What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-11 compared with 2021-03-10 · 302 added, 329 removed, 909 unchanged (41% of the section changed)

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Five Point Holdings, LLC and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive (loss) income, capital, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of Five Point Holdings, LLC and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and schedule III—real estate and accumulated depreciation (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

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OTHER INCOME:

Adjustment to payable pursuant to tax receivable agreement

Interest income

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3,814 1,725 72,762

EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES

42,364 2,327 ( 2,163 )

INCOME (LOSS) BEFORE INCOME TAX PROVISION 2,838 24,713 ( 58,762 )

INCOME TAX PROVISION ( 1,744 ) ( 2,445 ) ( 9,183 )

NET INCOME (LOSS)

1,094 22,268 ( 67,945 )

LESS NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

1,522 13,235 ( 33,231 )

NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY $ ( 428 ) $ 9,033 $ ( 34,714 )

NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 6,188 42,364 2,327

INCOME BEFORE INCOME TAX PROVISION 12,985 2,838 24,713

INCOME TAX BENEFIT (PROVISION) 325 ( 1,744 ) ( 2,445 )

NET INCOME 13,310 1,094 22,268

LESS NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 6,742 1,522 13,235

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ 6,568 $ ( 428 ) $ 9,033

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE

$ 0.09 $ ( 0.01 ) $ 0.13

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143,491,204 69,000,096 145,491,898

NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE

Basic and diluted

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FIVE POINT HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

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2021 2020 2019

NET INCOME (LOSS)

$ 1,094 $ 22,268 $ ( 67,945 )

OTHER COMPREHENSIVE (LOSS) INCOME:

Net actuarial (loss) gain on defined benefit pension plan ( 332 ) 917 ( 1,252 )

Reclassification of actuarial loss on defined benefit pension plan included in net income (loss)

Other comprehensive (loss) income before taxes ( 235 ) 1,060 ( 1,162 )

NET INCOME $ 13,310 $ 1,094 $ 22,268

OTHER COMPREHENSIVE INCOME (LOSS):

Net actuarial gain (loss) on defined benefit pension plan 1,067 ( 332 ) 917

Reclassification of actuarial loss on defined benefit pension plan included in net income 359 97 143

Other comprehensive income (loss) before taxes 1,426 ( 235 ) 1,060

INCOME TAX (PROVISION) BENEFIT RELATED TO OTHER COMPREHENSIVE INCOME (LOSS)

OTHER COMPREHENSIVE (LOSS) INCOME—Net of tax ( 235 ) 1,060 ( 1,162 )

COMPREHENSIVE INCOME (LOSS)

859 23,328 ( 69,107 )

LESS COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

1,434 13,633 ( 33,675 )

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY $ ( 575 ) $ 9,695 $ ( 35,432 )

OTHER COMPREHENSIVE INCOME (LOSS)—Net of tax 1,426 ( 235 ) 1,060

COMPREHENSIVE INCOME 14,736 859 23,328

LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 7,271 1,434 13,633

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ 7,465 $ ( 575 ) $ 9,695

See accompanying notes to consolidated financial statements.

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BALANCE - January 1, 2019 66,810,980 78,838,736 $ 556,521 $ 33,811 $ ( 3,306 ) $ 587,026 $ 1,261,491 $ 1,848,517

Adoption of accounting standards — — — 10,684 — 10,684 13,961 24,645

Net loss — — — ( 34,714 ) — ( 34,714 ) ( 33,231 ) ( 67,945 )

Net income — — — 9,033 — 9,033 13,235 22,268

Share-based compensation expense — — 13,631 — — 13,631 — 13,631

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Issuance of share-based compensation awards, net of forfeitures 1,894,168 — — — — — — —

Other comprehensive loss—net of tax of $ 0 -actuarial gain on pension plan

Other comprehensive income—net of tax of $ 0 -actuarial gain on pension plan

— — — — 662 662 398 1,060

Redemption of noncontrolling interest 2,625,481 ( 2,624,697 ) 30,190 — ( 102 ) 30,088 ( 30,088 ) —

Contribution from noncontrolling interest and related sale of Class B common shares — 436,498 3 — — 3 5,544 5,547

Redemption of noncontrolling interests 41,702 ( 41,690 ) 460 — ( 2 ) 458 ( 458 ) —

Adjustment to liability recognized under tax receivable agreement—net of tax of $ 0

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BALANCE - December 31, 2019 68,788,257 79,233,544 $ 571,532 $ 42,844 $ ( 2,682 ) $ 611,694 $ 1,272,106 $ 1,883,800

Net Income — — — 9,033 — 9,033 13,235 22,268

Adoption of new accounting standards at unconsolidated entities — — — ( 195 ) — ( 195 ) ( 224 ) ( 419 )

Net (loss) income — — — ( 428 ) — ( 428 ) 1,522 1,094

Share-based compensation expense — — 11,562 — — 11,562 — 11,562

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Issuance of share-based compensation awards, net of forfeitures 364,624 — — — — — — —

Other comprehensive income—net of tax of $ 0 -actuarial gain on pension plan

Other comprehensive loss—net of tax of $ 0 -actuarial loss on pension plan

— — — — ( 147 ) ( 147 ) ( 88 ) ( 235 )

Contribution from noncontrolling interest and related sale of Class B common shares — 436,498 3 — — 3 5,544 5,547

Redemption of noncontrolling interests 41,702 ( 41,690 ) 460 — ( 2 ) 458 ( 458 ) —

Tax distribution to noncontrolling interest — — — — — — ( 4,568 ) ( 4,568 )

Adjustment to liability recognized under tax receivable agreement—net of tax of $ 0

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BALANCE - December 31, 2020 69,051,284 79,233,544 $ 578,278 $ 42,221 $ ( 2,833 ) $ 617,666 $ 1,267,432 $ 1,885,098

Adoption of new accounting standards at unconsolidated entities — — — ( 195 ) — ( 195 ) ( 224 ) ( 419 )

Net (loss) income — — — ( 428 ) — ( 428 ) 1,522 1,094

Net income — — — 6,568 — 6,568 6,742 13,310

Share-based compensation expense — — 7,898 — — 7,898 — 7,898

Reacquisition of share-based compensation awards for tax-withholding purposes ( 324,905 ) — ( 2,047 ) — — ( 2,047 ) — ( 2,047 )

Settlement of restricted share units for Class A common shares 335,078 — — — — — — —

Issuance of share-based compensation awards, net of forfeitures 1,381,173 — — — — — — —

Other comprehensive loss—net of tax of $ 0 -actuarial gain on pension plan

Other comprehensive income—net of tax of $ 0 -actuarial gain on pension plan

— — — — 897 897 529 1,426

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ 1,094 $ 22,268 $ ( 67,945 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Equity in (earnings) loss from unconsolidated entities

( 42,364 ) ( 2,327 ) 2,163

Net income $ 13,310 $ 1,094 $ 22,268

Adjustments to reconcile net income to net cash used in operating activities:

Equity in earnings from unconsolidated entities ( 6,188 ) ( 42,364 ) ( 2,327 )

Return on investment from Gateway Commercial Venture — 78,968 —

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25,988 14,142 20,633

Noncash adjustment of payable pursuant to tax receivable agreement liability

— — ( 1,928 )

Gain on settlement of contingent consideration—related party

— — ( 64,870 )

Gain on sale of golf club operating properties

— — ( 6,700 )

Gain on insurance proceeds for damaged property

— — ( 1,566 )

Gain on distribution from indirect Legacy Interest in Great Park Venture—related party ( 978 ) — —

Share-based compensation

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CASH FLOWS FROM INVESTING ACTIVITIES:

Return of investment from Great Park Venture 76,623 — —

Return of investment from Gateway Commercial Venture — 57,532 1,987

Contribution to Gateway Commercial Venture

— — ( 8,438 )

Return of investment from Valencia Landbank Venture 1,582 — —

Contribution to Valencia Landbank Venture ( 3,756 ) ( 4,166 ) —

Purchase of indirect Legacy Interest in Great Park Venture—related party

— — ( 1,762 )

Distribution from indirect Legacy Interest in Great Park Venture—related party 1,020 1,721 —

Proceeds from sale of golf club operating properties

Proceeds from insurance on damaged property

Purchase of properties and equipment

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— — ( 1,941 )

Principal payment on settlement note

— — ( 5,000 )

Principal payment on Macerich note

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Net cash (used in) provided by financing activities ( 26,577 ) ( 23,541 ) 83,206

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH

( 49,100 ) ( 148,523 ) ( 352,848 )

NET DECREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH ( 32,682 ) ( 49,100 ) ( 148,523 )

CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period

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BUSINESS AND ORGANIZATION

Five Point Holdings, LLC, a Delaware limited liability company (the “Holding Company” and, together with its consolidated subsidiaries, the “Company”), is an owner and developer of mixed-use, master-planned communities in California.

The Holding Company owns all of its assets and conducts all of its operations through Five Point Operating Company, LP, a Delaware limited partnership (the “Operating Company”), and its subsidiaries.

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However, the distributions paid to holders of our Class B common shares are in an amount per share equal to 0.0003 multiplied by the amount paid per Class A common share.

The Company presents noncontrolling interests and classifies such interests within capital but separate from the Company’s Class A and Class B members’ capital.

The Company presents noncontrolling interests on the Company’s consolidated balance sheet and classifies such interests within capital but separate from the Company’s Class A and Class B members’ capital.

Noncontrolling interests represent equity interests in the Company’s consolidated subsidiaries held by partners in the Operating Company, excluding the Holding Company, and members in The Shipyard Communities, LLC (the “San Francisco Venture”), excluding the Operating Company (see Note 5).

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Principles of consolidation —The accompanying consolidated financial statements include the accounts of the Company and the accounts of all subsidiaries in which the Company has a controlling financial interest and the accounts of variable interest entities (“VIEs”) in which the Company is deemed to be the primary beneficiary.

All intercompany transactions and balances have been eliminated in consolidation.

Under the voting interest model, controlling financial interest is generally defined as a majority ownership of voting rights.

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The Company performs this analysis on an ongoing basis.

All intercompany transactions and balances have been eliminated in consolidation.

Use of estimates —The preparation of financial statements in conformity with U.S.

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The Company is subject to risks incidental to the ownership, development, and operation of commercial and residential real estate.

These include,

among others, the risks normally associated with changes in the general economic climate in the communities in which the Company operates, trends in the real estate industry, availability of land for development, changes in tax laws, interest rate levels, availability of financing, and potential liability under environmental and other laws.

These include, among others, the risks normally associated with changes in the general economic climate in the communities in which the Company operates, trends in the real estate industry, availability of land for development, changes in tax laws, interest rate levels, availability of financing, and potential liability under environmental and other laws.

The Company’s credit risk relates primarily to cash deposits, cash equivalents, contract assets and other miscellaneous financial assets.

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The Company’s risk management policies define parameters of acceptable market risk and strive to limit exposure to credit risk.

Noncontrolling interests —The Company presents noncontrolling interests and classifies such interests within capital but separate from the Company’s Class A and Class B members’ capital when the criteria for permanent equity classification has been met.

Net income (loss) attributable to the noncontrolling interests on the consolidated statement of operations represents the portion of earnings attributable to the economic interest in the Company’s subsidiaries held by the noncontrolling interests.

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The transaction price pertaining to management services revenue may be comprised of fixed and variable components.

In some of its development management agreements, the Company receives compensation equal to the actual general and administrative costs incurred by the Company’s project team.

In some of its development management agreements, the Company receives compensation equal to the actual general and administrative costs incurred by the Company as it performs services.

In these circumstances, the Company acts as the principal and recognizes management fee revenues on these reimbursements in the same period that these costs are incurred because the amount to which the Company has the right to invoice corresponds directly with the value consumed by the customer for the Company’s performance to date.

The Company’s management agreements may also contain incentive compensation fee provisions contingent on the financial performance of a customer.

In making estimates of incentive compensation the Company expects to be entitled to receive in exchange for providing management

services, significant assumptions and judgments are made in evaluating the factors that may determine the amount of consideration the Company will ultimately receive.

