restricted cash at beginning of the year	192,451	243,614	217,488
Cash, cash equivalents and restricted cash at end of the year	$ 198,073	$ 192,451	$ 243,614

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash, cash equivalents and restricted cash:
Cash and cash equivalents	$ 195,155	$ 192,083	$ 241,111
Restricted cash included in other assets	2,918	368	2,503
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	198,073	192,451	243,614
Cash paid during the period for:
Interest	11,852	11,823	11,811
Income taxes	2,005	5,430	2,302
Non-cash financing and investment activities:
Increase in notes receivable - PCR Note		(5,000)
(Decrease) increase in Community Development District debt	(467)	174	955
(Decrease) increase in expenditures for operating properties and property and equipment financed through accounts payable	$ (1,273)	$ 2,525	$ 139

Nature of Operations	12 Months Ended
Nature of Operations	Dec. 31, 2018
Nature of Operations
Nature of Operations	1. Nature of Operations The St. Joe Company, together with its consolidated subsidiaries, (“St. Joe” or the “Company”) is a Florida real estate development, asset management and operating company with real estate assets and operations currently concentrated in Northwest Florida. Approximately 90% of the Company’s real estate land holdings are located within fifteen miles of the Gulf of Mexico. The Company conducts primarily all of its business in the following four reportable operating segments: 1) residential real estate, 2) hospitality, 3) commercial leasing and sales and 4) forestry. Commencing in the fourth quarter of 2018, our previously titled “resorts and leisure” segment was retitled “hospitality,” with no effect on the consolidated balance sheets, statements of income, statements of comprehensive income or statements of cash flows for the periods presented. In 2016, the Company’s reportable operating segments were 1) residential real estate, 2) commercial real estate, 3) resorts and leisure 4) leasing operations and 5) forestry. Commencing in the fourth quarter of 2017, the Company’s commercial real estate segment and leasing operations segment were combined into a new segment titled “commercial leasing and sales”. This change is consistent with the Company’s belief that the decision making and management of the assets in these segments are being made as one group. Prior to the fourth quarter of 2017, commercial real estate and leasing operations were treated as individual operating segments. All 2016 segment information has been reclassified to conform to the 2018 and 2017 presentation. The change in reporting segments has no effect on the consolidated balance sheets, statements of income, statements of comprehensive income or statements of cash flows for the periods presented. See Note 21. Segment Information.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Significant Accounting Policies

Significant Accounting Policies

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all of its majority-owned and controlled subsidiaries and variable interest entities where the Company deems itself the primary beneficiary. Investments in JVs and limited partnerships in which the Company is not the primary beneficiary are accounted for by the equity method. All significant intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on the Company’s previously reported total assets and liabilities, stockholders’ equity or net income.

A variable interest entity (“VIE”) is an entity in which a controlling financial interest may be achieved through arrangements that do not involve voting interests. A VIE is required to be consolidated by its primary beneficiary, which is the entity that possesses the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to the entity. The Company consolidates VIEs when it is the primary beneficiary of the VIE, including real estate JVs determined to be VIEs. See Note 11. Real Estate Joint Ventures.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions including investment in real estate, real estate impairment assessments, investments, other-than-temporary impairment assessments, retained interest investments, accruals and deferred income taxes. Actual results could differ from those estimates.

Investment in Real Estate

The Company capitalizes costs directly associated with development and construction of identified real estate projects. The Company also capitalizes those indirect costs that relate to the projects under development or construction. These indirect costs include construction and development administration, legal fees, capitalized interest, and project administration to the extent that such costs are related to a specific project. Interest is capitalized (up to total interest expense) based on the amount of underlying borrowings and real estate taxes are capitalized on real estate projects under development.

Real estate development costs also include land and common development costs (such as roads, utilities and amenities), capitalized property taxes, capitalized interest and certain indirect costs. A portion of real estate development costs and estimates for costs to complete are allocated to each unit based on the relative sales value of each unit as compared to the estimated sales value of the total project. These estimates are reevaluated at least annually and more frequently if warranted by market conditions, changes in the project’s scope or other factors, with any adjustments being allocated prospectively to the remaining property or units available for sale.

The capitalization period relating to direct and indirect project costs is the period in which activities necessary to ready a property for its intended use are in progress. The period begins when such activities commence, typically when the Company begins site work for land already owned, and ends when the asset is substantially complete and ready for its intended use. Determination of when construction of a project is substantially complete and ready for its intended use requires judgment. The Company determines when the capitalization period begins and ends through communication with project and other managers responsible for the tracking and oversight of individual projects. In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed. If the Company determines not to complete a project, any previously capitalized costs are expensed in the period in which the determination is made and recovery is not deemed probable.

Investment in real estate is carried at cost, net of depreciation and timber depletion, unless circumstances indicate that the carrying value of the assets may not be recoverable. If the Company determines that an impairment exists due to the inability to recover an asset’s carrying value, an impairment charge is recorded to the extent that the carrying value exceeds estimated fair value. If such assets were held for sale, the provision for loss would be recorded to the extent that the carrying value exceeds estimated fair value less costs to sell.

Depreciation is computed on the straight-line method over the estimated economic lives of the assets, as follows:


		Estimated Useful
		Life (in years)
Land		N/A
Land improvements		15 - 20
Buildings		20-40
Building improvements		5-25
Timber		N/A

Building improvements are amortized on a straight-line basis over the shorter of the minimum lease term or the estimated economic life of the assets.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank demand accounts, money market instruments, short term commercial paper and short term U.S. Treasury securities having original maturities at acquisition date, of ninety days or less.

Investments

Investments – debt securities and restricted investments consist of available-for-sale securities recorded at fair value, which is established through external pricing services that use quoted market prices and pricing data from recently executed market transactions. Unrealized gains and temporary losses on investments, net of tax, are recorded in other comprehensive income (loss). Realized gains and losses on investments are determined using the specific identification method. The amortized cost of debt securities are adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method. Such amortization and accretion is included in investment income, net.

The Company evaluates investments classified as available-for-sale with an unrealized loss to determine if they are other-than-temporarily impaired. This evaluation is based on various factors, including the financial condition, business prospects, industry and creditworthiness of the issuer, severity and length of time the securities were in a loss position, the Company’s ability and intent to hold investments until the unrealized loss is recovered or until maturity and the amount of the unrealized loss. If a decline in fair value is considered other-than-temporary, the decline is then bifurcated into its credit and non-credit related components. The amount of the credit-related component is recognized in earnings, and the amount of the non-credit related component is recognized in other comprehensive income (loss), unless the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security prior to its anticipated recovery, in which case the decline in fair value is recognized entirely in earnings.

Due to the adoption of ASU 2016-01 on January 1, 2018, investments - equity securities with a readily determinable fair value are recorded at fair value, which is established through external pricing services that use quoted market prices and pricing data from recently executed market transactions. Unrealized holding gains and losses are recognized in investment income, net in the consolidated statements of income. Prior to 2018, unrealized gains and losses related to these investments were recognized in other comprehensive income (loss).

Restricted Investments

The Company’s restricted investments are related to the Company’s deferred compensation plan. As part of the Pension Plan termination in 2014, the Company directed the Pension Plan to transfer the Pension Plan’s surplus assets into a suspense account in the Company’s 401(k) plan. The Company has retained the risks and rewards of ownership of these assets; therefore, the assets held in the suspense account are included in the Company’s consolidated balance sheets until they are allocated to current or future 401(k) plan participants for up to the next three years. See Note 18. Employee Benefit Plan.

Fair Value Measurements

Fair value is an exit price, representing the amount that would be received by selling an asset or paying to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1. Quoted prices in active markets for identical assets or liabilities;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, such as internally-developed valuation models, which require the reporting entity to develop its own assumptions.

Comprehensive Income

The Company’s comprehensive income includes unrealized gains and losses on available-for-sale securities and restricted investments, which may be temporary.

Receivables

The Company’s receivables primarily include hurricane insurance proceeds receivable, receivables related to certain homesite sales, claim settlement receivable, homebuilder notes and Pier Park CDD notes. The Company evaluates the carrying value of receivables at each reporting date. Receivable balances are adjusted to net realizable value based upon a review of entity specific facts or when terms are modified. Judgments are made with respect to the collectability of accounts based on historical experience and current economic trends. Actual losses could differ from those estimates. As of December 31, 2018 and 2017, all amounts were deemed collectable.

Long-Lived Assets

Long-lived assets include the Company’s investments in operating and development property and property and equipment. The Company reviews its long-lived assets for impairment quarterly to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. As part of the Company’s review for impairment of its long-lived assets, the Company reviews the long-lived asset’s carrying value, current period actual financial results as compared to prior period and forecasted results contained in the Company’s business plan and any other events or changes in circumstances to identify whether an indicator of potential impairment may exist. Some of the events or changes in circumstances that are considered by the Company as indicators of potential impairment include:

a prolonged decrease in the fair value or demand for the Company’s properties;

a change in the expected use or development plans for the Company’s properties;

a material change in strategy that would affect the fair value of the Company’s properties;

continuing operating or cash flow loss for an operating property;

an accumulation of costs in excess of the projected costs for development or operating property; and

any other adverse change that may affect the fair value of the property.

The Company uses varying methods to determine if an impairment exists, such as (i) considering indicators of potential impairment, (ii) analyzing expected future cash flows and comparing the expected future undiscounted cash flows of the property to its carrying value or (iii) determining market resale values.

For projects under development, an estimate of undiscounted future cash flows is performed using estimated future expenditures necessary to develop and maintain the existing project and using management’s best estimates about future sales prices and holding periods. The projection of undiscounted cash flows requires that management develop various assumptions including:

the projected pace of sales of homesites based on estimated market conditions and the Company’s development plans;

estimated pricing and projected price appreciation over time;

the amount and trajectory of price appreciation over the estimated selling period;

the length of the estimated development and selling periods, which can differ depending on the size of the development and the number of phases to be developed;

the amount of remaining development costs, including the extent of infrastructure or amenities included in such development costs;

holding costs to be incurred over the selling period;

for bulk land sales of undeveloped and developed parcels future pricing is based upon estimated developed homesite pricing less estimated development costs and estimated developer profit;

for commercial development property, future pricing is based on sales of comparable property in similar markets; and

whether liquidity is available to fund continued development.

For operating properties, an estimate of undiscounted cash flows also requires management to make assumptions about the use and disposition of such properties. These assumptions include:

for investments in inns and rental condominium units, average occupancy and room rates, revenue from food and beverage and other amenity operations, operating expenses and capital expenditures, and eventual disposition of such properties as private residence vacation units or condominiums, based on current prices for similar units appreciated to the expected sale date;

for investments in commercial or retail property, future occupancy and rental rates and the amount of proceeds to be realized upon eventual disposition of such property at a terminal capitalization rate; and,

for investments in club assets, memberships dues, future rounds and greens fees, operating expenses and capital expenditures, and the amount of proceeds to be realized upon eventual disposition of such properties at a multiple of terminal year cash flows.

Homesites substantially completed and ready for sale are measured at the lower of carrying value or fair value less costs to sell. Management identifies homesites as being substantially completed and ready for sale when the properties are being actively marketed with intent to sell such properties in the near term and under current market conditions. Other homesites, which management does not intend to sell in the near term under current market conditions, are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of such property.

Other properties that management does not intend to sell in the near term under current market conditions and has the ability to hold are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of the property. The results of impairment analyses for development and operating properties are particularly dependent on the estimated holding and selling period for each asset group.

If a property is considered impaired, the impairment charge is determined by the amount the property’s carrying value exceeds its fair value. The Company uses varying methods to determine fair value, such as (i) analyzing expected future cash flows, (ii) determining resale values in a given market (iii) applying a capitalization rate to net operating income using prevailing rates in a given market or (iv) applying a multiplier to revenue using prevailing rates in a given market. The fair value of a property may be derived either from discounting projected cash flows at an appropriate discount rate, through appraisals of the underlying property, or a combination thereof.

The Company classifies the assets and liabilities of a long-lived asset as held-for-sale when management approves and commits to a formal plan of sale and it is probable that a sale will be completed. The carrying value of the assets held-for-sale are then recorded at the lower of their carrying value or fair value less estimated costs to sell.

