Second Quarter 2021 Highlights
- Great Park Venture sold 774 homesites generating proceeds of
$328.2 million.
- Received a total of $98.3 million in cash distributions and
incentive compensation payments from the Great Park Venture.
- Builders started home sales at Valencia in the Company’s first
phase of this community.
- Company maintains liquidity of $361.2 million at June 30, 2021.
Maturity date of the Company’s $125 million unsecured revolving
line of credit was extended by two years to April 2024.
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 2021
results. Emile Haddad, Chairman and CEO, said, “We are pleased to
report our results for the second quarter. The housing market
continued its robust trajectory with strong demand against a
limited supply of homesites in our markets. Following the sale of
774 homesites in the second quarter, the Great Park Venture made
distributions, incentive compensation payments and participation
payments totaling $295 million during the quarter, of which Five
Point received $98.3 million. This is an important milestone for
the Company since the priority distributions to the holders of the
legacy interests have been satisfied. This latest distribution
represents the commencement of distributions on Five Point’s 37.5%
percentage interest in the Great Park Venture. In Valencia, ten of
our first eighteen neighborhoods are open for sale and we are
looking forward to welcoming our first homeowners to the community
this fall.”
Second Quarter 2021 Consolidated
Results
Liquidity and Capital Resources
As of June 30, 2021, total liquidity of $361.2 million was
comprised of cash and cash equivalents totaling $236.5 million and
borrowing availability of $124.7 million under our $125.0 million
unsecured revolving credit facility. Total capital was $1.9
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 June 30,
2021
Revenues. Revenues of $8.3 million for the three months
ended June 30, 2021 were primarily generated from management
services.
Equity in earnings from unconsolidated entities. Equity
in earnings from unconsolidated entities was $12.1 million for the
three months ended June 30, 2021, comprised of $11.9 million in
earnings from our 37.5% percentage interest in the Great Park
Venture and earnings of $0.1 million from our 75% interest in the
Gateway Commercial Venture.
During the three months ended June 30, 2021, the Great Park
Venture sold 774 homesites on approximately 58 acres of land at the
Great Park Neighborhoods for a base price of $328.2 million in
addition to recognizing $7.6 million in variable marketing fees
expected to be received when homes are sold to homebuyers. After
completing the land sales, the Great Park Venture made aggregate
distributions to its members of $255.3 million, of which we
received $77.6 million for our 37.5% percentage interest and an
indirect legacy percentage interest we held. With these
distributions, the Great Park Venture has fully satisfied the
$476.0 million priority legacy distribution rights and reduced the
remaining maximum participating legacy distribution rights to $82.7
million. The remaining $82.7 million legacy interest will be paid
on a pro rata basis, with approximately 10% of future distributions
paid to the holders of legacy interests and approximately 90% of
such distributions paid to the holders of the percentage interests,
until such time as the remaining balance has been fully paid.
Selling, general, and administrative. Selling, general,
and administrative expenses were $19.2 million for the three months
ended June 30, 2021.
Net loss. Consolidated net loss for the quarter was $4.9
million. Net loss attributable to noncontrolling interests totaled
$2.6 million, resulting in net loss attributable to the Company of
$2.3 million. Net loss attributable to noncontrolling interests
represents the portion of loss 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.
Conference Call
Information
In conjunction with this release, Five Point will host a
conference call on Thursday, August 5, 2021 at 5:00 p.m. 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 (866) 269-5604
(domestic) or (929) 477-0593 (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
7892761. The telephonic replay will be available until 11:59 p.m.
Eastern Time on August 19, 2021.
