ST JOE Co
For the period ended Jun 30, 2024. Filed Jul 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 24, 2024
JOE$69.97+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-24.
0001558370-24-005603
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-24.
0001558370-24-010049
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 171 previous paragraphs and 203 current paragraphs.
87 unchanged; 72 reworded; 16 added; 5 removed; 7 previous and 28 current paragraphs rearranged.
Tables are not compared: 60 previous and 71 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Commercial and Forestry Real Estate Revenue and Gross Profit. During the three months ended June 30, 2024, we had a commercial and forestry real estate sale totaling approximately 168 acres for $0.7 million, with de minimis cost of revenue resulting in a gross profit margin of approximately of 100.0%. During the three months ended June 30, 2023, we had seven commercial and forestry real estate sales totaling approximately 130 acres for $5.1 million and land improvement services of $0.1 million, together resulting in a gross profit of $3.7 million (or gross margin of 71.2%).
Current report
During the six months ended June 30, 2024, we had three commercial and forestry real estate sales totaling approximately 243 acres for $2.1 million, resulting in a gross profit of $1.8 million (or gross margin of 85.7%). During the six months ended June 30, 2023, we had sixteen commercial and forestry real estate sales totaling approximately 183 acres for $10.8 million and land improvement services of $0.3 million, together resulting in a gross profit of $6.4 million (or gross margin of 57.7%).
Current report
Timber revenue decreased $0.7 million, or 23.3%, to $2.3 million during the six months ended June 30, 2024, as compared to $3.0 million in the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 142,000 tons of wood products sold at an average price per ton of $14.48 during the six months ended June 30, 2024, as compared to 167,000 tons of wood products sold at an average price per ton of $16.28, during the same period in 2023. Timber gross margin was 82.6% during the six months ended June 30, 2024, as compared to 86.7% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Current report
Leasing revenue increased $4.9 million, or 20.2%, to $29.1 million during the six months ended June 30, 2024, as compared to $24.2 million in the same period in 2023. The increase was primarily due to new multi-family and marina leases, as well as other new leases. Leasing gross margin was 50.2% during the six months ended June 30, 2024, as compared to 50.8% during the same period in 2023.
Current report
Management’s TRBG program for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael. Miscellaneous (expense) income, net during the six months ended June 30, 2023, also includes a $0.5 million gain on retained interest investment. See Note 16.Other Income, Net for additional information.
Current report
Income tax expense was $13.0 million during the six months ended June 30, 2024, as compared to $14.9 million during the same period in 2023. Our effective tax rate was 25.2% for the six months ended June 30, 2024, as compared to 24.9% during the same period in 2023.
Current report
Camp Creek Inn in June 2023. Our clubs gross margin was 44.9% during the three months ended June 30, 2024, compared to 27.8% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Current report
The increase of $1.1 million in depreciation, depletion and amortization expense during the three months ended June 30, 2024, as compared to the same period in 2023, was primarily due to new properties placed in service.
Current report
The increase of $4.3 million in depreciation, depletion and amortization expense during the six months ended June 30, 2024, as compared to the same period in 2023, was primarily due to new properties placed in service.
Current report
Total leasing revenue increased $1.8 million, or 15.3%, during the three months ended June 30, 2024, as compared to the same period in 2023. The increase was primarily due to new multi-family leases, as well as other new leases. Total leasing gross margin during the three months ended June 30, 2024 was 53.7%, as compared to 50.8% during the same period in 2023. The increase in leasing gross margin was primarily due to new leases, as well as new assets being operational throughout the current period.
Current report
During the three months ended June 30, 2024, we had a commercial and forestry real estate sale of approximately 168 acres for $0.7 million, with de minimis cost of revenue resulting in a gross profit margin of approximately 100.0%. During the three months ended June 30, 2023, we had seven commercial and forestry real estate sales of approximately 130 acres for $5.1 million and land improvement services of $0.1 million, together resulting in a gross margin of approximately 73.1%.
Current report
Other (expense) income, net during the three months ended June 30, 2023, includes $0.5 million of income received from the Florida Division of Emergency Management’s TRBG program for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael.
Current report
Timber revenue decreased $0.7 million, or 23.3%, to $2.3 million during the six months ended June 30, 2024, as compared to $3.0 million during the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 142,000 tons of wood products sold during the six months ended June 30, 2024, as compared to 167,000 tons of wood products sold during the same period in 2023. The average price of wood products sold decreased to $14.48 per ton during the six months ended June 30, 2024, as compared to $16.28 per ton during the same period in 2023. Timber gross margin was 82.6% during the six months ended June 30, 2024, as compared to 86.7% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Current report
The increase of $1.4 million in depreciation, depletion and amortization expense during the six months ended June 30, 2024, as compared to the same period in 2023, was primarily due to new properties placed in service.
Current report
Equity in (loss) income from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for by the equity method. Equity in loss from unconsolidated joint ventures was $2.1 million during the six months ended June 30, 2024, as compared to $0.1 million for the same period in 2023. The six months ended June 30, 2024, primarily include start-up expenses related to the Watersound Fountains Independent Living JV, which opened in March 2024 and is currently under lease-up. See Note 4.Joint Venturesfor additional information.
Current report
Other (expense) income, net during the six months ended June 30, 2023, includes $0.5 million of income received from the Florida Division of Emergency Management’s TRBG program for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael.
Removed paragraphs (5)
Previous report
As of March 31, 2024, we were in the process of constructing Residence Inn Panama City Beach Pier Park, with our JV partner, in Panama City Beach, Florida. The hotel, which opened to guests in April 2024, is operated by our JV partner and included within our commercial segment.
Previous report
Pier Park Crossings, which was developed in two phases, includes 360 completed multi-family units in Panama City Beach, Florida. Watersound Origins Crossings includes 217 completed multi-family units and Origins Crossings Townhomes includes 64 completed units near the Watersound Town Center. North Bay Landing includes 240 completed multi-family units in Panama City, Florida. Mexico Beach Crossings includes 216 completed multi-family units in Mexico Beach, Florida. The WindMark Beach community includes 31 completed long-term rental units in Port St. Joe, Florida. Watercrest includes 107 completed senior living units in Santa Rosa Beach, Florida. Watersound Fountains, an
Previous report
unconsolidated JV, includes 148 completed independent living units located near the Watersound Town Center and the Watersound Origins residential community. We have additional multi-family communities in various stages of planning.
Previous report
Timber Revenue and Gross Profit. Timber revenue decreased $0.5 million, or 29.4%, to $1.2 million during the three months ended March 31, 2024, as compared to $1.7 million in the same period in 2023. The decrease was
Previous report
The increase of $3.1 million in depreciation, depletion and amortization expense during the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to new properties placed in service.
