FPH Five Point Holdings LLC

Second Quarter 2023 Highlights

• Great Park Venture sold 798 homesites on approximately 84 acres of land and recognized revenue of $357.8 million.

• Great Park Venture distributions and incentive compensation payments to the Company totaled $103.8 million.

• Great Park builder sales of 177 homes during the quarter compared to 255 in the first quarter of 2023.

• Valencia builder sales of 79 homes during the quarter compared to 75 in the first quarter of 2023.

• Consolidated revenues of $21.3 million; consolidated net income of $50.6 million, which includes $52.3 million equity in earnings from the Great Park Venture.

• Cash and cash equivalents of $193.2 million as of June 30, 2023.

• Debt to total capitalization ratio of 24.7% and liquidity of $318.2 million as of June 30, 2023.

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 2023 results.

Dan Hedigan, Chief Executive Officer, said, “During the second quarter, we were able to execute effectively on our three main priorities (generating revenue, rightsizing SG&A, and managing capital spend) and to achieve results that exceeded our expectations. For the quarter, we had $50.6 million in consolidated net income and a net cash increase of $86.6 million, leaving us with a cash balance of $193.2 million at quarter end. While these results are due in part to the residential land sale market that has strengthened throughout the year, it is also a testament to the management team and our continued focus on matching our capital spend with near term revenue opportunities. Five Point has created a strong organizational base for moving the development of our communities forward and creating value for our shareholders.”

Consolidated Results

Liquidity and Capital Resources

As of June 30, 2023, total liquidity of $318.2 million was comprised of cash and cash equivalents totaling $193.2 million and borrowing availability of $125.0 million under our unsecured revolving credit facility. Total capital was $1.9 billion, reflecting $2.9 billion in assets and $1.0 billion in liabilities and redeemable noncontrolling interests.

Results of Operations for the Three Months Ended June 30, 2023

Revenues. Revenues of $21.3 million for the three months ended June 30, 2023 were primarily generated from management services. Additionally, we collected $22.0 million in incentive compensation payments under our development management agreement with the Great Park Venture.

Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $52.1 million for the three months ended June 30, 2023. The Great Park Venture generated net income of $168.2 million during the three months ended June 30, 2023, and our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $52.3 million. Additionally, we recognized $0.5 million in loss from our 75% interest in the Gateway Commercial Venture.

During the three months ended June 30, 2023, the Great Park Venture sold 798 homesites on approximately 84 acres of land at the Great Park Neighborhoods. The Great Park Venture recognized $357.8 million in revenue, consisting of $214.7 million paid at closing plus $143.1 million in revenue representing variable consideration from future price participation payments expected to be received when homes are sold to homebuyers. After completing the land sale, the Great Park Venture made aggregate distributions of $25.5 million to holders of Legacy Interests and $218.0 million to holders of Percentage Interests. We received $81.8 million for our 37.5% Percentage Interest.

Selling, general, and administrative. Selling, general, and administrative expenses were $12.7 million for the three months ended June 30, 2023.

Net income. Consolidated net income for the quarter was $50.6 million. Net income attributable to noncontrolling interests totaled $27.0 million, resulting in net income attributable to the Company of $23.6 million. Net income attributable to noncontrolling interests represents the portion of income allocated to related party partners and members that hold units of the operating company and the San Francisco Venture. Holders of units of the operating company and the San Francisco Venture can redeem their interests for either, at our election, our Class A common shares on a one-for-one basis or cash. In connection with any redemption or exchange, our ownership of our operating subsidiaries will increase thereby reducing the amount of income allocated to noncontrolling interests in subsequent periods.

Conference Call Information

In conjunction with this release, Five Point will host a conference call on Thursday, July 20, 2023 at 5:00 p.m. Eastern Time. Dan Hedigan, Chief Executive Officer, and Leo Kij, Interim Chief Financial Officer, will host the call. Interested investors and other parties can listen to a live Internet audio webcast of the conference call that will be available on the Five Point website at ir.fivepoint.com. The conference call can also be accessed by dialing (877) 451-6152 (domestic) or (201) 389-0879 (international). A telephonic replay will be available starting approximately two hours after the end of the call by dialing (844) 512-2921, or for international callers, (412) 317-6671. The passcode for the live call and the replay is 13740212. The telephonic replay will be available until 11:59 p.m. Eastern Time on July 28, 2023.

