What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-06 compared with 2025-02-24 · 138 added, 127 removed, 369 unchanged (42% of the section changed)

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(together, the “management company”), which provide development management services for the Great Park Neighborhoods;

The operating company consolidates and controls the management of all of these entities, except for the Great Park Venture and the Gateway Commercial Venture.

• Hearthstone Residential Holdings, LLC (the “Hearthstone Venture”), which is primarily engaged in providing asset management services to land banking funds (the “Hearthstone Funds”) that are primarily focused on acquiring, developing and managing residential lot option programs.

We acquired a controlling financial interest in the Hearthstone Venture on July 31, 2025.

The operating company consolidates and controls the management of all of these entities, except for the Great Park Venture, the Gateway Commercial Venture and the Hearthstone Funds.

The operating company owns a 37.5% percentage interest in the Great Park Venture and a 75% interest in the Gateway Commercial Venture and accounts for its interest in both using the equity method.

Please review “Structure and Formation of Our Company” and “Our Communities” under Part I, Item 1 of this report for a description of our organizational structure, each of our communities and our commercial venture.

The Hearthstone Venture generally has between a 1% and 3% interest in an individual Hearthstone Fund and accounts for such interest using the equity method.

Please review “Structure and Formation of Our Company,” “Our Communities” and “Hearthstone” under Part I, Item 1 of this report for a description of our organizational structure, each of our communities and the Hearthstone Venture.

Operational Highlights and Outlook

In 2024, we continued to focus on our three main priorities:

generating revenue and positive cash flow;

managing our capital spend to match near-term revenue opportunities;

and controlling our selling, general and administrative (“SG&A”) costs.

Our execution on these priorities allowed us to have a record year, and we remain well positioned to continue executing on land sales to our guest builders at the Great Park Neighborhoods and Valencia in 2025.

At Valencia, we closed the sale of 493 homesites on 54.4 acres for an aggregate purchase price of $137.9 million in 2024.

With a focus on managing capital spend to optimize the timing and amount of spending in relation to anticipated revenues, we were able to work with our homebuilder partners to shift some of the final land development costs to the builders, and we adjusted our sales pricing accordingly.

We will continue to look to minimize our capital spend between revenue opportunities.

Valencia guest homebuilders sold 348 homes during 2024, for a total of 1,599 homes sold since sales began in May 2021.

By the end of 2024, our guest homebuilders had sold out two of the three previously opened neighborhoods in our newest development area and opened five additional neighborhoods.

Homes in these neighborhoods consist of a wide mix of attached and detached single family homes that are attracting first time buyers along with trade-up buyers.

We expect to continue land sales at Valencia in the second half of 2025.

At the Great Park Neighborhoods, in which we have a 37.5% percentage interest and manage all aspects of the development cycle, the Great Park Venture recognized land sale revenue of $480.0 million from the sale of 559 homesites on 56.1 acres of land and $25.4 million from the sale of 12.8 acres of commercial land.

In 2025, we delivered another record year while continuing to execute on our core operating priorities and growth strategy.

Consolidated net income for 2025 was $183.5 million, exceeding our prior record of $177.6 million set in 2024.

We ended the year with $425.5 million of cash and cash equivalents and total liquidity of $643.0 million.

We also strengthened our balance sheet and capital structure during 2025, including refinancing our senior notes, reducing our outstanding debt by $75.0 million, and extending and expanding our revolving credit facility.

At Valencia, we closed the sale of 13.8 acres of commercial land for a purchase price of $42.5 million in 2025, representing our first significant industrial land sale at Valencia in over 15 years.

In 2025, we elected to delay residential land sales to optimize land values and align sales with market conditions, while our guest homebuilders sold 238 homes during the year, for a total of 1,837 homes sold since sales began in May 2021.

At the Great Park Neighborhoods, in which we have a 37.5% percentage interest and manage all aspects of the development cycle, the Great Park Venture recognized residential land sale revenue of $781.7 million from the sale of 920 homesites on 75.6 acres of land.

The Great Park Venture made distributions and related participating payments with proceeds from the land sales, of which we received approximately $319.9 million for both our ownership interests and incentive management fee compensation.

Home sales by guest homebuilders totaled 611 homes in 2025.

Our next neighborhood is comprised of 372 homes across five builder collections and is expected to open in phases throughout 2025.

We expect the Great Park Venture will close the sale of approximately 979 homesites across fourteen different programs during 2025.

Twelve of the fourteen programs consisting of 868 homesites and approximately 74 acres are under contract, and two of those programs consisting of 197 homesites on approximately 11 acres closed in February 2025.

We currently expect approximately 210 additional homesites on

approximately 18 acres to close during the first half of 2025, with the remaining 572 homesites on approximately 54 acres scheduled to close in the fourth quarter of 2025.

In San Francisco, we obtained final approval of our revised development plans in the fourth quarter of 2024, including the transfer of approximately two million square feet of commercial entitlements from The San Francisco Shipyard community to our Candlestick community.

We have commenced engineering for the next phase of infrastructure at Candlestick and expect to begin construction as early as the first quarter of 2026.

We believe we are well positioned to move forward with the implementation of growth initiatives to complement our three existing communities, which represents an expansion of the operating strategy we have been executing.

As part of our growth strategy, we may pursue acquisitions, investments, joint ventures or other growth opportunities.

Our next neighborhood is comprised of 513 homes across eight builder collections and is expected to open in phases throughout 2026.

In San Francisco, we are finalizing engineering for the next phase of infrastructure at Candlestick and expect to begin construction as early as the first half of 2026.

As part of our growth strategy, we expanded our platform and earnings profile through the acquisition and integration of the Hearthstone Venture, adding a complementary land bank management business that will provide us with an additional fee-based earnings stream.

