Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-38088 (Exact name of registrant as specified in its charter) (949) 349-1000 (Registrant's telephone number, including area code) Title of each class Trading Symbol(s) Name of each exchange on which registered Class ...

Exhibit 99.1 Five Point Holdings, LLC Reports Second Quarter 2024 Results Second Quarter 2024 Highlights Irvine, CA, July 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 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-38088 Five Point Holdings, LLC (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporat ...

Exhibit 99.1 First Quarter 2024 and Recent Highlights • Great Park Venture distributions and incentive compensation payments to the Company totaled $30.3 million. • Great Park builder sales of 69 homes during the quarter. • 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 10.500% initial rate Senior Notes due January 2028. • In April 2024, S&P Global Ratings upgraded our outlook to stable, upgraded our corpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-38088 Five Point Holdings, LLC (Exact name of registrant as specified in its charter) | Delaware | | | 27-0599397 | | --- | --- | --- ...

IRVINE, Calif.--(BUSINESS WIRE)--Five Point Holdings, LLC (“Five Point” or the “Company”) (NYSE:FPH), an owner and developer of large mixed-use planned communities in coastal California, today announced the appointment of Mike Alvarado as Chief Operating Officer of the Company, effective immediately. Mr. Alvarado will also continue to serve in his position as the Company’s Chief Legal Officer, Vice President and Secretary. Mr. Alvarado is an experienced executive with over 30 years of experience in real es ...

PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=2&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Five Point Holdings, LLC for the three and nine months ended September 30, 2023 and 2022, including balance sheets, statements of operations, comprehensive income (loss), capital, and cash flows, along with detailed notes explaining the company's business, accounting policies, segment performance, and other financial disclosures [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The company's total assets increased slightly from December 31, 2022, to September 30, 2023, driven primarily by an increase in cash and cash equivalents. Total liabilities saw a minor decrease, while total capital increased, reflecting improved financial health | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | **ASSETS** | | | | Inventories | $2,252,783 | $2,239,125 | | Cash and Cash Equivalents | $218,264 | $131,771 | | Total Assets | $2,934,547 | $2,885,784 | | **LIABILITIES AND CAPITAL** | | | | Total Liabilities | $988,164 | $992,737 | | Total Capital | $1,921,383 | $1,868,047 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a significant turnaround from net loss to net income for both the three and nine months ended September 30, 2023, primarily driven by a substantial increase in land sales revenue and equity in earnings from unconsolidated entities | Metric | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Revenues | $65,923 | $15,416 | $92,973 | $25,695 | | Total Costs and Expenses | $54,627 | $21,098 | $96,107 | $79,078 | | Equity in (Loss) Earnings from Unconsolidated Entities | $(622) | $(4,265) | $52,554 | $(4,654) | | Net Income (Loss) Attributable to the Company | $6,603 | $(4,439) | $25,638 | $(26,680) | | Basic EPS (Class A Share) | $0.10 | $(0.06) | $0.37 | $(0.39) | | Diluted EPS (Class A Share) | $0.09 | $(0.07) | $0.37 | $(0.39) | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported comprehensive income for the three and nine months ended September 30, 2023, a significant improvement from comprehensive losses in the prior year periods, primarily reflecting the positive shift in net income | Metric | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Income (Loss) | $14,158 | $(9,531) | $54,979 | $(57,272) | | Other Comprehensive Income—Net of tax | $41 | $13 | $122 | $39 | | Comprehensive Income (Loss) Attributable to the Company | $6,628 | $(4,431) | $25,714 | $(26,656) | [Unaudited Condensed Consolidated Statements of Capital](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Capital) Total capital increased from December 31, 2022, to September 30, 2023, primarily due to net income and share-based compensation expense, partially offset by tax distributions to noncontrolling interests | Metric | Balance Dec 31, 2022 (in thousands) | Balance Sep 30, 2023 (in thousands) | | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Contributed Capital | $587,733 | $590,551 | | Retained Earnings | $33,386 | $59,024 | | Total Members' Capital | $618,131 | $646,661 | | Noncontrolling Interests | $1,249,916 | $1,274,722 | | Total Capital | $1,868,047 | $1,921,383 | - **Net income** for the nine months ended September 30, 2023, was **$54,979 thousand**, contributing to the **increase in retained earnings and total capital**[24](index=24&type=chunk) - **Share-based compensation expense** for the nine months ended September 30, 2023, was **$2,610 thousand**[24](index=24&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated significant net cash from operating activities for the nine months ended September 30, 2023, a substantial improvement from cash used in operating activities in the prior year, primarily due to land sales and distributions from unconsolidated entities | Metric | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net Cash Provided by (Used in) Operating Activities | $65,064 | $(175,023) | | Net Cash Provided by Investing Activities | $29,946 | $2,307 | | Net Cash Used in Financing Activities | $(8,517) | $(6,367) | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | $86,493 | $(179,083) | | Cash, Cash Equivalents, and Restricted Cash—End of period | $219,256 | $87,709 | - **Operating activities benefited from $60.6 million in land sales** at Valencia and **$22.0 million in incentive compensation payments** from the Great Park Venture in 2023[196](index=196&type=chunk) - **Investing activities were positively impacted by $29.0 million return of investment** from Great Park Venture in 2023[199](index=199&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the company's accounting policies, business structure, segment information, related party transactions, debt, commitments, and other financial instruments, offering crucial context to the condensed consolidated financial statements [Note 1. BUSINESS AND ORGANIZATION](index=10&type=section&id=Note%201.%20BUSINESS%20AND%20ORGANIZATION) Five Point Holdings, LLC is a Delaware limited liability company focused on owning and developing mixed-use planned communities in California. It operates through Five Point Operating Company, LP, and has a complex organizational structure involving Class A and Class B common shares, noncontrolling interests, and equity interests held by major owners like Lennar Corporation and Castlelake, LP - The Holding Company owns **approximately 62.6%** of the outstanding **Class A Common Units** of the Operating Company as of September 30, 2023[35](index=35&type=chunk) - **Class A Common Units** of the Operating Company can be exchanged for Class A common shares or cash, and **Class A units** of the San Francisco Venture can be exchanged for **Class A Common Units** of the Operating Company[35](index=35&type=chunk)[63](index=63&type=chunk) [Note 2. BASIS OF PRESENTATION](index=11&type=section&id=Note%202.%20BASIS%20OF%20PRESENTATION) The financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial information, consolidating entities where the Holding Company has a controlling interest or is the primary beneficiary of VIEs. Management's estimates and assumptions are used, and actual results may differ - The company consolidates subsidiaries where it has a **controlling interest** and Variable Interest Entities (VIEs) where it is the **primary beneficiary**[37](index=37&type=chunk) - These condensed consolidated financial statements are **unaudited** and should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2022[38](index=38&type=chunk) [Note 3. REVENUES](index=13&type=section&id=Note%203.%20REVENUES) Consolidated revenues significantly increased for both the three and nine months ended September 30, 2023, primarily driven by land sales in the Valencia segment and increased management services revenue in the Great Park segment | Revenue Source | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Land sales | $60,694 | $72 | $60,685 | $643 | | Land sales—related party | $— | $2,817 | $595 | $4,529 | | Management services—related party | $4,502 | $12,108 | $29,512 | $18,358 | | Operating properties | $727 | $419 | $2,181 | $2,165 | | Total revenues | $65,923 | $15,416 | $92,973 | $25,695 | - The **decrease in contract assets by $6.8 million** for the nine months ended September 30, 2023, was mainly due to receipt of marketing fees and **$24.6 million in incentive compensation payments** from the Great Park Venture[43](index=43&type=chunk) [Note 4. INVESTMENT IN UNCONSOLIDATED ENTITIES](index=14&type=section&id=Note%204.