Reworded paragraphs (72)
Previous wording
We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to focus on our core business activity of real estate development, asset management and operations. We continue to develop a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject to delays caused by factors beyond our control. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Current wording
We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to focus on our core business activity of real estate development, asset management and operations. We continue to develop a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject
Previous wording
Highlights for the first quarter of 2024 compared to the first quarter of 2023 include:
Current wording
Highlights for the second quarter of 2024 compared to the second quarter of 2023 include:
Previous wording
Throughout the first three months of 2024, we continued to generate positive financial results. While macroeconomic factors such as inflation, elevated interest rates, higher insurance costs, supply chain disruptions, labor shortages, financial institution disruptions and geopolitical conflicts, among other things, continued to produce economic headwinds and impacted buyer sentiment, demand across our segments remains strong. We believe this is primarily due to the continued growth of Northwest Florida as a result of increased migration, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities.
Current wording
Throughout the first half of 2024, we continued to generate positive financial results. While macroeconomic factors such as inflation, elevated interest rates, higher insurance costs, supply chain disruptions, labor shortages, financial institution disruptions and geopolitical conflicts, among other things, continued to produce economic headwinds and impacted buyer sentiment, demand across our segments remains strong. We believe this is primarily due to the continued growth of Northwest Florida as a result of increased migration, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities.
Previous wording
The residential segment generates revenue from sales of homesites, homes and other residential land and certain homesite residuals from homebuilder sales that provide us a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold. Revenue is recognized at the point in time when a sale is closed and title and control has been transferred to the buyer. The residential segment also generates revenue from the sale of tap and impact fee credits, marketing fees and other fees on certain transactions. Certain homesite residuals and other revenue related to homebuilder homesite sales are recognized in revenue at the point in time of the closing of the sale. The residential segment incurs cost from direct costs (e.g., development and construction costs), selling costs and other indirect costs.
Current wording
The residential segment generates revenue from sales of homesites, homes and other residential land and certain homesite residuals from homebuilder sales that provide us a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold. Revenue is recognized at the point in time when a sale is closed and title and control has been transferred to the buyer. The residential segment also generates revenue from the sale of tap and impact fee credits, marketing fees and other fees on certain transactions. Certain homesite residuals and other revenue related to homebuilder homesite sales are recognized in revenue at the point in time of the closing of the sale. The residential segment incurs costs from direct costs (e.g., development and construction costs), selling costs and other indirect costs.
Previous wording
The Latitude Margaritaville Watersound community is a planned 55+ active adult residential community in Bay County, Florida. The community is located near the Intracoastal Waterway with convenient access to the Northwest Florida Beaches International Airport. The community is being developed through our unconsolidated Latitude Margaritaville Watersound JV with our partner Minto Communities USA, a homebuilder and community developer, and is estimated to include approximately 3,500 residential homes, which will be developed in smaller increments of discrete neighborhoods. As of March 31, 2024, the unconsolidated Latitude Margaritaville Watersound JV had 562 homes under contract, which are expected to result in a sales value of approximately $303.9 million at closing of the homes. See Note 4.Joint Ventures for additional information.
Current wording
The Latitude Margaritaville Watersound community is a planned 55+ active adult residential community in Bay County, Florida. The community is located near the Intracoastal Waterway with convenient access to the Northwest Florida Beaches International Airport. The community is being developed through our unconsolidated Latitude Margaritaville Watersound JV with our partner Minto Communities USA, a homebuilder and community developer, and is estimated to include approximately 3,500 residential homes, which are being developed in smaller increments of discrete neighborhoods. As of June 30, 2024, the unconsolidated Latitude Margaritaville Watersound JV had 534 homes under contract, which are expected to result in a sales value to the JV of approximately $302.8 million at closing of the homes. See Note 4.Joint Ventures for additional information.
Previous wording
As of March 31, 2024, we had twenty different homebuilders within our residential communities. As of March 31, 2024, we had 1,335 residential homesites under contract, which are expected to result in revenue of approximately $119.8 million, plus residuals, at closing of the homesites over the next several years. By comparison, as of March 31, 2023, we had 1,915 residential homesites under contract, with an expected revenue of approximately $165.0 million, plus residuals. The change in homesites under contract is due to homesite transactions during the period and amount of remaining homesites in current phases of the residential communities. The number of homesites under contract is subject to change based on homesite closings and new sales activity. Homesite prices vary significantly by community and often sell in concentrated transactions that may impact quarterly results. As of March 31, 2024, in addition to the 1,335 homesites under contract in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 562 homes under contract, which together with the 1,335 homesites are expected to result in a sales value of approximately $423.7 million at closing of the homesites and homes.
Current wording
As of June 30, 2024, we had nineteen different homebuilders within our residential communities. As of June 30, 2024, we had 1,303 residential homesites under contract, which are expected to result in revenue of approximately $114.0 million, plus residuals, at closing of the homesites over the next several years. By comparison, as of June 30, 2023, we had 1,825 residential homesites under contract, with an expected revenue of approximately $158.5 million, plus residuals. The change in homesites under contract is due to homesite transactions since the end of the prior period and the amount of remaining homesites in current phases of the residential communities. The number of homesites under contract is subject to change based on homesite closings and new sales activity. Homesite prices vary significantly by community and often sell in concentrated transactions that may impact quarterly results. As of June 30, 2024, in addition to the 1,303 homesites under contract in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 534 homes under contract, which together with the 1,303 homesites are expected to result in a sales value of approximately $416.8 million at closing of the homesites and homes.
Previous wording
Our hospitality segment features a private membership club (the “Watersound Club”), hotel operations, food and beverage operations, golf courses, beach clubs, retail outlets, gulf-front vacation rentals, marinas and other entertainment assets. The hospitality segment generates revenue from membership sales, golf courses, lodging at our hotels, short-term vacation rentals, food and beverage operations, merchandise sales, marina operations (including boat slip rentals, boat storage fees and fuel sales), charter flights, other resort and entertainment activities and beach clubs, which includes operation of the WaterColor Beach Club. Hospitality revenue is generally recognized at the point in time services are provided and represent a single performance obligation with a fixed transaction price. Hospitality revenue recognized over time includes non-refundable club membership initiation fees, club membership dues and other membership fees. The hospitality segment incurs costs from the services and goods provided, personnel costs, maintenance of the facilities and holding costs of the assets. From time to time, we may explore the sale of certain hospitality properties, the development of new hospitality properties, as well as new entertainment and management opportunities. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 9.Debt, Net.
