What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-06 compared with 2022-03-11 · 26 added, 38 removed, 302 unchanged (17% of the section changed)

3 unchanged sentences

Structure and Formation of Our Company

In 2009, our company was formed as a limited liability company to acquire ownership through the operating company of Newhall Land & Farming, which is developing our Valencia community (formerly known as Newhall Ranch).

In 2009, our company was formed as a limited liability company to acquire ownership through the operating company of Newhall Land & Farming, which is developing our Valencia community.

In May 2016, we completed the formation transactions in which we acquired an interest in the San Francisco Venture, which is developing our Candlestick and The San Francisco Shipyard communities, a 37.5% percentage interest in the Great Park Venture, which is developing Great Park Neighborhoods, and the management company that has been the development manager of Great Park Neighborhoods since 2010.

62 unchanged sentences

Commercial buildings in our communities are usually built by a third-party developer or the buyer.

For commercial or multi-family properties that we retain, we may construct the building ourselves or enter into a joint venture with an established developer to construct a particular property (such as a retail development).

For commercial or multi-family properties that we retain, we may construct the building ourselves or enter into a joint venture with an established developer to construct a particular property.

Community programming .

Our community building efforts go beyond development and construction.

We offer numerous community events, including music, food and art festivals, outdoor movies, educational programs, health and wellness programs, gardening lessons, cooking lessons, food truck events, bike tours and various holiday festivities.

We offer numerous community programs, including music, food and art events, educational programs, gardening and cooking lessons and various holiday festivities.

We plan and program all of our events with a goal of building a community that transcends the physical features of our development and connects neighbors through their interests.

3 unchanged sentences

Further, depending on the specific plans for each community and market conditions, we may vary the timing of certain of these activities.

Throughout this process, we continually analyze each community relative to its market to determine which portions to sell, which portions to build and then sell, and which portions to retain as part of our portfolio of commercial and multi-family properties.

We have organized our operations into four reportable segments, three of which are tied to our communities (our Valencia (formerly Newhall), San Francisco and Great Park segments) and one relating to our commercial operations (our Commercial segment).

Throughout this process, we continually analyze each community relative to its market to determine which portions to sell, which portions to build and then sell, and which portions that we might retain as part of a portfolio of commercial and multi-family properties.

We have organized our operations into four reportable segments, three of which are tied to our communities (our Valencia, San Francisco and Great Park segments) and one relating to our commercial operations (our Commercial segment).

Our operations relating to these segments are discussed in more detail below in the sections titled “Our Communities” and “Commercial.”

Our Communities

Valencia (formerly Newhall Ranch)

Valencia is a mixed-use planned community in Los Angeles County that spans approximately 15,000 acres and is designed to include approximately 21,500 homesites, approximately 11.5 million square feet of commercial space, approximately 50 miles of trails, approximately 275 acres of community parks and approximately 10,000 acres of protected open space.

46 unchanged sentences

Great Park Neighborhoods is close to Interstate 5, Interstate 405, State Route 133 and John Wayne Airport (SNA) in Orange County.

The first homesites at the Great Park Neighborhoods were sold in April 2013 and, as of December 31, 2021, the Great Park Venture had sold 7,099 homesites (including 709 affordable homesites) and commercial land allowing for development of up to 2 million square feet of commercial (research and development) space.

The first homesites at the Great Park Neighborhoods were sold in April 2013 and, as of December 31, 2022, the Great Park Venture had sold 7,326 homesites (including 853 affordable homesites) and 115 acres of commercial land, including the Five Point Gateway Campus, allowing for development of up to approximately 2.8 million square feet of commercial office and research and development space.

As of December 31, 2022, builder sales totaled 5,748 market rate homes at the Great Park Neighborhoods (including 38 homes under a fee build arrangement).

The Great Park Venture reacquired the development rights to approximately one million square feet that had been previously sold.

For additional information about the commercial land sale, see “—Commercial” below.

The Great Park Venture reacquired the development rights equivalent to approximately one million square feet that had been previously sold with the Five Point Gateway Campus.

