What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-24 compared with 2024-03-04 · 254 added, 208 removed, 1006 unchanged (31% of the section changed)

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In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Investment in unconsolidated entities – Other-than-temporary impairment assessment of Heritage Fields LLC (“Great Park Venture”)— Refer to Notes 2 and 4 to the financial statements

Management services – related party – Incentive compensation – Refer to Notes 2, 3, and 9 to the financial statements

Critical Audit Matter Description

As of December 31, 2023, the Company’s investments in unconsolidated entities consist of three investments totaling $252.8 million, and the carrying value of the investment in Great Park Venture is $213.8 million of the total balance.

The Company evaluates its investments in unconsolidated entities for other-than-temporary impairment by reviewing its investments for an absence of an ability to recover the carrying amount of the investment, by considering indicators of impairment including the fair value of the investment determined by a discounted cash flow of distributions.

If the carrying value of the investment in unconsolidated entities is greater than its estimated fair value, management makes an assessment of whether the impairment is other-than-temporary.

In making this assessment, management considers the length of time and the extent to which the fair value of the investment has been less than its carrying value.

In the event that an impairment is other-than-temporary, the Company will reduce the carrying value of the investment to its estimated fair value and recognize an impairment expense within the consolidated statements of comprehensive income (loss) in the period it is identified as incurred.

For the year ended December 31, 2023, management identified no indicators of impairment and no impairment loss has been recognized.

Given the quantitative significance of the investment in Great Park Venture and the complexities and judgments involved in identifying impairment indicators and developing the significant inputs used to develop management’s Great Park Venture discounted cash flow of distributions, a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, was deployed in performing audit procedures to evaluate the reasonableness of management’s identification of impairment indicators, and its estimates and assumptions related to significant inputs, including discount rate, residential revenues, and development cost estimates used in the Great Park Venture discounted cash flow of distributions.

Management services – related party revenue includes incentive compensation revenues recognized based on services performed under the amended and restated development management agreement (A&R DMA) with Heritage Fields LLC (Great Park Venture).

The A&R DMA contains an incentive compensation fee provision contingent on the financial performance of the Great Park Venture.

In making the estimate of incentive compensation the Company is 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.

In doing so, the Company uses projected cash flow of distributions from the Great Park Venture.

Given the complexities and judgments involved in developing the significant inputs used to develop the Great Park Venture’s cash flow of distributions, a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, was deployed in performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to significant inputs, including residential revenues, and development cost estimates used in the Great Park Venture’s projected cash flow of distributions.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s evaluation of indicators of impairment and the fair value of the investment in Great Park Venture included the following, among others:

– We tested the effectiveness of controls over management’s evaluation of indicators of impairment and the fair value of the investment in Great Park Venture, including those over significant input assumptions, including the discount rate, residential revenues, and development cost estimates.

– We tested the Company’s evaluation of indicators of impairment and significant input assumptions, including the discount rate, residential revenues, and development cost estimates by (1) evaluating the source information used by management, (2) independently obtaining and evaluating market data, (3) performing retrospective reviews, and (4) engaging our internal fair value specialists.

– We tested the mathematical accuracy of the discounted cash flow of distributions.

Our audit procedures related to management’s recognition of incentive compensation revenue included the following, among others:

– We tested the effectiveness of controls over management’s recognition of incentive compensation revenue inclusive of the controls over the significant input assumptions, such as residential revenues and development cost estimates used in the Great Park Venture’s projected cash flow of distributions.

– We tested the Company’s recognition of incentive compensation revenue through testing the significant input assumptions including residential revenues and development cost estimates used in the Great Park Venture’s projected cash flow of distributions by (1) evaluating the source information used by management, (2) performing retrospective reviews, and (3) engaging our fair value specialists to assess certain inputs and calculations.

– We tested the mathematical accuracy of the Great Park Venture’s cash flow of distributions and Company’s calculation of incentive compensation revenue recognized for the year ended December 31, 2024.

/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California

March 1, 2024

February 21, 2025

We have served as the Company’s auditor since 2009.

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INTANGIBLE ASSET, NET—RELATED PARTY

25,270 40,257

CASH AND CASH EQUIVALENTS

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Land sales—related party

595 7,512 43,286

Management services—related party

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Interest income

10,858 7,230 826

Miscellaneous

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EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 132,617 76,595 21,513

INCOME (LOSS) BEFORE INCOME TAX BENEFIT 109,298 ( 36,245 ) 12,985

INCOME TAX BENEFIT 4,418 1,471 325

INCOME (LOSS) BEFORE INCOME TAX (PROVISION) BENEFIT 205,096 109,298 ( 36,245 )

INCOME TAX (PROVISION) BENEFIT ( 27,462 ) 4,418 1,471

NET INCOME (LOSS) 177,634 113,716 ( 34,774 )

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Other comprehensive income (loss) before taxes 1,918 1,051 ( 1,674 )

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

INCOME TAX PROVISION RELATED TO OTHER COMPREHENSIVE INCOME (LOSS) ( 336 ) — —

OTHER COMPREHENSIVE INCOME (LOSS)—Net of tax 1,582 1,051 ( 1,674 )

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BALANCE - January 1, 2022 70,107,552 79,233,544 $ 587,587 $ 48,789 $ ( 1,952 ) $ 634,424 $ 1,265,954 $ 1,900,378

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

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

Net loss — — — ( 15,403 ) — ( 15,403 ) ( 19,371 ) ( 34,774 )

Share-based compensation — — 6,230 — — 6,230 — 6,230

Reacquisition of share-based compensation awards for tax-withholding purposes ( 417,716 ) — ( 2,736 ) — — ( 2,736 ) — ( 2,736 )

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

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

Forfeitures of share-based compensation awards, net of issuances ( 621,482 ) — — — — — — —

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

— — — — ( 1,047 ) ( 1,047 ) ( 627 ) ( 1,674 )

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BALANCE - December 31, 2022 69,068,354 79,233,544 $ 587,733 $ 33,386 $ ( 2,988 ) $ 618,131 $ 1,249,916 $ 1,868,047

Net loss — — — ( 15,403 ) — ( 15,403 ) ( 19,371 ) ( 34,774 )

Share-based compensation expense — — 6,230 — — 6,230 — 6,230

Net income — — — 55,394 — 55,394 58,322 113,716

Share-based compensation — — 3,665 — — 3,665 — 3,665

Reacquisition of share-based compensation awards for tax-withholding purposes ( 83,660 ) — ( 202 ) — — ( 202 ) — ( 202 )

Forfeitures of share-based compensation awards, net of issuances ( 621,482 ) — — — — — — —

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

Issuance of share-based compensation awards, net of forfeitures 215,244 — — — — — — —

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

— — — — 658 658 393 1,051

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Net income — — — 68,297 — 68,297 109,337 177,634

Share-based compensation expense — — 3,665 — — 3,665 — 3,665

Share-based compensation—net of tax of $ 1,865

— — 2,434 — — 2,434 — 2,434

Reacquisition of share-based compensation awards for tax-withholding purposes ( 282,883 ) — ( 823 ) — — ( 823 ) — ( 823 )

Issuance of share-based compensation awards, net of forfeitures 215,244 — — — — — — —

Issuance of share-based compensation awards 169,670 — — — — — — —

Settlement of restricted share units for Class A common shares 282,509 — — — — — — —

Other comprehensive income—net of tax of $ 336 -actuarial gain on pension plan

— — — — 866 866 716 1,582

Tax distribution to noncontrolling interest — — — — — — ( 4,033 ) ( 4,033 )

Tax distributions to noncontrolling interests — — — — — — ( 7,679 ) ( 7,679 )

Adjustment to liability recognized under tax receivable agreement—net of tax of $ 60

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19,363 19,934 16,946

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

Share-based compensation

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Contribution to Valencia Landbank Venture — — ( 205 )

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

Purchase of properties and equipment

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— ( 4,282 ) ( 6,546 )

Tax distribution to noncontrolling interest ( 4,033 ) ( 435 ) ( 4,429 )

Tax distributions to noncontrolling interests ( 7,679 ) ( 4,033 ) ( 435 )

Repayments of notes payable ( 100,000 ) — —

Borrowings under revolving credit facility — — 15,000

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Actual results could differ from those estimates.

