Five Point Holdings, LLC. (NYSE:FPH) Q3 2021 Results Earnings Conference Call November 3, 2021 5:00 PM ET Company Participants Lynn Jochim - President and COO Erik Higgins - Chief Financial Officer Mike Alvarado - Chief Legal Officer Greg McWilliams - Chief Policy Officer Stuart Miller - Executive Chair Emile Haddad - Chairman Emeritus Conference Call Participants Alan Ratner - Zelman and Associates Stephen Kim - Evercore ISI Operator Greetings and welcome to the Five Point Holdings LLC Third Quarter 2021 C ...

[Part I. Financial Information](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) The company reported a net loss of $34.2 million for the nine months ended September 30, 2021, with total assets slightly decreasing to $2.94 billion and increased cash usage in operations, influenced by complex VIE and unconsolidated entity structures Condensed Consolidated Balance Sheet Data (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $191,134 | $298,144 | | Inventories | $2,167,291 | $1,990,859 | | Investment in unconsolidated entities | $374,441 | $442,850 | | **Total Assets** | **$2,936,275** | **$2,961,985** | | Notes payable, net | $618,732 | $617,581 | | **Total Liabilities** | **$1,063,429** | **$1,051,887** | | **Total Capital** | **$1,847,846** | **$1,885,098** | Condensed Consolidated Statements of Operations (in thousands) | Metric | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $20,695 | $8,377 | $42,179 | $41,904 | | Equity in earnings from unconsolidated entities | $485 | $52,423 | $9,048 | $45,417 | | **Net (Loss) Income** | **($8,210)** | **$36,422** | **N/A** | **($34,182)** | **($2,559)** | **N/A** | | Net (Loss) Income Attributable to the Company | ($3,848) | $16,964 | ($15,916) | ($1,210) | | **Diluted EPS (Class A)** | **($0.06)** | **$0.25** | **($0.23)** | **($0.02)** | Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($162,301) | ($115,713) | | Net cash provided by investing activities | $78,313 | $57,129 | | Net cash used in financing activities | ($23,022) | ($18,080) | | **Net Decrease in Cash** | **($107,010)** | **($76,664)** | - The company conducts all operations through the Operating Company, a consolidated Variable Interest Entity (VIE), with substantially all assets and liabilities belonging to this VIE, and also consolidates other VIEs including the San Francisco Venture, FP LP, and FPL[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports strong new home sales and sufficient liquidity, despite a consolidated net loss influenced by varied segment performance and equity method investments, notably increased land sales in Great Park and reduced commercial revenue post-asset sales [Overview and Operational Highlights](index=30&type=section&id=Overview%20and%20Operational%20Highlights) The company operates through four segments, two accounted for by equity method, and underwent a significant leadership transition while reporting strong home sales in Great Park Neighborhoods and Valencia - Effective September 30, 2021, Emile Haddad transitioned to Chairman Emeritus and senior advisor, with Stuart Miller named Executive Chairman and Lynn Jochim becoming President and COO[135](index=135&type=chunk)[136](index=136&type=chunk) - Strong home sales were reported, with **135 homes sold at Great Park Neighborhoods in Q3 2021** (591 YTD) and **199 homes sold at Valencia** since its May 2021 launch[138](index=138&type=chunk) - In Q3 2021, the Great Park Venture sold **113 homesites and eight homes** for an aggregate gross price of **$78.0 million**[137](index=137&type=chunk) [Consolidated Results of Operations](index=31&type=section&id=Consolidated%20Results%20of%20Operations) Q3 2021 revenues increased to $20.7 million due to land sales and management fees, but a sharp decline in equity earnings from unconsolidated entities resulted in a net loss of $8.2 million for the quarter and $34.2 million YTD Comparison of Results of Operations (in thousands) | Metric | Q3 2021 | Q3 2020 | Change | YTD 2021 | YTD 2020 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $20,695 | $8,377 | +147.0% | $42,179 | $41,904 | +0.7% | | Total Costs & Expenses | $30,927 | $24,540 | +26.0% | $89,311 | $91,450 | -2.3% | | Equity in Earnings | $485 | $52,423 | -99.1% | $9,048 | $45,417 | -79.9% | | **Net (Loss) Income** | **($8,210)** | **$36,422** | **N/A** | **($34,182)** | **($2,559)** | **N/A** | - The decrease in equity in earnings for Q3 2021 was primarily due to a large gain from the sale of two buildings by the Gateway Commercial Venture in the prior-year period[148](index=148&type=chunk) - For the nine months ended Sep 30, 2020, equity in earnings included a **$26.9 million other-than-temporary impairment** on the company's investment in the Great Park Venture, offset by gains on asset sales from the Gateway Commercial Venture[155](index=155&type=chunk) [Segment Results](index=33&type=section&id=Segment%20Results) Segment performance varied, with Great Park profitable from land sales, Valencia incurring a loss due to marketing, San Francisco delayed by land retesting, and Commercial profit significantly down due to the absence of prior-year asset sales - **Valencia:** YTD revenues of **$11.5 million** included **$10.0 million** from a contingent payment on a 2011 