8-K

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

March 29, 2018

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.)
25 Enterprise, Suite 300, Aliso Viejo, California		92656
(Address of principal executive offices)		(Zip Code)

(949) 349-1000

(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 (see General Instruction A.2. below):

☐ 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))

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.  ☒

Item 2.02 Results of Operations and Financial Conditions.

On March 29, 2018, Five Point Holdings, LLC (the “Company”) issued a press release announcing its results of operations for the fourth quarter and full year ended December 31, 2017. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c) On March 29, 2018, the Company made a public announcement of the following appointments:

On March 21, 2018, Lynn Jochim, 54, was appointed as the Company’s Co-Chief Operating Officer. Ms. Jochim served as the Company’s Executive Vice President from May 2016 until her appointment as Co-Chief Operating Officer. From 2009 until May 2016, Ms. Jochim worked for the management company, being principally responsible for Great Park Neighborhoods, and in 2010 she became Executive Vice President of the management company. Prior to moving to Orange County to join the management company, Ms. Jochim worked for Lennar for 10 years, including as Regional Vice President of Lennar Communities in the San Francisco Bay Area, where she was involved in the development of Lennar’s master planned communities. Before joining Lennar, Ms. Jochim worked for Ernst & Young San Francisco Real Estate Consulting, where her assignments included financial and feasibility analysis for base reuse projects in the San Francisco Bay Area and corporate real estate analysis for Fortune 500 companies. In the early 1990s, Ms. Jochim co-founded a minority and women-owned business that contracted with the Resolution Trust Corporation and successfully managed and disposed of a large portfolio of commercial and hotel assets, as well as loans. Ms. Jochim has previously served on the boards of the Oakland Children’s Hospital and the Orange County Business Council and as a president and board member of the Building Industry Association (BIA) in northern California. She also founded the BIA Women’s Education Council. She currently serves on the USC Lusk Real Estate Advisory Committee. Ms. Jochim received a Bachelor of Science degree in Business from California State University, Sacramento with an emphasis in real estate, land use and finance.

On March 21, 2018, Kofi Bonner, 62, was appointed as the Company’s Co-Chief Operating Officer. Mr. Bonner served as the Company’s Regional President-Northern California from May 2016 until his appointment as Co-Chief Operating Officer, leading development of the Company’s communities, The San Francisco Shipyard and Candlestick Point, as well as the communities the Company manages for Lennar, Treasure Island and the Concord Naval Weapons Station. From 2005 until May 2016, Mr. Bonner was President of Lennar Urban, a division of Lennar. Before joining Lennar in 2005, he was Executive Vice President and Chief Administrative Officer of the Cleveland Browns from 1998 to 2004, where he was responsible for the business affairs of the team and built the Cleveland Browns Stadium. From 2004 to 2005, Mr. Bonner served as the Regional Director and Executive Vice President of MBNA. Prior to that, he served as Chief Economic Advisor to Mayor Willie Brown in San Francisco. Mr. Bonner also worked as Director of Community & Economic Development and Interim City Manager for the City of Oakland, Deputy Executive Director of the San Francisco Redevelopment Agency, and Redevelopment Director for the City of Emeryville. Mr. Bonner is a 2011 UC Berkeley College of Environmental Design Distinguished Fellow and a former non-resident Senior Fellow of the Brookings Institution’s Metropolitan Leadership Council. In 2010, Lambda Alpha International’s Golden Gate Chapter named Mr. Bonner “Member of the Year.” He currently serves on the Executive Committee of Bay Area Council where he co-chairs the Housing Committee. Mr. Bonner also is on UC Berkeley’s College of Environmental Design Advisory Council, UC Berkeley Foundation’s Board of Trustees, and the Board of Trustees of the Rock and Roll Hall of Fame Museum (Cleveland).