Current wording
vacation rentals, food and beverage operations, merchandise sales, marina operations (including boat slip rentals, boat storage fees and fuel sales), charter flights, other resort and entertainment activities and beach clubs, which includes operation of the WaterColor Beach Club. Hospitality revenue is generally recognized at the point in time services are provided and represent a single performance obligation with a fixed transaction price. Hospitality revenue recognized over time includes non-refundable club membership initiation fees, club membership dues and other membership fees. The hospitality segment incurs costs from the services and goods provided, personnel costs, maintenance of the facilities and holding costs of the assets. From time to time, we may explore the sale of certain hospitality properties, the development of new hospitality properties, as well as new entertainment and management opportunities. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 9.Debt, Net.
Previous wording
Watersound Club provides club members and guests of some of our hotels access to our member facilities, which include Camp Creek golf course and amenities, Shark’s Tooth golf course and tennis center, Watersound Beach Club and a Pilatus PC-12 NG aircraft (“N850J”). Watersound Club offers different types of club memberships, each with different access rights and associated fee structures. Watersound Club is focused on creating an outstanding membership experience combined with the luxurious aspects of a destination resort. Club operations include a private beach club located on Scenic Highway 30A, with over one mile of Gulf of Mexico frontage, two resort-style pools, two restaurants, three bars, kid’s room and a recreation area. Shark’s Tooth includes an 18-hole golf course, tennis center, a full club house, a pro shop, as well as two food and beverage outlets. Camp Creek includes an 18-hole golf course, a full club house, health and wellness center, three restaurants, a tennis and pickle ball center, a resort-style pool complex with separate adult pool, a golf teaching academy, pro shop and multi-sport fields. We are in the process of constructing The Third, an 18-hole golf course, planned to be added to our Watersound Club operations.
Current wording
Watersound Club provides club members and guests of some of our hotels access to our member facilities, which include Camp Creek golf course and amenities, Shark’s Tooth golf course and tennis center, Watersound Beach Club and a Pilatus PC-12 NG aircraft (“N850J”). Watersound Club offers different types of club memberships, each with different access rights and associated fee structures. Watersound Club is focused on creating an outstanding membership experience combined with the luxurious aspects of a destination resort. Club operations include a private beach club located on Scenic Highway 30A, with over one mile of Gulf of Mexico frontage, two resort-style pools, two restaurants, three bars, kid’s room and a recreation area. Shark’s Tooth includes an 18-hole golf course, tennis center, a full club house, a pro shop, as well as two food and beverage outlets. Camp Creek includes an 18-hole golf course, a full club house, health and wellness center, three restaurants, a tennis and pickle ball center, a resort-style pool complex with separate adult pool, a golf teaching academy, pro shop and multi-sport fields. We are in the process of constructing The Third, an 18-hole golf course, planned to be added to our Watersound Club operations. In June 2024, we opened The Sporting Preserve, a 12 stand sporting clays course.
Previous wording
Watersound Origins amenities include an executive golf course, resort-style pool, fitness center and two tennis courts located in the community. Access to these amenities is reserved to Watersound Origins and Watersound Origins West members consisting of the communities’ residents. The golf course is available for public play.
Current wording
Watersound Origins amenities include an executive golf course, resort-style pool, fitness center, pickle ball courts and tennis courts located in the community. Access to these amenities is reserved to Watersound Origins and Watersound Origins West members consisting of the communities’ residents. The golf course is available for public play.
Previous wording
We own and operate the award-winning WaterColor Inn (which includes the Fish Out of Water restaurant) and The Pearl Hotel (which includes the Havana Beach Bar & Grill restaurant); the Camp Creek Inn, the Hilton Garden Inn Panama City Airport, the Homewood Suites by Hilton Panama City Beach, the Hotel Indigo Panama City Marina, the Home2 Suites by Hilton Santa Rosa Beach, the WaterSound Inn and two gulf-front vacation rental houses. With our JV partners, we own and operate The Lodge 30A and the Embassy Suites by Hilton Panama City Beach Resort. We also
Current wording
We own and operate the award-winning WaterColor Inn (which includes the Fish Out of Water restaurant) and The Pearl Hotel (which includes the Havana Beach Bar & Grill restaurant); the Camp Creek Inn, the Hilton Garden Inn Panama City Airport, the Homewood Suites by Hilton Panama City Beach, the Hotel Indigo Panama City Marina, the Home2 Suites by Hilton Santa Rosa Beach, the WaterSound Inn and two gulf-front vacation rental houses. With our JV partners, we own and operate The Lodge 30A and the Embassy Suites by Hilton Panama City Beach Resort. We also operate the WaterColor Beach Club, which includes food and beverage operations and other hospitality related activities, such as beach chair rentals.
Previous wording
Our commercial segment includes leasing of commercial property, multi-family, senior living, self-storage and other assets. The commercial segment also oversees the planning, development, entitlement, management and sale of our commercial and forestry land holdings for a variety of uses, including a broad range of retail, office, hotel, senior living, multi-family, self-storage and industrial properties. We provide development opportunities for national, regional and local retailers and other strategic partners in Northwest Florida. We own and manage retail shopping centers and develop commercial parcels. We are currently developing the Watersound Town Center in Walton County, Florida and Watersound West Bay Center in Bay County, Florida. These lifestyle centers are complementary to our Watersound
Current wording
Our commercial segment includes leasing of commercial property, multi-family, senior living, self-storage and other assets. The commercial segment also oversees the planning, development, entitlement, management and sale of our commercial and forestry land holdings for a variety of uses, including a broad range of retail, office, hotel, senior living, multi-family, self-storage and industrial properties. We provide development opportunities for national, regional and local retailers and other strategic partners in Northwest Florida. We own and manage retail shopping centers and develop commercial parcels. We are currently developing the Watersound Town Center in Walton County, Florida and Watersound West Bay Center in Bay County, Florida. These lifestyle centers are complementary to our Watersound Origins and Latitude Margaritaville Watersound residential communities. In conjunction with Florida State University (“FSU”) and Tallahassee Memorial Hospital (“TMH”), we are in the process of developing an 87-acre medical campus in Panama City Beach, Florida. We have large land holdings near the Pier Park retail center, adjacent to the Northwest Florida Beaches International Airport, near or within business districts in the region and along major roadways. We lease land for various other uses. The commercial segment manages our timber holdings in Northwest Florida which includes growing and selling pulpwood, sawtimber and other products.
Previous wording
Our leasing portfolio consists of approximately 1,082,000 square feet of leasable space for mixed-use, retail, industrial, office, self-storage and medical uses. Through separate unconsolidated JVs, other commercial properties that are operated by our JV partners include a 124-room TownePlace Suites by Marriott, a Busy Bee branded fuel station and convenience store, which includes a Starbucks, and a golf cart sales and service facility, all located in Bay County, Florida.
