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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-38088
Five Point Holdings, LLC
(Exact name of registrant as specified in its charter)
Delaware
27-0599397
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2000 FivePoint
4th Floor
Irvine
California
92618
(Address of Principal Executive Offices)
(Zip code)
(949) 349-1000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common sharesFPHNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of April 30, 2022, 69,068,354 Class A common shares and 79,233,544 Class B common shares were outstanding.




FIVE POINT HOLDINGS, LLC

TABLE OF CONTENTS

FORM 10-Q
Page
PART I. FINANCIAL INFORMATION
ITEM 1.
ITEM 2.
ITEM 3.
ITEM 4.
PART II. OTHER INFORMATION
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.




CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are subject to risks and uncertainties. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. This report may contain forward-looking statements regarding: our expectations of our future revenues, costs and financial performance; future demographics and market conditions in the areas where our communities are located; the outcome of pending litigation and its effect on our operations; the timing of our development activities; and the timing of future real estate purchases or sales, including anticipated deliveries of homesites and anticipated amenities in our communities.
We caution you that any forward-looking statements presented in this report are based on our current views and information currently available to us. Forward-looking statements are subject to risks, trends, uncertainties and factors that are beyond our control. We believe these risks and uncertainties include, but are not limited to, the following:
uncertainties and risks related to public health issues such as a major epidemic or pandemic, including COVID-19;
risks associated with the real estate industry;
downturns in economic conditions or demographic changes at the national, regional or local levels, particularly in the areas where our properties are located;
uncertainty and risks related to zoning and land use laws and regulations, including environmental planning and protection laws;
risks associated with development and construction projects;
adverse developments in the economic, political, competitive or regulatory climate of California;
loss of key personnel;
uncertainties and risks related to adverse weather conditions, natural disasters and climate change;
fluctuations in interest rates;
the availability of cash for distribution and debt service and exposure to risk of default under debt obligations;
exposure to liability relating to environmental and health and safety matters;
exposure to litigation or other claims;
insufficient amounts of insurance or exposure to events that are either uninsured or underinsured;
intense competition in the real estate market and our ability to sell properties at desirable prices;
fluctuations in real estate values;
changes in property taxes;
risks associated with our trademarks, trade names and service marks;
conflicts of interest with our directors;
general volatility of the capital and credit markets and the price of our Class A common shares; and
risks associated with public or private financing or the unavailability thereof.
Please see Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, as well as other risks and uncertainties detailed from time to time in our subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission, for a more detailed discussion of these and other risks.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date of this report. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law.


PART I. FINANCIAL INFORMATION

ITEM 1.    Financial Statements

FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares)
(Unaudited)
March 31, 2022December 31, 2021
ASSETS
INVENTORIES
$2,144,757 $2,096,824 
INVESTMENT IN UNCONSOLIDATED ENTITIES
373,022 374,553 
PROPERTIES AND EQUIPMENT, NET
31,143 31,466 
INTANGIBLE ASSET, NET—RELATED PARTY
51,405 51,405 
CASH AND CASH EQUIVALENTS
203,647 265,462 
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT
1,330 1,330 
RELATED PARTY ASSETS
98,409 101,818 
OTHER ASSETS
19,629 20,052 
TOTAL
$2,923,342 $2,942,910 
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$619,500 $619,116 
Accounts payable and other liabilities
121,608 115,374 
Related party liabilities
105,556 95,918 
Deferred income tax liability, net
12,998 12,998 
Payable pursuant to tax receivable agreement
173,068 174,126 
Total liabilities
1,032,730 1,017,532 
COMMITMENTS AND CONTINGENT LIABILITIES (Note 11)
REDEEMABLE NONCONTROLLING INTEREST
25,000 25,000 
CAPITAL:
Class A common shares; No par value; Issued and outstanding: March 31, 2022—69,068,354 shares; December 31, 2021—70,107,552 shares
Class B common shares; No par value; Issued and outstanding: March 31, 2022—79,233,544 shares; December 31, 2021—79,233,544 shares
Contributed capital
585,606 587,587 
Retained earnings
31,659 48,789 
Accumulated other comprehensive loss
(1,933)(1,952)
Total members’ capital
615,332 634,424 
Noncontrolling interests
1,250,280 1,265,954 
Total capital
1,865,612 1,900,378 
TOTAL
$2,923,342 $2,942,910 

See accompanying notes to unaudited condensed consolidated financial statements.

1

FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended March 31,
20222021
REVENUES:
Land sales
$557 $22 
Land sales—related party
1 19 
Management services—related party
3,547 12,439 
Operating properties
781 700 
Total revenues
4,886 13,180 
COSTS AND EXPENSES:
Land sales
  
Management services
2,684 10,777 
Operating properties
1,839 1,585 
Selling, general, and administrative
16,791 19,538 
Restructuring19,437  
Total costs and expenses
40,751 31,900 
OTHER INCOME:
Interest income
21 27 
Miscellaneous
112 1,204 
Total other income
133 1,231 
EQUITY IN LOSS FROM UNCONSOLIDATED ENTITIES(1,032)(3,556)
LOSS BEFORE INCOME TAX (PROVISION) BENEFIT(36,764)(21,045)
INCOME TAX (PROVISION) BENEFIT(5) 
NET LOSS(36,769)(21,045)
LESS NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS(19,639)(11,266)
NET LOSS ATTRIBUTABLE TO THE COMPANY$(17,130)$(9,779)
NET LOSS ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE
Basic$(0.25)$(0.14)
Diluted
$(0.25)$(0.14)
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING
Basic68,167,586 67,288,860 
Diluted
70,050,872 67,288,860 
NET LOSS ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE
Basic and diluted
$(0.00)$(0.00)
WEIGHTED AVERAGE CLASS B SHARES OUTSTANDING
Basic and diluted79,233,544 79,233,544 

See accompanying notes to unaudited condensed consolidated financial statements.

2

FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
Three Months Ended March 31,
20222021
NET LOSS$(36,769)$(21,045)
OTHER COMPREHENSIVE INCOME:
Reclassification of actuarial loss on defined benefit pension plan included in net loss13 28 
Other comprehensive income before taxes
13 28 
INCOME TAX PROVISION RELATED TO OTHER COMPREHENSIVE INCOME
  
OTHER COMPREHENSIVE INCOME—Net of tax
13 28 
COMPREHENSIVE LOSS(36,756)(21,017)
LESS COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS(19,634)(11,255)
COMPREHENSIVE LOSS ATTRIBUTABLE TO THE COMPANY$(17,122)$(9,762)

See accompanying notes to unaudited condensed consolidated financial statements.


