Five Point Holdings, LLC Reports Third Quarter 2024 Results

Third Quarter 2024 Highlights

Great Park Venture closed two retail use commercial land sales totaling 12.8 acres for an aggregate purchase price of $25.4 million.
Great Park Venture distributions and incentive compensation payments to the Company totaled $49.4 million.
Great Park builder sales of 166 homes during the quarter.
Valencia builder sales of 89 homes during the quarter.
Renewed the development management agreement with Great Park Venture through December 31, 2026.
Consolidated revenues of $17.0 million; consolidated net income of $12.3 million.
Cash and cash equivalents of $224.5 million as of September 30, 2024.
Debt to total capitalization ratio of 20.5% and liquidity of $349.5 million as of September 30, 2024.

Five Point Holdings, LLC (“Five Point” or the “Company”) (NYSE:FPH), an owner and developer of large mixed-use planned communities in California, today reported its third quarter 2024 results.

Dan Hedigan, Chief Executive Officer, said, “In the third quarter, we generated stronger than expected net income of $12.3 million, which is our sixth consecutive quarter reporting net income, and we ended the quarter with cash and cash equivalents of $224.5 million and total liquidity of $349.5 million. We did not have any residential land sale closings scheduled during the quarter, however, we are continuing to see strong demand from builders for our land, driven largely by the chronic shortage of developable land in our markets. Importantly, we secured a two-year extension of the development management agreement with our Great Park Venture partners. This extension reflects the strength of our relationship with our partners and is a model that we believe can be expanded beyond our existing communities. We expect to close land sales in the fourth quarter in both of our active communities and to end the year either in line with or stronger than our prior guidance of consolidated annual net income of over $100 million and cash and cash equivalents in excess of $300 million. As always, we are focused on liquidity and protecting our balance sheet. This focus puts us in a position of strength, which will enable future growth. I am very optimistic about the future of Five Point, both for the remainder of this year and beyond.”

Consolidated Results

Liquidity and Capital Resources

As of September 30, 2024, total liquidity of $349.5 million was comprised of cash and cash equivalents totaling $224.5 million and borrowing availability of $125.0 million under our unsecured revolving credit facility. Total capital was $2.0 billion, reflecting $2.9 billion in assets and $0.9 billion in liabilities and redeemable noncontrolling interests.

Results of Operations for the Three Months Ended September 30, 2024

Revenues. Revenues of $17.0 million for the three months ended September 30, 2024 were primarily generated from management services.

Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $12.0 million for the three months ended September 30, 2024. The Great Park Venture generated net income of $33.4 million during the three months ended September 30, 2024, and our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $12.1 million. Additionally, we recognized $0.2 million in earnings from our 10% interest in the Valencia Landbank Venture, offset by $0.3 million in loss from our 75% interest in the Gateway Commercial Venture.

During the three months ended September 30, 2024, the Great Park Venture closed two commercial land sales planned for retail uses totaling 12.8 acres for an aggregate purchase price of $25.4 million. The Great Park Venture made aggregate distributions of $3.3 million to holders of Legacy Interests and $103.8 million to holders of Percentage Interests during the three months ended September 30, 2024. We received $38.9 million for our 37.5% Percentage Interest.

Selling, general, and administrative. Selling, general, and administrative expenses were $11.9 million for the three months ended September 30, 2024.

Net income. Consolidated net income for the quarter was $12.3 million. Net income attributable to noncontrolling interests totaled $7.6 million, resulting in net income attributable to the Company of $4.8 million. Net income attributable to noncontrolling interests represents the portion of income allocated to related party partners and members that hold units of the operating company and the San Francisco Venture. Holders of units of the operating company and the San Francisco Venture can redeem their interests for either, at our election, our Class A common shares on a one-for-one basis or cash. In connection with any redemption or exchange, our ownership of our operating subsidiaries will increase thereby reducing the amount of income allocated to noncontrolling interests in subsequent periods.

