0001574197false00015741972021-03-162021-03-16

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 16, 2021

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.)

15131 Alton Parkway

4th Floor

Irvine

California

92618

(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))

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.  ☒

---

Item 2.02. Results of Operations and Financial Condition.

On March 16, 2021, Five Point Holdings, LLC issued a press release announcing its results of operations for the three months ended December 31, 2020. 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 March 16, 2021
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

---

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 16, 2021

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

Exhibit 99.1

Five Point Holdings, LLC Reports Fourth Quarter and Year-End 2020 Results

Fourth Quarter 2020 Highlights

•Increased cash position by approximately $28 million, providing liquidity of $422.8 million at December 31, 2020.

•Sold 487 homesites at Valencia in the fourth quarter of 2020 and closed on 442 of these homesites, generating proceeds from the closed homesites of approximately $102 million.

•Contributed $4.2 million for a 10% interest in a joint venture providing land banking opportunities to Valencia guest builders.

Irvine, CA, March 16, 2021 (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 fourth quarter 2020 results. Emile Haddad, Chairman and CEO, said, “We are very grateful to end a very unusual year with the results we are presenting today. Our focus shifted a year ago to strengthening our balance sheet, preserving the value of our irreplaceable assets, protecting the well being of our associates, and helping our communities. We are proud that we accomplished our goals. We have already kicked off the new year with a lot of momentum driven by the strength of the housing market and the migration of homebuyers to the type of communities we build.”

Fourth Quarter 2020 Consolidated Results

Liquidity and Capital Resources

As of December 31, 2020, total liquidity of $422.8 million was comprised of cash and cash equivalents totaling $298.1 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 December 31, 2020

Revenues. Revenues of $111.7 million for the three months ended December 31, 2020 primarily consisted of $105.5 million in revenue recognized from land sales at our Valencia segment.

Equity in loss from unconsolidated entities. Equity in loss from unconsolidated entities was $3.1 million for the three months ended December 31, 2020, comprised of a $1.3 million loss from our 37.5% percentage interest in the Great Park Venture, loss of $0.2 million from our 75% interest in the Gateway Commercial Venture and $1.6 million loss from our 10% interest in the Valencia Landbank Venture as a result of intra-entity profit elimination due to the Valencia Landbank Venture purchasing homesites at Valencia.

Selling, general, and administrative. Selling, general, and administrative expenses were $24.9 million for the three months ended December 31, 2020.

Net income. Consolidated net income for the quarter was $3.7 million. Income before income tax provision was $5.4 million with income attributable to noncontrolling interests totaling $2.9 million. Net income attributable to the Company was $0.8 million after recognition of an income tax provision of $1.7 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 our Class A common shares on a one-for-one basis or, at our election, cash. In connection with any redemption or exchange, our ownership of our operating subsidiaries will increase and reduce the amount of income allocated to noncontrolling interests.

Segment Results

Valencia Segment (formerly Newhall). Total segment revenues were $106.0 million for the fourth quarter of 2020. Revenues were mainly attributable to the sale of land entitled for 442 homesites on approximately 45 acres in Valencia. Initial gross proceeds from the sale were $102.2 million, representing the base purchase price. Cost of land sales was $73.9 million, or 70.0% of total land sales and land sales-related party revenues for the fourth quarter. In the fourth quarter, 210 of the homesites sold were purchased by the Valencia Landbank Venture, in which we own a 10% equity interest. Revenues associated with these closings are reported as land sales-related party. When we sell land to the Valencia Landbank Venture, we eliminate our pro-rata share of the intra-entity profits generated from the sale through earnings (loss) from unconsolidated entities until the land is sold by the Valencia Landbank Venture to third party homebuilders. Selling, general, and administrative expenses were $2.4 million for the three months ended December 31, 2020.

San Francisco Segment. Selling, general, and administrative expenses were $3.1 million for the three months ended December 31, 2020.