%20INVESTMENT%20IN%20UNCONSOLIDATED%20ENTITIES) The company holds equity method investments in Great Park Venture, Gateway Commercial Venture, and Valencia Landbank Venture. The Great Park Venture significantly contributed to equity in earnings in 2023 due to substantial land sales, while Gateway Commercial Venture reported a net loss [Great Park Venture](index=14&type=section&id=Great%20Park%20Venture) The Great Park Venture, in which the company holds a 37.5% Percentage Interest, reported significant net income for the nine months ended September 30, 2023, primarily from land sales, a substantial improvement from a net loss in the prior year. The company's share of earnings from this venture was $53.1 million | Metric | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Land sale and related party land sale revenues | $372,472 | $39,020 | | Net income (loss) of Great Park Venture | $169,519 | $(19,658) | | Equity in earnings (loss) from Great Park Venture | $53,072 | $(5,634) | - The Great Park Venture made aggregate distributions of **$25.5 million** to Legacy Interests and **$218.0 million** to Percentage Interests during the nine months ended September 30, 2023, with the company receiving **$81.8 million** for its **37.5% share**[45](index=45&type=chunk) [Gateway Commercial Venture](index=15&type=section&id=Gateway%20Commercial%20Venture) The Gateway Commercial Venture, where the company holds a 75% interest, reported a net loss for the nine months ended September 30, 2023, primarily due to interest expense, contrasting with a small net income in the prior year. The company's equity in loss was $1.0 million | Metric | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Rental revenues | $6,329 | $6,248 | | Net (loss) income of Gateway Commercial Venture | $(1,357) | $129 | | Equity in (loss) earnings from Gateway Commercial Venture | $(1,018) | $97 | - The company is subject to certain guaranties of the Gateway Commercial Venture's mortgage note, including an interest and carry guaranty and a springing guaranty of **50%** of the outstanding balance under specific conditions[54](index=54&type=chunk) [Valencia Landbank Venture](index=16&type=section&id=Valencia%20Landbank%20Venture) The company holds a 10% equity method interest in the Valencia Landbank Venture, which facilitates residential lot purchases and options for homebuilders. The company recognized $0.5 million in equity in earnings for the nine months ended September 30, 2023 | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :------------------------------------ | :-------------------------- | :-------------------------- | | Company's investment in Valencia Landbank Venture | $1,400 | $1,900 | | Equity in earnings (9 months ended Sep 30, 2023) | $500 | N/A | | Equity in earnings (9 months ended Sep 30, 2022) | N/A | $900 | [Note 5. NONCONTROLLING INTERESTS](index=16&type=section&id=Note%205.%20NONCONTROLLING%20INTERESTS) Noncontrolling interests represent equity interests in the Operating Company and San Francisco Venture held by other partners, which can be exchanged for Class A common shares or cash. The company's ownership in the Operating Company increased to 62.6% due to share-based compensation activities [The Operating Company](index=16&type=section&id=The%20Operating%20Company) The Holding Company's ownership in the Operating Company increased to approximately 62.6% as of September 30, 2023. Holders of Class A Common Units can exchange their units for Class A common shares or cash, and tax distributions are made to partners based on estimated income tax liabilities - The Holding Company's **ownership interest** in the Operating Company **increased to approximately 62.6%** as of September 30, 2023[56](index=56&type=chunk) - **Class A Common Unit** holders have the right to exchange units for Class A common shares (**one-for-one**) or cash, which is currently exercisable[57](index=57&type=chunk) | Tax Distributions (in thousands) | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------- | :------------------------------ | :----------------------------- | :----------------------------- | | Management Partner | $2,059 | $4,033 | $435 | | Total Tax Distributions | $2,059 | $4,033 | $435 | [The San Francisco Venture](index=17&type=section&id=The%20San%20Francisco%20Venture) The Operating Company owns all Class B units of the San Francisco Venture, while Class A units, held by Lennar and Castlelake, are economically equivalent to Operating Company Class A Common Units and can be redeemed for them - **Class A units** of the San Francisco Venture are substantially economically equivalent to **Class A Common Units** of the Operating Company and can be redeemed for them on a **one-for-one basis**[62](index=62&type=chunk)[63](index=63&type=chunk) [Redeemable Noncontrolling Interest](index=17&type=section&id=Redeemable%20Noncontrolling%20Interest) The San Francisco Venture has 25.0 million Class C units outstanding, issued to an affiliate of Lennar, which are redeemable for cash up to $25.0 million upon certain conditions related to reimbursements from a Mello-Roos district - **25.0 million Class C units** were outstanding at September 30, 2023, and December 31, 2022, with a maximum redemption amount of **$25.0 million**[64](index=64&type=chunk) - **Redemption** is contingent on the company receiving reimbursements from the Mello-Roos community facilities district, **up to 50%** of reimbursements received[64](index=64&type=chunk) [Note 6. CONSOLIDATED VARIABLE INTEREST ENTITY](index=17&type=section&id=Note%206.%20CONSOLIDATED%20VARIABLE%20INTEREST%20ENTITY) The Holding Company consolidates the Operating Company and its subsidiaries, including the San Francisco Venture, FP LP, and FPL, all identified as VIEs where the company is the primary beneficiary due to its power to direct significant activities and receive economic benefits - The San Francisco Venture is consolidated as a VIE because the Operating Company has **unilateral power** over its significant economic activities and receives **99% of distributions**[66](index=66&type=chunk) | San Francisco Venture (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | Total combined assets | $1,350,000 | $1,310,000 | | Total combined liabilities | $65,700 | $67,300 | | FP LP and FPL (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------- | :----------- | :----------- | | Combined assets | $1,000,000 | $1,100,000 | | Combined liabilities | $68,700 | $77,200 | [Note 7. INTANGIBLE ASSET, NET—RELATED PARTY](index=18&type=section&id=Note%207.%20INTANGIBLE%20ASSET,%20NET%E2%80%94RELATED%20PARTY) The intangible asset, related to incentive compensation from the Great Park Venture's development management agreement, decreased due to amortization. Amortization expense is recognized as part of management services costs | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Gross carrying amount | $129,705 | $129,705 | | Accumulated amortization | $(98,676) | $(89,448) | | Net book value | $31,029 | $40,257 | - **Intangible asset amortization expense** was **$9.2 million** for the nine months ended September 30, 2023, and **$5.4 million** for the nine months ended September 30, 2022[76](index=76&type=chunk) [Note 8. RELATED PARTY TRANSACTIONS](index=19&type=section&id=Note%208.%20RELATED%20PARTY%20TRANSACTIONS) Related party assets and liabilities include contract assets, operating lease assets/liabilities, and reimbursement obligations. Management fee revenues from the Great Park Venture decreased for the three months but increased for the nine months ended September 30, 2023, due to variable incentive compensation | Related Party Item (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | **Assets:** | | | | Contract assets | $75,595 | $79,863 | | Total Related Party Assets | $91,103 | $97,126 | | **Liabilities:** | | | | Reimbursement obligation | $58,708 | $62,990 | | Total Related Party Liabilities | $81,547 | $93,086 | | Management Fee Revenues (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Management services—related party | $4,400 | $12,000 | $29,200 | $18,000 | - The Great Park Venture made a Legacy Incentive Compensation payment of **$2.6 million** and a Non-Legacy Incentive Compensation payment of **$22.0 million** to the company during the nine months ended September 30, 2023[79](index=79&type=chunk) [Note 9. NOTES PAYABLE, NET](index=20&type=section&id=Note%209.%20NOTES%20PAYABLE,%20NET) The company's notes payable primarily consist of 7.875% Senior Notes due 2025. The $125.0 million unsecured revolving credit facility was amended in October 2023, extending its maturity to April 2026, with no outstanding borrowings as of September 30, 2023 | Debt Instrument (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------- | :----------- | :----------- | | 7.875% Senior Notes due 2025 | $625,000 | $625,000 | | Unamortized debt issuance costs and discount | $(3,198) | $(4,349) | | Notes payable, net | $621,802 | $620,651 | - The **$125.0 million** unsecured **revolving credit facility's maturity date was extended to April 2026** (potentially accelerated to **July 2025** if senior notes are not refinanced)[83](index=83&type=chunk) - As of September 30, 2023, there were **no borrowings or letters of credit outstanding** on the revolving credit facility[82](index=82&type=chunk) [Note 10. TAX RECEIVABLE AGREEMENT](index=20&type=section&id=Note%2010.%20TAX%20RECEIVABLE%20AGREEMENT) The company has a Tax Receivable Agreement (TRA) with certain unit holders, obligating it to pay 85% of realized cash tax savings from specific tax attributes. The liability for expected payments was $173.2 million as of September 30, 2023, with no payments made during the reported periods | TRA Liability (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------- | :----------- | :----------- | | Payable pursuant to tax receivable agreement | $173,208 | $173,068 | - **No TRA payments were made** during the nine months ended September 30, 2023 or 2022[84](index=84&type=chunk) [Note 11. COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=Note%2011.