On March 21, 2018, Greg McWilliams, 66, was appointed as the Company’s Chief Policy Officer. Mr. Williams served as the Company’s Regional President-Southern California from May 2016 until his appointment as Chief Policy Officer. From 2004 until May 2016, Mr. McWilliams was President of Newhall Land & Farming. In this capacity, he has managed the entitlement and development of the final planning phases of Valencia and has overseen the entitlement and planning of Newhall Ranch. Mr. McWilliams served as President of Newhall Land & Farming when a joint venture between Lennar and LNR, which owned Newhall Land & Farming, commenced proceedings under Chapter 11 of the Bankruptcy Code. Prior to joining Newhall Land & Farming, Mr. McWilliams was at Lennar, most recently as Regional President of Lennar Urban Communities in California and as President of Lennar Communities in the Bay Area, where he managed complex development projects involving the transfer of military bases. Mr. McWilliams currently serves as Chairman of the California Business Properties Association (CBPA) in Sacramento and Chairman of the Southern California Association of Governments Global Land Use and Economic Council. He also serves on the Executive Board and is former Chairman of the Southern California Leadership Council (SCLC) and serves on the Board of Directors of the State of California Chamber of Commerce and the Building Industry Association. He also serves on the Board of Trustees of the Cal Arts Institute. Mr. McWilliams received a bachelor’s degree from the University of Redlands and a law degree from Western State University.

1

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press Release, dated March 29, 2018.

2

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: March 29, 2018

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

3

EX-99.1

Exhibit 99.1

Five Point Holdings, LLC Announces Fourth Quarter 2017 Results

Fourth Quarter 2017 and Recent Highlights

• Cash and cash equivalents of $848.5 million at December 31, 2017.

• No outstanding cash borrowings under $125 million revolving credit facility.

• Issued $500 million of 7.875% unsecured senior notes due 2025.

• Tax Receivable Agreement liability was reduced by $105.6 million as a result of the recent tax reform legislation.

Aliso Viejo, CA, March 29, 2018 (Business Wire) – Five Point Holdings, LLC (“Five Point” or “the Company”), an owner and developer of mixed-use master-planned communities in California, today reported fourth quarter 2017 financial results.

“2017 was a transformational year for Five Point in which we became a public company with sufficient liquidity to fund the company’s land development needs while also making significant progress at our communities,” said Emile Haddad, Chairman and CEO of Five Point. “The combination of vibrant job growth and limited housing supply in our core markets bodes well for our land portfolio heading into 2018. Buyer demand at the Great Park Neighborhoods in Irvine remains strong and we continue to move forward with our development program at Newhall Ranch in Los Angeles County. In San Francisco, our design and development program for residential, retail, and commercial uses continues to be refined with a focus on the Candlestick portion of the community. We remain committed to maintaining a strong balance sheet while pursuing our twin goals of investing in long-term land assets that can generate substantial free cash flow while developing a commercial portfolio of income producing properties.”

Fourth Quarter 2017 Consolidated Results

Liquidity and Capital Resources

As of December 31, 2017, we had $848.5 million of cash and cash equivalents and no cash borrowings under our operating company’s $125 million unsecured revolving credit facility. Total capital of Five Point was $1.9 billion as of December 31, 2017, reflecting $3.0 billion in assets and $1.1 billion in liabilities.

In November 2017, the Operating Company issued $500.0 million of 7.875% unsecured senior notes due 2025 in a private placement. We intend to use the net proceeds of the offering for general corporate purposes, which may include funding development activities at our communities.

Results of operations

Revenues. Revenues were $22.3 million for the three months ended December 31, 2017 primarily generated from the sale of remnant parcels in Sacramento and Los Angeles County in addition to management services revenue and collection of various builder fees attributable to previous land sales. There were no land sales at Newhall Ranch or The San Francisco Shipyard and Candlestick Park during the fourth quarter 2017.

Other income. For the three months ended December 31, 2017, the Company recognized $105.6 million of other income resulting from an adjustment to reduce the payable pursuant to our tax receivable agreement, primarily as a result of the Tax Cuts and Jobs Act of 2017’s reduction in the corporate tax rate.

Equity in loss from unconsolidated entities. Equity in loss from unconsolidated entities was $11.8 million for the three months ended December 31, 2017. The loss was primarily due to our proportionate share of the Great Park Venture’s net loss during the quarter of $77.4 million. After adjusting for amortization and accretion of the basis difference, our equity in loss from our 37.5% percentage interest in the Great Park Venture was $12.0 million. Equity in earnings from our 75% interest in the Gateway Commercial Venture was $0.2 million for the three months ended December 31, 2017.

Selling, general, and administrative. Selling, general, and administrative expenses were $29.7 million for the three months ended December 31, 2017 and were largely comprised of employee related costs, including $4.5 million in share based compensation expense.

Net income (loss). Consolidated net income for the quarter was $81.9 million primarily due to the adjustment to the payable associated with the tax receivable agreement. The net loss attributable to Non-Controlling Interests totaled $13.4 million. As a result, net income attributable to the company was $95.3 million.