Current wording
Our leasing portfolio consists of approximately 1,100,000 square feet of leasable space for mixed-use, retail, industrial, office, self-storage and medical uses. Through separate unconsolidated JVs, other commercial properties that are operated by our JV partners include a 124-room TownePlace Suites by Marriott, a 121-room Residence Inn, a Busy Bee branded fuel station and convenience store, which includes a Starbucks, and a golf cart sales and service facility, all located in Bay County, Florida. Through an unconsolidated JV, an additional golf cart sales showroom, located in Walton County, Florida, is operated by our JV partner.
Previous wording
The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We base these estimates on historical experience, available current market information and on various other assumptions that management believes are reasonable under the circumstances. Additionally, we evaluate the results of these estimates on an on-going basis. Management’s estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and our accounting estimates are subject to change.
Current wording
The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We base these estimates on historical experience, available current market information and on various other assumptions that management believes are reasonable under the circumstances. Additionally, we evaluate the results of these estimates on an on-going basis. Management’s estimates form the basis for making judgments about the carrying values of assets and liabilities that are
Previous wording
Critical accounting policies that we believe reflect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements are set forth in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no significant changes in these policies during the first three months of 2024, however we cannot assure you that these policies will not change in the future.
Current wording
Critical accounting policies that we believe reflect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements are set forth in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no significant changes in these policies during the first six months of 2024, however we cannot assure you that these policies will not change in the future.
Previous wording
Our operations may be affected by seasonal fluctuations. The revenues and earnings from our business segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic transactions. In addition, homesite prices vary significantly by community, which further impacts period over period results. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or commercial real estate sales. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Current wording
Our operations may be affected by seasonal fluctuations. The revenues and earnings from our business segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic transactions. For example, in the second quarter of 2023, we had an extraordinarily high number of homesites that were completed and sold, fueled by the completion and sale of a new phase of 133 homesites in the Watersound Origins community. As a result, revenue for our residential segment varied significantly for the second quarter of 2024 relative to the prior period. In addition, homesite prices vary significantly by community, which further impacts period over period results. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or commercial real estate sales. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Previous wording
Residential Real Estate Revenue and Gross Profit. During the three months ended March 31, 2024, residential real estate revenue increased $2.8 million, or 10.0%, to $30.8 million, as compared to $28.0 million during the same period in 2023. During the three months ended March 31, 2024, residential real estate gross profit increased $4.0 million to $15.8 million (or gross margin of 51.3%), as compared to $11.8 million (or gross margin of 42.1%) during the same period in 2023. During the three months ended March 31, 2024, we sold 216 homesites, compared to 327 homesites and unimproved residential land sales of $0.6 million during the same period in 2023. During the three months ended March 31, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $117,000 and $62,000, respectively, due to the mix of sales from different communities. Homesite sales in the prior period include the sale of 100 entitled but undeveloped homesites sold within the SouthWood community, which reduced the average price per homesite. The revenue, gross profit and margin for each period was impacted by the difference in pricing among the communities, the difference in the cost of the homesite development and the volume of sales within each of the communities. The number of homesites sold varied each period due to the timing of homebuilder contractual closing obligations in our residential communities.
Current wording
During the six months ended June 30, 2024, residential real estate revenue decreased $28.9 million, or 31.6%, to $62.5 million, as compared to $91.4 million during the same period in 2023. During the six months ended June 30, 2024, residential real estate gross profit decreased $14.2 million to $31.7 million (or gross margin of 50.7%), as compared to $45.9 million (or gross margin of 50.2%) during the same period in 2023. During the six months ended June 30, 2024, we sold 402 homesites, compared to 627 homesites and unimproved residential land sales of $0.6 million during the same period in 2023. During the six months ended June 30, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $128,000 and $105,000, respectively, due to the mix of sales from different communities. Homesite sales in the prior period include the sale of 100 entitled but undeveloped homesites sold within the SouthWood community, which reduced the average price per homesite. The revenue, gross profit and margin for each period was impacted by the difference in pricing among the communities, the difference in the cost of the homesite development and the volume of sales within each of the communities. The number of homesites sold varied each period due to the timing of homebuilder contractual closing obligations in our residential communities.
Previous wording
Our gross margin can vary significantly from period-to-period depending on the characteristics of property sold. Sales of forestry land typically have a lower cost basis than residential and commercial real estate sales. In addition, our cost basis in residential and commercial real estate can vary depending on the amount of development or other costs incurred on the property.
Current wording
Revenue from commercial and forestry real estate can vary significantly from period-to-period depending on the proximity to developed areas and mix of real estate sold in each period, with varying compositions of retail, office, industrial, timber and other commercial uses. Our gross margin can vary significantly from period-to-period depending on the characteristics of property sold. Sales of forestry land typically have a lower cost basis than residential and commercial real estate sales. In addition, our cost basis in residential and commercial real estate can vary depending on the amount of development or other costs incurred on the property.
Previous wording
primarily due to a decrease in tons of wood products sold and prices in the current period. There were 75,000 tons of wood products sold at an average price per ton of $14.83 during the three months ended March 31, 2024, as compared to 95,000 tons of wood products sold at an average price per ton of $16.44, during the same period in 2023. Timber gross margin was 83.3% during the three months ended March 31, 2024, as compared to 88.2% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Current wording
Timber Revenue and Gross Profit. Timber revenue decreased $0.2 million, or 15.4%, to $1.1 million during the three months ended June 30, 2024, as compared to $1.3 million in the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 67,000 tons of wood products sold at an average price per ton of $14.09 during the three months ended June 30, 2024, as compared to 72,000 tons of wood products sold at an average price per ton of $16.08, during the same period in 2023. Timber gross margin was 72.7% during the three months ended June 30, 2024, as compared to 84.6% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Previous wording
Hospitality revenue increased $14.8 million, or 60.4%, to $39.3 million during the three months ended March 31, 2024, as compared to $24.5 million in the same period in 2023. The increase in hospitality revenue was primarily related to the continued increase of club members and opening of new Camp Creek amenities in April 2023, as well as an increase in lodging revenue. The increase in lodging revenue was related to Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; The Lodge 30A, which opened in February 2023; and Home2 Suites by Hilton Santa Rosa Beach, Hotel Indigo Panama City Marina and Camp Creek Inn, which opened in June 2023. As of March 31, 2024, Watersound Club had 3,433 members, compared with 2,653 members as of March 31, 2023, an increase of 780 members. As of March 31, 2024, we had 1,053 operational hotel rooms, compared with 492 operational hotel rooms as of March 31, 2023, an increase of 561 rooms (both periods exclude 124 rooms related to an unconsolidated JV). Hospitality had a gross margin of 22.9% during the three months ended March 31, 2024, compared to 6.5% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational in the current period.