%20COMMITMENTS%20AND%20CONTINGENCIES) The company is subject to various commitments and contingencies, including performance bonds for development obligations, guarantees for the San Francisco Venture, letters of credit, and legal proceedings, notably the Hunters Point Litigation | Commitment (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------ | :----------- | :----------- | | Performance bonds | $307,200 | $315,000 | | San Francisco Venture guarantees | $198,300 | $198,300 | | Letters of credit | $1,000 | $1,000 | | Operating lease liabilities | $11,791 | $15,705 | [Performance and Completion Bonding Agreements](index=20&type=section&id=Performance%20and%20Completion%20Bonding%20Agreements) The company had outstanding performance bonds of $307.2 million as of September 30, 2023, primarily related to its Valencia community, to ensure completion of development obligations - **Outstanding performance bonds totaled $307.2 million** as of September 30, 2023, down from **$315.0 million** at December 31, 2022[86](index=86&type=chunk) [Candlestick and The San Francisco Shipyard Disposition and Development Agreement](index=21&type=section&id=Candlestick%20and%20The%20San%20Francisco%20Shipyard%20Disposition%20and%20Development%20Agreement) The San Francisco Venture has agreed to reimburse the San Francisco Agency for costs and expenses and may share profits from development. It also has outstanding guarantees of $198.3 million for infrastructure and park obligations - The San Francisco Venture has outstanding guarantees of **$198.3 million** benefiting the San Francisco Agency for infrastructure and park/open space obligations[88](index=88&type=chunk) [Letters of Credit](index=21&type=section&id=Letters%20of%20Credit) The company had $1.0 million in outstanding letters of credit at September 30, 2023, secured by $1.0 million in restricted cash, to secure various development and financial obligations - **Outstanding letters of credit totaled $1.0 million** at September 30, 2023, secured by **$1.0 million** in restricted cash and certificates of deposit[89](index=89&type=chunk)[94](index=94&type=chunk) [Legal Proceedings](index=21&type=section&id=Legal%20Proceedings) The company is involved in the Hunters Point Litigation, a putative class action alleging fraudulent misrepresentation by a contractor regarding toxic waste remediation. The company believes it has meritorious defenses and insurance/indemnification rights - The Bayview Action lawsuit alleges **fraudulent misrepresentation** by Tetra Tech regarding toxic radiological waste testing and remediation at The San Francisco Shipyard[90](index=90&type=chunk) - Plaintiffs seek **damages and an injunction** to prevent development activities at The San Francisco Shipyard[90](index=90&type=chunk) [Note 12. SUPPLEMENTAL CASH FLOW INFORMATION](index=22&type=section&id=Note%2012.%20SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) Supplemental cash flow information includes cash paid for interest, noncash lease expense, and noncash investing/financing activities. A reconciliation of cash, cash equivalents, and restricted cash is also provided | Metric (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Cash paid for interest | $26,668 | $26,902 | | Noncash lease expense | $3,086 | $3,453 | | Adjustment to TRA liability | $140 | $(1,058) | | Cash, Cash Equivalents, and Restricted Cash (in thousands) | Sep 30, 2023 | Sep 30, 2022 | | :------------------------------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $218,264 | $86,379 | | Restricted cash and certificates of deposit | $992 | $1,330 | | Total | $219,256 | $87,709 | [Note 13. SEGMENT REPORTING](index=22&type=section&id=Note%2013.%20SEGMENT%20REPORTING) The company operates through four reportable segments: Valencia, San Francisco, Great Park, and Commercial, each focusing on distinct mixed-use planned communities or commercial developments in California. Segment results are reconciled to consolidated balances, with unconsolidated ventures removed - The **Valencia segment** includes the Valencia community and agricultural operations in northern Los Angeles County, California[95](index=95&type=chunk) - The **San Francisco segment** covers the Candlestick and The San Francisco Shipyard communities on bayfront property in San Francisco[96](index=96&type=chunk) - The **Great Park segment** includes Great Park Neighborhoods in Orange County and management services provided to the Great Park Venture, where the company holds a **37.5% equity interest**[97](index=97&type=chunk) - The **Commercial segment** encompasses the Gateway Commercial Venture's operations at the Five Point Gateway Campus and property management services[98](index=98&type=chunk) [Note 14. SHARE-BASED COMPENSATION](index=24&type=section&id=Note%2014.%20SHARE-BASED%20COMPENSATION) The company's 2023 Incentive Award Plan increased available Class A common shares for issuance. Share-based compensation expense decreased for the three and nine months ended September 30, 2023, compared to the prior year, which included significant restructuring-related expenses - The 2023 Incentive Award Plan increased the aggregate number of Class A common shares available for issuance by **7,500,000**[102](index=102&type=chunk) | Metric (in thousands, except shares) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Nonvested at January 1 | 2,166 | N/A | | Granted | 3,947 | N/A | | Vested | (744) | N/A | | Nonvested at September 30 | 4,463 | N/A | | Share-based compensation expense | $2,600 | $5,500 | - For the nine months ended September 30, 2022, **$3.0 million of share-based compensation expense** was included in restructuring expense due to a modification of awards for former officers[103](index=103&type=chunk) [Note 15. EMPLOYEE BENEFIT PLANS](index=24&type=section&id=Note%2015.%20EMPLOYEE%20BENEFIT%20PLANS) The company maintains a frozen defined benefit Retirement Plan. Net periodic cost for the plan was $21 thousand for the three months and $62 thousand for the nine months ended September 30, 2023, an increase from a net benefit in the prior year | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net periodic cost (benefit) | $21 | $(112) | $62 | $(336) | - The **Retirement Plan** was **frozen in 2004** and does not include a service cost component[105](index=105&type=chunk) [Note 16. INCOME TAXES](index=24&type=section&id=Note%2016.%20INCOME%20TAXES) The company recorded no significant income tax provision or benefit for the three and nine months ended September 30, 2023 and 2022, due to the application of a valuation allowance against its net deferred tax assets, largely stemming from a history of book losses - **No significant income tax provision or benefit was recorded** for the three and nine months ended September 30, 2023 and 2022, after applying a **valuation allowance**[107](index=107&type=chunk) - The **effective tax rates** differ from the **21% federal statutory rate** primarily due to the **valuation allowance**, disallowance of executive compensation, and income/losses passed through to other partners[107](index=107&type=chunk) - The company continues to record a **full valuation allowance** against its federal and state net deferred tax assets due to a history of book losses[108](index=108&type=chunk) [Note 17. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS AND DISCLOSURES](index=25&type=section&id=Note%2017.%20FINANCIAL%20INSTRUMENTS%20AND%20FAIR%20VALUE%20MEASUREMENTS%20AND%20DISCLOSURES) The carrying amounts of most financial instruments approximated their fair values. However, the fair value of the company's notes payable, net, was lower than its carrying value at both September 30, 2023, and December 31, 2022 - The **carrying amount** of most financial instruments, excluding notes payable, **approximated fair value**[109](index=109&type=chunk) | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Fair value of notes payable, net | $590,400 | $525,500 | | Carrying value of notes payable, net | $621,800 | $620,700 | [Note 18. EARNINGS PER SHARE](index=25&type=section&id=Note%2018.%20EARNINGS%20PER%20SHARE) The company uses the two-class method for EPS calculation, allocating net income/loss between Class A and Class B common shares. Diluted EPS calculations consider convertible and exchangeable securities, with Class A basic EPS at $0.10 for Q3 2023 and $0.37 for the nine months - The company uses the **two-class method** for earnings per share, allocating **net income/loss** between Class A and Class B common shares, which have different distribution rates[111](index=111&type=chunk) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Basic EPS (Class A common shares) | $0.10 | $(0.06) | $0.37 | $(0.39) | | Diluted EPS (Class A common shares) | $0.09 | $(0.07) | $0.37 | $(0.39) | - **Diluted EPS calculations** consider convertible Class B common shares, exchangeable Class A units of the San Francisco Venture, and exchangeable Class A Common Units of the Operating Company[113](index=113&type=chunk) [Note 19. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=28&type=section&id=Note%2019.