About Five Point

Five Point, headquartered in Irvine, California, designs and develops large mixed-use planned communities in Orange County, Los Angeles County, and San Francisco County that combine residential, commercial, retail, educational, and recreational elements with public amenities, including civic areas for parks and open space. Five Point’s communities include the Great Park Neighborhoods® in Irvine, Valencia® in Los Angeles County, and Candlestick® and The San Francisco Shipyard® in the City of San Francisco. These communities are designed to include approximately 40,000 residential homes and approximately 23 million square feet of commercial space.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. This press release may contain forward-looking statements regarding: our expectations of our future revenues, costs and financial performance; future demographics and market conditions in the areas where our communities are located; the outcome of pending litigation and its effect on our operations; the timing of our development activities; and the timing of future real estate purchases or sales. We caution you that any forward-looking statements included in this press release are based on our current views and information currently available to us. Forward-looking statements are subject to risks, trends, uncertainties and factors that are beyond our control. Some of these risks and uncertainties are described in more detail in our filings with the SEC, including our Annual Report on Form 10-K, under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law.

FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

REVENUES:

 

 

 

 

 

 

 

Land sales

$

16

 

 

$

14

 

 

$

(9

)

 

$

571

 

Land sales—related party

 

(29

)

 

 

1,711

 

 

 

595

 

 

 

1,712

 

Management services—related party

 

20,774

 

 

 

2,703

 

 

 

25,010

 

 

 

6,250

 

Operating properties

 

588

 

 

 

965

 

 

 

1,454

 

 

 

1,746

 

Total revenues

 

21,349

 

 

 

5,393

 

 

 

27,050

 

 

 

10,279

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

Land sales

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Management services

 

9,682

 

 

 

2,200

 

 

 

12,048

 

 

 

4,884

 

Operating properties

 

1,798

 

 

 

2,378

 

 

 

2,970

 

 

 

4,217

 

Selling, general, and administrative

 

12,710

 

 

 

12,651

 

 

 

26,462

 

 

 

29,442

 

Restructuring

 

—

 

 

 

—

 

 

 

—

 

 

 

19,437

 

Total costs and expenses

 

24,190

 

 

 

17,229

 

 

 

41,480

 

 

 

57,980

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

Interest income

 

1,293

 

 

 

117

 

 

 

2,129

 

 

 

138

 

Miscellaneous

 

(20

)

 

 

112

 

 

 

(41

)

 

 

224

 

Total other income

 

1,273

 

 

 

229

 

 

 

2,088

 

 

 

362

 

EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES

 

52,128

 

 

 

643

 

 

 

53,176

 

 

 

(389

)

INCOME (LOSS) BEFORE INCOME TAX PROVISION

 

50,560

 

 

 

(10,964

)

 

 

40,834

 

 

 

(47,728

)

INCOME TAX PROVISION

 

(5

)

 

 

(8

)

 

 

(13

)

 

 

(13

)

NET INCOME (LOSS)

 

50,555

 

 

 

(10,972

)

 

 

40,821

 

 

 

(47,741

)

LESS NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

26,984

 

 

 

(5,861

)

 

 

21,786

 

 

 

(25,500

)

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

$

23,571

 

 

$

(5,111

)

 

$

19,035

 

 

$

(22,241

)

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE

 

 

 

 

 

 

 

Basic

$

0.34

 

 

$

(0.07

)

 

$

0.28

 

 

$

(0.32

)

Diluted

$

0.34

 

 

$

(0.07

)

 

$

0.27

 

 

$

(0.33

)

WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING

 

 

 

 

 

 

 

Basic

 

68,811,975

 

 

 