Current wording
Hospitality revenue increased $32.0 million, or 46.0%, to $101.6 million during the six months ended June 30, 2024, as compared to $69.6 million in the same period in 2023. The increase in hospitality revenue was primarily related to the continued increase of club members and opening of new Camp Creek amenities in April 2023, as well as an increase in lodging revenue. The increase in lodging revenue was related to Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; The Lodge 30A, which opened in February 2023; and Home2 Suites by Hilton Santa Rosa Beach, Hotel Indigo Panama City Marina and Camp Creek Inn, which all opened in June 2023. As of June 30, 2024, Watersound Club had 3,571 members, compared with 2,853 members as of June 30, 2023, an increase of 718 members. As of both June 30, 2024 and 2023, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs). Hospitality had a gross margin of 32.9% during the six months ended June 30, 2024, compared to 19.3% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Previous wording
Leasing revenue increased $2.5 million, or 21.2%, to $14.3 million during the three months ended March 31, 2024, as compared to $11.8 million in the same period in 2023. The increase was primarily due to new multi-family and marina leases, as well as other new leases. Leasing gross margin was 49.7% during the three months ended March 31, 2024, as compared to 54.2% during the same period in 2023. The decrease in gross margin was primarily due to increased operating costs and lease-up expenses in the current period.
Current wording
Leasing revenue increased $2.4 million, or 19.4%, to $14.8 million during the three months ended June 30, 2024, as compared to $12.4 million in the same period in 2023. The increase was primarily due to new multi-family and marina leases, as well as other new leases. Leasing gross margin was 50.7% during the three months ended June 30, 2024, as compared to 47.6% during the same period in 2023. The increase in leasing gross margin was primarily due to new leases, as well as new assets being operational throughout the current period.
Previous wording
Corporate and other operating expenses increased $1.4 million to $7.1 million during the three months ended March 31, 2024, as compared to $5.7 million in the same period in 2023, primarily due to employee costs for bonuses and restricted stock awards. See Note 14.Stockholders’ Equity for additional information related to the issuance of common stock for employee compensation.
Current wording
Corporate and other operating expenses increased $0.4 million to $5.9 million during the three months ended June 30, 2024, as compared to $5.5 million in the same period in 2023. Corporate and other operating expenses increased $1.6 million to $12.9 million during the six months ended June 30, 2024, as compared to $11.3 million in the same period in 2023. The increases were primarily due to employee costs for bonuses and restricted stock awards. See Note 14.Stockholders’ Equity for additional information related to the issuance of common stock for employee compensation.
Previous wording
Depreciation, depletion and amortization expense increased $3.9 million during the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to new hospitality and commercial assets placed in service.
Current wording
Depreciation, depletion and amortization expense increased $1.8 million and $5.7 million during the three and six months ended June 30, 2024, respectively, as compared to the same periods in 2023, primarily due to new hospitality and commercial assets placed in service.
Previous wording
Investment income, net increased $0.5 million to $3.4 million for the three months ended March 31, 2024, as compared to $2.9 million in the same period in 2023. The increase was primarily due to the change in cash and cash equivalents held and higher interest rates earned in the current period. The increase was also due to interest earned on the unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV related to increased home sales transactions in the community in the current period. See Note 4.Joint Venturesand Note 16.Other Income, Net* *for additional information.
Current wording
Investment income, net increased $0.2 million to $3.4 million for the three months ended June 30, 2024, as compared to $3.2 million in the same period in 2023. Investment income, net increased $0.7 million to $6.8 million for the six months ended June 30, 2024, as compared to $6.1 million in the same period in 2023. The increases were primarily due to the change in cash and cash equivalents held and higher interest rates earned in the current period. See Note 16.Other Income, Net* *for additional information.
Previous wording
Interest expense increased $2.3 million, or 37.1%, to $8.5 million during the three months ended March 31, 2024, as compared to $6.2 million in the same period in 2023. The increase in interest expense is primarily related to completion of projects where interest expense is no longer capitalized and the increase in project financing. See Note 9.Debt, Net and Note 16.Other Income, Net for additional information regarding project financing.
Current wording
Interest expense increased $1.3 million, or 18.1%, to $8.5 million during the three months ended June 30, 2024, as compared to $7.2 million in the same period in 2023. Interest expense increased $3.7 million, or 27.6%, to $17.1 million during the six months ended June 30, 2024, as compared to $13.4 million in the same period in 2023. The increase in interest expense is primarily related to completion of projects where interest expense is no longer capitalized and the increase in project financing. See Note 9.Debt, Net and Note 16.Other Income, Net for additional information regarding project financing.
Previous wording
Other (expense) income, net decreased $1.2 million to expense of $0.5 million during the three months ended March 31, 2024, as compared to $0.7 million of income in the same period in 2023. Accretion income from retained interest investments during the three months ended March 31, 2023, includes accretion of investment income over the life of the retained interest using the effective yield method, prior to optional prepayment, in full, of the installment notes in August 2023. Miscellaneous (expense) income, net during the three months ended March 31, 2024, includes a $0.5 million net loss on disposal of assets. Miscellaneous (expense) income, net during the three months ended March 31, 2023, includes a $0.5 million gain on retained interest investment. See Note 16.Other Income, Net for additional information.
Current wording
Other (expense) income, net decreased $1.6 million to expense of $0.1 million during the three months ended June 30, 2024, as compared to $1.5 million of income in the same period in 2023. Other (expense) income, net decreased $2.6 million to expense of $0.5 million during the six months ended June 30, 2024, as compared to $2.1 million of income in the same period in 2023. Accretion income from retained interest investments includes accretion of investment income over the life of the retained interest using the effective yield method, prior to optional prepayment, in full, of the installment notes in August 2023. Miscellaneous (expense) income, net during the six months ended June 30, 2024, includes a $0.5 million net loss on disposal of assets. Miscellaneous (expense) income, net during the three and six months ended June 30, 2023, includes $0.5 million of income received from the Florida Division of Emergency
Previous wording
Income tax expense was $4.7 million during the three months ended March 31, 2024, as compared to $3.4 million during the same period in 2023. Our effective tax rate was 25.0% for the three months ended March 31, 2024, as compared to 24.9% during the same period in 2023.
Current wording
Income tax expense was $8.3 million during the three months ended June 30, 2024, as compared to $11.5 million during the same period in 2023. Our effective tax rate was 25.3% for the three months ended June 30, 2024, as compared to 24.9% during the same period in 2023.
Previous wording
Our effective rate for the three months ended March 31, 2024 and 2023, differed from the federal statutory rate of 21.0% primarily due to state income taxes, tax credits and other permanent items. See Note 12.Income Taxes for additional information.
Current wording
Our effective rate for the three and six months ended June 30, 2024 and 2023, differed from the federal statutory rate of 21.0% primarily due to state income taxes, tax credits and other permanent differences. See Note 12.Income Taxes for additional information.
