joe_Current_Folio_10Q

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

Form 10-Q

 


(Mark One)

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2019

 

or

 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     .

 

Commission file number: 1‑10466

 


 

The St. Joe Company

(Exact name of registrant as specified in its charter)

 


 

 

 

Florida

59‑0432511

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

 

133 South Watersound Parkway

 

Watersound, Florida

32461

(Address of principal executive offices)

(Zip Code)

 

(850) 231‑6400

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

 

 

 

 

 

 

 

Title of Each Class

 

Trading Symbol(s)

 

Name of Exchange on Which Registered

Common Stock, no par value

 

JOE

 

New York Stock Exchange

 

 

 

 

 

 


 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   YES      NO  

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   YES      NO  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

 

 

 

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).   YES      NO  

 

As of July 29, 2019, there were 60,206,242 shares of common stock, no par value, outstanding.

 

 

Table of Contents

THE ST. JOE COMPANY

INDEX

 

 

 

Page No.

PART I 

 

Item 1. Financial Statements 

3

Condensed Consolidated Balance Sheets - June 30, 2019 and December 31, 2018 

3

Condensed Consolidated Statements of Income - Three and Six Months Ended June 30, 2019 and 2018 

5

Condensed Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2019 and 2018 

6

Condensed Consolidated Statements of Changes in Stockholders’ Equity - Three and Six Months Ended June 30, 2019 and 2018 

7

Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2019 and 2018 

10

Notes to the Condensed Consolidated Financial Statements 

12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 

39

Item 3. Quantitative and Qualitative Disclosures About Market Risk 

63

Item 4. Controls and Procedures 

64

PART II 

 

Item 1. Legal Proceedings 

64

Item 1A. Risk Factors 

64

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

65

Item 3. Defaults Upon Senior Securities 

65

Item 4. Mine Safety Disclosures 

65

Item 5. Other Information 

65

Item 6. Exhibits 

66

SIGNATURES 

67

 

 

2

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1.         Financial Statements

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

    

2019

    

2018

ASSETS

 

 

  

 

 

  

Investment in real estate, net

 

$

384,056

 

$

350,994

Cash and cash equivalents

 

 

195,587

 

 

195,155

Investments - debt securities

 

 

2,832

 

 

8,958

Investments - equity securities

 

 

36,270

 

 

36,132

Other assets

 

 

61,497

 

 

60,308

Property and equipment, net of accumulated depreciation of $61,692 and $60,271 at June 30, 2019 and December 31, 2018, respectively

 

 

18,950

 

 

12,031

Investments held by special purpose entities

 

 

207,055

 

 

207,384

Total assets

 

$

906,247

 

$

870,962

LIABILITIES AND EQUITY

 

 

  

 

 

  

Liabilities:

 

 

  

 

 

  

Debt, net

 

$

80,244

 

$

69,374

Other liabilities

 

 

58,758

 

 

47,387

Deferred tax liabilities, net

 

 

48,206

 

 

44,315

Senior Notes held by special purpose entity

 

 

176,899

 

 

176,775

Total liabilities

 

 

364,107

 

 

337,851

 

 

 

 

 

 

 

Commitments and contingencies (Note 18)

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

  

 

 

  

Common stock, no par value; 180,000,000 shares authorized; 60,672,034 issued at June 30, 2019 and December 31, 2018; and 60,200,534 and 60,672,034 outstanding at June 30, 2019 and December 31, 2018, respectively

 

 

330,209

 

 

331,395

Retained earnings

 

 

199,820

 

 

187,450

Accumulated other comprehensive loss

 

 

(70)

 

 

(674)

Treasury stock at cost, 471,500 shares held at June 30, 2019

 

 

(7,073)

 

 

 —

Total stockholders’ equity

 

 

522,886

 

 

518,171

Non-controlling interest

 

 

19,254

 

 

14,940

Total equity

 

 

542,140

 

 

533,111

Total liabilities and equity

 

$

906,247

 

$

870,962

 

See accompanying notes to the condensed consolidated financial statements.

3

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

The following presents the portion of the condensed consolidated balances attributable to the Company’s consolidated variable interest entities, which, as of June 30, 2019 and December 31, 2018, include the Pier Park North joint venture (“Pier Park North JV”), Pier Park Crossings LLC (“Pier Park Crossings JV”), Windmark JV, LLC (“Windmark JV”), Panama City Timber Finance Company, LLC and Northwest Florida Timber Finance, LLC as discussed in Note 2. Summary of Significant Accounting Policies. Basis of Presentation and Principles of Consolidation. As of June 30, 2019, the consolidated balances attributable to the Company’s consolidated variable interest entities also include Origins Crossings, LLC (“Origins Crossings JV”) and SJWCSL, LLC (“Watercrest JV”). The following assets may only be used to settle obligations of the consolidated variable interest entities and the following liabilities are only obligations of the variable interest entities and do not have recourse to the general credit of the Company, except for covenants and limited guarantees discussed in Note 10. Debt, Net.

