FPH 10-K & 10-Q changes, risk factors and insider trading

In addition, historically, California has been subject to natural disasters, including earthquakes, droughts, floods, wildfires and severe weather, and coastal locations may be particularly susceptible to climate stress events or adverse localized effects of climate change, such as sea-level rise and increased storm frequency or intensity. We therefore have greater exposure to the risks of natural disasters, which can lead to power shortages, shortages of labor and materials, increased costs, and delays in development. If our insurance does not fully cover losses resulting from these events, our financial condition and results of operations could be adversely affected. The occurrence of natural disasters may also negatively impact the availability of homeowners insurance and the demand for new homes in affected areas. For example, the wildfires that have occurred in recent years in California, along with the increasing risk of future wildfires, have resulted in increased homeowners’ insurance costs and the unavailability of private homeowners’ insurance in certain high-risk areas. We expect these issues may be exacerbated by the recent wildfires in Southern California. Additionally, if drought conditions occur within California, state and local authorities could enact restrictions or moratoriums on building permits and access to utilities, such as water and sewer taps, which could delay or prevent our construction activities, as well as the construction of homes and commercial buildings, even when we have obtained water rights for our communities.

We are highly dependent on our relationships with homebuilders to purchase lots at our residential communities.communities and to use the Hearthstone Venture for their land banking needs. Our business will be adversely affected if homebuilders do not view our residential communities as desirable locations for homebuilding operations.operations or do not use the Hearthstone Venture for land banking services. Also, some homebuilders may be unwilling or unable to either close on previously committed land parcel purchases or exercise their land purchase options with Hearthstone Venture-managed funds due to factors outside of our control. As a result, we may sell fewer land parcels or the Hearthstone Venture-managed funds may acquire fewer residential projects, and we may have lower revenues from sales,sales and Hearthstone Venture-generated management fees, which could adversely affect our financial condition and results of operations.

Inflation can adversely affect us by increasing costs of materials and labor. In addition, inflation is often accompanied by higher interest rates, which could have a negative impact on demand for homes and the cost of debt financing. In a highly inflationary environment, depending on industry and other economic conditions, we may be unable to raise prices enough to keep up with the rate of inflation, which would reduce our profit margins. While inflation has moderated somewhat over the last year,couple of years, interest rates and mortgage rates remain elevated relative to recentprior rate levels, which can decrease demand by homebuyers for new homes and soften demand by our guest builders for home sites.

Our growth strategy involves new potential joint ventures, acquisitions, investments and other transactions. For example, we acquired the Hearthstone Venture in July 2025, and we are currently integrating its operations into our business. These and other transactions will take time to execute and may create additional costs, expose us to additional legal and compliance risks, cause disruption to our current business and impact our operating results. Our ability to effectively pursue and manage anticipated ventures, acquisitions and investments may require significant capital and other expenditures, as well as allocation of valuable management resources, which may negatively impact our ongoing business. Acquisitions may result in additional valuation risks, including the risk of impairing goodwill. We recorded goodwill in connection with our acquisition of the assets and operations of the Hearthstone Venture in 2025. We assess goodwill for impairment each year, and more frequently if circumstances suggest an impairment may have occurred. If we are unable to successfully integrate an acquisition or there is a decline in the expectation of future performance, we may be required to recognize an impairment charge on our existing goodwill or goodwill acquired in a future acquisition. Our future financial performance and ability to execute on our growth strategies will depend, in part, on our ability to effectively integrate and manage the Hearthstone Venture and any future ventures, acquisitions or investments. There are no guarantees that we will be able to do so in an effective or timely manner, or at all.