Conference Call Information

In conjunction with this release, Five Point will host a conference call on Thursday, October 17, 2024 at 5:00 p.m. Eastern Time. Dan Hedigan, Chief Executive Officer, and Kim Tobler, Chief Financial Officer, will host the call. Interested investors and other parties can listen to a live Internet audio webcast of the conference call that will be available on the Five Point website at ir.fivepoint.com. The conference call can also be accessed by dialing (877) 451-6152 (domestic) or (201) 389-0879 (international). A telephonic replay will be available starting approximately three hours after the end of the call by dialing (844) 512-2921, or for international callers, (412) 317-6671. The passcode for the live call and the replay is 13749390. The telephonic replay will be available until 11:59 p.m. Eastern Time on October 26, 2024.

About Five Point

Five Point, headquartered in Irvine, California, designs and develops large mixed-use planned communities in Orange County, Los Angeles County, and San Francisco County that combine residential, commercial, retail, educational, and recreational elements with public amenities, including civic areas for parks and open space. Five Point’s communities include the Great Park Neighborhoods® in Irvine, Valencia® in Los Angeles County, and Candlestick® and The San Francisco Shipyard® in the City of San Francisco. These communities are designed to include up to approximately 40,000 residential homes and up to approximately 23 million square feet of commercial space.

Forward-Looking Statements

This press release 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. Forward-looking statements include, among others, statements that refer to: our expectations of our future home sales and/or builder sales; the impact of inflation and interest rates; our future revenues, costs and financial performance, including with respect to cash generation and profitability; and future demographics and market conditions, including housing supply levels, in the areas where our communities are located. We caution you that any forward-looking statements included in this press release 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. Some of these risks and uncertainties are described in more detail in our filings with the SEC, including our Annual Report on Form 10-K, under the heading “Risk Factors.” 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 hereof. 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.

FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

REVENUES:

Land sales

372

60,694

1,214

60,685

Land sales—related party

—

595

Management services—related party

16,030

4,502

75,035

29,512

Operating properties

611

727

1,891

2,181

Total revenues

17,013

65,923

78,140

92,973

COSTS AND EXPENSES:

Land sales

—

38,967

—

38,967

Management services

4,256

2,371

19,467

14,419

Operating properties

1,231

1,351

4,099

4,321

Selling, general, and administrative

11,911

11,938

37,013

38,400

Total costs and expenses

17,398

54,627

60,579

96,107

OTHER INCOME (EXPENSE):

Interest income

2,595

2,413

8,575

4,542

Miscellaneous

1,074

(5,857

)

1,033

Total other income

2,619

3,487

2,718

5,575

EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES

11,987

(622

)

45,071

52,554

INCOME BEFORE INCOME TAX PROVISION

14,221

14,161

65,350

54,995

INCOME TAX PROVISION

(1,886

)

(8,705

)

(16

)

NET INCOME

12,335

14,158

56,645

54,979

LESS NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

7,579

7,555

34,841

29,341

NET INCOME ATTRIBUTABLE TO THE COMPANY

4,756

6,603

21,804

25,638

NET INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE

Basic

0.07

0.10

0.31

0.37

Diluted

0.07

0.09

0.31

0.37

WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING

Basic

69,279,028

68,865,783

69,192,620

68,794,915

Diluted

146,565,417

145,312,266

146,394,307

145,064,113

NET INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE

Basic and diluted

0.00

WEIGHTED AVERAGE CLASS B SHARES OUTSTANDING

Basic and diluted

79,233,544

FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares)

(Unaudited)

September 30, 2024

December 31, 2023

ASSETS

INVENTORIES

2,340,031

2,213,479

INVESTMENT IN UNCONSOLIDATED ENTITIES

210,763

252,816

PROPERTIES AND EQUIPMENT, NET

29,466

29,145

INTANGIBLE ASSET, NET—RELATED PARTY

11,535

25,270

CASH AND CASH EQUIVALENTS

224,521

353,801

RESTRICTED CASH AND CERTIFICATES OF DEPOSIT

992

RELATED PARTY ASSETS

121,829

83,970

OTHER ASSETS

10,327

9,815

TOTAL

2,949,464

2,969,288

LIABILITIES AND CAPITAL

LIABILITIES:

