Insiders ranked by realized 90-day signed return on their open-market trades at St Joe Co. Minimum 3 scored trades. Returns are signed - a sale followed by a rally counts against the insider.
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.03pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Real-time Form 4 intelligence. Smarter insider tracking.
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.05pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
losses+2
adversely+1
downturns+1
persistent+1
disputes+1
Positive rising
successfully+1
desired+1
enhanced+1
Risk Factors (Item 1A)
8,990 words
Item 1A. Risk Factors
Forward-Looking Statements
This Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements include, among other things, information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, strategies, prospects and objectives. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar expressions concerning matters that are not historical facts. The Company cautions that its 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. All business decisions involve assessing known risks. However, some risks may be unknown with changing socio-economic, market conditions and interest rates. Estimates are used to assess, among other things, capital allocation decisions. Actual results or events may differ materially from estimates and those indicated in our forward-looking statements as a result of various important factors. Such factors include, but are not limited to, those discussed below.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
depletion+7
losses+4
loss+3
ceased+3
delayed+1
Positive rising
effective+2
opportunity+1
MD&A (Item 7)
19,674 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying audited consolidated financial statements and the related notes included in this Form 10-K. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Risk Factors” in this Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Form 10-K, unless required by law.
Business Overview
St. Joe is a diversified real estate development, asset management and operating company with all of its real estate assets and operations in Northwest Florida. We intend to use existing assets for residential, hospitality and commercial ventures. We have significant residential and commercial land-use entitlements. We actively seek higher and better uses for our real estate assets through a range of development activities. As part of our core business strategy, we have created a meaningful portion of our business through JVs. We enter into these arrangements for the purposes of developing real estate and other business activities, which we believe allows us to complement our growth strategy, leverage industry expertise and diversify our business. We may partner with or explore the sale of discrete assets, such as our sale of a senior living community property in September 2025, in order to optimize resource allocation and maximize value. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. We seek to continue to the value of our owned real estate assets by developing residential, hospitality and commercial projects to meet market demand. Approximately 87% of our real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf.
Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Form 10-Q, Form 8-K and other reports filed with the SEC.
You should carefully consider the risks described below, together with all of the other information in this Form 10-K. The risks described below are not the only risks facing us. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may affect our business. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also materially and adversely affect our business. If any of these risks actually occur, our business, financial condition, results of operations, cash flows, strategies and prospects may be materially adversely affected and could cause our actual results to differ materially from the results contemplated by the forward-looking statements in this report and in the other public statements we make.
Strategic and Competitive Risks
We may not be able to successfully implement our business strategy. Our business strategy consists of developing our residential real estate and expanding the scope of our hospitality assets and services, our commercial portfolio of
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income producing properties and our other ventures to build recurring revenues and enhance enterprise value, while maintaining sufficient enterprise liquidity. Our strategy also includes operating a portion of our business through JVs. Management may fail in assessing risks related to our strategy, profitably maintaining and growing operations and allocating capital. We may also face risks from unidentified issues not discovered in due diligence in our operations and investments. Management may fail in estimating and most efficiently allocating cash in excess of operational and strategic investment needs, including to shareholders by dividends and the repurchase of common stock.
Management may also fail to accurately forecast financial results, and, as a result, actual results may vary greatly from management estimates. As of December 31, 2025, we had approximately $1,004.9 million of real estate investments, $66.1 million of investment in unconsolidated joint ventures and $41.3 million of property and equipment, net recorded on our books at depreciated cost basis, subject to impairment testing. If market conditions were to deteriorate, our estimate of undiscounted future cash flows may fall below their carrying value and we may be required to take impairments, which would have an adverse effect on our results of operations and financial condition. Existing and planned operations utilize estimates of revenue, costs, profits, growth, and real estate market values.
We face significant competition across our business units. We compete with local, regional and national real estate leasing and development companies and homebuilders, some of which may have greater financial, marketing, sales and other resources than we do. Hospitality operations are subject to significant competition from other hospitality providers and lodging alternatives. Our ability to remain competitive and to attract new and repeat guests, customers and club members depends on our success in distinguishing the quality and value of our products and services from those offered by others. Competition from real estate leasing and development companies and homebuilders may adversely affect our ability to attract tenants and lease our commercial, multi-family and senior living properties, attract purchasers and sell residential homesites, homes and commercial real estate and attract and retain experienced real estate sales, leasing and development personnel. Labor markets in the industries in which we operate are also competitive, which have led to increased labor costs in recent years. We must attract, train and retain a large number of qualified employees while controlling related labor costs. In addition, we face competition for tenants from other retail shopping centers and commercial facilities, as well as for our multi-family and senior living communities. There can be no assurance we will be able to compete successfullyagainst current or future competitors or that competitive pressures will not have a material adverse effect on our business, results of operations, cash flows and financial condition.
A decline in general economic conditions, particularly in our primary market locations, could lead to reduced consumer demand for our products and services. Demand for our products and services is sensitive to changes in economic conditions over which we have no control, including the level of employment, consumer confidence, consumer income, consumer discretionary spending, consumer preferences, inflation, the availability of financing, changes in fiscal monetary policy and interest rate levels. In addition, the real estate market is subject to downturns, and our business is especially sensitive to economic conditions in Northwest Florida, where our developments and assets are located, and, more broadly, the Southeast region of the United States (“U.S.”), which in the past has produced a high percentage of customers for our products. If market conditions experience volatility or worsen, tenant and other customers’ demand may materially decline. For example, over the past several years, we have faced macroeconomic headwinds caused by, among other things, overall consumer confidence, inflation, elevated interest rates, higher insurance costs for consumers and uncertainty over tariffs, all of which impacted buyer sentiment. While demand across our segments remained strongdespite these challenges, if conditions worsen, such conditions could adversely impact our business and our ability to successfully execute our business strategy.
Additionally, we and the real estate industry in general may be adversely affected during periods of high inflation, primarily because of higher construction and operating costs. While the rate of inflation has moderated, it has remained persistent in the U.S. due, in part, to supply chain issues, elevated energy prices, labor shortages and trade policies, among other factors. As a result, we cannot predict whether such inflationary conditions will continue or the impact it will have on customer preferences and demand.
Our leasing projects are subject to a variety of risks that could impact returns. Our business strategy includes the development and leasing of multi-family properties, management of commercial properties and commercial assets for lease. These commercial developments may not be as successful as estimated due to leasing related risks, including the risk that we may not be able to lease new properties, obtain lease rates that are consistent with our projections or achieve
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targeted occupancy levels within expected timeframes as well as the risks generally associated with real estate development. Additionally, development of leasing projects involves the risk associated with the significant time lag between commencement and completion of the project. This time lag subjects us to greater risks relating to, among other things:
fluctuations in the general economy;
our ability to obtain construction or permanent financing on favorable commercial terms, if at all;
our ability to achieve projected rental rates;
the pace that we will be able to lease to new tenants;
higher than estimated construction costs (including labor and material costs); and
delays in the completion of projects because of, among other factors, inclement weather, labor disruptions, construction delays or delays in receiving zoning or other regulatory approvals, or man-made or natural disasters.
Failure to lease new properties or obtain lease rates that are consistent with our projections or significant time lags between commencement and completion of a commercial project may lead to lower than anticipated returns, which could adversely impact our ability to successfully execute our business strategy.
We face risks stemming from our strategic partnerships. We currently maintain, and in the future may seek additional strategic partnerships, including the formation of JVs, to develop real estate or to pursue other business activities, capitalize on the potential of our residential, hospitality and commercial opportunities and maximize the value of our assets. Certain of these JVs may be material to our business. For example, in the years ended December 31, 2025, 2024 and 2023, our equity in income from the unconsolidated Latitude Margaritaville Watersound JV accounted for over 20% of our pre-tax income. This concentration in a single JV means that any adverse changes affecting this project, whether from market conditions, issues with our joint venture partner, or project-specific challenges, could have a disproportionate impact on our overall financial performance, even if our other operations perform as expected.
Our partners may take actions contrary to our instructions or requests, or contrary to our policies or objectives. We may not have exclusive control over the development, financing, management and other aspects of the partnership, which may prevent us from taking actions that are in our best interest but opposed by our partner. Our partners may experience financial difficulties, become bankrupt or fail to fund their share of capital contributions, which may delay construction or development of property or increase our financial commitment to the partnership. Our partners may take actions that subject us to liabilities in excess of, or other than, those contemplated. We may disagree with our partners about decisions affecting the partnership, which may result in litigation or arbitration that increases our expenses, distracts our officers and directors and disrupts the day-to-day operations of the property or business, which may delay important decisions until the dispute is resolved. Actions by our partners may subject the JV to liabilities or have other adverse consequences, including if the market reputation of a partner deteriorates. If a JV agreement is terminated or dissolved, we may not continue to own or operate the interests or investments of the JV or may need to purchase such interests or investments at a premium to the market price to continue ownership. In addition, we may not have sufficient resources, experience and/or skills to manage our existing JVs or locate additional desirable partners.
Our real estate investments are generally illiquid. Real estate and timber holdings are relatively illiquid. It may be difficult for us to sell such assets if the need or desire arises, which may limit our ability to make rapid adjustments to the size and content of our property assets. Illiquid assets typically experience greater price volatility, as a ready market does not exist and therefore can be more difficult to value. In addition, validating third-party pricing for illiquid assets may be more subjective than more liquid assets. As a result, if we are required to liquidate all or a portion of our real estate or timber assets quickly, we may realize significantly less than the value at which we have previously recorded our assets. This impact may also be exacerbated in periods of general economic instability and capital markets volatility.
We may invest in new business endeavors or product lines, which are inherently risky and could disrupt our ongoing business and present risks not originally contemplated. In recent years, we have invested, and in the future may invest, in new business endeavors and product lines. New endeavors may involve new risks and uncertainties and
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may amplify existing risks, including additional competition, distraction of management from current operations, greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with operating in new businesses or product lines, inadequate return on capital and potential impairment of tangible and intangible assets. New ventures are inherently risky and may not be successful. In addition, we may face difficulty integrating new businesses or product lines, assimilating new facilities and personnel and harmonizing diverse businesses and methods of operation. If any of our business endeavors are unsuccessful and we fail to realize the expected benefits of any new investment or product line or are unable to successfully integrate new businesses or product lines, our business, results of operations, cash flows and financial condition could be adversely affected.
We face risks associated with short-term U.S. Treasury Bills. We hold significant cash balances that are invested in a variety of short-term U.S. Treasury Bills, currently classified as cash equivalents, that are intended to preserve principal value and maintain a high degree of liquidity. We have exposure to credit risk associated with our short-term U.S. Treasury Bills and these instruments are subject to price fluctuations as a result of changes in the financial market’s assessment of issuer credit quality, changes in prevailing interest rates and other economic factors.
Additionally, we have historically been exposed, and in the future may again be exposed, to credit risk associated with investments – debt securities (“Securities”), which are also subject to such fluctuations. A downgrade of the U.S. government’s credit rating may also decrease the value of any future investments in Securities. The market value of such potential future investments will be subject to change from period-to-period, especially in light of the political landscape, financial institution disruptions and geopolitical conflicts, instabilities or tensions, which have caused market volatility. Our Securities have historically included, and in the future may again include, investments in U.S. Treasury Bills classified as investments – debt securities. Credit-related impairmentlosses can negatively affect earnings. Investments in Securities and funds are not insured againstloss of principal. Under certain circumstances we may be required to redeem all or part of any future investment, which may result in a loss.
RISKS RELATED TO THE OPERATION OF OUR BUSINESS SEGMENTS
We are exposed to risks associated with commercial and residential real estate development and construction. Real estate development and construction, including homebuilding activities, entail risks that may adversely impact our results of operations, cash flows and financial condition, including:
general market conditions;
construction delays or cost overruns, which may increase project development costs;
labor costs and shortages of skilled labor;
supply chain disruptions and material shortages;
current or potentially new and rapidly evolving tariffs or quotas;
claims for construction defects after property has been developed, including claims by purchasers and property owners’ associations, and claims for construction defects arising from third-party contractors;
the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues;
weather-related and geological interference, including hurricanes, landslides, earthquakes, floods, drought, wildfires and other events, which may result in delays or increased costs;
an inability to obtain required governmental permits and authorizations;
an inability to secure tenants necessary to support commercial, multi-family or senior living projects;
compliance with building codes and other local regulations;
unavailability of raw materials when needed, which may result in project delays, stoppages or interruptions, which may make the project less profitable;
insufficient infrastructure capacity or availability (e.g., water, sewer and roads) to serve the needs of our projects;
instability in the financial industry may reduce the availability of financing; and
delay or inability to acquire property, rights of way or easements, which may result in delays or increased costs.
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The construction and building industry, similar to many other industries, has experienced, and may continue to experience worldwide supply chain disruptions and cost increases due to a multitude of factors, including inflation, elevated interest rates, higher insurance costs for consumers, rapidly evolving trade and tariff policies and disputes, labor shortages and geopolitical conflicts, instabilities and tensions. Materials, parts and labor costs have increased in recent years, sometimes significantly and over a short period of time. In addition, material time delays or increases in construction costs resulting from the aforementioned factors may impact our ability to realize anticipated returns on such projects, impact the timing of revenue recognition, lead to cancellations and otherwise materially adversely affect our business, results of operations, cash flows and financial condition. Nonetheless, should we experience increased cancellations as a result of such macroeconomic factors, our business could be adversely impacted.
Further, with regard to our residential segment, revenues from homesite sales can fluctuate significantly from period to period due to variations in the mix of sales from different communities, as well as other variations in product mix. Given these fluctuations revenues from our residential segment may significantly vary from period to period.