3

FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF CAPITAL
(In thousands, except share amounts)
(Unaudited)
Class A Common SharesClass B Common SharesContributed CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Members’ CapitalNoncontrolling InterestsTotal Capital
BALANCE - December 31, 202170,107,552 79,233,544 $587,587 $48,789 $(1,952)$634,424 $1,265,954 $1,900,378 
Net loss— — — (17,130)— (17,130)(19,639)(36,769)
Share-based compensation expense
— — 4,103 — — 4,103 — 4,103 
Reacquisition of share-based compensation awards for tax-withholding purposes(417,716)— (2,736)— — (2,736)— (2,736)
Forfeitures of share-based compensation awards, net of issuances(621,482)— — — — — — — 
Other comprehensive income—net of tax of $0
— — — — 8 8 5 13 
Tax distributions to noncontrolling interests— — — — — — (435)(435)
Adjustment to liability recognized under tax receivable agreement—net of tax of $0
— — 1,058 — — 1,058 — 1,058 
Adjustment of noncontrolling interest in the Operating Company
— — (4,406)— 11 (4,395)4,395  
BALANCE - March 31, 202269,068,354 79,233,544 $585,606 $31,659 $(1,933)$615,332 $1,250,280 $1,865,612 
BALANCE - December 31, 202069,051,284 79,233,544 $578,278 $42,221 $(2,833)$617,666 $1,267,432 $1,885,098 
Net loss— — — (9,779)— (9,779)(11,266)(21,045)
Share-based compensation expense
— — 1,316 — — 1,316 — 1,316 
Reacquisition of share-based compensation awards for tax-withholding purposes(324,905)— (2,047)— — (2,047)— (2,047)
Issuance of share-based compensation awards, net of forfeitures
31,968 — — — — — — — 
Other comprehensive income—net of tax of $0
— — — — 17 17 11 28 
Tax distributions to noncontrolling interests— — — — — — (2,879)(2,879)
Adjustment to liability recognized under tax receivable agreement—net of tax of $0
— — 522 — — 522 — 522 
Adjustment of noncontrolling interest in the Operating Company
— — (1,243)— 5 (1,238)1,238  
BALANCE - March 31, 202168,758,347 79,233,544 $576,826 $32,442 $(2,811)$606,457 $1,254,536 $1,860,993 


See accompanying notes to unaudited condensed consolidated financial statements.

4

FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March 31,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(36,769)$(21,045)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in earnings from unconsolidated entities1,032 3,556 
Depreciation and amortization1,592 9,252 
Share-based compensation4,103 1,316 
Changes in operating assets and liabilities:
Inventories(47,462)(52,080)
Related party assets2,845 (5,027)
Other assets(389)2,942 
Accounts payable and other liabilities6,282 8,903 
Related party liabilities10,797 (313)
Net cash used in operating activities(57,969)(52,496)
CASH FLOWS FROM INVESTING ACTIVITIES:
Return of investment from Valencia Landbank Venture484 55 
Purchase of properties and equipment (103)
Net cash provided by (used in) investing activities484 (48)
CASH FLOWS FROM FINANCING ACTIVITIES:
Related party reimbursement obligation(1,159)(11,004)
Reacquisition of share-based compensation awards for tax-withholding purposes(2,736)(2,047)
Tax distributions to noncontrolling interests(435)(2,879)
Net cash used in financing activities(4,330)(15,930)
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(61,815)(68,474)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period266,792 299,474 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period$204,977 $231,000 
SUPPLEMENTAL CASH FLOW INFORMATION (Note 12)
See accompanying notes to unaudited condensed consolidated financial statements.

5

FIVE POINT HOLDINGS, LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.    BUSINESS AND ORGANIZATION
Five Point Holdings, LLC, a Delaware limited liability company (the “Holding Company” and, together with its consolidated subsidiaries, the “Company”), is an owner and developer of mixed-use planned communities in California. The Holding Company owns all of its assets and conducts all of its operations through Five Point Operating Company, LP, a Delaware limited partnership (the “Operating Company”), and its subsidiaries.
The Company has two classes of shares outstanding: Class A common shares and Class B common shares. Holders of Class A common shares and holders of Class B common shares are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders, and are both entitled to receive distributions at the same time. However, the distributions paid to holders of Class B common shares are in an amount per share equal to 0.0003 multiplied by the amount paid per Class A common share.
The Company presents noncontrolling interests on the Company’s condensed consolidated balance sheet and classifies such interests within capital but separate from the Company’s Class A and Class B members’ capital. Noncontrolling interests represent equity interests in the Company’s consolidated subsidiaries held by partners in the Operating Company, excluding the Holding Company, and members in The Shipyard Communities, LLC (the “San Francisco Venture”), excluding the Operating Company (see Note 5).
The Company has an entity structure in which the Company’s two largest equity owners, Lennar Corporation (“Lennar”) and Castlelake, LP (“Castlelake”), and the Company’s founder and Chairman Emeritus, Emile Haddad, separately hold, in addition to interests in the Company’s common shares, equity interests in either or both the Operating Company or the San Francisco Venture that can be exchanged for, at the Company’s option, either the Company’s Class A common shares or cash. The diagram below presents a simplified depiction of the Company’s organizational structure as of March 31, 2022:

fph-20220331_g1.jpg
(1) A wholly owned subsidiary of the Holding Company serves as the sole managing general partner of the Operating Company. As of March 31, 2022, the Company owned approximately 62.5% of the outstanding Class A Common Units of the Operating Company. After a one year holding period, a holder of Class A Common Units of the Operating Company can exchange the units for, at the Company’s option, either Class A common shares of the Holding Company, on a one-for-one basis, or cash equal to the fair market value of such shares. Until Class A Common Units of the Operating Company are exchanged or redeemed, the capital associated with Class A Common Units of the Operating Company not held by the Holding Company is presented within "noncontrolling interests" on the Company’s condensed consolidated balance sheet. Assuming the exchange of all outstanding Class A Common Units of the Operating Company and all outstanding Class A units of the San Francisco Venture (see (2)