Previous wording
Other revenue includes tap and impact fee credits sold and marketing fees. Other revenue includes estimated fees related to homebuilder homesite sales of $0.8 million and $1.0 million, during the three months ended March 31, 2024 and 2023, respectively.
Current wording
Other revenue includes tap and impact fee credits sold, marketing fees and other fees. Other revenue includes estimated fees related to homebuilder homesite sales of $0.9 million and $1.8 million, during the three months ended June 30, 2024 and 2023, respectively.
Previous wording
Homesites. Revenue from homesite sales increased $3.2 million, or 12.5%, during the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to the mix and number of homesites sold per community and the timing of homebuilder contractual closing obligations in our residential communities. During the three months ended March 31, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $117,000 and $62,000, respectively, due to the mix of sales from different communities. Homesite sales in the prior period include the sale of 100 entitled but undeveloped homesites sold within the SouthWood community, which reduced the average price per homesite. Revenue includes estimated homesite residuals of $2.1 million and $3.2 million during the three months ended March 31, 2024 and 2023, respectively. The decrease in estimated homesite residuals was due to themix and number of homesites sold per community in the current period. Gross margin increased to 50.0% during the three months ended March 31, 2024, as compared to 41.0% during the same period in 2023, primarily due to the cost, mix and number of homesites sold from different communities during each respective period. Gross margin may vary each period depending on the location of homesite sales.
Current wording
Homesites. Revenue from homesite sales decreased $28.4 million, or 33.2%, during the six months ended June 30, 2024, as compared to the same period in 2023, primarily due to the mix and number of homesites sold per community and the timing of homebuilder contractual closing obligations in our residential communities. During the six months ended June 30, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $128,000 and $105,000, respectively, due to the mix of sales from different communities. Homesite sales in the prior period include the sale of 100 entitled but undeveloped homesites sold within the SouthWood community, which reduced the average price per homesite. Revenue includes estimated homesite residuals of $2.6 million and $15.1 million during the six months ended June 30, 2024 and 2023, respectively. The decrease in estimated homesite residuals was due to themix and number of homesites sold per community in the current period. Gross margin increased to 51.1% during the six months ended June 30, 2024, as compared to 49.9% during the same period in 2023, primarily due to the cost, mix and number of homesites sold from different communities during each respective period. Gross margin may vary each period depending on the location of homesite sales.
Previous wording
*Land sales.*During the three months ended March 31, 2024, we did not have any unimproved land sales. During the three months ended March 31, 2023, we had unimproved residential land sales for $0.6 million, resulting in a gross margin of approximately 83.3%.
Current wording
*Land sales.*During the six months ended June 30, 2024, we did not have any unimproved land sales. During the six months ended June 30, 2023, we had unimproved residential land sales of $0.6 million, resulting in a gross margin of approximately 83.3%.
Previous wording
Gain on contributions to unconsolidated joint ventures for the three months ended March 31, 2024 and 2023, includes a gain of less than $0.1 million and $0.5 million, respectively, on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. See Note 4.Joint Ventures for additional information.
Current wording
Gain on contributions to unconsolidated joint ventures for the six months ended June 30, 2024 and 2023, includes a gain of less than $0.1 million and $0.6 million, respectively, on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. See Note 4.Joint Ventures for additional information.
Previous wording
Equity in income from unconsolidated joint ventures includes our proportionate share of earnings or losses of an unconsolidated JV accounted for by the equity method. Equity in income from unconsolidated joint ventures increased $4.4 million during the three months ended March 31, 2024, as compared to the same period in 2023. The increase was due to a higher average margin per home sold and the increased volume of home sale transactions during the current period related to our unconsolidated Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV completed 177 home sale transactions during the three months ended March 31, 2024, compared to 149 home sale transactions during the same period in 2023. See Note 4.Joint Venturesfor additional information.
Current wording
Equity in income from unconsolidated joint ventures includes our proportionate share of earnings or losses of an unconsolidated JV accounted for by the equity method. Equity in income from unconsolidated joint ventures increased $5.0 million during the six months ended June 30, 2024, as compared to the same period in 2023. The increase was due to a higher average margin per home sold and the increased volume of home sale transactions during the current period related to our unconsolidated Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV completed 340 home sale transactions during the six months ended June 30, 2024, compared to 313 home sale transactions during the same period in 2023. See Note 4.Joint Venturesfor additional information.
Previous wording
The following table sets forth details of our hospitality segment consolidated revenue and gross profit (deficit):
Current wording
The following table sets forth details of our hospitality segment consolidated revenue and gross profit:
Previous wording
Revenue from our hotel operations increased $5.7 million, or 46.3%, during the three months ended March 31, 2024, as compared to the same period in 2023. The increase was primarily due to an increase in lodging revenue from Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; The Lodge 30A, which opened in February 2023 and Home2 Suites by Hilton Santa Rosa Beach and Hotel Indigo Panama City Marina, which both opened in June 2023. Our hotels had a gross margin of 2.2% for the three months ended March 31, 2024, compared to a negative gross margin of 13.0% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational in the current period.
Current wording
Revenue from our hotel operations increased $8.4 million, or 29.9%, during the three months ended June 30, 2024, as compared to the same period in 2023. The increase was primarily due to an increase in lodging revenue from Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; and Home2 Suites by Hilton Santa Rosa Beach and Hotel Indigo Panama City Marina, which both opened in June 2023. Our hotels had a gross margin of 36.7% for the three months ended June 30, 2024, compared to 25.3% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Previous wording
Revenue from other hospitality operations increased $0.2 million, or 9.5%, during the three months ended March 31, 2024, as compared to the same period in 2023. Our other hospitality operations had a gross margin of 17.4% during the three months ended March 31, 2024, compared to 0.0% during the same period in 2023. The increase in gross margin was due to increased occupancy at our Point South Marina Bay Point and Point South Marina Port St. Joe, which reopened in the second half of 2022.
Current wording
Revenue from other hospitality operations increased $0.5 million, or 13.5%, during the three months ended June 30, 2024, as compared to the same period in 2023. Our other hospitality operations had a gross margin of 31.0% during the three months ended June 30, 2024, compared to 27.0% during the same period in 2023. The increase in revenue and gross margin was due to increased occupancy and special events at our Point South Marina Bay Point and Point South Marina Port St. Joe, which reopened in the second half of 2022.
Previous wording
Interest expense primarily includes interest incurred from our hospitality project financing. The increase of $1.8 million in interest expense during the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to completion of projects where interest expense is no longer capitalized and the increase in project financing. See Note 9.Debt, Net for additional information.
Current wording
Interest expense primarily includes interest incurred from our hospitality project financing. The increase of $0.8 million in interest expense during the three months ended June 30, 2024, as compared to the same period in 2023, was primarily due to completion of projects where interest expense is no longer capitalized and the increase in project financing. See Note 9.Debt, Net for additional information.
