Segment Reporting

12 Months Ended

Dec. 31, 2018

SEGMENT REPORTING

As of and for the year ended December 31, 2018, the Company’s reportable segments consist of:

• Newhall—includes the community of Newhall Ranch planned for development in northern Los Angeles County, California. The Newhall segment derives revenues from the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers in addition to ancillary operations of operating properties.

• San Francisco—includes the Candlestick Point 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 in addition to management services provided to affiliates of a related party.

• Great Park—includes 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 December 31, 2018, the Company had a 37.5% Percentage Interest in the Great Park Venture and accounts 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 in the Formation Transactions. The Great Park segment derives revenues from the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers in addition to management services provided by the Company to the Great Park Venture.

• Commercial—includes Five Point Gateway Campus, an office and research and development campus within the Great Park Neighborhoods, consisting of four newly constructed buildings. Two of the four buildings are leased to one tenant under a 20-year triple net lease which commenced in August 2017. The Company and a subsidiary of Lennar have entered into separate 130-month full service gross leases to occupy a portion of the other two buildings. This segment also includes property management service provided by the Management Company to the Gateway Commercial Venture, the entity that owns the Five Point Gateway Campus. As of December 31, 2018, the Company had a 75% interest in the Gateway Commercial Venture and accounts 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.

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



	For the year ended December 31, 2018
	(in thousands)
	Newhall			San Francisco			Great Park		Commercial			Total reportable segments			Removal of Great Park Venture (1)			Removal of Gateway Commercial Venture (1)			Add investment in Great Park Venture			Add investment in Gateway Commercial Venture			Other eliminations (2)			Corporate and unallocated (3)			Total Consolidated
Revenues	$	6,401		$	6,010		$	210,779	$	28,069		$	251,259		$	(175,689	)	$	(26,580	)	$	—		$	—		$	—		$	—		$	48,990
Depreciation and amortization	271			287			12,456		11,730			24,744			—			(11,730		)	—			—			—			210			13,224
Interest income	1			—			2,815		—			2,816			(2,815		)	—			—			—			—			11,766			11,767
Interest expense	—			—			—		11,563			11,563			—			(11,563		)	—			—			—			—			—
Segment profit (loss)/net profit (loss)	(6,802		)	(18,060		)	15,211		(187		)	(9,838		)	(3,068		)	1,676			(906		)	(1,257		)	—			(54,552		)	(67,945		)
Other significant items:
Segment assets	596,222			1,151,372			1,303,362		479,662			3,530,618			(1,154,216		)	(478,956		)	425,653			107,246			(730		)	494,277			2,923,892
Inventory assets and real estate related assets, net	559,126			1,136,958			1,059,717		464,123			3,219,924			(1,059,717		)	(464,123		)	—			—			—			—			1,696,084
Expenditures for long-lived assets (4)	198,008			73,177			109,292		27,030			407,507			(109,292		)	(27,030		)	—			—			—			2,354			273,539

	For the year ended December 31, 2017
	(in thousands)
	Newhall			San Francisco			Great Park		Commercial			Total reportable segments			Removal of Great Park Venture (1)			Removal of Gateway Commercial Venture (1)			Add investment in Great Park Venture			Add investment in Gateway Commercial Venture			Other eliminations (2)			Corporate and unallocated (3)			Total Consolidated



Revenues	$	31,568		$	91,187		$	497,173		$	9,682	$	629,610		$	(480,934	)	$	(9,245	)	$	—		$	—	$	—		$	—		$	139,431
Depreciation and amortization	553			316			—			4,504		5,373			—			(4,504		)	—			—		—			185			1,054
Interest income	3			—			2,226			—		2,229			(2,226		)	—			—			—		—			2,574			2,577
Interest expense	—			—			—			3,628		3,628			—			(3,628		)	—			—		—			—			—
Segment profit (loss)/net profit (loss)	(12,358		)	(19,268		)	42,219			458		11,051			(36,061		)	(21		)	5,760			16		—			43,451			24,196
Other significant items:
Segment assets	444,407			1,123,266			1,578,142			456,292		3,602,107			(1,447,604		)	(456,006		)	423,492			106,516		(80,890		)	830,740			2,978,355
Inventory assets	361,943			1,063,949			1,089,513			448,795		2,964,200			(1,089,513		)	(448,795		)	—			—		—			—			1,425,892
Expenditures for long-lived assets (4)	84,024			62,188			311,932			446,072		904,216			(311,932		)	(446,072		)	—			—		—			1			146,213

	For the year ended December 31, 2016
	(in thousands)
	Newhall			San Francisco			Great Park			Commercial		Total reportable segments			Removal of Great Park Venture (1)			Removal of Gateway Commercial Venture (1)			Add investment in Great Park Venture			Add investment in Gateway Commercial Venture		Other eliminations (2)			Corporate and unallocated (3)			Total Consolidated
Revenues	$	22,044		$	3,999		$	35,830		$	—	$	61,873		$	(22,505	)	$	—		$	—		$	—	$	—		$	—		$	39,368
Depreciation and amortization	492			195			2,113			—		2,800			—			—			—			—		—			58			2,858
Interest income	91			—			11,723			—		11,814			(11,723		)	—			—			—		—			77			168
Segment loss/net loss	(22,703		)	(14,204		)	(67,668		)	—		(104,575		)	71,980			—			(1,356		)	—		—			(62,666		)	(96,617		)
Other significant items:
Segment assets	416,445			1,134,196			1,669,679			—		3,220,320			(1,496,102		)	—			417,732			—		(69,462		)	42,094			2,114,582
Inventory assets	280,377			1,080,074			1,115,818			—		2,476,269			(1,115,818		)	—			—			—		—			—			1,360,451
Expenditures for long-lived assets (4)	21,686			42,113			123,008			—		186,807			(123,008		)	—			—			—		—			461			64,260

(1) Represents the removal of the Great Park Venture’s and Gateway Commercial Venture’s operating results and balances that are included in the Great Park segment and Commercial segment operating results and balances, respectively, but are not included in the Company’s consolidated results and balances.

(2) Represents intersegment balances that eliminate in consolidation.

(3) Corporate and unallocated activity is primarily comprised of corporate general, and administrative expenses and income taxes. Corporate and unallocated assets consist of cash, marketable securities, receivables, prepaids, and deferred equity offering and financing costs.

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

Lennar and several of its affiliates represented one of the Company’s major customers for the years ended December 31, 2017 and 2016, and accounted for approximately $93.4 million or 67% and $6.0 million or 15%, respectively, of total consolidated revenues. These revenues represented land sales and management services revenues, and were reported in the Newhall and San Francisco segments. The Great Park Venture represented another of the Company’s major customers for the years ended December 31, 2018, 2017 and 2016, and accounted for approximately $35.1 million or 72%, $16.2 million or 12%, and $13.3 million or 34%, respectively, of total consolidated revenues. These revenues represented management services revenues and were reported in the Great Park segment.