In addition, real estate approvals may be subject to third-party responses. It is not uncommon for delays to occur, which affect the timing of transaction closings and may also impact the terms and conditions of the transaction. Delays related to regulatory approvals may be due to the applicable governmental entity not being open due to the government being shut down or staffed insufficiently due to the government’s budgetary issues. These timing issues may cause our operating results, particularly relating to the impact of our land sales, to vary significantly from quarter-to-quarter and year-to-year.
Mortgage financing issues, including lack of supply of mortgage loans, tightened lending requirements and elevated interest rates, may reduce demand for our products. Purchasers of our real estate products may obtain mortgage loans to finance a substantial portion of the purchase price or may need to obtain mortgage loans to finance the construction of homes to be built on homesites purchased from us. Homebuilder customers depend on retail purchasers who rely on mortgage financing. Elevated interest rates have increased the cost of owning a home in recent years and any future increases would further affect purchasing power, which may lower demand for residential real estate. In addition to residential real estate, increased interest rates and restrictions in the availability of credit may also negatively impact sales or development of our commercial properties or other land we offer for sale. While in recent years, elevated interest rates have negatively impacted buyers’ ability to obtain financing and the housing market generally, to date we have not experienced material declines in customer demand for our homesites. However, in the event financing challenges reduce demand from homebuilders to purchase homesites, then our sales, results of operations, cash flows and financial condition may be negatively affected.
Our residential segment is highly dependent on homebuilders and is subject to the risk of homebuilder concentration. We are highly dependent on homebuilders to be the primary customers for our homesites and to provide construction services in our residential developments. As of December 31, 2025, we had 18 different homebuilders within our residential communities. The homebuilder customers that have already committed to purchase homesites from us may decide to reduce, delay or cancel their existing commitments to purchase homesites in our developments. From time to time, we have financed, and in the future may finance, real estate sales with mortgage note receivables. If these homebuilders fail to pay their debts to us or delay paying us, it would reduce our anticipated cash flows. Homebuilders also may not view our developments as desirable locations for homebuilding operations, or they may choose to purchase land from other sellers. We also rely on a concentrated number of homebuilders for a significant portion of our residential homesite sales. Any of these events may have an adverse effect on our business, results of operations, cash flows and financial condition.
Our hospitality segment is subject to various risks inherent to the hospitality industry. Although hospitality revenue has continued to grow in recent years, the following factors, among others, are common to the hospitality industry, and may reduce the revenues generated by hotel properties, food and beverage operations, golf courses, beach clubs, marinas and other entertainment offerings or the rate at which they are generated:
reduced travel (including from airline disruptions, business reduction or elimination of typical travel in efforts to be conservative in uncertain financial times or adverse economic conditions), which we may be susceptible to given that the travel tourism on which our hospitality segment relies can entail a relatively high cost of
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participation and is based on discretionary consumer spending;
increased labor costs and shortages of skilled labor;
inclement weather conditions;
cyclical downturns in the hospitality industry;
changes in desirability of geographic regions in which our properties are located;
significant competition from other hospitality providers and lodging or entertainment alternatives;
our relationships with and the performance of third-party managers;
increases in operating costs, including increases in the cost of property insurance, utilities and real estate and personal property taxes, due to inflation and other factors that may not be offset by increased prices; and
natural or man-made disasters.
Any of these factors may increase our costs or limit or reduce the prices we are able to charge for our hospitality products or services, or otherwise affect our ability to maintain existing properties, develop new properties or add amenities to our existing properties.
Our insurance coverage on our properties may be inadequate or our insurance costs may increase and uninsuredlosses or losses in excess of our insurance coverage could adversely affect our business. We maintain insurance on our properties, including property, liability, fire, flood and extended coverage, but capacity constraints in the Florida insurance market may limit availability of desired coverages or materially increase costs. We do not insure our timber assets. Additionally, our insurance for hurricanes has limitations per named storm and is subject to deductibles. We use our discretion when determining amounts, coverage limits and deductibles for insurance. These terms are determined based on retaining an acceptable level of risk. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also may make it unfeasible to use insurance proceeds to replace a facility after it has been damaged or destroyed. Under such circumstances, we may not receive insurance proceeds or the insurance proceeds we receive may not fully cover business interruptions or losses and our earnings, liquidity, or capital resources may be adversely affected.
Homeowner property insurance companies doing business in Florida have reacted to previous hurricanes by increasing premiums, requiring higher deductibles, reducing limits, restricting coverage, imposing exclusions, refusing to insure certain property owners, and in some instances, ceasing insurance operations in the state. It is uncertain what effect these actions may have on future property insurance availability and rates in the state. The high costs of property insurance premiums in Florida may deter potential customers from purchasing a homesite in one of our developments or make Northwest Florida less attractive to new employers that can create high quality jobs needed to increase growth in the region, either of which may have a material adverse effect on our business, results of operations, cash flows and financial condition. Florida’s state-owned property insurance company, Citizens Property Insurance Corp., underwrites homeowner property insurance. If there were to be a catastrophic hurricane or series of hurricanes to hit Florida, the exposure of the state government to property insurance claims may place extreme stress on state finances.
Our insurance policies are generally renewed on an annual basis and, depending on factors such as market conditions, the premiums, terms, policy limits and/or deductibles can vary substantially. We can give no assurance that we will be able to maintain adequate insurance in the future at rates or on other terms we consider commercially reasonable.
To offset negative insurance market trends, we may decide to self-insure additional risks. In the event that we decide to self-insure additional risks, if we experience a greater number of self-insured losses than we anticipate, our financial performance could be adversely affected. If we lose our ability to, or decide not to, self-insure these additional risks, our insurance costs could materially increase and we may find it difficult to obtain adequate levels of insurance coverage.
Our commercial segment is subject to risks associated with the financial condition of our commercial tenants. If one or more of our tenants, particularly an anchor tenant, declares bankruptcy, defaults or voluntarily vacates from the leased premises, we may be unable to collect rent payments from such tenant, re-lease such space or to re-lease it on
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comparable or more favorable terms. Additionally, the loss or failure to renew of an anchor tenant may make it more difficult to lease the remainder of the affected properties, which may have a material adverse effect on our business, results of operations, cash flows and financial condition.
Alternatively, increases in consumer spending through e-commerce channels may significantly affect our tenants’ ability to generate sales, which could affect their ability to make payments to us. These economic and market conditions, combined with rising or sustained high levels of inflation and lack of labor availability, may also place a number of our key customers under financial stress, which may adversely affect our occupancy rates and our profitability, which, in turn, may have a material adverse effect on our business, results of operations, cash flows and financial condition.
Our financial results may vary significantly period over period. The revenues and earnings from our business segments may vary significantly from period to period. Homebuilders tend to buy multiple homesites in sporadic transactions. In addition, homesite prices vary significantly by community, which further impacts period over period results. Therefore, there may be reporting periods in which we have no, or significantly less, revenue from residential or commercial real estate sales. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Hospitality operations are affected by seasonal fluctuations. Hospitality revenues are typically higher in the second and third quarters, and vary depending on the timing of holidays and school breaks. Commercial real estate sales tend to be non-recurring. Projects depend on uncertain demand. Extraordinary events such as hurricanes may dramatically change demand and pricing for products and services.
We are subject to various geographic risks.
Growth of Northwest Florida . We are focused on developing real estate and expanding operations in Northwest Florida. Our success will be dependent on continued strong migration and population expansion in Northwest Florida. The future economic growth of Northwest Florida will largely depend on the ability and willingness of state and local governments, in combination with the private sector, to plan and complete significant infrastructure improvements in the region, such as new or existing transportation hubs, roads, bridges, rail, pipeline, medical facilities and schools and to attract families and companies offering high-quality and high salary jobs. Our future revenues will also depend on individuals seeking retirement or vacation homes in Northwest Florida. Florida’s population growth may be negatively affected in the future by a variety of factors, including adverse economic conditions, changes in state income tax or federal immigration laws, the occurrence of natural or man-made disasters or the high cost of real estate, insurance and property taxes. If Northwest Florida experiences an extended period of slow growth, or even net out-migration, our business, results of operations, cash flows and financial condition will likely be materially adversely affected.
Hurricanes . Florida is particularly susceptible to the occurrence of hurricanes. Depending on where any particular hurricane makes landfall, our developments in Northwest Florida may experience catastrophicdamage. Such damage may materially delay sales or lessen demand for our residential or commercial real estate and lessen demand for our hospitality and leasing operations. If our corporate headquarters facility is damaged or destroyed, we may have difficulty performing certain corporate and operational functions. We maintain property and business interruption insurance, subject to certain deductibles.
Climate Conditions . The occurrence of other natural disasters and climate conditions in Northwest Florida, such as tornadoes, floods, fires, unusually heavy or prolonged rain, droughts, extreme heat or cold, or other adverse weather events may have a material adverse effect on our ability to develop and sell properties or realize income from our projects. To the extent that such natural disasters and climate conditions occur, our projects could be damaged or destroyed, which may result in losses exceeding our insurance coverage. Natural disasters and climate conditions can also lead to increased competition for subcontracts, which can delay construction activities even after an event has concluded. In addition, our timber assets are subject to damage by fire, insect infestation, disease, prolongeddrought, flooding, hurricane and natural disasters, which may adversely affect our timber inventory and forestry business. Furthermore, sea level rise due to climate change may have a material adverse effect on our coastal properties. The occurrence of natural
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disasters and the threat of adverse climate changes (or perceived threat from climate change) may also have a long-term negative effect on the attractiveness of Northwest Florida and on our ability to obtain flood or other hazard insurance coverage. Man-made disasters or disruptions, such as oil spills, acts of terrorism, power outages and communications failures may simultaneously disrupt our operations.
We are dependent on third-party service providers for certain services. We rely on various third parties to conduct the day-to-day operations of certain residential, hospitality, multi-family, senior living and other commercial properties. Failure of such third parties to adequately perform their contracted services may negatively impact our ability to retain customers. As a result, any such failure may negatively impact our results of operations, cash flows and financial condition.
Risks RELATED to our existing ownership structure
Our largest shareholder controls approximately 33.8% of our common stock, which may limit our minority shareholders’ ability to influence corporate matters. As of December 31, 2025, based on public filings, clients of Fairholme Capital Management, L.L.C. (“FCM”), an investment advisor registered with the SEC, beneficially owned approximately 33.8% of our common stock. FCM and its client, The Fairholme Fund, a series of investments originating from Fairholme Funds, Inc., may be deemed affiliates of ours. Fairholme Holdings, LLC (“Fairholme”), which wholly owns FCM, is in a position to influence the vote of most matters submitted to our shareholders, including any merger, consolidation or sale of all or substantially all of our assets, the nomination of individuals to our Board and any potential change in our control. These factors may discourage, delay or prevent a takeover attempt that shareholders might consider in their best interests or that might result in shareholders receiving a premium for their common stock. Additionally, our articles of incorporation and certain provisions of Florida law contain anti-takeover provisions that may make it more difficult to effect a change in our control.
Future sales of our common stock by Fairholme, or the perception in the public markets that these sales may occur, may depress our stock price.
LEGAL, REGULATORY, AND LITIGATION RISK
We are subject to various existing government regulations.
Development and Land Use Requirements . Approval to develop real property entails an extensive entitlements process involving multiple and overlapping regulatory jurisdictions and often requiring discretionary action by local governments. This process is often political, uncertain and may require significant exactions in order to secure approvals. Real estate projects in Florida must generally comply with the provisions of the Community Planning Act and local land development regulations. Compliance with the State of Florida planning requirements and local land development regulations is usually lengthy and costly and can be expected to materially affect our real estate development activities. The Community Planning Act requires local governments to adopt comprehensive plans guiding and controlling future real property development in their respective jurisdictions and to evaluate, assess and keep those plans current. Included in all comprehensive plans is a future land use map, which sets forth allowable land use development rights. Some of our land has an “agricultural” or “silviculture” future land use designation and we may be required to seek an amendment to the future land use map to develop real estate projects. Approval of these comprehensive plan map amendments is highly discretionary.
All development orders and permits must be consistent with the comprehensive plan. Each plan must address such topics as future land use and capital improvements and make adequate provision for a multitude of public services including transportation, schools, solid waste disposal, sewerage, potable water supply, drainage, affordable housing, open space, parks and others. The local governments’ comprehensive plans must also establish “levels of service” with respect to certain specified public facilities, including roads, schools and services to residents. In many areas, infrastructure funding has not kept pace with growth, causing facilities to operate below established levels of service. Local governments are prohibited from issuing development orders or permits if the development will reduce the level of service for public facilities below the level of service established in the local government’s comprehensive plan, unless the developer either sufficiently improves the services up front to meet the required level of service or provides
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financial assurances that the additional services will be provided as the project progresses. In addition, local governments that fail to keep their plans current may be prohibited by law from amending their plans to allow for new development.
If any one or more of these factors were to occur, we may be unable to develop our real estate projects successfully or within the expected timeframes. Changes in the Community Planning Act or the interpretation thereof, new enforcement of these laws or the enactment of new laws regarding the development of real property may lead to a decline in our ability to develop and market our communities successfully and to generate positive cash flow from these operations in a timely manner, which may have a materially adverse effect on our ability to service our demand and negatively impact our business, results of operations, cash flows or financial condition.
Our properties are subject to federal, state and local environmental regulations and restrictions that may impose significant limitations on our development ability. In most cases, approval to develop requires multiple permits, which involve a long, uncertain and costly regulatory process. Our land holdings contain jurisdictional wetlands, some of which may be unsuitable for development or prohibited from development by applicable law. Development approval most often requires mitigation for impacts to wetlands that require land to be conserved at a disproportionate ratio versus the actual wetlands impacted and approved for development. Some of our property is undeveloped land located in areas where development may have to avoid, minimize or mitigate for impacts to the natural habitats of various protected wildlife or plant species. Additionally, some of our property is in coastal areas that usually have a more restrictive permitting burden or must address issues such as coastal high hazard, hurricane evacuation, floodplains and dune protection.