Previous wording
Revenue from our clubs increased $8.9 million, or 88.1%, during the three months ended March 31, 2024, as compared to the same period in 2023. The increase in revenue in the current period was due to increases in the number of club members and membership revenue, as well as the opening of new Camp Creek amenities in April 2023 and Camp Creek Inn in June 2023. As of March 31, 2024, Watersound Club had 3,433 members, compared with 2,653 members as of March 31, 2023, an increase of 780 members. Our clubs gross margin was 43.2% during the three months ended March 31, 2024, compared to 31.7% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational in the current period.
Current wording
Revenue from our clubs increased $17.2 million, or 73.5%, during the six months ended June 30, 2024, as compared to the same period in 2023. The increase in revenue in the current period was due to increases in the number of club members and membership revenue, as well as the opening of new Camp Creek amenities in April 2023 and Camp Creek Inn in June 2023. As of June 30, 2024, Watersound Club had 3,571 members, compared with 2,853 members as of June 30, 2023, an increase of 718 members. Our clubs gross margin was 43.8% during the six months ended June 30, 2024, compared to 29.5% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Previous wording
As of March 31, 2024, we had 1,053 operational hotel rooms, compared with 492 operational hotel rooms as of March 31, 2023, an increase of 561 rooms (both periods exclude 124 rooms related to an unconsolidated JV).
Current wording
As of both June 30, 2024 and 2023, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs).
Previous wording
Other expense, net for the three months ended March 31, 2024, primarily includes net loss on disposal of assets.
Current wording
Other income (expense), net for the six months ended June 30, 2024, primarily includes net loss on disposal of assets.
Previous wording
Timber revenue decreased $0.5 million, or 29.4%, to $1.2 million during the three months ended March 31, 2024, as compared to $1.7 million during the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 75,000 tons of wood products sold during the three months ended March 31, 2024, as compared to 95,000 tons of wood products sold during the same period in 2023. The average price of wood products sold decreased to $14.83 per ton during the three months ended March 31, 2024, as compared to $16.44 per ton during the same period in 2023. Timber gross margin was 83.3% during the three months ended March 31, 2024, as compared to 88.2% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Current wording
Timber revenue decreased $0.2 million, or 15.4%, to $1.1 million during the three months ended June 30, 2024, as compared to $1.3 million during the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 67,000 tons of wood products sold during the three months ended June 30, 2024, as compared to 72,000 tons of wood products sold during the same period in 2023. The average price of wood products sold decreased to $14.09 per ton during the three months ended June 30, 2024, as compared to $16.08 per ton during the same period in 2023. Timber gross margin was 72.7% during the three months ended June 30, 2024, as compared to 84.6% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Showing the first 40 of 72 pairs. Open the source sections for the rest.
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Current report — wording carried from elsewhere
to delays caused by factors beyond our control. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Current report — wording carried from elsewhere
Our hospitality segment features a private membership club (the “Watersound Club”), hotel operations, food and beverage operations, golf courses, beach clubs, retail outlets, gulf-front vacation rentals, marinas and other entertainment assets. The hospitality segment generates revenue from membership sales, golf courses, lodging at our hotels, short-term
Current report — wording carried from elsewhere
not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and our accounting estimates are subject to change.
Current report — wording carried from elsewhere
Residential Real Estate Revenue and Gross Profit. During the three months ended June 30, 2024, residential real estate revenue decreased $31.7 million, or 50.0%, to $31.7 million, as compared to $63.4 million during the same period in 2023. During the three months ended June 30, 2024, residential real estate gross profit decreased $18.2 million to $15.9 million (or gross margin of 50.2%), as compared to $34.1 million (or gross margin of 53.8%) during the same period in 2023. During the three months ended June 30, 2024, we sold 186 homesites, compared to 300 homesites during the same period in 2023. During the three months ended June 30, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $140,000 and $153,000, respectively, due to the mix of sales from different communities. The revenue, gross profit and margin for each period was impacted by the difference in pricing among the communities, the difference in the cost of the homesite development and the volume of sales within each of the communities. The number of homesites sold varied each period due to the timing of homebuilder contractual closing obligations in our residential communities.
Current report — wording carried from elsewhere
Hospitality revenue increased $17.2 million, or 38.1%, to $62.3 million during the three months ended June 30, 2024, as compared to $45.1 million in the same period in 2023. The increase in hospitality revenue was primarily related to the continued increase of club members and opening of new Camp Creek amenities in April 2023, as well as an increase in lodging revenue. The increase in lodging revenue was primarily related to Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; and the Home2 Suites by Hilton Santa Rosa Beach, Hotel Indigo Panama City Marina and Camp Creek Inn, which all opened in June 2023. Hospitality had a gross margin of 39.2% during the three months ended June 30, 2024, compared to 26.2% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Current report — wording carried from elsewhere
Homesites. Revenue from homesite sales decreased $31.6 million, or 52.8%, during the three months ended June 30, 2024, as compared to the same period in 2023, primarily due to the mix and number of homesites sold per community and the timing of homebuilder contractual closing obligations in our residential communities. During the three months ended June 30, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $140,000 and $153,000, respectively, due to the mix of sales from different communities. Revenue includes estimated homesite residuals of $0.5 million and $11.9 million during the three months ended June 30, 2024 and 2023, respectively. The decrease in estimated homesite residuals was due to themix and number of homesites sold per community in the current period. Gross margin decreased to 52.3% during the three months ended June 30, 2024, as compared to 53.8% during the same period in 2023, primarily due to the cost, mix and number of homesites sold from different communities during each respective period. Gross margin may vary each period depending on the location of homesite sales.
Current report — wording carried from elsewhere
Equity in income from unconsolidated joint ventures includes our proportionate share of earnings or losses of an unconsolidated JV accounted for by the equity method. Equity in income from unconsolidated joint ventures increased $0.6 million during the three months ended June 30, 2024, as compared to the same period in 2023. The increase was due to a higher average margin per home sold during the current period related to our unconsolidated Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV completed 163 home sale transactions during the three months ended June 30, 2024, compared to 164 home sale transactions during the same period in 2023. See Note 4.Joint Venturesfor additional information.
Current report — wording carried from elsewhere
The following table sets forth our consolidated residential real estate revenue and cost of revenue activity:
Current report — wording carried from elsewhere
The following discussion sets forth details of the consolidated results of operations of our residential segment.
Current report — wording carried from elsewhere
Other revenue includes tap and impact fee credits sold, marketing fees and other fees. Other revenue includes estimated fees related to homebuilder homesite sales of $1.6 million and $2.9 million, during the six months ended June 30, 2024 and 2023, respectively.
