Third Quarter 2021 Highlights
- Great Park Venture sold 113 homesites and 8 homes generating
proceeds of $78.0 million.
- Great Park Neighborhoods home sales were 135 during the third
quarter bringing the total to 591 year-to-date, representing a 44%
increase compared to the first nine months of 2020.
- In Valencia, 11 neighborhoods are open for sale by builders,
and the first homebuyers moved into their new homes in the third
quarter.
- Valencia home sales were 156 during the third quarter and 199
through the end of the quarter since sales commenced in May
2021.
- Consolidated revenues of $20.7 million; consolidated net loss
of $8.2 million.
- Company maintains a debt to total capitalization ratio of 25.3%
and liquidity of $315.8 million as of September 30, 2021.
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 third quarter 2021
results.
Lynn Jochim, President and Chief Operating Officer, said,
“Business conditions continue to be favorable for Five Point and
its homebuilding partners. Homebuilders are continuing to see
strong demand throughout California, and this is especially true in
our unique Five Point communities. While we reported a $8.2 million
loss for the quarter, current market conditions provide us an
excellent environment to drive volume and performance. To that end,
we anticipate meaningful land sales over the next quarters,
starting with Valencia in either the fourth quarter or the first
quarter of 2022 and then at Great Park Neighborhoods in the second
half of 2022.
“Given our well-positioned communities in supply constrained
markets, our strategy going forward will be as follows: First, we
will continue to build leading sustainable mixed-use communities,
which we believe will drive short-term and long-term value. Second,
we will enhance entitlements to address the current housing
shortage. Third, we are crafting a renewed strategic approach for
the 23 million square feet of planned commercial opportunities in
our three communities. Fourth, we will intensify our focus on
bringing our extraordinary properties in San Francisco to market.
And fifth, we will optimize and rationalize our cost structure to
properly fit the size and scale of our business.
“Let me conclude by saying that our irreplaceable assets and
strong business conditions leave me optimistic about both the
short-term and long-term future of our company. With a clearly
defined strategy and a commitment to excellence by our associates,
we will continue to lead in sustainable community development while
we focus on maximizing returns and driving shareholder value.”
Third Quarter 2021 Consolidated
Results
Liquidity and Capital Resources
As of September 30, 2021, total liquidity of $315.8 million was
comprised of cash and cash equivalents totaling $191.1 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 September 30,
2021
Revenues. Revenues of $20.7 million for the three months
ended September 30, 2021 were primarily generated from management
services and contingent consideration received from a commercial
land sale in Valencia that was sold in 2011.
Equity in earnings from unconsolidated entities. Equity
in earnings from unconsolidated entities was $0.5 million for the
three months ended September 30, 2021, comprised of $0.4 million in
earnings from our 37.5% percentage interest in the Great Park
Venture offset by less than $0.1 million in loss from our 75%
interest in the Gateway Commercial Venture.
During the three months ended September 30, 2021, the Great Park
Venture sold 113 homesites on approximately 13 acres of land at the
Great Park Neighborhoods for a base price of $65.1 million in
addition to recognizing $1.4 million in variable marketing fees
expected to be received when homes are sold to homebuyers.
Additionally, the Great Park Venture closed on the sales of eight
homes that were constructed, marketed, and sold under a fee build
agreement for an aggregate sales price of $12.9 million.
Selling, general, and administrative. Selling, general,
and administrative expenses were $20.8 million for the three months
ended September 30, 2021.
Net loss. Consolidated net loss for the quarter was $8.2
million. Net loss attributable to noncontrolling interests totaled
$4.4 million, resulting in net loss attributable to the Company of
$3.8 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 Wednesday, November 3, 2021 at 5:00 p.m. Eastern
Time. Lynn Jochim, President and Chief Operating 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 (856) 344-9283
(domestic) or (800) 263-0877 (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