Cash flow projections are typically utilized in making such estimates.

In making estimates of incentive compensation the Company expects to be entitled to receive in exchange for providing management services, significant assumptions and judgments are made in evaluating the factors that may determine the amount of consideration the Company will ultimately receive.

Cash flow projections of the project being developed are typically utilized in making such estimates.

These cash flows are significantly affected by estimates and assumptions related to market supply and demand, the local economy, projected pace of sales of homesites, pricing and price appreciation over the estimated selling period, the length of the estimated development and selling periods, remaining development, general and administrative costs, the expected contract period, and other factors.

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Agriculture crop and energy revenues are recognized at a point in time when control is transferred to the customer.

Agriculture leasing revenue is recognized in accordance with applicable lease accounting guidance.

Agriculture and other leasing revenue is recognized in accordance with applicable lease accounting guidance.

Impairment of assets —Long-lived assets, including inventory and the Company’s intangible asset, are reviewed for impairment when events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable.

Impairment indicators for long-lived inventory assets include, but are not limited to, significant increases in horizontal development costs, significant decreases in the pace and pricing of home sales within the Company’s communities and surrounding areas and political and societal events that may negatively affect the local economy.

For operating properties, impairment indicators may include significant increases in operating costs, decreased utilization, and continued net operating losses.

For operating properties, impairment indicators may include

significant increases in operating costs, decreased utilization, and continued net operating losses.

If indicators of impairment exist, and the undiscounted cash flows expected to be generated by a long-lived asset are less than its carrying amount, an impairment charge is recorded to write down the carrying amount of such long-lived asset to its estimated fair value.

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Any difference between the carrying amount of the equity method investment on the Company’s balance sheet and the underlying equity in net assets on the entity’s balance sheet results in a basis difference which is adjusted as the related underlying assets are depreciated, amortized, or sold and the liabilities are settled.

The Company eliminates a portion of intra-entity profits or losses resulting from land sales between the Company and its unconsolidated entities until the assets are sold to a third party.

The Company’s interests in Heritage Fields LLC (the “Great Park Venture”), Five Point Office Venture Holdings I, LLC (the “Gateway Commercial Venture”) and FP-HS Lot Option Joint Venture - Valencia, LLC (the “Valencia Landbank Venture”) were accounted for using the equity method for all years presented in the accompanying consolidated financial statements.

The Company eliminates a portion of intra-entity profits resulting from land sales between the Company and its unconsolidated entities until the assets are sold to a third-party.

Cumulative distributions from unconsolidated entities are treated as returns on investment to the extent of the Company's share of cumulative earnings from the investment and included in the Company's consolidated statements of cash flows as cash flow from operating activities.

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If the carrying value of the investment is greater than the estimated fair value, management makes an assessment of whether the impairment is “temporary” or “other-than-temporary.” In making this assessment, management considers the following:

(1) the length of time and the extent to which fair value has been less than cost, (2) the financial condition and near-term prospects of the entity, and (3) the Company’s intent and ability to retain its interest long enough for a recovery in market value.

(1) the length of time and the extent to

which fair value has been less than cost, (2) the financial condition and near-term prospects of the entity, and (3) the Company’s intent and ability to retain its interest long enough for a recovery in market value.

If management concludes that the impairment is “other-than-temporary,” the Company reduces the investment to its estimated fair value.

During the year ended December 31, 2020, the Company recognized an other-than-temporary impairment charge of $ 26.9 million related to the Company’s investment in Heritage Fields LLC (the “Great Park Venture”) (see Note 4).

During the year ended December 31, 2020, the Company recognized an other-than-temporary impairment charge of $ 26.9 million related to the Company’s investment in Great Park Venture (see Note 4).

No other-than-temporary impairments were identified during the years ended December 31, 2021 or 2019.

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and site costs, such as grading and amenities, to bring the land to a saleable state.

General and administrative costs related to project litigation are charged to expense when incurred.

Costs that cannot be clearly associated with the acquisition, development, and construction of a real estate project and selling expenses are expensed as incurred.

The Company expenses advertising costs as incurred, which were $ 3.3 million,

$ 1.7 million and $ 2.0 million during the years ended December 31, 2020, 2019 and 2018, respectively.

Certain public infrastructure project costs incurred by the Company are eligible for reimbursement, typically, from the proceeds of Community Facilities District (“CFD”) bond debt, state and federal grants or property tax assessments.

Costs that cannot be clearly associated with the acquisition, development, and construction of a real estate project and selling expenses are expensed as incurred.

Selling and advertising costs were $ 9.3 million, $ 3.3 million and $ 1.7 million during the years ended December 31, 2021, 2020 and 2019, respectively.

Capitalized inventory costs that are allocated to individual parcels within a project are allocated to the parcels benefited using relative sales value.

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Since this method requires the Company to estimate future development costs and the expected sales price for future land sales, the profit margin on subsequent parcels sold will be affected by both changes in the estimated total revenues, as well as any changes in the estimated total cost of the project.

Intangible Asset —The Company records intangible asset amortization expense over the expected contract period based on the pattern in which the Company expects to recognize the economic benefits from the asset.

Receivables —The Company evaluates the carrying value of receivables, which includes receivables from related parties, at each reporting date to determine the need for an allowance of expected credit loss.

At December 31, 2020, there was no material allowance for credit loss and at December 31, 2019, the allowance for doubtful accounts was not significant.

See “Recently adopted accounting pronouncements” below relating to the Company’s adoption of Accounting Standards Update (“ASU”) No.

2016-13, Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU No.

At December 31, 2021 and 2020, there was no material allowance for credit loss.

Leases —Under ASC Topic 842, Leases , the Company determines at contract inception if an arrangement contains a lease.

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The Company only includes renewal options in the lease term when it is reasonably certain that it will exercise such options.

The Company excludes the recognition of short-term leases on the balance sheet and lease payments for short term leases are recognized in the consolidated statements of operations on a straight-line basis over the lease term.

Fair value measurements —ASC Topic 820, Fair Values Measurement, emphasizes that a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.

The Company excludes the recognition of short-term leases on the balance sheet and lease payments for short term leases are recognized as an expense in the consolidated statements of operations on a straight-line basis over the lease term.

Fair value measurements —ASC Topic 820, Fair Value Measurement, emphasizes that a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.

As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions.

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Level 3 —Significant inputs to the valuation model are unobservable

In instances where the determination of the fair value measurements is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input

that is significant to the fair value measurement in its entirety.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

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2021 2020 2019

Gain on sale of golf club operating property $ — $ — $ 6,700

Gain on insurance claims and other — 13 1,566

Net periodic pension benefit $ 290 $ 356 $ 35

Other 1,382 — 13

Other—related party 2,048 — —

Total miscellaneous other income $ 3,720 $ 356 $ 48

The Tournament Players Club at Valencia Golf Course Disposal

In January 2018, The Tournament Players Club at Valencia Golf Course was sold for net cash proceeds of $ 5.7 million and the buyer’s assumption of certain liabilities, including certain club membership related liabilities.

The Company recognized a gain of $ 6.7 million as a result of the sale and such gain is included in miscellaneous other income in the consolidated statement of operations for the year ended December 31, 2018 within the Valencia segment.

Recently adopted accounting pronouncements —In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2016-13 which amends the guidance on the impairment of financial instruments, including most debt instruments, trade receivables, contract assets, and loans.

2016-13 adds to U.S.

GAAP an impairment model known as the current expected credit loss model, or CECL, that is based on expected losses rather than incurred losses.

Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses for instruments measured at amortized cost, resulting in a net presentation of the amount expected to be collected on the financial asset.

The Company and its unconsolidated entities adopted ASU No.

2016-13 on January 1, 2020 using a modified retrospective approach with no material impact on the Company’s consolidated financial statements.

Under the new guidance, the Company performs a credit loss assessment for new financial assets obtained on a pooling basis by financial asset type (e.g., contract assets, trade receivables, investments, etc.) and estimates an allowance of expected credit loss.

Factors considered in the estimation of expected credit loss include, but are not limited to, historical loss experience, third-party default rates on similar financial assets, credit-rating agency ratings and qualitative macroeconomic conditions.

The Company continually monitors its credit loss exposure by evaluating changes in economic conditions or significant events and how that may impact current credit loss estimates.

At December 31, 2020, there was no material allowance for credit loss.

Recently adopted accounting pronouncements —Although there have been several new accounting pronouncements recently issued by the Financial Accounting Standards Board that the Company has adopted or will adopt, the Company does not believe any of these accounting pronouncements had or will have a material impact on the Company’s consolidated financial statements or disclosures.

The following tables present the Company’s consolidated revenues disaggregated by revenue source and reporting segment (see Note 15) (in thousands):

Year Ended December 31, 2021

Valencia San Francisco Great Park Commercial Total

Valencia San Francisco Great Park (1)

Commercial (1)

Land sales and land sales—related party

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Year Ended December 31, 2020

Valencia San Francisco Great Park Commercial Total

Valencia San Francisco Great Park (1)

Commercial (1)

Land sales and land sales—related party

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Year Ended December 31, 2019

Valencia San Francisco Great Park Commercial Total

Valencia San Francisco Great Park (1)

Commercial (1)

Land sales and land sales—related party

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$ 143,190 $ 3,995 $ 36,873 $ 322 $ 184,380

(1) The tables above do not include revenues of the Great Park Venture and the Gateway Commercial Venture, which are included in the Company’s reporting segment totals (see Notes 4 and 15).

The Company, through Five Point Communities, LP (“FP LP”), and Five Point Communities Management, Inc., (“FP Inc.” and together with FP LP, the “Management Company”), has a development management agreement, as amended and restated (“A&R DMA”), with the Great Park Venture.

The A&R DMA had an original term commencing on December 29, 2010 and ending on December 31, 2021 (the “Initial Term”).

By mutual agreement, the Initial Term has been extended through April 30, 2022 while the terms of renewal are being discussed.

In addition to a fixed base fee and variable cost reimbursements, the Initial Term of the A&R DMA included incentive compensation that becomes payable in connection with and as a percentage of distributions made to the members of the Great Park Venture, including distributions made in periods after the Initial Term.

Consideration in the form of contingent incentive compensation from the A&R DMA was recognized as revenue and a contract asset as services were provided over the contract term.

During the year ended December 31, 2021, the Great Park Venture made distributions to its members that resulted in the Company receiving incentive compensation payments of $ 21.3 million (see Note 9).

Due to the contingencies associated with estimating the amount of incentive compensation that ultimately will become payable for services provided through the Initial Term, the Company has constrained, under the guidance of ASC Topic 606, its estimate of incentive compensation revenues such that the Company believes that a significant reversal of revenues is not probable of occurring.

As the contingencies are resolved and incentive compensation payments are made in future periods, the Company may record adjustments to revenue to reflect changes in the Company’s estimate of incentive compensation expected to be received.

Significant judgment is involved in management’s estimate of the amount of variable consideration included in the transaction price.

In making this estimate, management utilizes projected cash flows of the operations of the Great Park Venture.

These cash flows are significantly affected by estimates and assumptions related to market supply and demand, the local economy, projected pace of sales of homesites, pricing and price

appreciation over the estimated selling period, the length of the estimated development and selling periods, remaining development, general, and administrative costs, the expected contract period, and other factors.

Contract balances are recorded on the consolidated balance sheet in either related party assets or other assets for receivables from customers and contract assets (unbilled receivables) depending on whether the customer is a related party.

Similarly, contract liabilities (deferred revenue) are included in accounts payable and other liabilities and related party liabilities.

Similarly, contract liabilities (deferred revenue) are included in accounts payable and other liabilities or related party liabilities.

The opening and closing balances of the Company’s contract assets for the year ended December 31, 2021 were $ 85.1 million ($ 78.1 million related party, see Note 9) and $ 87.6 million ($ 79.1 million related party, see Note 9), respectively.

