First Quarter 2020 and Recent
Highlights
- Rapid response to potential impacts of COVID-19 ensuring safety
of associates and financial stability of the Company.
- Company maintains liquidity of $372.4 million at March 31,
2020.
- Closed 35 previously sold homesites at Great Park Neighborhoods
with a base purchase price of $20.3 million.
- In May 2020, closed 70 previously sold homesites at Valencia
with a base purchase price of $16.5 million, including a seller
secured note that is payable in December 2020.
Five Point Holdings, LLC (“Five Point” or the “Company”)
(NYSE:FPH), an owner and developer of large mixed-use,
master-planned communities in California, today reported its first
quarter 2020 results. Emile Haddad, Chairman and CEO, said, “In
these unprecedented times, we are thankful that all of our
associates are healthy, comforted by the strength of our balance
sheet and liquidity, encouraged by the performance of our guest
builders, grateful to those who continue investing in our vision,
and proud of our team.”
First Quarter 2020 Consolidated
Results
Liquidity and Capital Resources
As of March 31, 2020, total liquidity of $372.4 million was
comprised of cash and cash equivalents totaling $247.8 million and
borrowing availability of $124.7 million under our $125.0 million
unsecured revolving credit facility. Total capital was $1.8
billion, reflecting $2.9 billion in assets and $1.1 billion in
liabilities and redeemable noncontrolling interests.
Results of Operations for the Three Months Ended March 31,
2020
Revenues. Revenues of $9.2 million for the three months
ended March 31, 2020 were primarily generated from management
services.
Equity in loss from unconsolidated entities. Equity in
loss from unconsolidated entities was $30.9 million for the three
months ended March 31, 2020 comprised of a $3.5 million loss from
our 37.5% percentage interest in the Great Park Venture and a $0.6
million loss from our 75% interest in the Gateway Commercial
Venture. Equity in loss from unconsolidated entities also included
the recognition of an other-than-temporary impairment of $26.9
million attributed to our investment in the Great Park Venture.
Selling, general, and administrative. Selling, general,
and administrative expenses were $24.6 million for the three months
ended March 31, 2020.
Net loss. Consolidated net loss for the quarter was $53.2
million. The net loss attributable to noncontrolling interests
totaled $28.4 million, resulting in net loss attributable to the
Company of $24.8 million.
Segment Results
Valencia Segment (formerly Newhall). Total segment
revenues were $0.8 million for the first quarter of 2020 and were
derived from agricultural land leasing and the sale of citrus
crops. Selling, general, and administrative expenses were $3.7
million for the three months ended March 31, 2020.
San Francisco Segment. Total segment revenues were $1.0
million for the first quarter of 2020. Revenues during the quarter
were mostly attributable to fees generated from management
agreements. Selling, general, and administrative expenses were $3.6
million for the three months ended March 31, 2020.
Great Park Segment. Total segment revenues were $29.5
million for the first quarter of 2020. Revenues were mainly
attributable to the sale of land entitled for 35 homesites on
approximately four acres at the Great Park Neighborhoods. Initial
gross proceeds from the sale were $20.3 million representing the
base purchase price. The Great Park segment’s net loss for the
quarter was $2.5 million, which included net income of $1.8 million
from management services and a net loss of $4.3 million attributed
to the Great Park Venture. We do not include the Great Park Venture
as a consolidated subsidiary in our consolidated financial
statements, but rather account for it as an equity method investee.
After adjusting to account for a difference in investment basis,
the Company’s equity in loss from the Great Park Venture was $3.5
million for the three months ended March 31, 2020. During the first
quarter of 2020, the Company’s equity in loss from the Great Park
Venture also included the recognition of an other-than-temporary
impairment of $26.9 million attributed to our investment in the
Great Park Venture. The impairment was primarily a result of
expected delays in both the timing of land sales to builders and
distributions to us causing a decline in the fair value of our
investment in the Great Park Venture.
Commercial Segment. Total segment revenues were $8.6
million from tenant leases at the Five Point Gateway Campus and
property management services provided by us to the Gateway
Commercial Venture during the first quarter of 2020. Segment
expenses were mostly comprised of depreciation, amortization and
interest expense totaling $7.5 million. Segment net loss was
approximately $0.6 million, which included net income of $0.1
million from management services and a net loss of $0.7 million
attributed to the Gateway Commercial Venture. We do not include the
Gateway Commercial Venture as a consolidated subsidiary in our
consolidated financial statements, but rather account for it as an
equity method investee. Our share of equity in loss from the
Gateway Commercial Venture totaled $0.6 million for the three
months ended March 31, 2020.
