Five Point Holdings, LLC Reports Second Quarter 2024 Results

Second Quarter 2024 Highlights

• Great Park Venture sold 105 homesites on 12.3 acres of land for an aggregate purchase price of $96.1 million.
• Great Park Venture distributions and incentive compensation payments to the Company totaled $29.7 million.
• Great Park builder sales of 63 homes during the quarter.
• Valencia builder sales of 84 homes during the quarter.
• Consolidated revenues of $51.2 million; consolidated net income of $38.2 million.
• Cash and cash equivalents of $217.4 million as of June 30, 2024.
• Debt to total capitalization ratio of 20.6% and liquidity of $342.4 million as of June 30, 2024.

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 second quarter 2024 results.

Dan Hedigan, Chief Executive Officer, said, "We had another strong quarter, with consolidated net income of $38.2 million on revenues of $51.2 million, ending with total cash and cash equivalents of $217.4 million. Although the inflation and interest rate environment remained challenging during the quarter, we continued to see meaningful appreciation in our residential land sale pricing, especially in our Great Park Neighborhoods community where we closed a sale during the quarter at a price of $7.8 million per acre and are seeing current pricing for new land sales move even higher. As we plan for the future of Five Point, our team is focused on perfecting our entitlements at our Valencia and San Francisco communities and continuing to execute on our key priorities: generating revenue, controlling our SG&A, and managing our capital spend. For the second half of 2024, we expect demand in our chronically undersupplied housing markets to remain strong and to drive a strong finish to the year. While we expect a relatively soft third quarter, we expect to close land sales in the fourth quarter in both of our active communities and to end the year with consolidated annual net income of over $100 million and cash and cash equivalents in excess of $300 million."

Consolidated Results

Liquidity and Capital Resources

As of June 30, 2024, total liquidity of $342.4 million was comprised of cash and cash equivalents totaling $217.4 million and borrowing availability of $125.0 million under our unsecured revolving credit facility. Total capital was $2.0 billion, reflecting $2.9 billion in assets and $0.9 billion in liabilities and redeemable noncontrolling interests.

Results of Operations for the Three Months Ended June 30, 2024

Revenues. Revenues of $51.2 million for the three months ended June 30, 2024 were primarily generated from management services.

Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $15.5 million for the three months ended June 30, 2024. The Great Park Venture generated net income of $44.9 million during the three months ended June 30, 2024, and our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $15.5 million. Additionally, we recognized $0.2 million in earnings from our 10% interest in the Valencia Landbank Venture, offset by $0.2 million in loss from our 75% interest in the Gateway Commercial Venture.

During the three months ended June 30, 2024, the Great Park Venture sold 105 homesites on 12.3 acres of land at the Great Park Neighborhoods for an aggregate purchase price of $96.1 million. After completing the land sale, the Great Park Venture made aggregate distributions of $7.3 million to holders of Legacy Interests and $62.5 million to holders of Percentage Interests. We received $23.4 million for our 37.5% Percentage Interest.

Selling, general, and administrative. Selling, general, and administrative expenses were $12.2 million for the three months ended June 30, 2024.

Net income. Consolidated net income for the quarter was $38.2 million. Net income attributable to noncontrolling interests totaled $23.5 million, resulting in net income attributable to the Company of $14.7 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 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.

Conference Call Information

In conjunction with this release, Five Point will host a conference call on Thursday, July 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 13747738. The telephonic replay will be available until 11:59 p.m. Eastern Time on July 27, 2024.

About Five Point

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 up to approximately 40,000 residential homes and up to 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. 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.

Segment Results

The following tables reconcile the results of operations of our segments to our consolidated results for the three and six months ended June 30, 2024 (in thousands):

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 condensed consolidated statements of operations for the three and six months ended June 30, 2024 (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 condensed consolidated statements of operations for the three and six months ended June 30, 2024 (in thousands):

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