Timber Inventory

The Company estimates its standing timber inventory on an annual basis utilizing a process referred to as a “timber cruise.” Specifically, the Company conducts field measurements of the number of trees, tree height and tree diameter on a sample area equal to approximately 20% of the Company’s timber holdings each year. Inventory data is used to calculate volumes and products along with growth projections to maintain accurate data. Industry practices are used for modeling, including growth projections, volume and product classifications. A depletion rate is established annually by dividing merchantable inventory cost by standing merchantable inventory volume.

Property and Equipment, net

Property and equipment is stated at cost, net of accumulated depreciation. Major improvements are capitalized while maintenance and repairs are expensed in the period the cost is incurred. Depreciation is computed using the straight-line method over the estimated economic lives of various assets, as follows:


		Estimated Useful
		Life (in years)
Railroad and equipment		15-30
Furniture and fixtures		5-10
Machinery and equipment		3-10
Office equipment		5-10
Autos and trucks		5

Income Taxes

The Company’s provision for income taxes includes the current tax owed on the current period earnings, as well as a deferred provision, which reflects the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Changes in existing tax laws and rates, their related interpretations, as well as the uncertainty generated by the prospect of tax legislation in the future may affect the amounts of deferred tax liabilities or the realizability of deferred tax assets.

For tax positions the Company has taken or expects to take in a tax return, the Company applies a more likely than not assessment (i.e., there is a greater than 50 percent chance) about whether the tax position will be sustained upon examination by the appropriate tax authority with full knowledge of all relevant information. Amounts recorded for uncertain tax positions are periodically assessed, including the evaluation of new facts and circumstances, to ensure sustainability of the position. The Company records interest related to unrecognized tax benefits, if any, in interest expense and penalties in other income, net.

Concentration of Risks and Uncertainties

The Company’s real estate investments are concentrated in Northwest Florida in a number of specific development projects. Uncertain economic conditions could have an adverse impact on the Company’s real estate values and could cause the Company to sell assets at depressed values in order to pay ongoing obligations.

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, investments, other receivables, investments held by special purpose entity or entities (“SPE”), and investments in retained interests. The Company deposits and invests cash with local and regional financial institutions and as of December 31, 2018 these balances exceed the amount of FDIC insurance provided on such deposits by $15.9 million. In addition, as of December 31, 2018, the Company had $6.9 million invested in U.S. Treasury securities, $2.0 million invested in two issuers of corporate debt securities that are non-investment grade, $36.1 million invested in five issuers of preferred stock that are non-investment grade and one issuer of preferred stock that is investment grade, as well as investments of $107.6 million in short term commercial paper from eleven issuers and short term U.S. Treasury securities of $30.0 million.

Earnings Per Share

Basic and diluted earnings per share are calculated by dividing net income attributable to the Company by the average number of common shares outstanding for the period. For the three years ended December 31, 2018, basic and diluted average shares outstanding were the same. There were no outstanding common stock equivalents as of December 31, 2018 or 2017. Non-vested restricted stock is included in outstanding shares at the time of grant.

Revenue and Revenue Recognition

Revenue consists primarily of real estate sales, hospitality operations, leasing operations, and timber sales. Taxes collected from customers and remitted to governmental authorities (e.g., sales tax) are excluded from revenue, costs and expenses.

In accordance with Topic 606, revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by applying the following steps; (1) identifying the contract(s) with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when (or as) the Company satisfies a performance obligation. The adoption of Topic 606 impacted the Company’s residential real estate segment as detailed below and had a de minimis impact on the hospitality segment, but did not impact the commercial leasing and sales or forestry segments. Lease related revenue is excluded from Topic 606. The following summary details the Company’s revenue and the related timing of revenue recognition by segment.

Real Estate Revenue

Revenue from real estate sales, including sales of homesites, commercial properties, operating properties and rural or timberland, is recognized at the point in time when a sale is closed and title and control have been transferred to the buyer. If a performance obligation is not yet complete when title transfers to the buyer, the revenue associated with the incomplete performance obligation is deferred until completed.

Residential real estate revenue includes the sale of developed homesites; the sale of parcels of entitled, undeveloped land; a homesite residual on homebuilder sales that provides the Company a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold; the sale of tap and impact fee credits; marketing fees and other fees on certain transactions.

Effective January 1, 2018, with the adoption of Topic 606, estimated homesite residuals and certain estimated fees are recognized as revenue at the point in time of sale to homebuilders, subject to constraints, and any change in material circumstances from the estimated amounts are updated at each reporting period. The variable consideration for homesite residuals and certain estimated fees are based on historical experience and are recognized as revenue when it can be reasonably estimated and only to the extent it is probable that a significant reversal in the estimated amount of cumulative revenue will not occur when uncertainties are resolved. For the year ended December 31, 2018, real estate revenue includes $1.0 million of estimated homesite residuals and $1.1 million of certain estimated fees related to homebuilder homesite sales. Prior to 2018, these homesite residuals and fees were recognized in revenue when consideration was received by the Company in periods subsequent to the initial recognition of revenue for the sale of the homesite.

Hospitality Revenue

The Company’s hospitality segment generates revenue from the WaterColor Inn and WaterSound Inn, lodging rentals, management of The Pearl Hotel, membership sales, membership reservations, restaurants, golf courses, beach clubs, marina operations and other related resort activities. Hospitality revenue is generally recognized at the point in time services are provided and represent a single performance obligation with a fixed transaction price. Hospitality revenue recognized over time includes non-refundable membership initiation fees and management fees.

WaterColor Inn, WaterSound Inn, Lodging and Other Management Services - WaterColor Inn, WaterSound Inn and lodging generate revenue from (1) the WaterColor Inn, WaterSound Inn and other management services, (2) management of The Pearl Hotel, (3) lodging and (4) restaurants. The WaterColor Inn and WaterSound Inn generate revenue from service and daily lodging fees, recognized at the point in time services are provided. Revenue generated from the Company’s management services of The Pearl Hotel includes a monthly management fee, fifty percent of certain resort fees and a percentage of The Pearl Hotel’s gross operating profit, which is recognized over time as time elapses and the Company’s performance obligations are met. As discussed further in Note 8. Sale of Vacation Rental Management, the Company sold its short term vacation rental management business in December 2017. Prior to the sale of the short term vacation rental management business in December 2017, the vacation rental management business generated revenue from the rental of private homes owned by third parties and other services, which included the entire lodging fee collected from the customer, including the homeowner’s portion. A percentage of the fee was remitted to the homeowner and presented in the cost of hospitality revenue. Following the December 2017 sale, the Company no longer manages third party vacation rentals, but continues to manage rental properties the Company owns. The Company’s restaurants generate revenue from food and beverage sales, which are recognized at the point of sale.

Clubs - Club operations include the Company’s golf courses, beach club and facilities that generate revenue from membership sales, membership reservations, daily play at the golf courses, merchandise sales and food and beverage sales. Daily play at the golf courses, merchandise sales and food and beverages sales are recognized at the point of sale. Club membership revenue consists of monthly dues, which are recognized monthly at the point in time as access is provided for the period, membership reservations that are recognized at the point in time when certain performance obligations are met and non-refundable initiation fees that are deferred and recognized ratably over time, which is the estimated membership period.

Leasing Revenue

Leasing revenue is excluded from the adoption of Topic 606 and consists of long term rental revenue from retail, office and commercial property, cell towers and other assets, which is recognized as earned, using the straight-line method over the life of each lease. Certain leases provide for tenant occupancy during periods for which no rent is due or where minimum rent payments change during the lease term. Accordingly, a receivable or liability is recorded representing the difference between the straight-line rent and the rent that is contractually due from the tenant. Leasing revenue includes properties located in the Company’s Beckrich Office Park, consolidated Pier Park North JV and Windmark JV, as well as the Company’s industrial park, VentureCrossings and other properties.

Leasing revenue within the forestry segment consists primarily of hunting leases, which is recognized as income over the term of each lease. The Company’s marinas generate revenue from boat slip rentals recognized over the term of the lease.

Minimum future base rental revenue on non-cancelable leases for the next five years are:



2019	$	10,743
2020		10,214
2021		9,527
2022		9,001
2023		7,127
	$	46,612

Forestry Product Revenue

Revenue from the sale of the Company’s forestry products is primarily from open market sales of timber on site without the associated delivery costs and is derived from either pay-as-cut sales contracts or timber bid sales.

Under a pay-as-cut sales contract, the risk of loss and title to the specified timber transfers to the buyer when cut by the buyer, and the buyer or some other third party is responsible for all logging and hauling costs, if any. Revenue is recognized at the point in time when risk of loss and title to the specified timber are transferred.

Timber bid sales are agreements in which the buyer agrees to purchase and harvest specified timber (i.e., mature pulpwood and/or sawlogs) on a tract of land over the term of the contract. Unlike a pay-as-cut sales contract, risk of loss and title to the trees transfer to the buyer when the contract is signed and revenue is recognized at that point in time accordingly. The buyer pays the full purchase price when the contract is signed and the Company does not have any additional performance obligations.

The following represents revenue disaggregated by segment, good or service and timing:


	Year Ended December 31, 2018
						Commercial
		Residential				Leasing
		Real Estate		Hospitality		and Sales		Forestry		Other		Total
Revenue by Major Good/Service:
Real estate revenue	$	42,761	$	-	$	4,801	$	1,807	$	2,814	$	52,183
Hospitality revenue		-		38,736		-		-		-		38,736
Leasing revenue		-		1,237		11,684		806		-		13,727
Timber revenue		108		-		-		5,522		-		5,630
Total revenue	$	42,869	$	39,973	$	16,485	$	8,135	$	2,814	$	110,276

Timing of Revenue Recognition:
Recognized at a point in time	$	42,869	$	36,700	$	4,801	$	7,329	$	2,814	$	94,513
Recognized over time		-		2,036		-		-		-		2,036
Over lease term		-		1,237		11,684		806		-		13,727
Total revenue	$	42,869	$	39,973	$	16,485	$	8,135	$	2,814	$	110,276

Recently Adopted Accounting Pronouncements

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09 that established the principles used to recognize revenue for all entities. In March 2016, the FASB issued ASU 2016‑08 that further clarified the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016‑10 that clarified guidance on identifying performance obligations and to improve the operability and understandability of licensing implementation guidance. In May 2016, the FASB issued ASU 2016‑11 that rescinded SEC guidance pursuant to announcements at the March 3, 2016 Emerging Issues Task Force Meeting. In May 2016, the FASB issued ASU 2016‑12 that provided narrow-scope improvements and practical expedients to Revenue from Contracts with Customers. In December 2016, the FASB issued ASU 2016‑20 that included technical corrections and improvements to Topic 606. The Company adopted the new guidance as of January 1, 2018 and elected to implement Topic 606 using the modified retrospective application, with the cumulative effect recorded as an adjustment to beginning retained earnings. The impact of adopting this guidance resulted in an adjustment to increase retained earnings by $1.5 million, offset by a decrease of $0.4 million related to tax effects, for a net effect of $1.1 million, an increase to accounts receivable, net by $2.1 million and a decrease to investment in real estate, net by $0.6 million as of January 1, 2018, related to the recognition of estimated homesite residuals and certain fees for homesites sold to homebuilders, where the homes had not yet been sold to homeowners as of December 31, 2017.

Financial Instruments

In January 2016, the FASB issued ASU 2016‑01 that amended existing guidance to address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in results of operations. Additionally, certain disclosure requirements and other aspects of accounting for financial instruments changed as a result of the new guidance. In February 2018, the FASB issued ASU 2018‑03 that included technical corrections and improvements to ASU 2016‑01. The Company adopted ASU 2016‑01 and ASU 2018‑03 simultaneously, effective January 1, 2018, and implemented it using a cumulative-effect adjustment between accumulated other comprehensive loss and retained earnings of $0.9 million, offset by an adjustment of $0.2 million related to tax effects, for a net effect of $0.7 million as of the date of adoption. As a result of the adoption of this guidance the change in the fair value of the Company’s equity investments is recognized in the consolidated statements of income rather than the consolidated statements of comprehensive income.

