Form 8-K - Current report

0001574197false00015741972024-07-182024-07-18

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

July 18, 2024

Date of report (date of earliest event reported)

FIVE POINT HOLDINGS, LLC

(Exact name of registrant as specified in its charter)

Delaware			001-38088			27-0599397
(State or other jurisdiction of incorporation)			(Commission File Number)			(I.R.S. Employer Identification No.)

2000 FivePoint

4th Floor

Irvine

California

92618

(Address of Principal Executive Offices)

(Zip code)

[phone]

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common shares

FPH

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.  ☐

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Item 2.02. Results of Operations and Financial Condition.

On July 18, 2024, Five Point Holdings, LLC issued a press release announcing its results of operations for the three months ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d)    Exhibits.

99.1			Press Release, dated July 18, 2024
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.

Date: July 18, 2024

FIVE POINT HOLDINGS, LLC
By:			/s/ Michael Alvarado
Name:			Michael Alvarado
Title:			Chief Operating Officer, Chief Legal Officer, Vice President and Secretary

Exhibit 99.1

Five Point Holdings, LLC Reports Second Quarter 2024 Results

Second Quarter 2024 Highlights

•Great Park Venture sold 105 homesites on 12.3 acres of land for an aggregate purchase price of $96.1 million.

•Great Park Venture distributions and incentive compensation payments to the Company totaled $29.7 million.

•Great Park builder sales of 63 homes during the quarter.

•Valencia builder sales of 84 homes during the quarter.

•Consolidated revenues of $51.2 million; consolidated net income of $38.2 million.

•Cash and cash equivalents of $217.4 million as of June 30, 2024.

•Debt to total capitalization ratio of 20.6% and liquidity of $342.4 million as of June 30, 2024.

Irvine, CA, July 18, 2024 (Business Wire) – 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 second quarter 2024 results.

Dan Hedigan, Chief Executive Officer, said, “We had another strong quarter, with consolidated net income of $38.2 million on revenues of $51.2 million, ending with total cash and cash equivalents of $217.4 million. Although the inflation and interest rate environment remained challenging during the quarter, we continued to see meaningful appreciation in our residential land sale pricing, especially in our Great Park Neighborhoods community where we closed a sale during the quarter at a price of $7.8 million per acre and are seeing current pricing for new land sales move even higher. As we plan for the future of Five Point, our team is focused on perfecting our entitlements at our Valencia and San Francisco communities and continuing to execute on our key priorities: generating revenue, controlling our SG&A, and managing our capital spend. For the second half of 2024, we expect demand in our chronically undersupplied housing markets to remain strong and to drive a strong finish to the year. While we expect a relatively soft third quarter, we expect to close land sales in the fourth quarter in both of our active communities and to end the year with consolidated annual net income of over $100 million and cash and cash equivalents in excess of $300 million.”

Consolidated Results

Liquidity and Capital Resources

As of June 30, 2024, total liquidity of $342.4 million was comprised of cash and cash equivalents totaling $217.4 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 June 30, 2024

Revenues. Revenues of $51.2 million for the three months ended June 30, 2024 were primarily generated from management services.

Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $15.5 million for the three months ended June 30, 2024. The Great Park Venture generated net income of $44.9 million during the three months ended June 30, 2024, and our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $15.5 million. Additionally, we recognized $0.2 million in earnings from our 10% interest in the Valencia Landbank Venture, offset by $0.2 million in loss from our 75% interest in the Gateway Commercial Venture.

During the three months ended June 30, 2024, the Great Park Venture sold 105 homesites on 12.3 acres of land at the Great Park Neighborhoods for an aggregate purchase price of $96.1 million. After completing the land sale, the Great Park Venture made aggregate distributions of $7.3 million to holders of Legacy Interests and $62.5 million to holders of Percentage Interests. We received $23.4 million for our 37.5% Percentage Interest.

Selling, general, and administrative. Selling, general, and administrative expenses were $12.2 million for the three months ended June 30, 2024.

Net income. Consolidated net income for the quarter was $38.2 million. Net income attributable to noncontrolling interests totaled $23.5 million, resulting in net income attributable to the Company of $14.7 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

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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, July 18, 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 [phone] (domestic) or [phone] (international). A telephonic replay will be available starting approximately three hours after the end of the call by dialing [phone], or for international callers, [phone]. The passcode for the live call and the replay is 13747738. The telephonic replay will be available until 11:59 p.m. Eastern Time on July 27, 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.