8172054. The telephonic replay will be available until 11:59 p.m.
Eastern Time on November 17, 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
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
REVENUES:
Land sales
$
10,000
$
42
$
10,087
$
17,076
Land sales—related party
17
2
73
14
Management services—related party
10,156
7,999
30,242
22,557
Operating properties
522
334
1,777
2,257
Total revenues
20,695
8,377
42,179
41,904
COSTS AND EXPENSES:
Land sales
—
—
—
11,861
Management services
8,075
6,120
24,700
16,587
Operating properties
2,095
764
5,098
4,408
Selling, general, and administrative
20,757
17,656
59,513
58,594
Total costs and expenses
30,927
24,540
89,311
91,450
OTHER INCOME:
Interest income
21
71
74
1,303
Miscellaneous
1,516
91
3,833
267
Total other income
1,537
162
3,907
1,570
EQUITY IN EARNINGS FROM UNCONSOLIDATED
ENTITIES
485
52,423
9,048
45,417
(LOSS) INCOME BEFORE INCOME TAX BENEFIT
(PROVISION)
(8,210
)
36,422
(34,177
)
(2,559
)
INCOME TAX BENEFIT (PROVISION)
—
—
(5
)
—
NET (LOSS) INCOME
(8,210
)
36,422
(34,182
)
(2,559
)
LESS NET (LOSS) INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(4,362
)
19,458
(18,266
)
(1,349
)
NET (LOSS) INCOME ATTRIBUTABLE TO THE
COMPANY
$
(3,848
)
$
16,964
$
(15,916
)
$
(1,210
)
NET (LOSS) INCOME ATTRIBUTABLE TO THE
COMPANY PER CLASS A SHARE
Basic
$
(0.06
)
$
0.25
$
(0.23
)
$
(0.02
)
Diluted
$
(0.06
)
$
0.25
$
(0.23
)
$
(0.02
)
WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING
Basic
67,429,394
66,746,065
67,376,746
66,709,190
Diluted
67,429,394
142,866,245
67,376,746
68,848,283
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)
September 30, 2021
December 31, 2020
ASSETS
INVENTORIES
$
2,167,291
$
1,990,859
INVESTMENT IN UNCONSOLIDATED ENTITIES
374,441
442,850
PROPERTIES AND EQUIPMENT, NET
31,785
32,769
INTANGIBLE ASSET, NET—RELATED PARTY
56,259
71,747
CASH AND CASH EQUIVALENTS
191,134
298,144
RESTRICTED CASH AND CERTIFICATES OF
DEPOSIT
1,330
1,330
RELATED PARTY ASSETS
96,659
103,681
OTHER ASSETS
17,376
20,605
TOTAL
$
2,936,275
$
2,961,985
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$
618,732
$
617,581
Accounts payable and other liabilities
158,197
135,331
Related party liabilities
99,796
113,149
Deferred income tax liability, net
12,578
12,578
Payable pursuant to tax receivable
agreement
174,126
173,248
Total liabilities
1,063,429
1,051,887
REDEEMABLE NONCONTROLLING INTEREST
25,000
25,000
CAPITAL:
Class A common shares; No par value;
Issued and outstanding: September 30, 2021—70,107,552 shares;
December 31, 2020—69,051,284 shares
Class B common shares; No par value;
Issued and outstanding: September 30, 2021—79,233,544 shares;
December 31, 2020—79,233,544 shares
Contributed capital
583,890
578,278
Retained earnings
26,305
42,221
Accumulated other comprehensive loss
(2,797
)
(2,833
)
Total members’ capital
607,398
617,666
Noncontrolling interests
1,240,448
1,267,432
Total capital
1,847,846
1,885,098
TOTAL
$
2,936,275
$
2,961,985
FIVE POINT HOLDINGS,
LLC
SUPPLEMENTAL DATA
(In thousands)
(Unaudited)
Liquidity
September 30, 2021
Cash and cash equivalents
$
191,134
Borrowing capacity (1)
124,651
Total liquidity
$
315,785
(1)
As of September 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
September 30, 2021
Debt (1)
$
625,000
Total capital
1,847,846
Total capitalization
$
2,472,846
Debt to total capitalization
25.3
%
Debt (1)
$
625,000
Less: Cash and cash equivalents
191,134
Net debt
433,866
Total capital
1,847,846
Total net capitalization
$
2,281,712
Net debt to total capitalization
(2)
19.0
%
(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 nine months ended September 30, 2021 (in thousands):
Three Months Ended September
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
$
10,000
$
—
$
66,950
$
—
$
76,950
$
—
$
76,950
$
(66,950
)
$
10,000
Land sales—related party
17
—
2,535
—
2,552
—
2,552
(2,535
)
17
Home sales
—
—
12,947
—
12,947
—
12,947
(12,947
)
—
Management services—related party(2)
—
—
10,054
102
10,156
—
10,156
—
10,156
Operating properties
381
141
—
2,108
2,630
—
2,630
(2,108
)
522
Total revenues
10,398
141
92,486
2,210
105,235
—
105,235
(84,540
)
20,695
COSTS AND EXPENSES:
Land sales
—
—
49,827
—
49,827
—
49,827
(49,827
)
—
Home sales
—
—
10,187
—
10,187
—
10,187
(10,187
)
—
Management services(2)
—
—
8,075
—
8,075
—
8,075
—
8,075
Operating properties
2,095
—
—
596
2,691
—
2,691
(596
)
2,095
Selling, general, and administrative
5,227
926
8,630
1,255
16,038
14,604
30,642
(9,885
)
20,757
Management fees—related party
—
—
6,893
—
6,893
—
6,893
(6,893
)
—
Total costs and expenses
7,322
926
83,612
1,851
93,711
14,604
108,315
(77,388
)
30,927
OTHER INCOME (EXPENSE):
Interest income
—
—
83
—
83
21
104
(83
)
21
Interest expense
—
—
—
(311
)
(311
)
—
(311
)
311
—
Miscellaneous
1,516
—
—
—
1,516
—
1,516
—
1,516
Total other income (expense)
1,516
—
83
(311
)
1,288
21
1,309
228
1,537
EQUITY IN EARNINGS FROM UNCONSOLIDATED
ENTITIES
159
—
—
—
159
—
159
326
485
SEGMENT PROFIT (LOSS)/LOSS BEFORE INCOME
TAX BENEFIT
4,751
(785
)
8,957
48
12,971
(14,583
)
(1,612
)
(6,598
)
(8,210
)
INCOME TAX BENEFIT
—
—
—
—
—
—
—
—
—
SEGMENT PROFIT (LOSS)/NET LOSS
$
4,751
$
(785
)
$
8,957
$
48
$
12,971
$
(14,583
)
$
(1,612
)
$
(6,598
)
$
(8,210
)
(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.