Our communities are subject to numerous local, state, and federal laws and other statutes, ordinances, rules and regulations concerning zoning, development, building design, construction and similar matters that impose restrictive zoning and density requirements in order to limit the number of homes or commercial square feet that can eventually be built within the boundaries of a particular area, as well as governmental taxes, fees and levies on the acquisition and development of land parcels. These regulations often provide broad discretion to the administering governmental authorities as to the conditions for our projects being approved, if approved at all. Further, if the terms and conditions of our existing development agreements with the County of Los Angeles and the Cities of Irvine and San Francisco are not complied with, existing entitlements under those agreements could be lost, including (in the case of San Francisco) the right to acquire certain portions of the land on which development activity is expected. New housing and commercial developments are often subject to determinations by the administering governmental authorities as to the adequacy of water and sewage facilities, roads and other local services, and may also be subject to various assessments for schools, parks, streets, affordable housing and other public improvements. As a result, the development of properties may be subject to periodic delays in certain areas due to the conditions imposed by the administering governmental authorities. Due to building moratoriums, zoning changes or “slow-growth” or “no-growth” initiatives that could be implemented in the future in the areas in which our properties are located, our communities may also be subject to periodic delays, or we could be precluded entirely from developing in certain communities or otherwise restricted in our business activities. Such moratoriums or zoning changes can occur either prior or subsequent to commencement of our development operations, without notice or recourse. Local and state governments also have broad discretion regarding the imposition of development fees for projects in their jurisdictions. Projects for which we have received land use and development entitlements or approvals may still require a variety of other governmental approvals and permits during the development process and can also be impacted adversely by unforeseen health, safety, and welfare issues, which can further delay these projects or prevent their development. In addition, federal or state government shutdowns, funding lapses, or budgetary constraints could result in delays in processing permits, approvals, or other governmental actions required for our development activities, which could adversely affect our project timelines and financial condition. As a result, revenue from land sales or leasing of retail or other commercial space may be adversely affected, or costs may increase, which could negatively affect our financial condition and results of operations.

Increasing scrutiny and evolvingEvolving expectations from investors, regulators, and other stakeholders regarding our environmental, social and governance practices and reporting may impose additional costs on us or expose us to new or additional risks.

We may from time to time be subject to various claims and routine litigation arising in the ordinary course of business. Among other things, we are, and are likely to continue to be, affected by litigation against governmental agencies related to environmental and similar approvals that we receive or seek to obtain or relating to historical contamination at our properties that have had prior industrial uses, such as The San Francisco Shipyard. For additional information on recent litigation relating to our properties, see “Item 3. Legal Proceedings.” In addition, we and our subsidiaries manage joint ventures and land banking funds on behalf of third-party capital partners. To the extent our capital partners suffer losses resulting from our fraud, gross negligence, or willful misconduct, such partners may have contractual or other remedies against us.

Litigation and other claims may result in potentially significant defense costs, settlements, fines or judgments against us, some of which may not be covered by insurance. Payment of any such costs, settlements, fines or judgments that are not insured or that exceed our insurance limits could have an adverse impact on our financial condition and results of operations. In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage and adversely affect our results of operations, expose us to increased risks that would be uninsured or adversely impact our ability to attract officers and directors. Such litigation could adversely affect the length of time and the cost required to obtain the necessary governmental approvals. In addition, adverse decisions or publicity arising from any litigation could increase the cost and length of time to obtain ultimate approval of a project, could require us to abandon all or portions of a project andproject, could adversely affect the design, scope, plans and profitability of a project, and could result in reputational harm that may impair the ability of the Hearthstone Venture to maintain existing capital partner relationships and attract new capital in the future, any of which could negatively affect our financial condition and results of operations.

The ability of the operating company to make distributions in an amount sufficient to allow us to pay our taxes and operating expenses, including any payments under the TRA, is subject to the obligations of the operating company and its subsidiaries to their respective creditors. In addition, future financing arrangements may contain negative covenants limiting the ability of the operating company to make distributions to us. Furthermore, the ability of the operating company’s subsidiaries and the Great Park Venture to pay distributions to the operating company may be limited by their obligations to their respective creditors and other investors. Similarly, we may be limited in our ability to move capital among the operating company and its subsidiaries as a result of future financing arrangements and obligations to creditors.

As of December 31, 2024,2025, Lennar owned Class A common shares and Class B common shares representing approximately 39% of our outstanding voting interests. One of our directors is the Executive Chairman and Co-ChiefChief Executive Officer of Lennar. Lennar is one of the nation’s largest homebuilders and has in the past purchased properties from us. In the future, we expect that we will sell additional properties to Lennar. Transactions between Lennar and us must be approved by our conflicts committee. Our conflicts committee also reviews transactions between the Great Park Venture and Lennar, which are ultimately subject to approval by a majority of the members of the Great Park Venture (excluding us). Nonetheless, Lennar’s relationship with us could give it an advantage in bidding for properties that we own.

Due to the various factors that will affect the amount and timing of the tax benefits we will receive, it is not possible to determine the exact amount of payments that will be made under the TRA. If the TRA had been terminated on December 31, 2024,2025, we estimate that the termination payment would have been approximately $110.6$123.9 million, assuming no material changes to the relevant tax law, that the aggregate value of our properties is equal to the value implied by such per share price and that the adjusted SOFR is 4.24%.4.16%. However, this is merely an estimate, and the actual payments made under the TRA in the event that it is terminated or otherwise could be significantly greater.