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016‑15, which amended the classification of certain cash receipts and cash payments, to reduce the diversity in how these cash receipts and cash payments are presented and classified in the statement of cash flows. The Company adopted the new guidance as of January 1, 2018. As this guidance only affects the classification within the statement of cash flows, it did not have any impact on the Company’s cash flows.

Statement of Cash Flows - Restricted Cash

In November 2016, the FASB issued ASU 2016‑18, which required that the statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted the new guidance as of January 1, 2018, using a retrospective transition method to each period presented. The adoption of this guidance did not have a material impact on the Company’s cash flows.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Loss

In February 2018, the FASB issued ASU 2018‑02, which allowed a reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the Tax Act. The ASU also required additional disclosures that include a description of the accounting policy for releasing income tax effects from accumulated other comprehensive loss, whether the Company elected to reclassify the effects from the Tax Act and information about other tax effects related to the Tax Act that are reclassified from accumulated other comprehensive loss to retained earnings, if any. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years and should be applied either in the period of adoption or retrospectively to each period in which the effect of the Tax Act is recognized. Early adoption is permitted, including adoption in an interim period. The Company elected to early adopt the new guidance as of January 1, 2018, and implemented it using a cumulative-effect adjustment to retained earnings from accumulated other comprehensive loss of $0.3 million related to unrealized gains and losses on available-for-sale securities as of the date of adoption. The new guidance also required the Company to disclose its policy on accounting for income tax effects in accumulated other comprehensive loss. In general, the Company applies the aggregate portfolio method with respect to available-for-sale debt securities.

Recently Issued Accounting Pronouncements

Leases

In February 2016, the FASB issued ASU 2016‑02 that amends the existing accounting standards for lease accounting, including requiring lessees to recognize both finance and operating leases with terms of more than 12 months on the balance sheet. The accounting applied by a lessor is largely unchanged from existing guidance. This amendment also requires certain quantitative and qualitative disclosures about leasing arrangements. In January 2018, the FASB issued ASU 2018‑01, which provides an optional transition practical expedient to not evaluate under the new lease standard, existing or expired land easements that were not previously accounted for as leases. In July 2018, the FASB issued ASU 2018-10 that provides clarifications and improvements to ASU 2016-02. In July 2018, the FASB issued ASU 2018-11 that provides entities with an additional and optional transition method to apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. In December 2018, the FASB issued ASU 2018-20 that provides an accounting policy election for certain narrow-scope improvements for lessors. The new guidance will be effective for annual and interim periods beginning after December 15, 2018. Accordingly, the standard is effective for the Company beginning January 1, 2019. During the Company’s evaluation of ASU 2016-02, as amended, the following practical expedients and accounting policies with respect to Topic 842 have been elected and/or adopted effective January 1, 2019:

The Company, as lessee and as lessor, will not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases or (iii) initial direct costs for any expired or existing leases.

The Company, as lessee, will not apply the recognition requirements of Topic 842 to short-term (twelve months or less) leases. Instead, the Company, as lessee, will recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

The Company, as lessor, will not separate nonlease components from lease components and, instead, will account for each separate lease component and the nonlease components associated with that lease as a single component if the nonlease components otherwise would be accounted for under ASC Topic 606. The primary reason for this election is related to instances where common area maintenance is, or may be, a component of base rent within a lease agreement.

The Company has elected to implement ASC 842 retrospectively at the beginning of the period of adoption, January 1, 2019, through a cumulative-effect adjustment. The Company estimates an adjustment of less than $0.5 million to increase right-of use assets and lease liabilities for operating leases for which the Company is the lessee. The Company does not anticipate any adjustment related to the leases for which the Company is the lessor.

Financial Instruments - Credit Losses

In June 2016, the FASB issued ASU 2016‑13 that requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected and requires that credit losses from available-for-sale debt securities be presented as an allowance for credit loss. In November 2018, the FASB issued ASU 2018-19, which clarifies that impairment of receivables from operating leases should be accounted for using lease guidance. This new guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted for annual and interim periods beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its financial condition, results of operations and cash flows.

Investment in Real Estate

12 Months Ended

Dec. 31, 2018

Investment in Real Estate

Investment in Real Estate

3. Investment in Real Estate

Real estate by property type and segment includes the following:


	December 31,		December 31,
	2018		2017
Development property:
Residential real estate	$	105,323	$	100,279
Hospitality		3,726		4,131
Commercial leasing and sales		73,128		53,896
Forestry		2,144		2,488
Corporate		2,497		2,571
Total development property		186,818		163,365

Operating property:
Residential real estate		7,344		7,344
Hospitality		93,046		103,616
Commercial leasing and sales		111,471		110,491
Forestry		19,765		19,510
Other		50		50
Total operating property		231,676		241,011
Less: Accumulated depreciation		67,500		71,752
Total operating property, net		164,176		169,259
Investment in real estate, net	$	350,994	$	332,624

Development property consists of land the Company is developing or intends to develop for sale or future operations and includes direct costs associated with the land, development and construction costs and indirect costs. Residential real estate includes residential communities. Hospitality development property consists of the improvement and expansion of existing beach club property, land and construction costs related to two gulf-front vacation rental homes and development costs and improvements for other property. Commercial leasing and sales development property primarily consists of land and development costs for commercial and industrial uses, including the Pier Park Crossings JV, land holdings near the Northwest Florida Beaches International Airport and Port of Port St. Joe. Development property in the hospitality and commercial leasing and sales segments will be reclassified as operating property as it is placed into service.

Operating property includes the following components:


		December 31,		December 31,
		2018		2017
Land and land improvements	$	75,663	$	77,788
Buildings and building improvements		144,730		152,272
Timber		11,283		10,951
		231,676		241,011
Less: Accumulated depreciation		67,500		71,752
Total operating property, net	$	164,176	$	169,259

Operating property includes property that the Company uses for operations and activities. Residential real estate operating property consists primarily of residential utility assets. The hospitality operating property includes the WaterColor Inn, WaterSound Inn, golf courses, a beach club, marinas and certain rental properties. Commercial leasing and sales operating property includes property developed or purchased by the Company and used for retail and commercial rental purposes, including property in the Pier Park North JV, VentureCrossings and Beckrich Office Park as well as other properties. Forestry operating property includes the Company’s timberlands. Operating property may be sold in the future as part of the Company’s principal real estate business.

Depreciation expense related to real estate investments was $6.0 million, $6.2 million and $6.0 million in 2018, 2017 and 2016, respectively. Depletion and amortization expense related to the Company’s timber operations was $0.5 million in each of 2018, 2017 and 2016.

Investments

12 Months Ended

Dec. 31, 2018

Investments

Investments

4. Investments

Available-For-Sale Investments

Investments classified as available-for-sale securities were as follows:


	December 31, 2018
			Gross Unrealized		Gross Unrealized
	Amortized Cost		Gains		(Losses)		Fair Value
Investments - debt securities:
U.S. Treasury securities	$	6,936	$	1	$	—	$	6,937
Corporate debt securities		2,908		—		(887)		2,021
		9,844		1		(887)		8,958
Restricted investments:
Short-term bond		3,274		—		(9)		3,265
Money market fund		167		—		—		167
		3,441		—		(9)		3,432
	$	13,285	$	1	$	(896)	$	12,390


	December 31, 2017
			Gross Unrealized		Gross Unrealized
	Amortized Cost		Gains		(Losses)		Fair Value
Investments - debt securities:
U.S. Treasury securities	$	9,892	$	—	$	(22)	$	9,870
Corporate debt securities		67,781		411		(1,817)		66,375
		77,673		411		(1,839)		76,245

Investments - equity securities:
Preferred stock		35,955		423		(1,355)		35,023

Restricted investments:
Short-term bond		4,264		—		(13)		4,251
Money market fund		218		—		—		218
		4,482		—		(13)		4,469
	$	118,110	$	834	$	(3,207)	$	115,737

During 2018, net realized losses from the sale of available-for-sale securities were $1.0 million, proceeds from the sale of available-for-sale securities were $64.7 million, proceeds from the maturity of available-for-sale securities were $10.0 million and purchases of available-for-sale securities were $7.0 million.

During 2017, net realized gains from the sale of available-for-sale securities were $10.7 million, proceeds from the sale of available-for-sale securities were $174.5 million, proceeds from the maturity of available-for-sale securities were $14.0 million and purchases of available-for-sale securities were $115.9 million.

The following table provides the available-for-sale investments unrealized loss position and related fair values:


	December 31, 2018
	Less Than 12 Months				12 Months or Greater
			Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses
Investments - debt securities:
Corporate debt securities	$	—	$	—	$	1,843	$	887
Restricted investments:
Short-term bond		—		—		3,265		9
	$	—	$	—	$	5,108	$	896


	December 31, 2017
	Less Than 12 Months				12 Months or Greater
			Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses
Investments - debt securities:
U.S. Treasury securities	$	9,870	$	22	$	—	$	—
Corporate debt securities		15,515		691		29,595		1,126
Investments - equity securities:
Preferred stock		11,263		1,337		1,986		18
Restricted investments:
Short-term bond		—		—		4,251		13
	$	36,648	$	2,050	$	35,832	$	1,157

As of December 31, 2018, the Company had unrealized losses of $0.9 million related to corporate debt securities and restricted investments. The Company had unrealized losses of $3.2 million as of December 31, 2017, related to U.S. Treasury securities, corporate debt securities, preferred stock investments and restricted investments. As of December 31, 2018 and 2017, the Company did not intend to sell the investments with a material unrealized loss and it is more likely than not that the Company will not be required to sell any of these securities prior to their anticipated recovery, which could be maturity. During 2018, the Company determined that unrealized losses related to its corporate debt securities were other-than-temporary and recorded an impairment of $2.3 million for credit-related loss in investment income, net in the Company’s consolidated statements of income. During 2017, the Company determined that unrealized losses related to its corporate debt securities and preferred stock were other-than-temporary and recorded an impairment of $2.3 million for credit-related loss in investment income, net in the Company’s consolidated statements of income.

The amortized cost and estimated fair value of investments – debt securities and restricted investments classified as available-for-sale, by contractual maturity are shown in the following table. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations.


	December 31, 2018
	Amortized Cost		Fair Value
Due in one year or less	$	9,844	$	8,958
Restricted investments		3,441		3,432
	$	13,285	$	12,390

Investments – Equity Securities

At December 31, 2018, investments – equity securities included $36.1 million of preferred stock investments recorded at fair value. During 2018, the Company had unrealized losses on investments – equity securities of $3.0 million, which were included within investment income, net on the consolidated statements of income due to the adoption of ASU 2016-01 on January 1, 2018. Prior to 2018, unrealized gains and losses related to these investments were recognized in other comprehensive income (loss). As of January 1, 2018, the outstanding unrealized losses of $0.9 million were reclassified to retained earnings with the adoption of ASU 2016-01.

Investment Management Agreement

Mr. Bruce R. Berkowitz is the Chairman of the Company’s Board. He is the Manager of, and controls entities that own and control, Fairholme Holdings, which wholly owns FCM and FTC. Mr. Berkowitz is the Chief Investment Officer of FCM, and the Chief Executive Officer and a director of FTC. Since April 2013, FCM has provided investment advisory services to the Company directly, or more recently, as the sub-advisor to FTC. Neither FCM nor FTC receives any compensation for services as the Company’s investment advisor. As of December 31, 2018, clients of FCM and FTC beneficially owned approximately 41.18% of the Company’s common stock and Fairholme, including Mr. Berkowitz and clients of FCM and FTC, collectively beneficially owned 43.76% of the Company’s common stock. FCM and its client, The Fairholme Fund, a series of the Fairholme Funds, Inc., may be deemed affiliates of the Company.

Both Mr. Cesar Alvarez and Mr. Howard Frank are members of the Company’s Board and also serve as directors of Fairholme Funds, Inc. Mr. Alvarez is also a director of FTC.