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Accumulated other comprehensive loss attributable to the company primarily consists of unamortized defined benefit pension plan net actuarial losses, totaling $2.9 million at September 30, 2023, with a full valuation allowance against related tax benefits | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Accumulated other comprehensive loss attributable to the Company | $2,900 | $3,000 | | Accumulated other comprehensive loss included in noncontrolling interests | $1,800 | $1,900 | - **Reclassifications from accumulated other comprehensive loss to net income (loss) related to amortization of net actuarial losses were approximately $76,000** for the nine months ended September 30, 2023[115](index=115&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, highlighting a significant shift from net losses to net income, driven by increased land sales and effective cost management. It details operational achievements, segment-specific results, liquidity, and capital structure changes for the three and nine months ended September 30, 2023 [Overview](index=29&type=section&id=Overview) Five Point Holdings, LLC conducts all business through its operating company, Five Point Operating Company, LP, which directly or indirectly owns equity interests in various development entities across California, including Valencia, San Francisco, Great Park, and Gateway Commercial Ventures - The company, through a wholly owned subsidiary, is the sole managing general partner and owned **approximately 62.6%** of the operating company as of September 30, 2023[118](index=118&type=chunk) - The operating company consolidates and controls the management of Five Point Land, LLC, and The Shipyard Communities, LLC, but accounts for its interests in the Great Park Venture and Gateway Commercial Venture using the **equity method**[118](index=118&type=chunk)[119](index=119&type=chunk) [Operational Highlights](index=30&type=section&id=Operational%20Highlights) The company achieved consolidated net income for Q3 and the nine months ended September 30, 2023, a significant improvement from prior year losses, by focusing on revenue generation, cost control, and capital management. Key activities included land sales at Valencia and public financing reimbursements at Great Park Venture | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :----------------------------- | :------------------------------ | :----------------------------- | | Consolidated Net Income (Loss) | $14,200 | $55,000 | $(9,500) | $(57,300) | | SG&A Expenses | $11,900 | $38,400 | $12,000 | $41,500 | - **Closed the sale of 146 homesites** on approximately **26 acres** at Valencia for **$60.6 million** in Q3 2023[121](index=121&type=chunk) - **Total liquidity was $343.3 million** at September 30, 2023, including **$218.3 million in cash** and **$125.0 million available** under the revolving credit facility[123](index=123&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) The company experienced significant revenue growth and a shift from net loss to net income for both the three and nine months ended September 30, 2023, primarily due to increased land sales at Valencia and improved equity in earnings from unconsolidated entities, particularly the Great Park Venture | Metric | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Revenues | $65,923 | $15,416 | $92,973 | $25,695 | | Total Costs and Expenses | $54,627 | $21,098 | $96,107 | $79,078 | | Equity in (Loss) Earnings from Unconsolidated Entities | $(622) | $(4,265) | $52,554 | $(4,654) | | Net Income (Loss) Attributable to the Company | $6,603 | $(4,439) | $25,638 | $(26,680) | [Three Months Ended September 30, 2023 and 2022](index=31&type=section&id=Three%20Months%20Ended%20September%2030,%202023%20and%202022) Revenues surged by 327.6% to $65.9 million, driven by Valencia land sales. Cost of management services decreased by 68.3% due to lower intangible asset amortization. Equity in loss from unconsolidated entities improved, and net income attributable to the company turned positive - **Revenues increased by $50.5 million (327.6%)** to **$65.9 million**, primarily due to land sales at the Valencia segment[128](index=128&type=chunk) - **Cost of management services decreased by $5.1 million (68.3%)** to **$2.4 million**, mainly due to a **decrease in intangible asset amortization expense**[129](index=129&type=chunk) - **Equity in loss** from unconsolidated entities **improved from $(4.3) million to $(0.6) million**, primarily due to the Great Park Venture[131](index=131&type=chunk) [Nine Months Ended September 30, 2023 and 2022](index=32&type=section&id=Nine%20Months%20Ended%20September%2030,%202023%20and%202022) Revenues increased by 261.8% to $93.0 million, largely from Valencia land sales and Great Park management services. Selling, general, and administrative expenses decreased by 7.4%. Equity in earnings from unconsolidated entities significantly improved to $52.6 million, reversing a prior-year loss - **Revenues increased by $67.3 million (261.8%)** to **$93.0 million**, driven by land sales at Valencia and increased management services revenue at Great Park[134](index=134&type=chunk) - **Selling, general, and administrative expenses decreased by $3.1 million (7.4%)** to **$38.4 million**, mainly due to lower employee-related and selling/marketing expenses[136](index=136&type=chunk) - **Equity in earnings from unconsolidated entities was $52.6 million**, a **significant increase from a loss of $4.7 million**, primarily due to net income from Great Park Venture land sales[139](index=139&type=chunk) [Segment Results and Financial Information](index=34&type=section&id=Segment%20Results%20and%20Financial%20Information) The company's four reportable segments—Valencia, San Francisco, Great Park, and Commercial—show varied performance. Valencia and Great Park segments were key revenue drivers, with Great Park showing a substantial profit turnaround. San Francisco and Commercial segments reported losses [Valencia Segment](index=37&type=section&id=Valencia%20Segment) The Valencia segment experienced a significant increase in land sales revenues for both the three and nine months ended September 30, 2023, due to the sale of 146 homesites. This led to corresponding costs of land sales, while SG&A expenses decreased - **Total land sales revenues increased by $57.8 million to $60.7 million** for the three months ended September 30, 2023, due to the sale of **146 homesites**[153](index=153&type=chunk) - For the nine months ended September 30, 2023, **total land sales revenues increased by $56.1 million to $61.3 million**[155](index=155&type=chunk) - **Selling, general, and administrative expenses decreased by $2.0 million (18.6%)** to **$8.6 million** for the nine months ended September 30, 2023, mainly due to lower community-related selling and marketing expenses[157](index=157&type=chunk) [San Francisco Segment](index=38&type=section&id=San%20Francisco%20Segment) The San Francisco segment, developing Candlestick and The San Francisco Shipyard, continues to face delays in land transfers from the U.S. Navy due to environmental retesting allegations. The segment's development plans are designed for flexibility, but future impacts remain uncertain - **Development at Candlestick and The San Francisco Shipyard is not subject to San Francisco's Proposition M growth control measure**, allowing flexibility in commercial space construction[160](index=160&type=chunk) - **Land transfers from the U.S. Navy at The San Francisco Shipyard are delayed due to allegations of misrepresented sampling results** by contractors, leading to reevaluation and additional testing[161](index=161&type=chunk) - The company **may be named in lawsuits seeking damages** related to alleged contamination at The San Francisco Shipyard[162](index=162&type=chunk) [Great Park Segment](index=39&type=section&id=Great%20Park%20Segment) The Great Park segment, including the Great Park Neighborhoods and management services to the Great Park Venture, saw a significant increase in land sales revenues for the nine months ended September 30, 2023, leading to a substantial profit turnaround. Management fee revenues also increased due to higher variable incentive compensation - **Land sales and related party land sales revenues increased to $372.5 million** for the nine months ended September 30, 2023, from **$39.0 million** in the prior year, primarily from the sale of **798 homesites**[172](index=172&type=chunk) - **Management fee revenues increased** for the nine months ended September 30, 2023, mainly due to a **rise in variable incentive compensation revenue recognized ($20.2 million vs. $9.0 million YoY)**[176](index=176&type=chunk) - **Segment profit for the nine months ended September 30, 2023, was $184.3 million**, a **significant improvement from a loss of $14.0 million** in the prior year[147](index=147&type=chunk) [Commercial Segment](index=42&type=section&id=Commercial%20Segment) The Commercial segment, encompassing the Gateway Commercial Venture and its Five Point Gateway Campus, reported a segment loss for both the three and nine months ended September 30, 2023. The company holds a 75% interest but has limited control over major decisions - The **Commercial segment reported a segment loss of $(358) thousand** for the three months and **$(1,036) thousand** for the nine months ended September 30, 2023[147](index=147&type=chunk) - The company holds a **75% interest** in the Gateway Commercial Venture, but major decisions require **unanimous approval** by an executive committee, **limiting the company's control**[182](index=182&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved significantly with $218.3 million in cash and $125.0 million available on its revolving credit facility as of September 30, 2023. Short-term cash needs include development expenditures and debt service, while long-term needs focus on future development and potential vertical construction. The company is evaluating alternatives for its senior notes due in 2025 - **Consolidated cash and cash equivalents increased to $218.3 million** at September 30, 2023, from **$131.8 million** at December 31, 2022[186](index=186&type=chunk) - The company had **$125.0

Five Point Holdings, LLC (NYSE:FPH) Q3 2023 Earnings Conference Call October 19, 2023 5:00 PM ET Company Participants Dan Hedigan - Chief Executive Officer Kim Tobler - Chief Financial Officer Conference Call Participants Arun Seshadri - BNP Paribas Alan Ratner - Zelman & Associates Myron Kaplan - Private Investor Ben Fader-Rattner - Space Summit Capital Kyle Chung - Private Investor Operator Greetings and welcome to the Five Point Holdings LLC Third Quarter 2023 Conference Call. As a reminder this call is ...