As of December 31, 2024,2025, we had approximately $525.0$450.0 million of total indebtedness, comprised of $523.5$450.0 million of our 10.500% initial8.000% rate senior notes due JanuaryOctober 2028 and $1.5 million of our 7.875% senior notes due November 2025.2030. We also had $125.0$217.5 million available to be borrowed under our revolving credit facility as of December 31, 2024.2025. Our indebtedness could subject us to many risks that, if realized, would adversely affect us, including the following:

Our business operations and information technology systems, and the information technology systems we use that are provided or managed by third-party service providers, including artificial intelligence resources, may be attacked by individuals or organizations intending to disrupt our business operations and information technology systems and those of our third-party service providers, whether through cyber-attacks or cyber-intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the sophistication of artificial intelligence and the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. We rely on information technology systems to conduct important operational activities and to maintain our business and employee records and financial data. Disruption of those systems could adversely impact our ability to conduct development activities and to otherwise operate our business. Accordingly, if such an attack or act of terrorism were to occur, our operations and financial results could be adversely affected.

From time to time, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that future deterioration in credit and financial markets and confidence in economic conditions will not occur. Our business strategy and performance may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, terrorism or other geopolitical events. Sanctions or tariffs imposed by the United States and other countries in response to such conflicts or events may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. For example, on February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977. Following the Supreme Court’s decision, President Trump stated that he intends to use other authorities to invoke other laws to collect tariffs and announced new tariffs on imports from all countries. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our business, financial condition, results of operations and stock price.

•Five Point Office Venture Holdings I, LLC (the “Gateway Commercial Venture”), which previously owned portions of the Five Point Gateway Campus, a commercial office, research and development and medical campus located within the Great Park Neighborhoods; and

•Five Point Communities, LP and Five Point Communities Management, Inc. (together, the “management company”), which provide development management services for the Great Park Neighborhoods.Neighborhoods; and

The operating company consolidates and controls the management of all of these entities, except for the Great Park Venture andVenture, the Gateway Commercial Venture.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. 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 CompanyCompany,” “Our Communities” and “Our CommunitiesHearthstone” under Part I, Item 1 of this report for a description of our organizational structure, each of our communities and ourthe commercialHearthstone venture.Venture.

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 $480.0$781.7 million from the sale of 559920 homesites on 56.175.6 acres of land and $25.4 million from the sale of 12.8 acres of commercial land. The Great Park Venture made distributions and related participating payments with proceeds from the land sales, of which we received approximately $231.0$319.9 million for both our ownership interests and incentive management fee compensation. Home sales by guest homebuilders totaled 441611 homes in 2024.2025. Our next neighborhood is comprised of 372513 homes across fiveeight 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 2025.2026.

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

We believeAs we arelook wellat positioned to move forward with the implementation ofadditional 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,opportunities, we may pursue acquisitions, investments, joint ventures or other growth opportunities.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 (i) de-risk and accelerate monetization of our existing communitiescommunities, and the opportunity to(ii) generate additional fee-based revenue streams from new assets and investments.investments Inand addition, the joint venture strategy will allow us to(iii) 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.

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 ParkPark, 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.

Revenues. Revenues increaseddecreased by $26.2$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, from $211.7 million for the year ended December 31, 2023.2024. The increasedecrease in revenues was primarily due to anlower increaseland sales at our Valencia segment in 2025 compared to 2024 and a decrease in management services revenue at our Great Park segment in 2024,2025, partially offset by lowermanagement landservices salesrevenue recognized at our Valencianew segmentHearthstone in 2024 compared to 2023.segment.

Cost of management services. Cost of management services increaseddecreased by $1.7$3.5 million, or 7.6%,14.5%, to $20.4 million for the year ended December 31, 2025, from $23.9 million for the year ended December 31, 2024, from $22.2 million for the year ended December 31, 2023.2024. The increasedecrease was primarily due to ana increasedecrease 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 decreasedincreased by $0.3$9.4 million, or 0.5%,18.3%, to $60.6 million for the year ended December 31, 2025, from $51.2 million for the year ended December 31, 2024, from $51.5 million for the year ended December 31, 2023.2024. The decreaseincrease was mainly attributable to acosts decreaseassociated with our acquisition of the Hearthstone Venture and an increase in corporateshare-based generalcompensation and administrative expenses.expense.

