Fourth Quarter 2021 Highlights
- In Valencia, closed the sale of 643 homesites for an aggregate
purchase price of $167.3 million.
- Builder sales of 147 homes in Valencia.
- Builder sales of 64 homes in Great Park Neighborhoods
(including 3 homes under a fee build arrangement).
- Consolidated revenues of $182.2 million; consolidated net
income of $47.5 million.
2021 Highlights
- Great Park Venture closed the sale of 887 homesites and 16
homes for an aggregate purchase price of $419.5 million.
- Great Park Venture distributions and incentive compensation
payments to the Company totaled $98.3 million.
- Builder sales of 655 homes in Great Park Neighborhoods
(including 37 homes under a fee build arrangement), representing an
11% increase compared to 2020.
- Valencia homesite closings totaled 643 for an aggregate
purchase price of $167.3 million, bringing the total homesites sold
and closed to 1,866 since sales commenced in December 2019.
- Builder sales of 346 homes in Valencia since sales commenced in
May 2021.
- Extended the maturity date of the Company’s $125 million
unsecured revolving line of credit to April 2024.
- Consolidated revenues of $224.4 million; consolidated net
income of $13.3 million.
- Debt to total capitalization ratio of 24.7% and liquidity of
$390.1 million as of December 31, 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 fourth quarter and
year-end 2021 results.
Dan Hedigan, Chief Executive Officer, said, “I could not be more
excited about leading the Five Point team. The Company’s
well-located and irreplaceable assets provide a solid foundation
upon which we can drive shareholder value. My immediate priority is
to focus on revenue enhancement, cost management and process
refinement. While local market conditions remain favorable for Five
Point and its homebuilding partners, macro-economic issues related
to geopolitical events, rising inflation and higher interest rates
are being closely monitored. By focusing on the things we can
control, such as maintaining a strong balance sheet, optimizing our
cost structure and implementing operational efficiencies, we will
have the flexibility to react to changing market conditions while
driving shareholder value.”
Consolidated Results
Liquidity and Capital Resources
As of December 31, 2021, total liquidity of $390.1 million was
comprised of cash and cash equivalents totaling $265.5 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 $1.0 billion in
liabilities and redeemable noncontrolling interests.
Results of Operations for the Three Months Ended December 31,
2021
Revenues. Revenues of $182.2 million for the three months
ended December 31, 2021 primarily consisted of revenue recognized
from land sales at our Valencia segment. At Valencia we closed the
sale of land entitled for an aggregate of 643 homesites on
approximately 57 acres. The base purchase price was $167.3 million,
and we also recognized additional revenue of $5.1 million in the
transaction price as an estimate of the amount of variable
consideration from marketing fees that we expect to be entitled to
receive.
Equity in loss from unconsolidated entities. Equity in
loss from unconsolidated entities was $2.9 million for the three
months ended December 31, 2021. The Great Park Venture had no land
sales during the three months ended December 31, 2021 but did close
the sale of eight homes under its fee build program at Great Park
Neighborhoods, generating $13.2 million in revenues. The remaining
22 homes subject to the fee building agreement are expected to
close in 2022. Net loss for the Great Park Venture was $6.7
million. Our share of the net loss from our 37.5% percentage
interest, adjusted for basis differences, was $1.9 million.
Additionally, we recognized $0.2 million in earnings from our 75%
interest in the Gateway Commercial Venture and a $1.2 million loss
from our 10% interest in the Valencia Landbank Venture, which was
primarily 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 $17.6 million for the three months
ended December 31, 2021.
Net income. Consolidated net income for the quarter was
$47.5 million. Net income attributable to noncontrolling interests
totaled $25.0 million, resulting in net income attributable to the
Company of $22.5 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.
Results of Operations for the Twelve Months Ended December 31,
2021
Revenues. Revenues of $224.4 million for the twelve
months ended December 31, 2021 primarily consisted of revenue
recognized from land sales at our Valencia segment. At Valencia we
closed the sale of land entitled for an aggregate of 643 homesites
on approximately 57 acres. The base purchase price was $167.3
million, and we also recognized additional revenue of $5.1 million
in the transaction price as an estimate of the amount of variable
consideration from marketing fees that we expect to be entitled to
receive.