Segment Results

Newhall Segment – We are continuing land development activities and expect to start deliveries in Mission Village in late 2019. Mission Village is approved for up to 4,055 homesites and approximately 1.6 million square feet of commercial development. Although we entered into a settlement with key national and state environmental and Native American organizations in September 2017, we are still involved in related lawsuits with two local environmental groups that did not join the settlement regarding the approvals and permits that have been issued for development areas within Newhall Ranch.

Total revenues were $15.8 million for the fourth quarter 2017. In October 2017, we sold the remaining 153 residential homesites on approximately 24 acres at our property in Sacramento, California for gross proceeds of $7.2 million. Additional land sale revenues in the period represent recognition of deferred revenue, and collection of various builder fees related to prior period land sales. Selling, general, and administrative expenses were $5.7 million for the fourth quarter.

San Francisco Segment – We are continuing our land development activities at Candlestick and Hunter’s Point. We are working with the City of San Francisco to increase the total amount of commercial square footage entitlement at Shipyard/Candlestick by over 2 million square feet. We currently expect to receive approval for the increased entitlement in 2018.

Total revenues were $1.9 million for the fourth quarter 2017. Revenues during the quarter are mostly attributable to fees generated from our management agreements in which we provide certain management services to ventures in which Lennar is an investor. There were no land sales at The San Francisco Shipyard and Candlestick Point during the three months ended December 31, 2017. Selling, general, and administrative expenses were $7.5 million for the fourth quarter.

Great Park Segment – As of December 31, 2017, based on reports we receive from third party homebuilders, the percentage of homes sold in Parasol Park, the only active development area within the Great Park Neighborhoods was 78%. As of March 2018, Parasol Park is now more than 90% sold out, and the Great Park Venture opened a new development area in early March where we previously delivered 1,007 homesites to eight builders.

Total segment revenues were $19.8 million for the fourth quarter 2017, partially resulting from the recognition of deferred land sale revenues from prior period land sales in addition to the collection of builder marketing fees that were also recognized. The Great Park segment’s net loss for the quarter was $75.9 million, mostly attributable to the Great Park Venture’s recognition and accrual of incentive compensation management fee expense for services provided by the Great Park Venture’s managers.

We do not consolidate the financial results of the Great Park Venture but instead account for our 37.5% percentage interest using the equity method. After taking into account the investment basis difference adjustment, the Company’s investment in the Great Park Venture decreased by $12.0 million for the three months ended December 31, 2017.

Commercial Segment – For the three months ended December 31, 2017, our commercial segment recognized $6.3 million in revenues from the triple net lease with Broadcom and our property management services. Expenses were mostly comprised of depreciation, amortization and interest expense totaling $4.5 million. Our segment net income was $0.6 million and our share of equity in income from the Gateway Commercial Venture totaled $0.2 million for the three months ended December 31, 2017.

Corporate Developments

On March 21, 2018, we appointed Lynn Jochim, formerly our Executive Vice President, and Kofi Bonner, formerly our Regional President-Northern California, to be our Co-Chief Operating Officers, and we appointed Greg McWilliams, formerly our Regional President-Southern California, to be our Chief Policy Officer.

Conference Call Information

In conjunction with this release, Five Point will host a conference call today, Thursday, March 29, 2018 at 5:00 pm Eastern Time. Emile Haddad, Chairman, President and Chief Executive Officer, and Erik Higgins, Vice President and Chief Financial Officer, will host the call. Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company’s website at ir.fivepoint.com. The online replay will be available on the same website immediately following the call. The conference call can also be accessed by dialing (877) 425-9470 (domestic) or (201) 389-0878 (international). A telephonic replay will be available approximately two hours after the call by dialing (844) 512-2921, or for international callers, (412) 317-6671. The passcode for the live call and the replay is 13677847. The replay will be available until 11:59 p.m. Eastern Time on April 12, 2018.