Concentration of risk —As of December 31, 2023, the Company’s inventories and the Company’s unconsolidated entities’ inventories and properties are all located in California.

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

Concentration of risk —As of December 31, 2024, the Company’s inventories and the Company’s unconsolidated entities’ inventories are all located in California.

The Company is subject to risks incidental to the ownership and development 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.

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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

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.

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.

The Company allocates income (loss) to noncontrolling interests based on the substantive profit sharing provisions of the applicable subsidiary operating agreements.

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In addition, some residential homesite sale agreements contain a provision requiring the homebuilder to pay a marketing fee per residence sold, as a percentage of the home sale price.

Such fees are estimated as a variable form of consideration and the amount the Company expects to be entitled to receive from the homebuilder is recognized as revenue at the time of land sale.

Such marketing fees are estimated as a variable form of consideration and the amount the Company expects to be entitled to receive from the homebuilder is recognized as revenue at the time of land sale.

Since payment for variable consideration is received in future periods, but the Company has completed its performance obligation, a contract asset is recorded for contingent variable consideration, if any, included in the transaction price.

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The Company’s management agreements may 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 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.

In making estimates of incentive compensation the Company is 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 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, projected pricing over the estimated selling period, the length of the estimated development and selling periods, remaining development, general and administrative costs, the contract period, and other factors.

The Company includes in the transaction price an estimate of incentive compensation only to the extent that a significant reversal of revenue is not probable.

Incentive compensation revenue from management services is recognized evenly over the expected contract term, as the performance obligation is satisfied.

When changes in estimates and assumptions occur, the estimate of the amount of incentive compensation the Company expects to be entitled to receive and constraints on the estimate may change, resulting in a cumulative catch-up being recorded in the period of the change.

Incentive compensation revenue from management services is recognized evenly over the contract term, as the performance obligation is satisfied.

When changes in estimates and assumptions occur, the estimate of the amount of incentive compensation the Company is entitled to receive and constraints on the estimate may change, resulting in a cumulative catch-up being recorded in the period of the change.

A contract asset is recognized when there is a timing difference between recognition of revenue upon satisfaction of performance obligations and revenues becoming billable.

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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.

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.

The Company generally estimates the fair value of its long-lived assets using a discounted cash flow model or sales comparison approach of the underlying property or a combination thereof.

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, political and societal events that may negatively affect the local economy, and changes in development strategies that would result in acceleration of the realization of the value of such assets.

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.

The Company may estimate the fair value of its long-lived assets using a discounted cash flow model or sales comparison approach of the underlying property or a combination thereof.

The Company’s projected cash flows for each long-lived inventory asset 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 costs, and other factors.

For operating properties, the Company’s projected cash flows also include estimates and assumptions about the use and eventual disposition of such properties, including utilization, capital expenditures, operating expenses, and the amount of proceeds to be realized upon eventual disposition of such properties.

In determining these estimates and assumptions, the Company utilizes historical trends from past development projects of the Company in addition to internal and external market studies and trends, which generally include, but are not limited to, statistics on population demographics, unemployment rates and interest rates.

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While many of the estimates are calculated based on historical and projected trends, all estimates are subjective and change as market and economic conditions change.

In some instances, there may be various potential outcomes for future cash flows.

In these instances, the future cash flow models used to assess recoverability are probability-weighted based on our best estimates as of the date of evaluation.

The determination of fair value also requires discounting the estimated cash flows at a rate the Company believes a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams.

The discount rate used in determining each asset’s fair value generally depends on the asset’s projected life and development stage.

During the years ended December 31, 2024, 2023 and 2022, the Company did not recognize any impairment losses on its long-lived assets.

Share-based payments — Share-based payments are recognized on a straight-line basis over the service period in the statement of operations based on measurement date fair values.

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The Company evaluates its investments in unconsolidated entities for other-than-temporary impairment by reviewing each investment for any indicators of impairment, including the fair value of such investments compared to their carrying amounts.

The Company typically estimates the fair value of its investments by discounting the cash flows from distributions the Company expects to receive from the venture.

Significant input assumptions used in estimating the distributions the Company expects to receive from the

venture include revenue appreciation rates and cost appreciation rates.

The Company estimates the fair value of its investments by discounting the cash flows from distributions the Company expects to receive

from the venture.

Significant input assumptions used in estimating the distributions the Company expects to receive from the venture include revenue appreciation rates and cost inflation rates.

The determination of fair value also requires discounting the estimated cash flows at a rate that the Company believes a market participant would determine to be commensurate with the inherent risks associated with the investment and related estimated cash flow streams.

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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 intangible 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.

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

At December 31, 2024 and 2023, there was no material allowance for credit losses.

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federal, state, and local tax purposes and determines the provision or benefit for income taxes on an interim basis using an estimate of its annual effective tax rate and the impact of specific events as they occur.

The Company’s estimate of the Holding Company’s annual effective tax rate is subject to change based on changes in federal and state tax laws and regulations, the Holding Company’s ownership interest in the Operating Company and the Operating Company’s ownership in the San Francisco Venture, and the Company’s assessment of its deferred tax asset valuation allowance.

Cumulative adjustments are made in interim periods in which the Company identifies a change in its estimate of the amount of future tax benefit when it is more likely than not that some portion of the deferred tax assets will not be realized.

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Preceding Mr.

Hedigan’s appointment, Emile Haddad stepped down from his roles as Chairman, Chief Executive Officer and President effective as of September 30, 2021 and transitioned into a senior advisory role pursuant to a three-year advisory agreement.

Haddad remains a member of the Company’s Board of Directors serving as Chairman Emeritus.

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( 5,928 ) ( 694 ) —

Other—related party — — 2,048

Total miscellaneous other (expense) income $ ( 5,977 ) $ ( 776 ) $ 245

(1) In December 2023, the Company initiated an exchange offer on its $ 625.0 million 7.875 % Senior Notes that was settled in January 2024 (see Note 10).

For the year ended December 31, 2023, the Company incurred $ 1.8 million in third party costs related to the debt modification, which is included in other in the table above.

Recently issued accounting pronouncements —In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment

Disclosures , which primarily requires expanded disclosure of significant segment expenses and other segment items on an annual and interim basis.

(1) In January 2024, the Company settled an exchange offer on its $ 625.0 million 7.875 % Senior Notes (see Note 10).

For the years ended December 31, 2024 and 2023, the Company incurred $ 5.9 million and $ 1.8 million, respectively, in third party costs related to the debt modification, which is included in other in the table above.