Five Point Holdings, LLC (NYSE:FPH) Q2 2023 Earnings Conference Call July 20, 2023 5:00 PM ET Company Participants Dan Hedigan - Chief Executive Officer Leo Kij - Interim Chief Financial Officer Conference Call Participants Alan Ratner - Zelman & Associates Terrance Balkaran - Diameter Capital Arun Seshadri - BNP Paribas Operator Greetings, and welcome to the Five Point Holdings, LLC Second Quarter 2023 Conference Call. As a reminder, this call is being recorded. Today's conference may include forward-looki ...

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's analysis of financial condition and results [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income, capital, and cash flow statements, and detailed notes [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202023%20and%20December%2031%2C%202022) This section presents the company's unaudited condensed consolidated balance sheets for June 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------- | :-------------- | :------------------ | | Total Assets | $2,913,903 | $2,885,784 | | Inventories | $2,254,935 | $2,239,125 | | Cash and Cash Equivalents | $193,203 | $131,771 | | Total Liabilities | $980,577 | $992,737 | | Notes payable, net | $621,419 | $620,651 | | Total Capital | $1,908,326 | $1,868,047 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20three%20months%20and%20six%20months%20ended%20June%2030%2C%202023%20and%202022) This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 Statements of Operations Highlights (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | YoY Change | | :------------------------------------------ | :----- | :----- | :--------- | | Total Revenues | $21,349 | $5,393 | +295.9% | | Total Costs and Expenses | $24,190 | $17,229 | +40.4% | | Equity in Earnings (Loss) from Unconsolidated Entities | $52,128 | $643 | +8070.8% | | Net Income (Loss) Attributable to the Company | $23,571 | $(5,111) | **N/A (swing to profit)** | | Basic EPS (Class A) | $0.34 | $(0.07) | **N/A (swing to profit)** | Statements of Operations Highlights (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | YoY Change | | :------------------------------------------ | :----- | :----- | :--------- | | Total Revenues | $27,050 | $10,279 | +163.2% | | Total Costs and Expenses | $41,480 | $57,980 | -28.5% | | Equity in Earnings (Loss) from Unconsolidated Entities | $53,176 | $(389) | **N/A (swing to profit)** | | Net Income (Loss) Attributable to the Company | $19,035 | $(22,241) | **N/A (swing to profit)** | | Basic EPS (Class A) | $0.28 | $(0.32) | **N/A (swing to profit)** | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20for%20the%20three%20months%20and%20six%20months%20ended%20June%2030%2C%202023%20and%202022) This section presents the unaudited condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2023 and 2022 Comprehensive Income (Loss) Highlights (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Net Income (Loss) | $50,555 | $(10,972) | | Other Comprehensive Income | $40 | $13 | | Comprehensive Income (Loss) Attributable to the Company | $23,596 | $(5,103) | Comprehensive Income (Loss) Highlights (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Net Income (Loss) | $40,821 | $(47,741) | | Other Comprehensive Income | $81 | $26 | | Comprehensive Income (Loss) Attributable to the Company | $19,086 | $(22,225) | [Unaudited Condensed Consolidated Statements of Capital](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Capital%20for%20the%20three%20months%20and%20six%20months%20ended%20June%2030%2C%202023%20and%202022) This section presents the unaudited condensed consolidated statements of capital for the three and six months ended June 30, 2023 and 2022 - Total Capital increased from **$1.87 billion** at December 31, 2022, to **$1.91 billion** at June 30, 2023[25](index=25&type=chunk) - Net income attributable to the company for the six months ended June 30, 2023, was **$19.04 million**[25](index=25&type=chunk) - Share-based compensation expense for the six months ended June 30, 2023, was **$1.69 million**[25](index=25&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202023%20and%202022) This section presents the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022 Cash Flow Highlights (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | | :-------------------------------------------------- | :------- | :-------- | | Net cash provided by (used in) operating activities | $37,925 | $(133,531) | | Net cash provided by investing activities | $29,676 | $1,387 | | Net cash used in financing activities | $(6,169) | $(5,498) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $61,432 | $(137,642) | | Cash, cash equivalents, and restricted cash—End of period | $194,195 | $129,150 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements [1. BUSINESS AND ORGANIZATION](index=10&type=section&id=1.%20BUSINESS%20AND%20ORGANIZATION) This section describes Five Point Holdings, LLC's business, organizational structure, and share classes - Five Point Holdings, LLC is an owner and developer of mixed-use planned communities in California, conducting operations through Five Point Operating Company, LP[31](index=31&type=chunk) - The company has Class A and Class B common shares; Class A and B holders are entitled to one vote per share, but Class B distributions are **0.0003 times** the amount paid per Class A common share[32](index=32&type=chunk) - Noncontrolling interests represent equity interests in consolidated subsidiaries held by partners in the Operating Company and members in The Shipyard Communities, LLC[33](index=33&type=chunk) [2. BASIS OF PRESENTATION](index=11&type=section&id=2.%20BASIS%20OF%20PRESENTATION) This section outlines the basis for preparing the condensed consolidated financial statements - The company consolidates the accounts of the Holding Company and its subsidiaries where it has a controlling interest, and variable interest entities (VIEs) where it is deemed the primary beneficiary[37](index=37&type=chunk) - The accompanying condensed consolidated financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial information, Form 10-Q, and Article 10 of Regulation S-X[38](index=38&type=chunk) - Management's preparation of financial statements involves estimates and assumptions, and actual results could differ from these estimates[39](index=39&type=chunk) [3. REVENUES](index=13&type=section&id=3.%20REVENUES) This section details the company's consolidated revenues by segment for the three and six months ended June 30, 2023 and 2022 Consolidated Revenues by Segment (Three Months Ended June 30, in thousands) | Segment | 2023 | 2022 | | :-------------- | :----- | :----- | | Valencia | $413 | $2,568 | | San Francisco | $162 | $122 | | Great Park | $20,670 | $2,602 | | Commercial | $104 | $101 | | **Total Revenues** | **$21,349** | **$5,393** | Consolidated Revenues by Segment (Six Months Ended June 30, in thousands) | Segment | 2023 | 2022 | | :-------------- | :----- | :----- | | Valencia | $1,716 | $3,727 | | San Francisco | $324 | $302 | | Great Park | $24,799 | $6,046 | | Commercial | $211 | $204 | | **Total Revenues** | **$27,050** | **$10,279** | - Contract assets decreased by **$7.9 million** for the six months ended June 30, 2023, primarily due to the receipt of marketing fees and **$24.6 million** in incentive compensation payments from the Great Park Venture, partially offset by additional earned incentive compensation revenue[43](index=43&type=chunk) [4. INVESTMENT IN UNCONSOLIDATED ENTITIES](index=14&type=section&id=4.%20INVESTMENT%20IN%20UNCONSOLIDATED%20ENTITIES) This section describes the company's equity method investments in unconsolidated entities - The company owns a **37.5% Percentage Interest** in the Great Park Venture and accounts for it using the equity method[45](index=45&type=chunk) Great Park Venture Net Income (Loss) (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | | :-------------------------------- | :------- | :------- | | Net income (loss) of Great Park Venture | $170,900 | $(1,355) | | The Company's share of net income (loss) | $64,088 | $(508) | | Equity in earnings (loss) from Great Park Venture | $53,484 | $(1,094) | - The company owns a **75% interest** in the Gateway Commercial Venture, accounted for using the equity method due to limited control, and recognized an equity in loss of **($667 thousand)** for the six months ended June 30, 2023[52](index=52&type=chunk)[54](index=54&type=chunk) [5. NONCONTROLLING INTERESTS](index=16&type=section&id=5.