Current report — wording carried from elsewhere
Other operating expenses include salaries and benefits, property taxes, marketing, professional fees, project administration, owner association and CDD assessments and other administrative expenses.
Current report — wording carried from elsewhere
Investment income, net primarily consists of interest earned on our notes receivable and unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. See Note 4.Joint Ventures for additional information. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 9.Debt, Net for additional information.
Current report — wording carried from elsewhere
Revenue from our clubs increased $8.3 million, or 62.4%, during the three months ended June 30, 2024, as compared to the same period in 2023. The increase in revenue in the current period was due to increases in the number of club members and membership revenue, as well as the opening of new Camp Creek amenities in April 2023 and
Current report — wording carried from elsewhere
The following table sets forth details of our hospitality segment consolidated revenue and gross profit:
Current report — wording carried from elsewhere
Revenue from our hotel operations increased $14.1 million, or 34.9%, during the six months ended June 30, 2024, as compared to the same period in 2023. The increase was primarily due to an increase in lodging revenue from Embassy
Current report — wording carried from elsewhere
Suites by Hilton Panama City Beach Resort, which opened in April 2023; The Lodge 30A, which opened in February 2023; and Home2 Suites by Hilton Santa Rosa Beach and Hotel Indigo Panama City Marina, which both opened in June 2023. Our hotels had a gross margin of 25.5% for the six months ended June 30, 2024, compared to 13.6% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Current report — wording carried from elsewhere
Revenue from other hospitality operations increased $0.7 million, or 12.1%, during the six months ended June 30, 2024, as compared to the same period in 2023. Our other hospitality operations had a gross margin of 26.2% during the six months ended June 30, 2024, compared to 17.2% during the same period in 2023. The increase in revenue and gross margin was due to increased occupancy and special events at our Point South Marina Bay Point and Point South Marina Port St. Joe, which reopened in the second half of 2022.
Current report — wording carried from elsewhere
Leasing revenue includes marina boat slip and dry storage rental, as well as leases of other hospitality assets.
Current report — wording carried from elsewhere
Other operating expenses include salaries and benefits, professional fees and other administrative expenses.
Current report — wording carried from elsewhere
Interest expense primarily includes interest incurred from our hospitality project financing. The increase of $2.6 million in interest expense during the six months ended June 30, 2024, as compared to the same period in 2023, was primarily due to completion of projects where interest expense is no longer capitalized and the increase in project financing. See Note 9.Debt, Net for additional information.
Current report — wording carried from elsewhere
The following table sets forth details of our commercial segment consolidated revenue and gross profit:
Current report — wording carried from elsewhere
The following discussion sets forth details of the consolidated results of operations of our commercial segment.
Current report — wording carried from elsewhere
Other operating expenses include salaries and benefits, property taxes, CDD assessments, professional fees, marketing, project administration and other administrative expenses.
Current report — wording carried from elsewhere
Interest expense primarily includes interest incurred from our commercial project financing and CDD debt. The increase of $1.0 million in interest expense during the six months ended June 30, 2024, as compared to the same period in 2023, was primarily due to completion of projects where interest expense is no longer capitalized and the increase in project financing. See Note 9.Debt, Net for additional information.
Current report — wording carried from elsewhere
9% for any additional principal that is prepaid through August 2031. The loan is secured by the real property and certain other Security Interests. See Note 9.Debt, Net for additional information.
Current report — wording carried from elsewhere
any additional fees, with the project maintaining a certain debt service coverage. See Note 9.Debt, Net for additional information.
Current report — wording carried from elsewhere
for escrow deposits in connection with our title insurance agencies for real estate transactions were $9.8 million and $10.0 million as of June 30, 2024 and December 31, 2023, respectively. These escrow funds are not available for regular operations.
Current report — wording carried from elsewhere
regulatory scrutiny negatively impacting our reputation; our ability to maintain adequate internal controls; risks associated with our financing arrangements, including our compliance with certain restrictions and limitations; our ability to pay our quarterly dividend; the potential volatility of our common stock; and the other risks and uncertainties discussed in “Risk Factors” beginning on page 7 of our most recent annual report on Form 10-K and from time to time in our subsequent filings with the SEC. We assume no obligation to revise or publicly released any revision to any forward-looking statements contained in this quarterly report on Form 10-Q unless required by law.
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Previous report — wording carried elsewhere
operate the WaterColor Beach Club, which includes food and beverage operations and other hospitality related activities, such as beach chair rentals.
Previous report — wording carried elsewhere
Origins and Latitude Margaritaville Watersound residential communities. In conjunction with Florida State University (“FSU”) and Tallahassee Memorial Hospital (“TMH”), we are in the process of developing an 87-acre medical campus in Panama City Beach, Florida. We have large land holdings near the Pier Park retail center, adjacent to the Northwest Florida Beaches International Airport, near or within business districts in the region and along major roadways. We lease land for various other uses. The commercial segment manages our timber holdings in Northwest Florida which includes growing and selling pulpwood, sawtimber and other products.
Previous report — wording carried elsewhere
Commercial and Forestry Real Estate Revenue and Gross Profit. During the three months ended March 31, 2024, we had two commercial and forestry real estate sales totaling approximately 76 acres for $1.4 million, resulting in a gross profit of $1.1 million (or gross margin of 78.6%). During the three months ended March 31, 2023, we had nine commercial and forestry real estate sales totaling approximately 54 acres for $5.7 million and land improvement services of $0.2 million, together resulting in a gross profit of $2.6 million (or gross margin of 44.1%). Revenue from commercial and forestry real estate can vary significantly from period-to-period depending on the proximity to developed areas and mix of real estate sold in each period, with varying compositions of retail, office, industrial, timber and other commercial uses.
Previous report — wording carried elsewhere
In 2021, a wholly-owned subsidiary of ours entered into a $28.0 million loan, which is guaranteed by us. As of March 31, 2024 and December 31, 2023, $27.7 million and $28.0 million, respectively, was outstanding on the Watersound Camp Creek Loan. The loan matures in December 2047 and bears interest at a rate of SOFR plus 2.1%, with a floor of 2.6%. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability
Previous report — wording carried elsewhere
SouthWood community, $1.9 million at the existing Pier Park retail center and less than $0.1 million at the Wild Heron community. We pay interest on this total outstanding CDD debt.
Previous report — wording carried elsewhere
million during the three months ended March 31, 2024, as compared to $9.5 million during the same period in 2023. The increase in net cash provided by operating activities was primarily due to the changes in net income, depreciation, depletion and amortization, deferred income tax and expenditures for and acquisition of real estate to be sold, partially offset by the changes in cost of real estate sold, other assets and accounts payable and other liabilities during the period.
Previous report — wording carried elsewhere
We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors, including: our ability to successfully implement our strategic objectives; new or