Recently adopted and issued accounting pronouncements —In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which primarily requires expanded disclosure of significant segment expenses and other segment

items on an interim and annual basis.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The standard will be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the effect of this update on the Company’s financial statements disclosures.

The Company has adopted this standard for the current year consolidated financial statements and has applied this standard retrospectively for all prior periods presented in the consolidated financial statements (see Note 15).

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which primarily requires expanded disclosures for income taxes paid and the effective tax rate reconciliation.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis.

The Company is currently evaluating the effect of this update on the Company’s financial statements disclosures.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retrospective basis.

The Company is currently evaluating the effect of this update on the Company’s financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which primarily requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements on an interim and annual basis.

The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted and can be applied on either a prospective or retrospective basis.

The Company is currently evaluating the effect of this update on the Company’s financial statement disclosures.

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

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Valencia San Francisco Great Park (1)

Commercial (1)

Unallocated Total

Land sales and land sales—related party

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Valencia San Francisco Great Park (1)

Commercial (1)

Unallocated Total

Land sales and land sales—related party

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Valencia San Francisco Great Park (1)

Commercial (1)

Unallocated Total

Land sales and land sales—related party

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$ 10,571 $ 690 $ 31,015 $ 418 $ 42,694

(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).

(1) The tables above do not include revenues of the Great Park 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.

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In addition to an annual 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.

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.

By mutual agreement, the Initial Term had been extended through December 31, 2022 (the “2022 Extension”).

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The 2022 Extension did not change the incentive compensation provisions of the A&R DMA applicable to the Initial Term.

In December 2022, the Company and the Great Park Venture entered into a second amendment to the A&R DMA.

Under the amendment, the term of the A&R DMA has been renewed through December 31, 2024 (the “First Renewal Term”).

compensation payable to the Company during the First Renewal Term remains unchanged from the 2022 Extension and includes the annual fixed base fee and incentive compensation payments.

In December 2022, the Company and the Great Park Venture entered into a second amendment to the A&R DMA establishing the terms of service through December 31, 2024 (the “First Renewal Term”).

The compensation payable to the Company during the First Renewal Term remained unchanged from the 2022 Extension and included the annual fixed base fee and incentive compensation payments.

In September 2024, the Company and the Great Park Venture entered into a third amendment to the A&R DMA.

Under the third amendment, the term of the A&R DMA has been renewed through December 31, 2026 (the “Second Renewal Term”).

The compensation payable to the Company during the Second Renewal Term includes a $ 13.5 million annual fixed base fee beginning in 2025, which reflects an increase from the current $ 12.0 million annual fixed base fee under the First Renewal Term, and incentive compensation payments.

The incentive compensation provisions of the A&R DMA were not changed pursuant to the third amendment.

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.

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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.

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, projected pricing over the estimated selling period, the length of the estimated development and selling periods, remaining development, general, and administrative costs, the 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.

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The opening and closing balances of the Company’s contract assets for the year ended December 31, 2024 were $ 72.1 million ($ 69.1 million related party, see Note 9) and $ 101.8 million ($ 100.8 million related party, see Note 9), respectively.

The net decrease of $ 14.4 million between the opening and closing balances of the Company’s contract assets primarily resulted from additional incentive compensation revenue recognized during the period that resulted from changes in the estimated constrained transaction price of the A&R DMA offset by the receipt of $ 46.5 million in incentive compensation payments from the Great Park Venture and the receipt of marketing fees from prior period land sales.

The net increase of $ 29.7 million between the opening and closing balances of the Company’s contract assets primarily resulted from additional incentive compensation revenue recognized during the period that resulted from changes in the estimated constrained transaction price of the A&R DMA partially offset by the receipt of $ 50.9 million in incentive compensation payments from the Great Park Venture and the receipt of marketing fees from homebuilders from prior period land sales.

The opening and closing balances of the Company’s contract assets for the year ended December 31, 2023 were $ 86.5 million ($ 79.9 million related party, see Note 9) and $ 72.1 million ($ 69.1 million related party, see Note 9), respectively.

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Great Park Venture

The Great Park Venture has two classes of membership interests—“Percentage Interests” and “Legacy Interests.” The Operating Company owned 37.5 % of the Great Park Venture’s Percentage Interests as of December 31, 2023.

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 Great Park Venture previously had two classes of membership interests—“Percentage Interests” and “Legacy Interests.” The Operating Company owned 37.5 % of the Great Park Venture’s Percentage Interests as of December 31, 2024.

Legacy Interest holders were entitled to receive priority distributions in an aggregate amount equal to $ 476.0 million, which were satisfied as of December 31, 2021, and up to an additional $ 89.0 million from participation in subsequent distributions of cash depending on the performance of the Great Park Venture.

During the year ended December 31, 2024, the Great Park Venture made aggregate distributions of $ 18.1 million to holders of Legacy Interests and $ 485.1 million to holders of Percentage Interests.

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The Company received $ 154.2 million for its 37.5 % Percentage Interest.

As of December 31, 2021, the Great Park Venture had fully satisfied the $ 476.0 million priority distribution rights, and the remaining maximum participating Legacy Interest distribution rights at December 31, 2023 were $ 18.1 million, which will be paid to Legacy Interest holders pro-rata with payments to Percentage Interest holders.

Approximately 10 % of future distributions will be paid to the Legacy Interest holders until such time as the remaining balance has been fully paid.

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

With the distributions to the holders of Legacy Interests during the year ended December 31, 2024, the Great Park Venture fully satisfied the $ 89.0 million maximum participating Legacy Interest distribution rights, as a result of which, the Legacy Interests are no longer deemed to be outstanding.

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

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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, 2023, the Great Park Venture recognized $ 16.2 million in land sale revenues to related parties of the Company and $ 538.6 million in land sale revenues to third parties, of which $ 357.8 million relates to 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.

During the year ended December 31, 2024, the Great Park Venture recognized $ 22.6 million in land sale revenues to related parties of the Company and $ 590.2 million in land sale revenues to third parties.

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, of which $ 236.6 million relates to 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 in 2021 included $ 57.4 million sold 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 accounts for the investment under the equity method of accounting.

During the year ended December 31, 2023, the Great Park Venture recognized $ 16.2 million in land sale revenues to related parties of the Company and $ 538.6 million in land sale revenues to third parties, of which $ 357.8 million relates to homesites sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire these homesites in the future from the land bank entity.

During the year ended December 31, 2022, the Great Park Venture recognized $ 12.5 million in land sale revenues to related parties of the Company and $ 270.9 million in land sale revenues to third parties.

The following table summarizes the statements of operations of the Great Park Venture for the years ended December 31, 2024, 2023 and 2022 (in thousands):

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118,256 61,054

Contract assets, receivables and other assets, net 166,793 43,955

Contract assets and receivables, net 169,604 166,793

$ 562,598 $ 619,199

2 unchanged sentences

Redeemable Legacy Interests

18,075 66,254

Capital (Percentage Interest)

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The unanimous approval of the executive committee is required for certain matters, which limits the Company’s ability to control the Gateway Commercial Venture, however, the Company is able to exercise significant influence and therefore accounts for its investment in the Gateway Commercial Venture using the equity method.

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 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.

The Company and a subsidiary of Lennar Corporation separately lease portions of the building under the ownership of the Gateway Commercial Venture, and during the years ended December 31, 2023, 2022 and 2021, the Gateway Commercial Venture recognized $ 8.5 million, $ 8.4 million and $ 8.5 million, respectively, in rental revenues from those leasing arrangements.