The increase of $ 12.1 million between the opening and closing balances of the Company’s contract

assets primarily result from a timing difference between the Company’s recognition of revenue earned for the performance of management services and no contractual payments due from the customer during the period.

The increase of $ 2.5 million between the opening and closing balances of the Company’s contract assets primarily resulted from a timing difference between when payments are made and the Company’s recognition of revenue earned for the performance of management services in the period.

Offsetting the timing difference was a reduction of $ 21.3 million from the receipt of incentive compensation payments from the Great Park Venture.

The opening and closing balances of the Company’s contract assets for the year ended December 31, 2020 were $ 73.0 million ($ 68.1 million related party) and $ 85.1 million ($ 78.1 million related party, see Note 9), respectively.

The increase of $ 12.1 million between the opening and closing balances of the Company’s contract assets primarily result from a timing difference between the Company’s recognition of revenue earned for the performance of management services and no contractual payments due from the customer during the period.

The opening and closing balances of the Company’s receivables from contracts with customers and contract liabilities for the years ended December 31, 2020 and 2019 were insignificant.

The A&R DMA has an original term commencing on December 29, 2010 and ending on December 31, 2021, with options to renew upon mutual agreement for three additional years and then two additional years.

Consideration in the form of contingent incentive compensation from the A&R DMA is recognized as revenue and a contract asset as services are provided over the expected contract term, although contractual payments are due in connection with distributions made to the members of the Great Park Venture.

As of December 31, 2020, the aggregate amount of the constrained transaction price allocated to the Company’s partially unsatisfied performance obligations associated with the A&R DMA was $ 16.5 million.

The Company will recognize this revenue ratably as services are provided over the remaining expected contract term.

At each reporting period the Company will reassess the estimate of the amount of variable consideration the Company is expected to be entitled to such that it is probable that a significant reversal will not occur.

Significant judgment is involved in management’s estimate of the amount of variable consideration included in the transaction price.

In making this estimate, management utilizes projected cash flows of the operations of the Great Park Venture.

These cash flows are significantly affected by estimates and assumptions related to market supply and demand, the local economy, projected pace of sales of homesites, pricing and price appreciation over the estimated selling period, the length of the estimated development and selling periods, remaining development, general, and administrative costs, the expected contract period, and other factors.

When changes in the estimate occur, a cumulative catch-up will be recorded in the period and the transaction price allocated to the unsatisfied performance obligation will be adjusted.

The opening and closing balances of the Company’s other receivables from contracts with customers and contract liabilities for the years ended December 31, 2021 and 2020 were insignificant.

The Company applies the disclosure exemptions associated with remaining performance obligations for contracts with an original expected term of one year or less, contracts for which revenue is recognized in proportion to the amount of services performed and variable consideration that is allocated to wholly unsatisfied performance obligations for services that form part of a series of services.

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Great Park Venture

The Great Park Venture has two classes of interests—“Percentage Interests” and “Legacy Interests.” Legacy Interest holders are entitled to receive priority distributions in an aggregate amount equal to $ 476.0 million and up to an additional $ 89.0 million from participation in subsequent distributions of cash depending on the performance of the Great Park Venture.

The Great Park Venture has two classes of interests—“Percentage Interests” and “Legacy Interests.” The Operating Company owned 37.5 % of the Great Park Venture’s Percentage Interests as of December 31, 2021.

Legacy Interest holders were entitled to receive priority distributions in an aggregate amount equal to $ 476.0 million and up to an additional $ 89.0 million from participation in subsequent distributions of cash depending on the performance of the Great Park Venture.

The holders of the Percentage Interests will receive all other distributions.

The Operating Company owns 37.5 % of the Great Park Venture’s Percentage Interests as of December 31, 2020.

The Great Park Venture has made priority distributions to the holders of Legacy Interests in the aggregate amount of $ 431.3 million as of December 31, 2020.

The Great Park Venture is the owner of Great Park Neighborhoods, a mixed-use, master-planned community located in Orange County, California.

During the year ended December 31, 2021, the Great Park Venture made aggregate distributions of $ 51.0 million to holders of Legacy Interests and $ 204.3 million to holders of Percentage Interests.

The Company received $ 76.6 million for its 37.5 % Percentage Interest.

With the distributions to the holders of Legacy Interests during the year ended December 31, 2021, the Great Park Venture fully satisfied the $ 476.0 million priority distribution rights and reduced the remaining maximum participating Legacy Interest distribution rights to $ 82.7 million.

The Great Park Venture is the owner of Great Park Neighborhoods, a mixed-use planned community located in Orange County, California.

The Company, through the A&R DMA, manages the planning, development and sale of the Great Park Neighborhoods and supervises the day-to-day affairs of the Great Park Venture.

The Great Park Venture is managed by an executive committee of representatives appointed by only the holders of Percentage Interests.

The Great Park Venture is governed by an executive committee of representatives appointed by only the holders of Percentage Interests.

The Company serves as the administrative member but does not control the actions of the executive committee.

At each reporting period, and when events and circumstances dictate, the Company evaluates its equity method investment in the Great Park Venture for impairment.

This evaluation focuses on the recoverability of the carrying value based upon the discounted value of distributions the Company expects to receive from the Great Park Venture.

This evaluation is performed at the investment level and is separate and apart from impairment evaluations on long-lived assets, such as the Company’s consolidated inventory balances, that focus on recoverability with undiscounted cash flows.

The Company evaluates the investment as a whole and does not evaluate the underlying assets of the Great Park Venture for impairment.

If the Great Park Venture records an impairment charge against its assets, the Company will recognize its share of the loss, adjusted for basis differences.

During the years ended December 31, 2020, 2019 and 2018, the Great Park Venture did not recognize any impairment losses on its long-lived assets.

In March 2020, the Company determined that an other-than-temporary impairment existed for the Company’s investment in the Great Park Venture as the estimated fair value of the investment was less than the carrying value.

This was the result of delays to the projected timing of distributions from Great Park Venture to the Company.

In determining that the impairment was other-than-temporary, the Company concluded at the measurement date that it was uncertain if a near term recovery of value that was lost as a result of expected delays to land sales from the impacts of the COVID-19 pandemic would occur.

As a result, the Company recognized a $ 26.9 million impairment charge that is included in equity in earnings from unconsolidated entities on the consolidated statement of operations during the year ended December 31, 2020.

Below are the most significant unobservable inputs used in the Company’s discounted cash flow model to determine the estimated fair value (level 3) of the Company’s investment in the Great Park Venture at the time the other-than-temporary impairment was recognized:

Unobservable inputs Range

Annual home price appreciation 0 % - 7 %

Annual horizontal development cost appreciation 0 % - 3 %

Average annual absorption of homesites (market rate homesites) 900

2020 home price range $ 640,000 - $ 1,300,000

Unlevered discount rate 9 %

The carrying value of the Company’s investment in the Great Park Venture, acquired through a series of acquisitions in May 2016 (the “Formation Transactions”), adjusted for the impairment, is higher than the Company’s underlying share of equity in the carrying value of net assets of the Great Park Venture resulting in a basis difference.

The Company accounts for its investment in the Great Park Venture using the equity method.

The carrying value of the Company’s investment in the Great Park Venture, acquired through a series of acquisitions in May 2016 (the “Formation Transactions”), is higher than the Company’s underlying share of equity in the carrying value of net assets of the Great Park Venture resulting in a basis difference.

The Company’s earnings or losses from the equity method investment are adjusted by amortization and accretion of the basis differences as the assets (mainly inventory) and liabilities that gave rise to the basis difference are sold, settled or amortized.

During the year ended December 31, 2021, the Great Park Venture recognized $ 62.8 million in land sale revenues to related parties of the Company and $ 346.8 million in land sale revenues to third parties.

Land sale revenues to third parties included $ 236.6 million in revenues from homesites sold to an unaffiliated land banking entity whereby a related party of the Company retained the option to acquire these homesites in the future from the land bank entity.

Land sales to related parties included $ 57.4 million in sales to an entity in which the Great Park Venture holds a 10 % interest (the “Great Park Landbank Venture”).

The Great Park Landbank Venture is a land banking entity that was formed in June 2021.

The Great Park Venture made an initial contribution of $ 4.6 million for its interest and accounts for the investment under the equity method of accounting.

During the year ended December 31, 2020, the Great Park Venture recognized $ 2.7 million in land sale revenues to related parties of the Company and

$ 22.1 million in land sale revenues to third parties.

During the year ended December 31, 2019, the Great Park Venture recognized $ 133.3 million in land sale revenues to a related party of the Company and $ 137.7 million in land sale revenues to third parties, of which $ 31.0 million relates to homesites sold to a land banking entity whereby a related party of the Company has retained the option to acquire these homesites in the future from the land banking entity.

During the year ended December 31, 2018, the Great Park Venture recognized $ 3.9 million in land sale revenues to related parties and $ 171.8 million in land sale revenues to third parties.

The following table summarizes the statement of operations of the Great Park Venture for the years ended December 31, 2020, 2019 and 2018 (in thousands):

2020 2019 2018

Land sale revenues

The following table summarizes the statements of operations of the Great Park Venture for the years ended December 31, 2021, 2020 and 2019 (in thousands):

2021 2020 2019

Land sale and related party land sale revenues $ 409,555 $ 24,827 $ 270,970

Home sale revenues 26,172 — —

Cost of land sales

( 301,247 ) ( 15,304 ) ( 179,836 )

Cost of home sales ( 20,022 ) — —

Other costs and expenses

( 57,540 ) ( 38,929 ) ( 56,248 )

Net (loss) income of Great Park Venture $ ( 29,406 ) $ 34,886 $ 3,068

The Company’s share of net (loss) income $ ( 11,027 ) $ 13,082 $ 1,151

Net income (loss) of Great Park Venture $ 56,918 $ ( 29,406 ) $ 34,886

The Company’s share of net income (loss) $ 21,344 $ ( 11,027 ) $ 13,082

Basis difference amortization

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Other-than-temporary investment impairment — ( 26,851 ) —

Equity in (loss) earnings from Great Park Venture $ ( 39,951 ) $ 6,182 $ ( 906 )

Equity in earnings (loss) from Great Park Venture $ 6,432 $ ( 39,951 ) $ 6,182

The following table summarizes the balance sheet data of the Great Park Venture and the Company’s investment balance as of December 31, 2021 and 2020 (in thousands):

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$ 128,677 $ 139,929

Distribution payable to Legacy Interests

Redeemable Legacy Interests

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$ 321,274 $ 391,465

At each reporting period, and when events and circumstances dictate, the Company evaluates its equity method investment in the Great Park Venture for impairment.

This evaluation focuses on the recoverability of the carrying value based upon the discounted value of distributions the Company expects to receive from the Great Park Venture.

The Company evaluates the investment as a whole and does not evaluate the underlying assets of the Great Park Venture for impairment.

If the Great Park Venture records an impairment charge against its assets, the Company will recognize its share of the loss, adjusted for basis differences.

During the years ended December 31, 2021, 2020 and 2019, the Great Park Venture did not recognize any impairment losses on its long-lived assets.

In March 2020, the Company determined that an other-than-temporary impairment existed for the Company’s investment in the Great Park Venture and recognized a $ 26.9 million impairment charge that is included in equity in earnings from unconsolidated entities on the consolidated statement of operations during the year ended December 31, 2020.

Unobservable inputs Range

Annual home price appreciation 0 % - 7 %

Annual horizontal development cost appreciation 0 % - 3 %

Average annual absorption of homesites (market rate homesites) 900

2020 home price range $ 640,000 - $ 1,300,000

Unlevered discount rate 9 %

Gateway Commercial Venture

On August 4, 2017, the Company entered into the Limited Liability Company Agreement of Five Point Office Venture Holdings I, LLC, a Delaware limited liability company (the “Gateway Commercial Venture”), made a capital contribution of $ 106.5 million to the Gateway Commercial Venture, and received a 75 % interest in the venture.

The Company owned a 75 % interest in the Gateway Commercial Venture as of December 31, 2021.

The Gateway Commercial Venture is governed by an executive committee in which the Company is entitled to appoint two individuals.