%20NONCONTROLLING%20INTERESTS) This section explains the nature and impact of noncontrolling interests on consolidated financial statements - The Holding Company owned approximately **62.6%** of the outstanding Class A Common Units of the Operating Company as of June 30, 2023, consolidating its financial results and recording a noncontrolling interest for the remaining **37.4%**[58](index=58&type=chunk) - Holders of Class A Common Units of the Operating Company and Class A units of the San Francisco Venture have exchange rights for Class A common shares or cash, which can increase the Holding Company's ownership[59](index=59&type=chunk)[65](index=65&type=chunk) - A Redeemable Noncontrolling Interest of **$25.0 million** relates to Class C units in the San Francisco Venture, which are required to be redeemed upon certain reimbursements or at the Venture's option[66](index=66&type=chunk) [6. CONSOLIDATED VARIABLE INTEREST ENTITY](index=17&type=section&id=6.%20CONSOLIDATED%20VARIABLE%20INTEREST%20ENTITY) This section identifies and describes the company's consolidated variable interest entities (VIEs) - The Operating Company, San Francisco Venture, FP LP, and FPL are identified as Variable Interest Entities (VIEs), with the company determined to be the primary beneficiary, leading to their consolidation[67](index=67&type=chunk)[68](index=68&type=chunk)[73](index=73&type=chunk) - As of June 30, 2023, the San Francisco Venture had total combined assets of **$1.34 billion** (primarily inventories) and total combined liabilities of **$67.3 million**[69](index=69&type=chunk) - As of June 30, 2023, FP LP and FPL had combined assets of **$1.1 billion** (primarily inventories) and total combined liabilities of **$71.8 million**[74](index=74&type=chunk) [7. INTANGIBLE ASSET, NET—RELATED PARTY](index=18&type=section&id=7.%20INTANGIBLE%20ASSET%2C%20NET%E2%80%94RELATED%20PARTY) This section details the intangible asset related to incentive compensation provisions and its amortization - The intangible asset relates to the contract value of incentive compensation provisions from the Amended and Restated Development Management Agreement (A&R DMA) with the Great Park Venture[77](index=77&type=chunk) Intangible Asset, Net (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | Net book value | $31,656 | $40,257 | - Intangible asset amortization expense was **$8.6 million** for the six months ended June 30, 2023, included in the cost of management services[78](index=78&type=chunk) [8. RELATED PARTY TRANSACTIONS](index=19&type=section&id=8.%20RELATED%20PARTY%20TRANSACTIONS) This section outlines significant transactions and balances with related parties Related Party Assets (June 30, 2023, in thousands) | Asset Type | Amount | | :-------------------------------------------------- | :----- | | Contract assets | $73,826 | | Operating lease right-of-use asset | $15,245 | | Other | $862 | | **Total Related Party Assets** | **$89,933** | Related Party Liabilities (June 30, 2023, in thousands) | Liability Type | Amount | | :-------------------------------------------------- | :----- | | Reimbursement obligation | $58,998 | | Payable to holders of Management Company's Class B interests | $4,116 | | Operating lease liability | $11,776 | | Accrued advisory fees | $7,625 | | Other | $1,169 | | **Total Related Party Liabilities** | **$83,684** | - Management fee revenues from the Great Park Venture increased to **$24.8 million** for the six months ended June 30, 2023, from **$6.0 million** in the prior year, primarily due to variable incentive compensation revenue[82](index=82&type=chunk) [9. NOTES PAYABLE, NET](index=20&type=section&id=9.%20NOTES%20PAYABLE%2C%20NET) This section provides details on the company's notes payable, net, including senior notes and credit facility Notes Payable, Net (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :------------ | :---------------- | | 7.875% Senior Notes due 2025 | $625,000 | $625,000 | | Unamortized debt issuance costs and discount | $(3,581) | $(4,349) | | **Total Notes payable, net** | **$621,419** | **$620,651** | - In June 2023, the Operating Company amended its **$125.0 million** unsecured revolving credit facility, replacing LIBOR with SOFR as the benchmark interest rate[84](index=84&type=chunk) - As of June 30, 2023, there were no borrowings or letters of credit outstanding on the Operating Company's revolving credit facility[84](index=84&type=chunk) [10. TAX RECEIVABLE AGREEMENT](index=20&type=section&id=10.%20TAX%20RECEIVABLE%20AGREEMENT) This section describes the company's Tax Receivable Agreement (TRA) and related payment obligations - The company has a Tax Receivable Agreement (TRA) with certain unit holders, providing for payments equal to **85%** of cash savings in income tax realized from specific tax attributes[85](index=85&type=chunk)[192](index=192&type=chunk) Payable pursuant to Tax Receivable Agreement (in thousands) | Date | Amount | | :---------------- | :------- | | June 30, 2023 | $173,208 | | December 31, 2022 | $173,068 | - No TRA payments were made during the six months ended June 30, 2023 or 2022, and none are expected for the next several years based on current projections[85](index=85&type=chunk)[192](index=192&type=chunk) [11. COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=11.%20COMMITMENTS%20AND%20CONTINGENCIES) This section outlines the company's significant commitments and contingencies, including leases, bonds, and legal proceedings Operating Lease Assets and Liabilities (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $16,156 | $19,067 | | Operating lease liabilities | $12,597 | $15,705 | - Outstanding performance bonds totaled **$307.3 million** as of June 30, 2023, predominantly related to the Valencia community[87](index=87&type=chunk)[189](index=189&type=chunk) - The San Francisco Venture had outstanding guarantees of **$198.3 million** benefiting the San Francisco Agency for infrastructure and construction obligations as of June 30, 2023[89](index=89&type=chunk)[190](index=190&type=chunk) - The company is a defendant in the Bayview Action lawsuit, alleging fraudulent misrepresentation of test results and remediation efforts at The San Francisco Shipyard[91](index=91&type=chunk) [12. SUPPLEMENTAL CASH FLOW INFORMATION](index=23&type=section&id=12.%20SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) This section provides supplemental cash flow details, including cash paid for interest and cash reconciliation Supplemental Cash Flow Information (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | | :------------------------------------------ | :------- | :------- | | Cash paid for interest (capitalized to inventories) | $25,998 | $26,146 | | Noncash lease expense | $2,094 | $2,452 | Reconciliation of Cash, Cash Equivalents, and Restricted Cash (June 30, in thousands) | Metric | 2023 | 2022 | | :------------------------------------------------------------------------------------------------ | :------- | :------- | | Cash and cash equivalents | $193,203 | $127,820 | | Restricted cash and certificates of deposit | $992 | $1,330 | | **Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows** | **$194,195** | **$129,150** | [13. SEGMENT REPORTING](index=23&type=section&id=13.%20SEGMENT%20REPORTING) This section presents financial information by the company's reportable segments - The company's reportable segments include Valencia, San Francisco, Great Park, and Commercial, each representing distinct mixed-use planned communities or commercial operations[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) Segment Profit (Loss) Before Income Tax Provision (Three Months Ended June 30, 2023, in thousands) | Segment | Profit (Loss) | | :-------------- | :------------ | | Valencia | $(4,538) | | San Francisco | $(885) | | Great Park | $179,145 | | Commercial | $(502) | Segment Profit (Loss) Before Income Tax Provision (Six Months Ended June 30, 2023, in thousands) | Segment | Profit (Loss) | | :-------------- | :------------ | | Valencia | $(6,977) | | San Francisco | $(1,915) | | Great Park | $183,651 | | Commercial | $(678) | [14. SHARE-BASED COMPENSATION](index=25&type=section&id=14.