The Company is the manager of the Gateway Commercial Venture, with responsibility to manage and administer its day-to-day affairs.

The Five Point Gateway Campus (the “Five Point Gateway Campus”) is a 73 -acre office, medical, research and development campus located within the Great Park Neighborhoods consisting of four buildings totaling approximately one million square feet.

During the year ended December 31, 2024, the Gateway Commercial Venture sold its remaining interests in the Five Point Gateway Campus, which included an approximately 189,000 square foot commercial office building and approximately 50 acres of commercial land on which up to an additional 189,000 square feet of commercial space can be developed, for a purchase price of $ 88.5 million.

The purchase price consisted of $ 45.0 million in cash paid at closing and a $ 43.5 million note that matures in December 2026.

After retiring the Gateway Commercial Venture’s outstanding debt, the Gateway Commercial Venture made distributions to its members, of which the Company received $ 17.2 million.

The Company and a subsidiary of Lennar Corporation separately leased portions of the building that was under the ownership of the Gateway Commercial Venture, and during the years ended December 31, 2024, 2023 and 2022, the Gateway Commercial Venture recognized $ 8.7 million, $ 8.5 million and $ 8.4 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, 2024, 2023 and 2022 (in thousands):

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Depreciation and amortization ( 4,011 ) ( 4,015 ) ( 3,960 )

Gain on sale of assets, net 17,826 — —

Interest expense ( 2,590 ) ( 2,531 ) ( 1,541 )

Net (loss) income of Gateway Commercial Venture $ ( 3,885 ) $ ( 169 ) $ 878

Equity in (loss) earnings from Gateway Commercial Venture $ ( 2,914 ) $ ( 127 ) $ 659

Net income (loss) of Gateway Commercial Venture $ 16,463 $ ( 3,885 ) $ ( 169 )

Equity in earnings (loss) from Gateway Commercial Venture $ 12,347 $ ( 2,914 ) $ ( 127 )

The following table summarizes the balance sheet data of the Gateway Commercial Venture and the Company’s investment balance as of December 31, 2024 and 2023 (in thousands):

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Cash and restricted cash 257 5,574

Other assets 3,554 4,588

Note receivable and other assets 43,667 3,554

Total assets $ 43,924 $ 85,847

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The Company’s investment in the Gateway Commercial Venture $ 32,943 $ 37,781

In August 2023, the Gateway Commercial Venture refinanced its mortgage note, extending the maturity date to August 2025.

As a condition of the refinancing, the Company is subject to certain guaranties of the Gateway Commercial Venture's mortgage note, including an interest and carry guaranty along with a springing guaranty of 50 % of the outstanding balance in the event the Gateway Commercial Venture's leases with either the Company or the affiliate of Lennar are no longer in effect and the Gateway Commercial Venture is unable to meet certain financial covenants.

During the year ended December 31, 2022, the Company received $ 8.6 million in distributions of excess cash from the Gateway Commercial Venture.

Valencia Landbank Venture

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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 year ended December 31, 2021, the Valencia Landbank Venture took assignment of certain purchase and sale agreements and purchased land from the Company for $ 42.0 million (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.

At December 31, 2024 and 2023, the Company’s investment in the Valencia Landbank Venture was $ 0.7 million and $ 1.2 million, respectively.

During the years ended December 31, 2023 and 2022, the Company recognized equity in earnings of $ 0.6 million and $ 1.2 million, respectively, from the Valencia Landbank Venture, and during the year ended December 31, 2021, the Company recognized equity in loss of $ 0.9 million.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized equity in earnings of $ 0.5 million, $ 0.6 million and $ 1.2 million, respectively, from the Valencia Landbank Venture.

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, 2024, the Holding Company and its wholly owned subsidiary owned approximately 62.6 % 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 37.4 % 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”).

The Holding Company consolidates the financial results of the Operating Company and its subsidiaries and records a noncontrolling interest for the remaining 37.4 % of the outstanding Class A Common Units of the Operating Company that are owned separately by affiliates of Lennar Corporation (“Lennar”), GFFP Holdings, LLC (“GFFP”), which in October 2024 acquired all of the interests previously owned by affiliates of Castlelake, L.P.

(“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.

In either situation, an equal number of that holder’s Class B common shares will automatically convert into Class A common shares, at a ratio of 0.0003 Class A common shares for each Class B common share.

This exchange right is currently exercisable by all holders of outstanding Class A Common Units of the Operating Company.

Other than GFFP, which is subject to the 12 month holding period, this exchange right is currently exercisable by all holders of outstanding Class A Common Units of the Operating Company.

With each exchange of Class A Common Units of the Operating Company for Class A common shares, the Holding Company’s percentage ownership interest in the Operating Company and its share of the Operating Company’s cash distributions and profits and losses will increase.

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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 Lennar and Castlelake.

All of the outstanding Class A units are owned by Lennar and GFFP, which in October 2024 acquired all of the interests previously owned by 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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Holders of Class A units of the San Francisco Venture can redeem their units at any time and receive Class A Common Units of the Operating Company 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).

If a holder requests a redemption of Class A units of the San Francisco Venture that would result in the Holding Company’s ownership of the Operating Company falling below 50.1 %, the Holding Company has the option of satisfying the redemption with Class A common shares instead.

If a holder requests a redemption of Class A units of the San Francisco Venture that would result in the Holding Company’s ownership of the Operating Company falling below 50.1 %, the

Holding Company has the option of satisfying the redemption with Class A common shares instead.

The Company also has the option, at any time, to acquire outstanding Class A units of the San Francisco Venture in exchange for Class A Common Units of the Operating Company.

The 12 month holding period for any Class A Common Units of the Operating Company issued in exchange for Class A units of the San Francisco Venture is calculated by including the period that such Class A units of the San Francisco Venture were owned.

This exchange right is currently exercisable by all holders of outstanding Class A units of the San Francisco Venture.

Other than GFFP who is subject to the 12 month holding period, this exchange right is currently exercisable by all holders of outstanding Class A units of the San Francisco Venture.

Redeemable Noncontrolling Interest

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In connection with the issuance of the Class C units, the San Francisco Venture agreed to spend $ 25.0 million on the development of infrastructure and/or parking facilities at the Company’s Candlestick development.

At December 31, 2023 and 2022, $ 25.0 million of Class C units were outstanding and included in redeemable noncontrolling interest on the consolidated balance sheets.

At each of December 31, 2024 and 2023, $ 25.0 million of Class C units were outstanding and included in redeemable noncontrolling interest on the consolidated balance sheets.

CONSOLIDATED VARIABLE INTEREST ENTITY

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The Company is determined to have more-than-insignificant economic benefit from the San Francisco Venture because, excluding Class C units, the Operating Company can prevent or cause the San Francisco Venture from making distributions on its units, and the Operating Company would receive 99 % of any such distributions made (assuming no distributions had been paid on the Class A Common Units of the Operating Company).

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.

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, 2024, the San Francisco Venture had total combined assets of $ 1.42 billion, primarily comprised of $ 1.42 billion of inventories and $ 0.9 million in related party assets, and total combined liabilities of $ 68.4 million, including $ 62.1 million in related party liabilities.

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

The San Francisco Venture’s operating subsidiaries are not guarantors of the Company’s obligations, and the assets held by the San Francisco Venture may only be used as collateral for the San Francisco Venture’s obligations.