About Five Point

FivePoint, headquartered in Aliso Viejo, California, designs and develops mixed-use, master-planned communities in coastal California. FivePoint is developing vibrant and sustainable communities in Orange County, Los Angeles County, and San Francisco County that will offer homes, commercial, retail, educational, and recreational elements as well as civic areas, parks, and open spaces. FivePoint’s three communities are: Great Park Neighborhoods^® in Irvine, Newhall Ranch^® near Valencia in Los Angeles County, and The San Francisco Shipyard/Candlestick Point in the City of San Francisco. The communities are planned to include approximately 40,000 residential homes and approximately 21 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. This press release 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. 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 quarterly reports on Form 10-Q, 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:

Bob Wetenhall, 949-349-1087

bob.wetenhall@fivepoint.com

or

Media:

Steve Churm, 949-349-1034

steve.churm@fivepoint.com

Source: Five Point Holdings, LLC

FIVE POINT HOLDINGS, LLC

SELECTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2017			2016			2017			2016
REVENUES:
Land sales	$	9,398		$	4,820		$	17,257		$	9,561
Land sales—related party		2,005			549			87,556			2,512
Management services—related party		6,100			7,956			22,517			16,856
Operating properties		4,760			3,204			12,101			10,439
Total revenues		22,263			16,529			139,431			39,368
COSTS AND EXPENSES:
Land sales		904			1,199			84,659			356
Management services		2,913			5,174			10,791			9,122
Operating properties		3,143			2,845			11,450			10,656
Selling, general, and administrative		29,738			25,899			122,274			120,667
Management fees—related party		—			—			—			1,716
Total costs and expenses		36,698			35,117			229,174			142,517
OTHER INCOME:
Adjustment to payable pursuant to tax receivable agreement		105,586			—			105,586			—
Interest income		2,577			—			2,577			—
Total other income		108,163			—			108,163			—
EQUITY IN (LOSS) EARNINGS FROM UNCONSOLIDATED ENTITIES		(11,808	)		(877	)		5,776			(1,356	)
INCOME (LOSS) BEFORE INCOME TAX BENEFIT		81,920			(19,465	)		24,196			(104,505	)
INCOME TAX BENEFIT		—			3,432			—			7,888
NET INCOME (LOSS)		81,920			(16,033	)		24,196			(96,617	)
LESS NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(13,407	)		(12,946	)		(49,039	)		(63,351	)
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$	95,327		$	(3,087	)	$	73,235		$	(33,266	)

FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares)

(Unaudited)

	December 31,
	2017			2016
ASSETS
INVENTORIES	$	1,425,892		$	1,360,451
INVESTMENT IN UNCONSOLIDATED ENTITIES		530,007			417,732
PROPERTIES AND EQUIPMENT, NET		29,656			34,409
ASSETS HELD FOR SALE, NET		4,519			—
INTANGIBLE ASSET, NET—RELATED PARTY		127,593			127,593
CASH AND CASH EQUIVALENTS		848,478			62,304
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT		1,467			2,343
MARKETABLE SECURITIES—HELD TO MATURITY		—			20,577
RELATED PARTY ASSETS		3,158			82,411
OTHER ASSETS		7,585			6,762
TOTAL	$	2,978,355		$	2,114,582
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net	$	560,618		$	69,387
Accounts payable and other liabilities		167,620			114,080
Liabilities related to assets held for sale		5,363			—
Related party liabilities		186,670			221,157
Payable pursuant to tax receivable agreement		152,475			201,845
Total liabilities		1,072,746			606,469
CAPITAL:
Class A common shares; No par value; Issued and outstanding: 2017—62,314,850 shares; 2016—37,426,008 shares
Class B common shares; No par value; Issued and outstanding: 2017—81,463,433 shares; 2016—74,320,576 shares
Contributed capital		530,015			260,779
Retained earnings (accumulated deficit)		57,841			(15,394	)
Accumulated other comprehensive loss		(2,455	)		(2,469	)
Total members’ capital		585,401			242,916
Noncontrolling interests		1,320,208			1,265,197
Total capital		1,905,609			1,508,113
TOTAL	$	2,978,355		$	2,114,582

FIVE POINT HOLDINGS, LLC

SUPPLEMENTAL DATA

(In thousands)

(Unaudited)

	December 31, 2017
Cash and cash equivalents	$	848,478
Borrowing capacity (1)		124,000
Total liquidity	$	972,478

(1) As of December 31, 2017, no funds have been drawn on the Company’s $125.0 million Revolving Credit Facility; however, letters of credit of $1.0 million are issued and outstanding under the Revolving Credit Facility, thus reducing the available capacity by the outstanding letters of credit amount.

	December 31, 2017
Debt (1)	$	607,692
Total capital		1,905,609
Total capitalization	$	2,513,301
Debt to total capitalization		24.2	%

(1) For purposes of this calculation, debt consists of (i) the outstanding principal on the Company’s 7.875% senior notes due 2025 of $500.0 million, (ii) a settlement note with an outstanding principal of $5.0 million, and (iii) the Company’s related party EB-5 reimbursement obligation of $102.7 million.