Notes payable, net

524,909

622,186

Accounts payable and other liabilities

100,135

81,649

Related party liabilities

72,618

78,074

Deferred income tax liability, net

14,382

7,067

Payable pursuant to tax receivable agreement

173,351

173,208

Total liabilities

885,395

962,184

REDEEMABLE NONCONTROLLING INTEREST

25,000

CAPITAL:

Class A common shares; No par value; Issued and outstanding: September 30, 2024—69,358,504 shares; December 31, 2023—69,199,938 shares

Class B common shares; No par value; Issued and outstanding: September 30, 2024—79,233,544 shares; December 31, 2023—79,233,544 shares

Contributed capital

594,204

591,606

Retained earnings

110,584

88,780

Accumulated other comprehensive loss

(2,313

)

(2,332

)

Total members’ capital

702,475

678,054

Noncontrolling interests

1,336,594

1,304,050

Total capital

2,039,069

1,982,104

TOTAL

2,949,464

2,969,288

FIVE POINT HOLDINGS, LLC

SUPPLEMENTAL DATA

(In thousands)

(Unaudited)

Liquidity

September 30, 2024

Cash and cash equivalents

224,521

Borrowing capacity(1)

125,000

Total liquidity

349,521

(1)

As of September 30, 2024, no borrowings or letters of credit were outstanding on the Company’s $125.0 million revolving credit facility.

Debt to Total Capitalization and Net Debt to Total Capitalization

September 30, 2024

Debt(1)

524,994

Total capital

2,039,069

Total capitalization

2,564,063

Debt to total capitalization

20.5

Debt(1)

524,994

Less: Cash and cash equivalents

224,521

Net debt

300,473

Total capital

2,039,069

Total net capitalization

2,339,542

Net debt to total capitalization(2)

12.8

(1)

For purposes of this calculation, debt is the amount due on the Company’s notes payable before offsetting for capitalized deferred financing costs.

(2)

Net debt to total capitalization is a non-GAAP financial measure defined as net debt (debt less cash and cash equivalents) divided by total net capitalization (net debt plus total capital). The Company believes the ratio of net debt to total capitalization is a relevant and a useful financial measure to investors in understanding the leverage employed in the Company’s operations. However, because net debt to total capitalization is not calculated in accordance with GAAP, this financial measure should not be considered in isolation or as an alternative to financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement the Company’s GAAP results.

Segment Results

The following tables reconcile the results of operations of our segments to our consolidated results for the three and nine months ended September 30, 2024 (in thousands):

Three Months Ended September 30, 2024

Valencia

San

Francisco

Great Park

Commercial

Total

reportable

segments

Corporate and

unallocated

Total under

management

Removal of

unconsolidated

entities(1)

Total

consolidated

REVENUES:

Land sales

372

—

58,291

—

58,663

—

58,663

(58,291

)

372

Land sales—related party

—

3,221

—

3,221

—

3,221

(3,221

)

—

Management services—related party(2)

—

15,915

115

16,030

—

16,030

—

16,030

Operating properties

440

171

—

2,229

2,840

—

2,840

(2,229

)

611

Total revenues

812

171

77,427

2,344

80,754

—

80,754

(63,741

)

17,013

COSTS AND EXPENSES:

Land sales

—

8,088

—

8,088

—

8,088

(8,088

)

—

Management services(2)

—

4,256

—

4,256

—

4,256

—

4,256

Operating properties

1,231

—

965

2,196

—

2,196

(965

)

1,231

Selling, general, and administrative

2,407

1,232

3,144

1,059

7,842

8,272

16,114

(4,203

)

11,911

Management fees—related party

—

18,790

—

18,790

—

18,790

(18,790

)

—

Total costs and expenses

3,638

1,232

34,278

2,024

41,172

8,272

49,444

(32,046

)

17,398

OTHER INCOME (EXPENSE):

Interest income

—

1,912

2,004

2,576

4,580

(1,985

)

2,595

Interest expense

—

(694

)

(694

)

—

(694

)

694

—

Miscellaneous

—

Total other income (expense)

1,912

(621

)

1,334

2,576

3,910

(1,291

)

2,619

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES

211

—

211

—

211

11,776

11,987

SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION

(2,591

)

(1,042

)