Environmental Regulation . Current or past operations are subject to extensive and evolving federal, state and local environmental laws and other regulations. The provisions and enforcement of these environmental laws and regulations may become more stringent in the future, including as a result of attention from environmental advocacy groups. Violations of these laws and regulations can result in, among other things, civil penalties, remediation expenses, natural resource damages, personal injurydamages, potential injunctions, cease and desist orders and criminalpenalties. In addition, some of these environmental laws impose strict liability, which means that we may be held liable for any environmental damage on our property regardless of fault.
Past and present real property, particularly properties used in connection with our previous transportation and papermill operations, were involved in the storage, use or disposal of hazardous substances that may have contaminated and may in the future contaminate the environment. We may bear liability for this contamination and for the costs of cleaning up a site at which we have disposed of, or to which we have transported, hazardous substances. The presence of hazardous substances on a property may also adversely affect our ability to sell or develop the property or to borrow funds using the property as collateral.
We may be subject to risks from changes in certain governmental policies.
Mortgage Rates . The availability of mortgage financing is significantly influenced by governmental entities such as the Federal Housing Administration, Veterans Administration and Government National Mortgage Association and government-sponsored enterprises known as Fannie Mae and Freddie Mac. Mortgage rates may also be adversely impacted by elevated interest rates. If borrowing standards are tightened and/or the federal government were to reduce or eliminate these mortgage loan programs (including due to any failure of lawmakers to agree on a budget or appropriation legislation to fund relevant programs or operations) or if mortgage rates increase generally, it would likely make it more difficult for potential purchasers of our products, including our homebuilder customers to obtain acceptable financing, which may have a negative effect on demand in our communities.
Climate Regulation . Potential impacts of climate change have previously influenced governmental authorities, consumer behavior patterns and the general business environment of the U.S., including, but not limited to, energy-efficiency measures, water use measures and land-use practices. The implementation of these policies may require us to invest additional capital in our properties or it may restrict the availability of land we are able to develop. These changes, or changes in other environmental laws or their
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interpretation thereof, new enforcement of laws, the identification of new facts or the failure of other parties to perform remediation at our current or former facilities may lead to new or greater liabilities that may materially adversely affect our business, results of operations, cash flows or financial condition.
Accounting Standards . Uncertainties posed by various initiatives of accounting standard-setting by the Financial Accounting Standards Board (“FASB”) and the SEC, which create and interpret applicable accounting standards for U.S. companies, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements. These changes and others may have a material impact on how we record and report our financial condition and results of operations. In some cases, we may be required to apply a new or revised standard retroactively, resulting in potentially material restatements of prior period financial statements.
Changes to U.S. tax laws may materially affect us. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. In many cases, the application of existing, newly enacted or amended tax laws may be uncertain and subject to differing interpretations. Future changes in the tax laws, or in the interpretation or enforcement of existing tax laws, could increase our state and federal tax rates and subject our business to audits, inquiries and legal challenges from taxing authorities. As a result of changes in tax laws, we may incur additional costs, including taxes and penalties for historical periods, which may have a material and adverse effect on our business, results of operations, cash flows or financial condition.
We may be subject to periodic litigation and other regulatory proceedings. We may be involved in lawsuits and regulatory actions relating to business agreements, operations, assets, liabilities, or our position as a public company. An adverse outcome in any of these matters may adversely affect our financial condition, our results of operations or impose additional restrictions or limitations on us. In addition, regardless of the outcome of any litigation or regulatory proceedings, these proceedings may result in substantial costs and may require that we devote substantial resources to defend our Company.
Land use approval processes have become increasingly complex. Moreover, the statutes, regulations and ordinances governing the approval processes provide third parties the opportunity to challenge the proposed plans and approvals. As a result, the prospect of third-party challenges to planned real estate developments provides additional uncertainties in real estate development planning and entitlements. Third-party challenges in the form of litigation may result in denial of the right to develop, or would, by their nature, adversely affect the length of time and the cost required to obtain the necessary approvals. In addition, adverse decisions arising from any litigation would increase the costs and length of time to obtain ultimate approval of a project and may adversely affect the design, scope, plans and profitability of a project.
GENERAL RISKS
Risks associated with our human capital. Our ability to successfully implement our business strategy depends on our ability to attract and retain skilled employees. The labor markets in the industries in which we operate are competitive. We must attract, train and retain a large number of qualified employees while controlling related labor costs. Tighter labor markets may make it even more difficult for us to hire and retain qualified employees and control labor costs. Our ability to attract qualified employees and control labor costs is subject to numerous external factors, including prevailing wage rates, employee preferences, employment law and regulation, labor relations and immigration policy. Changes in immigration laws and policies could also affect labor market conditions, potentially increasing competition for workers and related labor costs. While we are committed to recruiting top talent by offering, among other things, competitive wages, a significant increase in competition or labor costs increasing from any of the aforementioned factors may have a material adverse impact on our business, results of operations, cash flows and financial condition.
Furthermore, our hospitality operations are highly dependent on a large seasonal workforce. We have historically relied on the J-1 and H-2B visa programs to bring workers to the U.S. to fill seasonal staffing needs and ensure that we have the appropriate workforce in place. Our ability to recruit and retain seasonal hospitality staff may be adversely affected by changes in immigration policy and administration of non-immigrant visa programs. If we are unable to obtain sufficient numbers of seasonal workers, through the J-1 and H-2B programs or otherwise, we may not be able to
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recruit and hire adequate personnel, and material increases in the cost of securing our workforce may be possible in the future. Increased seasonal wages, an inadequate workforce or increased related labor costs may have a material adverse effect on our business, results of operations, cash flows and financial condition.
Risks associated with cybersecurity. We are reliant on computers and digital technology, including certain technology systems from third-party vendors, which we use to operate our business, which are not under our control. We collect digital information on all aspects of operations. Hospitality related businesses, in particular, require the collection and retention of identifiable information of our customers, as such information is entered into, processed, summarized, and reported by the various information systems we use. All of these activities give rise to material cyber risks and potential costs and consequences that cannot be estimated or predicted, and which may not be fully insured by our cyber risk insurance policy. For example, the SEC requires the disclosure of cybersecurity incidents that we determine to be “material,” to be made within four business days of such determination, which can be complex, requiring a number of assumptions based on several factors. It is possible that the SEC may not agree with our determinations, which could result in fines, civil litigation or damage to our reputation.
The integrity and protection of our customer, employee and other company data, is critical to us. We make efforts to maintain the security and integrity of these networks and related systems. We have implemented various measures to manage the risk of a security breach or disruption that are based in part on the Payment Card Industry Data Security Standard, the National Institute of Standard and Technology, and the System and Organization Controls, all of which are integrated into our overall enterprise risk management program. There can be no assurance that our security efforts and measures, or those of our third-party vendors, with which we interact, will be effective or that attempted security breaches or disruptions, whether through cyber attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, persons inside our organization or persons with access to systems, energy blackouts, natural disasters, terrorism, war, and other significant disruptions of our networks and related systems, or disruptions would not be successful or damaging. Further, the risk of a security breach or disruption, particularly through cyber attacks or cyber intrusion, including by computer hackers, foreign governments or state-sponsored actors, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In particular, there has been a spike in cybersecurity attacks as businesses have increased reliance on virtual environments and communications systems, which have been subject to increasing third-party vulnerabilities and security risks. Additionally, the emergence of artificial intelligence has provided additional tools for those who perpetrate these attacks, including through social engineering, the development of customized malware, and an enhanced ability to evade detection. Attachments crafted with artificial intelligence tools could directly attack information systems with greater speed and/or efficiency than a human threat actor or create more effective phishing emails. Vulnerabilities may also be introduced from the use of artificial intelligence by us, our customers, suppliers and other business partners and third-party providers. Use of artificial intelligence by our employees, whether authorized or unauthorized, increases the risk that our intellectual property and other proprietary information will be unintentionallydisclosed.
Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we and our service providers may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us and our service providers to entirely mitigate this risk. Our failure to maintain the security of the data, including via the penetration of our network security and the misappropriation of confidential and personal information, may result in business disruption, increase in costs, damage to our reputation, material legal claims, fines, penalties, regulatory proceedings and other severe financial and business implications.
We are subject to risks related to corporate social responsibility and reputation. Our reputation and brands are important to our business. Our reputation and brands affect our ability to attract and retain consumers, financing, and secure development opportunities. There are numerous ways our reputation or brands could be damaged. These include, among others, product safety or quality issues, negative media coverage or scrutiny from political figures or interest groups. Customers are also using social media to provide feedback and information about our Company and products and services in a manner that can be quickly and broadly disseminated. To the extent a customer has a negative experience with, or view of, our Company and shares it over social media, it may adversely impact our brand and reputation.
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In addition, companies across many industries have faced scrutiny from lawmakers, regulators, investors, customers, employees and other stakeholders related to their sustainability practices, including those related to the environment, climate, human rights and governance transparency. Various jurisdictions are developing climate-related laws or regulations that could cause us to incur additional direct costs for compliance, as well as indirect costs resulting from our customers, suppliers, or additional compliance costs that are passed on to us. Additionally, investor advocacy groups, including sustainability-focused investor advocacy groups, certain institutional investors, investment funds and other influential investors have also been focused on sustainability practices. Legal and regulatory requirements, as well as stakeholder expectations, on sustainability practices and disclosures are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with. Further, there is an increasing number of initiatives in the U.S. that may conflict with other regulatory requirements or various stakeholders’ expectations. We may from time to time also change our approach to sustainability matters due to a broader change in strategy, reduced relevance of such initiatives or changing market conditions. If we fail, or are perceived to be failing, to meet evolving legal and regulatory requirements or the expectations of our stakeholders, we may be subject to enforcement actions, required to pay fines, investors may sell their stock, we may suffer from reputational damage and our business or financial condition could be adversely affected.
The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements, or misrepresentations. While management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives at all times. Deficiencies, including any material weakness, in our internal control over financial reporting, which may occur in the future, may result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity.
Our financing arrangements contain restrictions and limitations. Our financing arrangements contain customary representations and warranties, as well as customary affirmative and negative covenants that restrict some of our activities. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information. Our ability to comply with the covenants and restrictions contained in our financing arrangements may be affected by economic, financial and industry conditions beyond our control, including credit or capital market disruptions. The breach of any of these covenants or restrictions could result in a default that would permit the applicable lenders to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. In any such case, we may be unable to repay the amounts due under such financing arrangements, which could have a material adverse effect on our results of operations, cash flows and financial condition.
We may provide a guarantee of the debt in connection with our JVs. In certain instances, these guarantees provide for the full payment and performance of the borrower. See Note 9. Debt, Net and Note 19. Commitments and Contingencies included in Item 15 of this Form 10-K for additional information. If we were to become obligated to perform on any of these guarantees, our results of operations, cash flows and financial condition may be adversely affected.
We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on certain loans and refinance outstanding debt prior to or in connection with its maturity . We may enter into interest rate swap instruments to limit our exposure to changes in variable interest rates. While our hedging strategy is designed to minimize the impact of increases in interest rates applicable to some of our variable rate debt, there can be no guarantee that our hedging strategy will be effective, and we may experience credit-related losses in some circumstances. See Note 5. Financial Instruments and Fair Value Measurements and Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information. In addition, we typically refinance our outstanding debt prior to or in connection with its maturity. If we are unable to refinance our debt on favorable terms, our interest expense may increase. A refinancing of our debt could also require us to comply with more onerous covenants and further restrict our business operations. Any of these circumstances could adversely impact our financial position and results of operations.
We cannot assure you that we will not make changes to our existing capital allocation plan, including whether we will continue to pay dividends at the current rate or at all. In 2025, we paid cash dividends of $0.14 per share on our
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common stock in each of the first three quarters, and $0.16 per share in the fourth quarter, and we currently expect to continue to pay quarterly dividends. We also repurchased approximately 1.4% of our outstanding shares during 2025, for an aggregate repurchase price of $40.0 million. As of December 31, 2025, we had the authority to repurchase additional shares up to our remaining authorization limit of $60.0 million. The declaration and payment of any future dividends and future decisions with respect to share purchases will be at the discretion of our Board after taking into account various factors, including without limitation, our financial condition, earnings, capital requirements of our business, and potential growth opportunities, the terms of any credit agreements or indentures to which we may be party at the time, legal requirements, industry practice, market conditions and other factors that our Board deems relevant. Our decisions regarding the allocation of capital among dividends, stock repurchases, development projects, and other uses may not satisfy market expectations or produce the long-term returns we anticipate. Changes in our capital allocation strategy, could adversely affect our stock price and our relationships with investors. Accordingly, there can be no assurance that our dividends or stock repurchases will continue at the same levels, or at all.
enhance
We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to continue to focus on our core business activity of real estate development, asset management and operations by developing long-term, scalable residential communities, growing our hospitality offerings and expanding our portfolio of income producing commercial properties. We continue to develop a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. These investments are made with a long-term value creation perspective. Timing of projects may be subject to delays caused by factors beyond our control. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Our real estate investment strategy focuses on projects that meet long-term risk-adjusted return criteria. Our practice is to only incur such expenditures when our analysis indicates that a project will generate a return equal to or greater than the threshold return over its life.
Highlights for the year ended December 31, 2025 compared to the year ended December 31, 2024 include:
Net income attributable to the Company increased by 55.8% to $115.6 million, or $2.00 per share, during 2025, from $74.2 million, or $1.27 per share, in 2024.
Total revenue in 2025 increased by 27.4%, to $513.2 million from $402.7 million in 2024. Real estate revenue increased by 63.5% to $234.2 million during 2025. Hospitality revenue increased by 8.1% to a record of $215.4 million during 2025. Leasing revenue increased by 5.5% to a record of $63.6 million during 2025.