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® (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
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
REVENUES:
Land sales
$
65
$
17,028
$
87
$
17,034
Land sales—related party
37
2
56
12
Management services—related party
7,647
6,314
20,086
14,558
Operating properties
555
963
1,255
1,923
Total revenues
8,304
24,307
21,484
33,527
COSTS AND EXPENSES:
Land sales
—
11,861
—
11,861
Management services
5,848
4,416
16,625
10,467
Operating properties
1,418
1,699
3,003
3,644
Selling, general, and administrative
19,218
16,312
38,756
40,938
Total costs and expenses
26,484
34,288
58,384
66,910
OTHER INCOME:
Interest income
26
226
53
1,232
Miscellaneous
1,113
88
2,317
176
Total other income
1,139
314
2,370
1,408
EQUITY IN EARNINGS (LOSS) FROM
UNCONSOLIDATED ENTITIES
12,119
23,905
8,563
(7,006
)
(LOSS) INCOME BEFORE INCOME TAX
(PROVISION) BENEFIT
(4,922
)
14,238
(25,967
)
(38,981
)
INCOME TAX (PROVISION) BENEFIT
(5
)
—
(5
)
—
NET (LOSS) INCOME
(4,927
)
14,238
(25,972
)
(38,981
)
LESS NET (LOSS) INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(2,638
)
7,606
(13,904
)
(20,807
)
NET (LOSS) INCOME ATTRIBUTABLE TO THE
COMPANY
$
(2,289
)
$
6,632
$
(12,068
)
$
(18,174
)
NET (LOSS) INCOME ATTRIBUTABLE TO THE
COMPANY PER CLASS A SHARE
Basic
$
(0.03
)
$
0.10
$
(0.18
)
$
(0.27
)
Diluted
$
(0.03
)
$
0.10
$
(0.18
)
$
(0.27
)
WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING
Basic
67,410,440
66,731,233
67,349,986
66,690,550
Diluted
67,410,440
142,851,412
67,349,986
68,854,356
NET (LOSS) INCOME 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, 2021
December 31, 2020
ASSETS
INVENTORIES
$
2,103,805
$
1,990,859
INVESTMENT IN UNCONSOLIDATED ENTITIES
374,296
442,850
PROPERTIES AND EQUIPMENT, NET
32,111
32,769
INTANGIBLE ASSET, NET—RELATED PARTY
61,189
71,747
CASH AND CASH EQUIVALENTS
236,517
298,144
RESTRICTED CASH AND CERTIFICATES OF
DEPOSIT
1,330
1,330
RELATED PARTY ASSETS
90,540
103,681
OTHER ASSETS
18,808
20,605
TOTAL
$
2,918,596
$
2,961,985
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$
618,349
$
617,581
Accounts payable and other liabilities
137,002
135,331
Related party liabilities
96,028
113,149
Deferred income tax liability, net
12,578
12,578
Payable pursuant to tax receivable
agreement
172,726
173,248
Total liabilities
1,036,683
1,051,887
REDEEMABLE NONCONTROLLING INTEREST
25,000
25,000
CAPITAL:
Class A common shares; No par value;
Issued and outstanding: June 30, 2021—68,758,347 shares; December
31, 2020—69,051,284 shares
Class B common shares; No par value;
Issued and outstanding: June 30, 2021—79,233,544 shares; December
31, 2020—79,233,544 shares
Contributed capital
577,949
578,278
Retained earnings
30,153
42,221
Accumulated other comprehensive loss
(2,793
)
(2,833
)
Total members’ capital
605,309
617,666
Noncontrolling interests
1,251,604
1,267,432
Total capital
1,856,913
1,885,098
TOTAL
$
2,918,596
$
2,961,985
FIVE POINT HOLDINGS,
LLC
SUPPLEMENTAL DATA
(In thousands)
(Unaudited)
Liquidity
June 30, 2021
Cash and cash equivalents
$
236,517
Borrowing capacity (1)
124,651
Total liquidity
$
361,168
(1)
As of June 30, 2021, 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
June 30, 2021
Debt (1)
$
625,000
Total capital
1,856,913
Total capitalization
$
2,481,913
Debt to total capitalization
25.2
%
Debt (1)
$
625,000
Less: Cash and cash equivalents
236,517
Net debt
388,483
Total capital
1,856,913
Total net capitalization
$
2,245,396
Net debt to total capitalization
(2)
17.3
%
(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 six months ended June 30, 2021 (in thousands):
Three Months Ended June 30,
2021
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
$
65
$
—
$
278,726
$
—
$
278,791
$
—
$
278,791
$
(278,726
)
$
65
Land sales—related party
37
—
58,140
—
58,177
—
58,177
(58,140
)
37
Management services—related party(2)
—
—
7,544
103
7,647
—
7,647
—
7,647
Operating properties
414
141
—
2,148
2,703
—
2,703
(2,148
)
555
Total revenues
516
141
344,410
2,251
347,318
—
347,318
(339,014
)
8,304
