Fourth Quarter 2020 Highlights
- Increased cash position by approximately $28 million, providing
liquidity of $422.8 million at December 31, 2020.
- Sold 487 homesites at Valencia in the fourth quarter of 2020
and closed on 442 of these homesites, generating proceeds from the
closed homesites of approximately $102 million.
- Contributed $4.2 million for a 10% interest in a joint venture
providing land banking opportunities to Valencia guest
builders.
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 fourth
quarter 2020 results. Emile Haddad, Chairman and CEO, said, “We are
very grateful to end a very unusual year with the results we are
presenting today. Our focus shifted a year ago to strengthening our
balance sheet, preserving the value of our irreplaceable assets,
protecting the well being of our associates, and helping our
communities. We are proud that we accomplished our goals. We have
already kicked off the new year with a lot of momentum driven by
the strength of the housing market and the migration of homebuyers
to the type of communities we build.”
Fourth Quarter 2020 Consolidated
Results
Liquidity and Capital Resources
As of December 31, 2020, total liquidity of $422.8 million was
comprised of cash and cash equivalents totaling $298.1 million and
borrowing availability of $124.7 million under our $125.0 million
unsecured revolving credit facility. Total capital was $1.9
billion, reflecting $3.0 billion in assets and $1.1 billion in
liabilities and redeemable noncontrolling interests.
Results of Operations for the Three Months Ended December 31,
2020
Revenues. Revenues of $111.7 million for the three months
ended December 31, 2020 primarily consisted of $105.5 million in
revenue recognized from land sales at our Valencia segment.
Equity in loss from unconsolidated entities. Equity in
loss from unconsolidated entities was $3.1 million for the three
months ended December 31, 2020, comprised of a $1.3 million loss
from our 37.5% percentage interest in the Great Park Venture, loss
of $0.2 million from our 75% interest in the Gateway Commercial
Venture and $1.6 million loss from our 10% interest in the Valencia
Landbank Venture as a result of intra-entity profit elimination due
to the Valencia Landbank Venture purchasing homesites at
Valencia.
Selling, general, and administrative. Selling, general,
and administrative expenses were $24.9 million for the three months
ended December 31, 2020.
Net income. Consolidated net income for the quarter was
$3.7 million. Income before income tax provision was $5.4 million
with income attributable to noncontrolling interests totaling $2.9
million. Net income attributable to the Company was $0.8 million
after recognition of an income tax provision of $1.7 million. Net
income attributable to noncontrolling interests represents the
portion of income allocated to related party partners and members
that hold units of the operating company and the San Francisco
Venture. Holders of units of the operating company and the San
Francisco Venture can redeem their interests for our Class A common
shares on a one-for-one basis or, at our election, cash. In
connection with any redemption or exchange, our ownership of our
operating subsidiaries will increase and reduce the amount of
income allocated to noncontrolling interests.
Segment Results
Valencia Segment (formerly Newhall). Total segment
revenues were $106.0 million for the fourth quarter of 2020.
Revenues were mainly attributable to the sale of land entitled for
442 homesites on approximately 45 acres in Valencia. Initial gross
proceeds from the sale were $102.2 million, representing the base
purchase price. Cost of land sales was $73.9 million, or 70.0% of
total land sales and land sales-related party revenues for the
fourth quarter. In the fourth quarter, 210 of the homesites sold
were purchased by the Valencia Landbank Venture, in which we own a
10% equity interest. Revenues associated with these closings are
reported as land sales-related party. When we sell land to the
Valencia Landbank Venture, we eliminate our pro-rata share of the
intra-entity profits generated from the sale through earnings
(loss) from unconsolidated entities until the land is sold by the
Valencia Landbank Venture to third party homebuilders. Selling,
general, and administrative expenses were $2.4 million for the
three months ended December 31, 2020.
San Francisco Segment. Selling, general, and
administrative expenses were $3.1 million for the three months
ended December 31, 2020.