1

---

Great Park Segment. The Great Park segment’s net income for the quarter was $0.4 million, which included net income of $1.6 million from management services and a net loss of $1.2 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 $1.3 million for the three months ended December 31, 2020.

Commercial Segment. Segment net loss was approximately $0.1 million, which included net income of $0.1 million from management services and a net loss of $0.2 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 loss from the Gateway Commercial Venture totaled $0.2 million for the three months ended December 31, 2020.

Conference Call Information

In conjunction with this release, Five Point will host a conference call on Wednesday, March 17, 2021 at 2:00 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 (800) 430-8332 (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 1398225. The telephonic replay will be available until 11:59 p.m. Eastern Time on March 31, 2021.

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, 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.

2

---

Investor Relations:

Bob Wetenhall, 949-349-1087

[email protected]

or

Media:

Steve Churm, 949-349-1034

[email protected]

Source: Five Point Holdings, LLC

3

---

FIVE POINT HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

			Three Months Ended December 31,												Twelve Months Ended December 31,
			2020						2019						2020						2019
REVENUES:
Land sales			$	52,322					$	139,946					$	69,398					$	140,020
Land sales—related party			53,205						228						53,219						923
Management services—related party			5,575						5,891						28,132						39,580
Operating properties			613						841						2,870						3,857
Total revenues			111,715						146,906						153,619						184,380
COSTS AND EXPENSES:
Land sales			73,892						97,113						85,753						97,113
Management services			3,899						5,698						20,486						28,492
Operating properties			719						1,077						5,127						5,565
Selling, general, and administrative			24,910						25,957						83,504						103,586
Total costs and expenses			103,420						129,845						194,870						234,756
OTHER INCOME:
Interest income			66						1,350						1,369						7,844
Gain on settlement of contingent consideration—related party			—						—						—						64,870
Miscellaneous			89						22						356						48
Total other income			155						1,372						1,725						72,762
EQUITY IN (LOSS) EARNINGS FROM UNCONSOLIDATED ENTITIES			(3,053)						(2,136)						42,364						2,327
INCOME BEFORE INCOME TAX PROVISION			5,397						16,297						2,838						24,713
INCOME TAX PROVISION			(1,744)						(1,179)						(1,744)						(2,445)
NET INCOME			3,653						15,118						1,094						22,268
LESS NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			2,871						8,718						1,522						13,235
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY			$	782					$	6,400					$	(428)					$	9,033
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE
Basic			$	0.01					$	0.09					$	(0.01)					$	0.13
Diluted			$	0.01					$	0.09					$	(0.01)					$	0.13
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING
Basic			66,760,897						66,302,138						66,722,187						66,261,968
Diluted			142,881,077						145,596,608						69,000,096						145,491,898
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 and diluted			79,233,544						79,269,524						79,233,544						79,221,176

4

---

FIVE POINT HOLDINGS, LLC

CONSOLIDATED BALANCE SHEETS

(In thousands, except shares)

(Unaudited)

 

			December 31, 2020						December 31, 2019
ASSETS
INVENTORIES			$	1,990,859					$	1,889,761
INVESTMENT IN UNCONSOLIDATED ENTITIES			442,850						533,239
PROPERTIES AND EQUIPMENT, NET			32,769						32,312
INTANGIBLE ASSET, NET—RELATED PARTY			71,747						80,350
CASH AND CASH EQUIVALENTS			298,144						346,833
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT			1,330						1,741
RELATED PARTY ASSETS			103,681						97,561
OTHER ASSETS			20,605						22,903
TOTAL			$	2,961,985					$	3,004,700
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net			$	617,581					$	616,046
Accounts payable and other liabilities			135,331						167,711
Related party liabilities			113,149						127,882
Deferred income tax liability, net			12,578						11,628
Payable pursuant to tax receivable agreement			173,248						172,633
Total liabilities			1,051,887						1,095,900
REDEEMABLE NONCONTROLLING INTEREST			25,000						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			578,278						571,532
Retained earnings			42,221						42,844
Accumulated other comprehensive loss			(2,833)						(2,682)
Total members’ capital			617,666						611,694
Noncontrolling interests			1,267,432						1,272,106
Total capital			1,885,098						1,883,800
TOTAL			$	2,961,985					$	3,004,700