Equity in earnings from unconsolidated entities. Equity
in earnings from unconsolidated entities was $6.2 million for the
twelve months ended December 31, 2021. The Great Park Venture
closed the sale of land entitled for an aggregate of 887 homesites
and closed the sale of 16 homes under its fee build program
generating net income of $56.9 million. Our share of the net income
from our 37.5% percentage interest, adjusted for basis differences,
was $6.4 million. Additionally, we recognized $0.7 million in
earnings from our 75% interest in the Gateway Commercial Venture
and a $0.9 million loss from our 10% interest in the Valencia
Landbank Venture, which was primarily 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 $77.1 million for the twelve
months ended December 31, 2021.
Net income. Consolidated net income for the year was
$13.3 million. Net income attributable to noncontrolling interests
totaled $6.7 million, resulting in net income attributable to the
Company of $6.6 million.
Conference Call
Information
In conjunction with this release, Five Point will host a
conference call on Thursday, March 10, 2022 at 5:00 p.m. Eastern
Time. Dan Hedigan, 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 (888) 256-1007
(domestic) or (856) 344-9299 (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
7435201. The telephonic replay will be available until 11:59 p.m.
Eastern Time on March 24, 2022.
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
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2021
2020
2021
2020
REVENUES:
Land sales
$
129,413
$
52,322
$
139,500
$
69,398
Land sales—related party
43,213
53,205
43,286
53,219
Management services—related party
8,839
5,575
39,081
28,132
Operating properties
750
613
2,527
2,870
Total revenues
182,215
111,715
224,394
153,619
COSTS AND EXPENSES:
Land sales
106,012
73,892
106,012
85,753
Management services
6,759
3,899
31,459
20,486
Operating properties
1,724
719
6,822
5,127
Selling, general, and administrative
17,605
24,910
77,118
83,504
Total costs and expenses
132,100
103,420
221,411
194,870
OTHER (EXPENSE) INCOME:
Interest income
20
66
94
1,369
Miscellaneous
(113
)
89
3,720
356
Total other (expense) income
(93
)
155
3,814
1,725
EQUITY IN (LOSS) EARNINGS FROM
UNCONSOLIDATED ENTITIES
(2,860
)
(3,053
)
6,188
42,364
INCOME BEFORE INCOME TAX BENEFIT
(PROVISION)
47,162
5,397
12,985
2,838
INCOME TAX BENEFIT (PROVISION)
330
(1,744
)
325
(1,744
)
NET INCOME
47,492
3,653
13,310
1,094
LESS NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
25,008
2,871
6,742
1,522
NET INCOME (LOSS) ATTRIBUTABLE TO THE
COMPANY
$
22,484
$
782
$
6,568
$
(428
)
NET INCOME (LOSS) ATTRIBUTABLE TO THE
COMPANY PER CLASS A SHARE
Basic
$
0.32
$
0.01
$
0.09
$
(0.01
)
Diluted
$
0.32
$
0.01
$
0.09
$
(0.01
)
WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING
Basic
67,448,348
66,760,897
67,394,794
66,722,187
Diluted
143,544,758
142,881,077
143,491,204
69,000,096
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
CONSOLIDATED BALANCE
SHEETS
(In thousands, except
shares)
(Unaudited)
December 31, 2021
December 31, 2020
ASSETS
INVENTORIES
$
2,096,824
$
1,990,859
INVESTMENT IN UNCONSOLIDATED ENTITIES
374,553
442,850
PROPERTIES AND EQUIPMENT, NET
31,466
32,769
INTANGIBLE ASSET, NET—RELATED PARTY
51,405
71,747
CASH AND CASH EQUIVALENTS
265,462
298,144
RESTRICTED CASH AND CERTIFICATES OF