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The Company is the manager of the Gateway Commercial Venture, with responsibility to manage and administer its day-to-day affairs and implement a business plan approved by the executive committee.

The Five Point Gateway Campus, consisting of approximately 73 acres of commercial land in the Great Park Neighborhoods, currently includes approximately one million square feet planned for research and development, medical and office space in four buildings, which are designed to accommodate thousands of employees.

In August 2020, the Gateway Commercial Venture closed on the sale of two buildings at the Five Point Gateway Campus, comprising a total of approximately 660,000 square feet of research and development space currently leased to one tenant under a triple net lease.

The purchase price was $ 355.0 million, and the purchaser is a real estate investment management company and operator.

The sale of the buildings, which had a carrying value of approximately $ 278.0 million, resulted in a gain of approximately $ 74.8 million, net of transaction costs.

Additionally, the Gateway Commercial Venture made a debt payment of $ 245.0 million to its lender and a distribution of $ 107.0 million to its members, of which approximately $ 80.3 million was distributed to the Company, with net proceeds generated from the sale.

In May 2020, the Gateway Commercial Venture closed on the sale of approximately 11 acres of land and an approximately 189,000 square foot building to City of Hope for a purchase price of $ 108.0 million.

The Gateway Commercial Venture owns one commercial office building and approximately 50 acres of commercial land with additional development rights at a 73 acre office, medical, research and development campus located within the Great Park Neighborhoods (the “Five Point Gateway Campus”).

The Five Point Gateway Campus consists of four buildings totaling approximately one million square feet.

Prior to May 2020, the Gateway Commercial Venture owned and operated all four buildings.

The sale of the buildings, which had a total carrying value of approximately $ 278.0 million, resulted in a gain of approximately $ 74.8 million, net of transaction costs.

Concurrently, the Gateway Commercial Venture, using net proceeds generated from the sale, made a debt payment of $ 245.0 million to its lender and a distribution of $ 107.0 million to its members, of which approximately $ 80.3 million was distributed to the Company.

In May 2020, the Gateway Commercial Venture closed on the sale of approximately 11 acres of land and an approximately 189,000 square foot building for a purchase price of $ 108.0 million.

The sale of this land and building, which had a carrying value of approximately $ 67.5 million, resulted in a gain of approximately $ 37.4 million, net of transaction costs.

Concurrently, the Gateway Commercial Venture made a debt payment of $ 30.0 million to its lender and a distribution of $ 75.0 million to its members, of which approximately $ 56.3 million was distributed to the Company, with net proceeds generated from the sale.

The Company and a related party of the Company separately lease office space in the remaining building owned by the Gateway Commercial Venture at the Five Point Gateway Campus, and during the years ended December 31, 2020, 2019 and 2018, the Gateway Commercial Venture recognized $ 8.4 million, $ 8.3 million and $ 1.1 million, respectively, in rental revenues from those leasing arrangements.

The following table summarizes the statement of operations of the Gateway Commercial Venture for the years ended December 31, 2020, 2019 and 2018 (in thousands):

Concurrently, the Gateway Commercial Venture, using net proceeds generated from the sale, made a debt payment of $ 30.0 million to its lender and a distribution of $ 75.0 million to its members, of which approximately $ 56.3 million was distributed to the Company.

The Company and a subsidiary of Lennar Corporation separately lease portions of the fourth building, which remains under the ownership of the Gateway Commercial Venture, and during the years ended December 31, 2021, 2020 and 2019, the Gateway Commercial Venture recognized $ 8.5 million, $ 8.4 million and $ 8.3 million, respectively, in rental revenues from those leasing arrangements.

The following table summarizes the statements of operations of the Gateway Commercial Venture for the years ended December 31, 2021, 2020 and 2019 (in thousands):

2021 2020 2019

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Valencia Landbank Venture

In December 2020, the Company made a capital contribution of $ 4.2 million to an entity (the “Valencia Landbank Venture”) organized for the purpose of taking assignment from homebuilders land purchase and sale agreements and purchasing residential lots within the Valencia community while concurrently entering into option and development agreements with homebuilders in which the homebuilder retains the option to purchase the land to construct and sell homes.

The Company has a 10 % interest in the Valencia Landbank Venture, and most major decisions require the Company’s approval in addition to the approval of the Valencia Landbank Venture’s other unaffiliated member.

The Company does not have a controlling financial interest in the Valencia Landbank Venture but has the ability to significantly influence the Valencia Landbank Venture’s operating and financial policies and accounts for the Valencia Landbank Venture under the equity method of accounting.

Subsequent to the Company’s investment, the Valencia Landbank Venture took assignment of certain purchase and sale agreements and purchased land from the Company for $ 51.6 million (see Note 9) while concurrently entering into option and development agreements with third party homebuilders.

As of December 31, 2021, the Company owned a 10 % interest in the Valencia Landbank Venture, an entity organized in December 2020 for the purpose of taking assignment from homebuilders of purchase and sale agreements for the purchase of residential lots within the Company’s Valencia community.

The Valencia Landbank Venture concurrently enters into option and development agreements with homebuilders pursuant to which the homebuilders retain the option to purchase the land to construct and sell homes.

The Company does not have a controlling financial interest in the Valencia Landbank Venture, however, the Company has the ability to significantly influence the Valencia Landbank Venture’s operating and financial policies, and most major decisions require the Company’s approval in addition to the approval of the Valencia Landbank Venture’s other unaffiliated member, and therefore the Company accounts for its investment in the Valencia Landbank Venture using the equity method.

During the years ended December 31, 2021 and 2020, the Valencia Landbank Venture took assignment of certain purchase and sale agreements and purchased land from the Company for $ 42.0 million and $ 51.6 million, respectively, (see Note 9) while concurrently entering into option and development agreements with third-party homebuilders.

When the Company sells land to the Valencia Landbank Venture, it eliminates its pro-rata share of the intra-entity profits generated from the sale through earnings (loss) from unconsolidated entities until the land is sold by the Valencia Landbank Venture to third-party homebuilders.

During the year ended December 31, 2020, the Company recognized equity in loss of $ 1.6 million from the Valencia Landbank Venture.

At December 31, 2021 and 2020, the Company’s investment in the Valencia Landbank Venture was $ 3.8 million and $ 2.6 million, respectively.

During the years ended December 31, 2021 and 2020, the Company recognized equity in loss of $ 0.9 million and $ 1.6 million from the Valencia Landbank Venture, respectively.

NONCONTROLLING INTERESTS

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The Holding Company’s wholly owned subsidiary is the managing general partner of the Operating Company, and at December 31, 2021, the Holding Company and its wholly owned subsidiary owned approximately 62.9 % of the outstanding Class A Common Units and 100 % of the outstanding Class B Common Units of the Operating Company.

The Holding Company consolidates the financial results of the Operating Company and its subsidiaries and records a noncontrolling interest for the remaining 37.5 % of the outstanding Class A Common Units of the Operating Company.

The Holding Company consolidates the financial results of the Operating Company and its subsidiaries and records a noncontrolling interest for the remaining 37.1 % of the outstanding Class A Common Units of the Operating Company that are owned separately by affiliates of Lennar Corporation (“Lennar”), affiliates of Castlelake, LP (“Castlelake”) and an entity controlled by Emile Haddad, the Company’s Chairman Emeritus of the Board of Directors and former Chief Executive Officer (the “Management Partner”).

After a 12 month holding period, holders of Class A Common Units of the Operating Company may exchange their units for, at the Company’s option, either (i) Class A common shares on a one -for-one basis (subject to adjustment in the event of share splits, distributions of shares, warrants or share rights, specified extraordinary distributions and similar events), or (ii) cash in an amount equal to the market value of such shares at the time of exchange.

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Additionally, other issuances of common shares of the Holding Company or common units of the Operating Company result in changes to the noncontrolling interest percentage.

As a result, such equity transactions result in an adjustment between members’ capital and the noncontrolling interest in the Company’s consolidated balance sheets and statements of capital to account for the changes in the noncontrolling interest ownership percentage as well as any change in total net assets of the Company.

Such equity transactions result in an adjustment between members’ capital and the noncontrolling interest in the Company’s consolidated balance sheet and statement of capital to account for the changes in the noncontrolling interest ownership percentage as well as any change in total net assets of the Company.

During the years ended December 31, 2021, 2020 and 2019, the Holding Company increased its ownership interest in the Operating Company as a result of net equity transactions related to the Company’s share-based compensation plan and exchanges of Class A Common Units of the Operating Company for Class A common shares.

The terms of the Operating Company's Limited Partnership Agreement (“LPA”) provide for the payment of certain tax distributions to the Operating Company's partners and management partner in an amount equal to the estimated income tax liabilities resulting from taxable income or gain allocated to those parties.

The tax distribution provisions in the LPA were included in the Operating Company's governing documents adopted prior to our initial public offering and were designed to provide funds necessary to pay tax liabilities for income that might be allocated, but not paid, to the partners and the management partner.

The management partner is an entity controlled by the Company’s Chairman and Chief Executive Officer, Emile Haddad.

A tax distribution payment of $ 4.6 million was paid to the management partner in January 2020 as a result of taxable income allocated to it in 2018 and 2019.

The tax distribution made is treated as an advance distribution under the LPA and is taken into account when determining the amounts otherwise distributable to the management partner under the LPA.

In January 2021, the Operating Company made tax distributions to all partners totaling $ 2.9 million, net of amounts distributable to the Holding Company.

The management partner’s share of the distribution was $ 1.4 million.

The terms of the Operating Company's Limited Partnership Agreement (“LPA”) provide for the payment of tax distributions to the Operating Company's partners in an amount equal to the estimated income tax liabilities resulting from taxable income or gain allocated to those parties.

The tax distribution provisions in the LPA were included in the Operating Company's governing documents adopted prior to the Company’s initial public offering and were designed to provide funds necessary to pay tax liabilities for income that might be allocated, but not paid, to the partners.

Tax distributions to the partners of the Operating Company for the years ended December 31, 2021 and 2020, were as follows (in thousands):

Year Ended December 31,

Management Partner $ 2,932 $ 4,568

Other partners (excluding the Holding Company) 1,497 —

Total tax distributions $ 4,429 $ 4,568

Generally, tax distributions are treated as advance distributions under the LPA and are taken into account when determining the amounts otherwise distributable under the LPA.

The San Francisco Venture

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The Operating Company acquired a controlling interest in the San Francisco Venture in the May 2016 Formation Transactions by acquiring all of the outstanding Class B units of the San Francisco Venture.

All of the outstanding Class A units are owned by affiliates of Lennar Corporation (“Lennar”) and affiliates of Castlelake, LP (“Castlelake”).

All of the outstanding Class A units are owned by Lennar and Castlelake.

The Class A units of the San Francisco Venture are intended to be substantially economically equivalent to the Class A Common Units of the Operating Company.

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Provided that Lennar completes the construction of a certain number of new homes in Candlestick as contemplated under purchase and sale agreements with the Company, the San Francisco Venture is required to redeem the Class C units if and when the Company receives reimbursements from the Mello-Roos communities facilities district formed for the development, in an aggregate amount equal to 50 % of any reimbursements received up to a maximum amount of $ 25.0 million.

The San Francisco Venture also maintains the ability to redeem the then outstanding balance of Class C units for cash at any time.

The San Francisco Venture also maintains the ability to redeem the then outstanding balance of Class C units for

cash at any time.

Upon a liquidation of the San Francisco Venture, the holders of Class C Units are entitled to a liquidation preference.

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CONSOLIDATED VARIABLE INTEREST ENTITY

Operating Company, other than items attributed to income taxes and the payable pursuant to tax receivable agreement (“TRA”).

The Operating Company has investments in and consolidates the assets and liabilities of the San Francisco Venture, FP LP and Five Point Land, LLC (“FPL”), all of which have also been determined to be VIEs.

The Holding Company conducts all of its operations through the Operating Company, a consolidated VIE, and as a result, substantially all of the Company’s assets and liabilities represent the assets and liabilities of the Operating Company, other than items attributed to income taxes and the payable pursuant to tax receivable agreement (“TRA”).