Pursuant to the terms of the Investment Management Agreement, as amended, with the Company, FTC agreed to supervise and direct the investment accounts established by the Company in accordance with the investment guidelines and restrictions approved by the Investment Committee of the Company’s Board. The investment guidelines are set forth in the Investment Management Agreement and require that, as of the date of any investment: (i) no more than 15% of the investment account may be invested in securities of any one issuer (excluding the U.S. Government), (ii) any investment in any one issuer (excluding the U.S. Government) that exceeds 10% of the investment account, but not 15%, requires the consent of at least two members of the Investment Committee, (iii) 25% of the investment account must be held in cash and cash equivalents, (iv) the investment account is permitted to be invested in common equity securities; however, common stock investments shall be limited to exchange-traded common equities, shall not exceed 5% ownership of a single issuer and, cumulatively, the common stock held in the Company’s investment portfolio shall not exceed $100.0 million market value and (v) the aggregate market value of investments in common stock, preferred stock or other equity investments cannot exceed 25% of the market value of the Company’s investment portfolio at the time of purchase.

Financial Instruments and Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Financial Instruments and Fair Value Measurements

Financial Instruments and Fair Value Measurements

5. Financial Instruments and Fair Value Measurements

Fair Value Measurements

The financial instruments measured at fair value on a recurring basis are as follows:


	December 31, 2018
							Total Fair
	Level 1		Level 2		Level 3		Value
Cash equivalents:
Money market funds	$	43,346	$	—	$	—	$	43,346
Commercial paper		107,586		—		—		107,586
U.S. Treasury securities		29,998		—		—		29,998
		180,930		—		—		180,930

Investments - debt securities:
U.S. Treasury securities		6,937		—		—		6,937
Corporate debt securities		—		2,021		—		2,021
		6,937		2,021		—		8,958
Investments - equity securities:
Preferred stock		10,470		25,662		—		36,132

Restricted investments:
Short-term bond		3,265		—		—		3,265
Money market fund		167		—		—		167
		3,432		—		—		3,432
	$	201,769	$	27,683	$	—	$	229,452


	December 31, 2017
							Total Fair
	Level 1		Level 2		Level 3		Value
Cash equivalents:
Money market funds	$	10,505	$	—	$	—	$	10,505
Commercial paper		159,970		—		—		159,970
		170,475		—		—		170,475

Investments - debt securities:
U.S. Treasury securities		9,870		—		—		9,870
Corporate debt securities		—		66,375		—		66,375
		9,870		66,375		—		76,245
Investments - equity securities:
Preferred stock		10,717		24,306		—		35,023

Restricted investments:
Short-term bond		4,251		—		—		4,251
Money market fund		218		—		—		218
		4,469		—		—		4,469
	$	195,531	$	90,681	$	—	$	286,212

Money market funds, commercial paper, U.S. Treasury securities, certain preferred stock investments and short-term bonds are measured based on quoted market prices in an active market and categorized within Level 1 of the fair value hierarchy. Money market funds, commercial paper and short term U.S. Treasury securities with a maturity date of 90 days or less from the date of purchase are classified as cash equivalents in the Company’s consolidated balance sheets.

The Company’s corporate debt securities and certain preferred stock investments are not traded on a nationally recognized exchange, but are traded in the U.S. over-the-counter market where there is less trading activity and the investments are measured primarily using pricing data from external pricing services that report prices observed for recently executed market transactions. For these reasons, the Company has determined that corporate debt securities and certain preferred stock investments are categorized as Level 2 financial instruments since their fair values were determined from market inputs in an inactive market.

Restricted investments include certain of the surplus assets that were transferred from the Company’s Pension Plan to a suspense account in the Company’s 401(k) plan in December 2014. The Company has retained the risks and rewards of ownership of these assets; therefore, the assets held in the suspense account are included in the Company’s consolidated financial statements until they are allocated to participants. As of December 31, 2018 and 2017, the assets held in the suspense account were invested in Vanguard Money Market Funds, which invest in short-term, high quality securities or short-term U.S. government securities and seek to provide current income and preserve shareholders’ principal investment and a Vanguard Short-Term Bond Fund, which invests in money market instruments and short-term high quality bonds, including asset-backed, government, and investment grade corporate securities with an expected maturity of 0‑3 years. The Vanguard Money Market Funds and Vanguard Short-Term Bond Fund are measured based on quoted market prices in an active market and categorized within Level 1 of the fair value hierarchy. The Company’s Retirement Plan Investment Committee is responsible for investing decisions and allocation decisions of the suspense account. Refer to Note 18. Employee Benefit Plan.

Long-lived Assets

The Company reviews its long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The fair value of long-lived assets required to be assessed for impairment is determined on a nonrecurring basis using Level 3 inputs in the fair value hierarchy. During 2018 and 2017, the Company recorded impairment charges of $0.1 million and $0.7 million, respectively, included in cost of hospitality revenue, related to non-strategic hospitality assets. During 2016 the Company recorded an impairment charge of $0.4 million, included in cost of real estate revenue, related to a commercial leasing and sales property.

Fair Value of Financial Instruments

The Company uses the following methods and assumptions in estimating fair value for financial instruments:

The fair value of the Investments held by SPE - time deposit is based on the present value of future cash flows at the current market rate.

The fair value of the Investments held by SPE - U.S. Treasury securities are measured based on quoted market prices in an active market.

The fair value of the Senior Notes held by SPE is based on the present value of future cash flows at the current market rate.

The carrying amount and fair value, measured on a nonrecurring basis, of the Company’s financial instruments were as follows:


	December 31, 2018					December 31, 2017
	Carrying					Carrying
	value		Fair value		Level	value		Fair value		Level
Assets
Investments held by SPEs:
Time deposit	$	200,000	$	200,000	3	$	200,000	$	200,000	3
U.S. Treasury securities and cash	$	7,384	$	7,092	1	$	7,989	$	7,797	1
Liabilities
Senior Notes held by SPE	$	176,775	$	193,293	3	$	176,537	$	198,530	3

Investments and Senior Notes Held by Special Purpose Entities

In connection with a real estate sale in 2014, the Company received consideration including the $200.0 million fifteen-year installment Timber Note issued by Panama City Timber Finance Company, LLC. The Company contributed the Timber Note and assigned its rights as a beneficiary under a letter of credit to Northwest Florida Timber Finance, LLC. Northwest Florida Timber Finance, LLC monetized the Timber Note by issuing $180.0 million aggregate principal amount of its 4.8% Senior Secured Notes due in 2029 at an issue price of 98.5% of face value to third party investors. The investments held by Panama City Timber Finance Company, LLC as of December 31, 2018, consist of a $200.0 million time deposit that, subsequent to April 2, 2014, pays interest at 4.0% and matures in March 2029, U.S. Treasuries of $7.0 million and cash of $0.4 million. The Senior Notes held by Northwest Florida Timber Finance, LLC as of December 31, 2018, consist of $176.8 million, net of the $3.2 million discount and debt issuance costs. Panama City Timber Finance Company, LLC and Northwest Florida Timber Finance, LLC are VIEs, which the Company consolidates as the primary beneficiary of each entity.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Claim Settlement Receivable	12 Months Ended
Claim Settlement Receivable	Dec. 31, 2018
Claim Settlement Receivable
Claim Settlement Receivable	6. Claim Settlement Receivable On March 24, 2016, the Company entered into a full and final release agreement with BP p.l.c. and various related entities pursuant to which the Company, on its own behalf and on behalf of certain wholly owned subsidiaries, released any and all claims related to the Deepwater Horizon oil spill, which occurred on April 20, 2010. In exchange for this release, the Company will receive $13.2 million, from BP Exploration & Production Inc., a large portion of which will reimburse the Company for expenses incurred. In both October 2018 and 2017, the Company received a payment of $2.7 million and in October 2016 the Company received a payment of $5.0 million. The remaining settlement amount of $2.7 million is due in October 2019. The Company also received a guaranty of payments from BP North America Corporation Inc. As of March 24, 2016, the Company recorded the claim settlement receivable using an imputed interest rate of 3.0%, based on its best estimate of the prevailing market rates for the source of credit, resulting in an initial present value of $12.5 million and a discount of $0.7 million. The claim settlement of $12.5 million was recognized as other income in the Company’s consolidated statements of income for the year ended December 31, 2016. The discount is being accreted over the term of the receivable using the effective interest method. Interest income for the years ended December 31, 2018 and 2017 and the period from March 24, 2016 to December 31, 2016 was $0.1 million, $0.2 million and $0.3 million, respectively.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

Hurricane Michael	12 Months Ended
Hurricane Michael	Dec. 31, 2018
Hurricane Michael
Hurricane Michael	7. Hurricane Michael On October 10, 2018, Hurricane Michael made landfall in the Florida Panhandle, which resulted in widespread damage to the area. The majority of the Company’s properties incurred minimal or no damage; however the Company’s Bay Point Marina in Bay County and Port St. Joe Marina in Gulf County, as well as certain timber and commercial leasing assets were impacted. The marinas suffered significant damage requiring long-term restoration and will remain closed during the reconstruction of significant portions of these assets, which is currently underway. The Company maintains property and business interruption insurance, subject to certain deductibles, and is currently assessing claims under such policies; however, the timing and amount of insurance proceeds are uncertain and may not be sufficient to cover all losses. Timing differences are likely to exist between the impairment losses, capital expenditures made to repair or restore properties and recognition and receipt of insurance proceeds reflected in the Company’s financial statements. GAAP guidance provides that property damaged by a natural disaster be evaluated for impairment loss in the period the loss occurs, recording an insurance receivable for the lesser of the expected net insurance recovery or the net book value of damaged assets that are planned to be replaced. Insurance recoveries for business interruption, clean-up and demolition costs, post-event costs or property damage in excess of net book value will be recognized in income in the period received or when all contingencies associated with the recoveries are resolved and the insurance companies have committed to a recovery amount. The impairment loss represents the Company’s estimate of property damage. The Company is continuing to make a full assessment of the extent of the impact. During 2018, the Company recorded a loss on disposal of assets of $7.3 million related to the net book value of the marinas and certain forestry and commercial leasing assets. As of December 31, 2018, the Company has recognized $7.2 million of insurance proceeds, of which $6.7 million was included in accounts receivable, net and the Company believes is probable of receipt. The loss on disposal of assets and insurance proceeds were recorded in other income, net on the consolidated statements of income. The insurance proceeds receivable are included in other assets on the consolidated balance sheets. The Company’s timber assets are self-insured and an initial assessment of timber operations revealed an approximate 3% loss of total timber assets, primarily located in eastern Bay County and Gulf County. Approximately 234,000 tons, of timber were affected and is being salvaged or will be lost. During 2018, the Company recorded timber loss expense of $0.3 million included in other income, net on the consolidated statements of income. The majority of the Company’s other timberlands have little or no damage. The Company has incurred costs of $1.0 million during 2018 for additional hurricane expense items such as clean-up costs, landscape repairs, demolition costs, food spoilage, damaged inventory and temporary housing for employees included in other income, net on the consolidated statements of income. No insurance recoveries have been recorded for these costs, however some of these costs may be covered by business interruption or property insurance. Costs incurred due to business interruption, primarily at the marinas are currently being evaluated. The Company does not expect revenue at these locations until the properties have been rebuilt, but will incur costs for employee retention and property maintenance. As of December 31, 2018, no insurance proceeds have been recorded related to business interruption insurance. The Company expects that its results of operations related to the marinas and timber assets will be impacted in the near term. Subsequent to December 31, 2018 and through February 25, 2019, the Company has received $6.1 million of the $6.7 million insurance proceeds receivable from its insurance carriers for property damage.

Other Assets

12 Months Ended

Dec. 31, 2018

Other Assets

Other Assets

9. Other Assets

Other assets consist of the following:


	December 31,		December 31,
	2018		2017
Accounts receivable, net	$	14,061	$	8,460
Homesite sales receivable		2,977		—
Notes receivable		2,265		9,522
Prepaid expenses		6,751		6,625
Straight line rent		3,581		3,804
Other assets		6,174		4,637
Retained interest investments		11,536		11,147
Accrued interest receivable for Senior Notes held by SPE		2,938		2,938
Total other assets	$	50,283	$	47,133

Accounts Receivable, Net

As of December 31, 2018, accounts receivable, net includes $6.7 million of insurance proceeds receivable related to Hurricane Michael that the Company believes are probable of receipt. See Note 7. Hurricane Michael for additional information.

