fph-20200813
0001574197false00015741972020-08-132020-08-13



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
August 13, 2020
Date of report (date of earliest event reported)
FIVE POINT HOLDINGS, LLC
(Exact name of registrant as specified in its charter)
Delaware001-3808827-0599397
(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 classTrading
Symbol(s)		Name of each exchange
on which registered
Class A common shares
FPHNew 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 August 13, 2020, Five Point Holdings, LLC issued a press release announcing its results of operations for the three months ended June 30, 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.
104Cover 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: August 13, 2020
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 Second Quarter 2020 Results
Second Quarter 2020 and Recent Highlights
•Closed 70 previously sold homesites at Valencia with a base purchase price of $16.6 million, including a seller secured note that is payable in December 2020.
•$56.3 million distribution received from Gateway Commercial Venture from proceeds generated by the sale of approximately 11 acres of land and an approximately 189,000 square foot building to City of Hope.
•Company maintains liquidity of $339.7 million at June 30, 2020.
•Subsequent to the end of the second quarter, the Gateway Commercial Venture closed on the sale of two buildings at the Five Point Gateway Campus for a purchase price of $355 million.
Irvine, CA, August 13, 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 second quarter 2020 results. Emile Haddad, Chairman and CEO, said, “While we remain cautious about current market conditions, our strong balance sheet and liquidity position give us confidence, and we are encouraged by the positive sentiment of homebuilders and the consistent pace of home sales at our Great Park Neighborhoods community. The recent commercial sales at the Five Point Gateway Campus are strong evidence of the value we are creating within our communities.”
Second Quarter 2020 Consolidated Results
Liquidity and Capital Resources
As of June 30, 2020, total liquidity of $339.7 million was comprised of cash and cash equivalents totaling $215.1 million and borrowing availability of $124.7 million under our $125.0 million unsecured revolving credit facility. Total capital was $1.8 billion, reflecting $2.9 billion in assets and $1.1 billion in liabilities and redeemable noncontrolling interests.
Results of Operations for the Three Months Ended June 30, 2020
Revenues. Revenues of $24.3 million for the three months ended June 30, 2020 were primarily generated from land sales at our Valencia segment.
Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $23.9 million for the three months ended June 30, 2020, comprised of a $4.1 million loss from our 37.5% percentage interest in the Great Park Venture and earnings of $28.0 million from our 75% interest in the Gateway Commercial Venture.
Selling, general, and administrative. Selling, general, and administrative expenses were $16.3 million for the three months ended June 30, 2020.
Net income. Consolidated net income for the quarter was $14.2 million. The net income attributable to noncontrolling interests totaled $7.6 million, resulting in net income attributable to the Company of $6.6 million.
Segment Results
Valencia Segment (formerly Newhall). Total segment revenues were $17.9 million for the second quarter of 2020. Revenues were mainly attributable to the sale of land entitled for 70 homesites on approximately seven acres in Valencia. The base purchase price was $16.6 million and the gross margin was approximately 30%. Selling, general, and administrative expenses were $2.7 million for the three months ended June 30, 2020.
San Francisco Segment. Selling, general, and administrative expenses were $2.6 million for the three months ended June 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 $4.1 million for the three months ended June 30, 2020.
Commercial Segment. In May 2020, the Gateway Commercial Venture closed on the sale of approximately 11 acres of land and an approximately 189,000 square foot building to City of Hope for a purchase price of $108.0 million. The sale of this land and building, which had a carrying value of approximately $67.5 million, resulted in a gain of approximately $37.4 million, net of transaction costs. Concurrently, the Gateway Commercial Venture made a debt payment of $30.0 million to its
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lender and made total distributions to its members of approximately $75.0 million, of which approximately $56.3 million was distributed to us. Segment net income was approximately $37.4 million, which included net income of $0.1 million from management services and net income of $37.3 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 $28.0 million for the three months ended June 30, 2020.
Conference Call Information
In conjunction with this release, Five Point will host a conference call today, Thursday, August 13, 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 (800) 437-2398 (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 6656122. The telephonic replay will be available until 11:59 p.m. Eastern Time on August 27, 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.