%20SHARE-BASED%20COMPENSATION) This section details the company's share-based compensation plans, activity, and related expenses - The Five Point Holdings, LLC 2023 Incentive Award Plan was approved, increasing the aggregate number of Class A common shares available for issuance by **7,500,000**[104](index=104&type=chunk) Share-Based Compensation Activity (Six Months Ended June 30, 2023) | Metric | Share-Based Awards (in thousands) | Weighted-Average Grant Date Fair Value | | :-------------------------- | :-------------------------------- | :----------------------------------- | | Nonvested at January 1, 2023 | 2,166 | $3.77 | | Granted | 3,947 | $1.92 | | Cancelled | (906) | $2.16 | | Vested | (690) | $6.01 | | Nonvested at June 30, 2023 | 4,517 | $2.13 | - Share-based compensation expense was **$1.7 million** for the six months ended June 30, 2023, compared to **$4.8 million** for the same period in 2022[105](index=105&type=chunk) [15. EMPLOYEE BENEFIT PLANS](index=25&type=section&id=15.%20EMPLOYEE%20BENEFIT%20PLANS) This section describes the company's employee benefit plans, including the frozen defined benefit pension plan - The Newhall Land and Farming Company Retirement Plan is a frozen defined benefit plan[107](index=107&type=chunk) Net Periodic Pension Cost (Benefit) (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | | :-------------------------- | :--- | :----- | | Interest cost | $404 | $272 | | Expected return on plan assets | $(444) | $(522) | | Amortization of net actuarial loss | $81 | $26 | | **Net periodic cost (benefit)** | **$41** | **$(224)** | [16. INCOME TAXES](index=25&type=section&id=16.%20INCOME%20TAXES) This section explains the company's income tax treatment, provision, and valuation allowance - The Holding Company is treated as a corporation for tax purposes, while most of its subsidiaries are pass-through entities[108](index=108&type=chunk) - For the six months ended June 30, 2023, the company recorded no provision or benefit for income taxes on pre-tax income of **$40.8 million**, due to the application of a decrease in its valuation allowance[109](index=109&type=chunk) - The company continues to record a valuation allowance against its federal and state net deferred tax assets, largely due to a history of book losses[110](index=110&type=chunk) [17. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS AND DISCLOSURES](index=26&type=section&id=17.%20FINANCIAL%20INSTRUMENTS%20AND%20FAIR%20VALUE%20MEASUREMENTS%20AND%20DISCLOSURES) This section provides disclosures on the fair value measurements of the company's financial instruments - The carrying amount of most of the company's financial instruments, including cash, restricted cash, and certain related party assets and liabilities, approximated their fair value at June 30, 2023, and December 31, 2022[111](index=111&type=chunk) - The estimated fair value of notes payable, net, was **$566.0 million** at June 30, 2023, compared to a carrying value of **$621.4 million**[112](index=112&type=chunk) [18. EARNINGS PER SHARE](index=26&type=section&id=18.%20EARNINGS%20PER%20SHARE) This section details the calculation of basic and diluted earnings per share for Class A common shares - The company uses the two-class method for earnings per share calculation, allocating net income between Class A and Class B common shares and participating securities[113](index=113&type=chunk) - No distributions on common shares were declared for the three and six months ended June 30, 2023 or 2022[114](index=114&type=chunk) Basic and Diluted Earnings (Loss) Per Class A Share | Period | Basic EPS | Diluted EPS | | :-------------------------- | :-------- | :---------- | | Three Months Ended June 30, 2023 | $0.34 | $0.34 | | Three Months Ended June 30, 2022 | $(0.07) | $(0.07) | | Six Months Ended June 30, 2023 | $0.28 | $0.27 | | Six Months Ended June 30, 2022 | $(0.32) | $(0.33) | [19. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=29&type=section&id=19.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) This section describes the components of accumulated other comprehensive loss attributable to the Company - Accumulated other comprehensive loss attributable to the Company totaled **$2.9 million** at June 30, 2023, primarily consisting of unamortized defined benefit pension plan net actuarial losses[117](index=117&type=chunk) - Reclassifications from accumulated other comprehensive loss to net income (loss) related to amortization of net actuarial losses were approximately **$51 thousand** for the six months ended June 30, 2023[117](index=117&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, operational results, liquidity, and capital resources [Forward-Looking Statements](index=30&type=section&id=Forward-Looking%20Statements) This section highlights forward-looking statements subject to risks and uncertainties - The discussion contains forward-looking statements subject to risks and uncertainties, which are detailed in the 'Risk Factors' section of the Annual Report on Form 10-K[119](index=119&type=chunk) [Overview](index=30&type=section&id=Overview) This section provides an overview of the company's business structure and ownership interests - The company conducts all business through Five Point Operating Company, LP, in which it owned approximately **62.6%** as of June 30, 2023[120](index=120&type=chunk) - The operating company holds equity interests in various entities, including Valencia, San Francisco Venture, Great Park Venture, Gateway Commercial Venture, and the management company[121](index=121&type=chunk) - The operating company consolidates and controls the management of all entities except for the Great Park Venture and the Gateway Commercial Venture, which are accounted for using the equity method[120](index=120&type=chunk) [Operational Highlights](index=31&type=section&id=Operational%20Highlights) This section summarizes key operational and financial achievements for the reporting period - Consolidated net income for Q2 2023 was **$50.6 million**, a significant improvement from a net loss of **$9.7 million** in Q1 2023[122](index=122&type=chunk) - Selling, general, and administrative (SG&A) expenses decreased to **$12.7 million** in Q2 2023 from **$13.8 million** in Q1 2023[122](index=122&type=chunk) - The Great Park Venture closed the sale of **798 homesites** for **$357.8 million** in Q2 2023, including **$143.1 million** in estimated variable price participation[124](index=124&type=chunk) - Total liquidity at June 30, 2023, was **$318.2 million**, comprising **$193.2 million** in cash and **$125.0 million** available under the revolving credit facility[125](index=125&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenues, expenses, and equity in earnings - Total revenues increased by **$16.0 million (295.9%)** to **$21.3 million** for the three months ended June 30, 2023, primarily due to increased management services revenue at the Great Park segment[129](index=129&type=chunk) - Equity in earnings from unconsolidated entities significantly increased to **$52.1 million** for the three months ended June 30, 2023, from **$0.6 million** in the prior year, driven by land sales at the Great Park Venture[132](index=132&type=chunk) - Selling, general, and administrative expenses decreased by **$3.0 million (10.1%)** to **$26.5 million** for the six months ended June 30, 2023, mainly due to lower employee-related and selling and marketing expenses[137](index=137&type=chunk) - Restructuring costs of **$19.4 million** were incurred during the six months ended June 30, 2022, related to executive management changes and layoffs[138](index=138&type=chunk)[139](index=139&type=chunk) [Segment Results and Financial Information](index=34&type=section&id=Segment%20Results%20and%20Financial%20Information) This section provides detailed financial results and information for each operating segment [Valencia Segment](index=37&type=section&id=Valencia%20Segment) This section details the financial performance and key developments of the Valencia segment - Selling, general, and administrative expenses for the Valencia segment decreased by **$2.0 million (24.7%)** to **$6.0 million** for the six months ended June 30, 2023, primarily due to reduced community-related selling and marketing expenses and employee-related costs[153](index=153&type=chunk) [San Francisco Segment](index=38&type=section&id=San%20Francisco%20Segment) This section details the financial performance and key developments of the San Francisco segment - Development at Candlestick and The San Francisco Shipyard is not subject to San Francisco's Proposition M growth control measure, allowing flexibility in commercial space construction[156](index=156&type=chunk) - Land transfers from the U.S. Navy for The San Francisco Shipyard are delayed due to allegations of misrepresented sampling results by contractors and subsequent resampling efforts, which could further