FPH Five Point Holdings LLC

First Quarter 2024 and Recent Highlights

• Great Park Venture sold 82 homesites on 11.6 acres of land for an aggregate purchase price of $74.6 million.
• Great Park Venture distributions and incentive compensation payments to the Company totaled $30.3 million.
• Valencia builder sales of 62 homes during the quarter.
• Great Park builder sales of 69 homes during the quarter.
• Consolidated revenues of $9.9 million; consolidated net income of $6.1 million.
• On January 16, 2024, exchanged $623.5 million of existing 7.875% Senior Notes due November 2025 for $100.0 million in cash and $523.5 million in new 10.500% initial rate Senior Notes due January 2028.
• In April 2024, S&P Global Ratings upgraded our outlook to stable, upgraded our corporate rating to B- and upgraded our senior notes rating to B.
• Cash and cash equivalents of $232.7 million as of March 31, 2024.
• Debt to total capitalization ratio of 20.9% and liquidity of $357.7 million as of March 31, 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 first quarter 2024 results.

Dan Hedigan, Chief Executive Officer, said, “In the first quarter of 2024, we continued to position ourselves for future success. We generated earnings for the fourth consecutive quarter and ended the quarter with total liquidity of $358 million. We also successfully completed an exchange offer for our senior notes, reduced our outstanding debt by $100 million, and received ratings and outlook upgrades from S&P. Although uncertainty remains around interest rates and inflation, we believe that demand for our residential land will continue to exceed supply, and we remain optimistic about the market for our commercial offerings. As we move forward, we continue to be focused on driving shareholder value by executing on our key operating priorities: generating revenue, controlling our SG&A, and managing our capital spend.”

Consolidated Results

Liquidity and Capital Resources

As of March 31, 2024, total liquidity of $357.7 million was comprised of cash and cash equivalents totaling $232.7 million and borrowing availability of $125.0 million under our unsecured revolving credit facility. Total capital was $2.0 billion, reflecting $2.9 billion in assets and $0.9 billion in liabilities and redeemable noncontrolling interests.

Results of Operations for the Three Months Ended March 31, 2024

Revenues. Revenues of $9.9 million for the three months ended March 31, 2024 were primarily generated from management services.

Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $17.6 million for the three months ended March 31, 2024. The Great Park Venture generated net income of $53.1 million during the three months ended March 31, 2024, and our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $17.7 million. Additionally, we recognized $0.1 million in loss from our 75% interest in the Gateway Commercial Venture.

During the three months ended March 31, 2024, the Great Park Venture sold 82 homesites on 11.6 acres of land at the Great Park Neighborhoods for an aggregate purchase price of $74.6 million. After completing the land sale, the Great Park Venture made aggregate distributions of $7.5 million to holders of Legacy Interests and $63.7 million to holders of Percentage Interests. We received $23.9 million for our 37.5% Percentage Interest.

Selling, general, and administrative. Selling, general, and administrative expenses were $12.9 million for the three months ended March 31, 2024.

Net income. Consolidated net income for the quarter was $6.1 million. Net income attributable to noncontrolling interests totaled $3.8 million, resulting in net income attributable to the Company of $2.3 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.

Conference Call Information

In conjunction with this release, Five Point will host a conference call on Thursday, April 18, 2024 at 5:00 p.m. Eastern Time. Dan Hedigan, Chief Executive Officer, and Kim Tobler, 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 (877) 451-6152 (domestic) or (201) 389-0879 (international). A telephonic replay will be available starting approximately three 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 13746067. The telephonic replay will be available until 11:59 p.m. Eastern Time on April 27, 2024.

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® in Los Angeles County, and Candlestick® and The San Francisco Shipyard® in the City of San Francisco. These communities are designed to include up to approximately 40,000 residential homes and up to 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. Forward-looking statements include, among others, statements that refer to: our expectations of our future home sales and/or builder sales; the impact of inflation and interest rates; our future revenues, costs and financial performance, including with respect to cash generation and profitability; and future demographics and market conditions, including housing supply levels, in the areas where our communities are located. 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 March 31,

 

2024

 

2023

REVENUES:

 

 

 

Land sales

$

535

 

 

$

(25

)

Land sales—related party

 

(3

)

 

 

624

 

Management services—related party

 

8,726

 

 

 

4,236

 

Operating properties

 

677

 

 

 

866

 

Total revenues

 

9,935

 

 

 

5,701

 

COSTS AND EXPENSES:

 

 

 

Land sales

 

—

 

 

 

—

 

Management services

 

3,896

 

 

 

2,366

 

Operating properties

 

990

 

 

 

1,172

 

Selling, general, and administrative

 

12,916

 

 

 

13,752

 

Total costs and expenses

 

17,802

 

 

 

17,290

 

OTHER INCOME (EXPENSE):

 

 

 

Interest income

 

3,225

 

 

 

836

 