Investor Relations:

Kim Tobler, 949-425-5211

[e-mail]

or

Media:

Eric Morgan, 949-349-1088

[e-mail]

Source: Five Point Holdings, LLC

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FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
REVENUES:
Land sales			$	307					$	16					$	842					$	(9)
Land sales—related party			3						(29)						—						595
Management services—related party			50,279						20,774						59,005						25,010
Operating properties			603						588						1,280						1,454
Total revenues			51,192						21,349						61,127						27,050
COSTS AND EXPENSES:
Land sales			—						—						—						—
Management services			11,315						9,682						15,211						12,048
Operating properties			1,878						1,798						2,868						2,970
Selling, general, and administrative			12,186						12,710						25,102						26,462
Total costs and expenses			25,379						24,190						43,181						41,480
OTHER INCOME (EXPENSE):
Interest income			2,755						1,293						5,980						2,129
Miscellaneous			26						(20)						(5,881)						(41)
Total other income			2,781						1,273						99						2,088
EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES			15,498						52,128						33,084						53,176
INCOME BEFORE INCOME TAX PROVISION			44,092						50,560						51,129						40,834
INCOME TAX PROVISION			(5,865)						(5)						(6,819)						(13)
NET INCOME			38,227						50,555						44,310						40,821
LESS NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			23,505						26,984						27,262						21,786
NET INCOME ATTRIBUTABLE TO THE COMPANY			$	14,722					$	23,571					$	17,048					$	19,035
NET INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE
Basic			$	0.21					$	0.34					$	0.25					$	0.28
Diluted			$	0.21					$	0.34					$	0.24					$	0.27
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING
Basic			69,239,296						68,811,975						69,148,940						68,758,894
Diluted			145,936,206						145,040,689						145,906,521						144,939,450
NET INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE
Basic and diluted			$	0.00					$	0.00					$	0.00					$	0.00
WEIGHTED AVERAGE CLASS B SHARES OUTSTANDING
Basic and diluted			79,233,544						79,233,544						79,233,544						79,233,544

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FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares)

(Unaudited)

 

			June 30, 2024						December 31, 2023
ASSETS
INVENTORIES			$	2,292,264					$	2,213,479
INVESTMENT IN UNCONSOLIDATED ENTITIES			237,777						252,816
PROPERTIES AND EQUIPMENT, NET			29,359						29,145
INTANGIBLE ASSET, NET—RELATED PARTY			13,728						25,270
CASH AND CASH EQUIVALENTS			217,387						353,801
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT			992						992
RELATED PARTY ASSETS			120,551						83,970
OTHER ASSETS			8,081						9,815
TOTAL			$	2,920,139					$	2,969,288
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net			$	524,104					$	622,186
Accounts payable and other liabilities			83,267						81,649
Related party liabilities			74,173						78,074
Deferred income tax liability, net			12,917						7,067
Payable pursuant to tax receivable agreement			173,351						173,208
Total liabilities			867,812						962,184
REDEEMABLE NONCONTROLLING INTEREST			25,000						25,000
CAPITAL:
Class A common shares; No par value; Issued and outstanding: June 30, 2024—69,358,504 shares; December 31, 2023—69,199,938 shares
Class B common shares; No par value; Issued and outstanding: June 30, 2024—79,233,544 shares; December 31, 2023—79,233,544 shares
Contributed capital			593,211						591,606
Retained earnings			105,828						88,780
Accumulated other comprehensive loss			(2,321)						(2,332)
Total members’ capital			696,718						678,054
Noncontrolling interests			1,330,609						1,304,050
Total capital			2,027,327						1,982,104
TOTAL			$	2,920,139					$	2,969,288

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FIVE POINT HOLDINGS, LLC

SUPPLEMENTAL DATA

(In thousands)

(Unaudited)

Liquidity

			June 30, 2024
Cash and cash equivalents			$	217,387
Borrowing capacity(1)			125,000
Total liquidity			$	342,387

(1) As of June 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

			June 30, 2024
Debt(1)			$	524,994
Total capital			2,027,327
Total capitalization			$	2,552,321
Debt to total capitalization			20.6		%
Debt(1)			$	524,994
Less: Cash and cash equivalents			217,387
Net debt			307,607
Total capital			2,027,327
Total net capitalization			$	2,334,934
Net debt to total capitalization(2)			13.2		%

(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.