Equity in earnings from unconsolidated entities increased by $56.0$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, from $76.6 million for the year ended December 31, 2023.2024. Equity in earnings for the years ended December 31, 20242025 and 20232024 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 generated fromfor the sale of its remaining interests in the Five Point Gateway Campus.

Income taxes. All operations are carried on through our subsidiaries, the majority of which are pass-through entities that are generally not subject to federal or state income taxation. We are responsible for income taxes on our allocable share of the operating company’s income or gain. 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 $205.1 million for the year ended December 31, 2024 resulted in a tax provision of $27.5 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, 2023,2025, it was more likely than not that such net deferred tax assetsasset would be fully realized,realizable, and ourwe had no valuation allowance was released.recorded. Our effective tax rate for the year ended December 31, 20242025 increasedwas fromsubstantially similar to our effective tax rate for 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.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.

Our Valencia property consists of approximately 15,000 acres in northern Los Angeles County and can currently include up to approximately 21,50021,000 homesites and approximately 11.59.3 million square feet of commercial space. The actual commercial square footage and number of homesites are subject to change basedas onwe ultimatefurther userefine andour development plans to optimize land planning.values. The current communities under development in Valencia complement the neighboring communities that were previously developed by us. We began selling homesites in the first development area at Valencia in 2019, and as of December 31, 20242025 we had sold 3,088 homesites for aggregate consideration of approximately $721.6 million. Homebuilders sold 348238 homes at Valencia during the year ended December 31, 20242025 and have sold a total of 1,5991,837 homes since home sales began in May 2021.

Land sales and related party land sales revenues. Total land sales revenues decreased by $22.3$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, from $161.4 million for the year ended December 31, 2023.2024. 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 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, 2023.2024. 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,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.

In November 2024, we received approvals from the City and County of San Francisco to (among other things) transfer approximately two million square feet of research and development and office space to Candlestick from The San Francisco Shipyard. 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 earlythe first half of 2026.

At The San Francisco Shipyard, approximately 408 acres are still owned by the U.S. Navy and will not be conveyed to us until the U.S. Navy satisfactorily completes its finding of suitability to transfer, or “FOST,” process, which involves multiple levels of environmental and governmental investigation, analysis, review, comment and approval. Based on our discussions with the U.S. Navy, we had previously expected the U.S. Navy to deliver this property between 2019 and 2022. However, allegations that Tetra Tech, Inc. and Tetra Tech EC, Inc. (collectively, “Tetra Tech”), contractors hired by the U.S. Navy, misrepresented sampling results at The San Francisco Shipyard have resulted in data reevaluation, governmental investigations, criminal proceedings, lawsuits, and a determination by the U.S. 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. Navy and could lead to additional legal claims or government investigations, all of which could in turn further delay or impede our future development of such parcels. 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 materiallyhave impactfurther material impacts on our development plans.

The Great Park Venture sold the first homesites in April 2013 and, as of December 31, 2024,2025, had sold 8,6839,603 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 officeoffice, industrial and research and development space for aggregate consideration of approximately $4.4$5.2 billion.

Land sales and related party land sales revenues. Land sales and related party land sales revenues increased by $58.0$212.9 million to $825.7 million for the year ended December 31, 2025, from $612.8 million for the year ended December 31, 2024,2024. fromIn $554.82025, millionthe Great Park Venture sold land entitled for an aggregate of 920 homesites on 75.6 acres at the yearGreat endedPark December 31, 2023.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.

TheFor the 2025 land sales, the base purchase price was $25.4$781.7 millionmillion, and $480.0 million for the 2024 commercial land sales and homesite land sales, respectively. Revenue recognized308 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 aggregatebase purchase price was $174.2$25.4 million and $480.0 million for the 20232024 commercial land sales.sales and homesite land sales, respectively.

During the years ended December 31, 20242025 and 2023,2024, 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, 20242025 and 2023,2024, the Great Park Venture recognized $39.8$24.5 million and $21.0$39.8 million, respectively, in profit participation revenues,revenues primarilyrelated fromto amountsprior receivedyear fromresidential homebuilders.land sales. During the yearyears ended December 31, 2025 and 2024, the Great Park Venture recognized additional estimated variable consideration of $19.4 million and $66.6 millionmillion, respectively, for price participation related to a residential land sale that closed in 20232023. forAs futureof priceDecember participation31, payments2025, expectedsubstantially all of the homes related to bethe received2023 whenland homessale arehave been sold to homebuyers. The increase in estimated variable consideration reflects updated pricing and absorption assumptions used to calculate expected price participation payments.