6

below), that are not held by the Company, based on the closing price of the Company’s Class A common shares on April 29, 2022 ($5.85), the equity market capitalization of the Company was approximately $867.7 million.
(2) The Operating Company owns all of the outstanding Class B units of the San Francisco Venture, the entity developing the Candlestick and The San Francisco Shipyard communities. The Class A units of the San Francisco Venture, which the Operating Company does not own, are intended to be economically equivalent to Class A Common Units of the Operating Company. As the holder of all outstanding Class B units of the San Francisco Venture, the Operating Company is entitled to receive 99% of available cash from the San Francisco Venture after the holders of Class A units in the San Francisco Venture have received distributions equivalent to the distributions, if any, paid on Class A Common Units of the Operating Company. Class A units of the San Francisco Venture can be exchanged, on a one-for-one basis, for Class A Common Units of the Operating Company (See Note 5). Until exchanged or redeemed through the Operating Company, the capital associated with Class A units of the San Francisco Venture is presented within "noncontrolling interests" on the Company’s condensed consolidated balance sheet.
(3) Together, the Operating Company, Five Point Communities, LP, a Delaware limited partnership (“FP LP”), and Five Point Communities Management, Inc., a Delaware corporation (“FP Inc.” and together with FP LP, the “Management Company”) own 100% of Five Point Land, LLC, a Delaware limited liability company (“FPL”), the entity developing Valencia, a mixed-use planned community located in northern Los Angeles County, California. The Operating Company has a controlling interest in the Management Company.
(4) Interests in Heritage Fields LLC, a Delaware limited liability company (the “Great Park Venture”), are either “Percentage Interests” or “Legacy Interests.” Holders of the Legacy Interests were entitled to receive priority distributions up to an aggregate amount of $565.0 million, of which $482.3 million had been distributed as of April 30, 2022 (See Note 4). The Company owns a 37.5% Percentage Interest in the Great Park Venture and serves as its administrative member. However, management of the Great Park Venture is vested in the four voting members, who have a total of five votes. Major decisions generally require the approval of at least 75% of the votes of the voting members. The Company has two votes, and the other three voting members each have one vote, so the Company is unable to approve any major decision without the consent or approval of at least two of the other voting members. The Company does not include the Great Park Venture as a consolidated subsidiary, but rather as an equity method investee, in its condensed consolidated financial statements.
(5) The Company owns a 75% interest in Five Point Office Venture Holdings I, LLC, a Delaware limited liability company (the “Gateway Commercial Venture”). The Company manages the Gateway Commercial Venture, however, the manager’s authority is limited. Major decisions by the Gateway Commercial Venture generally require unanimous approval by an executive committee composed of two people designated by the Company and two people designated by another investor. Some decisions require approval by all of the members of the Gateway Commercial Venture. The Company does not include the Gateway Commercial Venture as a consolidated subsidiary, but rather as an equity method investee, in its condensed consolidated financial statements.
2.    BASIS OF PRESENTATION
Principles of consolidation—The accompanying condensed consolidated financial statements include the accounts of the Holding Company and the accounts of all subsidiaries in which the Holding Company has a controlling interest and the consolidated accounts of variable interest entities (“VIEs”) in which the Holding Company is deemed to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.
Unaudited interim financial information—The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, all adjustments (including normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results and cash flows for the three months ended March 31, 2022 are not necessarily indicative of the operating results and cash flows that may be expected for the full year.
Use of estimates—The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from those estimates.
Restructuring—Restructuring costs consist of one-time employee-related termination benefits and other postemployment compensation arrangements.
On February 9, 2022, Daniel Hedigan was appointed as the Company’s Chief Executive Officer. Preceding Mr. Hedigan’s appointment, Emile Haddad stepped down from his roles as Chairman, Chief Executive Officer and President effective as of September 30, 2021 and transitioned into a senior advisory role pursuant to a three-year advisory agreement. Mr. Haddad remains a

7

member of the Board of Directors serving as Chairman Emeritus. Concurrent with Mr. Hedigan’s appointment, Lynn Jochim transitioned from her position as President and Chief Operating Officer into an advisory role pursuant to a three-year advisory agreement (see Note 8). Upon the appointment of Mr. Hedigan as the Company’s Chief Executive Officer, the Company accrued a related party liability of $15.6 million attributed to advisory agreement payments due to Mr. Haddad and Ms. Jochim. In addition, the Company determined the service condition associated with Mr. Haddad and Ms. Jochim’s unvested restricted share awards had been modified (see Note 14). As a result of this modification, the Company recognized approximately $3.0 million in restructuring costs during the three months ended March 31, 2022.
During the three months ended March 31, 2022, in addition to the Company’s executive management restructuring activities, the Company incurred $0.9 million in restructuring costs resulting from estimated severance benefits from company-wide layoffs. At March 31, 2022, $0.9 million in accrued severance is included in accounts payable and other liabilities on the Company’s condensed consolidated balance sheet.
Miscellaneous other income—Miscellaneous other income consisted of the following (in thousands):
Three Months Ended March 31,
20222021
Net periodic pension benefit$112 $134 
Other—related party
 1,070 
Total miscellaneous other income$112 $1,204 
Recently adopted accounting pronouncements—There are no recent accounting pronouncements that have had or are expected to have a material impact on the Company’s condensed consolidated financial statements or disclosures.

8

3.    REVENUES
The following tables present the Company’s consolidated revenues disaggregated by revenue source and reporting segment (in thousands):
Three Months Ended March 31, 2022
Valencia San Francisco
Great Park(1)
Commercial(1)
Total
Land sales and land sales—related party
$558 $ $ $ $558 
Management services—related party
  3,444 103 3,547 
Operating properties356    356 
914  3,444 103 4,461 
Operating properties leasing revenues245 180   425 
$1,159 $180 $3,444 $103 $4,886 