45,061

(301

)

41,127

(5,696

)

35,431

(21,210

)

14,221

INCOME TAX PROVISION

—

(1,886

)

(1,886

)

—

(1,886

)

SEGMENT (LOSS) PROFIT/NET INCOME

(2,591

)

(1,042

)

45,061

(301

)

41,127

(7,582

)

33,545

(21,210

)

12,335

(1)

Represents the removal of the Great Park Venture and Gateway Commercial Venture operating results, which are included in the Great Park segment and Commercial segment operating results at 100% of each venture’s historical basis, respectively, but are not included in our consolidated results as we account for our investment in each venture using the equity method of accounting.

(2)

For the Great Park and Commercial segments, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture and the Gateway Commercial Venture, as applicable.

Nine Months Ended September 30, 2024

Valencia

San

Francisco

Great Park

Commercial

Total

reportable

segments

Corporate and

unallocated

Total under

management

Removal of

unconsolidated

entities(1)

Total

consolidated

REVENUES:

Land sales

1,214

—

273,747

—

274,961

—

274,961

(273,747

)

1,214

Land sales—related party

—

19,846

—

19,846

—

19,846

(19,846

)

—

Management services—related party(2)

—

74,679

356

75,035

—

75,035

—

75,035

Operating properties

1,384

507

—

7,002

8,893

—

8,893

(7,002

)

1,891

Total revenues

2,598

507

368,272

7,358

378,735

—

378,735

(300,595

)

78,140

COSTS AND EXPENSES:

Land sales

—

67,062

—

67,062

—

67,062

(67,062

)

—

Management services(2)

—

19,467

—

19,467

—

19,467

—

19,467

Operating properties

4,099

—

2,805

6,904

—

6,904

(2,805

)

4,099

Selling, general, and administrative

8,116

3,661

8,708

3,107

23,592

25,236

48,828

(11,815

)

37,013

Management fees—related party

—

91,422

—

91,422

—

91,422

(91,422

)

—

Total costs and expenses

12,215

3,661

186,659

5,912

208,447

25,236

233,683

(173,104

)

60,579

OTHER INCOME (EXPENSE):

Interest income

—

5,062

166

5,279

8,524

13,803

(5,228

)

8,575

Interest expense

—

(2,078

)

(2,078

)

—

(2,078

)

2,078

—

Miscellaneous

—

(5,928

)

(5,857

)

—

(5,857

)

Total other income (expense)

5,062

(1,912

)

3,272

2,596

5,868

(3,150

)

2,718

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES

470

—

470

—

470

44,601

45,071

SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION

(9,076

)

(3,103

)

186,675

(466

)

174,030

(22,640

)

151,390

(86,040

)

65,350

INCOME TAX PROVISION

—

(8,705

)

(8,705

)

—

(8,705

)

SEGMENT (LOSS) PROFIT/NET INCOME

(9,076

)

(3,103

)

186,675

(466

)

174,030

(31,345

)

142,685

(86,040

)

56,645

(1)

Represents the removal of the Great Park Venture and Gateway Commercial Venture operating results, which are included in the Great Park segment and Commercial segment operating results at 100% of each venture’s historical basis, respectively, but are not included in our consolidated results as we account for our investments in each venture using the equity method of accounting.

(2)

The table below reconciles the Great Park segment results to the equity in earnings from our investment in the Great Park Venture that is reflected in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 (in thousands):

Three Months Ended

September 30, 2024

Nine Months Ended

September 30, 2024

Segment profit from operations

45,061

186,675

Less net income of management company attributed to the Great Park segment

11,659

55,212

Net income of the Great Park Venture

33,402

131,463

The Company’s share of net income of the Great Park Venture

12,526

49,299

Basis difference amortization, net

(438

)

(4,081

)

Equity in earnings from the Great Park Venture

12,088

45,218

The table below reconciles the Commercial segment results to the equity in loss from our investment in the Gateway Commercial Venture that is reflected in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 (in thousands):

Three Months Ended

September 30, 2024

Nine Months Ended

September 30, 2024

Segment loss from operations

(301

)

(466

)

Less net income of management company attributed to the Commercial segment

115

356