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In 2025, we funded $108.1 million in capital expenditures, paid $33.6 million in cash dividends, repurchased $40.0 million of our common stock and repaid a net amount of $46.6 million of debt.
Cash and cash equivalents balance increased by $40.8 million to $129.6 million as of December 31, 2025, as compared to $88.8 as of December 31, 2024 .
Market Conditions
While macroeconomic factors such as uncertainty over tariffs, inflation, elevated interest rates and higher insurance costs for consumers and overall consumer confidence, among other things, continued to produce economic headwinds and impacted buyer sentiment in many parts of the country, our segments continued to generate positive financial results throughout 2025. We believe this is primarily due to the continued growth of Northwest Florida as a result of net migration, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities.
While elevated interest rates, market conditions in their home states and higher insurance costs have negatively impacted or delayed the ability of some buyers to obtain financing or sell their existing home in their home state, the impact has been partially offset by the net migration into our markets and the number of cash buyers. Market conditions have also not caused an increase in cancellation rates as homebuilders have continued to perform on their contractual obligations with us.
Given our diverse portfolio of residential holdings, the mix of sales and pricing from different communities may impact revenue and margins period over period, as discussed in more detail below. Further discussion of the potential impacts on our business from the current macroeconomic environment are included in Part I. Item 1A. Risk Factors .
Reportable Segments
We conduct primarily all of our business in the following three reportable segments: 1) residential, 2) hospitality and 3) commercial.
The following table sets forth the relative contribution of these reportable segments to our consolidated operating revenue:
Year Ended December 31,
Segment Operating Revenue
Residential
Hospitality
Commercial
Other
Consolidated operating revenue
For more information regarding our reportable segments, see Note 18. Segment Information included in Item 15 of this Form 10-K for additional information.
Residential Segment
Our residential segment typically plans and develops residential communities of various sizes across a wide range of price points and sells homesites to homebuilders or retail consumers. Our residential segment also evaluates opportunities to enter into JV agreements for specific communities such as Latitude Margaritaville Watersound.
The residential segment generates revenue from sales of homesites, homes and other residential land and certain homesite residuals from homebuilder sales that provide us a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold. Revenue is recognized at the point in time when a sale is closed and title and control 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
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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. Cost of real estate revenue excludes depreciation, depletion and amortization expense.
Our residential segment includes the Bayside at Ward Creek, Breakfast Point East, Breakwater at Ward Creek, College Station, Park Place, Salt Creek at Mexico Beach, Salt Grass at Ward Creek, Titus Park, Watersound Camp Creek, Watersound Origins, Watersound Origins West and WindMark Beach communities, which are large scale, multi-phase communities with current development activity, sales activity or future phases. Homesites in these communities are developed based on market demand and sold primarily to homebuilders and on a limited basis to retail customers.
The East Lake Creek, East Lake Powell, Lake Powell, Pigeon Creek, Teachee, West Bay Creek and West Laird communities have phases of homesites in preliminary planning or permitting. Homesites in these communities will be developed based on market demand.
The SummerCamp Beach community has homesites available for sale and along with the RiverCamps and SouthWood communities, have additional lands for future development.
The Latitude Margaritaville Watersound community is a 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 3,700 residential homes, which are being developed in smaller increments of discrete neighborhoods. As of December 31, 2025, the unconsolidated Latitude Margaritaville Watersound JV has completed 2,190 home sale transactions of the total estimated 3,700 homes planned in the community and had 149 homes under contract, which are expected to result in a sales value to the JV of approximately $88.8 million at closing of the homes. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
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The residential homesite pipeline by community/project are as follows:
Residential Homesite Pipeline (a)
Platted or
Additional
Under
Engineering
Entitlements with
Community/Project
Location
Development
or Permitting
Concept Plan
Total
Breakfast Point East (b)
Bay County, FL
College Station
Bay County, FL
East Lake Creek (b)
Bay County, FL
East Lake Powell (c)
Bay County, FL
Lake Powell (d)
Bay County, FL
Latitude Margaritaville Watersound (d) (e)
Bay County, FL
Salt Creek at Mexico Beach (b)
Bay County, FL
Park Place
Bay County, FL
Pigeon Creek (d)
Bay County, FL
RiverCamps (c)
Bay County, FL
SouthWood (f)
Leon County, FL
SummerCamp Beach (b)
Franklin County, FL
Teachee (d)
Bay County, FL
Titus Park
Bay County, FL
Bayside at Ward Creek (d)
Bay County, FL
Breakwater at Ward Creek (d)
Bay County, FL
Salt Grass at Ward Creek (d)
Bay County, FL
Watersound Camp Creek (f)
Walton County, FL
Watersound Origins (f)
Walton County, FL
Watersound Origins West (d)
Walton County, FL
West Bay Creek (d)
Bay County, FL
West Laird (d)
Bay County, FL
WindMark Beach (f)
Gulf County, FL
Total Homesites
The number of homesites are preliminary and are subject to change. Includes homesites platted or currently in concept planning, engineering, permitting or development. We have significant additional entitlements for future residential homesites on our land holdings.
Planned Unit Development (“PUD”).
Development Agreement (“DA”).
Detailed Specific Area Plan (“DSAP”).
The unconsolidated Latitude Margaritaville Watersound JV builds and sells homes in this community.
Development of Regional Impact (“DRI”).
In addition to the communities listed above, we have a number of other residential project concepts in various stages of planning and evaluation.
As of December 31, 2025, we had eighteen different homebuilders within our residential communities. As of December 31, 2025, we had 1,992 residential homesites under contract, which are expected to result in revenue of approximately $143.5 million, plus residuals, at closing of the homesites over the next several years. By comparison, as of December 31, 2024, we had 1,074 residential homesites under contract, which were expected to result in revenue of approximately $102.0 million, plus residuals. The change in homesites under contract is due to homesite transactions during 2025, new contracts, including a long-term contract totaling approximately 650 undeveloped homesites within the SouthWood community, and the amount of remaining homesites in current phases of the residential communities. Homesite prices vary significantly by community and often sell in concentrated transactions that may impact period over period results. As of December 31, 2025, in addition to the 1,992 homesites under contract in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 149 homes under contract, which together with the 1,992 homesites are expected to result in a sales value of approximately $232.3 million at closing of the homesites and homes.
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Hospitality Segment
Our hospitality segment features a private membership club (the “Watersound Club”), hotel operations, food and beverage operations, golf courses, beach clubs, retail outlets, gulf-front vacation rentals, marinas and other entertainment offerings. 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), other resort and entertainment activities and beach clubs, which includes food and beverage operations 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. Our hospitality segment may also generate revenue from the sale of operating properties. Real estate sales in our hospitality segment incur costs of revenue directly associated with the land, development, construction and selling costs. Cost of hospitality revenue and cost of real estate revenue exclude depreciation, depletion and amortization expense. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 9. Debt, Net included in Item 15 of this Form 10-K.
Watersound Club provides club members access to our member facilities, which include the Watersound Beach Club, Camp Creek golf course and amenities, Shark’s Tooth golf course and tennis center and The Third golf course, which opened in November 2024. In addition, in June 2024, we opened The Sporting Preserve, a 12-stand sporting clays course. Watersound Club offers different types of club memberships, each with different access rights and associated fee structures. Watersound Club is focused on creating an outstanding membership experience combined with the luxurious aspects of a destination resort. Watersound Beach Club located on Scenic Highway 30A with over one mile of Gulf frontage, has two resort-style pools, two restaurants, three bars, kid’s room and a recreation area. Camp Creek includes an 18-hole golf course, a full club house, health and wellness center, three restaurants, a tennis and pickle ball center, a resort-style pool complex with separate adult pool, a golf teaching academy, pro shop and multi-sport fields. Shark’s Tooth includes an 18-hole golf course, tennis center, a full club house, a pro shop, as well as two food and beverage outlets. The Third includes an 18-hole golf course. Guests of some of our hotels also have access to certain Watersound Club amenities.
Watersound Origins amenities include a resort-style pool, fitness center, pickle ball courts and tennis courts located in the community. Access to these amenities is reserved to Watersound Origins, Watersound Origins West and Watersound Villas on the Fairway members consisting of the communities’ residents. In addition, an executive golf course located in the community is available to residents and for public play.
We own and operate the award-winning WaterColor Inn (which includes the Fish Out of Water restaurant) and The Pearl Hotel (which includes the Havana Beach Bar & Grill restaurant); the Camp Creek Inn, the Hilton Garden Inn Panama City Airport, the Homewood Suites by Hilton Panama City Beach, the Hotel Indigo Panama City Marina, the Home2 Suites by Hilton Santa Rosa Beach, 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.
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Our hotel portfolio by property is as follows:
Hotel
Location
Rooms (a)
Camp Creek Inn (b)
Walton County, FL
WaterColor Inn
Walton County, FL
The Pearl Hotel
Walton County, FL
Watersound Inn
Walton County, FL
The Lodge 30A (c) (d)
Walton County, FL
Home2 Suites by Hilton Santa Rosa Beach (b)
Walton County, FL
Embassy Suites by Hilton Panama City Beach Resort (d) (e)
Bay County, FL
Hilton Garden Inn Panama City Airport
Bay County, FL
Homewood Suites by Hilton Panama City Beach
Bay County, FL
Hotel Indigo Panama City Marina (b)
Bay County, FL
TownePlace Suites by Marriott Panama City Beach Pier Park (f)
Bay County, FL
Residence Inn Panama City Beach Pier Park (g)
Bay County, FL
Total rooms
Includes hotels currently in operation. We have significant additional entitlements for future hotel projects on our land holdings.
The hotel opened in June 2023.
The hotel opened in February 2023.
Property is related to a consolidated JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
The hotel opened in April 2023.
The hotel is operated by our JV partner. Pier Park TPS, LLC, (the “Pier Park TPS JV”) is unconsolidated and is accounted for using the equity method, which is included within our commercial segment. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
The hotel, which opened in April 2024, is operated by our JV partner. Pier Park RI, LLC, (the “Pier Park RI JV”) is unconsolidated and is accounted for using the equity method, which is included within our commercial segment. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
We own and operate two marinas, the Point South Marina Bay Point in Bay County, Florida and Point South Marina Port St. Joe in Gulf County, Florida. We are planning new marinas along the Intracoastal Waterway.
We also own and operate retail stores, two standalone restaurants and other entertainment assets.
In addition to the properties listed above, we have a number of hospitality projects in various stages of planning.
Commercial Segment
Our commercial segment includes leasing of commercial property, multi-family, self-storage and other assets, as well as senior living prior to the sale of the SJWCSL, LLC’s (“Watercrest JV”) senior living community property in September 2025. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. The commercial segment also oversees the planning, development, entitlement, management and sale of our commercial and forestry land holdings for a variety of uses, including a broad range of retail, office, hotel, senior living, multi-family, self-storage and industrial properties. We believe the diversity of our commercial segment complements the growth of our residential and hospitality segments. We provide development opportunities for national, regional and local retailers and other strategic partners in Northwest Florida. We own and manage retail shopping centers and develop commercial parcels. We are currently developing the Watersound Town Center in Walton County, Florida and Watersound West Bay Center in Bay County, Florida. These lifestyle centers are complementary to the Watersound Origins, Watersound Origins West and Latitude Margaritaville Watersound residential communities. In conjunction with FSU and TMH, we are in the process of developing an 87-acre medical campus in Panama City Beach, Florida, the first building of which opened in July 2024. 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.
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The commercial segment generates leasing revenue and incurs leasing expenses primarily from maintenance and management of our properties, personnel costs and asset holding costs. Our commercial segment generates revenue from the sale of developed and undeveloped land, timber holdings or land with limited development and/or entitlements and the sale of commercial operating properties. Real estate sales in our commercial segment incur costs of revenue directly associated with the land, development, construction, timber and selling costs. Our commercial segment generates timber revenue primarily from open market sales of timber on site without the associated delivery costs. Cost of leasing revenue and cost of real estate revenue exclude depreciation, depletion and amortization expense. Some of our JV assets and other assets incur interest and financing expenses related to loans as described in Note 9. Debt, Net included in Item 15 of this Form 10-K.
Total units and percentage leased for multi-family and senior living communities by location are as follows:
December 31, 2025
December 31, 2024
December 31, 2023
Percentage
Percentage
Percentage
Leased
Leased
Leased
Units
Units
Units
of Units
Units
Units
of Units
Units
Units
of Units
Location
Planned (a)
Completed
Leased
Completed
Completed
Leased
Completed
Completed
Leased
Completed
Multi-family
Pier Park Crossings (b)
Bay County, FL
Pier Park Crossings Phase II (b)
Bay County, FL
Watersound Origins Crossings (b)
Walton County, FL
North Bay Landing (c)
Bay County, FL
Mexico Beach Crossings (b) (d)
Bay County, FL
Watersound Villas on the Fairway (e)
Walton County, FL
WindMark Beach (f)
Gulf County, FL
Total multi-family units (g)
Senior living communities
Watercrest (b) (h)
Walton County, FL
Watersound Fountains (i)
Walton County, FL
Total senior living units
Total units
We have additional multi-family communities in various stages of planning.
Property is related to a consolidated JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Construction was completed in the second quarter of 2023.
Construction was completed in the fourth quarter of 2023.
Construction was completed in the first quarter of 2023. In January 2025, the community was platted as individual units, which created the ability to sell them individually. We are no longer entering into new leases. During 2025, we sold 24 townhomes, included within our residential segment.
Renovation of 19 units for long-term rental use was completed in the second half of 2023.