The Operating Company has investments in and consolidates the assets and liabilities of the San Francisco Venture, FP LP and Five Point Land, LLC (“FPL”), the entity developing Valencia (formerly known as Newhall Ranch), all of which have also been determined to be VIEs.

The San Francisco Venture is a VIE as the other members of the venture, individually or as a group, are not able to exercise kick-out rights or substantive participating rights.

The Company applied the variable interest model and determined that it is the primary beneficiary of the San Francisco Venture and, accordingly, the San Francisco Venture is consolidated in its results.

In making that determination, the Company evaluated that the Operating Company has unilateral and unconditional power to make decisions in regards to the activities that significantly impact the economics of the VIE, which are the development of properties, marketing and sale of properties, acquisition of land and other real estate properties and obtaining land ownership or ground lease for the underlying properties to be developed.

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In addition, the San Francisco Venture is only allowed to make a capital call on the Operating Company and not any other interest holders, which could be a significant financial risk to the Operating Company.

As of December 31, 2020, the San Francisco Venture had total combined assets of $ 1.2 billion, primarily comprised of $ 1,223.5 million of inventories and $ 2.8 million in related party assets and total combined liabilities of $ 97.9 million, including $ 89.0 million in related party liabilities.

As of December 31, 2019, the San Francisco Venture had total combined assets of $ 1.2 billion, primarily comprised of $ 1,186.2 million of inventories, $ 2.2 million in related party assets and $ 1.3 million in cash and total combined liabilities of $ 119.2 million, including $ 102.4 million in related party liabilities.

As of December 31, 2021, the San Francisco Venture had total combined assets of $ 1.3 billion, primarily comprised of $ 1.27 billion of inventories and $ 1.1 million in related party assets and total combined liabilities of $ 76.9 million, including $ 69.5 million in related party liabilities.

As of December 31, 2020, the San Francisco Venture had total combined assets of $ 1.2 billion, primarily comprised of $ 1.22 billion of inventories, $ 2.8 million in related party assets and total combined liabilities of $ 97.9 million, including $ 89.0 million in related party liabilities.

Those assets are owned by, and those liabilities are obligations of, the San Francisco Venture, not the Company.

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However, the Operating Company has guaranteed the performance of payment by the San Francisco Venture in accordance with the redemption terms of the Class C units of the San Francisco Venture (see Note 5).

FP LP and FPL, the entity developing Valencia (formerly known as Newhall Ranch), are VIEs because the other partners or members have disproportionately fewer voting rights and substantially all of the activities of the entities are conducted on behalf of the other partners or members and their related parties.

FP LP and FPL are VIEs because the other partners or members have disproportionately fewer voting rights and substantially all of the activities of the entities are conducted on behalf of the other partners or members and their related parties.

The Operating Company, or a wholly owned subsidiary of the Operating Company, is the primary beneficiary of FP LP and FPL.

As of December 31, 2021, FP LP and FPL had combined assets of $ 1.0 billion, primarily comprised of $ 826.4 million of inventories, $ 51.4 million of intangibles, $ 82.0 million in related party assets and total combined liabilities of $ 94.0 million, including $ 85.6 million in accounts payable and other liabilities and $ 8.4 million in related party liabilities.

As of December 31, 2019, FP LP and FPL had combined assets of $ 900.0 million, primarily comprised of $ 703.6 million of inventories, $ 80.4 million of intangibles, $ 72.3 million in related party assets and $ 0.5 million in cash and total combined liabilities of $ 126.8 million, including $ 117.6 million in accounts payable and other liabilities and $ 9.2 million in related party liabilities.

As of December 31, 2020, FP LP and FPL had combined assets of $ 1.0 billion, primarily comprised of $ 767.3 million of inventories, $ 71.7 million of intangibles, $ 80.0 million in related party assets and total combined liabilities of $ 108.9 million, including $ 99.9 million in accounts payable and other liabilities and $ 9.0 million in related party liabilities.

The Company evaluates its primary beneficiary designation on an ongoing basis and assesses the appropriateness of the VIE’s status when events have occurred that would trigger such an analysis.

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In 2010, the Great Park Venture, the Company’s equity method investee, engaged the Management Company under a development management agreement to provide management services to the Great Park Venture.

The compensation structure in place as per the A&R DMA consists of a base fee and incentive compensation.

The initial term of the development management agreement with the Great Park Venture expired on December 31, 2021 but has been extended by mutual agreement of the parties through April 30, 2022 while the terms of a renewal are discussed.

The compensation structure in place as per the A&R DMA’s Initial Term consists of a base fee and incentive compensation.

The base fee consists of a fixed annual fee and a variable fee equal to general and administrative costs incurred by the Management Company on behalf of the Great Park Venture.

Incentive compensation is characterized as “Legacy Incentive Compensation” and “Non-Legacy Incentive Compensation.” The remaining Legacy Incentive Compensation consists of a maximum of $ 9.0 million of incentive compensation payments attributed to contingent payments made under a cash flow participation agreement the Great Park Venture is a party to.

Incentive compensation is characterized as “Legacy Incentive Compensation” and “Non-Legacy Incentive Compensation.” Legacy Incentive

Compensation consists of a maximum of $ 9.0 million of incentive compensation payments attributed to contingent payments made under a cash flow participation agreement to which the Great Park Venture is a party.

Holders of the Management Company’s Class B interests are entitled to receive all distributions from the Management Company that are attributable to any Legacy Incentive Compensation received by the Management Company.

Non-Legacy Incentive Compensation is 9 % of distributions made by the Great Park Venture to holders of Percentage Interests of the Great Park Venture (see Note 4).

Non-Legacy Incentive Compensation is 9 % of distributions available to be made by the Great Park Venture to holders of Percentage Interests of the Great Park Venture (see Note 4).

During the year ended December 31, 2021, the Great Park Venture made a Legacy Incentive Compensation payment to the Company of $ 0.6 million and a Non-Legacy Incentive Compensation payment of $ 20.7 million.

Upon receiving the Legacy Incentive Compensation payment, the Company distributed the $ 0.6 million in proceeds to the holders of the Management Company's Class B interests.

For the years ended December 31, 2021, 2020 and 2019, the Company recognized revenue from management services of $ 38.7 million, $ 26.9 million and $ 36.9 million, respectively, related to all management fees under the A&R DMA, and such revenues are included in management services—related party in the accompanying consolidated statements of operations and are included in the Great Park segment.

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The receivable amounts are included in other related party assets in the table above.

The current term of the A&R DMA ends in December 2021 and provides for term extensions at the mutual agreement of terms and provisions by both the Company and the Great Park Venture.

Operating Lease Right-of-Use Asset and Operating Lease Liability

The Company leases corporate office space at the Five Point Gateway Campus.

Upon adoption of ASC Topic 842, Leases on January 1, 2019 , the Company recognized an operating lease right-of-use asset and operating lease liability pertaining to this related party lease (See note 12).

The Company leases corporate office space in the building owned by the Gateway Commercial Venture at the Five Point Gateway Campus (See note 12).

Indirect Legacy Interest in Great Park Venture

In June 2018, the Company purchased an indirect interest in rights to certain Legacy Interests in the Great Park Venture through an equity method investment that were held by the Company’s CEO, Emile Haddad.

At December 31, 2020 and 2019, the carrying value of the purchased interests was $ 0.1 million and $ 1.8 million, respectively, and is included in other related party assets in the table above.

Retail Project and Contingent Consideration to Class A Members of the San Francisco Venture

In 2018, the Company purchased an indirect interest in rights to certain Legacy Interests in the Great Park Venture through an equity method investment.

At December 31, 2020, the carrying value of the purchased interests was $ 0.1 million and is included in other related party assets in the table above.

During the year ended December 31, 2021, the Company received a cash distribution of $ 1.0 million which was in excess of the carrying value of the interests resulting in a miscellaneous other—related party gain of $ 978 thousand.

After receiving the distribution, the Company’s indirect Legacy Interest had no carrying value and has no additional distribution rights in the Great Park Venture.

Reimbursement Obligation

Prior to the Company’s acquisition of the San Francisco Venture, the San Francisco Venture completed a separation transaction (the “Separation Transaction”) pursuant to an Amended and Restated Separation and Distribution Agreement (“Separation Agreement”) in which the equity interests in a subsidiary of the San Francisco Venture known as CPHP Development, LLC (“CPHP”) were distributed directly to the Class A members of the San Francisco Venture:

(i) an affiliate of Lennar and (ii) an affiliate of Castlelake.

In early 2019, the Company and the members of a joint venture, formed between affiliates of The Macerich Company, Lennar and Castlelake (“Mall Venture”), that intended to construct a retail outlet shopping district at Candlestick (“Retail Project”) decided not to proceed with the project.

As part of the termination of the Retail Project, the San Francisco Venture was released from its obligation to convey parcels of property (the “Retail Project Property”) on which the Retail Project was intended to be developed and from certain development obligations.

As a result of terminating the project and agreements related thereto, the San Francisco Venture recognized a gain of $ 64.9 million for the year ended December 31, 2019, representing the settlement of the contingent consideration pertaining to the development obligations and relief from the conveyance of these parcels.

Concurrent with the termination of the Retail Project, the San Francisco Venture issued 436,498 Class A units (and the Holding Company issued 436,498 of its Class B common shares) to, and received a contribution of $ 5.5 million from, the holders of Class A units of the San Francisco Venture.

Reimbursement Obligation

The San Francisco Venture has entered into reimbursement agreements for which it has agreed to reimburse CPHP or its subsidiaries for a portion of the EB-5 loan liabilities and related interest that were assumed by CPHP or its subsidiaries pursuant to the Separation Agreement.

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The weighted average interest rate as of December 31, 2021 was 4.5 %.

In April 2020, the San Francisco Venture agreed with a subsidiary of CPHP to defer, until April 2025, $ 12.6 million in reimbursement obligations that were due.

The deferred amount will accrue interest at a rate of 6 % per year and can be prepaid at any time without any premium or penalty.

Additionally, throughout 2020, the Company was notified by CPHP or its affiliates that certain reimbursements that were previously expected to be paid in 2020 had been deferred to subsequent years.

Throughout 2021, the Company was notified by CPHP or its affiliates that certain reimbursements that were previously expected to be paid in 2021 had been deferred to subsequent years.

These deferred amounts continue to incur interest at the original interest rate.

Principal payments of $ 35.5 million, $ 40.2 million, $ 0.6 million and $ 12.6 million are expected to be paid in 2021, 2022, 2023 and 2025, respectively, however, additional deferral notices may further extend the expected payment dates.

San Francisco Bay Area Development Management Agreements

The Company previously entered into development management agreements with affiliates of Lennar and Castlelake in which the Company provided certain development management services to various real estate development projects located in the San Francisco Bay Area.

For the years ended December 31, 2020, 2019 and 2018, the Company recognized revenue from these management services of $ 0.8 million, $ 2.4 million and $ 4.4 million, respectively.

Revenues related to management fees under the San Francisco Bay Area development management agreements are included in management services—related party in the accompanying consolidated statements of operations.

As of December 31, 2020, all development management agreements had been terminated.

Gateway Commercial Venture Property Management Agreement

The Company has entered into a property management agreement with Gateway Commercial Venture in which the Company will provide certain property management services to the Five Point Gateway Campus.

For the years ended December 31, 2020, 2019, and 2018, the Company recognized revenue from these management services of $ 0.4 million, $ 0.3 million and $ 1.5 million, respectively, which is included in management services—related party in the accompanying consolidated statement of operations.

Principal payments of $ 56.3 million, $ 0.6 million and $ 12.6 million are expected to be paid in 2022, 2023, and 2025, respectively, however, additional deferral notices may further extend the expected payment dates.

Employment Transition Agreement and Advisory Agreement with Emile Haddad

On August 23, 2021, the Company and the Company’s then Chairman, Chief Executive Officer and President, Emile Haddad, entered into an employment transition agreement and an advisory agreement pursuant to which, effective as of September 30, 2021 (the “Transition Date”), Mr.