68,495,523

 

 

 

68,758,894

 

 

 

68,332,460

 

Diluted

 

145,040,689

 

 

 

69,635,563

 

 

 

144,939,450

 

 

 

69,472,500

 

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE

 

 

 

 

 

 

 

Basic and diluted

$

0.00

 

 

$

(0.00

)

 

$

0.00

 

 

$

(0.00

)

WEIGHTED AVERAGE CLASS B SHARES OUTSTANDING

 

 

 

 

 

 

 

Basic and diluted

 

79,233,544

 

 

 

79,233,544

 

 

 

79,233,544

 

 

 

79,233,544

 

FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares)

(Unaudited)

 

 

June 30, 2023

 

December 31, 2022

ASSETS

 

 

 

INVENTORIES

$

2,254,935

 

 

$

2,239,125

 

INVESTMENT IN UNCONSOLIDATED ENTITIES

 

302,337

 

 

 

331,594

 

PROPERTIES AND EQUIPMENT, NET

 

29,668

 

 

 

30,243

 

INTANGIBLE ASSET, NET—RELATED PARTY

 

31,656

 

 

 

40,257

 

CASH AND CASH EQUIVALENTS

 

193,203

 

 

 

131,771

 

RESTRICTED CASH AND CERTIFICATES OF DEPOSIT

 

992

 

 

 

992

 

RELATED PARTY ASSETS

 

89,933

 

 

 

97,126

 

OTHER ASSETS

 

11,179

 

 

 

14,676

 

TOTAL

$

2,913,903

 

 

$

2,885,784

 

 

 

 

 

LIABILITIES AND CAPITAL

 

 

 

LIABILITIES:

 

 

 

Notes payable, net

$

621,419

 

 

$

620,651

 

Accounts payable and other liabilities

 

90,760

 

 

 

94,426

 

Related party liabilities

 

83,684

 

 

 

93,086

 

Deferred income tax liability, net

 

11,506

 

 

 

11,506

 

Payable pursuant to tax receivable agreement

 

173,208

 

 

 

173,068

 

Total liabilities

 

980,577

 

 

 

992,737

 

 

 

 

 

REDEEMABLE NONCONTROLLING INTEREST

 

25,000

 

 

 

25,000

 

CAPITAL:

 

 

 

Class A common shares; No par value; Issued and outstanding: June 30, 2023—69,199,938 shares; December 31, 2022—69,068,354 shares

 

 

 

Class B common shares; No par value; Issued and outstanding: June 30, 2023—79,233,544 shares; December 31, 2022—79,233,544 shares

 

 

 

Contributed capital

 

589,634

 

 

 

587,733

 

Retained earnings

 

52,421

 

 

 

33,386

 

Accumulated other comprehensive loss

 

(2,939

)

 

 

(2,988

)

Total members’ capital

 

639,116

 

 

 

618,131

 

Noncontrolling interests

 

1,269,210

 

 

 

1,249,916

 

Total capital

 

1,908,326

 

 

 

1,868,047

 

TOTAL

$

2,913,903

 

 

$

2,885,784

 

FIVE POINT HOLDINGS, LLC

SUPPLEMENTAL DATA

(In thousands)

(Unaudited)

Liquidity

 

June 30, 2023

Cash and cash equivalents

$

193,203

Borrowing capacity(1)

 

125,000

Total liquidity

$

318,203

(1)

As of June 30, 2023, no borrowings or letters of credit were outstanding on the Company’s $125.0 million revolving credit facility.

 

Debt to Total Capitalization and Net Debt to Total Capitalization

 

June 30, 2023

Debt(1)

$

625,000

 

Total capital

 

1,908,326

 

Total capitalization

$

2,533,326

 

Debt to total capitalization

 

24.7

%

 

 

Debt(1)

$

625,000

 

Less: Cash and cash equivalents

 

193,203

 

Net debt

 

431,797

 

Total capital

 

1,908,326

 

Total net capitalization

$

2,340,123

 

Net debt to total capitalization(2)

 

18.5

%

(1)

For purposes of this calculation, debt is the amount due on the Company’s notes payable before offsetting for capitalized deferred financing costs.