All multi-family communities are managed by our unconsolidated JV, Watersound Management, LLC (the “Watersound Management JV”). The Watersound Management JV is unconsolidated and is accounted for using the equity method. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
In September 2025, the Watercrest JV sold its senior living community property to a third party and ceased operating activities. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
The community opened in March 2024. The senior living community is operated by our JV partner. WOSL, LLC, (the “Watersound Fountains Independent Living JV”) is unconsolidated and is accounted for using the equity method. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Our leasing portfolio consists of approximately 1,174,000 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 (Pier Park TPS JV), a 121-room
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Residence Inn (Pier Park RI JV), a Busy Bee branded fuel station and convenience store, which includes a Starbucks, (SJBB, LLC, the “Busy Bee JV”) and a golf cart sales and service facility (SJECC, LLC, the “Electric Cart Watersound JV”), all located in Bay County, Florida.
The total net leasable square feet and percentage leased of leasing properties are as follows:
December 31, 2025
December 31, 2024
December 31, 2023
Net
Net
Net
Leasable
Leasable
Leasable
Square
Percentage
Square
Percentage
Square
Percentage
Location
Feet*
Leased
Feet*
Leased
Feet*
Leased
Pier Park North (a)
Bay County, FL
VentureCrossings
Bay County, FL
Watersound Town Center (b) (c)
Walton County, FL
Beckrich Office Park (c) (d)
Bay County, FL
FSU/TMH Medical Campus (e)
Bay County, FL
Watersound Self-Storage
Walton County, FL
WindMark Beach Town Center (c) (f)
Gulf County, FL
Cedar Grove Commerce Park
Bay County, FL
WaterColor Town Center (c) (g)
Walton County, FL
Port St. Joe Commercial
Gulf County, FL
Beach Commerce Park (c)
Bay County, FL
South Walton Commerce Park
Walton County, FL
Watersound Gatehouse (c)
Walton County, FL
Other (h)
Bay, Gulf and Walton Counties, FL
Net Leasable Square Feet is designated as the current square feet available for lease as specified in the applicable lease agreements plus management’s estimate of space available for lease based on construction drawings.
Property is related to a consolidated JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
An additional building was completed in the second quarter of 2024 and construction of additional leasing space was completed in 2023. As of December 31, 2025, we occupied 6,752 square feet for our real estate brokerage, title insurance agency and insurance agency businesses, which is excluded from net leasable square feet. Included in net leasable square feet as of December 31, 2025, 2024 and 2023, is 1,200 square feet leased to an unconsolidated JV. Included in net leasable square feet as of December 31, 2024, is 6,752 square feet within our residential segment. Included in net leasable square feet as of December 31, 2024 and 2023, is 2,137 square feet leased to a consolidated JV.
In addition to net leasable square feet, there is also space that we occupy or that serves as common area.
We occupied approximately 22,556 square feet as of December 31, 2025 and 24,000 square feet as of each December 31, 2024 and 2023 as our headquarters, which is excluded from net leasable square feet. Included in net leasable square feet as of December 31, 2024 and 2023, is 1,500 square feet leased to a consolidated JV.
A medical office building was completed in the third quarter of 2024.
Included in net leasable square feet as of December 31, 2025 is 5,658 square feet and 13,808 square feet as of each December 31, 2024 and 2023, of unfinished space.
As of December 31, 2025, we occupied 4,639 square feet for our real estate brokerage business, which is excluded from net leasable square feet. As of December 31, 2024, a portion of vacant space was being held as a future office for our new real estate brokerage business.
Includes various other properties, each with less than 10,000 net leasable square feet.
We have commercial projects under development and construction as detailed in the table below. In addition to these properties, we have other commercial buildings and sites in various stages of planning and development.
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December 31, 2025
Location
Completed Square Feet
Square Feet Under Construction
Additional Planned Square Feet
Total Square Feet*
Watersound Town Center (a)
Walton County, FL
Watersound West Bay Center
Bay County, FL
FSU/TMH Medical Campus
Bay County, FL
Total square feet are based on current estimates and are subject to change.
We occupy 6,752 square feet of the completed space for our real estate brokerage, title insurance agency and insurance agency businesses.
Results of Operations
Consolidated Results
The following table sets forth a comparison of the results of our operations:
Year Ended December 31,
In millions
Revenue:
Real estate revenue
Hospitality revenue
Leasing revenue
Total revenue
Expenses:
Cost of real estate revenue (a)
Cost of hospitality revenue (a)
Cost of leasing revenue (a)
Corporate and other operating expenses (a)
Depreciation, depletion and amortization
Total expenses
Operating income
Other income (expense):
Investment income, net
Interest expense
Equity in income from unconsolidated joint ventures
Other income (expense), net
Total other income, net
Income before income taxes
Income tax expense
Net income
Excluding depreciation, depletion and amortization, shown separately above.
Results of operations in this Form 10-K generally discusses 2025 and 2024 items and comparisons. For a detailed discussion of results of operations and comparisons for 2024 and 2023, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations , included in our Form 10‑K for the year ended December 31, 2024 filed with the SEC on February 26, 2025.
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Real Estate Revenue and Gross Profit
The following table sets forth a comparison of our total consolidated real estate revenue and gross profit:
Dollars in millions
Revenue:
Residential real estate revenue
Commercial and forestry real estate revenue
Timber revenue
Other revenue
Real estate revenue
Gross profit:
Residential real estate
Commercial and forestry real estate
Timber
Other
Gross profit
Calculated percentage of total real estate revenue and the respective gross margin percentage.
Residential Real Estate Revenue and Gross Profit. During 2025, residential real estate revenue increased $48.2 million, or 41.3%, to $165.0 million, as compared to $116.8 million in 2024. During 2025, residential real estate gross profit increased $26.7 million, to $81.5 million (or gross margin of 49.4%), as compared to $54.8 million, (or gross margin of 46.9%) in 2024. During 2025, we sold 911 homesites, 25 homes and had an unimproved residential land sale of $0.9 million, compared to 912 homesites and no homes or unimproved residential land sales during 2024. During 2025 and 2024 the average base revenue, excluding homesite residuals, per homesite sold was approximately $137,000 and $108,000, respectively, due to the mix of sales from different communities. Homesite sales during 2024 also include the sale of 82 entitled but undeveloped homesites sold within the SouthWood community, compared to none in the current period. The revenue, gross profit and margin for each period was impacted by the difference in pricing among the communities, the difference in the cost of the development and the volume of sales within each of the communities. The number of homesites sold varied in each period due to the timing of homebuilder contractual closing obligations in our residential communities.
Commercial and Forestry Real Estate Revenue and Gross Profit. During 2025, we had sixteen commercial, hospitality and forestry real estate sales totaling approximately 351 acres for $57.1 million, resulting in a gross profit of $32.3 million (or gross margin of 56.6%). The commercial, hospitality and forestry real estate sales during 2025, included the sale of the Watercrest JV’s senior living community property for $41.0 million, resulting in a gross margin of approximately 47.2% and a commercial property used in hospitality operations for $1.4 million resulting in a gross margin of approximately 42.9%. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. During 2024, we had eleven commercial and forestry real estate sales totaling approximately 634 acres for $18.0 million, resulting in a gross profit of $13.1 million (or gross margin of 72.8%).
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 the 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.
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Timber Revenue and Gross Profit . Timber revenue was $4.2 million during each of 2025 and 2024. There were 246,000 tons of wood products sold at an average price per ton of $16.02 during 2025, as compared to 256,000 tons of wood products sold at an average price per ton of $14.56, during 2024. Timber gross margin was 81.0% during both 2025 and 2024.
Other Revenue . Other revenue primarily consists of our real estate brokerage, title insurance agency and insurance agency business revenue and mitigation bank credit sales. Other revenue increased $3.7 million during 2025, compared to 2024, primarily due to our real estate brokerage business, which began operations in the second quarter of 2025.
Hospitality Revenue and Gross Profit
Year Ended December 31,
Dollars in millions
Hospitality revenue
Gross profit
Gross margin
Hospitality revenue increased $16.2 million, or 8.1% to $215.4 million during 2025, as compared to $199.2 million in 2024. The increase in hospitality revenue was primarily related to the increase in membership dues and membership ancillary spend, as well as The Third golf course, which opened in November 2024 and the renovated Shark’s Tooth clubhouse, which reopened in February 2025. The increase in revenue was also related to an increase in hotel operations. As of December 31, 2025, Watersound Club had 3,594 members, compared with 3,476 members as of December 31, 2024, a net increase of 118 members. As of both December 31, 2025 and 2024, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs). Hospitality gross margin was 31.1% during 2025, compared to 31.5% during 2024. The decrease in gross margin was primarily due to ongoing operating costs for The Third golf course and reopening and ongoing operating costs of the Shark’s Tooth clubhouse during the current period.
Leasing Revenue and Gross Profit
Year Ended December 31,
Dollars in millions
Leasing revenue
Gross profit
Gross margin
Leasing revenue increased $3.3 million, or 5.5%, to $63.6 million during 2025, as compared to $60.3 million in 2024. The increase was primarily due to additional commercial property, multi-family and marina leases, partially offset by a decrease related to the Watercrest JV’s senior living community property, which was sold and ceased operating activities, and the sale of 24 townhomes in the Watersound Villas on the Fairway community in the current period. Leasing gross margin increased to 55.3% during 2025, as compared to 52.2% during 2024. The increase in leasing gross margin was primarily due to additional leases in the current period and the sale of the Watercrest JV’s senior living community property in September 2025, which operated with lower margins .
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Corporate and Other Operating Expenses
Year Ended December 31,
In millions
Employee costs
Property taxes and insurance
Professional fees
Marketing and owner association costs
Occupancy, repairs and maintenance
Other miscellaneous
Total corporate and other operating expenses (a)
Excluding depreciation, depletion and amortization.
Corporate and other operating expenses increased $2.1 million, or 8.3%, to $27.3 million during 2025, as compared to $25.2 million in 2024. The increase was due to increased operating costs, primarily related to employee costs, property taxes, licenses, professional fees, marketing and owner association costs.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization expense increased $1.1 million during 2025, as compared to 2024, primarily due to new hospitality and commercial assets placed in service, partially offset by assets sold in the current period. Depreciation is a non-cash, generally accepted accounting principles (“GAAP”) expense, which is amortized over an asset’s useful life, while maintenance and repair expenses are period costs and expensed as incurred. See Note 2. Significant Accounting Policies included in Item 15 of this Form 10-K for additional information.
Investment Income, Net
Investment income, net primarily includes (i) interest, dividends and accretion income accrued or received on our cash, cash equivalents and other investments, (ii) interest income earned on the time deposit held by a special purpose entity and (iii) interest earned on notes receivable, the Company’s unimproved land contribution to the unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community and other receivables as detailed in the table below:
Year Ended December 31,
In millions
Interest, dividend and accretion income
Interest income from investments in special purpose entities
Interest earned on notes receivable and other interest
Total investment income, net
Investment income, net decreased $0.3 million during 2025, as compared to 2024, primarily due to less interest earned on the unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV related to the decreased volume of home sales transacted in the community during the current period. The decrease was also due to lower yields on our cash, cash equivalents and other investments, partially offset by higher balances of cash, cash equivalents and other investments in the current period. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
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Interest Expense
Interest expense primarily includes interest incurred on project financing, the Senior Notes issued by Northwest Florida Timber Finance, LLC (“Senior Notes”), Community Development District (“CDD”) debt and finance leases, as well as amortization of debt discount and premium and debt issuance costs as detailed in the table below:
Year Ended December 31,
In millions
Interest incurred for project financing and other interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes issued by special purpose entity
Total interest expense
Interest expense decreased $3.1 million, or 9.2%, to $30.5 million in 2025, as compared to $33.6 million in 2024. The decrease in interest expense is due to repayment of project financing and a decrease in interest rates from the prior period. See Note 9. Debt, Net and Note 17. Other Income, Net included in Item 15 of this Form 10-K for additional information regarding project financing.
Equity in Income from Unconsolidated Joint Ventures
Equity in income (loss) from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for using the equity method as detailed in the table below. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Year Ended December 31,
In millions
Latitude Margaritaville Watersound JV (a)
Watersound Fountains Independent Living JV (b)
Pier Park TPS JV
Pier Park RI JV (c)
Busy Bee JV (d)
Electric Cart Watersound JV (e)
Watersound Management JV
Total equity in income from unconsolidated joint ventures
During 2025, 2024 and 2023, the Latitude Margaritaville Watersound JV completed 527, 659 and 641 home sale transactions, respectively. The year ended December 31, 2025, includes intra-entity profit elimination of $0.5 million related to the sale of additional land to the JV, a pro-rata portion of which will be recognized as each home on the land is sold by the JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
The community opened in March 2024 and is currently under lease-up.
The hotel opened in April 2024 and activity in the current period includes start-up, depreciation and interest expenses for the project.
Includes changes in the fair value of derivatives related to interest rate swaps entered into by the Busy Bee JV.
The permanent sales and service facility located in the Watersound West Bay Center opened in October 2023. An additional sales showroom located in the Watersound Town Center opened in June 2024 .
Other Income (Expense), Net
Other income (expense), net primarily includes accretion income from our retained interest investments, gain on contributions to unconsolidated joint ventures, gain (loss) on disposition of assets and other income and expense items as detailed in the table below:
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Year Ended December 31,
In millions
Accretion income from retained interest investments
Gain on contributions to unconsolidated joint ventures
Gain (loss) on disposition of assets
Miscellaneous (expense) income, net
Other income (expense), net
Other income (expense), net increased $1.3 million to other income, net of $0.6 million during 2025, as compared to other expense, net of $0.7 million in 2024.
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.
Gain on contributions to unconsolidated joint ventures includes gain on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Gain on disposition of assets during 2025 primarily includes a gain on the sale of our Pilatus PC-12 NG aircraft (“N850J”) previously used in hospitality operations. Loss on disposition of assets during 2024 primarily includes loss on disposal of hospitality assets.
Miscellaneous (expense) income, net during 2025, primarily includes expense of $1.2 million for design costs for certain residential, hospitality and commercial assets that we are no longer pursuing. Miscellaneous (expense) income, net during 2025 also includes loss on early extinguishment of debt related to the payoff of the Watercrest JV Loan, as well as fees related to other loans. See Note 9. Debt, Net and Note 17 . Other Income, Net included in Item 15 of this Form 10-K for additional information.