Three Months Ended March 31, 2021
Valencia San Francisco
Great Park(1)
Commercial(1)
Total
Land sales and land sales—related party
$41 $ $ $ $41 
Management services—related party
  12,340 99 12,439 
Operating properties277    277 
318  12,340 99 12,757 
Operating properties leasing revenues274 149   423 
$592 $149 $12,340 $99 $13,180 
(1) The tables above do not include revenues of the Great Park Venture and the Gateway Commercial Venture, which are included in the Company’s reporting segment totals (see Notes 4 and 13).
The Company, through the Management Company, has an amended and restated development management agreement (“A&R DMA”) with the Great Park Venture. The A&R DMA had an original term commencing on December 29, 2010 and ending on December 31, 2021 (the “Initial Term”). By mutual agreement, the Initial Term has been extended through May 16, 2022 while the terms of renewal are being discussed. In addition to a fixed base fee and variable cost reimbursements, the Initial Term of the A&R DMA included incentive compensation that becomes payable in connection with and as a percentage of distributions made to the members of the Great Park Venture, including distributions made in periods after the Initial Term. Consideration in the form of contingent incentive compensation from the A&R DMA was recognized as revenue and a contract asset as services were provided over the contract term.
The opening and closing balances of the Company’s contract assets for the three months ended March 31, 2022 were $87.6 million ($79.1 million related party, see Note 8) and $87.5 million ($79.1 million related party, see Note 8), respectively. The opening and closing balances of the Company’s contract assets for the three months ended March 31, 2021 were $85.1 million ($78.1 million related party) and $91.5 million ($85.1 million related party), respectively. The decrease of $0.1 million for the three months ended March 31, 2022 between the opening and closing balances of the Company’s contract assets primarily resulted from the receipt of marketing fees from homebuilders. The increase of $6.4 million for the three months ended March 31, 2021 between the opening and closing balances of the Company’s contract assets primarily resulted from a timing difference between the Company’s recognition of revenue earned for the performance of management services and no contractual payments due from the customer during the period.
The opening and closing balances of the Company’s other receivables from contracts with customers and contract liabilities for the three months ended March 31, 2022 and 2021 were insignificant.
4.    INVESTMENT IN UNCONSOLIDATED ENTITIES
Great Park Venture
The Great Park Venture has two classes of interests—“Percentage Interests” and “Legacy Interests.” The Operating Company owned 37.5% of the Great Park Venture’s Percentage Interests as of March 31, 2022. Legacy Interest holders were entitled to receive priority distributions in an aggregate amount equal to $476.0 million and up to an additional $89.0 million from participation in subsequent distributions of cash depending on the performance of the Great Park Venture. The holders of the Percentage Interests will receive all other distributions. As of March 31, 2022, the Great Park Venture had fully satisfied the $476.0 million priority distribution rights, and the remaining maximum participating Legacy Interest distribution rights were $82.7 million.

9

The Great Park Venture is the owner of Great Park Neighborhoods, a mixed-use planned community located in Orange County, California. The Company, through the A&R DMA, manages the planning, development and sale of land at the Great Park Neighborhoods and supervises the day-to-day affairs of the Great Park Venture. The Great Park Venture is governed by an executive committee of representatives appointed by only the holders of Percentage Interests. The Company serves as the administrative member but does not control the actions of the executive committee. The Company accounts for its investment in the Great Park Venture using the equity method.
The carrying value of the Company’s investment in the Great Park Venture is higher than the Company’s underlying share of equity in the carrying value of net assets of the Great Park Venture, resulting in a basis difference. The Company’s earnings or losses from the equity method investment are adjusted by amortization and accretion of the basis differences as the assets (mainly inventory) and liabilities that gave rise to the basis difference are sold, settled or amortized.
During the three months ended March 31, 2022, the Great Park Venture recognized $1.5 million in land sale revenues to related parties of the Company and $0.3 million in land sale revenues to third parties. During the three months ended March 31, 2021, the Great Park Venture recognized $0.2 million in land sale revenues to related parties of the Company and $0.7 million in land sale revenues to third parties.
The following table summarizes the statements of operations of the Great Park Venture for the three months ended March 31, 2022 and 2021 (in thousands):
Three Months Ended March 31,
20222021
Land sale and related party land sale revenues$1,819 $960 
Home sale revenues17,161 $ 
Cost of land sales
  
Cost of home sales(12,902) 
Other costs and expenses
(8,909)(13,444)
Net loss of Great Park Venture$(2,831)$(12,484)
The Company’s share of net loss$(1,062)$(4,682)
Basis difference (amortization) accretion(239)766 
Equity in loss from Great Park Venture$(1,301)$(3,916)
The following table summarizes the balance sheet data of the Great Park Venture and the Company’s investment balance as of March 31, 2022 and December 31, 2021 (in thousands):
March 31, 2022December 31, 2021
Inventories
$705,242 $687,235 
Cash and cash equivalents
126,974 140,004 
Receivable and other assets
31,524 32,550 
Total assets
$863,740 $859,789 
Accounts payable and other liabilities
$135,459 $128,677 
Redeemable Legacy Interests
82,719 82,719 
Capital (Percentage Interest)
645,562 648,393 
Total liabilities and capital
$863,740 $859,789 
The Company’s share of capital in Great Park Venture
$242,085 $243,147 
Unamortized basis difference
77,888 78,127 
The Company’s investment in the Great Park Venture
$319,973 $321,274 

Gateway Commercial Venture
The Company owned a 75% interest in the Gateway Commercial Venture as of March 31, 2022. The Gateway Commercial Venture is governed by an executive committee in which the Company is entitled to appoint two individuals. One of the other members of the Gateway Commercial Venture is also entitled to appoint two individuals to the executive committee. The unanimous approval of the executive committee is required for certain matters, which limits the Company’s ability to control the Gateway Commercial Venture, however, the Company is able to exercise significant influence and therefore accounts for its investment in the Gateway Commercial Venture using the equity method. The Company is the manager of the Gateway Commercial Venture, with responsibility to manage and administer its day-to-day affairs and implement a business plan approved by the executive committee.