Miscellaneous

 

(5,907

)

 

 

(21

)

Total other (expense) income

 

(2,682

)

 

 

815

 

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES

 

17,586

 

 

 

1,048

 

INCOME (LOSS) BEFORE INCOME TAX PROVISION

 

7,037

 

 

 

(9,726

)

INCOME TAX PROVISION

 

(954

)

 

 

(8

)

NET INCOME (LOSS)

 

6,083

 

 

 

(9,734

)

LESS NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

3,757

 

 

 

(5,198

)

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

$

2,326

 

 

$

(4,536

)

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE

 

 

 

Basic

$

0.03

 

 

$

(0.07

)

Diluted

$

0.03

 

 

$

(0.07

)

WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING

 

 

 

Basic

 

69,058,585

 

 

 

68,705,223

 

Diluted

 

145,876,835

 

 

 

68,706,164

 

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE

 

 

 

Basic and diluted

$

0.00

 

 

$

(0.00

)

WEIGHTED AVERAGE CLASS B SHARES OUTSTANDING

 

 

 

Basic and diluted

 

79,233,544

 

 

 

79,233,544

 

FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares)

(Unaudited)

 

 

March 31, 2024

 

December 31, 2023

ASSETS

 

 

 

INVENTORIES

$

2,250,070

 

 

$

2,213,479

 

INVESTMENT IN UNCONSOLIDATED ENTITIES

 

246,406

 

 

 

252,816

 

PROPERTIES AND EQUIPMENT, NET

 

29,104

 

 

 

29,145

 

INTANGIBLE ASSET, NET—RELATED PARTY

 

23,190

 

 

 

25,270

 

CASH AND CASH EQUIVALENTS

 

232,684

 

 

 

353,801

 

RESTRICTED CASH AND CERTIFICATES OF DEPOSIT

 

992

 

 

 

992

 

RELATED PARTY ASSETS

 

81,759

 

 

 

83,970

 

OTHER ASSETS

 

7,528

 

 

 

9,815

 

TOTAL

$

2,871,733

 

 

$

2,969,288

 

 

 

 

 

LIABILITIES AND CAPITAL

 

 

 

LIABILITIES:

 

 

 

Notes payable, net

$

523,321

 

 

$

622,186

 

Accounts payable and other liabilities

 

77,853

 

 

 

81,649

 

Related party liabilities

 

76,128

 

 

 

78,074

 

Deferred income tax liability, net

 

7,975

 

 

 

7,067

 

Payable pursuant to tax receivable agreement

 

173,351

 

 

 

173,208

 

Total liabilities

 

858,628

 

 

 

962,184

 

 

 

 

 

REDEEMABLE NONCONTROLLING INTEREST

 

25,000

 

 

 

25,000

 

CAPITAL:

 

 

 

Class A common shares; No par value; Issued and outstanding: March 31, 2024—69,358,504 shares; December 31, 2023—69,199,938 shares

 

 

 

Class B common shares; No par value; Issued and outstanding: March 31, 2024—79,233,544 shares; December 31, 2023—79,233,544 shares

 

 

 

Contributed capital

 

592,227

 

 

 

591,606

 

Retained earnings

 

91,106

 

 

 

88,780

 

Accumulated other comprehensive loss

 

(2,327

)

 

 

(2,332

)

Total members’ capital

 

681,006

 

 

 

678,054

 

Noncontrolling interests

 

1,307,099

 

 

 

1,304,050

 

Total capital

 

1,988,105

 

 

 

1,982,104

 

TOTAL

$

2,871,733

 

 

$

2,969,288

 

FIVE POINT HOLDINGS, LLC SUPPLEMENTAL DATA (In thousands) (Unaudited)

Liquidity

 

March 31, 2024

Cash and cash equivalents

$

232,684

Borrowing capacity(1)

 

125,000

Total liquidity

$

357,684

(1)

As of March 31, 2024, no borrowings or letters of credit were outstanding on the Company’s $125.0 million revolving credit facility.

Debt to Total Capitalization and Net Debt to Total Capitalization

 

March 31, 2024

Debt(1)

$

524,994

 

Total capital

 

1,988,105

 

Total capitalization

$

2,513,099

 

Debt to total capitalization

 

20.9

%

 

 

Debt(1)

$

524,994

 

Less: Cash and cash equivalents

 

232,684

 

Net debt

 

292,310

 

Total capital

 

1,988,105

 

Total net capitalization

$

2,280,415

 

Net debt to total capitalization(2)

 

12.8

%

(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 table reconciles the results of operations of our segments to our consolidated results for the three months ended March 31, 2024 (in thousands):

 

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

$

535

 

 

$

—

 

 

$

80,818

 

$

—

 

 

$

81,353

 

 

$

—

 

 

$

81,353

 

 

$

(80,818

)

 

$

535

 

Land sales—related party

 

(3

)

 

 

—

 