(2)

Net debt to total capitalization is a non-GAAP financial measure defined as net debt (debt less cash and cash equivalents) divided by total net capitalization (net debt plus total capital). The Company believes the ratio of net debt to total capitalization is a relevant and a useful financial measure to investors in understanding the leverage employed in the Company’s operations. However, because net debt to total capitalization is not calculated in accordance with GAAP, this financial measure should not be considered in isolation or as an alternative to financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement the Company's GAAP results.

Segment Results

The following table reconciles the results of operations of our segments to our consolidated results for the three and six months ended June 30, 2023 (in thousands):

 

Three Months Ended June 30, 2023

 

Valencia

 

San Francisco

 

Great Park

 

Commercial

 

Total reportable segments

 

Corporate and unallocated

 

Total under management

 

Removal of unconsolidated entities(1)

 

Total consolidated

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land sales

$

16

 

 

$

—

 

 

$

358,668

 

$

—

 

 

$

358,684

 

 

$

—

 

 

$

358,684

 

 

$

(358,668

)

 

$

16

 

Land sales—related party

 

(29

)

 

 

—

 

 

 

1,928

 

 

—

 

 

 

1,899

 

 

 

—

 

 

 

1,899

 

 

 

(1,928

)

 

 

(29

)

Management services—related party(2)

 

—

 

 

 

—

 

 

 

20,670

 

 

104

 

 

 

20,774

 

 

 

—

 

 

 

20,774

 

 

 

—

 

 

 

20,774

 

Operating properties

 

426

 

 

 

162

 

 

 

—

 

 

2,021

 

 

 

2,609

 

 

 

—

 

 

 

2,609

 

 

 

(2,021

)

 

 

588

 

Total revenues

 

413

 

 

 

162

 

 

 

381,266

 

 

2,125

 

 

 

383,966

 

 

 

—

 

 

 

383,966

 

 

 

(362,617

)

 

 

21,349

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land sales

 

—

 

 

 

—

 

 

 

165,749

 

 

—

 

 

 

165,749

 

 

 

—

 

 

 

165,749

 

 

 

(165,749

)

 

 

—

 

Management services(2)

 

—

 

 

 

—

 

 

 

9,682

 

 

—

 

 

 

9,682

 

 

 

—

 

 

 

9,682

 

 

 

—

 

 

 

9,682

 

Operating properties

 

1,798

 

 

 

—

 

 

 

—

 

 

1,019

 

 

 

2,817

 

 

 

—

 

 

 

2,817

 

 

 

(1,019

)

 

 

1,798

 

Selling, general, and administrative

 

3,394

 

 

 

1,049

 

 

 

1,815

 

 

1,033

 

 

 

7,291

 

 

 

8,267

 

 

 

15,558

 

 

 

(2,848

)

 

 

12,710

 

Management fees—related party

 

—

 

 

 

—

 

 

 

27,388

 

 

—

 

 

 

27,388

 

 

 

—

 

 

 

27,388

 

 

 

(27,388

)

 

 

—

 

Total costs and expenses

 

5,192

 

 

 

1,049

 

 

 

204,634

 

 

2,052

 

 

 

212,927

 

 

 

8,267

 

 

 

221,194

 

 

 

(197,004

)

 

 

24,190

 

OTHER (EXPENSE) INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

—

 

 

 

2

 

 

 

1,907

 

 

—

 

 

 

1,909

 

 

 

1,291

 

 

 

3,200

 

 

 

(1,907

)

 

 

1,293

 

Interest expense

 

—

 

 

 

—

 

 

 

—

 

 

(575

)

 

 

(575

)

 

 

—

 

 

 

(575

)

 

 

575

 

 

 

—

 

Miscellaneous

 

(20

)

 

 

—

 

 

 

—

 

 

—

 

 

 

(20

)

 

 

—

 

 

 

(20

)