The Hearthstone Venture contributed $11.8 million of management fee revenue and $3.9 million of net income to our consolidated results in 2025, and we believe it will considerably expand our relationships with institutional capital partners and builders and provide a scalable platform for fee-based earnings growth.

As we look at additional growth opportunities, we may pursue acquisitions, investments, joint ventures or other growth alternatives.

In particular, we may seek out capital partners to enter into joint ventures for the development of both our existing communities as well as new assets.

We believe these joint ventures offer the ability to de-risk and accelerate monetization of our existing communities and the opportunity to generate additional revenue streams from new assets and investments.

In addition, the joint venture strategy will allow us to move to an asset-lighter balance sheet model.

Although we may pursue a variety of potential acquisitions and investments, we believe a natural opportunity for us is to enter into joint ventures with third-party capital partners that will allow us to take a minority equity position while capitalizing on our expertise in land development and entitlement to generate management fees and incentive compensation.

We believe that we already have the core infrastructure and personnel required to pursue these opportunities.

We believe these joint ventures offer the ability to (i) de-risk and accelerate monetization of our existing communities, (ii) generate additional fee-based revenue streams from new assets and investments and (iii) move to an asset-lighter balance sheet model.

Factors That May Influence our Results of Operations

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As a result of many of the factors described above, we have historically experienced, and expect to continue to experience, variability in results of operations between comparable periods.

Following the sale of the Gateway Commercial Venture’s commercial operating assets in December 2024, our Commercial segment is no longer operating.

Our three remaining reportable operating segments include our three community segments, Valencia, San Francisco and Great Park:

Our reportable operating segments include our three community segments, Valencia, San Francisco and Great Park, and our Hearthstone segment:

• Our Valencia segment includes operating results related to the Valencia community and agricultural operations in Los Angeles and Ventura Counties, California.

Our investment in the Valencia Landbank Venture is also reported in the Valencia segment.

• Our San Francisco segment includes operating results for the Candlestick and The San Francisco Shipyard communities.

• Our Great Park segment includes operating results for the Great Park Neighborhoods community as well as development management services provided by the management company for the Great Park Venture.

• Our Hearthstone segment includes the operating results for the Hearthstone Venture, which owns and operates our residential asset management platform.

The operating results for the Hearthstone segment are presented from the acquisition date of July 31, 2025.

Results of Operations

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Interest income

Miscellaneous

17,254 10,858

Loss on debt extinguishment (1,819) —

Miscellaneous

Total other income

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 203,592 132,617

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

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

INCOME BEFORE INCOME TAX PROVISION 212,459 205,096

INCOME TAX PROVISION (28,925) (27,462)

NET INCOME 183,534 177,634

LESS NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 112,568 109,337

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ 68,297 $ 55,394

Revenues increased by $26.2 million, to $237.9 million for the year ended December 31, 2024, from $211.7 million for the year ended December 31, 2023.

The increase in revenues was primarily due to an increase in management services revenue at our Great Park segment in 2024, partially offset by lower land sales at our Valencia segment in 2024 compared to 2023.

NET INCOME ATTRIBUTABLE TO THE COMPANY $ 70,966 $ 68,297

Revenues decreased by $127.9 million, to $110.0 million for the year ended December 31, 2025, from $237.9 million for the year ended December 31, 2024.

The decrease in revenues was primarily due to lower land sales at our Valencia segment in 2025 compared to 2024 and a decrease in management services revenue at our Great Park segment in 2025, partially offset by management services revenue recognized at our new Hearthstone segment.

Cost of land sales.

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Cost of management services.

Cost of management services increased by $1.7 million, or 7.6%, to $23.9 million for the year ended December 31, 2024, from $22.2 million for the year ended December 31, 2023.

The increase was primarily due to an increase in intangible asset amortization expense at our Great Park segment.

Cost of management services decreased by $3.5 million, or 14.5%, to $20.4 million for the year ended December 31, 2025, from $23.9 million for the year ended December 31, 2024.

The decrease was primarily due to a decrease in intangible asset amortization expense at our Great Park segment, partially offset by the cost of management services recognized at our new Hearthstone segment.

Selling, general, and administrative.

SG&A expenses decreased by $0.3 million, or 0.5%, to $51.2 million for the year ended December 31, 2024, from $51.5 million for the year ended December 31, 2023.

The decrease was mainly attributable to a decrease in corporate general and administrative expenses.

SG&A expenses increased by $9.4 million, or 18.3%, to $60.6 million for the year ended December 31, 2025, from $51.2 million for the year ended December 31, 2024.

The increase was mainly attributable to costs associated with our acquisition of the Hearthstone Venture and an increase in share-based compensation expense.

Equity in earnings from unconsolidated entities.

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Equity in earnings from unconsolidated entities increased by $71.0 million, to $203.6 million for the year ended December 31, 2025, from $132.6 million for the year ended December 31, 2024.

Equity in earnings for the years ended December 31, 2024 and 2023 was primarily a result of recognizing our share of the net income of the Great Park Venture generated from land sales during each period and the net income of the Gateway Commercial Venture generated from the sale of its remaining interests in the Five Point Gateway Campus.

Equity in earnings for the years ended December 31, 2025 and 2024 was primarily a result of recognizing our share of the net income of the Great Park Venture generated from land sales during each period and additionally for the year ended December 31, 2024 from the net income of the Gateway Commercial Venture for the sale of its remaining interests in the Five Point Gateway Campus.

Income taxes.

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Pre-tax income of $212.5 million for the year ended December 31, 2025 resulted in a tax provision of $28.9 million.

Pre-tax income of $109.3 million for the year ended December 31, 2023 resulted in a tax benefit of $4.4 million.

