Business Wire | May 10, 2021 04:15PM EDT

Five Point Holdings, LLC Reports First Quarter 2021 Results

May 10, 2021

IRVINE, Calif.--(BUSINESS WIRE)--May 10, 2021--Five Point Holdings, LLC ("Five Point" or the "Company") (NYSE:FPH), an owner and developer of large mixed-use, master-planned communities in California, today reported its first quarter 2021 results. Emile Haddad, Chairman and CEO, said, "Housing continues to be a bright spot of the economy. Strong demand for housing is being driven by low interest rates and people having a newfound appreciation for their homes and for how housing fits into their evolving lives. As evidence of this strong demand, year to date home sales at the Great Park Neighborhoods are over twice the amount of sales during the same period in 2020. The planning and amenities that go into our communities are embraced even more today than in past years. In Valencia, with approximately 60 model homes under construction, we are excited about our guest builders opening for sale and welcoming our first homeowners later this year."

First Quarter 2021 Consolidated Results

Liquidity and Capital Resources

As of March 31, 2021, total liquidity of $354.3 million was comprised of cash and cash equivalents totaling $229.7 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 March 31, 2021

Revenues. Revenues of $13.2 million for the three months ended March 31, 2021 was primarily generated from management services.

Equity in loss from unconsolidated entities. Equity in loss from unconsolidated entities was $3.6 million for the three months ended March 31, 2021, comprised of a $3.9 million loss from our 37.5% percentage interest in the Great Park Venture offset by earnings of $0.4 million from our 75% interest in the Gateway Commercial Venture.

Selling, general, and administrative. Selling, general, and administrative expenses were $19.5 million for the three months ended March 31, 2021.

Net loss. Consolidated net loss for the quarter was $21.0 million. Net loss attributable to noncontrolling interests totaled $11.3 million, resulting in net loss attributable to the Company of $9.8 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 Monday, May 10, 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 (800) 437-2398 (domestic) or (929) 477-0577 (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 7087320. The telephonic replay will be available until 11:59 p.m. Eastern Time on May 24, 2021.

About Five Point

Five Point, headquartered in Irvine, California, designs and develops large mixed-use, master-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(r) in Irvine, Valencia(r) (formerly known as Newhall Ranch(r)) in Los Angeles County, and Candlestick(r) and The San Francisco Shipyard(r) 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 March 31,

2021 2020

REVENUES:

Land sales $ 22 $ 6

Land sales-related party 19 10

Management services-related party 12,439 8,244

Operating properties 700 960

Total revenues 13,180 9,220

COSTS AND EXPENSES:

Land sales - -

Management services 10,777 6,051

Operating properties 1,585 1,945

Selling, general, and administrative 19,538 24,626

Total costs and expenses 31,900 32,622

OTHER INCOME:

Interest income 27 1,006

Miscellaneous 1,204 88

Total other income 1,231 1,094

EQUITY IN LOSS FROM UNCONSOLIDATED ENTITIES (3,556 ) (30,911 )

LOSS BEFORE INCOME TAX BENEFIT (21,045 ) (53,219 )

INCOME TAX BENEFIT - -

NET LOSS (21,045 ) (53,219 )

LESS NET LOSS ATTRIBUTABLE TO NONCONTROLLING (11,266 ) (28,413 )INTERESTS

NET LOSS ATTRIBUTABLE TO THE COMPANY $ (9,779 ) $ (24,806 )



NET LOSS ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE

Basic $ (0.14 ) $ (0.36 )

Diluted $ (0.14 ) $ (0.37 )

WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING

Basic 67,288,860 66,649,866

Diluted 67,288,860 68,792,585

NET 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, 2021

December 31, 2020

ASSETS

INVENTORIES

$

2,043,407

$

1,990,859

INVESTMENT IN UNCONSOLIDATED ENTITIES

439,239

442,850

PROPERTIES AND EQUIPMENT, NET

32,452

32,769

INTANGIBLE ASSET, NET-RELATED PARTY

63,901

71,747

CASH AND CASH EQUIVALENTS

229,670

298,144

RESTRICTED CASH AND CERTIFICATES OF DEPOSIT

1,330

1,330

RELATED PARTY ASSETS

108,164

103,681

OTHER ASSETS

17,048

20,605

TOTAL

$

2,935,211

$

2,961,985

LIABILITIES AND CAPITAL

LIABILITIES:

Notes payable, net

$

617,843

$

617,581

Accounts payable and other liabilities

144,239

135,331

Related party liabilities

101,832

113,149

Deferred income tax liability, net

12,578

12,578

Payable pursuant to tax receivable agreement

172,726

173,248

Total liabilities

1,049,218

1,051,887

REDEEMABLE NONCONTROLLING INTEREST

25,000

25,000

CAPITAL:

Class A common shares; No par value; Issued and outstanding: March 31, 2021-68,758,347 shares; December 31, 2020-69,051,284 shares

Class B common shares; No par value; Issued and outstanding: March 31, 2021-79,233,544 shares; December 31, 2020-79,233,544 shares