Homesite Sales Receivable

Effective January 1, 2018, with the adoption of Topic 606, homesite sales receivable from contracts with customers include estimated homesite residuals and certain estimated fees that are recognized as revenue at the time of sale to homebuilders, subject to constraints. Any change in circumstances from the estimated amounts will be updated at each reporting period. The receivable will be collected as the homebuilders build the homes and sell to retail consumers, which can occur over multiple years. See Note 2. Summary of Significant Accounting Policies for additional information. The following table presents the changes in homesite sales receivable during 2018:


				Increases Due To
		Balance		Revenue Recognized		Decreases Due to		Balance
		January 1, 2018		for Lots Sold		Amounts Received		December 31, 2018
Homesite sales receivable	$	2,585	$	2,085	$	(1,693)	$	2,977

Notes Receivable

Notes receivable consist of the following:


	December 31,		December 31,
	2018		2017
PCR Note, secured by certain assets, 10% interest rate, principal payments due beginning September 2018 per agreed upon schedule, and any remaining amount outstanding is due by December 2020, paid in full February 2018	$	—	$	5,000
Pier Park Community Development District notes, non-interest bearing, due September 2022		803		1,527
Interest bearing homebuilder note, secured by the real estate sold — 5.5% interest rate, principal payment of $0.1 million due September 2018 and any remaining amount outstanding is due by September 2019		749		904
Interest bearing homebuilder note, secured by the real estate sold — 5.5% interest rate, principal payment of $0.1 million due June 2018 and any remaining amount outstanding is due by June 2019		422		857
Interest bearing homebuilder note, secured by the real estate sold — 5.5% interest rate, principal payment of $0.1 million due November 2018 and any remaining amount outstanding is due by November 2019, paid in full December 2018		—		1,060
Interest bearing homebuilder note, secured by the real estate sold — 6.3% interest rate, principal payment of less than $0.1 million due March 2019 and any remaining amount outstanding is due by March 2020		150		—
Various mortgage notes, secured by certain real estate, bearing interest at various rates		141		174
Total notes receivable	$	2,265	$	9,522

The Company evaluates the carrying value of the notes receivable and the need for an allowance for doubtful notes receivable at each reporting date. As of December 31, 2018 and 2017, there was no allowance for doubtful notes receivable.

Retained Interest Investments

The Company has a beneficial interest in certain bankruptcy-remote qualified SPEs used in the installment sale monetization of certain sales of timberlands in 2007 and 2008. The SPEs’ assets are not available to satisfy the Company’s liabilities or obligations and the liabilities of the SPEs are not the Company’s liabilities or obligations. Therefore, the SPEs’ assets and liabilities are not consolidated in the Company’s consolidated financial statements as of December 31, 2018 and 2017. The Company’s continuing involvement with the SPEs is the receipt of the net interest payments and the remaining principal of approximately $16.9 million to be received at the end of the installment notes’ fifteen year maturity period, in 2022 through 2024. The Company has a beneficial or retained interest investment related to these SPEs of $11.5 million and $11.1 million as of December 31, 2018 and 2017, respectively, recorded in other assets on the Company’s consolidated balance sheets.

Property and Equipment, Net

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment, Net

Property and Equipment, Net

10. Property and Equipment, Net

Property and equipment, net consists of the following:


	December 31,		December 31,
	2018		2017
Railroad and equipment	$	33,626	$	33,626
Furniture and fixtures		22,438		22,552
Machinery and equipment		8,964		9,468
Office equipment		5,237		5,322
Autos and trucks		988		1,012
		71,253		71,980
Less: Accumulated depreciation		60,271		60,697
		10,982		11,283
Construction in progress		1,049		493
Total property and equipment, net	$	12,031	$	11,776

Depreciation expense on property and equipment was $2.4 million, $1.9 million and $2.1 million in 2018, 2017 and 2016, respectively.

Real Estate Joint Ventures	12 Months Ended
Real Estate Joint Ventures	Dec. 31, 2018
Real Estate Joint Ventures
Real Estate Joint Ventures	11. Real Estate Joint Ventures The Company enters into real estate JVs, from time to time, for the purpose of developing real estate in which the Company may or may not have a controlling financial interest. GAAP requires consolidation of VIEs in which an enterprise has a controlling financial interest and is the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company examines specific criteria and uses judgment when determining whether the Company is the primary beneficiary and must consolidate a VIE. The Company continues to assess whether it is the primary beneficiary on an ongoing basis. Consolidated Real Estate Joint Ventures In April 2017, the Company entered into a JV agreement to develop, manage and lease apartments in Panama City Beach, Florida. The JV parties are working together to develop and construct a 240 unit apartment community. The community will be located on land in the Pier Park area that was contributed to the JV by the Company. As of December 31, 2018 and 2017, the Company owned a 75.0% equity interest in the consolidated JV. The Company’s partners are responsible for the day-to-day activities of the JV. However, the Company has significant involvement in the design of the development and approves all major decisions, including project development, annual budgets and financing. The Company determined Pier Park Crossings JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2018 and 2017. In December 2016, the Company sold all of its interest in the Windmark Beach project to Windmark JV. As of December 31, 2018 and 2017, the Company owned a 49.0% equity interest in Windmark JV. A wholly owned subsidiary of the Company is the managing member of Windmark JV and runs its day-to-day operations. Windmark JV owns and its members make major decisions related to the management and development of the WindMark Beach project. The Company determined Windmark JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2018 and 2017. During 2012, the Company entered into a JV agreement with a partner to develop a retail center at Pier Park North. As of December 31, 2018 and 2017, the Company owned a 60.0% equity interest in the consolidated JV. The Company’s partner is responsible for the day-to-day activities of the JV. However, the Company has significant involvement in the design of the development and approves all major decisions, including project development, annual budgets and financing. The Company determined the Pier Park North JV is a VIE and that the Company is the VIE’s primary beneficiary as of December 31, 2018 and 2017. As of December 31, 2017, the Company was the primary beneficiary of Artisan Park, L.L.C. and entitled to 74.0% of the profit or loss of this VIE. The Company is responsible for the day-to-day activities of Artisan Park L.L.C. Effective January 1, 2018, the Company acquired 100.0% ownership interest of Artisan Park, L.L.C. Unconsolidated Joint Ventures In April 2018, the Company entered into a JV agreement to develop and operate a 124 room hotel in Panama City Beach, Florida. The hotel will be located on land in the Pier Park area that the Company contributed to the JV on January 14, 2019. As of December 31, 2018, the Company owned a 50.0% equity interest in the JV. The Company’s partners are responsible for the day-to-day activities of the JV. The Company has determined that Pier Park TPS, LL is a VIE, but that the Company is not the primary beneficiary since it does not have the power to direct the activities that most significantly impact the economic performance of the JV. The Company’s investment in Pier Park TPS, LLC is accounted for using the equity method. As of December 31, 2018, the investment in the unconsolidated JV was $1.1 million. For the year ended December 31, 2018, the Company did not recognize any income or loss on this investment. Through November 2018, the Company was a partner in ALP and beneficially owned 23.9% of ALP’s outstanding beneficial interest units, for which the Company had no basis. The JV was entered into to develop and sell certain mixed use residential and commercial projects. In November 2018, the Company received a final distribution of $2.2 million, which is recorded in other income, net on the consolidated statements of income.

Debt

12 Months Ended

Dec. 31, 2018

Debt

Debt

12. Debt

Debt consists of the following:


	December 31, 2018						December 31, 2017
			Unamortized						Unamortized
			Discount and						Discount and
			Debt Issuance						Debt Issuance
	Principal		Costs		Net		Principal		Costs		Net
PPN JV Loan, due November 2025, bearing interest at 4.1%	$	46,423	$	446	$	45,977	$	47,295	$	512	$	46,783
Loan in the Pier Park Crossings JV, insured by HUD, due June 2060, bearing interest at 4.0%		15,399		1,114		14,285		—		—		—
Community Development District debt, secured by certain real estate or other collateral, due May 2023 through May 2039, bearing interest at 3.6% to 6.0%		6,324		—		6,324		7,241		—		7,241
Pier Park Outparcel Construction Loan, due March 2027, bearing interest at LIBOR plus 1.7% (effective rate of 4.2% at December 31, 2018)		1,585		16		1,569		1,624		18		1,606
WaterColor Crossings Construction Loan, due February 2029, bearing interest at LIBOR plus 1.7% (effective rate of 4.2% at December 31, 2018)		1,245		26		1,219		—		—		—
Total debt	$	70,976	$	1,602	$	69,374	$	56,160	$	530	$	55,630

In October 2015, the Pier Park North JV entered into a $48.2 million loan, secured by a first lien on, and security interest in, a majority of the Pier Park North JV’s property. In connection with the PPN JV Loan, the Company entered into a limited guarantee in favor of the lender, based on its percentage ownership of the JV. In addition, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation by the Pier Park North JV; any voluntary transfer or encumbrance of the property in violation of the due-on-sale clause in the security instrument; upon commencement of voluntary bankruptcy or insolvency proceedings and upon breach of covenants in the security instrument.

In May 2018, the Pier Park Crossings JV entered into a $36.6 million loan, insured by HUD, to finance the construction of apartments in Panama City Beach, Florida. The PPC JV Loan provides for interest only payments during the first twenty-four months and monthly principal and interest payments thereafter through maturity in June 2060. The PPC JV Loan may not be prepaid prior to July 1, 2020. From July 1, 2020 through June 30, 2030, a prepayment premium is due to the lender of 1.0% - 10.0% of any prepaid principal. The PPC JV Loan is secured by the Pier Park Crossings JV’s real property and the assignment of rents and leases.

CDD bonds financed the construction of infrastructure improvements at some of the Company’s projects. The principal and interest payments on the bonds are paid by assessments on the properties benefited by the improvements financed by the bonds. The Company has recorded a liability for CDD debt that is associated with platted property, which is the point at which it becomes fixed or 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 $19.9 million and $21.7 million at December 31, 2018 and 2017, respectively. The Company pays interest on this total outstanding CDD debt. During the second quarter of 2018, the CDD at SouthWood completed a refinance of its 2008 and 2011 bonds into 2018 bonds, reducing the interest rates.

In March 2017, a wholly owned subsidiary of the Company entered into a $1.6 million construction loan to finance the construction of a commercial leasing property located in Panama City Beach, Florida (the “Pier Park Outparcel Construction Loan”). The Pier Park Outparcel Construction Loan provides for interest only payments during the first twelve months and principal and interest payments thereafter with a final balloon payment at maturity. The Pier Park Outparcel Construction Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. In connection with the Pier Park Outparcel Construction Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Pier Park Outparcel Construction Loan until the project meets certain cash flow stabilization requirements.

In February 2018, a wholly owned subsidiary of the Company entered into a $1.9 million construction loan to finance the construction of a commercial leasing property located in Santa Rosa Beach, Florida (the “WaterColor Crossings Construction Loan”). The WaterColor Crossings Construction Loan provides for interest only payments during the first twelve months and monthly principal and interest payments thereafter with a final balloon payment at maturity. The WaterColor Crossings Construction Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. In connection with the WaterColor Crossings Construction Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the WaterColor Crossings Construction Loan.

In May 2018, a wholly owned subsidiary of the Company entered into a $1.7 million construction loan to finance the construction of two beach homes located in Panama City Beach, Florida (the “Beach Homes Loan”). The Beach Homes Loan provides for interest only payments during the first twelve months and monthly principal and interest payments thereafter with a final balloon payment at maturity. The Beach Homes Loan is secured by the real property, assignment of rents and the security interest in the rents and personal property. In connection with the Beach Homes Loan, the Company executed a guarantee in favor of the lender to guarantee the payment and performance of the borrower under the Beach Homes Loan. As of December 31, 2018, there was no principal balance and the Company incurred less than $0.1 million of loan costs related to the Beach Homes Loan.