The tax benefit was primarily the result of the increase in net deferred tax assets exceeding the net increase in deferred tax liabilities including the $17.6 million release of our valuation allowance.

We assessed the realization of the net deferred tax asset and the need for a valuation allowance, based on positive and negative evidence, and determined that at December 31, 2023, it was more likely than not that such net deferred tax assets would be fully realized, and our valuation allowance was released.

Our effective tax rate for the year ended December 31, 2024 increased from the year ended December 31, 2023 due to the release of the valuation allowance in 2023, net of changes in permanent differences, including executive compensation subject to limitations.

Pre-tax income of $205.1 million for the year ended December 31, 2024 resulted in a tax provision of $27.5 million.

We assessed the realization of the net deferred tax asset and the need for a valuation allowance, based on positive and negative evidence, and determined that at December 31, 2025, it was more likely than not that such net deferred tax asset would be realizable, and we had no valuation allowance recorded.

Our effective tax rate for the year ended December 31, 2025 was substantially similar to our effective tax rate for the year ended December 31, 2024.

Net income attributable to noncontrolling interests.

Until exchanged for our Class A common shares or, at our election, cash, noncontrolling interests represent interests held by other partners in the operating company and other members of the San Francisco Venture.

Redeemable noncontrolling interests that contain features that may result in cash settlement include the interests held by other members in the Hearthstone Venture and its subsidiaries and Class C interests in the San Francisco Venture.

Net income attributable to the noncontrolling interests on the consolidated statement of operations represents the portion of earnings or losses attributable to the interests in our subsidiaries held by the noncontrolling interests.

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Year Ended December 31, 2025

Valencia San Francisco Great Park Total reportable segments

Valencia San Francisco Great Park Hearthstone Total reportable segments

Corporate and unallocated Total under management Removal of unconsolidated entities (1)

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Interest income — 25 7,354 24 7,403 17,205 24,608 (7,354) 17,254

Interest expense — — — — — — — —

Loss on extinguishment of debt — — — — — (1,819) (1,819) — (1,819)

Miscellaneous 820 — — — 820 — 820 — 820

Total other income (expense) (49) 69 6,221 6,241 4,861 11,102 (6,221) 4,881

Total other income 820 25 7,354 24 8,223 15,386 23,609 (7,354) 16,255

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 460 — — 397 857 1,446 2,303 201,289 203,592

SEGMENT PROFIT (LOSS)/INCOME BEFORE INCOME TAX PROVISION 35,679 (4,136) 421,287 452,830 (18,337) 434,493 (229,397) 205,096

SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION (2,247) (4,711) 625,933 3,882 622,857 (27,208) 595,649 (383,190) 212,459

INCOME TAX PROVISION — — — — — (28,925) (28,925) — (28,925)

SEGMENT PROFIT (LOSS)/NET INCOME $ 35,679 $ (4,136) $ 421,287 $ 452,830 $ (45,799) $ 407,031 $ (229,397) $ 177,634

SEGMENT (LOSS) PROFIT/NET INCOME $ (2,247) $ (4,711) $ 625,933 $ 3,882 $ 622,857 $ (56,133) $ 566,724 $ (383,190) $ 183,534

(1) Represents the removal of the Great Park Venture operating results, which are included in the Great Park segment operating results at 100% of the venture’s historical basis but are not included in our consolidated results as we account for our 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, our commercial segment is no longer operating.

We have recast the segment presentation for the full year to report the equity in earnings from our investment in the Gateway Commercial Venture within the corporate and unallocated column in the table above.

The equity in earnings from our investment in the Gateway Commercial Venture is reported within the corporate and unallocated column in the table above.

(2) For the Great Park segment, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture as applicable.

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Land sales 90,109 — 144,876 234,985 — 234,985 (144,876) 90,109

Home sales — — 161 161 — 161 (161) —

Management services (2)

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Total costs and expenses 105,599 4,883 293,695 404,177 35,994 440,171 (269,843) 170,328

OTHER INCOME (EXPENSE):

OTHER (EXPENSE) INCOME:

Interest income — 69 6,221 6,290 10,789 17,079 (6,221) 10,858

Interest expense — — — — — — — —

Miscellaneous (49) — — (49) (5,928) (5,977) — (5,977)

Total other income (expense) 1,012 22 7,490 8,524 5,420 13,944 (7,490) 6,454

Total other (expense) income (49) 69 6,221 6,241 4,861 11,102 (6,221) 4,881

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 483 — — 483 12,347 12,830 119,787 132,617

SEGMENT PROFIT (LOSS)/INCOME BEFORE INCOME TAX BENEFIT 41,636 (3,313) 275,630 313,953 (32,992) 280,961 (171,663) 109,298

INCOME TAX BENEFIT — — — — 4,418 4,418 — 4,418

SEGMENT PROFIT (LOSS)/INCOME BEFORE INCOME TAX PROVISION 35,679 (4,136) 421,287 452,830 (18,337) 434,493 (229,397) 205,096

INCOME TAX PROVISION — — — — (27,462) (27,462) — (27,462)

SEGMENT PROFIT (LOSS)/NET INCOME $ 35,679 $ (4,136) $ 421,287 $ 452,830 $ (45,799) $ 407,031 $ (229,397) $ 177,634

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After the sale of the Gateway Commercial Venture’s commercial operating assets in December 2024, our commercial segment is no longer operating.

We have recast the segment presentation for the comparative prior period to report the equity in loss from our investment in the Gateway Commercial Venture within the corporate and unallocated column in the table above.

(2) For the Great Park segment, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture as applicable.

Valencia Segment

Our Valencia property consists of approximately 15,000 acres in northern Los Angeles County and can include up to approximately 21,500 homesites and approximately 11.5 million square feet of commercial space.

The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning.