Contributed capital

576,826

578,278

Retained earnings

32,442

42,221

Accumulated other comprehensive loss

(2,811

)

(2,833

)

Total members' capital

606,457

617,666

Noncontrolling interests

1,254,536

1,267,432

Total capital

1,860,993

1,885,098

TOTAL

$

2,935,211

$

2,961,985

FIVE POINT HOLDINGS, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares)

(Unaudited)

March 31, December 31, 2021 2020

ASSETS

INVENTORIES $ 2,043,407 $ 1,990,859

INVESTMENT IN UNCONSOLIDATED ENTITIES 439,239 442,850

PROPERTIES AND EQUIPMENT, NET 32,452 32,769

INTANGIBLE ASSET, NET-RELATED PARTY 63,901 71,747

CASH AND CASH EQUIVALENTS 229,670 298,144

RESTRICTED CASH AND CERTIFICATES OF DEPOSIT 1,330 1,330

RELATED PARTY ASSETS 108,164 103,681

OTHER ASSETS 17,048 20,605

TOTAL $ 2,935,211 $ 2,961,985



LIABILITIES AND CAPITAL

LIABILITIES:

Notes payable, net $ 617,843 $ 617,581

Accounts payable and other liabilities 144,239 135,331

Related party liabilities 101,832 113,149

Deferred income tax liability, net 12,578 12,578

Payable pursuant to tax receivable agreement 172,726 173,248

Total liabilities 1,049,218 1,051,887



REDEEMABLE NONCONTROLLING INTEREST 25,000 25,000

CAPITAL:

Class A common shares; No par value; Issued andoutstanding: March 31, 2021-68,758,347 shares; December 31, 2020-69,051,284 shares

Class B common shares; No par value; Issued andoutstanding: March 31, 2021-79,233,544 shares; December 31, 2020-79,233,544 shares

Contributed capital 576,826 578,278

Retained earnings 32,442 42,221

Accumulated other comprehensive loss (2,811 ) (2,833 )

Total members' capital 606,457 617,666

Noncontrolling interests 1,254,536 1,267,432

Total capital 1,860,993 1,885,098

TOTAL $ 2,935,211 $ 2,961,985

FIVE POINT HOLDINGS, LLC

SUPPLEMENTAL DATA

(In thousands)

(Unaudited)

Liquidity

March 31, 2021

Cash and cash equivalents

$

229,670

Borrowing capacity (1)

124,651

Total liquidity

$

354,321

FIVE POINT HOLDINGS, LLC

SUPPLEMENTAL DATA

(In thousands)

(Unaudited)

Liquidity

March 31, 2021

Cash and cash equivalents $ 229,670

Borrowing capacity (1) 124,651

Total liquidity $ 354,321

(1)

As of March 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.

As of March 31, 2021, no amounts were drawn on the Company's $125.0 million revolving credit facility; however, letters of credit of(1) 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

March 31, 2021

Debt (1)

$

625,000

Total capital

1,860,993

Total capitalization

$

2,485,993

Debt to total capitalization

25.1

%

Debt (1)

$

625,000

Less: Cash and cash equivalents

229,670

Net debt

395,330

Total capital

1,860,993

Total net capitalization

$

2,256,323

Net debt to total capitalization (2)

17.5

%

Debt to Total Capitalization and Net Debt to Total Capitalization

March 31, 2021

Debt (1) $ 625,000

Total capital 1,860,993

Total capitalization $ 2,485,993

Debt to total capitalization 25.1 %



Debt (1) $ 625,000

Less: Cash and cash equivalents 229,670

Net debt 395,330

Total capital 1,860,993

Total net capitalization $ 2,256,323

Net debt to total capitalization (2) 17.5 %

(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.

(1) For purposes of this calculation, debt is the amount due on the Company's notes payable before offsetting for capitalized deferred financing costs.

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(2) 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, 2021 (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

$

22

$

-

$

741

$

-

$

763

$

-

$

763

$

(741

)

$

22

Land sales-related party

19

-

219

-

238

-

238

(219

)

19

Management services-related party

-

-

12,340

99

12,439

-

12,439

-

12,439

Operating properties

551

149

-

2,101

2,801

-

2,801

(2,101

)

700

Total revenues

592

149

13,300

2,200

16,241

-

16,241

(3,061

)

13,180

COSTS AND EXPENSES:

Land sales

-

-

-

-

-

-

-

-

-

Management services

-

-

10,777

-

10,777

-

10,777

-

10,777

Operating properties

1,585

-

-

159

1,744

-

1,744

(159

)

1,585

Selling, general, and administrative

4,040

1,125

7,568

1,159

13,892

14,373

28,265

(8,727

)

19,538

Management fees-related party

-

-

6,118

-

6,118

-

6,118

(6,118

)

-

Total costs and expenses

5,625

1,125

24,463

1,318

32,531

14,373

46,904

(15,004

)

31,900

OTHER INCOME (EXPENSE):

Interest income

-

-

242

-

242

27

269

(242

)

27

Interest expense

-

-

-

(303

)

(303

)

-

(303

)