The aggregate maturities of debt subsequent to December 31, 2018 are:


	December 31,
	2018
2019	$	1,675
2020		1,778
2021		1,962
2022		1,942
2023		1,910
Thereafter		61,709
	$	70,976

Other Liabilities

12 Months Ended

Dec. 31, 2018

Other Liabilities

Other Liabilities

13. Other Liabilities

Other liabilities consist of the following:


	December 31,		December 31,
	2018		2017
Accounts payable	$	10,148	$	7,524
Accrued compensation		3,112		2,664
Other accrued liabilities		2,560		5,185
Deferred revenue		17,478		17,864
Club initiation fees		5,676		5,199
Club membership deposits		4,286		4,505
Advance deposits		1,277		1,468
Accrued interest expense for Senior Notes held by SPE		2,850		2,850
Total other liabilities	$	47,387	$	47,259

Deferred revenue as of December 31, 2018 and 2017 includes $12.5 million related to a 2006 agreement pursuant to which the Company agreed to sell land to the Florida Department of Transportation. Revenue is recognized when title to a specific parcel is legally transferred.

Club initiation fees are recognized as revenue over the estimated average duration of membership, which is evaluated periodically.

Advance deposits consist of deposits received on hotel rooms and lodging rentals. Advance deposits are recorded as other liabilities in the consolidated balance sheets without regard to whether they are refundable and are recognized as income at the time the service is provided for the related deposit.

The following table presents the changes in contract liabilities related to contracts with customers during 2018:


		Balance		Increases Due To		Decreases Due to		Balance
		January 1, 2018		Cash Received		Revenue Recognized		December 31, 2018
Contract liabilities
Club initiation fees	$	5,199	$	1,886	$	(1,409)	$	5,676

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Taxes

Income Taxes

14. Income Taxes

Income tax (benefit) expense consist of the following:


	Year Ended December 31,
	2018		2017		2016
Current:
Federal	$	4,305	$	7,418	$	(22,416)
State		—		48		(64)
Total		4,305		7,466		(22,480)
Deferred:
Federal		488		(23,512)		29,796
State		(5,529)		(1,835)		(169)
Total		(5,041)		(25,347)		29,627
Income tax (benefit) expense	$	(736)	$	(17,881)	$	7,147

Total income tax (benefit) expense was allocated in the consolidated financial statements as follows:


	Year Ended December 31,
	2018		2017		2016
Income tax (benefit) expense	$	(736)	$	(17,881)	$	7,147
Income tax recorded in accumulated other comprehensive loss
Income tax expense (benefit)		685		(2,488)		2,003
Total income tax (benefit) expense	$	(51)	$	(20,369)	$	9,150

Income tax (benefit) expense attributable to income from operations differed from the amount computed by applying the statutory federal income tax rate of 21% as of December 31, 2018 and 35% as of December 31, 2017 and 2016 to pre-tax income or loss as a result of the following:


	Year Ended December 31,
	2018		2017		2016
Tax at the statutory federal rate	$	6,643	$	14,594	$	8,065
State income taxes (net of federal benefit)		1,392		1,340		806
Decrease in valuation allowance, net		(4,993)		(142)		(941)
Decrease in uncertain tax positions		(2,165)		—		—
Change in US tax law		(1,035)		(33,542)		—
Dividend received deduction		(322)		(530)		(40)
Other permanent items		(256)		399		(743)
Total income tax (benefit) expense	$	(736)	$	(17,881)	$	7,147

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are presented below:


	December 31,		December 31,
	2018		2017
Deferred tax assets:
State net operating loss carryforwards	$	15,709	$	17,237
Impairment losses		38,844		41,837
Prepaid income from land sales		2,597		3,734
Capitalized costs		2,107		—
Other		3,508		322
Total gross deferred tax assets		62,765		63,130
Valuation allowance		—		(4,993)
Total net deferred tax assets		62,765		58,137
Deferred tax liabilities:
Investment in real estate and property and equipment basis differences		2,358		525
Deferred gain on land sales and involuntary conversions		19,109		19,671
Installment sales		83,268		85,769
Pension Plan assets transferred to the 401(k) plan		872		1,155
Other		1,473		—
Total gross deferred tax liabilities		107,080		107,120
Net deferred tax liabilities	$	(44,315)	$	(48,983)

As of December 31, 2018 and 2017, the Company had state net operating loss carryforwards of $357.0 million and $391.7 million, respectively and no federal net operating loss carryforwards. The majority of state net operating losses are available to offset future taxable income through 2038. As of December 31, 2017, the Company had an income tax receivable of $8.4 million related to the reclassification of a U.S. federal AMT credit carryforward following the enactment of the Tax Act in December 2017, which is refundable to the Company in the years 2018 through 2021. During the year ended December 31, 2018, the U.S. federal AMT credit carryforward decreased $4.5 million to $3.9 million due to the expected utilization in 2018 offset by the 2018 enactment of the Qualified Timber Gain preferential rate and other items impacting the 2017 U.S. federal income tax return.

The Tax Act was enacted on December 22, 2017, and changed many aspects of U.S. corporate income taxation including reducing the U.S. federal corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. The Company recognized the tax effects of the Tax Act during the year ended December 31, 2017, which included a $33.5 million income tax benefit from the reassessment of net deferred tax balances to reflect the newly enacted tax rate.

In general, a valuation allowance is recorded if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. Realization of the Company’s deferred tax assets is dependent upon the Company generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards.

In 2018, the Company reassessed its need for a valuation allowance by evaluating all available evidence, including but not limited to historical and projected pre-tax profits. Based on this assessment the Company determined it had the ability to fully realize the future benefit of its net operating loss carryforward and released the valuation allowance in full resulting in a $5.0 million tax benefit. As of December 31, 2017, the Company had a valuation allowance of $5.0 million.

The Company had no unrecognized tax benefits as of December 31, 2018 and approximately $2.1 million of total unrecognized tax benefits as of December 31, 2017. During 2018, the Company recognized a $2.1 million income tax benefit due to the expiration of the statute of limitations for the tax year covering the previously unrecognized tax benefits. There were no penalties required to be accrued as of December 31, 2018 and 2017. The Company records interest related to unrecognized tax benefits, if any, in interest expense and penalties in other income, net.

In December 2016, the Company entered into a JV agreement, pursuant to which the Company sold to Windmark JV all of its interest in the WindMark Beach project. The sale of the WindMark Beach project created a net taxable loss for the Company in 2016. The loss was carried back to 2014 for a federal income tax refund of $21.9 million, which was received during 2017. In addition, the Company received a federal tax refund for 2016 of $4.4 million during 2017.

The Company is currently open to examination by taxing authorities for the years ended December 31, 2015 through 2017. The IRS has completed a limited scope review of the Company’s tax returns for 2015 and 2016 without adjustment.

Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2018

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

15. Accumulated Other Comprehensive Loss

Following is a summary of the changes in the balances of accumulated other comprehensive loss, which is presented net of tax, as of December 31, 2018 and 2017:


	Unrealized Gain and
	(Loss) on Available-
	for-Sale Securities
Accumulated other comprehensive income at December 31, 2016	$	2,507
Other comprehensive income before reclassifications		1,235
Amounts reclassified from accumulated other comprehensive income		(5,203)
Other comprehensive loss		(3,968)
Accumulated other comprehensive loss at December 31, 2017	$	(1,461)
Other comprehensive loss before reclassifications		(2,127)
Amounts reclassified from accumulated other comprehensive loss		2,914
Other comprehensive income		787
Accumulated other comprehensive loss at December 31, 2018	$	(674)

The following is a summary of the tax effects allocated to other comprehensive income (loss):


	Year Ended December 31, 2018
	Before-		Tax Benefit or		Net-of-
	Tax Amount		(Expense)		Tax Amount
Unrealized loss on investments - debt securities and restricted investments:
Unrealized loss on available-for-sale investments	$	(2,845)	$	723	$	(2,122)
Unrealized loss on restricted investments		(6)		2		(4)
Reclassification adjustment for net loss included in earnings		1,061		(269)		792
Reclassification adjustment for other-than-temporary impairment loss included in earnings		2,330		(592)		1,738
Reclassification into retained earnings for the adoption of ASU 2016-01 (1)		932		(236)		696
Reclassification into retained earnings for the adoption of ASU 2018-02 (2)		—		(313)		(313)
Net unrealized gain		1,472		(685)		787
Other comprehensive income	$	1,472	$	(685)	$	787

(1)

The reclassification into retained earnings relates to the adoption of ASU 2016-01. The new guidance was effective January 1, 2018, and required equity investments to be measured at fair value with changes in fair value recognized in results of operations rather than the consolidated statements of comprehensive income. See Note 2. Summary of Significant Accounting Policies.

(2)

The reclassification into retained earnings relates to the adoption of ASU 2018-02. The new guidance was effective January 1, 2018, and allowed a reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the Tax Act. See Note 2. Summary of Significant Accounting Policies.


	Year Ended December 31, 2017
	Before-		Tax (Expense) or		Net-of-
	Tax Amount		Benefit		Tax Amount
Unrealized gain (loss) on investments and restricted investments:
Unrealized gain on available-for-sale investments	$	2,015	$	(774)	$	1,241
Unrealized loss on restricted investments		(9)		3		(6)
Reclassification adjustment for net gain included in earnings		(10,750)		4,139		(6,611)
Reclassification adjustment for other-than-temporary impairment loss included in earnings		2,288		(880)		1,408
Net unrealized loss		(6,456)		2,488		(3,968)
Other comprehensive loss	$	(6,456)	$	2,488	$	(3,968)

Stockholders' Equity	12 Months Ended
Stockholders' Equity	Dec. 31, 2018
Stockholders’ Equity
Stockholders' Equity	16. Stockholders’ Equity Stock Repurchase Program The Company’s Board has approved a Stock Repurchase Program pursuant to which the Company is authorized to repurchase shares of its common stock. The Stock Repurchase Program has no expiration date. During the years ended December 31, 2018 and 2017, the Company repurchased 5,238,566 and 8,450,294 shares, respectively, of its common stock at an average purchase price of $17.82 and $17.46, per share, respectively, for an aggregate purchase price of $93.4 million and $147.4 million, respectively, pursuant to its Stock Repurchase Program. As of December 31, 2018, the Company had a total authority of $42.9 million available for purchase of shares of its common stock pursuant to its Stock Repurchase Program. The Company may repurchase its common stock in open market purchases from time to time, in privately negotiated transactions or otherwise, pursuant to Rule 10b‑18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and amount of any additional shares to be repurchased will depend upon a variety of factors, including market and business conditions. Repurchases may be commenced or suspended at any time or from time to time without prior notice. The Stock Repurchase Program will continue until otherwise modified or terminated by the Company’s Board at any time in its sole discretion. In September 2018, the Company retired 5,238,566 shares of treasury stock at an aggregate cost of $93.4 million. In December 2017, the Company retired 8,450,294 shares of treasury stock at a value of $147.4 million. Subsequent to December 31, 2018 and through February 25, 2019, the Company purchased an additional 471,500 shares for an aggregate purchase price of $7.1 million. Issuance of Common Stock for Director’s Fees On May 23, 2018, the Company’s Board approved granting to each non-employee director an equity grant with an aggregate fair market value of $50,000 or, at the director’s election, its cash equivalent. On July 2, 2018, 2,778 shares of restricted stock were granted to one of the Company’s directors pursuant to the Board’s May 23, 2018 approval and the Company’s 2015 Performance and Equity Incentive Plan (the “2015 Plan”). This restricted stock will vest on the date of the Company’s 2019 Annual Meeting of Shareholders (the “2019 Annual Meeting”) and is subject to forfeiture upon termination of service on the Board prior to the 2019 Annual Meeting. Three non-employee directors elected to receive cash in lieu of the stock. On May 25, 2017, the Company’s Board approved granting to each non-employee director an equity grant with an aggregate fair market value of $50,000 or, at the director’s election, its cash equivalent. On July 3, 2017, 5,334 shares of restricted stock were granted to two of the Company’s directors pursuant to the Board’s May 25, 2017 approval and the Company’s 2015 Plan. This restricted stock vested on May 23, 2018, the date of the Company’s 2018 Annual Meeting of Shareholders. Four non-employee directors elected to receive cash in lieu of the stock. On May 17, 2016, the Board approved the issuance of 8,919 restricted stock awards to three members of the Board as part of their 2016 compensation package and pursuant to the 2015 Plan. These restricted stock awards vested 25% on the date of issue and 25% on August 17, 2016, November 17, 2016, and February 17, 2017. For each of the years ended December 31, 2018, 2017 and 2016, the Company recorded expense of $0.1 million, related to restricted stock awards to the Company’s directors. Issuance of Common Stock for Officer Compensation Pursuant to the Company’s 2015 Plan, the Company’s named executive officers (“NEOs”) were provided with the opportunity to elect to receive up to 50% of their discretionary cash incentive award for 2017 performance in shares of Company stock and four of the Company’s NEOs elected to do so. On March 15, 2018, 9,956 shares, net of shares withheld for taxes, of restricted stock were granted to four of the Company’s NEOs. The restricted stock vested immediately. For the year ended December 31, 2018, the Company recorded expense of $0.2 million related to restricted stock awards to the Company’s NEOs.