Management fee revenues. Management fee revenues are revenues generated by the management company from development management services provided to the Great Park Venture. The increasedecrease in management services related party revenue was mainly attributable to ana increasedecrease 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, 20242025 and 2023,2024, we recognized $84.0$40.0 million and $35.2$84.0 million, respectively, attributable to variable incentive compensation, mostlywhich as a result ofreflects changes in estimatesthe estimate of the amount of variable incentive compensation we expectexpected to receive.be entitled to receive and changes in constraints on the estimate.

Management services costs and expenses. Included within management services costs and expenses are general and administrative costs and expenses incurred directly by the management company’s project team that is managing the development of the Great Park Neighborhoods. We also include amortization expense related to the intangible asset attributable to the incentive compensation provisions of the development management agreement with the Great Park Venture. 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, 2024,2025, management services costs and expenses increaseddecreased by $1.7$11.8 million, or 7.6%,49.4%, to $23.9$12.1 million, from $22.2$23.9 million for the year ended December 31, 2023.2024. The increasedecrease was mainly attributable to ana increasedecrease in intangible asset amortization expense recognized during the year ended December 31, 2024.2025.

Management fees—related party. Management fees increaseddecreased by $48.5$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, from $65.4 million for the year ended December 31, 2023.2024. Management fees incurred by the Great Park Venture were comprised of base development management fees and incentive compensation fees. In general, incentive compensation fees will be paid as a percentage of distributions made to holders of the Great Park Venture’s membership interests. When payments are deemed probable of being made, the Great Park Venture recognizes the expense ratably over the period services are expected to be provided. 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 increasedecrease in management fees—related party was mainly attributable to anchanges increasedin the estimate of the amount of incentive compensation fees probable of being paid.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 $101.9$29.5 million and $53.4$101.9 million for incentive compensation fees during the years ended December 31, 20242025 and 2023,2024, respectively.

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 JanuarySeptember 2024,2025, we exchangedissued $623.5$450.0 million ofin ournew existing 7.875%8.000% senior notes due NovemberOctober 20252030. forWe $100.0used the net proceeds from the issuance of the new senior notes, together with cash on hand, to (i) purchase $471.5 million in cashprincipal andamount of the $523.5 million in newoutstanding 10.500% initial rate senior notes due January 2028. The new senior notes due January 2028 will(“2028 accrueNotes”) interestthat atwere validly tendered pursuant to a ratecash oftender 11.000%offer starting(the in“Concurrent NovemberTender 2025Offer”) and at(ii) aredeem 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$52.0 million in principal paymentsamount areof 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 underon ourNovember related15, party2025, reimbursementthe obligation.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 arewere deferred through MarchDecember 31, 2025.2025 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. Our related party has a history of receiving maturity date extensions, however, further extensions are not within our control and there can be no assurance that any such extensions will be obtained in the future.

The development stages of our communities continue to require significant cash outlays on both a short-term and long-term basis, and we expect to invest significant amounts on continued horizontal development at Valencia over the next 12 months. 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. 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 feesfees, 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.

We are a party to a tax receivable agreement (“TRA”) with current and former holders of Class A units of the operating company and the holders of Class A units of the San Francisco Venture. The TRA provides for payments by us to such investors or their successors in aggregate amounts equal to 85% of the cash savings, if any, in income tax that we realize as a result of (a) increases in tax basis that are attributable to exchanges of Class A units of the operating company for our Class A common shares or cash or certain other taxable acquisitions of equity interests by us, (b) allocations that result from the application of the principles of Section 704(c) of the Code and (c) tax benefits related to imputed interest or guaranteed payments deemed to be paid or incurred by us as a result of the TRA. We expect the TRA payments to be substantial, however, the actual amount and timing of any payments under the TRA will vary depending upon a number of factors, including the timing of exchanges of Class A units of the operating company or Class A units of the San Francisco Venture, the price of our Class A common shares at the time of such exchanges, the extent to which such exchanges are taxable and our ability to use the potential tax benefits, which will depend on the amount and timing of our taxable income and the rate at which we pay income tax. As of December 31, 2024,2025, there were no amounts currently payable under the TRA. 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 untilfor afterthe 2028.next several years.

(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. 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 arewere deferred through MarchDecember 31, 2025.2025 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.