The San Francisco Venture’s operating subsidiaries are not guarantors of the Company’s obligations, and the assets held by the San Francisco Venture’s operating subsidiaries may only be used as collateral for the obligations of the operating subsidiaries.

The creditors of the San Francisco Venture do not have recourse to the assets of the Operating Company, as the VIE’s primary beneficiary, or of the Holding Company.

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The intangible asset relates to the contract value of the incentive compensation provisions of the A&R DMA with the Great Park Venture acquired in the Formation Transactions (see Note 9).

The intangible asset will be amortized over the expected contract period based on the pattern in which the economic benefits are expected to be received.

The intangible asset will be amortized over the contract period based on the pattern in which the economic benefits are expected to be received.

The carrying amount and accumulated amortization of the intangible asset as of December 31, 2024 and 2023 were as follows (in thousands):

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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 during the Initial Term (see Note 4).

In December 2022, the Company and the Great Park Venture entered into the First Renewal Term.

The compensation payable to the Company during the First Renewal Term continues to include a base fee and incentive compensation payments.

In December 2022, the Company and the Great Park Venture extended the A&R DMA through the First Renewal Term.

The compensation payable to the Company during the First Renewal Term continued to include a base fee and incentive compensation payments.

In September 2024, the Company and the Great Park Venture further extended the A&R DMA through the Second Renewal Term.

The compensation payable to the Company during the Second Renewal Term includes a revised annual fixed base fee beginning in 2025 and incentive compensation payments.

The incentive compensation provisions of the A&R DMA remain unchanged through the Second Renewal Term.

If the A&R DMA is not extended by mutual agreement of the parties beyond December 31, 2026 and the Company is no longer providing management services subsequent to December 31, 2026, the Company will continue to be entitled to 6.75 % of distributions paid thereafter.

During the year ended December 31, 2023, the Great Park Venture made a Legacy Incentive Compensation payment to the Company of $ 4.9 million and a Non-Legacy Incentive Compensation payment of $ 41.6 million.

Upon receiving the Legacy Incentive Compensation payment, the Company distributed the $ 4.9 million in proceeds to the holders of the Management Company's Class B interests.

During the year ended December 31, 2022, the Great Park Venture made a Legacy Incentive Compensation payment to the Company of $ 1.7 million and a Non-Legacy Incentive Compensation payment of $ 14.2 million.

Upon receiving the Legacy Incentive Compensation payment, the Company distributed the $ 1.7 million in proceeds to the holders of the Management Company's Class B interests.

During the year ended December 31, 2024, the Great Park Venture made Legacy Incentive Compensation payments to the Company of $ 1.8 million and Non-Legacy Incentive Compensation payments of $ 49.1 million.

Upon receiving the Legacy Incentive Compensation payments, the Company distributed the $ 1.8 million in proceeds to the holders of the Management Company’s Class B interests.

During the year ended December 31, 2023, the Great Park Venture made Legacy Incentive Compensation payments to the Company of $ 4.9 million and Non-Legacy Incentive Compensation payments of $ 41.6 million.

Upon receiving the Legacy Incentive Compensation payments, the Company distributed the $ 4.9 million in proceeds to the holders of the Management Company’s Class B interests.

As of December 31, 2024, the holders of the Management Company’s Class B interests had no further distribution rights.

For the years ended December 31, 2024, 2023 and 2022, the Company recognized revenue from management services of $ 96.0 million, $ 47.2 million and $ 31.0 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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Operating Lease Right-of-Use Asset and Operating Lease Liability

The Company leases corporate office space in the building owned by the Gateway Commercial Venture, the Company’s equity method investee, at the Five Point Gateway Campus (See Note 12).

Indirect Legacy Interest in Great Park 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.

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 interest 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.

In December 2024, the Gateway Commercial Venture, the Company’s equity method investee, sold its remaining interests in the Five Point Gateway Campus (See Note 4).

The Company leases corporate office space in the building previously owned by the

Gateway Commercial Venture at the Five Point Gateway Campus (See Note 12).

Upon completion of the asset sale, the Company’s lease agreement for the corporate office space at the Five Point Gateway Campus continued with the third party buyer.

Reimbursement Obligation

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The weighted average interest rate as of December 31, 2024 was 4.6 %.

Throughout 2023, the Company was notified by CPHP or its affiliates that certain reimbursements totaling $ 46.1 million that were previously expected to be paid in 2023 had been deferred to 2024.

Pursuant to a reimbursement deferral agreement, principal and interest payments under the related party reimbursement obligation are deferred through March 31, 2025.

Additionally, throughout 2024, the Company was notified by CPHP or its affiliates that certain payments that were previously expected to be paid by CPHP or its affiliates in 2024 had been deferred to 2025 and 2026.

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

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Concurrently, the Company also entered into an advisory agreement with Mr.

Haddad for an initial term of three years , which became effective on October 1, 2021.

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

At December 31, 2023 and 2022, included in accrued advisory fees in the table above is $ 3.6 million and $ 8.4 million, respectively, attributed to Mr.

Haddad for an initial term of three years , which became effective on October 1, 2021 and expired on September 30, 2024.

Haddad received an annual retainer of $ 5.0 million, and his unvested equity awards continued to vest in accordance with their terms, subject to continued service as an advisor or member of the Company’s Board of Directors.

At December 31, 2023, included in accrued advisory fees in the table above is $ 3.6 million attributed to the initial term of Mr.

Haddad’s advisory agreement (see Note 2).

In December 2024, the Company and Mr.

Haddad entered into a first amendment to the advisory agreement.

Under the first amendment, the advisory agreement has been extended for a term of four years from December 1, 2024 through December 1, 2028 (the “Extended Term”).

During the Extended Term, Mr.

Haddad will receive an annual retainer of $ 1.5 million and an annual performance bonus of $ 1.0 million that is contingent upon the occurrence of certain vesting events.

The Company incurred expense of $ 0.1 million related to the Extended Term for the year ended December 31, 2024, which is included in selling, general, and administrative expenses on the accompanying consolidated statement of operations.

Employment Transition Agreement and Advisory Agreement with Lynn Jochim

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Initial gross proceeds were $ 76.9 million, representing the base purchase price.

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

In 2021, the Company sold 123 homesites on approximately 13 acres at the Company’s Valencia community to the Valencia Landbank Venture (see Note 4).

Initial gross proceeds were $ 42.0 million, representing the base purchase price.

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 unaffiliated homebuilders will purchase lots from the Valencia Landbank Venture and construct and sell homes to the homebuying public.

Lennar retained the option to acquire these homesites in the future from the unaffiliated land banking entity and has historically exercised its options to acquire such homesites.

In 2023, the Company entered into a purchase and sale agreement with an unaffiliated land banking entity for the sale of 583 homesites on approximately 46 acres at the Company’s Valencia community.

Initial gross proceeds were $ 101.8 million, representing

the base purchase price, and the Company also recognized $ 2.5 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.

the base purchase price.

Lennar retained the option to acquire these homesites in the future from the unaffiliated land banking entity and has historically exercised its options to acquire such homesites.

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.

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

In each of the years ended December 31, 2024, 2023, and 2022, the Company recognized revenue from these management services of $ 0.4 million, which is included in management services—related party in the accompanying consolidated statements of operations.