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The Gateway Commercial Venture owns one commercial office building and approximately 50 acres of commercial land with additional development rights at a 73 acre office, medical, research and development campus located within the Great Park Neighborhoods (the “Five Point Gateway Campus”). The Five Point Gateway Campus consists of four buildings totaling approximately one million square feet. The Company and a subsidiary of Lennar lease portions of the building owned by the Gateway Commercial Venture, and during the three months ended March 31, 2022 and 2021, the Gateway Commercial Venture recognized $1.9 million and $2.1 million, respectively, in rental revenues from those leasing arrangements.
The following table summarizes the statements of operations of the Gateway Commercial Venture for the three months ended March 31, 2022 and 2021 (in thousands):
Three Months Ended March 31,
20222021
Rental revenues$1,938 $2,101 
Rental operating and other expenses(535)(334)
Depreciation and amortization (984)(984)
Interest expense(307)(303)
Net income of Gateway Commercial Venture$112 $480 
Equity in earnings from Gateway Commercial Venture$84 $360 
The following table summarizes the balance sheet data of the Gateway Commercial Venture and the Company’s investment balance as of March 31, 2022 and December 31, 2021 (in thousands):
March 31, 2022December 31, 2021
Real estate and related intangible assets, net$85,668 $86,601 
Cash13,513 13,279 
Other assets5,144 4,486 
Total assets$104,325 $104,366 
Notes payable, net$29,388 $29,369 
Other liabilities8,895 9,067 
Members’ capital66,042 65,930 
Total liabilities and capital$104,325 $104,366 
The Company’s investment in the Gateway Commercial Venture$49,531 $49,447 
The debt of the Gateway Commercial Venture is non-recourse to the Company other than in the case of customary “bad act” exceptions or bankruptcy or insolvency events.
Valencia Landbank Venture
As of March 31, 2022, the Company owned a 10% interest in the Valencia Landbank Venture, an entity organized in December 2020 for the purpose of taking assignment from homebuilders of purchase and sale agreements for the purchase of residential lots within the Valencia community. The Valencia Landbank Venture concurrently enters into option and development agreements with homebuilders pursuant to which the homebuilders retain the option to purchase the land to construct and sell homes. The Company does not have a controlling financial interest in the Valencia Landbank Venture, however, the Company has the ability to significantly influence the Valencia Landbank Venture’s operating and financial policies, and most major decisions require the Company’s approval in addition to the approval of the Valencia Landbank Venture’s other unaffiliated member, and therefore the Company accounts for its investment in the Valencia Landbank Venture using the equity method. At March 31, 2022 and December 31, 2021, the Company’s investment in the Valencia Landbank Venture was $3.5 million and $3.8 million, respectively, and the Company recognized $0.2 million in equity in earnings for the three months ended March 31, 2022. The Company recognized no equity in earnings or loss for the three months ended March 31, 2021.
5.    NONCONTROLLING INTERESTS
The Operating Company
The Holding Company’s wholly owned subsidiary is the managing general partner of the Operating Company, and at March 31, 2022, the Holding Company and its wholly owned subsidiary owned approximately 62.5% of the outstanding Class A Common Units and 100% of the outstanding Class B Common Units of the Operating Company. The Holding Company consolidates the financial results of the Operating Company and its subsidiaries and records a noncontrolling interest for the remaining 37.5% of

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the outstanding Class A Common Units of the Operating Company that are owned separately by affiliates of Lennar, affiliates of Castlelake and an entity controlled by Emile Haddad, the Company’s Chairman Emeritus of the Board of Directors (the “Management Partner”).
After a 12 month holding period, holders of Class A Common Units of the Operating Company may exchange their units for, at the Company’s option, either (i) Class A common shares on a one-for-one basis (subject to adjustment in the event of share splits, distributions of shares, warrants or share rights, specified extraordinary distributions and similar events), or (ii) cash in an amount equal to the market value of such shares at the time of exchange. In either situation, an equal number of that holder’s Class B common shares will automatically convert into Class A common shares, at a ratio of 0.0003 Class A common shares for each Class B common share. This exchange right is currently exercisable by all holders of outstanding Class A Common Units of the Operating Company.
With each exchange of Class A Common Units of the Operating Company for Class A common shares, the Holding Company’s percentage ownership interest in the Operating Company and its share of the Operating Company’s cash distributions and profits and losses will increase. Additionally, other issuances of common shares of the Holding Company or common units of the Operating Company result in changes to the noncontrolling interest percentage. Such equity transactions result in an adjustment between members’ capital and the noncontrolling interest in the Company’s condensed consolidated balance sheet and statement of capital to account for the changes in the noncontrolling interest ownership percentage as well as any change in total net assets of the Company.
During the three months ended March 31, 2022 and 2021, the Holding Company’s ownership interest in the Operating Company changed as a result of net equity transactions related to the Company’s share-based compensation plan.
The terms of the Operating Company's Limited Partnership Agreement (“LPA”) provide for the payment of tax distributions to the Operating Company's partners in an amount equal to the estimated income tax liabilities resulting from taxable income or gain allocated to those parties. The tax distribution provisions in the LPA were included in the Operating Company's governing documents adopted prior to the Company’s initial public offering and were designed to provide funds necessary to pay tax liabilities for income that might be allocated, but not paid, to the partners.
Tax distributions to the partners of the Operating Company for the three months ended March 31, 2022 and 2021, were as follows (in thousands):
Three Months Ended March 31,
20222021
Management Partner$435 $1,382 
Other partners (excluding the Holding Company) 1,497 
Total tax distributions$435 $2,879 
Generally, tax distributions are treated as advance distributions under the LPA and are taken into account when determining the amounts otherwise distributable under the LPA.
The San Francisco Venture
 
The San Francisco Venture has three classes of units—Class A, Class B and Class C units. The Operating Company owns all of the outstanding Class B units of the San Francisco Venture. All of the outstanding Class A units are owned by Lennar and Castlelake. The Class A units of the San Francisco Venture are intended to be substantially economically equivalent to the Class A Common Units of the Operating Company. The Class A units of the San Francisco Venture represent noncontrolling interests to the Operating Company.
Holders of Class A units of the San Francisco Venture can redeem their units at any time and receive Class A Common Units of the Operating Company on a one-for-one basis (subject to adjustment in the event of share splits, distributions of shares, warrants or share rights, specified extraordinary distributions and similar events). If a holder requests a redemption of Class A units of the San Francisco Venture that would result in the Holding Company’s ownership of the Operating Company falling below 50.1%, the Holding Company has the option of satisfying the redemption with Class A common shares instead. The Company also has the option, at any time, to acquire outstanding Class A units of the San Francisco Venture in exchange for Class A Common Units of the Operating Company. The 12 month holding period for any Class A Common Units of the Operating Company issued in exchange for Class A units of the San Francisco Venture is calculated by including the period that such Class A units of the San Francisco Venture were owned. This exchange right is currently exercisable by all holders of outstanding Class A units of the San Francisco Venture.
Redeemable Noncontrolling Interest
In 2019, the San Francisco Venture issued 25.0 million Class C units to an affiliate of Lennar in exchange for a contribution of $25.0 million to the San Francisco Venture. Provided that Lennar completes the construction of a certain number of new homes in Candlestick as contemplated under purchase and sale agreements with the Company, the San Francisco Venture is required to redeem the Class C units if and when the Company receives reimbursements from the Mello-Roos communities facilities district formed for the development, in an aggregate amount equal to 50% of any reimbursements received up to a maximum amount of $25.0 million.