 

 

—

 

 

 

(20

)

Total other (expense) income

 

(20

)

 

 

2

 

 

 

1,907

 

 

(575

)

 

 

1,314

 

 

 

1,291

 

 

 

2,605

 

 

 

(1,332

)

 

 

1,273

 

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES

 

261

 

 

 

—

 

 

 

606

 

 

—

 

 

 

867

 

 

 

—

 

 

 

867

 

 

 

51,261

 

 

 

52,128

 

SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION

 

(4,538

)

 

 

(885

)

 

 

179,145

 

 

(502

)

 

 

173,220

 

 

 

(6,976

)

 

 

166,244

 

 

 

(115,684

)

 

 

50,560

 

INCOME TAX PROVISION

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

—

 

 

 

(5

)

 

 

(5

)

 

 

—

 

 

 

(5

)

SEGMENT (LOSS) PROFIT/NET INCOME

$

(4,538

)

 

$

(885

)

 

$

179,145

 

$

(502

)

 

$

173,220

 

 

$

(6,981

)

 

$

166,239

 

 

$

(115,684

)

 

$

50,555

 

(1)

Represents the removal of the Great Park Venture and Gateway Commercial Venture operating results, which are included in the Great Park segment and Commercial segment operating results at 100% of each venture’s historical basis, respectively, but are not included in our consolidated results as we account for our investment in each venture using the equity method of accounting.

(2)

For the Great Park and Commercial segments, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture and the Gateway Commercial Venture, as applicable.

 

Six Months Ended June 30, 2023

 

Valencia

 

San Francisco

 

Great Park

 

Commercial

 

Total reportable segments

 

Corporate and unallocated

 

Total under management

 

Removal of unconsolidated entities(1)

 

Total consolidated

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land sales

$

(9

)

 

$

—

 

 

$

361,801

 

$

—

 

 

$

361,792

 

 

$

—

 

 

$

361,792

 

 

$

(361,801

)

 

$

(9

)

Land sales—related party

 

595

 

 

 

—

 

 

 

7,395

 

 

—

 

 

 

7,990

 

 

 

—

 

 

 

7,990

 

 

 

(7,395

)

 

 

595

 

Management services—related party(2)

 

—

 

 

 

—

 

 

 

24,799

 

 

211

 

 

 

25,010

 

 

 

—

 

 

 

25,010

 

 

 

—

 

 

 

25,010

 

Operating properties

 

1,130

 

 

 

324

 

 

 

—

 

 

4,175

 

 

 

5,629

 

 

 

—

 

 

 

5,629

 

 

 

(4,175

)

 

 

1,454

 

Total revenues

 

1,716

 

 

 

324

 

 

 

393,995

 

 

4,386

 

 

 

400,421

 

 

 

—

 

 

 

400,421

 

 

 

(373,371

)

 

 

27,050

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land sales

 

—

 

 

 

—

 

 

 

165,749

 

 

—

 

 

 

165,749

 

 

 

—

 

 

 

165,749

 

 

 

(165,749

)

 

 

—

 

Management services(2)

 

—

 

 

 

—

 

 

 

12,048

 

 

—

 

 

 

12,048

 

 

 

—

 

 

 

12,048

 

 

 

—

 

 

 

12,048

 

Operating properties

 

2,970

 

 

 

—

 

 

 

—

 

 

1,803

 

 

 

4,773

 

 

 

—

 

 

 

4,773

 

 

 

(1,803

)

 

 

2,970

 

Selling, general, and administrative

 

6,041

 

 

 

2,242

 

 

 

5,143

 

 

2,153

 

 

 

15,579

 

 

 

18,179

 

 

 

33,758

 

 

 

(7,296

)

 

 

26,462

 

Management fees—related party

 

—

 

 

 

—

 

 

 

31,848

 

 

—

 

 

 

31,848

 

 

 

—

 

 

 

31,848

 

 

 

(31,848

)

 

 

—

 

Total costs and expenses

 

9,011

 

 

 