Stock Based Compensation

12 Months Ended

Dec. 31, 2018

Stock Based Compensation

Stock Based Compensation

17. Stock Based Compensation

The Company’s 2015 Performance and Equity Incentive Plan offers a stock incentive plan whereby awards are granted to certain employees and non-employee directors of the Company in various forms including restricted shares of Company common stock and options to purchase Company common stock. Awards are discretionary and determined by the Compensation Committee of the Board. Stock based compensation cost is measured at the grant date based on the fair value of the award and is typically recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. As of December 31, 2018, 1,469,251 shares were available for awards under the 2015 Plan.

Total stock-based compensation recorded in other operating and corporate expenses on the consolidated statements of income is as follows:


	Year Ended December 31,
	2018		2017		2016
Stock compensation expense before tax benefit	$	71	$	76	$	131
Income tax benefit		(19)		(22)		(50)
	$	52	$	54	$	81

In 2018, 2017 and 2016, the Company granted 2,778, 5,334 and 8,919 shares, respectively, of restricted stock awards to certain of the Company’s directors as fees for services rendered under the 2015 Plan, of which 5,334, 2,229 and 6,690 vested during the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, the Company had 2,778 unvested restricted stock units outstanding, which will vest in May 2019. The weighted average grant date fair value of restricted stock units during 2018, 2017 and 2016 were $18.00, $18.75 and $16.82, respectively. The total fair values of restricted stock units that vested were $0.1 million during each 2018, 2017 and 2016.

In 2018, the Company granted 9,956 shares, net of shares withheld for taxes, of restricted stock awards to certain of the Company’s NEO’s as their discretionary cash incentive award for 2017 performance under the 2015 Plan, of which all vested during the year ended December 31, 2018. The weighted average grant date fair value of the restricted stock units granted to the Company’s NEO’s during 2018 was $19.32. The total fair value of restricted stock units related to restricted stock awards to the Company’s NEO’s that vested were $0.2 million during 2018.

Employee Benefit Plan	12 Months Ended
Employee Benefit Plan	Dec. 31, 2018
Employee Benefit Plan
Employee Benefit Plan	18. Employee Benefit Plan The Company maintains a 401(k) retirement plan covering substantially all officers and employees of the Company, which permits participants to defer up to the maximum allowable amount determined by the IRS of their eligible compensation. As part of the Pension Plan termination in 2014, the Company directed the Pension Plan to transfer $7.9 million of the Pension Plan’s surplus assets into a suspense account in the Company’s 401(k) plan. The Company has retained the risks and rewards of ownership of these assets; therefore, the assets held in the suspense account are included in the Company’s consolidated financial statements until they are allocated to participants. As of December 31, 2018 and 2017, the fair value of these assets was recorded in restricted investments on the Company’s consolidated balance sheets and were $3.4 million and $4.5 million, respectively. The Company expenses the fair value of the assets at the time the assets are allocated to participants, which is expected to be allocated up to the next three years. During 2018, 2017 and 2016, the Company recorded an expense of $1.1 million, $1.2 million and $1.4 million, respectively, for the fair value of the assets, less expenses, that were allocated to participants. Any gain or loss on these assets is reflected in the Company’s consolidated statements of income and was less than a $0.1 million loss for the years ended December 31, 2018 and 2016 and less than a $0.1 million gain for the year ended December 31, 2017.

RiverTown Impact Fees	12 Months Ended
RiverTown Impact Fees	Dec. 31, 2018
RiverTown Impact Fees
RiverTown Impact Fees	19. RiverTown Impact Fees As part of the Company’s April 2014 RiverTown transaction, the buyer, an affiliate of Mattamy (Jacksonville) Partnership d/b/a Mattamy Homes (“Mattamy”), was obligated to pay certain impact fees to the Company prior to April 2, 2019 and, depending on circumstances, potentially thereafter. On April 3, 2018, the Board of County Commissioners for St. Johns County, Florida adopted revised impact fee schedules that went into effect as of July 3, 2018, and increased impact fee rates for residential units. In June 2018, the Company received $23.1 million from Mattamy to pay the estimated impact fees based on Mattamy’s current development plans and the impact fee schedule in effect at the time of the payment. For the year ended December 31, 2018, the impact fees of $23.1 million were included in real estate revenue in the Company’s consolidated statements of income. Mattamy may be required to pay to the Company additional impact fees based on its future development plans. Any consideration the Company may receive for additional impact fees will be based on a variety of factors outside the Company’s control, including impact fee increases or decreases by St. Johns County, home sizes and the number of homes built in the project. The Company received impact fees for a total of $23.7 million, $0.9 million and $0.4 million during 2018, 2017 and 2016, respectively.

Other Income (Expense)

12 Months Ended

Dec. 31, 2018

Other Income (Expense)

Other Income (Expense)

20. Other Income (Expense)

Other income (expense) consists of the following:



	Year Ended December 31,
	2018		2017		2016
Investment income, net
Interest and dividend income	$	9,060	$	16,380	$	6,602
Accretion income		684		1,983		1,829
Net realized (loss) gain on the sale of investments		(973)		10,750		795
Other-than-temporary impairment loss		(2,330)		(2,288)		—
Unrealized loss on investments, net		(3,035)		—		—
Interest income from investments in SPEs		8,197		8,201		8,202
Interest accrued on notes receivable and other interest		547		384		348
Total investment income, net		12,150		35,410		17,776
Interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE		(8,788)		(8,777)		(8,833)
Other interest expense		(3,052)		(3,368)		(3,462)
Total interest expense		(11,840)		(12,145)		(12,295)
Claim settlement		—		—		12,548
Sale of vacation rental management, net		—		9,800		—
Other income, net
Accretion income from retained interest investments		1,232		1,100		991
Insurance proceeds		7,199		—		—
Hurricane expense		(8,628)		—		—
Miscellaneous income, net		1,349		3,613		513
Other income, net		1,152		4,713		1,504
Total other income, net	$	1,462	$	37,778	$	19,533

Investment Income, Net

Interest and dividend income includes interest income accrued or received on the Company’s corporate debt securities, commercial paper and money market funds, and dividend income received from the Company’s investment in preferred stock. Accretion income includes the amortization of the premium or accretion of discount related to the Company’s available-for-sale securities, which is amortized based on an effective interest rate method over the term of the available-for-sale securities. Net realized (loss) gain on the sale of investments include the gains or losses recognized on the sale of an available-for-sale securities prior to maturity. Other-than-temporary impairment loss includes impairments related to the Company’s corporate debt securities for the year ended December 31, 2018 and impairments related to the Company’s corporate debt securities and preferred stock investments for the year ended December 31, 2017.

Unrealized loss on investments, net includes unrealized gains or losses on investments – equity securities due to the adoption of ASU 2016-01. Prior to 2018, unrealized gains or losses related to these investments were recorded in accumulated other comprehensive loss.

Interest income from investments in SPEs primarily includes interest earned on the investments held by Panama City Timber Finance Company, LLC, which is used to pay the interest expense for Senior Notes held by Northwest Florida Timber Finance, LLC.

Interest Expense

Interest expense includes interest expense related to the Company’s CDD debt, PPN North JV Loan, Pier Park Outparcel Construction Loan and WaterColor Crossings Construction Loan. Borrowing costs, including the discount and issuance costs for the Senior Notes issued by Northwest Florida Timber Finance, LLC, are amortized based on the effective interest method at an effective rate of 4.9%.

Claim Settlement

Claim settlement during the year ended December 31, 2016 includes $12.5 million for a settlement related to the Deepwater Horizon oil spill. See Note 6. Claim Settlement Receivable for further discussion.

Sale of Vacation Rental Management, Net

Sale of vacation rental management, net includes proceeds of $9.9 million, which resulted in a gain of $9.8 million from the PCR Rentals sale in December 2017. See Note 8. Sale of Vacation Rental Management for further discussion.

Other Income, Net

Other income, net primarily includes income from the Company’s retained interest investments, insurance proceeds, hurricane expenses and other income and expense items.

Insurance proceeds during the year ended December 31, 2018, includes $7.2 million of hurricane insurance proceeds that the Company believes are probable of receipt. Hurricane expenses during the year ended December 31, 2018, includes a $7.3 million loss on disposal of assets related to damage from Hurricane Michael and $1.3 million of additional hurricane expenses. See Note 7. Hurricane Michael for additional information. Miscellaneous income, net primarily consists of $2.2 million of income related to the final distribution from the Company’s unconsolidated JV ALP, offset by $0.6 million for a homeowners’ association settlement related to one of the Company’s residential communities. During 2017, the Company negotiated an insurance settlement that resulted in proceeds of $3.5 million, included within miscellaneous income, net, for reimbursement of certain attorney fees and related costs incurred by the Company.

The Company records the accretion of investment income from its retained interest investment over the life of the retained interest using the effective yield method with rates ranging from 3.7% to 12.0%.

Segment Information

12 Months Ended

Dec. 31, 2018

Segment Information

Segment Information

21. Segment Information

The Company currently conducts primarily all of its business in the following four operating segments: 1) residential real estate, 2) hospitality, 3) commercial leasing and sales and 4) forestry. Prior to the fourth quarter of 2017, commercial real estate and leasing operations were treated as individual operating segments. See Note 1. Nature of Operations for additional information.

The Company’s reportable segments are strategic business units that offer different products and services. They are each managed separately and decisions about allocations of resources are determined by management based on these strategic business units.

The Company uses income before income taxes and non-controlling interest and other measures for purposes of making decisions about allocating resources to each segment and assessing each segment’s performance, which the Company believes represents current performance measures.

The accounting policies of the segments are the same as those described herein. Total revenue represents sales to unaffiliated customers, as reported in the Company’s consolidated statements of income. All significant intercompany transactions have been eliminated in consolidation. The caption entitled “Other” consists of mitigation credit and title fee revenue and non-allocated corporate general and administrative expenses, net of investment income.

