EX-99.1 2 ex-991xfphx20201110x8k.htm EX-99.1 Document

Exhibit 99.1
Five Point Holdings, LLC Reports Third Quarter 2020 Results
Third Quarter 2020 Highlights
•Consolidated net income of $36.4 million and an increase in cash of approximately $55 million.
•Cash distributions of $80.3 million received from Gateway Commercial Venture from proceeds generated by the sale of two buildings at the Five Point Gateway Campus for a purchase price of $355 million.
•Company maintains liquidity of $395.2 million at September 30, 2020.
Irvine, CA, November 10, 2020 (Business Wire) – Five Point Holdings, LLC (“Five Point” or the “Company”) (NYSE:FPH), an owner and developer of large mixed-use, master-planned communities in California, today reported its third quarter 2020 results. Emile Haddad, Chairman and CEO, said, “We are pleased to present our third quarter results where we improved our cash position by $55 million and generated consolidated net income of $36.4 million. We are seeing continued strength in our markets evidenced by the rate of sales at our Great Park Neighborhoods community, the interest from homebuilders in Valencia and the reported home price appreciation in both the Los Angeles County and Orange County markets.”
Third Quarter 2020 Consolidated Results
Liquidity and Capital Resources
As of September 30, 2020, total liquidity of $395.2 million was comprised of cash and cash equivalents totaling $270.6 million and borrowing availability of $124.7 million under our $125.0 million unsecured revolving credit facility. Total capital was $1.9 billion, reflecting $3.0 billion in assets and $1.1 billion in liabilities and redeemable noncontrolling interests.
Results of Operations for the Three Months Ended September 30, 2020
Revenues. Revenues of $8.4 million for the three months ended September 30, 2020 were primarily generated from management services.
Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $52.4 million for the three months ended September 30, 2020, comprised of a $4.2 million loss from our 37.5% percentage interest in the Great Park Venture and earnings of $56.6 million from our 75% interest in the Gateway Commercial Venture.
Selling, general, and administrative. Selling, general, and administrative expenses were $17.7 million for the three months ended September 30, 2020.
Net income. Consolidated net income for the quarter was $36.4 million. The net income attributable to noncontrolling interests totaled $19.5 million, resulting in net income attributable to the Company of $17.0 million.
Segment Results
Valencia Segment (formerly Newhall). Selling, general, and administrative expenses were $2.8 million for the three months ended September 30, 2020.
San Francisco Segment. Selling, general, and administrative expenses were $2.0 million for the three months ended September 30, 2020.
Great Park Segment. The Great Park segment’s net loss for the quarter was $10.2 million, which included net income of $1.8 million from management services and a net loss of $12.0 million attributed to the Great Park Venture. We do not include the Great Park Venture as a consolidated subsidiary in our consolidated financial statements but rather account for it as an equity method investee. After adjusting to account for a difference in investment basis, the Company’s equity in loss from the Great Park Venture was $4.2 million for the three months ended September 30, 2020.
Commercial Segment. In August 2020, the Gateway Commercial Venture closed on the sale of two buildings, comprising a total of approximately 660,000 square feet of research and development space currently leased to a subsidiary of Broadcom Inc. for a purchase price of $355.0 million. The sale of the buildings, which had a carrying value of approximately $278.0 million, resulted in a gain of approximately $74.8 million, net of transaction costs. Concurrently, the Gateway Commercial Venture made a debt payment of $245.0 million to its lender and made total distributions to its members of approximately $107.0 million, of which approximately $80.3 million was distributed to us. Segment net income was approximately $75.6 million, which included net income of $0.1 million from management services and net income of $75.5 million attributed to the Gateway Commercial Venture. We do not include the Gateway Commercial Venture as a consolidated subsidiary in our consolidated financial statements but rather account for it as an equity method investee. Our share of equity in earnings from the Gateway Commercial Venture totaled $56.6 million for the three months ended September 30, 2020.
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Conference Call Information
In conjunction with this release, Five Point will host a conference call today, Tuesday, November 10, 2020 at 5:00 pm Eastern Time. Emile Haddad, 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 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 (866) 248-8441 (domestic) or (720) 452-9102 (international). A telephonic replay will be available starting approximately two 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 2148805 The telephonic replay will be available until 11:59 p.m. Eastern Time on November 24, 2020.
About Five Point
Five Point, headquartered in Irvine, California, designs and develops large mixed-use, master-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® (formerly known as Newhall Ranch®) in Los Angeles County, and Candlestick® and The San Francisco Shipyard® in the City of San Francisco. These communities are designed to include approximately 40,000 residential homes and 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. 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 Annual Report on Form 10-K and 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
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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
September 30,		Nine Months Ended
September 30,
 2020201920202019
REVENUES:
Land sales
$42 $9 $17,076 $74 
Land sales—related party
2 229 14 695 
Management services—related party
7,999 11,458 22,557 33,689 
Operating properties
334 318 2,257 3,016 
Total revenues
8,377 12,014 41,904 37,474 
COSTS AND EXPENSES:
Land sales
— — 11,861 — 
Management services
6,120 7,699 16,587 22,794 
Operating properties
764 1,388 4,408 4,488 
Selling, general, and administrative
17,656 25,863 58,594 77,629 
Total costs and expenses
24,540 34,950 91,450 104,911 
OTHER INCOME:
Interest income
71 1,724 1,303 6,494 
Gain on settlement of contingent consideration—related party
— — — 64,870 
Miscellaneous
91 7 267 26 
Total other income
162 1,731 1,570 71,390 
EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES
52,423 (1,750)45,417 4,463 
INCOME (LOSS) BEFORE INCOME TAX (PROVISION) BENEFIT
36,422 (22,955)(2,559)8,416 
INCOME TAX (PROVISION) BENEFIT
— — — (1,266)
NET INCOME (LOSS)
36,422 (22,955)(2,559)7,150 
LESS NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS
19,458 (12,292)(1,349)4,517 
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY
$16,964 $(10,663)$(1,210)$2,633 
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE
Basic
$0.25 $(0.16)$(0.02)$0.04 
Diluted
$0.25 $(0.16)$(0.02)$0.04 
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING
Basic
66,746,065 66,276,694 66,709,190 66,248,431 
Diluted
142,866,245 66,276,694 68,848,283 145,456,670 
NET INCOME (LOSS) 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
79,233,544 79,275,234 79,233,544 79,204,883 
Diluted
79,233,544 79,275,234 79,233,544 79,276,016 