DEPOSIT
1,330
1,330
RELATED PARTY ASSETS
101,818
103,681
OTHER ASSETS
20,052
20,605
TOTAL
$
2,942,910
$
2,961,985
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$
619,116
$
617,581
Accounts payable and other liabilities
115,374
135,331
Related party liabilities
95,918
113,149
Deferred income tax liability, net
12,998
12,578
Payable pursuant to tax receivable
agreement
174,126
173,248
Total liabilities
1,017,532
1,051,887
REDEEMABLE NONCONTROLLING INTEREST
25,000
25,000
CAPITAL:
Class A common shares; No par value;
Issued and outstanding: December 31, 2021—70,107,552 shares;
December 31, 2020—69,051,284 shares
Class B common shares; No par value;
Issued and outstanding: December 31, 2021—79,233,544 shares;
December 31, 2020—79,233,544 shares
Contributed capital
587,587
578,278
Retained earnings
48,789
42,221
Accumulated other comprehensive loss
(1,952
)
(2,833
)
Total members’ capital
634,424
617,666
Noncontrolling interests
1,265,954
1,267,432
Total capital
1,900,378
1,885,098
TOTAL
$
2,942,910
$
2,961,985
FIVE POINT HOLDINGS,
LLC
SUPPLEMENTAL DATA
(In thousands)
(Unaudited)
Liquidity
December 31, 2021
Cash and cash equivalents
$
265,462
Borrowing capacity (1)
124,651
Total liquidity
$
390,113
(1)
As of December 31, 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
December 31, 2021
Debt (1)
$
625,000
Total capital
1,900,378
Total capitalization
$
2,525,378
Debt to total capitalization
24.7
%
Debt (1)
$
625,000
Less: Cash and cash equivalents
265,462
Net debt
359,538
Total capital
1,900,378
Total net capitalization
$
2,259,916
Net debt to total capitalization
(2)
15.9
%
(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, 2021 (in thousands):
Three Months Ended December
31, 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
$
129,413
$
—
$
341
$
—
$
129,754
$
—
$
129,754
$
(341
)
$
129,413
Land sales—related party
43,213
—
1,903
—
45,116
—
45,116
(1,903
)
43,213
Home sales
—
—
13,225
—
13,225
—
13,225
(13,225
)
—
Management services—related party(2)
—
—
8,737
102
8,839
—
8,839
—
8,839
Operating properties
633
117
—
2,118
2,868
—
2,868
(2,118
)
750
Total revenues
173,259
117
24,206
2,220
199,802
—
199,802
(17,587
)
182,215
COSTS AND EXPENSES:
Land sales
106,012
—
—
—
106,012
—
106,012
—
106,012
Home sales
—
—
9,835
—
9,835
—
9,835
(9,835
)
—
Management services(2)
—
—
6,759
—
6,759
—
6,759
—
6,759
Operating properties
1,724
—
—
624
2,348
—
2,348
(624
)
1,724
Selling, general, and administrative
3,590
2,202
5,824
901
12,517
11,813
24,330
(6,725
)
17,605
Management fees—related party
—
—
6,576
—
6,576
—
6,576
(6,576
)
—
Total costs and expenses
111,326
2,202
28,994
1,525
144,047
11,813
155,860
(23,760
)
132,100
OTHER (EXPENSE) INCOME:
Interest income
—
—
80
—
80
20
100
(80
)
20
Interest expense
—
—
—
(314
)
(314
)
—
(314
)
314
—
Miscellaneous
(113
)
—
—
—
(113
)
—
(113
)
—
(113
)
Total other (expense) income
(113
)
—
80
(314
)
(347
)
20
(327
)
234
(93
)
EQUITY IN LOSS FROM UNCONSOLIDATED
ENTITIES
(1,183
)
—
—
—
(1,183
)
—
(1,183
)
(1,677
)
(2,860
)
SEGMENT PROFIT (LOSS)/INCOME BEFORE INCOME
TAX BENEFIT
60,637
(2,085
)
(4,708
)
381
54,225
(11,793
)
42,432
4,730
47,162
INCOME TAX BENEFIT
—
—
—
—
—
330
330
—
330
SEGMENT PROFIT (LOSS)/NET INCOME
$
60,637
$
(2,085
)
$
(4,708
)
$
381
$
54,225
$
(11,463
)
$
42,762
$
4,730
$
47,492
(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.
