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March 10, 2022, 4:10 p.m. EST

Five Point Holdings, LLC Reports Fourth Quarter and Year-End 2021 Results

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.

IRVINE, Calif., (BUSINESS WIRE) -- Five Point Holdings, LLC (“Five Point” or the “Company”) /zigman2/quotes/208628463/composite FPH -4.85% , 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 Twelve Months Ended
  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/

SOURCE: Five Point Holdings, LLC

Investor Relations:
Bob Wetenhall, 949-349-1087
bob.wetenhall@fivepoint.com or Media:
Steve Churm, 949-349-1034
steve.churm@fivepoint.com

COMTEX_403896232/2456/2022-03-10T16:10:20

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Nov. 30, 2022 4:00p
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