In December 2024, the Company’s property management agreement with the Gateway Commercial Venture was terminated, and the Company is no longer managing any commercial operations at the Five Point Gateway Campus.

NOTES PAYABLE, NET

At December 31, 2023 and 2022, notes payable consisted of the following (in thousands):

7.875 % Senior Notes due 2025

At December 31, 2024 and 2023, notes payable, net consisted of the following (in thousands):

10.500 % initial rate New Senior Notes due 2028

$ 523,494 $ —

Unamortized debt issuance costs and discount

7.875 % Senior Notes due 2025

1,500 625,000

Unamortized premium 2,591 —

Unamortized debt issuance costs ( 1,848 ) ( 2,814 )

$ 525,737 $ 622,186

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Interest on the Senior Notes is payable on May 15 and November 15 of each year.

Interest incurred, including amortization of debt issuance costs, on the Senior Notes during each of the years ended December 31, 2023, 2022 and 2021 totaled $ 50.8 million.

All interest incurred was capitalized to inventories for all three years.

The Senior Notes are guaranteed, jointly and severally, by certain direct and indirect subsidiaries of the Operating Company and are redeemable at the option of the Issuers, in whole or in part, at par, plus accrued and unpaid interest.

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Interest on the New Senior Notes is payable semi-annually on each May 15 and November 15, commencing May 15, 2024.

The exchange was accounted for as a debt modification under ASC 470-50 as the terms of the New Senior Notes were not substantially different from the terms of the Senior Notes.

Under debt modification accounting, third party costs are expensed as incurred.

During the year ended December 31, 2024, the Company expensed $ 5.9 million in third party transaction and advisory costs incurred in connection with the exchange.

Debt issuance costs and premium are amortized over the term of the New Senior Notes using the effective interest method, and at December 31, 2024 the effective interest rate was 11.13 %.

The New Senior Notes are guaranteed, jointly and severally, by certain direct and indirect subsidiaries of the Operating Company and are redeemable at the option of the Issuers, in whole or in part, at a declining call premium as set forth in the indenture governing the New Senior Notes, plus accrued and unpaid interest.

Interest incurred, including amortization of debt issuance costs and premium, on the Senior Notes and New Senior Notes during the years ended December 31, 2024, 2023 and 2022 totaled $ 58.4 million, $ 50.8 million and $ 50.8 million, respectively.

All interest incurred was capitalized to inventories for all three years.

Revolving Credit Facility

The Operating Company has a $ 125.0 million unsecured revolving credit facility that matures in April 2026.

The Operating Company has a $ 125.0 million unsecured revolving credit facility, with $ 100.0 million of the commitments under the revolving credit facility maturing in July 2027 and the remaining $ 25.0 million commitment maturing in April 2026.

Any borrowings under the revolving credit agreement will bear interest at CME Term Secured Overnight Financing Rate 1 Month increased by 0.10 % plus a margin of either 2.25 % or 2.50 % based on the Company’s leverage ratio.

The revolving credit facility may be further extended to April 2027, subject to the satisfaction of certain conditions, including the approval of the administrative agent and lenders.

As of December 31, 2023, no borrowings or letters of credit were outstanding on the revolving credit facility.

The revolving credit facility includes an accordion feature that allows the Operating Company to increase the maximum aggregate commitments up to $ 150.0 million, subject to certain conditions, including the receipt of commitments from the lenders.

As of December 31, 2024, no borrowings or letters of credit were outstanding on the Operating Company’s revolving credit facility.

TAX RECEIVABLE AGREEMENT

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As of December 31, 2024, 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 five years to six 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 four years to five years , one of which includes a Company option to extend the lease for up to five years and one of which includes a landlord option to terminate the lease 18 months subsequent to written notice to the Company.

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

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Years Ending December 31, Rental

Thereafter 479

Total lease payments $ 12,667

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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.

Given the preliminary nature of the claims, the Company cannot predict the outcome of the Bayview Action.

The Company believes that it has meritorious defenses to the allegations in the Bayview Action and may have insurance and indemnification rights against third parties with respect to the claims.

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Cash paid for interest, all of which was capitalized to inventories $ 54,091 $ 51,278 $ 52,295

Cash paid for income taxes $ 3,473 $ — $ —

Noncash lease expense $ 2,788 $ 3,958 $ 4,632

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Adjustment to liability recognized under TRA $ 215 $ 140 $ ( 1,058 )

Senior Notes due 2025 exchanged for New Senior Notes due 2028 (see Note 10) $ 523,500 $ — $ —

Noncash lease expense is included within the depreciation and amortization adjustment to net income (loss) on the Company’s consolidated statements of cash flows.

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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 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, 2023, 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 at the historical basis of the venture.

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

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 and management services provided by the Company to the Great Park Venture.

The Company’s chief operating decision maker (“CODM”) is the Company’s President and Chief Executive Officer.

The CODM seeks to allocate resources to the Company’s segments with the objective of maximizing value by managing capital and

overhead spend with revenue opportunities.

Segment profit is a measure that the CODM uses in the process of monitoring the performance of each segment and making operating decisions to best achieve those objectives.

Segment operating results and reconciliations to the Company’s consolidated balances for the years ended December 31, 2024, 2023 and 2022 are as follows:

For the year ended December 31, 2024

(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)

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

Add investment in Great Park Venture Corporate and unallocated (2)

Total Consolidated

Revenues $ 140,844 $ 678 $ 708,761 $ 850,283 $ ( 612,806 ) $ — $ 449 $ 237,926

Cost of land sales 90,109 — 144,876 234,985 ( 144,876 ) — — 90,109

Management services — — 23,852 23,852 — — — 23,852

Selling, general, and administrative 10,356 4,883 11,033 26,272 ( 11,033 ) — 35,994 51,233

Management fees-related party — — 113,934 113,934 ( 113,934 ) — — —

Other segment items (3)

4,700 ( 69 ) ( 6,221 ) ( 1,590 ) 6,221 ( 119,787 ) 10,254 ( 104,902 )

Segment profit (loss) / Net income (loss) 35,679 ( 4,136 ) 421,287 452,830 ( 349,184 ) 119,787 ( 45,799 ) 177,634

Other segment disclosures:

Depreciation and amortization 38 — 16,233 16,271 — — 298 16,569

Interest income — 69 6,221 6,290 ( 6,221 ) — 10,789 10,858

Interest expense — — — 2,531 2,531 — ( 2,531 ) — — — — —

Segment profit (loss)/net profit (loss) 41,636 ( 3,313 ) 275,630 ( 3,454 ) 310,499 ( 250,610 ) 3,885 78,947 ( 2,914 ) — ( 26,091 ) 113,716

Other significant items:

Segment assets 914,583 1,424,819 670,906 3,010,308 ( 562,598 ) 151,647 477,060 3,076,417

Inventory assets and real estate related assets, net 855,574 1,357,905 391,352 76,719 2,681,550 ( 391,352 ) ( 76,719 ) — — — — 2,213,479

Inventory assets 876,172 1,421,908 274,738 2,572,818 ( 274,738 ) — — 2,298,080

Expenditures for long-lived assets (4)

111,493 64,003 26,346 201,842 ( 26,346 ) — — 175,496

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

After the sale of the Gateway Commercial Venture’s commercial operating assets in December 2024 (See Note 4), the Company’s commercial segment is no longer operating.

The Company has reported the equity in earnings from the Company’s investment in the Gateway Commercial Venture within the corporate and unallocated column in the table above.