 

 

 

 

 

 

 

 

    

June 30, 

    

December 31, 

 

 

2019

 

2018

ASSETS

 

 

  

 

 

  

Investment in real estate

 

$

89,584

 

$

70,124

Cash and cash equivalents

 

 

4,301

 

 

2,113

Other assets

 

 

17,834

 

 

16,165

Investments held by special purpose entities

 

 

207,055

 

 

207,384

Total assets

 

$

318,774

 

$

295,786

LIABILITIES

 

 

  

 

 

  

Debt, net

 

$

69,096

 

$

60,262

Other liabilities

 

 

6,507

 

 

5,773

Senior Notes held by special purpose entity

 

 

176,899

 

 

176,775

Total liabilities

 

$

252,502

 

$

242,810

 

See accompanying notes to the condensed consolidated financial statements.

4

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2019

 

2018

    

2019

    

2018

 

Revenue:

    

 

  

    

 

  

 

 

  

 

 

  

 

Real estate revenue

 

$

15,553

 

$

32,159

 

$

20,144

 

$

39,861

 

Hospitality revenue

 

 

15,560

 

 

12,847

 

 

22,991

 

 

19,925

 

Leasing revenue

 

 

3,674

 

 

3,517

 

 

7,181

 

 

6,935

 

Timber revenue

 

 

759

 

 

1,911

 

 

1,254

 

 

3,577

 

Total revenue

 

 

35,546

 

 

50,434

 

 

51,570

 

 

70,298

 

Expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

Cost of real estate revenue

 

 

6,846

 

 

2,954

 

 

8,679

 

 

7,122

 

Cost of hospitality revenue

 

 

9,002

 

 

9,449

 

 

16,193

 

 

16,158

 

Cost of leasing revenue

 

 

1,121

 

 

1,213

 

 

2,060

 

 

2,327

 

Cost of timber revenue

 

 

193

 

 

193

 

 

334

 

 

406

 

Other operating and corporate expenses

 

 

5,094

 

 

5,010

 

 

11,062

 

 

10,955

 

Depreciation, depletion and amortization

 

 

2,422

 

 

2,271

 

 

4,533

 

 

4,527

 

Total expenses

 

 

24,678

 

 

21,090

 

 

42,861

 

 

41,495

 

Operating income

 

 

10,868

 

 

29,344

 

 

8,709

 

 

28,803

 

Other income (expense):

 

 

  

 

 

  

 

 

  

 

 

  

 

Investment income, net

 

 

2,535

 

 

5,981

 

 

8,580

 

 

9,646

 

Interest expense

 

 

(3,024)

 

 

(2,954)

 

 

(5,966)

 

 

(5,979)

 

Other income, net

 

 

3,283

 

 

243

 

 

4,979

 

 

520

 

Total other income, net

 

 

2,794

 

 

3,270

 

 

7,593

 

 

4,187

 

Income before income taxes

 

 

13,662

 

 

32,614

 

 

16,302

 

 

32,990

 

Income tax expense

 

 

(3,434)

 

 

(6,547)

 

 

(4,095)

 

 

(6,298)

 

Net income

 

 

10,228

 

 

26,067

 

 

12,207

 

 

26,692

 

Net loss attributable to non-controlling interest

 

 

145

 

 

128

 

 

163

 

 

260

 

Net income attributable to the Company

 

$

10,373

 

$

26,195

 

$

12,370

 

$

26,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE

 

 

  

 

 

  

 

 

  

 

 

  

 

Basic and Diluted

 

 

  

 

 

  

 

 

  

 

 

  

 

Weighted average shares outstanding

 

 

60,200,534

 

 

63,760,022

 

 

60,260,488

 

 

64,613,298

 

Net income per share attributable to the Company

 

$

0.17

 

$

0.41

 

$

0.21

 

$

0.42

 

 

 

See accompanying notes to the condensed consolidated financial statements.