5

---

FIVE POINT HOLDINGS, LLC

SUPPLEMENTAL DATA

(In thousands)

(Unaudited)

Liquidity

			December 31, 2020
Cash and cash equivalents			$	298,144
Borrowing capacity (1)			124,651
Total liquidity			$	422,795

(1) As of December 31, 2020, no amounts were drawn on the Company’s $125.0 million revolving credit facility; however, letters of credit of approximately $0.3 million were issued and outstanding under the revolving credit facility, thus reducing the available capacity by the outstanding letters of credit amount.

Debt to Total Capitalization and Net Debt to Total Capitalization

			December 31, 2020
Debt (1)			$	625,000
Total capital			1,885,098
Total capitalization			$	2,510,098
Debt to total capitalization			24.9		%
Debt (1)			$	625,000
Less: Cash and cash equivalents			298,144
Net debt			326,856
Total capital			1,885,098
Total net capitalization			$	2,211,954
Net debt to total capitalization (2)			14.8		%

(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.

6

---

Segment Results

The following tables reconcile the results of operations of our segments to our consolidated results for the three and twelve months ended December 31, 2020 (in thousands):

			Three Months Ended December 31, 2020
			Valencia						San Francisco						Great Park						Commercial						Total reportable segments						Corporate and unallocated						Total under management						Removal of unconsolidated entities						Total consolidated
REVENUES:
Land sales			$	52,322					$	—					$	203					$	—					$	52,525					$	—					$	52,525					$	(203)					$	52,322
Land sales—related party			53,205						—						1,570						—						54,775						—						54,775						(1,570)						53,205
Management services—related party			—						—						5,476						99						5,575						—						5,575						—						5,575
Operating properties			468						145						—						2,100						2,713						—						2,713						(2,100)						613
Total revenues			105,995						145						7,249						2,199						115,588						—						115,588						(3,873)						111,715
COSTS AND EXPENSES:
Land sales			73,892						—						—						—						73,892						—						73,892						—						73,892
Management services			—						—						3,899						—						3,899						—						3,899						—						3,899
Operating properties			719						—						—						817						1,536						—						1,536						(817)						719
Selling, general, and administrative			2,385						3,113						6,251						1,213						12,962						19,412						32,374						(7,464)						24,910
Management fees—related party			—						—						(3,255)						—						(3,255)						—						(3,255)						3,255						—
Total costs and expenses			76,996						3,113						6,895						2,030						89,034						19,412						108,446						(5,026)						103,420
OTHER INCOME (EXPENSE):
Interest income			22						—						62						—						84						44						128						(62)						66
Interest expense			—						—						—						(310)						(310)						—						(310)						310						—
Miscellaneous			89						—						—						—						89						—						89						—						89
Total other income (expense)			111						—						62						(310)						(137)						44						(93)						248						155
EQUITY IN LOSS FROM UNCONSOLIDATED ENTITIES			(1,569)						—						—						—						(1,569)						—						(1,569)						(1,484)						(3,053)
SEGMENT PROFIT (LOSS)/INCOME (LOSS) BEFORE INCOME TAX PROVISION			27,541						(2,968)						416						(141)						24,848						(19,368)						5,480						(83)						5,397
INCOME TAX PROVISION			—						—						—						—						—						(1,744)						(1,744)						—						(1,744)
SEGMENT PROFIT (LOSS)/NET INCOME (LOSS)			$	27,541					$	(2,968)					$	416					$	(141)					$	24,848					$	(21,112)					$	3,736					$	(83)					$	3,653