Conference Call
Information
In conjunction with this release, Five Point will host a
conference call today, Thursday, May 21, 2020 at 5:00 pm Eastern
Time. Emile Haddad, President and Chief Executive Officer, and Erik
Higgins, Vice President and 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 (800) 458-4121
(domestic) or (720) 543-0206 (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
3425685. The telephonic replay will be available until 11:59 p.m.
Eastern Time on June 4, 2020.
About Five Point
Five Point, headquartered in Irvine, California, designs and
develops large mixed-use, master-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® (formerly known as Newhall
Ranch®) 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 and our Quarterly Reports on Form
10-Q, 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
March 31,
2020
2019
REVENUES:
Land sales
$
6
$
55
Land sales—related party
10
230
Management services—related party
8,244
11,063
Operating properties
960
1,725
Total revenues
9,220
13,073
COSTS AND EXPENSES:
Land sales
—
—
Management services
6,051
7,616
Operating properties
1,945
1,901
Selling, general, and administrative
24,626
25,773
Total costs and expenses
32,622
35,290
OTHER INCOME:
Interest income
1,006
2,454
Gain on settlement of contingent
consideration—related party
—
64,870
Miscellaneous
88
10
Total other income
1,094
67,334
EQUITY IN (LOSS) EARNINGS FROM
UNCONSOLIDATED ENTITIES
(30,911
)
8,882
(LOSS) INCOME BEFORE INCOME TAX
(PROVISION) BENEFIT
(53,219
)
53,999
INCOME TAX (PROVISION) BENEFIT
—
(1,266
)
NET (LOSS) INCOME
(53,219
)
52,733
LESS NET (LOSS) INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(28,413
)
28,925
NET (LOSS) INCOME ATTRIBUTABLE TO THE
COMPANY
$
(24,806
)
$
23,808
NET (LOSS) INCOME ATTRIBUTABLE TO THE
COMPANY PER CLASS A SHARE
Basic
$
(0.36
)
$
0.35
Diluted
$
(0.37
)
$
0.35
WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING
Basic
66,649,866
66,210,916
Diluted
68,792,585
145,296,469
NET (LOSS) INCOME ATTRIBUTABLE TO THE
COMPANY PER CLASS B SHARE
Basic and diluted
$
(0.00
)
$
0.00
WEIGHTED AVERAGE CLASS B SHARES
OUTSTANDING
Basic
79,233,544
79,061,835
Diluted
79,233,544
79,275,234
FIVE POINT HOLDINGS,
LLC
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except
shares)
(Unaudited)
March 31, 2020
December 31, 2019
ASSETS
INVENTORIES
$
1,958,901
$
1,889,761
INVESTMENT IN UNCONSOLIDATED ENTITIES
501,909
533,239
PROPERTIES AND EQUIPMENT, NET
33,071
32,312
INTANGIBLE ASSET, NET—RELATED PARTY
77,990
80,350
CASH AND CASH EQUIVALENTS
247,754
346,833
RESTRICTED CASH AND CERTIFICATES OF
DEPOSIT
1,742
1,741
RELATED PARTY ASSETS
95,148
97,561
OTHER ASSETS
20,908
22,903
TOTAL
$
2,937,423
$
3,004,700
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$
616,430
$
616,046
Accounts payable and other liabilities
161,665
167,711
Related party liabilities
126,958
127,882
Deferred income tax liability, net
11,628
11,628
Payable pursuant to tax receivable
agreement
173,248
172,633
Total liabilities
1,089,929
1,095,900
REDEEMABLE NONCONTROLLING INTEREST
25,000
25,000
CAPITAL:
Class A common shares; No par value;
Issued and outstanding: 2020—69,061,898 shares; 2019—68,788,257
shares
Class B common shares; No par value;
Issued and outstanding: 2020—79,233,544 shares; 2019—79,233,544
shares
Contributed capital
569,772
571,532
Retained earnings
17,843
42,844
Accumulated other comprehensive loss
(2,671
)
(2,682
)
Total members’ capital
584,944
611,694
Noncontrolling interests
1,237,550
1,272,106
Total capital
1,822,494
1,883,800
TOTAL
$
2,937,423
$
3,004,700
FIVE POINT HOLDINGS,
LLC
SUPPLEMENTAL DATA
(In thousands)
(Unaudited)
Liquidity
March 31, 2020
Cash and cash equivalents
$
247,754
Borrowing capacity (1)
124,651
Total liquidity
$
372,405
(1)
As of March 31, 2020, no amounts were
drawn on the Company’s $125.0 million revolving credit facility;
however, letters of credit of approximately $0.3 million are issued
and outstanding under the revolving credit facility, thus reducing
the available capacity by the outstanding letters of credit
amount.