Nine Months Ended September
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
$
10,087
$
—
$
346,417
$
—
$
356,504
$
—
$
356,504
$
(346,417
)
$
10,087
Land sales—related party
73
—
60,894
—
60,967
—
60,967
(60,894
)
73
Home sales
—
—
12,947
—
12,947
—
12,947
(12,947
)
—
Management services—related party(2)
—
—
29,938
304
30,242
—
30,242
—
30,242
Operating properties
1,346
431
—
6,357
8,134
—
8,134
(6,357
)
1,777
Total revenues
11,506
431
450,196
6,661
468,794
—
468,794
(426,615
)
42,179
COSTS AND EXPENSES:
Land sales
—
—
301,247
—
301,247
—
301,247
(301,247
)
—
Home sales
—
—
10,187
—
10,187
—
10,187
(10,187
)
—
Management services(2)
—
—
24,700
—
24,700
—
24,700
—
24,700
Operating properties
5,098
—
—
1,265
6,363
—
6,363
(1,265
)
5,098
Selling, general, and administrative
14,750
2,988
24,834
3,572
46,144
41,775
87,919
(28,406
)
59,513
Management fees—related party
—
—
19,393
—
19,393
—
19,393
(19,393
)
—
Total costs and expenses
19,848
2,988
380,361
4,837
408,034
41,775
449,809
(360,498
)
89,311
OTHER INCOME (EXPENSE):
Interest income
—
—
416
—
416
74
490
(416
)
74
Interest expense
—
—
—
(921
)
(921
)
—
(921
)
921
—
Miscellaneous—related party
—
1,070
—
—
1,070
978
2,048
—
2,048
Miscellaneous
1,785
—
—
—
1,785
—
1,785
—
1,785
Total other income (expense)
1,785
1,070
416
(921
)
2,350
1,052
3,402
505
3,907
EQUITY IN EARNINGS (LOSS) FROM
UNCONSOLIDATED ENTITIES
280
—
(1,409
)
—
(1,129
)
—
(1,129
)
10,177
9,048
SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME
TAX PROVISION
(6,277
)
(1,487
)
68,842
903
61,981
(40,723
)
21,258
(55,435
)
(34,177
)
INCOME TAX PROVISION
—
—
—
—
—
(5
)
(5
)
—
(5
)
SEGMENT (LOSS) PROFIT/NET LOSS
$
(6,277
)
$
(1,487
)
$
68,842
$
903
$
61,981
$
(40,728
)
$
21,253
$
(55,435
)
$
(34,182
)
(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 nine months
ended September 30, 2021 (in thousands):
Three Months Ended
September 30, 2021
Nine Months Ended
September 30, 2021
Segment profit from operations
$
8,957
$
68,842
Less net income of management company
attributed to the Great Park segment
1,979
5,238
Net income of the Great Park Venture
6,978
63,604
The Company’s share of net income of the
Great Park Venture
2,617
23,852
Basis difference amortization
(2,250
)
(15,533
)
Equity in earnings from the Great Park
Venture
$
367
$
8,319
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 nine months
ended September 30, 2021 (in thousands):
Three Months Ended
September 30, 2021
Nine Months Ended
September 30, 2021
Segment profit from operations
$
48
$
903
Less net income of management company
attributed to the Commercial segment
102
304
Net (loss) income of the Gateway
Commercial Venture
(54
)
599
Equity in (loss) earnings from the Gateway
Commercial Venture
$
(41
)
$
449
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211103006188/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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