Twelve Months Ended December
31, 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
$
139,500
$
—
$
346,758
$
—
$
486,258
$
—
$
486,258
$
(346,758
)
$
139,500
Land sales—related party
43,286
—
62,797
—
106,083
—
106,083
(62,797
)
43,286
Home sales
—
—
26,172
—
26,172
—
26,172
(26,172
)
—
Management services—related party(2)
—
—
38,675
406
39,081
—
39,081
—
39,081
Operating properties
1,979
548
—
8,475
11,002
—
11,002
(8,475
)
2,527
Total revenues
184,765
548
474,402
8,881
668,596
—
668,596
(444,202
)
224,394
COSTS AND EXPENSES:
Land sales
106,012
—
301,247
—
407,259
—
407,259
(301,247
)
106,012
Home sales
—
—
20,022
—
20,022
—
20,022
(20,022
)
—
Management services(2)
—
—
31,459
—
31,459
—
31,459
—
31,459
Operating properties
6,822
—
—
1,889
8,711
—
8,711
(1,889
)
6,822
Selling, general, and administrative
18,340
5,190
30,658
4,473
58,661
53,588
112,249
(35,131
)
77,118
Management fees—related party
—
—
25,969
—
25,969
—
25,969
(25,969
)
—
Total costs and expenses
131,174
5,190
409,355
6,362
552,081
53,588
605,669
(384,258
)
221,411
OTHER INCOME (EXPENSE):
Interest income
—
—
496
—
496
94
590
(496
)
94
Interest expense
—
—
—
(1,235
)
(1,235
)
—
(1,235
)
1,235
—
Miscellaneous
1,672
1,070
—
—
2,742
978
3,720
—
3,720
Total other income (expense)
1,672
1,070
496
(1,235
)
2,003
1,072
3,075
739
3,814
EQUITY IN (LOSS) EARNINGS FROM
UNCONSOLIDATED ENTITIES
(903
)
—
(1,409
)
—
(2,312
)
—
(2,312
)
8,500
6,188
SEGMENT PROFIT (LOSS)/INCOME BEFORE INCOME
TAX BENEFIT
54,360
(3,572
)
64,134
1,284
116,206
(52,516
)
63,690
(50,705
)
12,985
INCOME TAX BENEFIT
—
—
—
—
—
325
325
—
325
SEGMENT PROFIT (LOSS)/NET INCOME
$
54,360
$
(3,572
)
$
64,134
$
1,284
$
116,206
$
(52,191
)
$
64,015
$
(50,705
)
$
13,310
(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 (loss) earnings 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, 2021
(in thousands):
Three Months Ended December
31, 2021
Twelve Months Ended December
31, 2021
Segment (loss) profit from operations
$
(4,708
)
$
64,134
Less net income of management company
attributed to the Great Park segment
1,978
7,216
Net (loss) income of the Great Park
Venture
(6,686
)
56,918
The Company’s share of net (loss) income
of the Great Park Venture
(2,508
)
21,344
Basis difference accretion
(amortization)
621
(14,912
)
Equity in (loss) earnings from the Great
Park Venture
$
(1,887
)
$
6,432
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 consolidated statements of
operations for the three and twelve months ended December 31, 2021
(in thousands):
Three Months Ended December
31, 2021
Twelve Months Ended December
31, 2021
Segment profit from operations
$
381
$
1,284
Less net income of management company
attributed to the Commercial segment
102
406
Net income of the Gateway Commercial
Venture
279
878
Equity in earnings from the Gateway
Commercial Venture
$
210
$
659
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220309006067/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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From Jul 2023 to Jul 2024