Income Tax Expense
Income tax expense was $39.2 million in 2025, as compared to $26.0 million during 2024. Our effective tax rate was 25.3% in 2025, as compared to 26.4% in 2024.
Our effective rate for 2025 and 2024, differed from the federal statutory rate of 21.0% primarily due to state income taxes, nontaxable or nondeductible and other differences. See Note 12. Income Taxes included in Item 15 of this Form 10-K for additional information.
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Segment Results
Residential
The table below sets forth the consolidated results of operations of our residential segment:
Year Ended December 31,
In millions
Revenue:
Real estate revenue
Residential real estate revenue
Other revenue
Total real estate revenue
Leasing revenue
Total revenue
Expenses:
Cost of real estate and other revenue (a)
Cost of leasing revenue (a)
Other operating expenses (a)
Depreciation, depletion and amortization
Total expenses
Operating income
Other income (expense):
Investment income, net
Interest expense
Equity in income from unconsolidated joint ventures
Other (expense) income, net
Total other income, net
Income before income taxes
Excluding depreciation, depletion and amortization, shown separately above.
The following tables set forth our consolidated residential real estate revenue and cost of revenue activity:
Year Ended December 31, 2025
Units
Cost of
Gross
Gross
Sold
Revenue
Revenue
Profit
Margin
Dollars in millions
Consolidated
Homesites
Homes
Land sales
Total consolidated
Unconsolidated
Homes (a)
Total consolidated and unconsolidated
Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for using the equity method. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
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Year Ended December 31, 2024
Units
Cost of
Gross
Gross
Sold
Revenue
Revenue
Profit
Margin
Dollars in millions
Consolidated
Homesites (a)
Total consolidated
Unconsolidated
Homes (b)
Total consolidated and unconsolidated
Includes 82 entitled but undeveloped homesites sold within the SouthWood community.
Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for using the equity method. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Year Ended December 31, 2023
Units
Cost of
Gross
Gross
Sold
Revenue
Revenue
Profit
Margin
Dollars in millions
Consolidated
Homesites (a)
Land sales
Total consolidated
Unconsolidated
Homes (b)
Total consolidated and unconsolidated
Includes 100 entitled but undeveloped homesites sold within the SouthWood community.
Includes homes sold by the Latitude Margaritaville Watersound JV, which is unconsolidated and is accounted for using the equity method. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
The following discussion sets forth details of the consolidated results of operations of our residential segment.
Homesites. Revenue from homesite sales increased $32.7 million, or 30.5%, during 2025, as compared to 2024, 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 2025 and 2024, the average base revenue, excluding homesite residuals, per homesite sold was approximately $137,000 and $108,000, respectively, due to the mix of sales from different communities. Homesite sales during 2024 also include the sale of 82 entitled but undeveloped homesites sold within the SouthWood community, compared to none in the current period. Revenue includes estimated homesite residuals of $10.9 million and $3.6 million, during 2025 and 2024, respectively. The increase in estimated homesite residuals was due to the mix and number of homesites sold in specific communities during the current period. Homesite gross margin increased to 50.5% during 2025, as compared to 47.0% during 2024, primarily due to the cost, mix and number of homesites sold from different communities during each period. Gross margin may vary each period depending on the location of homesite sales.
Homes . During 2025, we sold 24 completed townhomes within our Watersound Villas on the Fairway community and a home within our Watersound Origins community for a total of $14.2 million, resulting in a gross margin of 36.6%. During 2024, we did not have any home sales.
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Land sales. During 2025, we had an unimproved residential land sale for $0.9 million, with de minimis cost of revenue. During 2024, we did not have any unimproved residential land sales.
Other revenue includes tap and impact fee credits sold, marketing fees and other fees. Other revenue includes estimated fees related to homebuilder homesite sales of $2.8 million and $2.5 million during 2025 and 2024, respectively.
Leasing revenue includes long-term leases of residential assets.
Other operating expenses include salaries and benefits, property taxes, marketing, professional fees, project administration, owner association and CDD assessments and other administrative expenses.
Investment income, net consists of interest earned on our unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. Investment income, net decreased $0.2 million during 2025, as compared to 2024, due to fewer home sales transacted in the community during the current period. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
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 $2.9 million during 2025, compared to 2024. The increase was primarily due to higher average sales price and margin per home sold, partially offset by the decreased volume of home sale transactions. The year ended December 31, 2025, also includes $0.5 million of intra-entity profit elimination related to the sale of additional land to our unconsolidated Latitude Margaritaville Watersound JV, a pro-rata portion of which will be recognized as each home on the land is sold by the JV. The Latitude Margaritaville Watersound JV completed 527 home sale transactions during 2025, compared to 659 home sale transactions during 2024. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Other (expense) income, net in 2025 primarily includes expense of $0.6 million for design costs for certain residential assets that we are no longer pursuing.
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Hospitality
The table below sets forth the consolidated results of operations of our hospitality segment:
Year Ended December 31,
In millions
Revenue:
Hospitality revenue
Leasing revenue
Real estate revenue
Total revenue
Expenses:
Cost of hospitality revenue (a)
Cost of leasing revenue (a)
Cost of real estate revenue (a)
Other operating expenses (a)
Depreciation, depletion and amortization
Total expenses
Operating income
Other income (expense):
Investment income, net
Interest expense
Other income (expense), net
Total other expense, net
Income before income taxes
Excluding depreciation, depletion and amortization, shown separately above.
The following table sets forth details of our hospitality segment consolidated revenue and gross profit:
Year Ended December 31, 2025
Year Ended December 31, 2024
Year Ended December 31, 2023
Gross
Gross
Gross
Gross
Gross
Gross
Revenue
Profit
Margin
Revenue
Profit
Margin
Revenue
Profit
Margin
Dollars in millions
Clubs (a)
Hotels
Other
Total
Includes the Camp Creek Inn due to its proximity and guest access to Watersound Club amenities. The hotel opened in June 2023.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenue from our clubs increased $10.7 million, or 13.2%, during 2025, as compared to 2024. The increase in revenue in the current period was due to an increase in membership dues, membership ancillary spend, lodging related to the Camp Creek Inn, as well as The Third golf course, which opened in November 2024 and the renovated Shark’s Tooth clubhouse, which reopened in February 2025. As of December 31, 2025, Watersound Club had 3,594 members, compared with 3,476 members as of December 31, 2024, a net increase of 118 members. Our clubs gross margin was 42.2% during 2025, compared to 44.6% during 2024. The decrease in gross margin was primarily due to ongoing operating costs for The Third golf course and reopening and ongoing operating costs of the Shark’s Tooth clubhouse during the current period.
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Revenue from our hotel operations increased $4.6 million, or 4.4%, during 2025, as compared to 2024. The increase was primarily related to lodging revenue, as well as guest ancillary spend. Our hotels had a gross margin of 24.2% during 2025, comparable to 23.5% during 2024.
As of both December 31, 2025 and 2024, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs).
Revenue from other hospitality operations increased $0.9 million, or 7.1%, during 2025, as compared to 2024. The increase was primarily due to our standalone restaurants and marina operations. Our other hospitality operations gross margin was 11.8% during 2025, compared to 15.7% during 2024. The decrease in gross margin was due to increased operational costs during the current period.
Leasing revenue includes marina boat slip and dry storage rentals, as well as leases of other hospitality assets. Leasing revenue increased $0.4 million, or 11.4%, during 2025, as compared to 2024, primarily due to increased occupancy and rates at our marinas and other hospitality assets.
Real estate revenue during 2025, includes the sale of a hospitality property for $1.4 million, resulting in a gross profit of $0.6 million (or gross margin of 42.9%).
Other operating expenses include salaries and benefits, professional fees, repairs and maintenance, and other administrative expenses. The increase of $0.4 million in other operating expenses during 2025, as compared to 2024, was primarily related to repair and maintenance and salaries and benefits expenses in the current period.
The increase of $1.5 million in depreciation, depletion and amortization expense during 2025, as compared to 2024, was primarily due to new assets placed in service, partially offset by assets sold in the current period.
Interest expense primarily includes interest incurred from our hospitality project financing. The decrease of $1.4 million in interest expense during 2025, as compared to 2024, was primarily due to repayment of project financing and a decrease in interest rates from the prior period. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
Other income (expense), net during 2025 primarily includes a gain of $2.6 million on the sale of our N850J aircraft previously used in hospitality operations, partially offset by expense of $0.5 million for design costs for certain hospitality assets that we are no longer pursuing. Other income (expense), net during 2024 primarily includes net loss on disposal of assets.
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Commercial
The table below sets forth the consolidated results of operations of our commercial segment:
Year Ended December 31,
In millions
Revenue:
Leasing revenue
Commercial leasing revenue
Multi-family leasing revenue
Senior living leasing revenue
Total leasing revenue
Real estate revenue
Commercial and forestry real estate revenue
Timber revenue
Total real estate revenue
Total revenue
Expenses:
Cost of leasing revenue (a)
Cost of real estate revenue (a)
Other operating expenses (a)
Depreciation, depletion and amortization
Total expenses
Operating income
Other (expense) income:
Interest expense
Equity in loss from unconsolidated joint ventures
Other (expense) income, net
Total other expense, net
Income before income taxes
Excluding depreciation, depletion and amortization, shown separately above.
The following table sets forth details of our commercial segment consolidated revenue and gross profit:
Year Ended December 31, 2025
Year Ended December 31, 2024
Year Ended December 31, 2023
Gross
Gross
Gross
Gross
Gross
Gross
Revenue
Profit
Margin
Revenue
Profit
Margin
Revenue
Profit
Margin
Dollars in millions
Leasing
Commercial leasing
Multi-family leasing
Senior living leasing
Total leasing
Real estate
Commercial and forestry real estate
Timber
Total real estate
Total
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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The following discussion sets forth details of the consolidated results of operations of our commercial segment.
Total leasing revenue increased $2.7 million, or 4.8% during 2025, as compared to 2024. The increase was primarily due to additional commercial property and multi-family leases, partially offset by a decrease for assets sold during the current period. Total leasing gross margin during 2025 increased to 57.0%, as compared to 54.1% during 2024. The increase in leasing gross margin was primarily due to additional leases in the current period and the sale of the Watercrest JV’s senior living community property in September 2025, which operated with lower margins. As of December 31, 2025, we had net leasable square feet of approximately 1,174,000, of which approximately 1,133,000 square feet were under lease. As of December 31, 2024, we had net leasable square feet of approximately 1,182,000, of which approximately 1,126,000 square feet were under lease. As of December 31, 2025 and 2024, our consolidated entities had 1,104 and 1,235, respectively, multi-family and senior living units completed, of which 988 and 1,064, respectively, were leased (excludes 148 senior living units related to the unconsolidated Watersound Fountains Independent Living JV). The number of multi-family and senior living units decreased during 2025, due to the Watercrest JV’s senior living community property, which was sold and ceased operating activities, and the sale of 24 townhomes in the Watersound Villas on the Fairway community. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Commercial and forestry real estate revenue related to sales during the three years ended December 31, 2025 includes the following:
Number of
Average Price
Gross Profit
Period
Sales
Acres Sold
Per Acre
Revenue
on Sales
In millions (except for average price per acre)
Includes the sale of the Watercrest JV’s senior living community property for $41.0 million, resulting in a gross margin of approximately 47.2%.
Commercial and forestry real estate revenue can vary depending on the proximity to developed areas and the mix and characteristics of commercial and forestry real estate sold in each period, with varying compositions of retail, office, industrial, timber and other commercial uses. During 2025, we had fifteen commercial and forestry real estate sales of approximately 351 acres for $55.7 million, resulting in a gross margin of approximately 56.9%. The year ended December 31, 2025, included the sale of the Watercrest JV’s senior living community property for $41.0 million, resulting in a gross margin of approximately 47.2%. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. During 2024, we had eleven commercial and forestry real estate sales of approximately 634 acres for $18.0 million, resulting in a gross margin of approximately 72.8%.
Timber revenue was $4.2 million during each of 2025 and 2024. There were 246,000 tons of wood products sold during 2025, as compared to 256,000 tons of wood products sold during 2024. The average price of wood products sold increased to $16.02 per ton during 2025, as compared to $14.56 per ton during 2024. Timber gross margin was 81.0% during both 2025 and 2024.
Other operating expenses include salaries and benefits, property taxes, CDD assessments, professional fees, marketing, project administration and other administrative expenses. The increase of $0.8 million in other operating expenses during 2025, as compared to 2024, was primarily related to property taxes.
The decrease of $0.4 million in depreciation, depletion and amortization expense during 2025, as compared to 2024, was primarily due to assets sold, partially offset by new assets placed in service in the current period.
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Interest expense primarily includes interest incurred from our commercial project financing and CDD debt. The decrease of $1.7 million in interest expense during 2025, as compared to 2024, was primarily due to repayment of project financing and a decrease in interest rates from the prior period. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
Equity in loss from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for using the equity method. Equity in loss from unconsolidated joint ventures was $6.6 million during 2025, as compared to $5.7 million in 2024. Equity in loss from unconsolidated joint ventures during 2025 includes start-up, depreciation and interest expenses related to the Pier Park RI JV, which opened a 121-room hotel in April 2024. Equity in loss from unconsolidated joint ventures during 2025 and 2024, also includes lease-up, depreciation and interest expenses related to the Watersound Fountains Independent Living JV, which opened a 148-unit independent senior living community in March 2024 and is currently under lease-up. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
Other (expense) income, net during 2025 primarily includes loss on early extinguishment of debt related to the payoff of the Watercrest JV Loan, as well as fees related to other loans. See Note 9. Debt included in Item 15 of this Form 10-K for additional information.