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FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares)
(Unaudited)
 
September 30, 2020December 31, 2019
ASSETS
INVENTORIES
$2,021,155 $1,889,761 
INVESTMENT IN UNCONSOLIDATED ENTITIES
441,737 533,239 
PROPERTIES AND EQUIPMENT, NET
33,018 32,312 
INTANGIBLE ASSET, NET—RELATED PARTY
73,269 80,350 
CASH AND CASH EQUIVALENTS
270,580 346,833 
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT
1,330 1,741 
RELATED PARTY ASSETS
100,478 97,561 
OTHER ASSETS
21,357 22,903 
TOTAL
$2,962,924 $3,004,700 
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$617,198 $616,046 
Accounts payable and other liabilities
138,066 167,711 
Related party liabilities
118,897 127,882 
Deferred income tax liability, net
11,628 11,628 
Payable pursuant to tax receivable agreement
173,248 172,633 
Total liabilities
1,059,037 1,095,900 
REDEEMABLE NONCONTROLLING INTEREST25,000 25,000 
CAPITAL:
Class A common shares; No par value; Issued and outstanding: 2020—69,051,284 shares; 2019—68,788,257 shares
Class B common shares; No par value; Issued and outstanding: 2020—79,233,544 shares; 2019—79,233,544 shares
Contributed capital
575,412 571,532 
Retained earnings
41,439 42,844 
Accumulated other comprehensive loss
(2,640)(2,682)
Total members’ capital
614,211 611,694 
Noncontrolling interests
1,264,676 1,272,106 
Total capital
1,878,887 1,883,800 
TOTAL
$2,962,924 $3,004,700 

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FIVE POINT HOLDINGS, LLC
SUPPLEMENTAL DATA
(In thousands)
(Unaudited)


Liquidity
September 30, 2020
Cash and cash equivalents
$270,580 
Borrowing capacity (1)124,651 
Total liquidity$395,231 

(1) As of September 30, 2020, no amounts were drawn on the Company’s $125.0 million revolving credit facility; however, letters of credit of approximately $0.3 million are issued and outstanding under the revolving credit facility, thus reducing the available capacity by the outstanding letters of credit amount.

Debt to Total Capitalization
September 30, 2020
Debt (1)
$625,000 
Total capital1,878,887 
Total capitalization$2,503,887 
Debt to total capitalization25.0 %

(1) For purposes of this calculation, debt is not the same as the calculation of “Consolidated Funded Indebtedness” under the Company’s revolving credit facility and Senior Notes indenture, which would include a $94.4 million related party contractual reimbursement obligation. Prior to the second quarter of 2019, the Company presented this calculation inclusive of the reimbursement obligation.