COSTS AND EXPENSES:
Land sales
—
—
251,420
—
251,420
—
251,420
(251,420
)
—
Management services(2)
—
—
5,848
—
5,848
—
5,848
—
5,848
Operating properties
1,418
—
—
510
1,928
—
1,928
(510
)
1,418
Selling, general, and administrative
5,483
937
8,636
1,158
16,214
12,798
29,012
(9,794
)
19,218
Management fees—related party
—
—
6,382
—
6,382
—
6,382
(6,382
)
—
Total costs and expenses
6,901
937
272,286
1,668
281,792
12,798
294,590
(268,106
)
26,484
OTHER INCOME (EXPENSE):
Interest income
—
—
91
—
91
26
117
(91
)
26
Interest expense
—
—
—
(307
)
(307
)
—
(307
)
307
—
Miscellaneous
135
—
—
—
135
978
1,113
—
1,113
Total other income (expense)
135
—
91
(307
)
(81
)
1,004
923
216
1,139
EQUITY IN EARNINGS (LOSS) FROM
UNCONSOLIDATED ENTITIES
121
—
(1,409
)
—
(1,288
)
—
(1,288
)
13,407
12,119
SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME
TAX PROVISION
(6,129
)
(796
)
70,806
276
64,157
(11,794
)
52,363
(57,285
)
(4,922
)
INCOME TAX PROVISION
—
—
—
—
—
(5
)
(5
)
—
(5
)
SEGMENT (LOSS) PROFIT/NET LOSS
$
(6,129
)
$
(796
)
$
70,806
$
276
$
64,157
$
(11,799
)
$
52,358
$
(57,285
)
$
(4,927
)
(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,
2021
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
$
87
$
—
$
279,467
$
—
$
279,554
$
—
$
279,554
$
(279,467
)
$
87
Land sales—related party
56
—
58,359
—
58,415
—
58,415
(58,359
)
56
Management services—related party(2)
—
—
19,884
202
20,086
—
20,086
—
20,086
Operating properties
965
290
—
4,249
5,504
—
5,504
(4,249
)
1,255
Total revenues
1,108
290
357,710
4,451
363,559
—
363,559
(342,075
)
21,484
COSTS AND EXPENSES:
Land sales
—
—
251,420
—
251,420
—
251,420
(251,420
)
—
Management services(2)
—
—
16,625
—
16,625
—
16,625
—
16,625
Operating properties
3,003
—
—
669
3,672
—
3,672
(669
)
3,003
Selling, general, and administrative
9,523
2,062
16,204
2,317
30,106
27,171
57,277
(18,521
)
38,756
Management fees—related party
—
—
12,500
—
12,500
—
12,500
(12,500
)
—
Total costs and expenses
12,526
2,062
296,749
2,986
314,323
27,171
341,494
(283,110
)
58,384
OTHER INCOME (EXPENSE):
Interest income
—
—
333
—
333
53
386
(333
)
53
Interest expense
—
—
—
(610
)
(610
)
—
(610
)
610
—
Miscellaneous
269
1,070
—
—
1,339
978
2,317
—
2,317
Total other income (expense)
269
1,070
333
(610
)
1,062
1,031
2,093
277
2,370
EQUITY IN EARNINGS (LOSS) FROM
UNCONSOLIDATED ENTITIES
121
—
(1,409
)
—
(1,288
)
—
(1,288
)
9,851
8,563
SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME
TAX PROVISION
(11,028
)
(702
)
59,885
855
49,010
(26,140
)
22,870
(48,837
)
(25,967
)
INCOME TAX PROVISION
—
—
—
—
—
(5
)
(5
)
—
(5
)
SEGMENT (LOSS) PROFIT/NET LOSS
$
(11,028
)
$
(702
)
$
59,885
$
855
$
49,010
$
(26,145
)
$
22,865
$
(48,837
)
$
(25,972
)
(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 statement of
operations for the three and six months ended June 30, 2021 (in
thousands):
Three Months Ended June 30,
2021
Six Months Ended June 30,
2021
Segment profit from operations
$
70,806
$
59,885
Less net income of management company
attributed to the Great Park segment
1,696
3,259
Net income of the Great Park Venture
69,110
56,626
The Company’s share of net income of the
Great Park Venture
25,917
21,235
Basis difference amortization
(14,049
)
(13,283
)
Equity in earnings from the Great Park
Venture
$
11,868
$
7,952
The table below reconciles the Commercial segment results to the
equity in earnings from our investment in the Gateway Commercial
Venture that is reflected in the condensed consolidated statement
of operations for the three and six months ended June 30, 2021 (in
thousands):
Three Months Ended June 30,
2021
Six Months Ended June 30,
2021
Segment profit from operations
$
276
$
855
Less net income of management company
attributed to the Commercial segment
103
202
Net income of the Gateway Commercial
Venture
173
653
Equity in earnings from the Gateway
Commercial Venture
$
130
$
490
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805006096/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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