Liquidity and Capital Resources
As of December 31, 2025, we had cash and cash equivalents of $129.6 million, compared to $88.8 million as of December 31, 2024 .
We believe that our current cash position, financing arrangements and cash generated from operations will provide us with sufficient liquidity to satisfy our anticipated working capital needs, expected capital expenditures, principal and interest payments on our long-term debt, authorized stock repurchases and authorized dividends for the next twelve months. See Part I. Item 1A. Risk Factors .
During 2025, we invested a total of $108.1 million in capital expenditures, which includes $77.9 million for our residential segment, $8.9 million for our hospitality segment, $18.6 million for our commercial segment and $2.7 million for corporate and other expenditures. The $108.1 million in capital expenditures included $103.8 million for development or for new operating assets and $4.3 million for sustaining capital on existing operating properties. We anticipate that future capital commitments will be funded through cash generated from operations, cash and cash equivalents on hand and new financing arrangements. As of December 31, 2025, we had a total of $32.1 million primarily in construction and development related contractual obligations. Capital expenditures and contractual obligations exclude amounts related to unconsolidated JVs. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
As of December 31, 2025 and 2024, we had various loans outstanding totaling $396.0 million and $442.7 million, respectively, with maturities from April 2027 through March 2064. As of December 31, 2025, the weighted average effective interest rate of total outstanding debt was 4.8%, of which 80.8% includes fixed or swapped interest rates, and the average remaining life was 19.6 years. As of December 31, 2025, the weighted average rate on our variable rate loans, excluding the swapped portion, was 5.9%. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
Our indebtedness consists of various loans on real and leasehold property. These loans are typically secured by various interests in the property such as assignment of rents, leases, deposits, permits, plans, specifications, fees, agreements, approvals, contracts, licenses, construction contracts, development contracts, service contracts, franchise agreements, the borrower’s assets, improvements, and security interests in the rents, personal property, management agreements, construction agreements, improvements, accounts, profits, leases and fixtures (collectively, “Security Interests”). The specific Security Interests vary from loan to loan.
In 2015, the Pier Park North JV (the “Pier Park North JV”) entered into a $48.2 million loan (the “PPN JV Loan”). In September 2025, the PPN JV Loan was refinanced, which increased the principal amount of the loan from $39.5
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million to $40.0 million and fixed the interest rate to 6.1%. The refinanced loan provides for monthly payments of principal and interest, with a final ballon payment at maturity in October 2035. As of December 31, 2025 and 2024, $39.9 million and $40.4 million, respectively, was outstanding on the PPN JV Loan. The loan may not be prepaid prior to October 2029. Commencing in October 2029 through May 2035, any principal prepaid is subject to a prepayment fee equal to the greater of (i) a prepayment ratio, as outlined in the loan agreement, or (ii) 1% of the amount prepaid. From June 2035 through maturity, the loan may be prepaid without a prepayment fee upon prior written notice. In connection with the loan, we entered into a limited guarantee in favor of the lender with respect to environmental indemnity matters and specified non-recourse carveouts outlined in the loan agreement. We incurred $0.3 million in loan costs due to the refinance. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2018, Pier Park Crossings LLC ( the “Pier Park Crossings JV”) entered into a $36.6 million loan, insured by the U.S. Department of Housing and Urban Development (“HUD”), as amended, (the “PPC JV Loan”). As of December 31, 2025 and 2024, $33.6 million and $34.2 million, respectively, was outstanding on the PPC JV Loan. The loan bears interest at a rate of 3.1% and matures in June 2060. The loan includes a prepayment premium due to the lender of 2% - 7% for any additional principal that is prepaid through August 2031. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information .
In 2019, a wholly-owned subsidiary of ours entered into a $5.5 million loan, which is guaranteed by us (the “Beckrich Building III Loan”). As of December 31, 2025 and 2024, $1.1 million and $5.0 million, respectively, was outstanding on the Beckrich Building III Loan. The loan bears interest at a rate of SOFR plus 1.8% and matures in August 2029. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information. In January 2026, the loan was paid in full.
In 2020, a wholly-owned subsidiary of ours entered into a $15.3 million loan, which is guaranteed by us (the “Airport Hotel Loan”). As of December 31, 2025 and 2024, $3.2 million and $11.7 million, respectively, was outstanding on the Airport Hotel Loan. The loan bears interest at SOFR plus 2.1%, with a floor of 3.0%. In February 2025, the Airport Hotel Loan maturity date was extended from March 2025 to February 2030. We incurred less than $0.1 million of additional loan costs due to the modification. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2020, Pier Park Resort Hotel, LLC (the “Pier Park Resort Hotel JV”) entered into a loan with an initial amount of $52.5 million up to a maximum of $60.0 million through additional earn-out requests (the “Pier Park Resort Hotel JV Loan”). As of December 31, 2025 and 2024, $49.8 million and $50.9 million, respectively, was outstanding on the Pier Park Resort Hotel JV Loan. The loan matures in April 2027 and bears interest at a rate of SOFR plus 2.1%. The loan is secured by the real property and certain other Security Interests. In connection with the loan, as guarantors, we and our JV partner entered into a guarantee based on each partner’s ownership interest in favor of the lender, to guarantee the payment and performance of the borrower. As guarantor, our liability under the loan can be released upon reaching and maintaining certain debt service coverage. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants or warranties to be performed on the part of such guarantor. The Pier Park Resort Hotel JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to SOFR. The interest rate swap matures in April 2027 and fixed the variable rate on the notional amount of related debt, initially at $42.0 million, amortizing to $38.7 million at swap maturity, to a rate of 3.2%. See Note 5. Financial Instruments and Fair Value Measurements and Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2020, a wholly-owned subsidiary of ours entered into a $16.8 million loan, which is guaranteed by us (the “Breakfast Point Hotel Loan”). As of December 31, 2025 and 2024, $15.0 million and $15.5 million, respectively, was outstanding on the Breakfast Point Hotel Loan. The loan matures in November 2042 and bears interest at a rate of 6.0% through November 2027 and the 1-year constant maturity Treasury rate plus 3.3% from December 2027 through November 2042, with a minimum rate of 6.0% throughout the term of the loan. The loan includes a prepayment premium due to the lender of 1% of the outstanding principal balance for any additional principal that is prepaid through November 2027. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
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In 2021, 30A Greenway Hotel, LLC (“The Lodge 30A JV”) entered into a $15.0 million loan (the “Lodge 30A JV Loan”). As of December 31, 2025 and 2024, $13.6 million and $14.1 million, respectively, was outstanding on the Lodge 30A JV Loan. The loan bears interest at a rate of 3.8% and matures in January 2028. The loan is secured by the real property and certain other Security Interests. In connection with the loan, we, wholly-owned subsidiaries of ours and our JV partner entered into a joint and several payment and performance guarantee in favor of the lender. Upon reaching a certain debt service coverage ratio for a minimum of twenty-four months, our liability as guarantor can be reduced to 75% of the outstanding principal amount for a twelve-month period. The debt service coverage ratio will be tested annually thereafter and can be reduced to 50% in year four and 25% in year five. We receive a monthly fee related to the guarantee from our JV partner based on the JV partner’s ownership percentage. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2021, a wholly-owned subsidiary of ours entered into a loan, as amended (the “North Bay Landing Loan”). In February 2025, the North Bay Landing Loan was refinanced, which increased the principal amount of the loan to $27.8 million, fixed the interest rate to 5.9% and provides for monthly principal and interest payments through maturity in March 2060. As of December 31, 2025 and 2024, $27.6 million and $22.7 million, respectively, was outstanding on the North Bay Landing Loan. The refinanced loan terms include a prepayment premium due to the lender of 1% - 10% for any principal that is prepaid through March 2035. The refinanced loan is insured by HUD and is secured by the real property and certain other Security Interests. We incurred $0.6 million in loan costs due to the refinance. As a result of the refinance, 2025 includes a less than $0.1 million loss on early extinguishment of debt related to unamortized debt issuance costs, included within other income, net on the consolidated statements of income. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2021, a wholly-owned subsidiary of ours entered into a $28.0 million loan, which is guaranteed by us (the “Watersound Camp Creek Loan”). As of December 31, 2025 and 2024, $26.8 million and $27.4 million, respectively, was outstanding on the Watersound Camp Creek Loan. The loan matures in December 2047 and bears interest at a rate of SOFR plus 2.1%, with a floor of 2.6%. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan will be reduced to 50% of the outstanding principal amount upon the project reaching and maintaining a trailing six months of operations with a certain debt service coverage ratio and reduced to 25% of the outstanding principal amount upon reaching and maintaining a trailing twelve months of operations with a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants, warranties or other certain obligations to be performed on the part of such guarantor. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2021, a wholly-owned subsidiary of ours entered into a $12.0 million loan, which is guaranteed by us (the “Watersound Town Center Grocery Loan”). As of December 31, 2025 and 2024, $4.7 million and $8.1 million, respectively, was outstanding on the Watersound Town Center Grocery Loan. The loan bears interest at SOFR plus 2.1%, with a floor of 2.3%, and matures in August 2031. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan has been reduced to 25% of the outstanding principal amount after reaching a certain debt service coverage ratio. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2021, a wholly-owned subsidiary of ours entered into a $21.2 million loan, which is guaranteed by us (the “Hotel Indigo Loan”). As of December 31, 2025 and 2024, $19.0 million and $19.9 million, respectively, was outstanding on the Hotel Indigo Loan. The loan bears interest at a rate of SOFR plus 2.5%, with a floor of 2.5%. The loan matures in October 2028 and includes an option for an extension of the maturity date by sixty months, subject to certain conditions. The loan is secured by the leasehold property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2022, Mexico Beach Crossings, LLC (the “Mexico Beach Crossings JV”) entered into a $43.5 million loan, insured by HUD (the “Mexico Beach Crossings JV Loan”). As of December 31, 2025 and 2024, $42.5 million and $43.1 million, respectively, was outstanding on the Mexico Beach Crossings JV Loan. The loan bears interest at a rate of 3.0% and matures in March 2064. The loan includes a prepayment premium due to the lender of 1% - 9% for any principal that is prepaid through March 2034. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
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In 2022, Pier Park Crossings Phase II LLC (the “Pier Park Crossings Phase II JV”) refinanced into a $22.9 million loan, insured by HUD (the “PPC II JV Loan”). As of December 31, 2025 and 2024, $21.4 million and $21.8 million, respectively, was outstanding on the PPC II JV Loan. The loan bears interest at a rate of 2.7% and matures in May 2057. The loan includes a prepayment premium due to the lender of 1% - 7% for any principal that is prepaid through May 2032. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2022, a wholly-owned subsidiary of ours entered into a $13.7 million loan, which is guaranteed by us (the “Topsail Hotel Loan”). As of December 31, 2025 and 2024, $11.2 million and $12.3 million, respectively, was outstanding on the Topsail Hotel Loan. The loan bears interest at a rate of SOFR plus 2.1%, with a floor of 3.0% and matures in July 2027. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2022, a wholly-owned subsidiary of ours entered into a $37.0 million loan, which is guaranteed by us (“The Pearl Hotel Loan”). As of December 31, 2025 and 2024, $32.6 million and $34.0 million, respectively, was outstanding on The Pearl Hotel Loan. The loan bears interest at a rate of 6.3% and matures in December 2032. The loan includes a prepayment fee due to the lender of 1% - 2% of the outstanding principal balance if the loan is refinanced with another financial institution through December 2027. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
In 2023, Origins Crossings, LLC (the “Watersound Origins Crossings JV”) refinanced into a $52.9 million loan, insured by HUD (the “Watersound Origins Crossings JV Loan”). As of December 31, 2025 and 2024, $51.3 million and $52.0 million, respectively, was outstanding on the Watersound Origins Crossings JV Loan. The loan bears interest at a rate of 5.0% and matures in April 2058. The loan includes a prepayment premium due to the lender of 1% - 8% for any principal that is prepaid through April 2033. The refinanced loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.
CDD bonds financed the construction of infrastructure improvements in some of our communities. The principal and interest payments on the bonds are paid by assessments on the properties benefited by the improvements financed by the bonds. We have recorded a liability for CDD debt that is associated with platted property, which is the point at which it becomes fixed and determinable. Additionally, we have recorded a liability for the balance of the CDD debt that is associated with unplatted property if it is probable and reasonably estimable that we will ultimately be responsible for repayment. We have recorded CDD related debt of $2.6 million as of December 31, 2025. Total outstanding CDD debt related to our land holdings was $9.0 million as of December 31, 2025, which is comprised of $7.4 million at the SouthWood community, $1.5 million at the existing Pier Park retail center and less than $0.1 million at the Wild Heron residential community. We pay interest on this total outstanding CDD debt.
As of December 31, 2025, our unconsolidated Latitude Margaritaville Watersound JV, Watersound Fountains Independent Living JV, Pier Park TPS JV, Pier Park RI JV, Busy Bee JV and Electric Cart Watersound JV had various loans outstanding, some of which we have entered into guarantees. See Note 4. Joint Ventures and Note 19. Commitments and Contingencies included in Item 15 of this Form 10-K for additional information.
During 2025 and 2024, we paid dividends of $0.58 and $0.52, respectively, per share on our common stock for a total of $33.6 million and $30.4 million, respectively.
During 2025, we repurchased 798,622 shares of our common stock outstanding at an average repurchase price of $50.10, per share, for an aggregate repurchase price of $40.0 million, excluding the excise tax on stock repurchases in excess of issuances as a result of the IRA. During 2024, we repurchased 70,985 shares of our common stock outstanding at an average repurchase price of $47.38, per share, for an aggregate repurchase price of $3.4 million, excluding the excise tax on stock repurchases in excess of issuances as a result of the IRA. See Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 14. Stockholders’ Equity included in Item 15 of this Form 10-K for additional information regarding the Stock Repurchase Program and treasury stock retirement during 2025.