7

---

			Twelve Months Ended December 31, 2020
			Valencia						San Francisco						Great Park						Commercial						Total reportable segments						Corporate and unallocated						Total under management						Removal of unconsolidated entities						Total consolidated
REVENUES:
Land sales			$	69,398					$	—					$	22,165					$	—					$	91,563					$	—					$	91,563					$	(22,165)					$	69,398
Land sales—related party			53,219						—						2,662						—						55,881						—						55,881						(2,662)						53,219
Management services—related party			—						835						26,900						397						28,132						—						28,132						—						28,132
Operating properties			2,275						595						—						24,241						27,111						—						27,111						(24,241)						2,870
Total revenues			124,892						1,430						51,727						24,638						202,687						—						202,687						(49,068)						153,619
COSTS AND EXPENSES:
Land sales			85,753						—						15,304						—						101,057						—						101,057						(15,304)						85,753
Management services			—						488						19,998						—						20,486						—						20,486						—						20,486
Operating properties			5,127						—						—						5,347						10,474						—						10,474						(5,347)						5,127
Selling, general, and administrative			11,629						11,297						35,823						9,978						68,727						60,578						129,305						(45,801)						83,504
Management fees—related party			—						—						4,378						—						4,378						—						4,378						(4,378)						—
Total costs and expenses			102,509						11,785						75,503						15,325						205,122						60,578						265,700						(70,830)						194,870
OTHER INCOME (EXPENSE):
Interest income			23						—						1,272						—						1,295						1,346						2,641						(1,272)						1,369
Interest expense			—						—						—						(8,857)						(8,857)						—						(8,857)						8,857						—
Loss on extinguishment of debt			—						—						—						(474)						(474)						—						(474)						474						—
Gain on asset sales, net			—						—						—						112,260						112,260						—						112,260						(112,260)						—
Miscellaneous			356						—						—						—						356						—						356						—						356
Total other income (expense)			379						—						1,272						102,929						104,580						1,346						105,926						(104,201)						1,725
EQUITY IN (LOSS) EARNINGS FROM UNCONSOLIDATED ENTITIES			(1,569)						—						—						—						(1,569)						—						(1,569)						43,933						42,364
SEGMENT PROFIT (LOSS)/INCOME (LOSS) BEFORE INCOME TAX PROVISION			21,193						(10,355)						(22,504)						112,242						100,576						(59,232)						41,344						(38,506)						2,838
INCOME TAX PROVISION			—						—						—						—						—						(1,744)						(1,744)						—						(1,744)
SEGMENT PROFIT (LOSS)/NET INCOME (LOSS)			$	21,193					$	(10,355)					$	(22,504)					$	112,242					$	100,576					$	(60,976)					$	39,600					$	(38,506)					$	1,094

8

---

The table below reconciles the Great Park segment results to the equity in loss from our investment in the Great Park Venture that is reflected in the consolidated statements of operations for the three and twelve months ended December 31, 2020:

			Three Months Ended December 31,									Twelve Months Ended December 31,
			2020												2020
			(in thousands)
Segment profit (loss) from operations			$	416											$	(22,504)
Less net income of management company attributed to the Great Park segment			1,577												6,902
Net loss of the Great Park Venture			(1,161)												(29,406)
The Company’s share of net loss of the Great Park Venture			(435)												(11,027)
Basis difference amortization			(869)												(2,073)
Other-than-temporary investment impairment			—												(26,851)
Equity in loss from the Great Park Venture			$	(1,304)											$	(39,951)

The table below reconciles the Commercial segment results to the equity in (loss) earnings from our investment in the Gateway Commercial Venture that is reflected in the consolidated statements of operations for the three and twelve months ended December 31, 2020:

			Three Months Ended December 31,									Twelve Months Ended December 31,
			2020												2020
			(in thousands)
Segment (loss) profit from operations			$	(141)											$	112,242
Less net income of management company attributed to the Commercial segment			99												397
Net (loss) income of the Gateway Commercial Venture			(240)												111,845
Equity in (loss) earnings from the Gateway Commercial Venture			$	(180)											$	83,884

9