Our Valencia property consists of approximately 15,000 acres in northern Los Angeles County and can currently include up to approximately 21,000 homesites and approximately 9.3 million square feet of commercial space.

The actual commercial square footage and number of homesites are subject to change as we further refine our development plans to optimize land values.

The current communities under development in Valencia complement the neighboring communities that were previously developed by us.

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Total land sales revenues decreased by $96.6 million to $42.5 million for the year ended December 31, 2025, from $139.1 million for the year ended December 31, 2024.

The decrease in total land sales revenues was attributable to the recognition of revenue from the sale of land entitled for an aggregate of 493 homesites on 54.4 acres during the year ended December 31, 2024 compared to the recognition of revenue from the sale of land entitled for an aggregate of 729 homesites on approximately 72 acres during the year ended December 31, 2023.

The aggregate base purchase price was $137.9 million and $162.4 million for the 2024 and 2023 sales, respectively.

In 2024 and 2023, 179 and 583 of the homesites, respectively, were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity.

The decrease in total land sales revenues was attributable to the recognition of revenue from the sale of 13.8 acres of commercial land for $42.5 million during the year ended December 31, 2025 compared to the recognition of revenue from the sale of residential land entitled for an aggregate of 493 homesites on 54.4 acres during the year ended December 31, 2024.

The aggregate base purchase price was $137.9 million for the 2024 sales, and 179 of the homesites were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity.

Cost of land sales.

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Since this method requires us to estimate future development costs and the expected sales prices 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.

Selling, general, and administrative.

SG&A expenses decreased by $1.2 million, or 10.5%, to $10.4 million for the year ended December 31, 2024, from $11.6 million for the year ended December 31, 2023.

The decrease was mainly attributable to a decrease in community related selling and marketing expenses and a decrease in office lease expense.

Equity in earnings from unconsolidated entity.

Equity in earnings from the Valencia Landbank Venture of $0.5 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively, was primarily a result of recognition of our pro-rata share of profits from land sold by the Valencia Landbank Venture to third-party homebuilders.

San Francisco Segment

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Candlestick now has the potential to include up to approximately 2.8 million square feet of research and development and office space, approximately 7,200 homesites, and approximately 550,000 square feet of retail, hotel, entertainment and community uses.

We have commenced engineering for the next phase of infrastructure at Candlestick and expect to begin construction in early 2026.

We have commenced engineering for the next phase of infrastructure at Candlestick and expect to begin construction in the first half of 2026.

Our development at Candlestick and The San Francisco Shipyard is not subject to San Francisco’s Proposition M growth control measure, which imposes annual limitations on office development and is applicable to all other developers with projects in the city.

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Navy and other regulatory agencies to undertake additional sampling.

As part of the 2018 Congressional spending bill, the U.S.

Department of Defense allocated $36.0 million to help fund resampling efforts at The San Francisco Shipyard.

An additional $60.4 million to fund resampling efforts was approved as part of a 2019 military construction spending bill.

These activities have delayed the remaining land transfers from the U.S.

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Our development plans were designed with the flexibility to adjust for potential land transfer delays, and we have the ability to shift the phasing of our development activities to account for potential delays caused by U.S.

Navy retesting, but there can be no assurance that these matters and other related matters that may arise in the future will not materially impact our development plans.

Navy retesting, but there can be no assurance that these matters and other related matters that may arise in the future will not have further material impacts on our development plans.

We have been, and may in the future be, named as a defendant in lawsuits seeking damages and other relief arising out of alleged contamination at The San Francisco Shipyard and Tetra Tech’s alleged misrepresentations of related sampling work.

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Given the preliminary nature of the claims to date, we cannot predict the outcome of these matters.

Hearthstone Segment

We have a 75% controlling financial interest in the Hearthstone Venture, which operates our residential asset management platform providing capital solutions to the U.S.

homebuilding industry, primarily through land banking.

The Hearthstone Venture’s operations include managing funds that acquire fully entitled residential land parcels and enter into option and development agreements with U.S.

homebuilders.

The funds then engage the homebuilders to complete the horizontal development of the land, after which the homebuilders acquire the fully developed homesites from the funds pursuant to the option agreements.

The Hearthstone Venture manages these lot option programs across multiple U.S.

markets, working with capital partners consisting of state employee pension plans and institutional and private equity.

The Hearthstone Venture sources projects mainly from large U.S.

publicly-traded homebuilders.

The Hearthstone Venture receives asset management fees and under some arrangements may also receive performance fees upon achievement of stipulated investor returns.

We completed our acquisition of the Hearthstone Venture on July 31, 2025.

As of December 31, 2025, the Hearthstone Venture had $3.4 billion in assets under management, which consisted of 30,647 lots with 13 separate homebuilders across 16 states.

Great Park Segment

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We have a controlling interest in the management company, an entity which performs development management services at Great Park Neighborhoods.

We do not include the Great Park Venture as a consolidated subsidiary in our consolidated financial statements.

We do not include the Great Park Venture as a consolidated subsidiary in our consolidated

financial statements.

However, because of the relationship between the management company and the Great Park Venture, we assess our investment in the Great Park Venture based on the financial information for the Great Park Venture in its entirety, and not just our equity interest in it.

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The actual commercial square footage and number of homesites are subject to change based on ultimate use and land planning.

The Great Park Venture sold the first homesites in April 2013 and, as of December 31, 2024, had sold 8,683 homesites (including 853 affordable homesites) and 166 acres of commercial land, including the Five Point Gateway Campus, allowing for development of up to approximately 3.6 million square feet of commercial office and research and development space for aggregate consideration of approximately $4.4 billion.

Interests in the Great Park Venture were previously either “percentage interests” or “legacy interests.” Holders of the legacy interests 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.

The holders of percentage interests were entitled to all other distributions.