5

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

    

2019

    

2018

    

2019

    

2018

 

Net income:

 

$

10,228

 

$

26,067

 

$

12,207

 

$

26,692

 

Other comprehensive (loss) income:

 

 

 

 

 

  

 

 

 

 

 

  

 

Available-for-sale investment items:

 

 

 

 

 

  

 

 

 

 

 

  

 

Net unrealized (loss) gain on available-for-sale investments

 

 

(9)

 

 

321

 

 

790

 

 

(482)

 

Net unrealized gain (loss) on restricted investments

 

 

 7

 

 

 —

 

 

18

 

 

(9)

 

Reclassification of net realized (gain) loss included in earnings

 

 

 —

 

 

(28)

 

 

 2

 

 

1,050

 

Reclassification into retained earnings (1)

 

 

 —

 

 

 —

 

 

 —

 

 

932

 

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

 

 

 —

 

 

 —

 

 

 —

 

 

63

 

Total before income taxes

 

 

(2)

 

 

293

 

 

810

 

 

1,554

 

Income tax expense (2)

 

 

 —

 

 

(74)

 

 

(206)

 

 

(706)

 

Total other comprehensive (loss) income, net of tax

 

 

(2)

 

 

219

 

 

604

 

 

848

 

Total comprehensive income, net of tax

 

$

10,226

 

$

26,286

 

$

12,811

 

$

27,540

 


(1)

The reclassification into retained earnings for the six months ended June 30, 2018 relates to the adoption of Accounting Standards Update (“ASU”) 2016‑01 Financial Instruments - Overall, as amended (“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 condensed consolidated statements of comprehensive income.

(2)

Income tax expense for the six months ended June 30, 2018 includes $0.3 million of income tax expense related to the adoption of ASU 2018‑02 Income Statement - Reporting Comprehensive Income (“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 Cuts and Jobs Act (the “Tax Act”).

 

See accompanying notes to the condensed consolidated financial statements.

 

 

6

Table of Contents

 

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

    

    

 

    

    

 

    

 

Accumulated

    

    

 

    

    

 

    

    

 

 

 

Common Stock

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

 

Retained

 

 

Comprehensive

 

 

Treasury

 

 

Non-controlling

 

 

 

 

    

Shares

    

 

Amount

    

 

Earnings

    

 

Loss

    

 

Stock

    

 

Interest

    

 

Total

Balance at March 31, 2019

 

60,200,534

 

$

331,408

 

$

189,447

 

$

(68)

 

$

(7,073)

 

$

16,606

 

$

530,320

Allocation of ownership interest in Watercrest JV

 

 —

 

 

(1,209)

 

 

 —

 

 

 —

 

 

 —

 

 

1,209

 

 

 —

Capital contribution from non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,784

 

 

1,784

Capital distribution to non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(200)

 

 

(200)

Stock based compensation expense

 

 —

 

 

10

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

10

Other comprehensive loss, net of tax

 

 —

 

 

 —

 

 

 —

 

 

(2)

 

 

 —

 

 

 —

 

 

(2)

Net income

 

 —

 

 

 —

 

 

10,373

 

 

 —

 

 

 —

 

 

(145)

 

 

10,228

Balance at June 30, 2019

 

60,200,534

 

$

330,209

 

$

199,820

 

$

(70)

 

$

(7,073)

 

$

19,254

 

$

542,140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

    

    

 

    

    

 

    

 

Accumulated

    

    

 

    

    

 

    

    

 

 

 

Common Stock

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

 

Retained

 

 

Comprehensive

 

 

Treasury

 

 

Non-controlling

 

 

 

 

    

Shares

    

 

Amount

    

 

Earnings

    

 

(Loss) Income

    

 

Stock

    

 

Interest

    

 

Total

Balance at March 31, 2018

 

65,142,997

 

$

425,223

 

$

155,838

 

$

(832)

 

$

(13,695)

 

$

14,662

 

$

581,196

Allocation of ownership interest in Pier Park Crossings JV

 

 —

 

 

(490)

 

 

 —

 

 

 —

 

 

 —

 

 

490

 

 

 —

Capital contribution from non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

823

 

 

823

Stock based compensation expense

 

 —

 

 

15

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

15

Issuance of common stock for officer compensation, net of tax withholding

 

 —

 

 

(12)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(12)

Repurchase of common shares

 

(3,300,335)

 

 

 —

 

 

 —

 

 

 —

 

 

(58,768)

 

 

 —

 

 

(58,768)

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

219

 

 

 —

 

 

 —

 

 

219

Net income

 

 —

 

 

 —

 

 

26,195

 

 

 —

 

 

 —

 

 

(128)

 

 

26,067

Balance at June 30, 2018

 

61,842,662

 

$

424,736

 

$

182,033

 

$

(613)

 

$

(72,463)

 

$

15,847

 

$

549,540

 

 

See accompanying notes to the condensed consolidated financial statements.