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Investor Relations:
Bob Wetenhall, 949-349-1087
[email protected]
or
Media:
Steve Churm, 949-349-1034
[email protected]

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,
 2020201920202019
REVENUES:
Land sales
$17,028  $10  $17,034  $65  
Land sales—related party
2  236  12  466  
Management services—related party
6,314  11,168  14,558  22,231  
Operating properties
963  973  1,923  2,698  
Total revenues
24,307  12,387  33,527  25,460  
COSTS AND EXPENSES:
Land sales
11,861  —  11,861  —  
Management services
4,416  7,479  10,467  15,095  
Operating properties
1,699  1,199  3,644  3,100  
Selling, general, and administrative
16,312  25,993  40,938  51,766  
Total costs and expenses
34,288  34,671  66,910  69,961  
OTHER INCOME:
Interest income
226  2,316  1,232  4,770  
Gain on settlement of contingent consideration—related party
—  —  —  64,870  
Miscellaneous
88  9  176  19  
Total other income
314  2,325  1,408  69,659  
EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES
23,905  (2,669) (7,006) 6,213  
INCOME (LOSS) BEFORE INCOME TAX (PROVISION) BENEFIT
14,238  (22,628) (38,981) 31,371  
INCOME TAX (PROVISION) BENEFIT
—  —  —  (1,266) 
NET INCOME (LOSS)
14,238  (22,628) (38,981) 30,105  
LESS NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS
7,606  (12,116) (20,807) 16,809  
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY
$6,632  $(10,512) $(18,174) $13,296  
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE
Basic
$0.10  $(0.16) $(0.27) $0.19  
Diluted
$0.10  $(0.16) $(0.27) $0.18  
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING
Basic
66,731,233  66,256,961  66,690,550  66,234,066  
Diluted
142,851,412  66,256,961  68,854,356  145,403,189  
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  79,169,124  
Diluted
79,233,544  79,275,234  79,233,544  79,275,824  

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FIVE POINT HOLDINGS, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares)
(Unaudited)
 
June 30, 2020December 31, 2019
ASSETS
INVENTORIES
$1,978,879  $1,889,761  
INVESTMENT IN UNCONSOLIDATED ENTITIES
469,564  533,239  
PROPERTIES AND EQUIPMENT, NET
33,274  32,312  
INTANGIBLE ASSET, NET—RELATED PARTY
75,629  80,350  
CASH AND CASH EQUIVALENTS
215,085  346,833  
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT
1,742  1,741  
RELATED PARTY ASSETS
97,373  97,561  
OTHER ASSETS
36,757  22,903  
TOTAL
$2,908,303  $3,004,700  
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$616,814  $616,046  
Accounts payable and other liabilities
122,262  167,711  
Related party liabilities
119,759  127,882  
Deferred income tax liability, net
11,628  11,628  
Payable pursuant to tax receivable agreement
173,248  172,633  
Total liabilities
1,043,711  1,095,900  
REDEEMABLE NONCONTROLLING INTEREST25,000  25,000  
CAPITAL:
Class A common shares; No par value; Issued and outstanding: 2020—69,056,591 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
572,587  571,532  
Retained earnings
24,475  42,844  
Accumulated other comprehensive loss
(2,656) (2,682) 
Total members’ capital
594,406  611,694  
Noncontrolling interests
1,245,186  1,272,106  
Total capital
1,839,592  1,883,800  
TOTAL
$2,908,303  $3,004,700  

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


Liquidity
June 30, 2020
Cash and cash equivalents
$215,085  
Borrowing capacity (1)124,651  
Total liquidity$339,736  

(1) As of June 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
June 30, 2020
Debt (1)
$625,000  
Total capital1,839,592  
Total capitalization$2,464,592  
Debt to total capitalization25.4 %

(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 $95.0 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 six months ended June 30, 2020 and 2019.
Three Months Ended
June 30,		Six Months Ended
June 30,
2020201920202019
(in thousands)
Statement of Operations Data
Revenues
Land sales
$17,028  $10  $17,034  $65  
Land sales—related party
2  14  12  23  
Operating properties
831  796  1,611  2,347  
Total revenues
17,861  820  18,657  2,435  
Costs and expenses
Land sales
11,861  —  11,861  —  
Operating properties
1,699  1,199  3,644  3,100  
Selling, general, and administrative
2,713  3,892  6,446  7,701  
Total costs and expenses
16,273  5,091  21,951  10,801  
Other income89  10  177  21  
Segment income (loss)
$1,677  $(4,261) $(3,117) $(8,345) 