303

-

Miscellaneous

134

1,070

-

-

1,204

-

1,204

-

1,204

Total other income (expense)

134

1,070

242

(303

)

1,143

27

1,170

61

1,231

EQUITY IN LOSS FROM UNCONSOLIDATED ENTITIES

-

-

-

-

-

-

-

(3,556

)

(3,556

)

SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME TAX BENEFIT

(4,899

)

94

(10,921

)

579

(15,147

)

(14,346

)

(29,493

)

8,448

(21,045

)

INCOME TAX BENEFIT

-

-

-

-

-

-

-

-

-

SEGMENT (LOSS) PROFIT/NET LOSS

$

(4,899

)

$

94

$

(10,921

)

$

579

$

(15,147

)

$

(14,346

)

$

(29,493

)

$

8,448

$

(21,045

)

Segment Results

The following table reconciles the results of operations of our segments to ourconsolidated results for the three months ended March 31, 2021 (in thousands):

Total Corporate Removal of San and Total under Total Valencia Great Park Commercial reportable unconsolidated Francisco unallocated management consolidated segments entities^(1)

REVENUES:

Land sales $ 22 $ - $ 741 $ - $ 763 $ - $ 763 $ (741 ) $ 22

Landsales-related 19 - 219 - 238 - 238 (219 ) 19 party

Managementservices-related - - 12,340 99 12,439 - 12,439 - 12,439 party

Operating 551 149 - 2,101 2,801 - 2,801 (2,101 ) 700 properties

Total revenues 592 149 13,300 2,200 16,241 - 16,241 (3,061 ) 13,180

COSTS AND EXPENSES:

Land sales - - - - - - - - -

Management - - 10,777 - 10,777 - 10,777 - 10,777 services

Operating 1,585 - - 159 1,744 - 1,744 (159 ) 1,585 properties

Selling,general, and 4,040 1,125 7,568 1,159 13,892 14,373 28,265 (8,727 ) 19,538 administrative

Managementfees-related - - 6,118 - 6,118 - 6,118 (6,118 ) - party

Total costs and 5,625 1,125 24,463 1,318 32,531 14,373 46,904 (15,004 ) 31,900 expenses

OTHER INCOME (EXPENSE):

Interest income - - 242 - 242 27 269 (242 ) 27

Interest expense - - - (303 ) (303 ) - (303 ) 303 -

Miscellaneous 134 1,070 - - 1,204 - 1,204 - 1,204

Total other 134 1,070 242 (303 ) 1,143 27 1,170 61 1,231 income (expense)

EQUITY IN LOSSFROM - - - - - - - (3,556 ) (3,556 )UNCONSOLIDATEDENTITIES

SEGMENT (LOSS)PROFIT/LOSS (4,899 ) 94 (10,921 ) 579 (15,147 ) (14,346 ) (29,493 ) 8,448 (21,045 )BEFORE INCOMETAX BENEFIT

INCOME TAX - - - - - - - - - BENEFIT

SEGMENT (LOSS) $ (4,899 ) $ 94 $ (10,921 ) $ 579 $ (15,147 ) $ (14,346 ) $ (29,493 ) $ 8,448 $ (21,045 )PROFIT/NET LOSS

(1)

Represents the removal of the Great Park Venture's and Gateway Commercial Venture's operating results that are included in the Great Park segment and Commercial segment operating results, respectively, but are not included in our consolidated results.

Represents the removal of the Great Park Venture's and Gateway Commercial(1) Venture's operating results that are included in the Great Park segment and Commercial segment operating results, respectively, but are not included in our consolidated results.

The table below reconciles the Great Park segment results to the equity in loss from our investment in the Great Park Venture that is reflected in the condensed consolidated statement of operations for the three months ended March 31, 2021 (in thousands):

Segment loss from operations

$

(10,921

)

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

1,563

Net loss of the Great Park Venture

(12,484

)

The Company's share of net loss of the Great Park Venture

(4,682

)

Basis difference accretion

766

Equity in loss from the Great Park Venture

$

(3,916

)

The table below reconciles the Great Park segment results to the equity in lossfrom our investment in the Great Park Venture that is reflected in thecondensed consolidated statement of operations for the three months ended March31, 2021 (in thousands):

Segment loss from operations $ (10,921 )

Less net income of management company attributed to the Great Park 1,563 segment

Net loss of the Great Park Venture (12,484 )

The Company's share of net loss of the Great Park Venture (4,682 )

Basis difference accretion 766

Equity in loss from the Great Park Venture $ (3,916 )

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 months ended March 31, 2021 (in thousands):

Segment profit from operations

$

579

Less net income of management company attributed to the Commercial segment

99

Net income of the Gateway Commercial Venture

480

Equity in earnings from the Gateway Commercial Venture

$

360

View source version on businesswire.com: https://www.businesswire.com/news/home/20210510005871/en/

CONTACT: Investor Relations: Bob Wetenhall, 949-349-1087 bob.wetenhall@fivepoint.com

CONTACT: or

CONTACT: Media: Steve Churm, 949-349-1034 steve.churm@fivepoint.com