For additional information about the Five Point Gateway Campus commercial land sale, see “—Commercial” below.

We currently expect to develop and operate certain commercial properties within our existing mixed-use planned communities.

1 unchanged sentence

Factors we consider in determining whether or not to proceed with a particular commercial investment include (1) our existing knowledge of the mixed-use planned communities we are currently developing and understanding their respective needs, (2) whether, in our judgment, a particular commercial property or investment will create additional value for our remaining land within the community, in addition to achieving desired investment returns on such property or investment on a stand-alone basis, (3) existing entitlements and our ability to change them, (4) compatibility of the physical site with our proposed uses, and (5) environmental considerations, traffic patterns and access to the site.

In August 2017, the Gateway Commercial Venture, in which we own a 75% interest, acquired the Five Point Gateway Campus, consisting of approximately 73 acres of commercial land in the Great Park Neighborhoods.

The Five Point Gateway Campus 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 May 2020, the Gateway Commercial Venture closed on the sale of one building including approximately 11 acres of land within the campus to City of Hope, which intends to develop and operate a comprehensive cancer care center and build a future micro hospital.

In May 2020, the Gateway Commercial Venture closed on the sale of one building including approximately 11 acres of land within the campus to City of Hope.

City of Hope operates the building as a comprehensive cancer care center and is currently constructing a hospital adjacent to the cancer care center.

In August 2020, the Gateway Commercial Venture closed on the sale of two buildings to a real estate management company and operator.

20 unchanged sentences

Such ordinances, regulations or codes typically divide uses of land into two categories—permitted uses and discretionary uses.

Permitted uses are presumptively permitted, while discretionary uses are subject to a discretionary approval process, usually involving an application, an environmental review and a public hearing with input from other locally affected property owners and stake holders.

property owners and stake holders.

In order to grant a discretionary use entitlement, the municipality must find that the use does not negatively impact surrounding properties and may condition such an entitlement with special requirements or limitations unique to each individual case.

22 unchanged sentences

As a result, some of our properties have been or may be impacted by contamination arising from the releases of such substances.

For example, oil and gas wells have formerly operated or are currently operating at Valencia (formerly Newhall Ranch).

For example, oil and gas wells have formerly operated or are currently operating at Valencia.

In certain cases, prior owners or operators have in the past investigated or remediated, or are currently investigating or remediating, such conditions, but contamination may continue to be present at these sites, and future remedial activities could delay or otherwise impede property development on sites where contamination is present.

6 unchanged sentences

To meet NEPA requirements federal agencies prepare a detailed statement known as an Environmental Impact Statement (“EIS”).

Additionally, all Department of Defense installations (such as The San Francisco Shipyard and the El Toro Base) selected for closure or realignment pursuant to the Base Closure and Realignment Acts of 1988 or 1990 and being considered for transfer by deed, and where a release or disposal of hazardous substances or petroleum products has occurred, are subject to an environmental review process and may not be transferred until a finding of suitability for transfer (“FOST”) is documented.

Additionally, all Department of Defense installations (such as The San Francisco Shipyard and the El Toro Base) selected for

closure or realignment pursuant to the Base Closure and Realignment Acts of 1988 or 1990 and being considered for transfer by deed, and where a release or disposal of hazardous substances or petroleum products has occurred, are subject to an environmental review process and may not be transferred until a finding of suitability for transfer (“FOST”) is documented.

In addition, our development projects are subject to the California Environmental Quality Act (“CEQA”), which is similar in scope to NEPA, and requires potential environmental impacts of projects subject to discretionary governmental approval to be studied by the California governmental entity approving the proposed projects.

Projects with significant expected impacts require an Environmental Impact Report (“EIR”) while

more limited projects may be approved based on a Mitigated Negative Declaration.

Projects with significant expected impacts require an Environmental Impact Report (“EIR”) while more limited projects may be approved based on a Mitigated Negative Declaration.

All of our development sites and projects have either been or continue to be investigated, remediated or reviewed (with documented EISs, FOSTs and EIRs, as applicable) in accordance with the above-described and other applicable environmental laws to determine the suitability of their proposed uses and to protect human health and the environment.