 

7

Table of Contents

 

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

    

    

 

    

    

 

    

 

Accumulated

    

    

 

    

    

 

    

    

 

 

 

Common Stock

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

 

Retained

 

 

Comprehensive

 

 

Treasury

 

 

Non-controlling

 

 

 

 

    

Shares

    

 

Amount

    

 

Earnings

    

 

(Loss) Income

    

 

Stock

    

 

Interest

    

 

Total

Balance at December 31, 2018

 

60,672,034

 

$

331,395

 

$

187,450

 

$

(674)

 

$

 —

 

$

14,940

 

$

533,111

Allocation of ownership interest in Watercrest JV

 

 —

 

 

(1,209)

 

 

 —

 

 

 —

 

 

 —

 

 

1,209

 

 

 —

Capital contribution from non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

3,468

 

 

3,468

Capital distribution to non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(200)

 

 

(200)

Stock based compensation expense

 

 —

 

 

23

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

23

Repurchase of common shares

 

(471,500)

 

 

 —

 

 

 —

 

 

 —

 

 

(7,073)

 

 

 —

 

 

(7,073)

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

604

 

 

 —

 

 

 —

 

 

604

Net income

 

 —

 

 

 —

 

 

12,370

 

 

 —

 

 

 —

 

 

(163)

 

 

12,207

Balance at June 30, 2019

 

60,200,534

 

$

330,209

 

$

199,820

 

$

(70)

 

$

(7,073)

 

$

19,254

 

$

542,140

 

 

See accompanying notes to the condensed consolidated financial statements.

8

Table of Contents

 

 

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

    

    

 

    

    

 

    

 

Accumulated

    

    

 

    

    

 

    

    

 

 

 

Common Stock

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

 

Retained

 

 

Comprehensive

 

 

Treasury

 

 

Non-controlling

 

 

 

 

    

Shares

    

 

Amount

    

 

Earnings

    

 

(Loss) Income

    

 

Stock

    

 

Interest

    

 

Total

Balance at December 31, 2017

 

65,897,866

 

$

424,694

 

$

154,324

 

$

(1,461)

 

$

 —

 

$

15,027

 

$

592,584

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

 

 

887

Stock based compensation expense

 

 —

 

 

43

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

43

Issuance of common stock for officer compensation, net of tax withholding

 

9,956

 

 

192

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

192

Repurchase of common shares

 

(4,065,160)

 

 

 —

 

 

 —

 

 

 —

 

 

(72,463)

 

 

 —

 

 

(72,463)

Adoption of ASU 2014-09 Revenue From Contracts with Customers, as amended, net of tax

 

 —

 

 

 —

 

 

1,140

 

 

 —

 

 

 —

 

 

 —

 

 

1,140

Adoption of ASU 2016-01 Financial Instruments - Overall, as amended, net of tax

 

 —

 

 

 —

 

 

(696)

 

 

696

 

 

 —

 

 

 —

 

 

 —

Adoption of ASU 2018-02 Income Statement - Reporting Comprehensive Income

 

 —

 

 

 —

 

 

313

 

 

(313)

 

 

 —

 

 

 —

 

 

 —

Other comprehensive income, net of tax

 

 —

 

 

 —

 

 

 —

 

 

465

 

 

 —

 

 

 —

 

 

465

Net income

 

 —

 

 

 —

 

 

26,952

 

 

 —

 

 

 —

 

 

(260)

 

 

26,692

Balance at June 30, 2018

 

61,842,662

 

$

424,736

 

$

182,033

 

$

(613)

 

$

(72,463)

 

$

15,847

 

$

549,540

 

 

See accompanying notes to the condensed consolidated financial statements.

 

 

9

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 30, 

 

    

2019

    

2018

Cash flows from operating activities:

    

 

  

    

 

  

Net income

 

$

12,207

 

$

26,692

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

  

Depreciation, depletion and amortization

 

 

4,533

 

 

4,527

Stock based compensation

 

 

23

 

 

235

Loss on sale of investments

 

 

 2

 

 

1,086

Unrealized gain on investments, net

 

 

(133)

 

 

(729)

Other-than-temporary impairment loss

 

 

 —

 

 

63

Deferred income tax expense (benefit)

 

 

3,685

 

 

(54)

Impairment loss on investment in real estate