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The San Francisco Venture also maintains the ability to redeem the then outstanding balance of Class C units for cash at any time. Upon a liquidation of the San Francisco Venture, the holders of Class C Units are entitled to a liquidation preference. The maximum amount payable by the San Francisco Venture pursuant to redemptions or liquidation of the Class C units is $25.0 million. The holders of Class C units are not entitled to receive any other forms of distributions and are not entitled to any voting rights. In connection with the issuance of the Class C units, the San Francisco Venture agreed to spend $25.0 million on the development of infrastructure and/or parking facilities at the Company’s Candlestick development. At March 31, 2022 and December 31, 2021, $25.0 million of Class C units were outstanding and included in redeemable noncontrolling interest on the condensed consolidated balance sheets.
6.    CONSOLIDATED VARIABLE INTEREST ENTITY
The Holding Company conducts all of its operations through the Operating Company, a consolidated VIE, and as a result, substantially all of the Company’s assets and liabilities represent the assets and liabilities of the Operating Company, other than items attributed to income taxes and the payable pursuant to a tax receivable agreement (“TRA”). The Operating Company has investments in and consolidates the assets and liabilities of the San Francisco Venture, FP LP and FPL, all of which have also been determined to be VIEs.
The San Francisco Venture is a VIE as the other members of the venture, individually or as a group, are not able to exercise kick-out rights or substantive participating rights. The Company applied the variable interest model and determined that it is the primary beneficiary of the San Francisco Venture and, accordingly, the San Francisco Venture is consolidated in the Company’s results. In making that determination, the Company evaluated that the Operating Company has unilateral and unconditional power to make decisions in regards to the activities that significantly impact the economics of the VIE, which are the development of properties, marketing and sale of properties, acquisition of land and other real estate properties and obtaining land ownership or ground lease for the underlying properties to be developed. The Company is determined to have more-than-insignificant economic benefit from the San Francisco Venture because, excluding Class C units, the Operating Company can prevent or cause the San Francisco Venture from making distributions on its units, and the Operating Company would receive 99% of any such distributions made (assuming no distributions had been paid on the Class A Common Units of the Operating Company). In addition, the San Francisco Venture is only allowed to make a capital call on the Operating Company and not any other interest holders, which could be a significant financial risk to the Operating Company.
As of March 31, 2022, the San Francisco Venture had total combined assets of $1.3 billion, primarily comprised of $1.28 billion of inventories, $1.1 million in related party assets and total combined liabilities of $75.3 million including $68.4 million in related party liabilities.
As of December 31, 2021, the San Francisco Venture had total combined assets of $1.3 billion, primarily comprised of $1.27 billion of inventories, $1.1 million in related party assets and total combined liabilities of $76.9 million including $69.5 million in related party liabilities.
Those assets are owned by, and those liabilities are obligations of, the San Francisco Venture, not the Company. The San Francisco Venture’s operating subsidiaries are not guarantors of the Company’s obligations, and the assets held by the San Francisco Venture may only be used as collateral for the San Francisco Venture’s obligations. The creditors of the San Francisco Venture do not have recourse to the assets of the Operating Company, as the VIE’s primary beneficiary, or of the Holding Company.
The Company and the other members do not generally have an obligation to make capital contributions to the San Francisco Venture. In addition, there are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to the San Francisco Venture. The Company does not guarantee any debt of the San Francisco Venture. However, the Operating Company has guaranteed the performance of payment by the San Francisco Venture in accordance with the redemption terms of the Class C units of the San Francisco Venture (see Note 5).
FP LP and FPL are VIEs because the other partners or members have disproportionately fewer voting rights, and substantially all of the activities of the entities are conducted on behalf of the other partners or members and their related parties. The Operating Company, or a wholly owned subsidiary of the Operating Company, is the primary beneficiary of FP LP and FPL.
As of March 31, 2022, FP LP and FPL had combined assets of $1.0 billion, primarily comprised of $863.0 million of inventories, $51.4 million of intangibles, $79.1 million in related party assets, and total combined liabilities of $96.4 million, including $88.0 million in accounts payable and other liabilities and $8.4 million in related party liabilities.
As of December 31, 2021, FP LP and FPL had combined assets of $1.0 billion, primarily comprised of $826.4 million of inventories, $51.4 million of intangibles, $82.0 million in related party assets and total combined liabilities of $94.0 million, including $85.6 million in accounts payable and other liabilities and $8.4 million in related party liabilities.
The Company evaluates its primary beneficiary designation on an ongoing basis and assesses the appropriateness of the VIE’s status when events have occurred that would trigger such an analysis. During the three months ended March 31, 2022 and 2021, there were no VIEs that were deconsolidated.

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7.    INTANGIBLE ASSET, NET—RELATED PARTY
The intangible asset relates to the contract value of the incentive compensation provisions of the A&R DMA with the Great Park Venture. The intangible asset will be amortized over the expected contract period based on the pattern in which the economic benefits are expected to be received.
The carrying amount and accumulated amortization of the intangible asset as of March 31, 2022 and December 31, 2021 were as follows (in thousands):
March 31, 2022December 31, 2021
Gross carrying amount$129,705 $129,705 
Accumulated amortization(78,300)(78,300)
Net book value$51,405 $51,405 