56 unchanged sentences

We expect to pursue our investment objectives primarily through the ownership, development, operation and disposition of our communities:

(1) Valencia (formerly known as Newhall Ranch);

(1) Valencia;

(2) Candlestick and The San Francisco Shipyard;

17 unchanged sentences

We are innovators and collaborators in the evolution of cities in coastal California, and our associates are the force behind the success of our communities.

We maintain a relatively flat organizational structure, which encourages our associates to contribute and to grow their roles within the company without the limitations imposed by a rigid hierarchy.

We believe in cultivating a work environment that fosters inclusion, diversity of thought, professional development and opportunities to grow and share innovative ideas across all our community elements.

Our associates are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.

All of our associates must adhere to a code of business conduct and

ethics that sets standards for appropriate behavior and participate in required training on preventing and identifying harassment and discrimination.

All of our associates must adhere to a code of business conduct and ethics that sets standards for appropriate behavior and participate in required training on preventing and identifying harassment and discrimination.

We believe that diversity within our employee base helps us to incorporate a wide range of perspectives into the development of our communities.

7 unchanged sentences

In response to the COVID-19 pandemic, we took immediate steps to protect the health and well-being of our associates and to preserve the financial strength of the company.

The substantial majority of our associates are still working remotely with access to necessary systems and resources to ensure business continuity.

We have utilized various technological resources to expand the use of virtual interactions, including holding company-wide meetings, which we use to keep the team informed of the company’s plans regarding the evolving nature of the work environment.

We will transition our associates back to our offices when we believe it is appropriate after taking into account all federal, state and local laws, rules and regulations.

We have a COVID-19 Prevention Program, which sets forth COVID-19-related safety protocols and procedures, and we have worksite-specific operational plans for the locations at which associates have returned to work on site.

The COVID-19 Prevention Program and worksite plans incorporate numerous safety protocols, including social distancing, mask wearing, cleaning procedures, daily health checks, and contact tracing and notification procedures.

In addition, we provide paid time off for associates directly impacted by COVID-19.

At December 31, 2021, we had approximately 160 employees.

Beginning in April 2022, the substantial majority of our associates returned back to our offices on a hybrid schedule.

When working remotely, our associates have access to necessary systems and resources to ensure business continuity.

At December 31, 2022, we had approximately 105 employees, all of whom were working full-time.

Information about our Executive Officers

2 unchanged sentences

Daniel Hedigan 69 Chief Executive Officer

54 Chief Financial Officer and Vice President

Michael Alvarado 57 Chief Legal Officer, Vice President and Secretary

Greg McWilliams 71 Chief Policy Officer

58 Incoming Interim Chief Financial Officer

(1) On January 20, 2022, Mr.

Higgins provided notice of his intent to resign from the company after the filing of this annual report on Form 10-K.

Upon the effective date of Mr.

Higgins’ resignation, Leo Kij, who currently serves as the company’s Vice President and Corporate Controller, will serve as interim Chief Financial Officer until Mr.

Higgins’ successor is appointed.

Leo Kij 59 Interim Chief Financial Officer

Daniel Hedigan.

2 unchanged sentences

Hedigan served as President of Land Sales and Home Building for the Irvine Company from 2013 to 2021, where he oversaw the design, building and sales of new homes in the master-planned villages of the Irvine Ranch in Orange County, California.

Higgins is our Chief Financial Officer and Vice President and has been since May 2016.

From September 2015 to May 2016, Mr.

Higgins was Chief Financial Officer of the management company.

Michael Alvarado .

8 unchanged sentences

McWilliams was President of Newhall Land & Farming.

Kij has served as our Vice President and Corporate Controller since 2016.

Kij was appointed our Interim Chief Financial Officer in March 2022.

Prior to his appointment, Mr.

Kij served as our Vice President and Corporate Controller since 2016.

From 2009 to 2016, he served as Controller of our subsidiary, Five Point Communities Management, Inc.

8 unchanged sentences

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 1. Business