 

 

11,891

 

 

—

 

 

 

11,888

 

 

 

—

 

 

 

11,888

 

 

 

(11,891

)

 

 

(3

)

Management services—related party(2)

 

—

 

 

 

—

 

 

 

8,613

 

 

113

 

 

 

8,726

 

 

 

—

 

 

 

8,726

 

 

 

—

 

 

 

8,726

 

Operating properties

 

509

 

 

 

168

 

 

 

—

 

 

2,549

 

 

 

3,226

 

 

 

—

 

 

 

3,226

 

 

 

(2,549

)

 

 

677

 

Total revenues

 

1,041

 

 

 

168

 

 

 

101,322

 

 

2,662

 

 

 

105,193

 

 

 

—

 

 

 

105,193

 

 

 

(95,258

)

 

 

9,935

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land sales

 

—

 

 

 

—

 

 

 

29,958

 

 

—

 

 

 

29,958

 

 

 

—

 

 

 

29,958

 

 

 

(29,958

)

 

 

—

 

Management services(2)

 

—

 

 

 

—

 

 

 

3,896

 

 

—

 

 

 

3,896

 

 

 

—

 

 

 

3,896

 

 

 

—

 

 

 

3,896

 

Operating properties

 

990

 

 

 

—

 

 

 

—

 

 

976

 

 

 

1,966

 

 

 

—

 

 

 

1,966

 

 

 

(976

)

 

 

990

 

Selling, general, and administrative

 

3,194

 

 

 

1,135

 

 

 

2,939

 

 

1,029

 

 

 

8,297

 

 

 

8,587

 

 

 

16,884

 

 

 

(3,968

)

 

 

12,916

 

Management fees—related party

 

—

 

 

 

—

 

 

 

8,162

 

 

—

 

 

 

8,162

 

 

 

—

 

 

 

8,162

 

 

 

(8,162

)

 

 

—

 

Total costs and expenses

 

4,184

 

 

 

1,135

 

 

 

44,955

 

 

2,005

 

 

 

52,279

 

 

 

8,587

 

 

 

60,866

 

 

 

(43,064

)

 

 

17,802

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

—

 

 

 

15

 

 

 

1,479

 

 

34

 

 

 

1,528

 

 

 

3,210

 

 

 

4,738

 

 

 

(1,513

)

 

 

3,225

 

Interest expense

 

—

 

 

 

—

 

 

 

—

 

 

(694

)

 

 

(694

)

 

 

—

 

 

 

(694

)

 

 

694

 

 

 

—

 

Miscellaneous

 

24

 

 

 

—

 

 

 

—

 

 

—

 

 

 

24

 

 

 

(5,931

)

 

 

(5,907

)

 

 

—

 

 

 

(5,907

)

Total other income (expense)

 

24

 

 

 

15

 

 

 

1,479

 

 

(660

)

 

 

858

 

 

 

(2,721

)

 

 

(1,863

)

 

 

(819

)

 

 

(2,682

)

EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES

 

16

 

 

 

—

 

 

 

—

 

 

—

 

 

 

16

 

 

 

—

 

 

 

16

 

 

 

17,570

 

 

 

17,586

 

SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION

 

(3,103

)

 

 

(952

)

 

 

57,846

 

 

(3

)

 

 

53,788

 

 

 

(11,308

)

 

 

42,480

 

 

 

(35,443

)

 

 

7,037

 

INCOME TAX PROVISION

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

—

 

 

 

(954

)

 

 

(954

)

 

 

—

 

 

 

(954

)

SEGMENT (LOSS) PROFIT/NET INCOME

$

(3,103

)

 

$

(952

)

 

$

57,846

 

$

(3

)

 

$

53,788

 

 

$

(12,262

)

 

$

41,526

 

 

$

(35,443

)

 

$

6,083

 

(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.

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 statements of operations for the three months ended March 31, 2024 (in thousands):

Segment profit from operations

$

57,846

 

Less net income of management company attributed to the Great Park segment

 

4,717

 

Net income of the Great Park Venture

 

53,129

 

The Company’s share of net income of the Great Park Venture

 

19,923

 

Basis difference amortization, net

 

(2,266

)

Equity in earnings from the Great Park Venture

$

17,657

 

The table below reconciles the Commercial segment results to the equity in loss from our investment in the Gateway Commercial Venture that is reflected in the condensed consolidated statements of operations for the three months ended March 31, 2024 (in thousands):

Segment loss from operations

$

(3

)

Less net income of management company attributed to the Commercial segment

 

113

 

Net loss of the Gateway Commercial Venture

 

(116

)

Equity in loss from the Gateway Commercial Venture

$

(87

)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240418282527/en/

Investor Relations: Kim Tobler, 949-425-5211 Kim.Tobler@fivepoint.com

or

Media: Eric Morgan, 949-349-1088 Eric.Morgan@fivepoint.com