Intangible asset amortization expense, as a result of revenue recognition attributable to incentive compensation, was $7.8 million for the three months ended March 31, 2021. No amortization expense was recognized during the three months ended March 31, 2022 as no incentive compensation revenue was recognized during the period. Amortization expense is included in the cost of management services in the accompanying condensed consolidated statements of operations and is included in the Great Park segment.
8.     RELATED PARTY TRANSACTIONS
Related party assets and liabilities included in the Company’s condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 consisted of the following (in thousands):
March 31, 2022December 31, 2021
Related Party Assets:
Contract assets (see Note 3)
$79,118 $79,082 
Operating lease right-of-use asset (corporate office lease at Five Point Gateway Campus)18,151 18,715 
Other
1,140 4,021 
$98,409 $101,818 
Related Party Liabilities:
Reimbursement obligation
$68,377 $69,536 
Payable to holders of Management Company’s Class B interests
8,365 8,365 
Operating lease liability (corporate office lease at Five Point Gateway Campus)13,602 13,931 
Accrued advisory fees14,875  
Other
337 4,086 
$105,556 $95,918 
Development Management Agreement with the Great Park Venture (Incentive Compensation Contract Asset)
In 2010, the Great Park Venture, the Company’s equity method investee, engaged the Management Company under a development management agreement to provide management services to the Great Park Venture. The initial term of the development management agreement with the Great Park Venture expired on December 31, 2021 but has been extended by mutual agreement of the parties through May 16, 2022 while the terms of a renewal are discussed. The compensation structure in place as per the A&R DMA’s initial term consists of a base fee and incentive compensation. Incentive compensation is characterized as “Legacy Incentive Compensation” and “Non-Legacy Incentive Compensation.” Legacy Incentive Compensation consists of a maximum of $9.0 million of incentive compensation payments attributed to contingent payments made under a cash flow participation agreement to which the Great Park Venture is a party. Holders of the Management Company’s Class B interests are entitled to receive distributions from the Management Company that are attributable to any Legacy Incentive Compensation received by the Management Company. Non-Legacy Incentive Compensation is 9% of distributions available to be made by the Great Park Venture to holders of Percentage Interests of the Great Park Venture.
At each of March 31, 2022 and December 31, 2021, included in contract assets in the table above is $74.3 million attributed to Legacy and Non-Legacy Incentive Compensation revenue recognized but not yet due (see Note 3). Management fee revenues under the A&R DMA are included in management services—related party in the accompanying condensed consolidated statements of operations and are included in the Great Park segment. Management fee revenues under the A&R DMA were $3.4 million and $12.3 million for the three months ended March 31, 2022 and 2021, respectively.

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Employment Transition Agreement and Advisory Agreement with Emile Haddad
On August 23, 2021, the Company and the Company’s then Chairman, Chief Executive Officer and President, Emile Haddad, entered into an employment transition agreement pursuant to which, effective as of September 30, 2021, Mr. Haddad stepped down from his roles as Chairman, Chief Executive Officer and President. Mr. Haddad remained a member of the Board of Directors serving as Chairman Emeritus. Concurrently, the Company also entered into an advisory agreement with Mr. Haddad for an initial term of three years, which became effective on October 1, 2021. At March 31, 2022, included in accrued advisory fees in the table above is $12.0 million attributed to Mr. Haddad’s advisory agreement (see Note 2).
Employment Transition Agreement and Advisory Agreement with Lynn Jochim
On February 9, 2022, the Company entered into an employment transition agreement with Lynn Jochim, the Company’s former President and Chief Operating Officer. Pursuant to the agreement, Ms. Jochim agreed to continue in her then current positions, at her then current compensation levels, until February 14, 2022. Concurrently, the Company also entered into an advisory agreement with Ms. Jochim for an initial term of three years, which became effective on February 15, 2022. Pursuant to the advisory agreement, the Company agreed to pay Ms. Jochim an annual retainer of $1.0 million. At March 31, 2022, included in accrued advisory fees in the table above is $2.9 million attributed to Ms. Jochim’s advisory agreement (see Note 2).
9.    NOTES PAYABLE, NET
At March 31, 2022 and December 31, 2021, notes payable consisted of the following (in thousands):
March 31, 2022December 31, 2021
7.875% Senior Notes due 2025
$625,000 $625,000 
Unamortized debt issuance costs and discount
(5,500)(5,884)
$619,500 $619,116 
Revolving Credit Facility
The Operating Company has a $125.0 million unsecured revolving credit facility with a maturity date in April 2024, with one option to extend the maturity date by an additional year, subject to the satisfaction of certain conditions including the approval of the administrative agent and lenders. As of March 31, 2022, no funds had been drawn on the Operating Company’s revolving credit facility. However, letters of credit of $0.3 million were issued and outstanding under the revolving credit facility, thus reducing the available capacity to $124.7 million.
10.    TAX RECEIVABLE AGREEMENT
The Company is a party to a TRA with all of the holders of Class A Common Units of the Operating Company, all the holders of Class A units of the San Francisco Venture, and prior holders of Class A Common Units of the Operating Company and prior holders of Class A units of the San Francisco Venture that have exchanged their holdings for Class A common shares (as parties to the TRA, the “TRA Parties”). At March 31, 2022 and December 31, 2021, the Company’s condensed consolidated balance sheets included a liability of $173.1 million and $174.1 million, respectively, for payments expected to be made under certain components of the TRA which the Company deems to be probable and estimable. No TRA payments were made during the three months ended March 31, 2022 and 2021.
11.    COMMITMENTS AND CONTINGENCIES
The Company is subject to the usual obligations associated with entering into contracts for the purchase, development and sale of real estate, which the Company does in the routine conduct of its business. The operations of the Company are conducted through the Operating Company and its subsidiaries, and in some cases, the Holding Company will guarantee the payment by or performance of the Operating Company or its subsidiaries. The Company has operating leases for its corporate office and other facilities and the Holding Company is a guarantor to some of these lease agreements. Operating lease right-of-use assets are included in other assets or related party assets, and operating lease liabilities are included in accounts payable and other liabilities or related party liabilities on the condensed consolidated balance sheets and were as follows as of March 31, 2022 and December 31, 2021 (in thousands):
March 31, 2022December 31, 2021
Operating lease right-of-use assets ($18,151 and $18,715 related party, respectively)
$22,459 $23,779 
Operating lease liabilities ($13,602 and $13,931 related party, respectively)
$18,822 $20,034 
In addition to operating lease payment guarantees, the Holding Company had other contractual payment guarantees as of March 31, 2022 totaling $18.3 million.