MajorDuring componentsthe ofyear operatingended cashDecember used31, in2025, bothwe periodspaid consisted$47.4 ofmillion for interest due on our continuedexisting investment7.875% insenior horizontalnotes developmentdue atNovember our communities2025 and SG&A10.500% costs.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. The exchange of $523.5 million of our existing senior notes for new senior notes was accounted for as a debt modification under ASC 470-50. Under debt modification accounting, third party costs are expensed as incurred and reported as operating cash flows. 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.

Cash Flows from Investing Activities. Net cash providedused byin investing activities was $70.1$6.6 million for the year ended December 31, 2024,2025, compared to the net cash provided by investing activities of $77.1$70.1 million for the year ended December 31, 2023.2024.

During the year ended December 31, 2023,2025, we received total distributions of $154.2$252.0 million from the Great Park Venture, of which $76.0$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.activity, Additionally,a wedistribution receivedof $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 $1.1$5.2 million mostly from funds managed by the Valencia LandbankHearthstone 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.

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. During the years ended December 31, 20242025 and 2023,2024, we made tax distributions of $7.7$12.6 million and $4.0$7.7 million, respectively, to noncontrolling interests in accordance with the operating company’s Limited Partnership Agreement (“LPA”). 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 $0.8$2.4 million and $0.2$0.8 million during the years ended December 31, 20242025 and 2023,2024, respectively, to net settle certain share-based compensation awards with employees for tax withholding purposes.

During the year ended December 31, 2024,2025, our 62.6%65.0% ownership percentage in the operating company increased slightly 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 shared-basedshare-based compensation in the form of 0.20.1 million restricted Class A common shares and 0.30.9 million restricted share units that were settled for Class A common shares, partially offset by our reacquisition of approximately 0.30.4 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.

We conduct all of our business in or through our operating company, Five Point Operating Company, LP (the “operating company”). We are, through a wholly owned subsidiary, the sole managing general partner and owned, as of MarchJune 31,30, 2026, approximately 65.4%65.3% of the operating company. The operating company directly or indirectly owns equity interests in:

We reported a consolidated net lossincome of $5.0$29.9 million for the three months ended MarchJune 31,30, 2026, compared to net income of $60.6$8.6 million for the three months ended MarchJune 31,30, 2025. Our results for the quarter were primarily driven by the timing of residential land sales, as we did not complete any significant land closings during the period, and revenues were primarily generated from management services revenue recognized at our Great Park and Hearthstone segments.segments and equity in earnings from the Great Park Venture, which completed a significant land sale during the period. Selling, general and administrative (“SG&A”) expense totaled $14.7$14.3 million for the three months ended MarchJune 31,30, 2026. At MarchJune 31,30, 2026, we had $332.6$348.4 million in cash and $217.5 million available under our revolving credit facility, giving us total liquidity of $550.1$565.9 million.

At Valencia, our guest builders sold 90 homes during the first quarter of 2026, compared to 69 homes during the first quarter of 2025. At the Great Park Neighborhoods, guest builders sold a total of 82 homes during the first quarter of 2026, compared to 233 homes during the first quarter of 2025. While absorption has moderated compared to prior periods, we continue to see engagement from homebuyers across our communities and remain focused on managing the pace and structure of land sales to optimize long-term value. We currently expect that our remaining land sale activity in 2026 will occur during the fourth quarter.

The following table summarizes our consolidated historical results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025:

Three Months Ended MarchJune 31,30, 2026 and 2025

Revenues. Revenues increased by $0.4$6.4 million, or 3.2%,86.0%, to $13.6$13.9 million for the three months ended MarchJune 31,30, 2026, from $13.2$7.5 million for the three months ended MarchJune 31,30, 2025. The increase in revenues was primarily due to management services revenue recognized at our new Hearthstone segment,segment partiallyand offsetan by a decreaseincrease in management services revenue at our Great Park segment during the three months ended MarchJune 31,30, 2026.

Cost of management services. Cost of management services increased by $3.8$3.3 million, or 125.2%,139.8%, to $6.9$5.6 million for the three months ended MarchJune 31,30, 2026, from $3.1$2.3 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to the cost of management services recognized at our new Hearthstone segment, partially offset by a decrease in intangible asset amortization expense at our Great Park segment.

Equity in (loss) earnings from unconsolidated entities. Our consolidated results reflect our share in the earnings or losses of our interests in our unconsolidated entities, including the Great Park Venture and the Gateway Commercial Venture, within equity in earnings from unconsolidated entities on our condensed consolidated statement of operations. Our segment results for the Great Park segment present the results of the Great Park Venture at the book basis of the venture within the segment.