(2) Corporate and unallocated activity is primarily comprised of corporate general and administrative expenses, interest income, income tax provision of $ 27.5 million, Senior Notes exchange costs and equity in earnings from the Gateway Commercial Venture.

Corporate and unallocated assets consist of cash and cash equivalents, investment in the Gateway Commercial Venture, leasehold improvements, ROU assets, prepaid expenses and deferred financing costs.

(3) Other segment items for each reportable segment include:

• Valencia—operating properties expenses, pension costs and equity in earnings from the Valencia Landbank Venture.

• San Francisco—interest income.

• Great Park—interest income.

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

For the year ended December 31, 2024, Valencia’s net expenditures include $ 10.1 million, San Francisco’s net expenditures include $ 1.1 million and Great Park Venture’s net expenditures include $ 167.3 million in inventory cost reimbursements and recoveries received.

For the year ended December 31, 2023

(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)

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

Add investment in Great Park Venture Corporate and unallocated (2)

Total Consolidated

Revenues $ 163,457 $ 654 $ 602,015 $ 766,126 $ ( 554,825 ) $ — $ 431 $ 211,732

Cost of land sales (3)

105,651 — 237,309 342,960 ( 237,309 ) — — 105,651

Management services — — 22,170 22,170 — — — 22,170

Selling, general, and administrative 11,577 3,989 10,927 26,493 ( 10,927 ) — 35,929 51,495

Management fees-related party — — 65,395 65,395 ( 65,395 ) — — —

Other segment items (4)

4,593 ( 22 ) ( 9,416 ) ( 4,845 ) 9,416 ( 78,947 ) ( 6,924 ) ( 81,300 )

Segment profit (loss) / Net income (loss) 41,636 ( 3,313 ) 275,630 313,953 ( 250,610 ) 78,947 ( 28,574 ) 113,716

Other segment disclosures:

Depreciation and amortization 3 — 14,987 14,990 — — 986 15,976

Interest income — 22 7,490 7,512 ( 7,490 ) — 7,208 7,230

Interest expense — — — 1,541 1,541 — ( 1,541 ) — — — — —

Segment profit (loss)/net profit (loss) ( 8,823 ) ( 3,396 ) 79,708 249 67,738 ( 68,954 ) 169 20,444 ( 127 ) — ( 54,044 ) ( 34,774 )

Other significant items:

Segment assets 895,983 1,360,036 710,665 2,966,684 ( 619,199 ) 213,786 408,017 2,969,288

Inventory assets and real estate related assets, net 927,929 1,311,196 605,893 82,797 2,927,815 ( 605,893 ) ( 82,797 ) — — — — 2,239,125

Inventory assets 855,574 1,357,905 391,352 2,604,831 ( 391,352 ) — — 2,213,479

Expenditures for long-lived assets (5)

34,066 46,708 21,004 101,778 ( 21,004 ) — — 80,774

After the sale of the Gateway Commercial Venture’s commercial operating assets in December 2024 (See Note 4), the Company’s commercial segment is no longer operating.

The Company has recast the segment presentation for the comparative prior period to report the equity in loss from the Company’s investment in the Gateway Commercial Venture within the corporate and unallocated column in the table above.

(2) Corporate and unallocated activity is primarily comprised of corporate general and administrative expenses, interest income, income tax benefit of $ 4.4 million, Senior Notes exchange costs and equity in loss from the Gateway Commercial Venture.

Corporate and unallocated assets consist of cash and cash equivalents, investment in the Gateway Commercial Venture, leasehold improvements, ROU assets, prepaid expenses and deferred financing costs.

(3) For the year ended December 31, 2023, included within cost of land sales at the Great Park segment is cost of home sales of $ 0.2 million.

(4) Other segment items for each reportable segment include:

• Valencia—operating properties expenses, pension costs, miscellaneous other income and equity in earnings from the Valencia Landbank Venture.

• San Francisco—interest income.

• Great Park—interest income and equity in earnings from the Great Park Landbank Venture.

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

For the year ended December 31, 2023, Valencia’s net expenditures include $ 64.1 million, San Francisco’s net expenditures include $ 1.1 million and Great Park Venture’s net expenditures include $ 89.6 million in inventory cost reimbursements and recoveries received.

For the year ended December 31, 2022

(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)

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

Add investment in Great Park Venture Corporate and unallocated (2)

Total Consolidated

Revenues $ 10,571 $ 690 $ 354,892 $ 366,153 $ ( 323,877 ) $ — $ 418 $ 42,694

Cost of land sales (3)

( 996 ) — 185,384 184,388 ( 185,384 ) — — ( 996 )

Management services — — 20,261 20,261 — — — 20,261

Selling, general, and administrative 13,602 4,087 18,127 35,816 ( 18,127 ) — 36,902 54,591

Management fees-related party — — 53,298 53,298 ( 53,298 ) — — —

Other segment items (4)

6,788 ( 1 ) ( 1,886 ) 4,901 1,886 ( 20,444 ) 17,269 3,612

Segment profit (loss) / Net income (loss) ( 8,823 ) ( 3,396 ) 79,708 67,489 ( 68,954 ) 20,444 ( 53,753 ) ( 34,774 )

Other segment disclosures:

Depreciation and amortization 45 77 11,149 11,271 — — 1,031 12,302

Interest income 1 1 1,532 1,534 ( 1,532 ) — 824 826

Interest expense — — — 1,235 1,235 — ( 1,235 ) — — — — —

Segment profit (loss)/net profit (loss) 54,360 ( 3,572 ) 64,134 1,284 116,206 ( 56,918 ) ( 878 ) 6,432 659 — ( 52,191 ) 13,310

Other significant items:

Segment assets 972,028 1,314,308 916,909 3,203,245 ( 799,174 ) 289,026 192,687 2,885,784

2 unchanged sentences

101,634 40,742 102,695 245,071 ( 102,695 ) — — 142,376

(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.

(3) Corporate and unallocated activity is primarily comprised of corporate general and administrative expenses, restructuring expenses and income taxes.

Corporate and unallocated assets consist of cash and cash equivalents, receivables, ROU assets, prepaid expenses and deferred financing costs.

After the sale of the Gateway Commercial Venture’s commercial operating assets in December 2024 (See Note 4), the Company’s commercial segment is no longer operating.

(2) Corporate and unallocated activity is primarily comprised of corporate general and administrative expenses, interest income, income tax benefit of $ 1.5 million, restructuring expenses and equity in loss from the Gateway Commercial Venture.

Corporate and unallocated assets consist of cash and cash equivalents, investment in the Gateway Commercial Venture, leasehold improvements, ROU assets, prepaid expenses and deferred financing costs.

(3) For the year ended December 31, 2022, included within cost of land sales at the Great Park segment is cost of home sales of $ 29.7 million.

(4) Other segment items for each reportable segment include:

• Valencia—operating properties expenses, interest income, pension costs and equity in earnings from the Valencia Landbank Venture.

• San Francisco—interest income.

• Great Park—interest income and equity in earnings from the Great Park Landbank Venture.

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

For the years ended December 31, 2023, 2022 and 2021, Valencia’s net expenditures include $ 64.1 million, $ 34.8 million and $ 4.5 million, respectively, San Francisco’s net expenditures include $ 1.1 million, $ 3.3 million and $ 0.7 million, respectively, and Great Park Venture’s net expenditures include $ 89.6 million, $ 43.7 million and $ 52.1 million, respectively, in inventory cost reimbursements and recoveries received.