Debt to Total
Capitalization
March 31, 2020
Debt (1)
$
625,000
Total capital
1,822,494
Total capitalization
$
2,447,494
Debt to total capitalization
25.5
%
(1)
For purposes of this calculation, debt is
not the same as the calculation of “Consolidated Funded
Indebtedness” under the Company’s revolving credit facility and
Senior Notes indenture, which would include a $101.8 million
related party contractual reimbursement obligation. Prior to the
second quarter of 2019, the Company presented this calculation
inclusive of the reimbursement obligation.
Segment Results
Valencia (formerly Newhall)
The following table summarizes the results of operations of our
Valencia segment for the three months ended March 31, 2020 and
2019.
Three Months Ended
March 31,
2020
2019
(in thousands)
Statement of Operations Data
Revenues
Land sales
$
6
$
55
Land sales—related party
10
9
Operating properties
780
1,551
Total revenues
796
1,615
Costs and expenses
Land sales
—
—
Operating properties
1,945
1,901
Selling, general, and administrative
3,733
3,809
Total costs and expenses
5,678
5,710
Other income
88
11
Segment loss
$
(4,794
)
$
(4,084
)
San Francisco
The following table summarizes the results of operations of our
San Francisco segment for the three months ended March 31, 2020 and
2019.
Three Months Ended
March 31,
2020
2019
(in thousands)
Statement of Operations Data
Revenues
Land sales—related party
$
—
$
221
Operating property
180
174
Management services—related party
795
698
Total revenues
975
1,093
Costs and expenses
Land sales
—
—
Management services
475
377
Selling, general, and administrative
3,592
4,512
Total costs and expenses
4,067
4,889
Other income—gain on settlement of
contingent consideration, related party
—
64,870
Segment (loss) income
$
(3,092
)
$
61,074
Great Park
The following table summarizes the results of operations of our
Great Park segment for the three months ended March 31, 2020 and
2019.
Three Months Ended
March 31,
2020
2019
(in thousands)
Statement of Operations Data
Revenues
Land sales
$
21,475
$
31,466
Land sales—related party
701
127,697
Management services—related party
7,352
10,396
Total revenues
29,528
169,559
Costs and expenses
Land sales
15,304
107,819
Management services
5,576
7,239
Selling, general, and administrative
11,948
6,575
Management fees—related party
153
8,217
Total costs and expenses
32,981
129,850
Interest income
911
559
Segment (loss) income
$
(2,542
)
$
40,268
The table below reconciles the Great Park segment results to the
equity in (loss) earnings from our investment in the Great Park
Venture that is reflected in the condensed consolidated statements
of operations for the three months ended March 31, 2020 and
2019.
Three Months Ended
March 31,
2020
2019
(in thousands)
Segment net (loss) income from
operations
$
(2,542
)
$
40,268
Less net income of management company
attributed to the Great Park segment
1,776
3,157
Net (loss) income of Great Park
Venture
(4,318
)
37,111
The Company’s share of net (loss) income
of the Great Park Venture
(1,619
)
13,917
Basis difference amortization
(1,890
)
(4,473
)
Other-than-temporary investment
impairment
(26,851
)
—
Equity in (loss) earnings from the Great
Park Venture
$
(30,360
)
$
9,444
Commercial
The following table summarizes the results of operations of our
Commercial segment for the three months ended March 31, 2020 and
2019.
Three Months Ended
March 31,
2020
2019
(in thousands)
Statement of Operations Data
Revenues
Rental and related income
$
6,415
$
6,391
Rental and related income—related
party
2,061
1,989
Property management services—related
party
97
(31
)
Total revenues
8,573
8,349
Costs and expenses
Rental operating expenses
1,636
1,564
Interest
3,711
4,331
Depreciation
2,743
2,177
Amortization
1,038
1,029
Other expenses
83
29
Total costs and expenses
9,211
9,130
Segment loss
$
(638
)
$
(781
)
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 months ended March 31, 2020 and
2019.
Three Months Ended
March 31,
2020
2019
(in thousands)
Segment net loss from operations
$
(638
)
$
(781
)
Less net income (loss) of management
company attributed to the Commercial segment
97
(31
)
Net loss of Gateway Commercial Venture
(735
)
(750
)
Equity in loss from the Gateway Commercial
Venture
$
(551
)
$
(562
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200521005725/en/
Investor Relations: Bob Wetenhall, 949-349-1087
bob.wetenhall@fivepoint.com or Media: Steve Churm, 949-349-1034
steve.churm@fivepoint.com
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