San Francisco
The following table summarizes the results of operations of our San Francisco segment for the three and six months ended June 30, 2020 and 2019.
Three Months Ended
June 30,		Six Months Ended
June 30,
2020201920202019
(in thousands)
Statement of Operations Data
Revenues
Land sales—related party
$—  $222  $—  $443  
Operating property
132  177  312  351  
Management services—related party
40  573  835  1,271  
Total revenues
172  972  1,147  2,065  
Costs and expenses
Management services
13  252  488  629  
Selling, general, and administrative
2,625  5,185  6,217  9,697  
Total costs and expenses
2,638  5,437  6,705  10,326  
Other income—gain on settlement of contingent consideration, related party—  —  —  64,870  
Segment (loss) income
$(2,466) $(4,465) $(5,558) $56,609  

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Great Park
The following table summarizes the results of operations of our Great Park segment for the three and six months ended June 30, 2020 and 2019.
Three Months Ended
June 30,		Six Months Ended
June 30,
2020201920202019
(in thousands)
Statement of Operations Data
Revenues
Land sales
$346  $31,079  $21,821  $62,545  
Land sales—related party
304  2,338  1,005  130,035  
Management services—related party
6,177  10,437  13,529  20,833  
Total revenues
6,827  43,854  36,355  213,413  
Costs and expenses
Land sales
—  21,149  15,304  128,968  
Management services
4,403  7,227  9,979  14,466  
Selling, general, and administrative
8,784  10,496  20,732  17,071  
Management fees—related party
4,040  8,403  4,193  16,620  
Total costs and expenses
17,227  47,275  50,208  177,125  
Interest income
215  1,096  1,126  1,655  
Segment (loss) income
$(10,185) $(2,325) $(12,727) $37,943  

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 six months ended June 30, 2020 and 2019.
Three Months Ended
June 30,		Six Months Ended
June 30,
2020201920202019
(in thousands)
Segment net (loss) income from operations
$(10,185) $(2,325) $(12,727) $37,943  
Less net income of management company attributed to the Great Park segment
1,774  3,211  3,550  6,368  
Net (loss) income of Great Park Venture
(11,959) (5,536) (16,277) 31,575  
The Company’s share of net (loss) income of the Great Park Venture
(4,485) (2,076) (6,104) 11,841  
Basis difference accretion (amortization)
393  580  (1,497) (3,893) 
Other-than-temporary investment impairment
—  —  (26,851) —  
Equity in (loss) earnings from the Great Park Venture
$(4,092) $(1,496) $(34,452) $7,948  

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Commercial
The following table summarizes the results of operations of our Commercial segment for the three and six months ended June 30, 2020 and 2019.
Three Months Ended
June 30,		Six Months Ended
June 30,
2020201920202019
(in thousands)
Statement of Operations Data
Revenues
Rental and related income
$6,447  $6,713  $12,862  $13,104  
Rental and related income—related party
2,059  2,041  4,120  4,030  
Property management services—related party
97  158  194  127  
Total revenues
8,603  8,912  17,176  17,261  
Costs and expenses
Rental operating expenses1,619  1,584  3,255  3,148  
Interest 3,231  4,358  6,942  8,689  
Depreciation2,612  3,307  5,355  5,484  
Amortization
1,038  1,029  2,077  2,058  
Other expenses
90  40  172  69  
Total costs and expenses
8,590  10,318  17,801  19,448  
Other income—gain on asset sale, net37,413  —  37,413  —  
Segment income (loss)$37,426  $(1,406) $36,788  $(2,187) 

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 six months ended June 30, 2020 and 2019.
Three Months Ended
June 30,		Six Months Ended
June 30,
2020201920202019
(in thousands)
Segment net income (loss) from operations
$37,426  $(1,406) $36,788  $(2,187) 
Less net income of management company attributed to the Commercial segment
97  158  194  127  
Net income (loss) of Gateway Commercial Venture
37,329  (1,564) 36,594  (2,314) 
Equity in earnings (loss) from the Gateway Commercial Venture
$27,997  $(1,173) $27,446  $(1,735) 

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