Haddad stepped down from his roles as Chairman, Chief Executive Officer and President and transitioned to a senior advisor to the Company.

Haddad will remain a member of the Board of Directors, and as the Company’s founder, the Board elected him as Chairman Emeritus.

Under the terms of the employment transition agreement, Mr.

Haddad received his regular compensation through the Transition Date.

The employment transition agreement also provides that Mr.

Haddad will be paid a pro-rated 2021 annual cash bonus of $ 3.8 million for services he provided as an employee of the Company through September 30, 2021.

The bonus was paid in early 2022.

Additionally, Mr.

Haddad was granted 396,825 restricted share awards that vest in three equal amounts on January 15, 2022, January 15, 2023 and January 15, 2024, subject to his continued service to the Company as a senior advisor.

All compensation expense to Mr.

Haddad for the year ended December 31, 2021 is included in selling, general and administrative expenses on the accompanying condensed consolidated statement of operations.

At December 31, 2021, included in other related party liabilities in the table above is the $ 3.8 million cash bonus due to Mr.

The advisory agreement has an initial term of three years .

Haddad will receive an annual retainer of $ 5.0 million, and his existing unvested equity awards will continue to vest in accordance with their terms, subject to continued service as an advisor and/or member of the Board.

In the event of an involuntary termination of the advisory agreement by the Company other than for cause, by Mr.

Haddad for good reason, following Mr.

Haddad’s death or disability, or upon a change in control of the Company, Mr.

Haddad will remain eligible to receive the remaining payments under the advisory agreement for its then-current term (or, in the case of death or disability, for a period of 12 months (but in no event beyond the then-current term)), and his equity awards will accelerate (or remain eligible to vest, in the case of his performance-based equity awards).

Valencia Purchase and Sale Agreements

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The Company also recognized $ 1.2 million in the transaction price as an estimate of the amount of variable consideration from marketing fees that the Company expects to be entitled to receive.

The Valencia Landbank Venture has entered into option and development agreements with homebuilders in which the homebuilders will purchase lots from the Valencia Landbank Venture and construct and sell homes to the homebuying public.

In 2020, the Company sold 210 homesites on approximately 26 acres to the Valencia Landbank Venture.

Initial gross proceeds were $ 51.6 million, representing the base purchase price.

The Company also recognized $ 1.6 million in the transaction price as an estimate of the amount of variable consideration from marketing fees that the Company expects to be entitled to receive.

The Valencia Landbank Venture has entered into option and development agreements with homebuilders in which unaffiliated homebuilders will purchase lots from the Valencia Landbank Venture and construct and sell homes to the homebuying public.

In 2021, the Company entered into a purchase and sale agreement with an unaffiliated land banking entity for the sale of 328 homesites on approximately 26 acres.

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A related party of the Company retained the option to acquire these homesites in the future from the unaffiliated land banking entity.

In 2019, the Company entered into a purchase and sale agreement with an unaffiliated land banking entity for the sale of 711 homesites on approximately 59 acres.

Initial gross proceeds were $ 135.2 million, representing the base purchase price, and the Company also recognized $ 4.7 million in the transaction price as an estimate of the amount of variable consideration from marketing fees that the Company expects to be entitled to receive.

A related party of the Company retained the option to acquire these homesites in the future from the unaffiliated land banking entity.

Gateway Commercial Venture Property Management Agreement

The Company has entered into a property management agreement with Gateway Commercial Venture in which the Company will provide certain property management services to the Five Point Gateway Campus.

For the years ended December 31, 2021, 2020, and 2019, the Company recognized revenue from these management services of $ 0.4 million, $ 0.4 million and $ 0.3 million, respectively, which is included in management services—related party in the accompanying consolidated statements of operations.

San Francisco Bay Area Development Management Agreements

For the years ended December 31, 2020 and 2019, the Company recognized revenue from these management services of $ 0.8 million and $ 2.4 million, respectively.

As of December 31, 2020, all development management agreements had been terminated.

Retail Project and Contingent Consideration to Class A Members of the San Francisco Venture

NOTES PAYABLE, NET

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Revolving Credit Facility

The Operating Company has a $ 125.0 million revolving credit facility with a maturity date in April 2022, with one option to extend the maturity date by an additional year, subject to the satisfaction of certain conditions including the approval of the administrative agent and lenders.

The aggregate commitment is $ 125.0 million, with an accordion feature that allows the Operating Company to request to increase the maximum aggregate amount by up to $ 50.0 million to $ 175.0 million, subject to certain conditions, including receipt of commitments.

Any borrowings bear interest at LIBOR plus a margin ranging from 1.75 % to 2.00 % based on the Company’s leverage ratio.

In the event LIBOR is unavailable, the revolving credit facility provides for a replacement rate to be selected.

As of December 31, 2020, no funds have been drawn on the revolving credit facility, however letters of credit of $ 0.3 million are issued and outstanding under the revolving credit facility as of December 31, 2020, thus reducing the available capacity by the outstanding letters of credit amount.

In April 2021, the Operating Company entered into the third amendment to its $ 125.0 million unsecured revolving credit facility which, among other things, (i) extended the maturity date of the revolving credit facility from April 2022 to April 2024, with one option to extend the maturity date by an additional year, subject to the satisfaction of certain conditions including the approval of the administrative agent and lenders and (ii) amended the revolving credit facility to include customary provisions to provide for the eventual replacement of LIBOR as a benchmark interest rate.

Any borrowings under the revolving credit facility continue to bear interest at LIBOR plus a margin ranging from 1.75 % to 2.00 % based on the Company’s leverage ratio.

The aggregate commitment remains at $ 125.0 million, with an accordion feature that allows the Operating Company to request to increase the maximum aggregate amount by up to $ 50.0 million to $ 175.0 million, subject to certain conditions, including receipt of commitments.

As of December 31, 2021, no funds have been drawn on the revolving credit facility.

However, letters of credit of $ 0.3 million were issued and outstanding under the revolving credit facility, thus reducing the available capacity to $ 124.7 million.

TAX RECEIVABLE AGREEMENT

The Company is a party to a TRA with all of the holders of Class A Common Units of the Operating Company, all the holders of Class A Units of the San Francisco Venture, and prior holders of Class A common Units of the Operating Company and prior holders of Class A Units of the San Francisco Venture that have exchanged their holdings for Class A common shares (as parties to the TRA, the “TRA Parties”).

The Company is a party to a TRA with all of the holders of Class A Common Units of the Operating Company, all the holders of Class A units of the San Francisco Venture, and prior holders of Class A Common Units of the Operating Company and prior holders of Class A units of the San Francisco Venture that have exchanged their holdings for Class A common shares (as parties

to the TRA, the “TRA Parties”).

The TRA provides for payment by the Company to the TRA Parties or their successors of 85 % of the amount of cash savings, if any, in income tax the Company realizes as a result of:

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No TRA payments were made during the years ended December 31, 2021, 2020 and 2019.

The Company adopted ASC Topic 842, Leases , on January 1, 2019 on a modified retrospective basis.

Periods presented prior to adoption are in accordance with historical U.S.

GAAP (Topic 840, Leases ).

The Company’s lessee arrangements consist of agreements to lease certain office facilities and equipment and the Company’s lessor arrangements consist of leases of portions of land to third parties for agriculture or other miscellaneous uses.

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As of December 31, 2021, all leasing arrangements are classified as operating leases and do not contain residual value guarantees or material restrictions.

The Company’s office leases have remaining lease terms of approximately three years to eight years and include one or more extension options to renew, some of which include options to extend the leases for up to ten years .

The Company’s office leases have remaining lease terms of approximately two years to seven years and include one or more extension options to renew, some of which include options to extend the leases for up to ten years .

The Company only includes renewal options in the lease term when it is reasonably certain that it will exercise such options.

The components of lease costs were as follows for the years ended December 31, 2021, 2020 and 2019 (in thousands):

2021 2020 2019

Operating lease cost $ 2,371 $ 2,146 $ 2,498

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Short-term lease cost 501 551 527

Rent expense (ASC 840) for the year ended December 31, 2018 was $ 2.7 million.

Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 were as follows (in thousands, except lease term in years and discount rate):

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The Holding Company has provided a guaranty to the Settling Petitioners for monetary payments due from the Company as required under the settlement.

As of December 31,

2020, the remaining estimated maximum potential amount of monetary payments subject to the guaranty was $ 20.8 million with the final payment due in 2026.

The Company did not reach a settlement with two local environmental organizations that had pending challenges to certain Valencia project approvals.

See “Legal Proceedings” below.

As of December 31, 2021, the remaining estimated maximum potential amount of monetary payments subject to the guaranty was $ 18.5 million with the final payment due in 2026.

Water Purchase Agreement

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At both December 31, 2021 and 2020, the Company had $ 8.9 million included in accounts payable and other liabilities in the accompanying consolidated balance sheets, representing unreimbursed construction costs payable to Los Angeles County.

The Company expects to make the final payment of $ 8.9 million in 2021.

Performance and Completion Bonding Agreements

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Candlestick and The San Francisco Shipyard Disposition and Development Agreement

The San Francisco Venture is a party to a disposition and development agreement with the San Francisco Agency in which the San Francisco Agency has agreed to convey portions of Candlestick and The San Francisco Shipyard to the San Francisco Venture for development.

The San Francisco Venture is a party to a disposition and development agreement with the Successor to the Redevelopment Agency of the City and County of San Francisco (the “San Francisco Agency”) in which the San Francisco Agency has agreed to convey portions of Candlestick and The San Francisco Shipyard to the San Francisco Venture for development.

The San Francisco Venture has agreed to reimburse the San Francisco Agency for reasonable costs and expenses actually incurred and paid by the San Francisco Agency in performing its obligations under the disposition and development agreement.

The San Francisco Agency can also earn a return of certain profits generated from the development and sale of Candlestick and The San Francisco Shipyard if certain thresholds are met.

At December 31, 2020 and 2019, the San Francisco Venture had outstanding guarantees benefiting the San Francisco Agency for infrastructure and construction of certain park and open space obligations with aggregate maximum obligations of $ 198.3 million and $ 197.8 million, respectively.

At both December 31, 2021 and 2020, the San Francisco Venture had outstanding guarantees benefiting the San Francisco Agency for infrastructure and construction of certain park and open space obligations with aggregate maximum obligations of $ 198.3 million.

Letters of Credit

At December 31, 2020 and 2019, the Company had outstanding letters of credit totaling $ 1.3 million and $ 2.4 million, respectively.

At both December 31, 2021 and 2020, the Company had outstanding letters of credit totaling $ 1.3 million.

These letters of credit were issued to secure various development and financial obligations.

At December 31, 2020 and 2019, the Company had restricted cash and certificates of deposit of $ 1.0 million and $ 1.4 million, respectively, pledged as collateral under certain of the letters of credit agreements.

At both December 31, 2021 and 2020, the Company had restricted cash and certificates of deposit of $ 1.0 million pledged as collateral under certain of the letters of credit agreements.

Legal Proceedings

Landmark Village/Mission Village

During the pendency of certain prior litigation involving the approval of the original environmental impact reports and related permits for the Landmark Village and Mission Village projects at Valencia, in July 2017, the Los Angeles County Board of Supervisors certified the final additional environmental analyses required as a result of a prior California Supreme Court decision regarding the original greenhouse gas analysis related to the projects and reapproved the Landmark Village and Mission Village projects and related permits.

In August 2017, two petitioners, Santa Clarita Organization for Planning and the Environment and Friends of the Santa Clara River (collectively, “Non-Settling Petitioners”), who did not participate in a settlement of prior litigation involving the Company and certain other petitioners, filed a new petition for writ of mandate in the Los Angeles Superior Court.

The petition challenged Los Angeles County’s July 2017 approvals of the Mission Village and Landmark Village environmental analyses and the two projects based on claims arising under the California Environmental Quality Act and the California Water Code.

