Fourth Quarter 2023 and Recent Highlights

•Valencia sold 583 homesites on approximately 46 acres of land for a purchase price of $101.8 million.

•Great Park Venture closed two commercial land sales totaling approximately 38 acres for an aggregate purchase price of $174.2 million.

•Great Park Venture distributions and incentive compensation payments to the Company totaled $92.0 million.

•Valencia builder sales of 31 homes during the quarter.

•Great Park builder sales of 76 homes during the quarter.

•Consolidated revenues of $118.8 million; consolidated net income of $58.7 million.

•Cash and cash equivalents of $353.8 million as of December 31, 2023.

•Debt to total capitalization ratio of 24.0% and liquidity of $478.8 million as of December 31, 2023.

•On January 16, 2024, exchanged $623.5 million of existing 7.875% Senior Notes due November 2025 for $100.0 million in cash and $523.5 million in new 10.5% initial rate Senior Notes due January 2028.

2023 Highlights

•Valencia closed the sale of 729 homesites on approximately 72 acres of land for an aggregate purchase price of $162.4 million.

•Great Park Venture recognized land sale revenue of $532.0 million from the sale of 38 acres of commercial land and 798 homesites on approximately 84 acres of land.

•Great Park Venture distributions and incentive compensation payments to the Company totaled $195.8 million.

•Valencia builder sales of 297 homes during the year.

•Great Park builder sales of 628 homes during the year.

•Consolidated revenues of $211.7 million; consolidated net income of $113.7 million.

•Extended the maturity date of the Company’s $125.0 million unsecured revolving credit facility to April 2026.

Irvine, CA, January 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 fourth quarter and year-end 2023 results.

Dan Hedigan, Chief Executive Officer, said, “We finished 2023 strong with consolidated net income for the quarter of $58.7 million, giving us consolidated net income for the year of $113.7 million and total cash and cash equivalents of $353.8 million as of year-end. This week we successfully settled our senior note exchange with a participation rate over 99%. Achieving these results in the face of a challenging economic and interest rate environment is a testament to our team’s focus on executing our key operating priorities: generating revenue, right-sizing our SG&A, and managing our capital spend. We will continue to closely monitor the market and interest rates; however, we believe that the ongoing housing supply shortage will help sustain strong demand for our land.”

As of December 31, 2023, total liquidity of $478.8 million was comprised of cash and cash equivalents totaling $353.8 million and borrowing availability of $125.0 million under our unsecured revolving credit facility. Total capital was $2.0 billion, reflecting $3.0 billion in assets and $1.0 billion in liabilities and redeemable noncontrolling interests.

Revenues. Revenues of $118.8 million for the three months ended December 31, 2023 were primarily generated from land sales at our Valencia segment. At Valencia we closed the sale of land entitled for an aggregate of 583 homesites on approximately 46 acres. The fixed base purchase price of $101.8 million was paid at closing.

Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $24.0 million for the three months ended December 31, 2023. The Great Park Venture generated net income of $81.1 million during the three months ended December 31, 2023, and our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $25.9 million.

Additionally, we recognized $1.9 million in loss from our 75% interest in the Gateway Commercial Venture.

During the three months ended December 31, 2023, the Great Park Venture closed two commercial land sales totaling approximately 38 acres for an aggregate purchase price of $174.2 million. After completing the land sale, the Great Park Venture made aggregate distributions of $22.6 million to holders of Legacy Interests and $193.1 million to holders of Percentage Interests. We received $72.4 million for our 37.5% Percentage Interest.

Selling, general, and administrative. Selling, general, and administrative expenses were $13.1 million for the three months ended December 31, 2023.

Net income. Consolidated net income for the quarter was $58.7 million. Net income attributable to noncontrolling interests totaled $29.0 million, resulting in net income attributable to the Company of $29.8 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 ownership of our operating subsidiaries will increase thereby reducing the amount of income allocated to noncontrolling interests in subsequent periods.

Revenues. Revenues of $211.7 million for the twelve months ended December 31, 2023 were primarily generated from land sales at our Valencia segment. At Valencia we closed the sale of land entitled for an aggregate of 729 homesites on approximately 72 acres. The fixed base purchase price of $162.4 million was paid at closing.

Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $76.6 million for the twelve months ended December 31, 2023. The Great Park Venture generated net income of $250.6 million during the twelve months ended December 31, 2023, and our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $78.9 million. Additionally, we recognized $2.9 million in loss from our 75% interest in the Gateway Commercial Venture.

During the twelve months ended December 31, 2023, the Great Park Venture closed the sale of approximately 38 acres of land entitled for commercial use for an aggregate purchase price of $174.2 million and sold 798 homesites on approximately 84 acres of land at the Great Park Neighborhoods. For the homesite sale, the Great Park Venture recognized $357.8 million in revenue, consisting of $214.7 million paid at closing plus $143.1 million in revenue representing variable consideration from future price participation payments expected to be received when homes are sold to homebuyers. The Great Park Venture made aggregate distributions of $48.2 million to holders of Legacy Interests and $411.2 million to holders of Percentage Interests. We received $154.2 million for our 37.5% Percentage Interest.