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.

The Great Park Venture sold the first homesites in April 2013 and, as of December 31, 2025, had sold 9,603 homesites (including 853 affordable homesites) and 166 acres of commercial land, including the Five Point Gateway Campus, allowing for development of up to approximately 3.6 million square feet of commercial office, industrial and research and development space for aggregate consideration of approximately $5.2 billion.

During the year ended December 31, 2025, the Great Park Venture made aggregate distributions of $672.0 million to holders of percentage interests.

The Company received $252.0 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 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.

Land sales and related party land sales revenues.

Land sales and related party land sales revenues increased by $212.9 million to $825.7 million for the year ended December 31, 2025, from $612.8 million for the year ended December 31, 2024.

In 2025, the Great Park Venture sold land entitled for an aggregate of 920 homesites on 75.6 acres at the Great Park Neighborhoods.

In 2024, the Great Park Venture sold 12.8 acres of commercial land planned for retail uses and land entitled for an aggregate of 559 homesites on 56.1 acres at the Great Park Neighborhoods.

In 2023, the Great Park Venture closed 38 acres of commercial land and land entitled for an aggregate of 798 homesites on approximately 84 acres.

For the 2025 land sales, the base purchase price was $781.7 million, and 308 of the homesites were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity.

The base purchase price was $25.4 million and $480.0 million for the 2024 commercial land sales and homesite land sales, respectively.

Revenue recognized of $357.8 million for the 2023 homesite land sales consisted of $214.7 million paid at closing, plus $143.1 million in estimated variable consideration from future price participation payments expected to be received when homes are sold to homebuyers.

The 798 homesites were sold to an unaffiliated land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity.

The aggregate purchase price was $174.2 million for the 2023 commercial land sales.

During the years ended December 31, 2025 and 2024, revenues also included changes in estimates of variable consideration, including profit participation and price participation, from those amounts previously recorded by the Great Park Venture.

During the years ended December 31, 2024 and 2023, the Great Park Venture recognized $39.8 million and $21.0 million, respectively, in profit participation revenues, primarily from amounts received from homebuilders.

During the year ended December 31, 2024, the Great Park Venture recognized additional estimated variable consideration of $66.6 million related to a residential land sale that closed in 2023 for future price participation payments expected to be received when homes are sold to homebuyers.

The increase in estimated variable consideration reflects updated pricing and absorption assumptions used to calculate expected price participation payments.

During the years ended December 31, 2025 and 2024, the Great Park Venture recognized $24.5 million and $39.8 million, respectively, in profit participation revenues related to prior year residential land sales.

During the years ended December 31, 2025 and 2024, the Great Park Venture recognized additional estimated variable consideration of $19.4 million and $66.6 million, respectively, for price participation related to a residential land sale that closed in 2023.

As of December 31, 2025, substantially all of the homes related to the 2023 land sale have been sold to homebuyers.

Cost of land sales.

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Management fee revenues are revenues generated by the management company from development management services provided to the Great Park Venture.

The increase in management services related party revenue was mainly attributable to an increase in variable incentive compensation revenue recognized during the year ended December 31, 2024.

For the years ended December 31, 2024 and 2023, we recognized $84.0 million and $35.2 million, respectively, attributable to variable incentive compensation, mostly as a result of changes in estimates of the amount of variable incentive compensation we expect to receive.

The decrease in management services related party revenue was mainly attributable to a decrease in variable incentive compensation revenue recognized during the year ended December 31, 2025, partially offset by the increase in the annual fixed base fee that began in 2025.

In September 2024, the development management agreement with the Great Park Venture was renewed by mutual agreement of the parties through December 31, 2026 (the “second renewal term”).

In connection with the extension under the second renewal term, the annual fixed base fee was increased to $13.5 million beginning in 2025, which reflects an increase from the $12.0 million annual fixed base fee for 2024.

The incentive compensation provisions of the development management agreement remain unchanged through the second renewal term.

For the years ended December 31, 2025 and 2024, we recognized $40.0 million and $84.0 million, respectively, attributable to variable incentive compensation, which reflects changes in the estimate of the amount of incentive compensation we expected to be entitled to receive and changes in constraints on the estimate.

Management services costs and expenses.

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Corporate and non-project team salaries and overhead incurred by us are not allocated to management services costs and expenses or to our reportable segments and are reported in SG&A costs in the consolidated statement of operations.

During the year ended December 31, 2024, management services costs and expenses increased by $1.7 million, or 7.6%, to $23.9 million, from $22.2 million for the year ended December 31, 2023.

The increase was mainly attributable to an increase in intangible asset amortization expense recognized during the year ended December 31, 2024.

During the year ended December 31, 2025, management services costs and expenses decreased by $11.8 million, or 49.4%, to $12.1 million, from $23.9 million for the year ended December 31, 2024.

The decrease was mainly attributable to a decrease in intangible asset amortization expense recognized during the year ended December 31, 2025.

Selling, general, and administrative.

SG&A expenses decreased by $1.4 million, or 12.8%, to $9.6 million for the year ended December 31, 2025, from $11.0 million for the year ended December 31, 2024.

The decrease was mainly attributable to a decrease in marketing expenses and property maintenance expenses.

Management fees—related party.

Management fees increased by $48.5 million, to $113.9 million for the year ended December 31, 2024, from $65.4 million for the year ended December 31, 2023.

Management fees decreased by $70.9 million, to $43.0 million for the year ended December 31, 2025, from $113.9 million for the year ended December 31, 2024.

Management fees incurred by the Great Park Venture were comprised of base development management fees and incentive compensation fees.

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When estimates of the amount of incentive compensation probable of being paid change, the Great Park Venture records a cumulative adjustment in the period in which the estimate changes.