2,242

 

 

 

214,788

 

 

3,956

 

 

 

229,997

 

 

 

18,179

 

 

 

248,176

 

 

 

(206,696

)

 

 

41,480

 

OTHER (EXPENSE) INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

—

 

 

 

3

 

 

 

3,208

 

 

—

 

 

 

3,211

 

 

 

2,126

 

 

 

5,337

 

 

 

(3,208

)

 

 

2,129

 

Interest expense

 

—

 

 

 

—

 

 

 

—

 

 

(1,108

)

 

 

(1,108

)

 

 

—

 

 

 

(1,108

)

 

 

1,108

 

 

 

—

 

Miscellaneous

 

(41

)

 

 

—

 

 

 

—

 

 

—

 

 

 

(41

)

 

 

—

 

 

 

(41

)

 

 

—

 

 

 

(41

)

Total other (expense) income

 

(41

)

 

 

3

 

 

 

3,208

 

 

(1,108

)

 

 

2,062

 

 

 

2,126

 

 

 

4,188

 

 

 

(2,100

)

 

 

2,088

 

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES

 

359

 

 

 

—

 

 

 

1,236

 

 

—

 

 

 

1,595

 

 

 

—

 

 

 

1,595

 

 

 

51,581

 

 

 

53,176

 

SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION

 

(6,977

)

 

 

(1,915

)

 

 

183,651

 

 

(678

)

 

 

174,081

 

 

 

(16,053

)

 

 

158,028

 

 

 

(117,194

)

 

 

40,834

 

INCOME TAX PROVISION

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

—

 

 

 

(13

)

 

 

(13

)

 

 

—

 

 

 

(13

)

SEGMENT (LOSS) PROFIT/NET INCOME

$

(6,977

)

 

$

(1,915

)

 

$

183,651

 

$

(678

)

 

$

174,081

 

 

$

(16,066

)

 

$

158,015

 

 

$

(117,194

)

 

$

40,821

 

(1)

Represents the removal of the Great Park Venture and Gateway Commercial Venture operating results, which are included in the Great Park segment and Commercial segment operating results at 100% of each venture’s historical basis, respectively, but are not included in our consolidated results as we account for our investments in each venture using the equity method of accounting.

(2)

For the Great Park and Commercial segments, represents the revenues and expenses attributable to the management company for providing services to the Great Park Venture and the Gateway Commercial Venture, as applicable.

The table below reconciles the Great Park segment results to the equity in earnings from our investment in the Great Park Venture that is reflected in the condensed consolidated statements of operations for the three and six months ended June 30, 2023 (in thousands):

 

Three Months Ended June 30, 2023

 

Six Months Ended June 30, 2023

Segment profit from operations

$

179,145

 

 

$

183,651

 

Less net income of management company attributed to the Great Park segment

 

10,988

 

 

 

12,751

 

Net income of the Great Park Venture

 

168,157

 

 

 

170,900

 

The Company’s share of net income of the Great Park Venture

 

63,059

 

 

 

64,088

 

Basis difference amortization, net

 

(10,737

)

 

 

(10,604

)

Equity in earnings from the Great Park Venture

$

52,322

 

 

$

53,484

 

The table below reconciles the Commercial segment results to the equity in loss from our investment in the Gateway Commercial Venture that is reflected in the condensed consolidated statements of operations for the three and six months ended June 30, 2023 (in thousands):

 

Three Months Ended June 30, 2023

 

Six Months Ended June 30, 2023

Segment loss from operations

$

(502

)

 

$

(678

)

Less net income of management company attributed to the Commercial segment

 

104

 

 

 

211

 

Net loss of the Gateway Commercial Venture

 

(606

)

 

 

(889

)

Equity in loss from the Gateway Commercial Venture

$

(455

)

 

$

(667

)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230720083825/en/

Investor Relations: Leo Kij, 949-349-1029 Leo.Kij@fivepoint.com

or

Media: Eric Morgan, 949-349-1088 Eric.Morgan@fivepoint.com