Selling, general, and administrative. Selling, general, and administrative expenses were $51.5 million for the twelve months ended December 31, 2023.

Net income. Consolidated net income for the year was $113.7 million. Net income attributable to noncontrolling interests totaled $58.3 million, resulting in net income attributable to the Company of $55.4 million.

In conjunction with this release, Five Point will host a conference call on Thursday, January 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 (877) 451-6152 (domestic) or (201) 389-0879 (international). A telephonic replay will be available starting approximately three 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 13743863. The telephonic replay will be available until 11:59 p.m. Eastern Time on January 27, 2024.

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 approximately 40,000 residential homes and approximately 23 million square feet of commercial space.

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

Kim.Tobler@fivepoint.com

or

Media:

Eric Morgan, 949-349-1088

Eric.Morgan@fivepoint.com

Source: Five Point Holdings, LLC

 

			December 31, 2023						December 31, 2022
ASSETS
INVENTORIES			$	2,213,479					$	2,239,125
INVESTMENT IN UNCONSOLIDATED ENTITIES			252,816						331,594
PROPERTIES AND EQUIPMENT, NET			29,145						30,243
INTANGIBLE ASSET, NET—RELATED PARTY			25,270						40,257
CASH AND CASH EQUIVALENTS			353,801						131,771
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT			992						992
RELATED PARTY ASSETS			83,970						97,126
OTHER ASSETS			9,815						14,676
TOTAL			$	2,969,288					$	2,885,784
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net			$	622,186					$	620,651
Accounts payable and other liabilities			81,649						94,426
Related party liabilities			78,074						93,086
Deferred income tax liability, net			7,067						11,506
Payable pursuant to tax receivable agreement			173,208						173,068
Total liabilities			962,184						992,737
REDEEMABLE NONCONTROLLING INTEREST			25,000						25,000
CAPITAL:
Class A common shares; No par value; Issued and outstanding: December 31, 2023—69,199,938 shares; December 31, 2022—69,068,354 shares
Class B common shares; No par value; Issued and outstanding: December 31, 2023—79,233,544 shares; December 31, 2022—79,233,544 shares
Contributed capital			591,606						587,733
Retained earnings			88,780						33,386
Accumulated other comprehensive loss			(2,332)						(2,988)
Total members’ capital			678,054						618,131
Noncontrolling interests			1,304,050						1,249,916
Total capital			1,982,104						1,868,047
TOTAL			$	2,969,288					$	2,885,784

(1) As of December 31, 2023, no borrowings or letters of credit were outstanding on the Company’s $125.0 million revolving credit facility.

(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.

The following tables reconcile the results of operations of our segments to our consolidated results for the three and twelve months ended months ended December 31, 2023 (in thousands):

			Three Months Ended December 31, 2023
			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			$	100,111					$	—					$	175,556					$	—					$	275,667					$	—					$	275,667					$	(175,556)					$	100,111
Land sales—related party			—						—						6,797						—						6,797						—						6,797						(6,797)						—
Management services—related party(2)			—						—						17,999						110						18,109						—						18,109						—						18,109
Operating properties			374						165						—						2,153						2,692						—						2,692						(2,153)						539
Total revenues			100,485						165						200,352						2,263						303,265						—						303,265						(184,506)						118,759
COSTS AND EXPENSES:
Land sales			66,684						—						71,399						—						138,083						—						138,083						(71,399)						66,684
Home sales			—						—						161						—						161						—						161						(161)						—
Management services(2)			—						—						7,751						—						7,751						—						7,751						—						7,751
Operating properties			1,846						—						—						856						2,702						—						2,702						(856)						1,846
Selling, general, and administrative			2,997						714						3,495						3,156						10,362						9,384						19,746						(6,651)						13,095
Management fees—related party			—						—						28,888						—						28,888						—						28,888						(28,888)						—
Total costs and expenses			71,527						714						111,694						4,012						187,947						9,384						197,331						(107,955)						89,376
OTHER (EXPENSE) INCOME:
Interest income			—						13						2,318						33						2,364						2,675						5,039						(2,351)						2,688
Interest expense			—						—						—						(702)						(702)						—						(702)						702						—
Miscellaneous			(21)						—						—						—						(21)						(1,788)						(1,809)						—						(1,809)
Total other (expense) income			(21)						13						2,318						(669)						1,641						887						2,528						(1,649)						879
EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES			62						—						363						—						425						—						425						23,616						24,041
SEGMENT PROFIT (LOSS)/INCOME BEFORE INCOME TAX BENEFIT			28,999						(536)						91,339						(2,418)						117,384						(8,497)						108,887						(54,584)						54,303
INCOME TAX BENEFIT			—						—						—						—						—						4,434						4,434						—						4,434
SEGMENT PROFIT (LOSS)/NET INCOME			$	28,999					$	(536)					$	91,339					$	(2,418)					$	117,384					$	(4,063)					$	113,321					$	(54,584)					$	58,737

(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.

(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.

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 consolidated statements of operations for the three and twelve months ended December 31, 2023 (in thousands):

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 consolidated statements of operations for the three and twelve months ended December 31, 2023 (in thousands):