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Performance and Completion Bonding Agreements
In the ordinary course of business and as a part of the entitlement and development process, the Company is required to provide performance bonds to ensure completion of certain development obligations. The Company had outstanding performance bonds of $288.0 million and $279.6 million as of March 31, 2022 and December 31, 2021, respectively.
Candlestick and The San Francisco Shipyard Disposition and Development Agreement
The San Francisco Venture is a party to a disposition and development agreement with the Successor to the Redevelopment Agency of the City and County of San Francisco (the “San Francisco Agency”) in which the San Francisco Agency has agreed to convey portions of Candlestick and The San Francisco Shipyard to the San Francisco Venture for development. The San Francisco Venture has agreed to reimburse the San Francisco Agency for reasonable costs and expenses actually incurred and paid by the San Francisco Agency in performing its obligations under the disposition and development agreement. The San Francisco Agency can also earn a return of certain profits generated from the development and sale of Candlestick and The San Francisco Shipyard if certain thresholds are met.
At each of March 31, 2022 and December 31, 2021, the Company had outstanding guarantees benefiting the San Francisco Agency for infrastructure and construction of certain park and open space obligations with aggregate maximum obligations of $198.3 million.
Letters of Credit
At each of March 31, 2022 and December 31, 2021, the Company had outstanding letters of credit totaling $1.3 million. These letters of credit were issued to secure various development and financial obligations. At each of March 31, 2022 and December 31, 2021, the Company had restricted cash and certificates of deposit of $1.0 million pledged as collateral under certain of the letters of credit agreements.
Legal Proceedings
Hunters Point Litigation
In May 2018, residents of the Bayview Hunters Point neighborhood in San Francisco filed a putative class action in San Francisco Superior Court naming Tetra Tech, Inc. and Tetra Tech EC, Inc., an independent contractor hired by the U.S. Navy to conduct testing and remediation of toxic radiological waste at The San Francisco Shipyard (“Tetra Tech”), Lennar and the Company as defendants (the “Bayview Action”). The plaintiffs allege that, among other things, Tetra Tech fraudulently misrepresented its test results and remediation efforts. The plaintiffs are seeking damages against Tetra Tech and the Company and have requested an injunction to prevent the Company and Lennar from undertaking any development activities at The San Francisco Shipyard. Given the preliminary nature of the claims, the Company cannot predict the outcome of the Bayview Action.
Since July 2018, a number of lawsuits have been filed in San Francisco Superior Court on behalf of homeowners in The San Francisco Shipyard, which name Tetra Tech, Lennar and the Company, among others, as defendants (the “Homeowners Action”). The plaintiffs allege that environmental contamination issues at The San Francisco Shipyard were not properly disclosed to them before they purchased their homes. They also allege that Tetra Tech and other defendants (not including the Company) have created a nuisance at The San Francisco Shipyard under California law. They seek damages as well as certain declaratory relief.
All of these cases have been removed to the U.S. District Court for the Northern District of California. The Company believes that it has meritorious defenses to the allegations in all of these cases and may have insurance and indemnification rights against third parties, including related parties, with respect to these claims. In March 2022, the District Court approved the terms of a settlement of the Homeowners Action, including the payment of $6.3 million in damages to be paid out of insurance proceeds under a joint insurance policy held by the Company and Lennar, as well as a dismissal with prejudice to be entered on behalf of the Company. Once the judgment is entered, it will be subject to appeal.
Other
Other than the actions outlined above, the Company is also a party to various other claims, legal actions, and complaints arising in the ordinary course of business, the disposition of which, in the Company’s opinion, will not have a material adverse effect on the Company’s condensed consolidated financial statements.
As a significant land owner and developer of unimproved land it is possible that environmental contamination conditions could exist that would require the Company to take corrective action. In the opinion of the Company, such corrective actions, if any, would not have a material adverse effect on the Company’s condensed consolidated financial statements.

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12.    SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental cash flow information for the three months ended March 31, 2022 and 2021 were as follows (in thousands):
Three Months Ended March 31,
20222021
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest, all of which was capitalized to inventories$776 $919 
NONCASH INVESTING AND FINANCING ACTIVITIES:
Adjustment to liability recognized under TRA$(1,058)$(522)
Cash paid for income taxes$ $770 
Purchase of properties and equipment in accounts payable$ $33 
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 (in thousands):
March 31, 2022March 31, 2021
Cash and cash equivalents$203,647 $229,670 
Restricted cash and certificates of deposit1,330 1,330 
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows$204,977 $231,000 
Amounts included in restricted cash and certificates of deposit represent amounts held as collateral on open letters of credit related to development obligations or because of other contractual obligations of the Company that require the restriction.
13.    SEGMENT REPORTING
The Company’s reportable segments consist of:
• Valencia—includes the community of Valencia being developed in northern Los Angeles County, California. The Valencia segment derives revenues from the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers. The Company’s investment in the Valencia Landbank Venture is also reported in the Valencia segment.
• San Francisco—includes the Candlestick and The San Francisco Shipyard communities located on bayfront property in the City of San Francisco, California. The San Francisco segment derives revenues from the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers.
• Great Park—includes the Great Park Neighborhoods being developed adjacent to and around the Orange County Great Park, a metropolitan park under construction in Orange County, California. This segment also includes management services provided by the Management Company to the Great Park Venture, the owner of the Great Park Neighborhoods. As of March 31, 2022, the Company had a 37.5% Percentage Interest in the Great Park Venture and accounted for the investment under the equity method. The reported segment information for the Great Park segment includes the results of 100% of the Great Park Venture at the historical basis of the venture, which did not apply push down accounting at acquisition date. The Great Park segment derives revenues at the Great Park Neighborhoods from sales of residential and commercial land sites to homebuilders, commercial developers and commercial buyers, sales of homes constructed and marketed under a fee build arrangement, and management services provided by the Company to the Great Park Venture.
• Commercial—includes the operations of the Gateway Commercial Venture, which owns an approximately 189,000 square foot office building at the Five Point Gateway Campus. The Five Point Gateway Campus is an office, medical and research and development campus located within the Great Park Neighborhoods and consists of four buildings and surrounding land. The Company and a subsidiary of Lennar lease portions of the building owned by the Gateway Commercial Venture. The Gateway Commercial Venture also owns approximately 50 acres of the surrounding commercial land with additional development rights at the campus. This segment also includes property management services provided by the Management Company to the Gateway Commercial Venture. As of March 31, 2022, the Company had a 75% interest in the Gateway Commercial Venture and accounted for the investment under the equity method. The reported segment information for the Commercial segment includes the results of 100% of the Gateway Commercial Venture at the historical basis of the venture.

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     Segment operating results and reconciliations to the Company’s consolidated balances are as follows (in thousands):
RevenuesProfit (Loss)
Three Months Ended March 31,
2022202120222021
Valencia
$1,159 $592 $(4,827)$(4,899)
San Francisco
180 149 (669)94 
Great Park