The increase in management fees — related party was mainly attributable to an increased estimate of the amount of incentive compensation fees probable of being paid.

The decrease in management fees — related party was mainly attributable to changes in the estimate of the amount of incentive compensation fees probable of being paid that resulted in a cumulative adjustment recognized during the year ended December 31, 2025 that was lower than the cumulative adjustment recognized during the year ended December 31, 2024, partially offset by the increase in base development management fees that began in 2025.

The Great Park Venture recognized expense of $29.5 million and $101.9 million for incentive compensation fees during the years ended December 31, 2025 and 2024, respectively.

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Our short-term cash needs consist primarily of general and administrative expenses and development expenditures at Valencia and the Candlestick and The San Francisco Shipyard communities, interest payments under our senior notes and payments under a related party reimbursement obligation.

In January 2024, we exchanged $623.5 million of our existing 7.875% senior notes due November 2025 for $100.0 million in cash and $523.5 million in new 10.500% initial rate senior notes due January 2028.

The new senior notes due January 2028 will accrue interest at a rate of 11.000% starting in November 2025 and at a rate of 12.000% starting from November 2026 through the maturity date.

In 2025, aggregate interest payments of $55.1 million on our existing and new senior notes are due, and $57.5 million in principal payments are due under our related party reimbursement obligation.

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

In September 2025, we issued $450.0 million in new 8.000% senior notes due October 2030.

We used the net proceeds from the issuance of the new senior notes, together with cash on hand, to (i) purchase $471.5 million in principal amount of the $523.5 million outstanding 10.500% initial rate senior notes due 2028 (“2028 Notes”) that were validly tendered pursuant to a cash tender offer (the “Concurrent Tender Offer”) and (ii) redeem $52.0 million in principal amount of the remaining 2028 Notes that were not purchased in the Concurrent Tender Offer by concurrently delivering and irrevocably depositing amounts with the indenture trustee (the “Trust Amounts”) sufficient to fund the payment of the principal amount and interest due on November 15, 2025, the redemption date.

After the deposit of such Trust Amounts, the indenture governing the 2028 Notes was satisfied and discharged in accordance with its terms.

Pursuant to a reimbursement deferral agreement, principal and interest payments under our related party reimbursement obligation were deferred through December 31, 2025 and resumed in January 2026.

Reimbursement payments may be further deferred when our related party receives an extension on the maturity date of the associated EB-5 loan liability.

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We manage our development activities and expenditures to coincide with projected demand for our residential and commercial land with the objective of maintaining an appropriate level of liquidity.

We expect to meet our cash requirements for at least the next 12 months with available cash, distributions from our unconsolidated entities, collection of management fees under our development management agreement with the Great Park Venture, proceeds from land sales, reimbursements from public financing and access to financing sources, including our revolving credit facility.

At Hearthstone, we expect to make co-investment contributions to our existing and new lot option funds as we invest in growing the Hearthstone management platform over the next 12 months.

We typically contribute a 1% co-investment alongside our capital partners.

We expect to meet our cash requirements for at least the next 12 months with available cash, distributions from our unconsolidated entities, collection of development management fees, including incentive compensation, under our development management agreement with the Great Park Venture, asset management fees at the

Hearthstone Venture, proceeds from land sales, reimbursements from public financing and access to financing sources, including our revolving credit facility.

Our long-term cash needs relate primarily to future horizontal development expenditures and new investments and acquisitions, along with debt service and general and administrative expenses.

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Budgeted amounts are expected to be funded through a combination of available cash, cash flows from land sales at our communities and reimbursements from public financing, including community facilities districts, tax increment financing and local, state and federal grants.

Cash flows from our communities may occur in uneven

patterns as cash is primarily generated by land sales and reimbursements, which can occur at various points over the life cycle of our communities.

Cash flows from our communities may occur in uneven patterns as cash is primarily generated by land sales and reimbursements, which can occur at various points over the life cycle of our communities.

We currently expect to have sufficient capital to fund the horizontal development of our communities in accordance with our development plan and to pursue our growth strategies for several years.

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However, TRA payments associated with California state taxes may become payable between 2026 and 2028 as a result of the passage in June 2024 of California Senate Bill 167, which, in part, suspends the usage of California net operating loss deductions for tax years 2024 through 2026.

The majority of TRA payments, however, are not expected to begin until after 2028.

The majority of TRA payments, however, are not expected to begin for the next several years.

We are committed under various performance bonds and letters of credit (“LOCs”) to perform certain development activities and provide certain guarantees in the normal course of the entitlement and development process.

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As of December 31, 2025, no capacity under the revolving credit facility was used to support LOCs.

Several of the funds that the Hearthstone Venture manages utilize financing arrangements to partially fund the acquisition of land.

The debt is non-recourse to the Hearthstone Venture other than in the case of customary “bad act” exceptions or bankruptcy or insolvency events.

In 2004, our defined benefit pension plan was amended to cease future benefit accruals for services provided by participants of the plan and to close the plan to new participants.

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(2) Prior to our acquisition of the San Francisco Venture, certain subsidiaries of the San Francisco Venture entered into EB-5 loan agreements with lenders that are authorized by the United States Citizenship and Immigration Services to raise capital from foreign nationals who seek to obtain permanent residency in the United States.

Prior to our acquisition, related parties assumed the EB-5 loan liabilities, and the San Francisco Venture entered into reimbursement agreements pursuant to which it agreed to

reimburse the related parties for a portion of the EB-5 loan liabilities and related interest.

Prior to our acquisition, related parties assumed the EB-5 loan liabilities, and the San Francisco Venture entered into reimbursement agreements pursuant to which it agreed to reimburse the related parties for a portion of the EB-5 loan liabilities and related interest.