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Segment Results

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

			Three Months Ended June 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			$	307					$	—					$	134,638					$	—					$	134,945					$	—					$	134,945					$	(134,638)					$	307
Land sales—related party			3						—						4,734						—						4,737						—						4,737						(4,734)						3
Management services—related party(2)			—						—						50,151						128						50,279						—						50,279						—						50,279
Operating properties			435						168						—						2,224						2,827						—						2,827						(2,224)						603
Total revenues			745						168						189,523						2,352						192,788						—						192,788						(141,596)						51,192
COSTS AND EXPENSES:
Land sales			—						—						29,016						—						29,016						—						29,016						(29,016)						—
Management services(2)			—						—						11,315						—						11,315						—						11,315						—						11,315
Operating properties			1,878						—						—						864						2,742						—						2,742						(864)						1,878
Selling, general, and administrative			2,515						1,294						2,625						1,019						7,453						8,377						15,830						(3,644)						12,186
Management fees—related party			—						—						64,470						—						64,470						—						64,470						(64,470)						—
Total costs and expenses			4,393						1,294						107,426						1,883						114,996						8,377						123,373						(97,994)						25,379
OTHER INCOME (EXPENSE):
Interest income			—						17						1,671						59						1,747						2,738						4,485						(1,730)						2,755
Interest expense			—						—						—						(690)						(690)						—						(690)						690						—
Miscellaneous			23						—						—						—						23						3						26						—						26
Total other income (expense)			23						17						1,671						(631)						1,080						2,741						3,821						(1,040)						2,781
EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES			243						—						—						—						243						—						243						15,255						15,498
SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION			(3,382)						(1,109)						83,768						(162)						79,115						(5,636)						73,479						(29,387)						44,092
INCOME TAX PROVISION			—						—						—						—						—						(5,865)						(5,865)						—						(5,865)
SEGMENT (LOSS) PROFIT/NET INCOME			$	(3,382)					$	(1,109)					$	83,768					$	(162)					$	79,115					$	(11,501)					$	67,614					$	(29,387)					$	38,227

(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.

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			Six Months Ended June 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			$	842					$	—					$	215,456					$	—					$	216,298					$	—					$	216,298					$	(215,456)					$	842
Land sales—related party			—						—						16,625						—						16,625						—						16,625						(16,625)						—
Management services—related party(2)			—						—						58,764						241						59,005						—						59,005						—						59,005
Operating properties			944						336						—						4,773						6,053						—						6,053						(4,773)						1,280
Total revenues			1,786						336						290,845						5,014						297,981						—						297,981						(236,854)						61,127
COSTS AND EXPENSES:
Land sales			—						—						58,974						—						58,974						—						58,974						(58,974)						—
Management services(2)			—						—						15,211						—						15,211						—						15,211						—						15,211
Operating properties			2,868						—						—						1,840						4,708						—						4,708						(1,840)						2,868
Selling, general, and administrative			5,709						2,429						5,564						2,048						15,750						16,964						32,714						(7,612)						25,102
Management fees—related party			—						—						72,632						—						72,632						—						72,632						(72,632)						—
Total costs and expenses			8,577						2,429						152,381						3,888						167,275						16,964						184,239						(141,058)						43,181
OTHER INCOME (EXPENSE):
Interest income			—						32						3,150						93						3,275						5,948						9,223						(3,243)						5,980
Interest expense			—						—						—						(1,384)						(1,384)						—						(1,384)						1,384						—
Miscellaneous			47						—						—						—						47						(5,928)						(5,881)						—						(5,881)
Total other income (expense)			47						32						3,150						(1,291)						1,938						20						1,958						(1,859)						99
EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES			259						—						—						—						259						—						259						32,825						33,084
SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION			(6,485)						(2,061)						141,614						(165)						132,903						(16,944)						115,959						(64,830)						51,129
INCOME TAX PROVISION			—						—						—						—						—						(6,819)						(6,819)						—						(6,819)
SEGMENT (LOSS) PROFIT/NET INCOME			$	(6,485)					$	(2,061)					$	141,614					$	(165)					$	132,903					$	(23,763)					$	109,140					$	(64,830)					$	44,310

(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) 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.

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 six months ended June 30, 2024 (in thousands):

			Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
Segment profit from operations			$	83,768											$	141,614
Less net income of management company attributed to the Great Park segment			38,836												43,553
Net income of the Great Park Venture			44,932												98,061
The Company’s share of net income of the Great Park Venture			16,850												36,773
Basis difference amortization, net			(1,377)												(3,643)
Equity in earnings from the Great Park Venture			$	15,473											$	33,130

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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 six months ended June 30, 2024 (in thousands):

			Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
Segment loss from operations			$	(162)											$	(165)
Less net income of management company attributed to the Commercial segment			128												241
Net loss of the Gateway Commercial Venture			(290)												(406)
Equity in loss from the Gateway Commercial Venture			$	(218)											$	(305)

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Cover	Jul. 18, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 18, 2024
Entity Registrant Name	FIVE POINT HOLDINGS, LLC
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38088
Entity Tax Identification Number	27-0599397
Entity Address, Address Line One	2000 FivePoint
Entity Address, Address Line Two	4th Floor
Entity Address, City or Town	Irvine
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92618
City Area Code	949
Local Phone Number	349-1000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A common shares
Trading Symbol	FPH
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001574197
Amendment Flag	false

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