Equity in lossearnings from unconsolidated entities was $0.1$41.0 million for the three months ended MarchJune 31,30, 2026, aan decreaseincrease from equity in earnings of $71.4$17.1 million for the three months ended MarchJune 31,30, 2025. Equity in loss for the three months ended March 31, 2026 was primarily a result of recognizing our share of the net loss generated by the Great Park Venture during the quarter, and equity in earnings for the three months ended MarchJune 31,30, 2026 and 2025 was primarily a result of recognizing our share of the net income generated by the Great Park Venture from land sales during theeach quarter.

Income taxes. Pre-tax lossincome of $5.9$36.1 million for the three months ended MarchJune 31,30, 2026 resulted in a $0.9$6.2 million tax benefit.provision. Pre-tax income of $70.1$9.9 million for the three months ended MarchJune 31,30, 2025 resulted in a $9.5$1.3 million tax provision. We assessed the realization of our net deferred tax asset and the need for a valuation allowance and determined that at MarchJune 31,30, 2026, it was more likely than not that the net deferred tax asset would be realizable, and we had no valuation allowance recorded. Our effective tax rate for the three months ended MarchJune 31,30, 2026 increased slightly as compared to our effective tax rate for the three months ended MarchJune 31,30, 20252025, primarily due to the increase in disallowance of executive compensation expenses not deductible for tax.

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

The following tables reconcile the results of operations of our segments to our consolidated results for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

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. We began selling homesites in the first development area at Valencia in 2019, and as of MarchJune 31,30, 2026 we had sold 3,088 homesites.

In November 2024, we received approvals from the City and County of San Francisco to (among other things) transfer approximately two million square feet of research and development and office space to Candlestick from The San Francisco Shipyard. 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 haverecently commencedrecorded engineeringsubdivision maps for the next phase of infrastructuredevelopment at Candlestick and expectare scheduled to begincommence constructiongrading activities in the firstthird halfquarter of 2026.

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 MarchJune 31,30, 2026, the Hearthstone Venture had $3.4 billion in assets under management, which consisted of approximately 30,00031,000 lots with 12 separate homebuilders across 1718 states.

Great Park Neighborhoods consists of approximately 2,100 acres in Orange County and is being built around the approximately 1,300 acre Orange County Great Park, a metropolitan public park that is under construction. Great Park Neighborhoods can include up to approximately 11,800 homesites and approximately 4.1 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. The Great Park Venture sold the first homesites in April 2013 and, as of MarchJune 31,30, 2026, had sold 9,6039,643 homesites (including 853893 affordable homesites).

Three Months Ended MarchJune 31,30, 2026 and 2025

Land sales and related party land sales revenues. Land sales and related party land sales revenues decreasedincreased to $3.6$161.7 million for the three months ended MarchJune 31,30, 2026, from $285.4$72.2 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily attributable to the recognition of revenue from the sale of 17.7 acres of commercial land planned for senior living uses at the Great Park Neighborhoods during the three months ended June 30, 2026, compared to the recognition of revenue from the sale of residential land at the Great Park Neighborhoods entitled for an aggregate of 32582 homesites on 23.65.7 acres during the three months ended MarchJune 31,30, 2025,2025. comparedThe tobase nopurchase landprice saleswas during$159.3 million for the same period in 2026. For the 20252026 land sales, and the base purchase price was $278.9$63.6 million,million and 197 offor the homesites were sold to an unaffiliated2025 land banking entity whereby Lennar retained the option to acquire the homesites in the future from the land bank entity.sales.

During the three months ended MarchJune 31,30, 2026 and 2025, 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 three months ended MarchJune 31,30, 2026 and 2025, the Great Park Venture recognized $3.6$2.4 million and $2.4$4.3 million, respectively, in profit participation revenues. During the three months ended MarchJune 31,30, 2025, the Great Park Venture recognized additional estimated variable consideration of $4.0$4.3 million 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 had been sold to homebuyers.

Cost of land sales. The Great Park Venture closed no land sales and therefore had no costCost of land sales for the three months ended MarchJune 31,30, 2026,2026 comparedand to2025 costwere of land sales of $70.2$37.6 million forand the$16.0 threemillion, months ended March 31, 2025.respectively. The cost of land sales includes both actual and estimated future capitalized costs allocated based upon relative sales values. Since this method requires the Great Park Venture 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.