The amounts set forth in the above table include interest based on the weighted average interest rate of 4.6%.

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

Pursuant to a reimbursement deferral agreement, principal and interest payments under our related party reimbursement obligation were deferred through December 31, 2025 and resumed in January 2026.

Reimbursement payments may be further deferred when the related parties receive an extension on the maturity date of the associated EB-5 loan liability.

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We also received incentive compensation payments of $68.0 million under our development management agreement with the Great Park Venture.

The payment is net of $1.8 million that we concurrently distributed to the holders of the management company’s Class B units.

As of December 31, 2024, the holders of the management company’s Class B units had no further distribution rights.

Additionally, we received total distributions of $181.9 million from the Great Park Venture, of which $119.8 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity and a distribution of $17.2 million from the Gateway Commercial Venture, of which $9.4 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.

Additionally, we received total distributions of $252.0 million from the Great Park Venture, of which $201.3 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity, a distribution of $1.6 million from the Gateway Commercial Venture, of which $1.4 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity and total distributions of $5.2 million mostly from funds managed by the Hearthstone Venture, of which $0.6 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.

During the year ended December 31, 2024, we received $137.9 million from the sale of land at our Valencia segment.

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The payment is net of $1.8 million that we concurrently distributed to the holders of the management company’s Class B units.

Additionally, we received total distributions of $154.2 million from the Great Park Venture, of which $78.2 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.

Major components of operating cash used in both periods consisted of our continued investment in horizontal development at our communities and SG&A costs.

As of December 31, 2024, the holders of the management company’s Class B units had no further distribution rights.

Additionally, we received total distributions of $181.9 million from the Great Park Venture, of which $119.8 million is reflected as a

return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity and a distribution of $17.2 million from the Gateway Commercial Venture, of which $9.4 million is reflected as a return on our investment (operating activity) in the statement of cash flows, with the balance reflected as an investing activity.

Major components of operating cash used in both periods consisted of our continued investment in horizontal development at our communities, SG&A costs and management services costs.

Our horizontal development costs for the years ended December 31, 2025 and 2024 were partially offset by $1.2 million and $9.1 million in public financing reimbursements for public infrastructure development costs we incurred in Valencia, respectively.

During the year ended December 31, 2025, we paid $47.4 million for interest due on our existing 7.875% senior notes due November 2025 and 10.500% initial rate senior notes due January 2028.

During the year ended December 31, 2024, we paid $8.3 million for interest accrued through the settlement date on our existing 7.875% senior notes due November 2025 that were exchanged in January 2024.

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Included in operating cash outflows during the year ended December 31, 2024 is $7.7 million in third party transaction and advisory costs incurred in connection with the senior notes exchange.

During the year ended December 31, 2024, an additional $45.8 million was paid for interest due on our existing 7.875% senior notes and new 10.500% initial rate senior notes.

During the year ended December 31, 2023, $49.2 million was paid for interest due on our existing 7.875% senior notes.

Our horizontal development costs for the year ended December 31, 2024 were partially offset by $9.1 million in public financing reimbursements for public infrastructure development costs we incurred in Valencia.

Our horizontal development costs for the year ended December 31, 2023 were partially offset by $18.9 million in public financing reimbursements for public infrastructure development costs we incurred in Valencia and a nonrecurring $44.5 million recovery from a third party related to certain project development costs in Valencia .

During the year ended December 31, 2024, an additional $45.8 million was paid for interest due on our existing 7.875% senior notes and 10.500% initial rate senior notes.

Cash Flows from Investing Activities.

Net cash provided by investing activities was $70.1 million for the year ended December 31, 2024, compared to the net cash provided by investing activities of $77.1 million for the year ended December 31, 2023.

During the year ended December 31, 2024, we received total distributions of $181.9 million from the Great Park Venture, of which $62.1 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity and a distribution of $17.2 million from the Gateway Commercial Venture, of which $7.8 million is

reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity.

Additionally, we received total distributions of $1.0 million from the Valencia Landbank Venture, which is reflected as a return of our investment (investing activity) in the statement of cash flows.

During the year ended December 31, 2023, we received total distributions of $154.2 million from the Great Park Venture, of which $76.0 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity.

Additionally, we received total distributions of $1.1 million from the Valencia Landbank Venture, which is reflected as a return of our investment (investing activity) in the statement of cash flows.

Net cash used in investing activities was $6.6 million for the year ended December 31, 2025, compared to the net cash provided by investing activities of $70.1 million for the year ended December 31, 2024.

During the year ended December 31, 2025, we received total distributions of $252.0 million from the Great Park Venture, of which $50.7 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity, a distribution of $1.6 million from the Gateway Commercial Venture, of which $0.2 million is reflected as a return of our investment (investing activity) in the statement of cash flows, with the balance reflected as an operating activity and total distributions of $5.2 million mostly from funds managed by the Hearthstone Venture, of which $4.6 million is reflected as a return of our investment (investing activity) in the statement of cash flows.

During the year ended December 31, 2025, we paid $55.3 million, net of cash acquired, to acquire a 75% controlling financial interest in the Hearthstone Venture, and subsequent to the acquisition, we co-invested $6.5 million to funds managed by the Hearthstone Venture.

Additionally, we received total distributions of $1.0 million from other equity method investments, which is reflected as a return of our investment (investing activity) in the statement of cash flows.

Cash Flows from Financing Activities.

Net cash used in financing activities was $104.0 million for the year ended December 31, 2025, compared to net cash used in financing activities of $109.0 million for the year ended December 31, 2024.

During the year ended December 31, 2025, we issued $450.0 million in new 8.000% senior notes due October 2030 and paid debt issuance costs of $6.7 million.

Using the net proceeds of the issuance, together with cash on hand, we used $528.6 million to either purchase or redeem and satisfy and discharge all of the existing 10.500% initial rate senior notes.