For the year ended December 31, 2022, Valencia’s net expenditures include $ 34.8 million, San Francisco’s net expenditures include $ 3.3 million and Great Park Venture’s net expenditures include $ 43.7 million in inventory cost reimbursements and recoveries received.

A third-party home builder represented one of the Company’s major customers during the year ended December 31, 2024, accounting for approximately $ 31.2 million, or 13 %, of total consolidated revenues.

Revenues generated from this customer were from the sale of homesites and variable land sale consideration from profit participation and marketing fees in Valencia.

An unaffiliated land banking entity that acquired homesites in Valencia in 2024 represented another one of the Company’s major customers during the year ended December 31, 2024 and accounted for approximately $ 76.9 million, or 32 % of total consolidated revenues.

Lennar retained the option to acquire these homesites in the future from the unaffiliated land banking entity and has historically exercised its options to acquire such homesites.

Two third-party home builders represented major customers of the Company during the year ended December 31, 2023, accounting for approximately $ 39.4 million, or 19 %, and $ 21.7 million, or 10 %, of total consolidated revenues, respectively.

1 unchanged sentence

An unaffiliated land banking entity that acquired homesites in Valencia in 2023 represented one of the Company’s major customers during the year ended December 31, 2023 and accounted for approximately $ 101.8 million, or 48 %, of total consolidated revenues.

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

A related party of the Company represented one of the Company’s major customers during the year ended December 31, 2022, accounting for approximately $ 7.5 million, or 18 %, of total consolidated revenues.

Revenues generated from this customer primarily consisted of variable land sale consideration from profit participation in Valencia.

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

Two third-party home builders represented major customers 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.

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 represented one of the Company’s major customers during the year ended December 31, 2021 and accounted for approximately $ 76.5 million, or 34 % of total consolidated revenues.

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

Lennar retained the option to acquire these homesites in the future from the unaffiliated land banking entity and has historically exercised its options to acquire such homesites.

Lennar represented one of the Company’s major customers during the year ended December 31, 2022, accounting for approximately $ 7.5 million, or 18 %, of total consolidated revenues.

Revenues generated from Lennar primarily consisted of variable land sale consideration from profit participation in Valencia.

The Great Park Venture represented another of the Company’s major customers for the years ended December 31, 2024, 2023 and 2022, and accounted for approximately $ 96.0 million, or 40 %, $ 47.2 million, or 22 %, and $ 31.0 million, or 73 %, of total consolidated revenues, respectively.

14 unchanged sentences

The grant date fair value of awards with a market condition are determined using a Monte-Carlo valuation model.

The Monte Carlo model is based on random projections of share price

paths and must be repeated numerous times to achieve a probabilistic assessment.

The Monte Carlo model is based on random projections of share price paths and must be repeated numerous times to achieve a probabilistic assessment.

The model incorporates assumptions related to the expected volatility of our share price and risk free interest rates.

Expected volatility was 57.98 % and was calculated based on the historical volatility of the Company's common stock using daily share price returns over a three-year lookback period from the date of grant.

The risk-free interest rate was 4.44 % and was based on U.S.

For awards granted during the years ended December 31, 2024 and 2023 , expected volatility was 46.78 % and 57.98 %, respectively, and was calculated based on the historical volatility of the Company’s common stock using daily share price returns over a three-year lookback period from the date of grant, and t he risk-free interest rate was 4.15 % and 4.44 %, respectively, and was based on U.S.

Treasury yield curve rates with maturities consistent with the three-year vesting period.

9 unchanged sentences

Nonvested at December 31, 2022 2,166 $ 3.77

( 834 ) $ 2.96

Cancelled ( 906 ) $ 2.16

( 798 ) $ 5.50

Nonvested at December 31, 2023 4,409 $ 2.13

Cancelled ( 906 ) $ 2.16

( 890 ) $ 4.57

18 unchanged sentences

Fair value of plan assets—beginning of year $ 15,045 $ 15,661

Actual gain (loss) on plan assets 449 ( 3,676 )

Actual gain on plan assets 2,112 449

Employer contributions — 86

2 unchanged sentences

Funded status $ 1,344 $ ( 524 )

Amounts recognized in the consolidated balance sheet—liability $ ( 524 ) $ ( 1,579 )

Amounts recognized in the consolidated balance sheet—asset (liability) $ 1,344 $ ( 524 )

Amounts recognized in accumulated other comprehensive loss—net actuarial loss $ ( 1,881 ) $ ( 3,799 )

42 unchanged sentences

The Company’s funding policy is to contribute amounts sufficient to meet minimum requirements but not more than the maximum tax-deductible amount.

The Company expects to have a minimum required contribution of approximately $ 0.1 million in 2024 and expects future benefit payments to be paid as follows (in thousands):

The Company does not expect to have a minimum required contribution in 2025 and expects future benefit payments to be paid as follows (in thousands):

2030-2034 4,556

7 unchanged sentences

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

The benefit for income taxes for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands):

The (provision) benefit for income taxes for the years ended December 31, 2024, 2023 and 2022 was as follows (in thousands):

2024 2023 2022

Current income tax (expense) benefit:

Current income tax expense:

$ ( 48 ) $ ( 12 ) $ ( 14 )

( 3,051 ) ( 9 ) ( 7 )

Total current income tax (expense) benefit ( 21 ) ( 21 ) 745

Total current income tax expense ( 3,099 ) ( 21 ) ( 21 )

Deferred income tax (expense) benefit:

4 unchanged sentences

Expiration of unused loss carryforwards — ( 65 ) ( 66 )

Benefit for income taxes $ 4,418 $ 1,471 $ 325

(Provision) benefit for income taxes $ ( 27,462 ) $ 4,418 $ 1,471

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.

16 unchanged sentences

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.

Based upon the review of all positive and negative evidence, the Holding Company released the valuation allowance against the deferred tax assets during the year ended December 31, 2023.

Based upon the review of all positive and negative evidence, the Holding Company had no valuation allowance recorded as of December 31, 2024.

At December 31, 2024, the Holding Company had federal tax effected net operating loss (“NOL”) carryforwards totaling $ 120.4 million, and state tax effected NOL carryforwards, net of federal income tax benefit, totaling $ 39.9 million.

1 unchanged sentence

Federal NOLs incurred in 2018 and forward do not expire.

The Company also has federal tax credits of $ 0.6 million that begin to expire in 2042.

The Internal Revenue Code generally limits the availability of NOLs if an ownership change occurs within any three-year period under Section 382.

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.

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.

32 unchanged sentences

In the event of a net loss, the Company determined that both classes share in the Company’s losses, and they share in the losses using the same mechanism as the distributions.

The Company also has restricted share awards and performance restricted share awards (see Note 16) that have a right to non-forfeitable dividends while unvested and are contemplated as participating when the Company is in a net income position.

The Company also has restricted share awards that have a right to non-forfeitable dividends while unvested and are contemplated as participating when the Company is in a net income position.

These awards participate in distributions on a basis equivalent to other Class A common shares but do not participate in losses.

43 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 income (loss) attributable to the Company related to amortization of net actuarial losses were approximately $ 102,000 , $ 160,000 and $ 225,000 , net of taxes, and are included in miscellaneous other income on the accompanying consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021, respectively.

miscellaneous other (expense) income on the accompanying consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022, 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