Information by business segment is as follows:



	Year Ended December 31,
	2018		2017		2016
Operating revenue:
Residential real estate (a)	$	42,869	$	21,747	$	19,483
Hospitality		39,973		54,820		57,284
Commercial leasing and sales		16,485		14,510		11,929
Forestry revenue		8,135		8,443		7,791
Other (b)		2,814		518		375
Consolidated operating revenue	$	110,276	$	100,038	$	96,862

Cost of revenue:
Cost of residential real estate revenue	$	9,775	$	12,455	$	6,383
Cost of hospitality revenue		33,825		47,816		50,229
Cost of commercial leasing and sales revenue		6,397		5,979		4,431
Cost of forestry revenue		1,097		903		1,121
Cost of other revenue		223		41		30
Consolidated cost of revenue	$	51,317	$	67,194	$	62,194

Other operating and corporate expenses:
Residential real estate	$	4,695	$	4,297	$	5,744
Hospitality		555		494		547
Commercial leasing and sales		3,183		3,444		3,492
Forestry		384		396		530
Other		11,740		11,751		12,706
Consolidated other operating and corporate expenses	$	20,557	$	20,382	$	23,019

Depreciation, depletion and amortization:
Residential real estate	$	167	$	187	$	286
Hospitality		3,761		4,225		4,402
Commercial leasing and sales		4,411		3,729		3,137
Forestry		514		575		552
Other		145		169		194
Consolidated depreciation, depletion and amortization	$	8,998	$	8,885	$	8,571

Investment income, net:
Residential real estate and other	$	320	$	89	$	97
Corporate (c)		11,830		35,321		17,679
Consolidated investment income, net	$	12,150	$	35,410	$	17,776

Interest expense:
Residential real estate	$	(867)	$	(1,164)	$	(1,284)
Commercial leasing and sales		(2,180)		(2,200)		(2,169)
Corporate and other (d)		(8,793)		(8,781)		(8,842)
Consolidated interest expense	$	(11,840)	$	(12,145)	$	(12,295)

Sale of vacation rental management, net:
Hospitality (e)	$	—	$	9,800	$	—
Consolidated sale of vacation rental management, net	$	—	$	9,800	$	—

Income (loss) before income taxes:
Residential real estate (a)	$	27,084	$	3,903	$	5,887
Hospitality (e)		1,652		12,444		2,087
Commercial leasing and sales		(121)		(836)		(1,233)
Forestry		6,222		6,586		5,609
Corporate (b) (c) (d)		(3,971)		19,258		10,261
Consolidated income before income taxes	$	30,866	$	41,355	$	22,611

Capital expenditures:
Residential real estate	$	15,865	$	8,407	$	3,319
Hospitality		7,400		4,918		1,287
Commercial leasing and sales		20,483		25,248		6,836
Forestry		1,069		1,100		1,095
Other		379		207		321
Total capital expenditures	$	45,196	$	39,880	$	12,858


	December 31,		December 31,
	2018		2017
Total assets:
Residential real estate	$	125,642	$	117,732
Hospitality		70,746		83,151
Commercial leasing and sales		182,658		163,271
Forestry		20,189		20,212
Other		471,727		536,627
Total assets	$	870,962	$	920,993

(a)

Includes revenue of $23.1 million in 2018 for a one-time receipt of RiverTown impact fees related to the 2014 RiverTown transaction. See Note 19. RiverTown Impact Fees.

(b)

Includes revenue of $2.2 million in 2018 related to a specific sale of mitigation bank credits.

(c)

Includes interest income from investments in SPEs of $8.2 million in each 2018, 2017 and 2016.

(d)

Includes interest expense from Senior Notes issued by SPE of $8.8 million in each 2018, 2017 and 2016.

(e)

Includes proceeds of $9.9 million, which resulted in a net gain of $9.8 million from the PCR Rentals sale in 2017. See Note 8. Sale of Vacation Rental Management.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	22. Commitments and Contingencies The Company establishes an accrued liability when it is both probable that a material loss has been incurred and the amount of the loss can be reasonably estimated. The Company will evaluate the range of reasonably estimated losses and record an accrued liability based on what it believes to be the minimum amount in the range, unless it believes an amount within the range is a better estimate than any other amount. In such cases, there may be an exposure to loss in excess of the amounts accrued. The Company evaluates quarterly whether further developments could affect the amount of the accrued liability previously established or would make a loss contingency both probable and reasonably estimable. The Company also provides disclosure when it believes it is reasonably possible that a material loss will be incurred or when it believes it is reasonably possible that the amount of a loss will exceed the recorded liability. The Company reviews loss contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made. This estimated range of possible losses is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. The Company is subject to a variety of litigation, claims, other disputes and governmental proceedings that arise from time to time in the ordinary course of its business, including litigation related to its prior homebuilding and development activities. The Company cannot make assurances that it will be successful in defending these matters. Based on current knowledge, the Company does not believe that loss contingencies arising from pending litigation, claims, other disputes and governmental proceedings, including those described herein, will have a material adverse effect on the consolidated financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in these matters, an adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period. The Company is subject to costs arising out of environmental laws and regulations, which include obligations to remove or limit the effects on the environment of the disposal or release of certain wastes or substances at various sites, including sites that 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 or range of loss can be reasonably estimated. As assessments and cleanups proceed, these accruals are reviewed and adjusted, if necessary, as additional information becomes available. The Company is in the process of assessing certain properties in regard to the effects, if any, on the environment from the disposal or release of wastes or substances. Management is unable to quantify future rehabilitation costs above present accruals at this time or provide a reasonably estimated range of loss. Other litigation, claims, disputes and governmental proceedings, including environmental matters, are pending against the Company. Accrued aggregate liabilities related to the matters described above and other litigation matters were $1.2 million and $1.3 million as of December 31, 2018 and 2017, respectively. Significant judgment is required in both the determination of probability and the determination as to whether the amount of an exposure is reasonably estimable. Due to uncertainties related to these matters, accruals are based only on the information available at the time. As additional information becomes available, management reassesses potential liabilities related to pending claims and litigation and may revise its previous estimates, which could materially affect the Company’s results of operations for any particular reporting period. The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage, including its timber assets. At December 31, 2018 and 2017, the Company was required to provide surety bonds that guarantee completion of certain infrastructure in certain development projects and mitigation banks of $9.4 million and $8.6 million, respectively, as well as standby letters of credit in the amount of less than $0.1 million at December 31, 2017, which may potentially result in liability to the Company if certain obligations of the Company are not met. As of December 31, 2018, the Company had a total of $34.6 million in contractual obligations. As part of certain sales of timberlands in 2007, 2008 and 2014, the Company generated significant tax gains. The installment notes structure allowed the Company to defer the resulting federal tax liability of $33.7 million until 2022 - 2024 and $37.8 million until 2029, respectively, the maturity dates for the installment notes. The Company has a deferred tax liability related to the gains in connection with these sales.

Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (unaudited)

23. Quarterly Financial Data (unaudited)


	Quarters Ended
	December 31,		September 30,		June 30,		March 31,
2018
Operating revenue	$	16,301	$	23,676	$	50,434	$	19,865
Operating (loss) income	$	(1,343)	$	1,944	$	29,344	$	(541)
Net (loss) income attributable to the Company	$	(66)	$	5,483	$	26,195	$	757
Basic and diluted income per share attributable to the Company (1)	$	—	$	0.09	$	0.41	$	0.01
2017
Operating revenue	$	21,891	$	33,988	$	30,647	$	13,512
Operating (loss) income	$	(1,555)	$	4,787	$	4,927	$	(4,582)
Net income attributable to the Company	$	38,503	$	5,943	$	10,764	$	4,368
Basic and diluted income per share attributable to the Company (1)	$	0.58	$	0.08	$	0.15	$	0.06

(1)

Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not be consistent with the per share amounts for the year.

Schedule III (Consolidated) - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2018

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

SCHEDULE III (CONSOLIDATED) - REAL ESTATE AND ACCUMULATED DEPRECIATION

THE ST. JOE COMPANY

SCHEDULE III (CONSOLIDATED) - REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2018

(in thousands)


			Initial Cost to Company (2)						Gross Amount at December 31, 2018
							Costs Capitalized
							Subsequent to										Date of	Depreciation
			Land &		Buildings &		Acquisition or		Land & Land		Buildings and				Accumulated		Construction or	Life
Description (1)	Encumbrances		Improvements		Improvements		Construction (3)		Improvements		Improvements		Total		Depreciation		Acquisition	(In Years)
Residential developments	$	1,471	$	48,430	$	10,954	$	53,283	$	111,207	$	1,460	$	112,667	$	2,044	through 2018	5-25
Hospitality
WaterColor Inn		—		2,237		15,790		6,778		3,259		21,546		24,805		9,591	2002. 2013, 2018	10 - 40
Clubs and golf courses		—		34,227		16,272		3,105		37,137		16,467		53,604		20,623	2001 - 2007, 2018	10 - 25
Marinas		—		5,351		2,540		329		5,559		2,661		8,220		1,517	2006 - 2007	10 - 25
Other		—		—		10,054		89		—		10,143		10,143		4,232	2008 - 2009	10 - 30
Commercial leasing and sales
Leasing properties:
Pier Park North		45,977		13,711		35,243		3,115		13,711		38,358		52,069		7,643	2014 - 2017	15 - 39
Town centers		—		713		21,887		(2,138)		787		19,675		20,462		15,424	2001 - 2008	10 - 25
VentureCrossings		—		5,791		24,490		(2,566)		3,775		23,940		27,715		3,433	2012. 2017	10 - 39
Pier Park Crossings		14,285		705		—		13,092		13,796		—		13,796		—	2018	N/A
Other		2,788		2,962		8,684		2,970		5,933		8,684		14,617		913	through 2018	10 - 39
Commercial developments		4,853		34,922		—		21,018		55,940		—		55,940		66	through 2018	5
Timberlands		—		6,687		1,796		11,282		17,969		1,796		19,765		1,983	n/a	5 - 30
Unimproved land		—		85		—		4,606		4,691		—		4,691		31	n/a	15 - 20
Total	$	69,374	$	155,821	$	147,710	$	114,963	$	273,764	$	144,730	$	418,494	$	67,500

(1)

All real estate properties are located in Northwest Florida.

(2)

Includes initial costs to the Company to place the assets in service.

(3)

Includes cumulative impairments.

Notes:

(A)

The aggregate cost of real estate owned at December 31, 2018 for federal income tax purposes is approximately $432.7 million.

(B)

Reconciliation of real estate owned (in thousands of dollars):


	December 31,		December 31,		December 31,
	2018		2017		2016
Balance at beginning of the year	$	404,376	$	381,969	$	377,668
Amounts capitalized		43,306		39,261		13,875
Impairments		(99)		(714)		(357)
Cost of real estate sold		(18,928)		(14,274)		(6,489)
Amounts retired or adjusted		(10,161)		(1,866)		(2,728)
Balance at the end of the year	$	418,494	$	404,376	$	381,969

(C)

Reconciliation of accumulated depreciation (in thousands of dollars):


	December 31,		December 31,		December 31,
	2018		2017		2016
Balance at beginning of the year	$	71,752	$	67,349	$	64,069
Depreciation expense		6,018		6,245		6,002
Amounts retired or adjusted		(10,270)		(1,842)		(2,722)
Balance at the end of the year	$	67,500	$	71,752	$	67,349

Schedule IV (Consolidated) - Mortgage Loans on Real Estate

12 Months Ended

Dec. 31, 2018

Mortgage Loans on Real Estate [Abstract]

SCHEDULE IV (CONSOLIDATED) - MORTGAGE LOANS ON REAL ESTATE

THE ST. JOE COMPANY

SCHEDULE IV (CONSOLIDATED) - MORTGAGE LOANS ON REAL ESTATE

DECEMBER 31, 2018

(in thousands)


									Principal Amount of
			Periodic		Face		Carrying		Loans Subject to
			Payment		Amount of		Amount of		Delinquent Principal
Description (a)	Interest Rate	Final Maturity Date	Terms	Prior Liens	Mortgages		Mortgages		or Interest
Seller financing, residential homesites	5.5%	September 2019	P&I(b)	—	$	749	$	749	—
Seller financing, residential homesites	5.5%	June 2019	P&I(b)	—		422		422	—
Seller financing, residential homesites	6.3%	March 2020	P&I(c)	—		150		150	—
Various other seller financing, rural land	6.4% to 6.7%	December 2022 through November 2023	P&I(d)	—		141		141	—
Total(e)					$	1,462	$	1,462

(a)

All seller financed properties are located in Northwest Florida.

(b)

Annual principal payment of $0.1 million due and interest is paid quarterly over a twenty year amortization schedule. On the maturity date, all outstanding principal, all accrued interest and any other customary charges shall be due and payable in full.

(c)

Annual principal payment of $0.1 million due and interest is accrued over a twenty year amortization schedule. On the maturity date, all outstanding principal, all accrued interest and any other customary charges shall be due and payable in full.

(d)

Principal and interest is paid monthly.

(e)

The aggregate cost for federal income tax purposes approximates the amount of unpaid principal.

The summarized changes in the carrying amount of mortgage loans are as follows:


	December 31,		December 31,		December 31,
	2018		2017		2016
Balance at beginning of the year	$	2,995	$	242	$	570
Additions during the year - new mortgage loans		1,471		2,821		—
Deductions during the year:
Collections of principal		3,004		68		328
Foreclosures		—		—		—
Balance at the end of the year	$	1,462	$	2,995	$	242

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Use of Estimates

Investment in Real Estate

Depreciation is computed on the straight-line method over the estimated economic lives of the assets, as follows:


		Estimated Useful
		Life (in years)
Land		N/A
Land improvements		15 - 20
Buildings		20-40
Building improvements		5-25
Timber		N/A