impede future development[157](index=157&type=chunk) [Great Park Segment](index=38&type=section&id=Great%20Park%20Segment) This section details the financial performance and key developments of the Great Park segment - Land sales and related party land sales revenues for the Great Park segment increased to **$369.2 million** for the six months ended June 30, 2023, from **$3.8 million** in the prior year, driven by the sale of **798 homesites**[170](index=170&type=chunk) - Management fee revenues increased to **$24.8 million** for the six months ended June 30, 2023, from **$6.0 million** in the prior year, mainly due to variable incentive compensation recognized[174](index=174&type=chunk) - Selling, general, and administrative expenses decreased by **$6.8 million (57.1%)** to **$5.1 million** for the six months ended June 30, 2023, due to lower marketing expenses and the elimination of a variable cost reimbursement component[176](index=176&type=chunk) [Commercial Segment](index=43&type=section&id=Commercial%20Segment) This section details the financial performance and key developments of the Commercial segment - The Gateway Commercial Venture owns one commercial office building and approximately **50 acres** of commercial land with additional development rights at the Five Point Gateway Campus[181](index=181&type=chunk) - The company's corporate headquarters are located in the building owned by the Gateway Commercial Venture[181](index=181&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity, cash flow, and available capital resources - Consolidated cash and cash equivalents were **$193.2 million** at June 30, 2023, up from **$131.8 million** at December 31, 2022[184](index=184&type=chunk) - The company has a **$125.0 million** unsecured revolving credit facility available, with no funds drawn or letters of credit outstanding as of June 30, 2023[184](index=184&type=chunk) - Short-term cash needs include general and administrative expenses, development expenditures, interest payments, and related party reimbursement obligations, some of which have been deferred to 2024[185](index=185&type=chunk) - The company expects to meet its cash requirements for the next **12 months** through available cash, distributions from unconsolidated entities, management fees, land sales, public financing reimbursements, and access to financing sources[186](index=186&type=chunk) - No Tax Receivable Agreement (TRA) payments are expected for the next several years based on current projections[192](index=192&type=chunk) [Summary of Cash Flows](index=45&type=section&id=Summary%20of%20Cash%20Flows) This section provides a summary and analysis of the company's cash flows Summary of Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2023 | 2022 | | :-------------------------- | :------- | :-------- | | Operating activities | $37,925 | $(133,531) | | Investing activities | $29,676 | $1,387 | | Financing activities | $(6,169) | $(5,498) | - Net cash provided by operating activities significantly improved to **$37.9 million** for the six months ended June 30, 2023, from **$133.5 million** net cash used in the prior year, aided by public financing reimbursements and a third-party recovery in Valencia[193](index=193&type=chunk) - The company received **$22.0 million** in incentive compensation payments and **$81.8 million** in total distributions from the Great Park Venture during the six months ended June 30, 2023[194](index=194&type=chunk) [Changes in Capital Structure](index=46&type=section&id=Changes%20in%20Capital%20Structure) This section outlines changes in the company's capital structure, including ownership percentages - The company's ownership percentage in the operating company increased to **62.6%** during the six months ended June 30, 2023, primarily due to the issuance and reacquisition of share-based compensation[199](index=199&type=chunk) Outstanding Class A Units (June 30, 2023) | Entity | Held by Us | Held by Noncontrolling Interest Members | | :-------------------------------- | :--------- | :------------------------------------ | | Class A units of the operating company | 69,199,938 | 41,363,271 | | Class A units of the San Francisco Venture | N/A | 37,870,273 | - There were **79,233,544 Class B common shares** outstanding at June 30, 2023, held by noncontrolling interest members, convertible to Class A common shares at a **0.0003:1 ratio**[201](index=201&type=chunk) [Critical Accounting Estimates](index=46&type=section&id=Critical%20Accounting%20Estimates) This section confirms no significant changes to the company's critical accounting estimates - There have been no significant changes to the company's critical accounting estimates during the six months ended June 30, 2023, compared to those disclosed in its Annual Report on Form 10-K for 2022[202](index=202&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines market risk exposure, primarily from fixed-rate indebtedness, and management strategies - The company's primary market risk stems from its indebtedness, which bears interest at fixed rates[203](index=203&type=chunk) - As of June 30, 2023, the company had outstanding consolidated net indebtedness of **$621.4 million**, none of which bears interest based on floating rates[204](index=204&type=chunk) - The company may consider using swap arrangements in the future to fix rates on floating rate debt, if applicable, to reduce cash flow variability and mitigate interest rate increases, not for speculative purposes[203](index=203&type=chunk) [ITEM 4. Controls and Procedures](index=46&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and changes in internal financial reporting [Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on management's conclusion regarding the effectiveness of disclosure controls - Management, with the supervision of the CEO and Interim CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[205](index=205&type=chunk) [Changes in Internal Control Over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any changes in internal control over financial reporting - There were no changes in internal control over financial reporting identified during the period covered by this report that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[206](index=206&type=chunk) PART II. OTHER INFORMATION This section covers other required disclosures, including legal proceedings, risk factors, and exhibits [ITEM 1. Legal Proceedings](index=48&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 11 of the condensed consolidated financial statements for legal proceedings - Disclosures regarding legal proceedings are incorporated by reference from Note 11 to the condensed consolidated financial statements[208](index=208&type=chunk) [ITEM 1A. Risk Factors](index=48&type=section&id=ITEM%201A.%20Risk%20Factors) This section states no material changes to risk factors from the Annual Report on Form 10-K - There have been no material changes in the company's risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022[209](index=209&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities and use of proceeds to report[210](index=210&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=48&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities - No defaults upon senior securities to report[210](index=210&type=chunk) [ITEM 4. Mine Safety Disclosures](index=48&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[210](index=210&type=chunk) [ITEM 5. Other Information](index=48&type=section&id=ITEM%205.%20Other%20Information) This section states that there is no other information to disclose - No other information to report[210](index=210&type=chunk) [ITEM 6. Exhibits](index=49&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including credit agreements and certifications - Exhibit **10.1** includes the Fourth Amendment to Credit Agreement, dated June 30, 2023[211](index=211&type=chunk) - Includes Certifications of Principal Executive Officer (**31.1, 32.1**) and Principal Financial Officer (**31.2, 32.2**) pursuant to Sarbanes-Oxley Act[211](index=211&type=chunk) - Includes Inline XBRL Instance Document and Taxonomy Extension Documents (**101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104**)[211](index=211&type=chunk) [Signatures](index=50&type=section&id=Signatures) This section contains the required signatures of the company's principal executive and financial officers - The report is signed by Daniel Hedigan, Chief Executive Officer, and Leo Kij, Interim Chief Financial Officer[214](index=214&type=chunk)