The Superior Court held a hearing on the merits of the petition in September 2018.

In December 2018, the Superior Court issued its written decision denying the Non-Settling Petitioners’ petition for writ of mandate.

Thereafter, in January 2019, the Superior Court entered judgment on the petition for writ of mandate in favor of Los Angeles County and the Company.

In March 2019, the Non-Settling Petitioners filed an appeal of the Superior Court’s ruling.

In April 2020, the Court of Appeal issued a ruling affirming the Superior Court’s judgment in favor of the Company and Los Angeles County.

In July 2020, the California Supreme Court issued an order denying the Non-Settling Petitioners’ petition to review the Court of Appeal’s decision.

The judgment in favor of Los Angeles County and the Company is now final with no further right to appeal.

Hunters Point Litigation

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The plaintiffs allege that, among other things, Tetra Tech fraudulently misrepresented its test results and remediation efforts.

The plaintiffs are seeking damages against Tetra Tech and have requested an injunction to prevent the Company and Lennar from undertaking any development activities at The San Francisco Shipyard.

Since July 2018, a number of lawsuits have been filed in San Francisco Superior Court on behalf of homeowners in The San Francisco Shipyard, which name Tetra Tech, Lennar, the Company and the Company’s CEO, among others, as defendants.

The plaintiffs are seeking damages against Tetra Tech and the Company and have requested an injunction to prevent the Company and Lennar from undertaking any development activities at The San Francisco Shipyard.

Since July 2018, a number of lawsuits have been filed in San Francisco Superior Court on behalf of homeowners in The San Francisco Shipyard, which name Tetra Tech, Lennar and the Company, among others, as defendants.

The plaintiffs allege that environmental contamination issues at The San Francisco Shipyard were not properly disclosed to them before they purchased their homes.

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NONCASH INVESTING AND FINANCING ACTIVITIES:

Liabilities assumed by buyer in connection with sale of golf course operating property

$ — $ — $ 7,795

Class A common shares issued for redemption of noncontrolling interests

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$ — $ 103 $ 381

Recognition of TRA liability $ 615 $ 3,124 $ 18,963

Supplemental cash flow information related to leases for the year ended December 31, 2020 and 2019 is as follows (in thousands):

Adjustment to liability recognized under TRA $ 878 $ 615 $ 3,124

Supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):

2021 2020 2019

Cash paid for amounts included in the measurement of operating lease liabilities $ 5,021 $ 4,831 $ 6,306

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The reported segment information for the Great Park segment includes the results of 100% of the Great Park Venture at the historical basis of the venture, which did not apply push down accounting at acquisition date.

The Great Park segment derives revenues from the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers, and management services provided by the Company to the Great Park Venture.

• Commercial—includes Five Point Gateway Campus, an office and research and development campus within the Great Park Neighborhoods, consisting of four buildings and surrounding land that the Gateway Commercial Venture acquired in 2017.

In 2020, the Gateway Commercial Venture sold three of the buildings and approximately 11 acres of land within the campus.

The Company and a subsidiary of Lennar lease portions of the fourth building that remains under the ownership of the Gateway Commercial Venture.

The Gateway Commercial Venture also owns approximately 50 acres of commercial land with additional development rights at the campus.

The Great Park segment derives revenues at the Great Park Neighborhoods from sales of residential and

commercial land sites to homebuilders, commercial developers and commercial buyers, sales of homes constructed and marketed under a fee build arrangement, and management services provided by the Company to the Great Park Venture.

• Commercial—includes the operations of the Gateway Commercial Venture, which owns an approximately 189,000 square foot office building at the Five Point Gateway Campus.

The Five Point Gateway Campus is an office, medical and research and development campus located within the Great Park Neighborhoods and consists of four buildings and surrounding land.

The Company and a subsidiary of Lennar lease portions of the building owned by the Gateway Commercial Venture.

The Gateway Commercial Venture also owns approximately 50 acres of the surrounding commercial land with additional development rights at the campus.

This segment also includes property management services provided by the Management Company to the Gateway Commercial Venture.

As of December 31, 2021, the Company had a 75 % interest in the Gateway Commercial Venture and accounted for the investment under the equity method.

The reported segment information for the Commercial segment includes the results of 100% of the Gateway Commercial Venture.

The reported segment information for the Commercial segment includes the results of 100% of the Gateway Commercial Venture at the historical basis of the venture.

Segment operating results and reconciliations to the Company’s consolidated balances are as follows:

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(in thousands)

Valencia San Francisco Great Park Commercial Total reportable segments Removal of Great Park Venture (1) Removal of Gateway Commercial Venture (1) Add investment in Great Park Venture Add investment in Gateway Commercial Venture Other eliminations (2) Corporate and unallocated (3) Total Consolidated

Valencia San Francisco Great Park Commercial Total reportable segments Removal of Great Park Venture (1)

Removal of Gateway Commercial Venture (1)

Add investment in Great Park Venture Add investment in Gateway Commercial Venture Other eliminations (2)

Corporate and unallocated (3)

Total Consolidated

Revenues $ 184,765 $ 548 $ 474,402 $ 8,881 $ 668,596 $ ( 435,727 ) $ ( 8,475 ) $ — $ — $ — $ — $ 224,394

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Expenditures for long-lived assets (4)

175,447 46,919 92,442 263 315,071 ( 92,442 ) ( 263 ) — — — 43 222,409

For the year ended December 31, 2020

(in thousands)

Valencia San Francisco Great Park Commercial Total reportable segments Removal of Great Park Venture (1)

Removal of Gateway Commercial Venture (1)

Add investment in Great Park Venture Add investment in Gateway Commercial Venture Other eliminations (2)

Corporate and unallocated (3)

Total Consolidated

Revenues $ 124,892 $ 1,430 $ 51,727 $ 24,638 $ 202,687 $ ( 24,827 ) $ ( 24,241 ) $ — $ — $ — $ — $ 153,619

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Expenditures for long-lived assets (4)

149,789 37,406 60,529 1,139 248,863 ( 60,529 ) ( 1,139 ) — — — 1,629 188,824

For the year ended December 31, 2019

(in thousands)

Valencia San Francisco Great Park Commercial Total reportable segments Removal of Great Park Venture (1)

Removal of Gateway Commercial Venture (1)

Add investment in Great Park Venture Add investment in Gateway Commercial Venture Other eliminations (2)

Corporate and unallocated (3)

Total Consolidated

Revenues $ 143,190 $ 3,995 $ 307,843 $ 34,479 $ 489,507 $ ( 270,970 ) $ ( 34,157 ) $ — $ — $ — $ — $ 184,380

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Expenditures for long-lived assets (4)

(1) Represents the removal of the Great Park Venture’s and Gateway Commercial Venture’s operating results and balances that are included in the Great Park segment and Commercial segment operating results and balances, respectively, but are not included in the Company’s consolidated results and balances.

241,410 49,421 ( 9,487 ) 2,924 284,268 9,487 ( 2,924 ) — — — 1,808 292,639

(1) Represents the removal of the Great Park Venture and Gateway Commercial Venture operating results and balances which are included in the Great Park segment and Commercial segment operating results and balances at 100% of each venture’s historical basis, respectively, but are not included in the Company’s consolidated results and balances as the Company accounts for its investment in each venture using the equity method of accounting.

(2) Represents intersegment balances that eliminate in consolidation.

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(4) Expenditures for long-lived assets are net of inventory cost reimbursements and include noncash project accruals and capitalized interest.

For the year ended December 31, 2020 and 2019, Great Park Venture’s net expenditures include $ 9.3 million and $ 127.0 million, respectively, in inventory cost reimbursements received.

The Valencia Landbank Venture represented one of the Company’s major customers during the year ended December 31, 2020, accounting for approximately $ 53.2 million, or 35 %, of total consolidated revenues.

For the year ended December 31, 2021, Valencia’s net expenditures include $ 4.5 million in inventory cost reimbursements received.

For the years ended December 31, 2021 and 2020, San Francisco’s net expenditures include $ 0.7 million and $ 2.2 million, respectively, and Great Park Venture’s net expenditures include $ 52.1 million and $ 9.3 million, respectively, in inventory cost reimbursements received.

The Valencia Landbank Venture represented one of the Company’s major customers during the years ended December 31, 2021 and 2020, accounting for approximately $ 43.2 million, or 19 %, and $ 53.2 million, or 35 %, of total consolidated revenues, respectively.

Two third-party home builders represented majors customer of the Company during the year ended December 31, 2021, accounting for approximately $ 30.3 million, or 14 %, and $ 22.5 million, or 10 %, of total consolidated revenues, respectively.

A third-party home builder represented another major customer of the Company during the year ended December 31, 2020, accounting for approximately $ 59.1 million, or 38 %, of total consolidated revenues.

Revenues generated from both customers were from the sale of homesites in Valencia.

An unaffiliated land banking entity that acquired homesites in Valencia in 2019 represented one of the Company’s major customers during the year ended December 31, 2019 and accounted for approximately $ 139.9 million, or 76 %, of total consolidated revenues.

Revenues generated from these customers were from the sale of homesites in Valencia.

An unaffiliated land banking entity that acquired homesites in Valencia in 2021 and 2019 represented one of the Company’s major customers during the years ended December 31, 2021 and 2019 and accounted for approximately $ 76.5 million, or 34 %, and $ 139.9 million, or 76 %, of total consolidated revenues, respectively.

A related party of the Company retained the option to acquire these homesites in the future from the unaffiliated land banking entity.

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Employees and consultants of the Company and its subsidiaries and affiliates, as well as non-employee members of the Company’s Board of Directors, are eligible to receive awards under the incentive award plan.

The incentive award plan authorizes the issuance of up to 11,710,148 Class A common shares of the Holding Company.

The incentive award plan authorized the issuance of up to 11,710,148 Class A common shares of the Holding Company.

As of December 31, 2021, there were 3,324,488 remaining Class A common shares available for future issuance under the incentive award plan.

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(in thousands) Weighted-

Average Grant

Date Fair Value

Average Grant Date Fair Value

Nonvested at January 1, 2019 1,893 $ 15.27

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( 777 ) $ 14.62

( 811 ) $ 18.76

Nonvested at December 31, 2019 3,011 $ 9.02

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Nonvested at December 31, 2021 2,640 $ 6.38

On January 15, 2022, 644,734 restricted share awards with a service and market condition included in the table above were forfeited for no consideration as the threshold levels had not been attained.

The shares had a grant date fair value of $ 1.47 .

Share-based compensation expense was $ 7.9 million, $ 11.6 million and $ 13.6 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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Benefits paid ( 2,029 ) ( 2,089 )

Actuarial loss 1,788 1,654

Actuarial (gain) loss ( 242 ) 1,788

Projected benefit obligation—end of year $ 20,613 $ 22,372

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Adjustment to accumulated other comprehensive loss:

Net actuarial loss (gain) 332 ( 917 ) 1,252

Net actuarial (gain) loss ( 1,067 ) 332 ( 917 )

Amortization of net actuarial loss ( 359 ) ( 97 ) ( 143 )

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The Holding Company is responsible for income taxes on its allocable share of the Operating Company’s income or gain.

The expense for income taxes for the years ended December 31, 2020, 2019 and 2018 was as follows (in thousands):

The benefit (expense) for income taxes for the years ended December 31, 2021, 2020 and 2019 was as follows (in thousands):

2021 2020 2019

Current income tax expense:

Current income tax benefit (expense):

$ ( 17 ) $ ( 24 ) $ —

Total current income tax (expense) ( 794 ) — —

Deferred income tax benefit (expense):

762 ( 770 ) —

Total current income tax benefit (expense) 745 ( 794 ) —

Deferred income tax (expense) benefit:

$ ( 2,655 ) $ ( 379 ) $ ( 3,750 )

Total deferred income tax benefit (expense) 151 ( 5,482 ) 7,406

(Increase) decrease in valuation allowance ( 1,101 ) 3,062 ( 16,585 )

( 1,977 ) 530 ( 1,732 )

Total deferred income tax (expense) benefit ( 4,632 ) 151 ( 5,482 )

Decrease (increase) in valuation allowance 4,243 ( 1,101 ) 3,062

Expiration of unused loss carryforwards ( 31 ) — ( 25 )

Expense for income taxes $ ( 1,744 ) $ ( 2,445 ) $ ( 9,183 )

Limitations on the utilization of net operating losses included in The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) caused the Holding Company to increase its deferred tax liability, net of valuation allowance, giving rise to a $ 1.0 million, $ 2.4 million and $ 9.2 million federal tax provision, respectively, for the years ended December 31, 2020, 2019 and 2018 and a state tax provision of $ 0.8 million for the year ended December 31, 2020.