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Segment Results
Valencia (formerly Newhall)
The following table summarizes the results of operations of our Valencia segment for the three and nine months ended September 30, 2020 and 2019.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
(in thousands)
Statement of Operations Data
Revenues
Land sales
$42 $9 $17,076 $74 
Land sales—related party
2 8 14 31 
Operating properties
196 134 1,807 2,481 
Total revenues
240 151 18,897 2,586 
Costs and expenses
Land sales
— — 11,861 — 
Operating properties
764 1,388 4,408 4,488 
Selling, general, and administrative
2,798 3,663 9,244 11,364 
Total costs and expenses
3,562 5,051 25,513 15,852 
Other income91 8 268 29 
Segment loss$(3,231)$(4,892)$(6,348)$(13,237)

San Francisco
The following table summarizes the results of operations of our San Francisco segment for the three and nine months ended September 30, 2020 and 2019.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
(in thousands)
Statement of Operations Data
Revenues
Land sales—related party
$— $221 $— $664 
Operating property
138 184 450 535 
Management services—related party
— 545 835 1,816 
Total revenues
138 950 1,285 3,015 
Costs and expenses
Management services
— 226 488 855 
Selling, general, and administrative
1,967 4,386 8,184 14,083 
Total costs and expenses
1,967 4,612 8,672 14,938 
Other income—gain on settlement of contingent consideration, related party— — — 64,870 
Segment (loss) income
$(1,829)$(3,662)$(7,387)$52,947 

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Great Park
The following table summarizes the results of operations of our Great Park segment for the three and nine months ended September 30, 2020 and 2019.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
(in thousands)
Statement of Operations Data
Revenues
Land sales
$141 $36,198 $21,962 $98,743 
Land sales—related party
87 2,438 1,092 132,473 
Management services—related party
7,895 10,814 21,424 31,647 
Total revenues
8,123 49,450 44,478 262,863 
Costs and expenses
Land sales
— 24,518 15,304 153,486 
Management services
6,120 7,473 16,099 21,939 
Selling, general, and administrative
8,840 9,680 29,572 26,751 
Management fees—related party
3,440 7,825 7,633 24,445 
Total costs and expenses
18,400 49,496 68,608 226,621 
Interest income
84 1,016 1,210 2,671 
Segment (loss) income
$(10,193)$970 $(22,920)$38,913 

The table below reconciles the Great Park segment results to the equity in (loss) 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, 2020 and 2019.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
(in thousands)
Segment net (loss) income from operations
$(10,193)$970 $(22,920)$38,913 
Less net income of management company attributed to the Great Park segment
1,775 3,340 5,325 9,708 
Net (loss) income of the Great Park Venture(11,968)(2,370)(28,245)29,205 
The Company’s share of net (loss) income of the Great Park Venture
(4,488)(889)(10,592)10,952 
Basis difference accretion (amortization)
293 199 (1,204)(3,694)
Other-than-temporary investment impairment
— — (26,851)— 
Equity in (loss) earnings from the Great Park Venture
$(4,195)$(690)$(38,647)$7,258 

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Commercial
The following table summarizes the results of operations of our Commercial segment for the three and nine months ended September 30, 2020 and 2019.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
(in thousands)
Statement of Operations Data
Revenues
Rental and related income
$2,935 $6,388 $15,797 $19,492 
Rental and related income—related party
2,224 2,186 6,344 6,216 
Property management services—related party
104 99 298 226 
Total revenues
5,263 8,673 22,439 25,934 
Costs and expenses
Rental operating expenses
1,275 1,946 4,530 5,094 
Interest
1,605 4,249 8,547 12,938 
Depreciation
972 2,745 6,327 8,229 
Amortization
23 1,032 2,100 3,090 
Other expenses
640 14 812 83 
Total costs and expenses
4,515 9,986 22,316 29,434 
Other income—gain on asset sales, net74,847 — 112,260 — 
Segment income (loss)$75,595 $(1,313)$112,383 $(3,500)

The table below reconciles the Commercial segment results to the equity in earnings (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, 2020 and 2019.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
(in thousands)
Segment net income (loss) from operations
$75,595 $(1,313)$112,383 $(3,500)
Less net income of management company attributed to the Commercial segment
104 99 298 226 
Net income (loss) of the Gateway Commercial Venture75,491 (1,412)112,085 (3,726)
Equity in earnings (loss) from the Gateway Commercial Venture
$56,618 $(1,060)$84,064 $(2,795)

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