Additionally, during the year ended December 31, 2025, we repaid the remaining $1.5 million of our existing 7.875% senior notes due November 2025 and paid $1.8 million transaction costs in connection with the extension and expansion of our revolving credit facility.

During the year ended December 31, 2024, we repaid $100.0 million of our existing 7.875% senior notes due November 2025 in connection with our exchange transaction.

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The tax distribution is treated as an advance distribution under the LPA.

We also made payments of $4.3 million to reduce our related party reimbursement obligation during the year ended December 31, 2023.

We used $2.4 million and $0.8 million during the years ended December 31, 2025 and 2024, respectively, to net settle certain share-based compensation awards with employees for tax withholding purposes.

Changes in Capital Structure

During the year ended December 31, 2024, our 62.6% ownership percentage in the operating company increased slightly primarily due to our issuance of shared-based compensation in the form of 0.2 million restricted Class A common shares and 0.3 million restricted share units that were settled for Class A common shares, partially offset by our reacquisition of approximately 0.3 million restricted Class A common shares from employees for income tax withholding purposes upon vesting.

During the year ended December 31, 2025, our 65.0% ownership percentage in the operating company increased primarily due to a unit holder’s exchange of 3.1 million Class A units of the operating company into 1.1 million Class A common shares, our issuance of share-based compensation in the form of 0.1 million restricted Class A common shares and 0.9 million restricted share units that were settled for Class A common shares, partially offset by our reacquisition of approximately 0.4 million restricted Class A common shares from employees for income tax withholding purposes upon vesting.

The issuances and settlements resulted in the operating company issuing to us an equal number of Class A units of the operating company or retiring an equal number of Class A units of the operating company that we previously held.

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The conversions will occur when the holders of Class A units of the operating company, including Class A units that have been issued upon redemption of Class A units of the San Francisco Venture, are redeemed for our Class A common shares or cash, at our election.

On October 13, 2025, Emile Haddad exchanged 3,137,134 Class A units of the operating company, and in exchange therefor, received 1,109,172 Class A common shares of the holding company.

The remaining 2,027,962 Class A units tendered for redemption by Mr.

Haddad were returned to the operating company in accordance with the dilution provisions of the operating company's partnership agreement and were canceled.

Significant Related Party and Third-Party Revenues

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We also provide management services to the Great Park Venture pursuant to a development management agreement.

For the years ended December 31, 2024 and 2023, we recognized $96.0 million and $47.2 million, respectively, of revenue from management

services provided to the Great Park Venture.

For the years ended December 31, 2025 and 2024, we recognized $53.5 million and $96.0 million, respectively, of revenue from management services provided to the Great Park Venture.

Other than the Great Park Venture, no related party customer accounted for more than 10% of our revenue during the years ended December 31, 2025 and 2024.

In addition to the related party revenues, during the year ended December 31, 2025, we recognized $42.5 million of revenue from a third-party commercial builder, which primarily consisted of commercial land sold to the third-party commercial builder and accounted for more than 10% of total consolidated revenues.

Other than the third-party commercial builder, no third-party customer accounted for more than 10% of our revenue during the year ended December 31, 2025.

In addition to the related party revenues, during the year ended December 31, 2024, we recognized an aggregate of $31.2 million of revenue from a third-party home builder, which primarily consisted of homesites sold to the third-party home builder and accounted for more than 10% of total consolidated revenues.

Other than the third-party home builder and the unaffiliated land bank entity, no third-party customer accounted for more than 10% of our revenue during the year ended December 31, 2024.

In addition to the related party revenues, during the year ended December 31, 2023, we recognized an aggregate of $21.7 million and $39.4 million of revenue from two third-party home builders, respectively, which primarily consisted of homesites sold to the two third-party home builders and which separately accounted for more than 10% of total consolidated revenues.

Other than the third-party home builders and the unaffiliated land bank entity, no third-party customer accounted for more than 10% of our revenue during the year ended December 31, 2023.

Critical Accounting Estimates

Critical accounting estimates are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments.

Our critical accounting estimates are discussed below.

Our critical accounting estimates

are discussed below.

For a summary of our significant accounting policies, see Note 2 to the notes to the consolidated financial statements in Item 8, Part II of this report.

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We review for impairment our long-lived assets, including our Valencia and San Francisco communities, when events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable.

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.

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.

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 our communities and surrounding areas, political and societal events that may negatively affect the local economy, and changes in development strategies, such as the contribution of an asset into a joint venture, that would result in acceleration of the realization of the value of such assets.

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Changes in these estimates can have a significant impact on the undiscounted cash flows that are used to test recoverability.

Business Combinations

We account for businesses we acquire in accordance with Accounting Standards Codification Topic 805, Business Combinations .

This methodology requires that assets acquired, liabilities assumed, and noncontrolling interests of the acquiree be recorded at their respective fair values on the date of acquisition.

Goodwill is recorded with regard to acquisitions of businesses when the purchase price of the business plus the fair value of noncontrolling interests of the acquiree exceeds the value of the identifiable assets acquired and liabilities assumed.

The estimated fair value of the acquired assets, assumed liabilities, and noncontrolling interests requires significant judgments by management and are determined primarily by a discounted cash flow model.

In forming such estimates, we make assumptions about revenue growth rates, including assets under management, margins and customer attrition.

In determining these assumptions, we utilize historical trends and data from the acquiree in addition to external market studies and trends, which generally include analysis of job and wage growth, mortgage interest rates and home prices.

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

We believe that the accounting related to business combinations is a critical accounting estimate because our determination of fair value uses significant judgments and estimates, including projected cash flows and selected discount rates.

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 7. Management’s Discussion and Analysis