Great Park Segment. The Great Park segment’s net income
for the quarter was $0.4 million, which included net income of $1.6
million from management services and a net loss of $1.2 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
$1.3 million for the three months ended December 31, 2020.
Commercial Segment. Segment net loss was approximately
$0.1 million, which included net income of $0.1 million from
management services and a net loss of $0.2 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 $0.2 million for the three months ended December
31, 2020.
Conference Call
Information
In conjunction with this release, Five Point will host a
conference call on Wednesday, March 17, 2021 at 2:00 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) 430-8332
(domestic) or (720) 452-9102 (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
1398225. The telephonic replay will be available until 11:59 p.m.
Eastern Time on March 31, 2021.
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, 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
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2020
2019
2020
2019
REVENUES:
Land sales
$
52,322
$
139,946
$
69,398
$
140,020
Land sales—related party
53,205
228
53,219
923
Management services—related party
5,575
5,891
28,132
39,580
Operating properties
613
841
2,870
3,857
Total revenues
111,715
146,906
153,619
184,380
COSTS AND EXPENSES:
Land sales
73,892
97,113
85,753
97,113
Management services
3,899
5,698
20,486
28,492
Operating properties
719
1,077
5,127
5,565
Selling, general, and administrative
24,910
25,957
83,504
103,586
Total costs and expenses
103,420
129,845
194,870
234,756
OTHER INCOME:
Interest income
66
1,350
1,369
7,844
Gain on settlement of contingent
consideration—related party
—
—
—
64,870
Miscellaneous
89
22
356
48
Total other income
155
1,372
1,725
72,762
EQUITY IN (LOSS) EARNINGS FROM
UNCONSOLIDATED ENTITIES
(3,053
)
(2,136
)
42,364
2,327
INCOME BEFORE INCOME TAX PROVISION
5,397
16,297
2,838
24,713
INCOME TAX PROVISION
(1,744
)
(1,179
)
(1,744
)
(2,445
)
NET INCOME
3,653
15,118
1,094
22,268
LESS NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
2,871
8,718
1,522
13,235
NET INCOME (LOSS) ATTRIBUTABLE TO THE
COMPANY
$
782
$
6,400
$
(428
)
$
9,033
NET INCOME (LOSS) ATTRIBUTABLE TO THE
COMPANY PER CLASS A SHARE
Basic
$
0.01
$
0.09
$
(0.01
)
$
0.13
Diluted
$
0.01
$
0.09
$
(0.01
)
$
0.13
WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING
Basic
66,760,897
66,302,138
66,722,187
66,261,968
Diluted
142,881,077
145,596,608
69,000,096
145,491,898
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
79,269,524
79,233,544
79,221,176
FIVE POINT HOLDINGS,
LLC
CONSOLIDATED BALANCE
SHEETS
(In thousands, except
shares)
(Unaudited)
December 31, 2020
December 31, 2019
ASSETS
INVENTORIES
$
1,990,859
$
1,889,761
INVESTMENT IN UNCONSOLIDATED ENTITIES
442,850
533,239
PROPERTIES AND EQUIPMENT, NET
32,769
32,312
INTANGIBLE ASSET, NET—RELATED PARTY
71,747
80,350
CASH AND CASH EQUIVALENTS
298,144
346,833
RESTRICTED CASH AND CERTIFICATES OF
DEPOSIT
1,330
1,741
RELATED PARTY ASSETS
103,681
97,561
OTHER ASSETS
20,605
22,903
TOTAL
$
2,961,985
$
3,004,700
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$
617,581
$
616,046
Accounts payable and other liabilities
135,331
167,711
Related party liabilities
113,149
127,882
Deferred income tax liability, net
12,578
11,628
Payable pursuant to tax receivable
agreement
173,248
172,633
Total liabilities
1,051,887
1,095,900
REDEEMABLE NONCONTROLLING INTEREST
25,000
25,000
CAPITAL:
Class A common shares; No par value;
Issued and outstanding: 2020—69,051,284 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
578,278
571,532
Retained earnings
42,221
42,844
Accumulated other comprehensive loss
(2,833
)
(2,682
)
Total members’ capital
617,666
611,694
Noncontrolling interests
1,267,432
1,272,106
Total capital
1,885,098
1,883,800
TOTAL
$
2,961,985
$
3,004,700
FIVE POINT HOLDINGS,
LLC
SUPPLEMENTAL DATA
(In thousands)
(Unaudited)
Liquidity
December 31, 2020
Cash and cash equivalents
$
298,144
Borrowing capacity (1)
124,651
Total liquidity
$
422,795
(1)
As of December 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 were
issued and outstanding under the revolving credit facility, thus
reducing the available capacity by the outstanding letters of
credit amount.