The 2020 current state tax provision is a result of California Assembly Bill 85 (“AB-85”), which suspends the use of net operating losses (“NOLs”) in tax years 2020 through 2022.

Benefit (expense) for income taxes $ 325 $ ( 1,744 ) $ ( 2,445 )

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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The amount of the valuation allowance recorded against the deferred tax asset could be adjusted if there are changes to the positive and negative factors discussed above.

During the year ended December 31, 2018, the valuation allowance increased by $ 16.6 million as a result of operating losses.

Also during 2018, the valuation allowance decreased by $ 1.3 million as a result of deferred taxes established through adjustments to contributed capital principally associated with increases in the payable pursuant to the tax receivable agreement.

The net increase in the valuation allowance for the year ended December 31, 2018 was $ 15.3 million.

During the year ended December 31, 2019 and 2020, the valuation allowance decreased by $ 3.1 million and $ 1.9 million, respectively, primarily due to operating income in both years.

With the enactment of the Tax Act, the corporate federal income tax rate dropped from 35% to a flat 21% rate effective January 1, 2018.

The SEC staff issued the Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act and provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740.

In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete.

To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.

If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

We applied the guidance in SAB 118 when accounting for the enactment-date effects of the Tax Act in 2017 and throughout 2018.

As of December 31, 2017, we had completed the majority of our accounting for the tax effects of the Tax Act.

As a result of the rate change, the Company was required to revalue its deferred tax asset at December 31, 2017 and recorded a provisional adjustment to reduce its value by $ 5.3 million, which is included in the tax provision for 2017.

Due to the Company’s valuation allowance, the $ 5.3 million was offset with a valuation allowance.

As of December 31, 2018, we completed our accounting for all of the enactment-date income tax effects of the Tax Act.

As part of our final analysis of the Tax Act, we recognized an adjustment of $ 9.2 million to the provisional amounts recorded at December 31, 2017 and included this adjustment as a component of income tax expense from continuing operations for the year ended December 31, 2018.

The change related to adjustments to the Company’s valuation allowance as a result of the limitation for post-2017 net operating losses to offset only 80% of tax income.

The change to the net operating loss utilization limitation requires additional valuation allowance to account for the limitation.

At December 31, 2020, the Holding Company had federal tax effected NOL carryforwards totaling $ 90.0 million, and state tax effected NOL carryforwards, net of federal income tax benefit, totaling $ 28.0 million.

At December 31, 2021, the Holding Company had federal tax effected net operating loss (“NOL”) carryforwards totaling $ 107.6 million, and state tax effected NOL carryforwards, net of federal income tax benefit, totaling $ 33.2 million.

Federal NOLs incurred prior to 2018 and California NOLs may be carried forward up to 20 years to offset future taxable income and begin to expire in 2029.

The additional year to utilize California NOLs is a result of bill AB-85, which suspended (and extended the carry forward period of) NOLs for tax years 2020 through 2022.

Federal NOLs incurred in 2018 and forward do not expire.

1 unchanged sentence

If the Holding Company were to experience an ownership change of more than 50%, the use of all NOLs (and potentially other built-in losses) would generally be subject to a limitation equal to the value of the Holding Company’s equity before the ownership change, multiplied by the long-term tax-exempt rate.

The Holding Company estimates that after giving effect to various transactions by members who hold a 5% or greater interest in the Holding Company, it has not experienced an ownership change as computed in accordance with Section 382.

The Holding Company estimates that after giving effect to

various transactions by members who hold a 5% or greater interest in the Holding Company, it has not experienced an ownership change as computed in accordance with Section 382.

In the event of an ownership change, the Holding Company’s use of the NOLs may be limited and not fully available for realization.

6 unchanged sentences

State income taxes-net of federal income tax benefit 6.98 6.98 6.98

Statutory federal tax rate change — — —

Noncontrolling interests ( 15.00 ) ( 14.98 ) ( 15.83 )

Pass-through to noncontrolling interests ( 14.55 ) ( 15.00 ) ( 14.98 )

Executive compensation limitation and other permanent items 14.35 5.94 8.34

Valuation allowance related to the Tax Act — — ( 15.63 )

Deferred tax asset valuation allowance ( 30.51 ) 42.54 ( 11.54 )

2 unchanged sentences

At December 31, 2021 and 2020, the Holding Company did not have any gross unrecognized tax benefits, and did not require an accrual for interest or penalties.

For the year ended December 31, 2020, the Company recorded income tax expense of $ 1.7 million on a pre-tax income of $ 2.8 million.

For the year ended December 31, 2019, the Company recorded tax expense of $ 2.4 million on a pre-tax income of $ 24.7 million.

For the year ended December 31, 2018, the Company recorded tax expense of $ 9.2 million on a pre-tax loss of 58.8 million.

The effective tax rates for the years ended December 31, 2020, 2019 and 2018, differ from the 21% federal statutory and applicable state statutory tax rates primarily due to the Company’s valuation allowance and to the pre-tax portion of income and losses that are passed through to the other partners of the Operating Company and the San Francisco Venture and from the change in the statutory federal tax rate in 2017.

The Holding Company files income tax returns in the U.S.

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The Company uses the two-class method in its computation of earnings per share.

The Company’s Class A common shares and the Class B common shares are entitled to receive distributions at different rates, with each Class B common share receiving 0.03 % of the distributions paid on each Class A common share.

The Company’s Class A common shares and Class B common shares are entitled to receive distributions at different rates, with each Class B common share receiving 0.03 % of the distributions paid on each Class A common share.

Under the two-class method, the Company’s net income available to common shareholders is allocated between the two classes of common shares on a fully-distributed basis and reflects residual net income after amounts attributed to noncontrolling interests.

3 unchanged sentences

No distributions to common shares were declared for the years ended December 31, 2021, 2020 and 2019.

Diluted income (loss) per share calculations for both Class A common shares and Class B common shares contemplate adjustments to the numerator and the denominator under the if-converted method for Class B common shares, the exchangeable Class A units of the San Francisco Venture and the exchangeable Class A Common Units of the Operating Company.

Diluted income (loss) per share calculations for both Class A common shares and Class B common shares contemplate adjustments to the numerator and the denominator under the if-converted method for the convertible Class B common shares, the exchangeable Class A units of the San Francisco Venture and the exchangeable Class A Common Units of the Operating Company.

The Company uses the treasury stock method or the two-class method when evaluating dilution for RSUs, restricted shares, and performance restricted shares.

The more dilutive of the two methods is included in the calculation for diluted income (loss) per share.

The following table summarizes the basic and diluted earnings per share calculations for the years ended December 31, 2020, 2019 and 2018 (in thousands, except shares and per share amounts):

The following table summarizes the basic and diluted earnings (loss) per share calculations for the years ended December 31, 2021, 2020 and 2019 (in thousands, except shares and per share amounts):

2021 2020 2019

Net (loss) income attributable to the Company $ ( 428 ) $ 9,033 $ ( 34,714 )

Adjustments to net (loss) income 20 50 221

Net (loss) income attributable to common shareholders $ ( 408 ) $ 9,083 $ ( 34,493 )

Net income (loss) attributable to the Company $ 6,568 $ ( 428 ) $ 9,033

Adjustments to net income (loss) attributable to the Company ( 176 ) 20 50

Net income (loss) attributable to common shareholders $ 6,392 $ ( 408 ) $ 9,083

Numerator — basic common shares:

Net (loss) income attributable to common shareholders $ ( 408 ) $ 9,083 $ ( 34,493 )

Net income (loss) attributable to common shareholders $ 6,392 $ ( 408 ) $ 9,083

net income allocated to participating securities $ 164 $ — $ 390

$ — $ ( 390 ) $ —

Allocation of net (loss) income to common shareholders $ ( 408 ) $ 8,693 $ ( 34,493 )

Numerator for basic net (loss) income available to Class A Common Shareholders $ ( 408 ) $ 8,690 $ ( 34,480 )

Numerator for basic net (loss) income available to Class B Common Shareholders $ — $ 3 $ ( 13 )

Allocation of basic net income (loss) among common shareholders $ 6,228 $ ( 408 ) $ 8,693

Numerator for basic net income (loss) available to Class A common shareholders $ 6,226 $ ( 408 ) $ 8,690

Numerator for basic net income (loss) available to Class B common shareholders $ 2 $ — $ 3

Numerator — diluted common shares:

Net (loss) income attributable to common shareholders $ ( 408 ) $ 9,083 $ ( 34,493 )

Reallocation of (loss) income upon assumed exchange of dilutive potential securities $ ( 16 ) $ 9,501 $ —

Net income (loss) attributable to common shareholders $ 6,392 $ ( 408 ) $ 9,083

Reallocation of income (loss) upon assumed exchange of dilutive potential securities $ 6,645 $ ( 16 ) $ 9,501

net income allocated to participating securities $ 159 $ — $ 372

Allocation of net (loss) income to common shareholders $ ( 424 ) $ 18,212 $ ( 34,493 )

Numerator for diluted net (loss) income available to Class A Common Shareholders $ ( 424 ) $ 18,209 $ ( 34,480 )

Numerator for diluted net (loss) income available to Class B Common Shareholders $ — $ 3 $ ( 13 )

Allocation of diluted net income (loss) among common shareholders $ 12,878 $ ( 424 ) $ 18,212

Numerator for diluted net income (loss) available to Class A common shareholders $ 12,876 $ ( 424 ) $ 18,209

Numerator for diluted net income (loss) available to Class B common shareholders $ 2 $ — $ 3

Basic weighted average Class A common shares outstanding 67,394,794 66,722,187 66,261,968

66,722,187 66,261,968 65,002,387

Diluted weighted average Class A common shares outstanding 143,491,204 69,000,096 145,491,898

69,000,096 145,491,898 65,002,387

Basic and diluted weighted average Class B common shares outstanding 79,233,544 79,233,544 79,221,176

79,233,544 79,221,176 79,859,730

Basic (loss) earnings per share:

Basic earnings (loss) per share:

Class A common shares

2 unchanged sentences

$ 0.00 $ ( 0.00 ) $ 0.00

Diluted (loss) earnings per share:

Diluted earnings (loss) per share:

Class A common shares

2 unchanged sentences

$ 0.00 $ ( 0.00 ) $ 0.00

Anti-dilutive potential RSUs

Anti-dilutive potential Performance RSUs

3 unchanged sentences

Anti-dilutive potential Performance Restricted Shares (weighted average)

Anti-dilutive potential Class A common shares (weighted average)

76,120,180 — 79,883,687

Anti-dilutive potential Class A common shares from exchanges (weighted average) 3,160,904 76,120,180 —

ACCUMULATED OTHER COMPREHENSIVE LOSS

3 unchanged sentences

Net actuarial gains or losses are re-determined annually or upon remeasurement events and principally arise from changes in the rate used to discount benefit obligations and differences between expected and actual returns on plan assets.

Reclassifications from accumulated other comprehensive loss to net loss related to amortization of net actuarial losses were approximately $ 61,000 , $ 89,000 and $ 55,000 , net of taxes, and are included in miscellaneous other income on the accompanying consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018, respectively.

Reclassifications from accumulated other comprehensive loss to net income (loss) attributable to the Company related to amortization of net actuarial losses were approximately $ 225,000 , $ 61,000 and $ 89,000 , net of taxes, and are included in miscellaneous other income on the accompanying consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019, respectively.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data