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As part of a certain sale of forestry land in 2014, we generated significant tax gains. The installment note’s structure allowed us to defer the resulting federal and state tax liability of $45.6 million until 2029, the maturity date for the installment note. We have a deferred tax liability related to the gain in connection with the sale. At the maturity date of the installment note in 2029, the $200.0 million time deposit included in investments held by special purpose entities will be used to pay the $180.0 million of principal for the Senior Notes held by special purpose entity and the remaining $20.0 million will become available to us, which can be used to pay a portion of the tax liability. See Note 5. Financial Instruments and Fair Value Measurements and Note 12. Income Taxes included in Item 15 of this Form 10-K for additional information.
As of December 31, 2025 and 2024, we were required to provide surety bonds that guarantee completion and maintenance of certain infrastructure in certain development projects and mitigation banks, as well as other financial guarantees of $14.7 million and $53.1 million, respectively, as well as standby letters of credit in the amount of $0.4 million and $0.7 million, respectively, which may potentially result in a liability to us if certain obligations are not met.
In conducting our operations, we routinely hold customers’ assets in escrow pending completion of real estate transactions, and are responsible for the proper disposition of these balances for our customers. These amounts are maintained in segregated bank accounts and have not been included in the accompanying consolidated balance sheets, consistent with GAAP and industry practice. The cash deposit accounts and offsetting liability balances for escrow deposits in connection with our title insurance agencies for real estate transactions were $8.0 million and $6.4 million as of December 31, 2025 and 2024, respectively. These escrow funds are not available for regular operations.
Summary of Cash Flows
A summary of our cash flows from operating, investing and financing activities are as follows:
Year Ended December 31,
In millions
Net cash provided by operating activities
Net cash used in investing activities
Net cash (used in) provided by financing activities
Net increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of the year
Cash, cash equivalents and restricted cash at end of the year
Cash Flows from Operating Activities
Net cash provided by operating activities includes net income, adjustments for non-cash items, distribution of earnings from unconsolidated joint ventures, changes in operating assets and liabilities and expenditures related to assets ultimately planned to be sold. Adjustments for non-cash items primarily include depreciation, depletion and amortization, equity in income from unconsolidated joint ventures, deferred income tax and cost of real estate sold. Net cash provided by operations was $190.7 million in 2025, as compared to $108.0 million in 2024. During 2025 net income was $115.9 million, compared to $72.4 million in 2024. The increase in net cash provided by operating activities was primarily due to the changes in net income, distribution of earnings from unconsolidated joint ventures, cost of real estate sold, deferred revenue and accounts payable and other liabilities, partially offset by the changes in equity in income from unconsolidated joint ventures, deferred income tax, expenditures for an acquisition of real estate to be sold, (gain) loss on disposal of property and equipment and other assets during the year. During 2025, the Watercrest JV sold its senior living community property to a third party for $41.0 million, resulting in a gross profit of $19.4 million and a corresponding cash distribution of $19.1 million made to us. During 2025, distribution of earnings from unconsolidated joint ventures were $35.6 million, compared to $26.8 million in 2024. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.
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Cash Flows from Investing Activities
Net cash used in investing activities primarily includes capital expenditures for operating property and property and equipment used in our operations and capital contributions to unconsolidated joint ventures, partially offset by proceeds from the disposition of assets and maturities of assets held by special purpose entities. During 2025, net cash used in investing activities was $26.2 million, which included capital expenditures for operating property and property and equipment of $23.8 million, primarily for our commercial and hospitality segments, and capital contributions to unconsolidated joint ventures of $7.8 million, partially offset by proceeds from the disposition of assets of $4.6 million primarily related to the sale of our N850J aircraft and maturities of assets held by SPEs of $0.8 million. During 2024, net cash used in investing activities was $50.4 million, which included capital expenditures for operating property and property and equipment of $49.9 million, primarily for our commercial and hospitality segments, and capital contributions to unconsolidated joint ventures of $1.7 million, partially offset by maturities of assets held by special purpose entities of $0.8 million, proceeds from insurance claims of $0.2 million and capital distributions from unconsolidated joint ventures of $0.2 million.
Cash Flows from Financing Activities
Net cash used in financing activities was $124.3 million in 2025, compared to $52.1 million in 2024. Net cash used in financing activities during 2025, included principal payments for debt of $114.5 million primarily related to the refinance of the PPN JV Loan and North Bay Landing Loan and payoff of the Watercrest JV Loan, repurchase of 798,622 shares of our common stock outstanding of $40.3 million, including excise tax, dividends paid of $0.58 per share on our common stock of $33.6 million, capital distributions to non-controlling interest of $2.9 million, debt issuance costs of $0.6 million and principal payments for finance leases of $0.2 million. Net cash used in financing activities during 2025, were partially offset by borrowings on debt of $67.8 million related to the refinance of the PPN JV Loan and North Bay Landing Loan. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information. Net cash used in financing activities during 2024 included dividends paid of $0.52 per share on our common stock $30.3 million, principal payments for debt of $18.2 million, repurchase of 70,985 shares of our common stock outstanding of $3.4 million, including excise tax, capital distributions to non-controlling interest of $1.0 million, principal payments for finance leases of $0.2 million and debt issuance costs of $0.1 million, partially offset by borrowings on debt of $1.1 million.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our 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.
Investment in Real Estate, Net and Cost of Real Estate Revenue. Costs associated with a specific real estate project are capitalized during the development period. These development costs include land and common development costs (such as structures, roads, utilities and amenities). We capitalize costs directly associated with development and construction of identified real estate projects. Indirect costs that clearly relate to a specific project under development, such as project administration, interest (up to total interest expense) and real estate property taxes, may also be capitalized.
A portion of real estate development costs and estimates for costs to complete are allocated to each unit based on the relative sales value of each unit as compared to the estimated sales value of the total project. These estimates are reevaluated at least annually, and more frequently if warranted by market conditions, changes in the project’s scope or other factors, with any adjustments being allocated prospectively to the remaining property or units.
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The capitalization period relating to direct and indirect project costs is the period in which activities necessary to ready a property for its intended use are in progress. The period begins when such activities commence, typically when we begin the site work or construction on land already owned, and ends when the asset is substantially complete and ready for its intended use. In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed. If we determine not to complete a project, any previously capitalized costs that are not recoverable are expensed in the period in which the determination is made and recovery is not deemed probable.
Our investments in real estate are carried at cost, net of depreciation and timber depletion, unless circumstances indicate that the carrying value of the assets may not be recoverable. If we determine that an impairment exists due to the inability to recover an asset’s carrying value, an impairment charge is recorded to the extent that the carrying value exceeds estimated fair value. If such assets were held for sale, the provision for loss would be recorded to the extent that the carrying value exceeds estimated fair value, including costs to sell.
Long-Lived Assets. Long-lived assets include our investments in land holdings, operating and development properties, property and equipment and investment in unconsolidated JV’s. We evaluate our investment in unconsolidated JVs for impairment during each reporting period. A series of operating losses of an investee or other factors may indicate that a decrease in the value of our investment in the unconsolidated JV has occurred. The amount of impairment recognized is the excess of the investment’s carrying value over its estimated fair value.
Our investments in land holdings, operating and development properties and property and equipment are carried at cost, net of depreciation and timber depletion. We review our long-lived assets for impairment quarterly to determine whether events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As part of our review for impairment of long-lived assets, we review the long-lived asset’s carrying value, current period actual financial results as compared to prior period and forecasted results contained in our business plan and any other events or changes in circumstances to identify whether an indicator of potential impairment may exist. Some of the events or changes in circumstances that are considered as indicators of potential impairment include:
a prolonged decrease in the value to below cost or demand for the properties;
a change in the expected use or development plans for the properties;
a material change in strategy that would affect the value of our properties;
continuing operating or cash flow losses for an operating property;
an accumulation of costs in excess of the projected costs for development or operating property; and
any other adverse change that may affect the value of the property.
We use varying methods to determine if an impairment exists, such as (i) considering indicators of potential impairment, (ii) analyzing expected future cash flows and comparing the expected future undiscounted cash flows of the property to its carrying value or (iii) determining market resale values.
The accounting estimate related to real estate impairment evaluation is susceptible to change due to the use of assumptions about future sales proceeds and future expenditures. For projects under development or construction, an estimate of future cash flows on an undiscounted basis is performed using estimated future expenditures necessary to maintain the existing project and using management’s best estimates about future sales prices and planned holding periods. Based on our investment return criteria for evaluating our projects under development or undeveloped land, management’s assumptions used in the projection of undiscounted cash flows include:
the projected pace of sales of homesites based on estimated market conditions and our development plans;
estimated pricing and projected price appreciation over time;
the amount and trajectory of price appreciation over the estimated selling period;
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the length of the estimated development and selling periods, which can differ depending on the size of the development and the number of phases to be developed;
the amount of remaining development costs, including the extent of infrastructure or amenities included in such development costs;
holding costs to be incurred over the selling period;
for bulk land sales of undeveloped and developed parcels, future pricing is based upon estimated developed homesite pricing less estimated development costs and estimated developer profit;
for commercial, multi-family, self-storage and senior living development property, future pricing is based on sales of comparable property in similar markets; and
whether liquidity is available to fund continued development.
For operating properties, an estimate of undiscounted cash flows requires management to make similar assumptions about the use and eventual disposition of such properties. Some of the significant assumptions that are used to develop the undiscounted cash flows include:
for investments in hotels, other rental units and vacation rental homes, use of average occupancy and room rates, revenue from food and beverage and other amenity operations, operating expenses and capital expenditures, and eventual disposition of such properties as hotels, private residence vacation units or condominiums, based on current prices for similar units appreciated to the expected sale date;
for investments in commercial, multi-family, self-storage, or retail property, use of future occupancy and rental rates, operating expenses and capital expenditures and the amount of proceeds to be realized upon eventual disposition of such property at a terminal capitalization rate; and
for investments in club, marina and retail assets, use of revenue from membership dues, future golf rounds and greens fees, boat slip rentals and boat storage fees, merchandise and other hospitality operations, operating expenses and capital expenditures, and the amount of proceeds to be realized upon eventual disposition of such properties at a multiple of terminal year cash flows.
Homesites substantially completed and ready for sale are measured at the lower of carrying value or fair value, including costs to sell. Management identifies homesites as being substantially completed and ready for sale when the properties are being actively marketed with intent to sell such properties in the near term and under current market conditions. Other homesites, which management does not intend to sell in the near term under current market conditions, are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of such property.
Other properties that management does not intend to sell in the near term under current market conditions and has the ability to hold are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of the property. Typically, assets are carried based on historical cost basis, which in some cases may exceed fair value if sold in the near term. The results of impairment analysis for development and operating properties are particularly dependent on the estimated holding and selling period for each asset group.
If a property is considered impaired, the impairment charge is determined by the amount the property’s carrying value exceeds its fair value. We use varying methods to determine fair value, such as (i) analyzing expected future cash flows, (ii) determining resale values in a given market, (iii) applying a capitalization rate to net operating income using prevailing rates in a given market or (iv) applying a multiplier to revenue using prevailing rates in a given market. The fair value of a property may be derived either from discounting projected cash flows at an appropriate discount rate, through appraisals of the underlying property, or a combination thereof.
We classify the assets and liabilities of a long-lived asset as held-for-sale when management approves and commits to a formal plan of sale and it is probable that a sale will be completed. The carrying value of the assets held-for-sale is then recorded at the lower of their carrying value or fair value, including costs to sell.
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Income Taxes. In preparing our consolidated financial statements, significant management judgment is required to estimate our income taxes. Our estimates are based on our interpretation of federal and state tax laws. We estimate our actual current tax due and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. The temporary differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Adjustments may be required by a change in assessment of our deferred tax assets and liabilities, changes due to audit adjustments by federal and state tax authorities and changes in tax laws. To the extent adjustments are required in any given period, we will include the adjustments in the deferred tax assets and liabilities in our consolidated financial statements. We record a valuation allowance against our deferred tax assets as needed based upon our analysis of the timing and reversal of future taxable amounts and our historical and future expectations of taxable income.
In general, a valuation allowance is recorded, if based on all the available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of our deferred tax assets is dependent upon us generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards.
As of December 31, 2025 and 2024, we had $9.5 million and $9.1 million, respectively, of federal net operating loss carryforwards (“NOLs”). The federal NOLs are specific to our qualified opportunity funds (“QOF”) entity and do not expire. As of December 31, 2025 and 2024, we had state net NOLs of $5.8 million and $4.0 million, respectively. The majority of these state NOLs are available to offset future taxable income through 2044 and will begin expiring in 2040. As of December 31, 2025 and 2024, we did not have a valuation allowance. As of December 31, 2025 and 2024, we had income tax payable of $2.1 million and $1.8 million, respectively, included within accounts payable and other liabilities on the consolidated balance sheets. See Note 12. Income Taxes included in Item 15 of this Form 10-K for additional information.
Recently Adopted Accounting Pronouncements
Measurement of Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”) that provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Revenue from Contracts with Customers (Topic 606). As of December 31, 2025, we adopted this guidance, which will be applied prospectively, and elected the practical expedient to assume current conditions as of the balance sheet date do not change for the remaining life of the assets. The adoption of this guidance had no impact on our financial condition, results of operations, cash flows and related disclosures.
Recently Issued Accounting Pronouncements
Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) that requires additional disclosure in the notes to the financial statements information about specific costs and expense categories, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and selling expenses, as well as qualitative descriptions for certain other expenses. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”) that clarifies the effective date of ASU 2024-03. This guidance will be effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The guidance should be applied either prospectively for periods after the effective date or retrospectively to all prior periods presented. We are currently evaluating the impact that the adoption of this guidance will have on our financial condition, results of operations, cash flows and related disclosures.