Debt to Total
Capitalization and Net Debt to Total Capitalization
December 31, 2020
Debt (1)
$
625,000
Total capital
1,885,098
Total capitalization
$
2,510,098
Debt to total capitalization
24.9
%
Debt (1)
$
625,000
Less: Cash and cash equivalents
298,144
Net debt
326,856
Total capital
1,885,098
Total net capitalization
$
2,211,954
Net debt to total capitalization
(2)
14.8
%
(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 tables reconcile the results
of operations of our segments to our consolidated results for the
three and twelve months ended December 31, 2020 (in thousands):
Three Months Ended December
31, 2020
Valencia
San Francisco
Great Park
Commercial
Total reportable
segments
Corporate and
unallocated
Total under
management
Removal of
unconsolidated
entities
Total
consolidated
REVENUES:
Land sales
$
52,322
$
—
$
203
$
—
$
52,525
$
—
$
52,525
$
(203
)
$
52,322
Land sales—related party
53,205
—
1,570
—
54,775
—
54,775
(1,570
)
53,205
Management services—related party
—
—
5,476
99
5,575
—
5,575
—
5,575
Operating properties
468
145
—
2,100
2,713
—
2,713
(2,100
)
613
Total revenues
105,995
145
7,249
2,199
115,588
—
115,588
(3,873
)
111,715
COSTS AND EXPENSES:
Land sales
73,892
—
—
—
73,892
—
73,892
—
73,892
Management services
—
—
3,899
—
3,899
—
3,899
—
3,899
Operating properties
719
—
—
817
1,536
—
1,536
(817
)
719
Selling, general, and administrative
2,385
3,113
6,251
1,213
12,962
19,412
32,374
(7,464
)
24,910
Management fees—related party
—
—
(3,255
)
—
(3,255
)
—
(3,255
)
3,255
—
Total costs and expenses
76,996
3,113
6,895
2,030
89,034
19,412
108,446
(5,026
)
103,420
OTHER INCOME (EXPENSE):
Interest income
22
—
62
—
84
44
128
(62
)
66
Interest expense
—
—
—
(310
)
(310
)
—
(310
)
310
—
Miscellaneous
89
—
—
—
89
—
89
—
89
Total other income (expense)
111
—
62
(310
)
(137
)
44
(93
)
248
155
EQUITY IN LOSS FROM UNCONSOLIDATED
ENTITIES
(1,569
)
—
—
—
(1,569
)
—
(1,569
)
(1,484
)
(3,053
)
SEGMENT PROFIT (LOSS)/INCOME (LOSS) BEFORE
INCOME TAX PROVISION
27,541
(2,968
)
416
(141
)
24,848
(19,368
)
5,480
(83
)
5,397
INCOME TAX PROVISION
—
—
—
—
—
(1,744
)
(1,744
)
—
(1,744
)
SEGMENT PROFIT (LOSS)/NET INCOME
(LOSS)
$
27,541
$
(2,968
)
$
416
$
(141
)
$
24,848
$
(21,112
)
$
3,736
$
(83
)
$
3,653
Twelve Months Ended December
31, 2020
Valencia
San Francisco
Great Park
Commercial
Total reportable
segments
Corporate and
unallocated
Total under
management
Removal of
unconsolidated
entities
Total
consolidated
REVENUES:
Land sales
$
69,398
$
—
$
22,165
$
—
$
91,563
$
—
$
91,563
$
(22,165
)
$
69,398
Land sales—related party
53,219
—
2,662
—
55,881
—
55,881
(2,662
)
53,219
Management services—related party
—
835
26,900
397
28,132
—
28,132
—
28,132
Operating properties
2,275
595
—
24,241
27,111
—
27,111
(24,241
)
2,870
Total revenues
124,892
1,430
51,727
24,638
202,687
—
202,687
(49,068
)
153,619
COSTS AND EXPENSES:
Land sales
85,753
—
15,304
—
101,057
—
101,057
(15,304
)
85,753
Management services
—
488
19,998
—
20,486
—
20,486
—
20,486
Operating properties
5,127
—
—
5,347
10,474
—
10,474
(5,347
)
5,127
Selling, general, and administrative
11,629
11,297
35,823
9,978
68,727
60,578
129,305
(45,801
)
83,504
Management fees—related party
—
—
4,378
—
4,378
—
4,378
(4,378
)
—
Total costs and expenses
102,509
11,785
75,503
15,325
205,122
60,578
265,700
(70,830
)
194,870
OTHER INCOME (EXPENSE):
Interest income
23
—
1,272
—
1,295
1,346
2,641
(1,272
)
1,369
Interest expense
—
—
—
(8,857
)
(8,857
)
—
(8,857
)
8,857
—
Loss on extinguishment of debt
—
—
—
(474
)
(474
)
—
(474
)
474
—
Gain on asset sales, net
—
—
—
112,260
112,260
—
112,260
(112,260
)
—
Miscellaneous
356
—
—
—
356
—
356
—
356
Total other income (expense)
379
—
1,272
102,929
104,580
1,346
105,926
(104,201
)
1,725
EQUITY IN (LOSS) EARNINGS FROM
UNCONSOLIDATED ENTITIES
(1,569
)
—
—
—
(1,569
)
—
(1,569
)
43,933
42,364
SEGMENT PROFIT (LOSS)/INCOME (LOSS) BEFORE
INCOME TAX PROVISION
21,193
(10,355
)
(22,504
)
112,242
100,576
(59,232
)
41,344
(38,506
)
2,838
INCOME TAX PROVISION
—
—
—
—
—
(1,744
)
(1,744
)
—
(1,744
)
SEGMENT PROFIT (LOSS)/NET INCOME
(LOSS)
$
21,193
$
(10,355
)
$
(22,504
)
$
112,242
$
100,576
$
(60,976
)
$
39,600
$
(38,506
)
$
1,094
The table below reconciles the Great Park
segment results to the equity in loss from our investment in the
Great Park Venture that is reflected in the consolidated statements
of operations for the three and twelve months ended December 31,
2020:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2020
2020
(in thousands)
Segment profit (loss) from operations
$
416
$
(22,504
)
Less net income of management company
attributed to the Great Park segment
1,577
6,902
Net loss of the Great Park Venture
(1,161
)
(29,406
)
The Company’s share of net loss of the
Great Park Venture
(435
)
(11,027
)
Basis difference amortization
(869
)
(2,073
)
Other-than-temporary investment
impairment
—
(26,851
)
Equity in loss from the Great Park
Venture
$
(1,304
)
$
(39,951
)
The table below reconciles the Commercial
segment results to the equity in (loss) earnings from our
investment in the Gateway Commercial Venture that is reflected in
the consolidated statements of operations for the three and twelve
months ended December 31, 2020:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2020
2020
(in thousands)
Segment (loss) profit from operations
$
(141
)
$
112,242
Less net income of management company
attributed to the Commercial segment
99
397
Net (loss) income of the Gateway
Commercial Venture
(240
)
111,845
Equity in (loss) earnings from the Gateway
Commercial Venture
$
(180
)
$
83,884
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210316006070/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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