Management fee revenues. Management fee revenues are revenues generated by the management company from development management services provided to the Great Park Venture. 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”). The annual fixed base fee is $13.5 million and the incentive compensation provisions of the development management agreement remain unchanged through the second renewal term. The decreaseincrease in management services related party revenue was mainly attributable to aan decreaseincrease in variable incentive compensation revenue recognized during the three months ended MarchJune 31,30, 2026. For the three months ended MarchJune 31,30, 2026 and 2025, we recognized $3.5$5.8 million and $9.2$3.6 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. Included within management services costs and expenses are general and administrative costs and expenses incurred by the management company’s project team that is managing the development of the Great Park Neighborhoods. We also include amortization expense related to the intangible asset attributable to the incentive compensation provisions of the development management agreement with the Great Park Venture within management services costs and expenses. Corporate and non-project team salaries and overhead are not allocated to management services costs and expenses or to our reportable segments and are reported in selling, general, and administrative costs in the condensed consolidated statements of operations. Management services costs and expenses decreased by $1.0 million, or 31.0%, to $2.1 million for the three months ended MarchJune 31,30, 2026,2026 fromand $3.12025 were $2.4 million forand the$2.3 threemillion, months ended March 31, 2025. The decrease was mainly attributable to a decrease in intangible asset amortization expense recognized during the three months ended March 31, 2026.respectively.

Selling, general, and administrative. SG&A expenses decreasedincreased by $1.6$0.6 million, or 58.3%,35.4%, to $1.2$2.4 million for the three months ended MarchJune 31,30, 2026, from $2.8$1.8 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease was mainly attributable to aan decreaseincrease in marketing expenses and property maintenance expenses.

Management fees—related party. Management fees decreasedincreased by $0.7$1.3 million to $7.1$9.0 million for the three months ended MarchJune 31,30, 2026, from $7.9$7.8 million for the three months ended MarchJune 31,30, 2025. Management fees incurred by the Great Park Venture are comprised of base development management fees and incentive compensation fees. In general, incentive compensation fees will be paid based on a percentage of distributions made to holders of the Great Park Venture’s membership interests. When payments are deemed probable of being made, the Great Park Venture recognizes the expense ratably over the period services are expected to be provided. 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 decreaseincrease 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 three months ended MarchJune 31,30, 2026 that was lowerhigher than the cumulative adjustment recognized during the three months ended MarchJune 31,30, 2025.

The table below reconciles the Great Park segment results to the equity in (loss) earnings from our investment in the Great Park Venture that is reflected in the condensed consolidated statements of operations for the three and six months ended MarchJune 31,30, 2026 and 2025.

As of MarchJune 31,30, 2026, we had $332.6$348.4 million of consolidated cash and cash equivalents, compared to $425.5 million at December 31, 2025. As of MarchJune 31,30, 2026, no funds had been drawn on and no letters of credit were outstanding on the operating company’s $217.5 million unsecured revolving credit facility.

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. Pursuant to a reimbursement deferral agreement, principal and interest payments under our related party reimbursement obligation were deferred through December 31, 2025, and during the threesix months ended MarchJune 31,30, 2026, the Company paid $40.1$42.2 million in principal and $6.2$6.4 million in accrued and current interest. Reimbursement payments may be further deferred when our related party receives an extension on the maturity date of the associated EB-5 loan liability. Our related party has a history of receiving maturity date extensions, however, further extensions are not within our control and there can be no assurance that any such extensions will be obtained in the future.

The development stages of our communities continue to require significant cash outlays on both a short-term and long-term basis, and we expect to invest significant amounts on continued horizontal development at Valencia over the next 12 months. 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. 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.

We had outstanding performance bonds of $347.6$484.4 million as of MarchJune 31,30, 2026 predominantlymostly related to our Valencia community.

At MarchJune 31,30, 2026, the San Francisco Venture had outstanding guarantees benefiting a municipal agency for infrastructure and construction of certain park and open space obligations with aggregate maximum obligations of $198.9 million.

Outstanding LOCs totaled $1.0 million at both MarchJune 31,30, 2026 and December 31, 2025. At both MarchJune 31,30, 2026 and December 31, 2025, we had $1.0 million in restricted cash and certificates of deposit securing certain of our LOCs. Additionally, under our revolving credit facility, we are able to utilize undrawn capacity to support the issuance of LOCs. As of MarchJune 31,30, 2026, no capacity under the revolving credit facility was used to support LOCs.