commercial property sale, while SG&A expenses increased **59.6% YTD** due to marketing for the new development area[171](index=171&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk) - **San Francisco:** Development progress is hampered by delays in land transfer from the U.S. Navy due to re-evaluation of environmental remediation work, and the company is also a defendant in related litigation[179](index=179&type=chunk)[180](index=180&type=chunk) - **Great Park:** YTD land sales revenue surged to **$407.3 million** (887 homesites) from **$23.1 million** (35 homesites) in the prior year, and the venture made distributions of **$204.3 million** to percentage interest holders, of which the company received **$76.6 million**[186](index=186&type=chunk)[196](index=196&type=chunk) - **Commercial:** YTD revenues decreased **70.3% to $6.7 million**, as the prior-year period included rental income from three buildings sold in 2020 for gross proceeds of **$463.0 million**[209](index=209&type=chunk)[213](index=213&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2021, the company held $191.1 million in cash and an undrawn $125.0 million credit facility, with cash used in operations totaling $162.3 million and investing activities providing $78.3 million, primarily from a Great Park Venture distribution Liquidity Position as of Sep 30, 2021 (in millions) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $191.1 | | Revolving credit facility capacity | $125.0 | | Drawn on credit facility | $0 | | Letters of credit outstanding | $0.3 | | **Available Liquidity** | **$315.8** | - Cash used in operating activities increased by **$46.6 million YTD**, driven by continued investment in horizontal development and SG&A costs[226](index=226&type=chunk) - Cash from investing activities was primarily driven by a **$76.6 million distribution** (return of investment) from the Great Park Venture[229](index=229&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is its **$618.7 million** in fixed-rate consolidated net indebtedness, which is not subject to interest rate fluctuations, and it does not use derivative financial instruments - As of September 30, 2021, the company had **$618.7 million** in outstanding consolidated net indebtedness, which bears interest at fixed rates[239](index=239&type=chunk) - The company has not entered into any transactions using derivative financial instruments[239](index=239&type=chunk) [Controls and Procedures](index=46&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting identified during the quarter - Management concluded that disclosure controls and procedures were effective as of September 30, 2021[240](index=240&type=chunk) - No changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal controls were identified during the quarter[241](index=241&type=chunk) [Part II. Other Information](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=47&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is a defendant in multiple lawsuits, including a class action related to The San Francisco Shipyard, alleging fraudulent environmental misrepresentation by a U.S. Navy contractor, for which the company asserts meritorious defenses - The company is a defendant in a putative class action lawsuit filed in May 2018 concerning The San Francisco Shipyard, alleging fraudulent misrepresentation of test results and remediation by Tetra Tech, a contractor hired by the U.S. Navy[99](index=99&type=chunk) - Additional lawsuits have been filed by homeowners at The San Francisco Shipyard, alleging that environmental contamination issues were not properly disclosed, to which the company believes it has meritorious defenses[100](index=100&type=chunk)[101](index=101&type=chunk) [Risk Factors](index=47&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since those disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 - The company states there have been no material changes in its risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020[245](index=245&type=chunk) [Other Disclosures (Items 2, 3, 4, 5, 6)](index=47&type=section&id=Other%20Disclosures%20(Items%202,%203,%204,%205,%206)) This section confirms no unregistered equity sales, no defaults on senior securities, no other material information under Item 5, and provides a list of exhibits, with mine safety disclosures being inapplicable - The company reported no activity for Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, or Other Information[246](index=246&type=chunk)

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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, 2020 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 (State or other jurisdictio ...

Five Point Holdings, LLC (NYSE:FPH) Q3 2020 Earnings Conference Call November 10, 2020 5:00 PM ET Company Participants Emile Haddad – Chairman, President and Chief Executive Officer Erik Higgins – Chief Financial Officer, Vice President and Treasurer Conference Call Participants Stephen Kim – Evercore ISI Elad Hillman – JPMorgan Alan Ratner – Zelman and Associates Truman Patterson – Wells Fargo Operator Good day, everyone. Welcome to today’s Five Point Holdings Third Quarter 2020 Conference Call. Currently, ...

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