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  Title	Five Point Holdings, LLC Reports Third Quarter 2024 Results
  ID	3330955
  External ID	201000638
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  Published Date	Oct. 17, 2024, 3:10 p.m.
  Summary	Five Point Holdings, LLC Reports Third Quarter 2024 Results Business Wire Thu, Oct 17, 2024, 1:10 PM 12 min read In This Article: FPH -0.71% Third Quarter 2024 Highlights Great Park Venture closed two
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  Content ID	1709506
  Key	4afd0b87-48c6-433c-9940-9368e5f50012
  Content	Five Point Holdings, LLC Reports Third Quarter 2024 Results Business Wire Thu, Oct 17, 2024, 1:10 PM 12 min read In This Article: FPH -0.71% Third Quarter 2024 Highlights Great Park Venture closed two retail use commercial land sales totaling 12.8 acres for an aggregate purchase price of $25.4 million. Great Park Venture distributions and incentive compensation payments to the Company totaled $49.4 million. Great Park builder sales of 166 homes during the quarter. Valencia builder sales of 89 homes during the quarter. Renewed the development management agreement with Great Park Venture through December 31, 2026. Consolidated revenues of $17.0 million; consolidated net income of $12.3 million. Cash and cash equivalents of $224.5 million as of September 30, 2024. Debt to total capitalization ratio of 20.5% and liquidity of $349.5 million as of September 30, 2024. IRVINE, Calif., October 17, 2024 --( BUSINESS WIRE )--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 2024 results. Dan Hedigan, Chief Executive Officer, said, "In the third quarter, we generated stronger than expected net income of $12.3 million, which is our sixth consecutive quarter reporting net income, and we ended the quarter with cash and cash equivalents of $224.5 million and total liquidity of $349.5 million. We did not have any residential land sale closings scheduled during the quarter, however, we are continuing to see strong demand from builders for our land, driven largely by the chronic shortage of developable land in our markets. Importantly, we secured a two-year extension of the development management agreement with our Great Park Venture partners. This extension reflects the strength of our relationship with our partners and is a model that we believe can be expanded beyond our existing communities. We expect to close land sales in the fourth quarter in both of our active communities and to end the year either in line with or stronger than our prior guidance of consolidated annual net income of over $100 million and cash and cash equivalents in excess of $300 million. As always, we are focused on liquidity and protecting our balance sheet. This focus puts us in a position of strength, which will enable future growth. I am very optimistic about the future of Five Point, both for the remainder of this year and beyond." Consolidated Results Liquidity and Capital Resources As of September 30, 2024, total liquidity of $349.5 million was comprised of cash and cash equivalents totaling $224.5 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. Story Continues Results of Operations for the Three Months Ended September 30, 2024 Revenues. Revenues of $17.0 million for the three months ended September 30, 2024 were primarily generated from management services. Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $12.0 million for the three months ended September 30, 2024. The Great Park Venture generated net income of $33.4 million during the three months ended September 30, 2024, and our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $12.1 million. Additionally, we recognized $0.2 million in earnings from our 10% interest in the Valencia Landbank Venture, offset by $0.3 million in loss from our 75% interest in the Gateway Commercial Venture. During the three months ended September 30, 2024, the Great Park Venture closed two commercial land sales planned for retail uses totaling 12.8 acres for an aggregate purchase price of $25.4 million. The Great Park Venture made aggregate distributions of $3.3 million to holders of Legacy Interests and $103.8 million to holders of Percentage Interests during the three months ended September 30, 2024. We received $38.9 million for our 37.5% Percentage Interest. Selling, general, and administrative. Selling, general, and administrative expenses were $11.9 million for the three months ended September 30, 2024. Net income. Consolidated net income for the quarter was $12.3 million. Net income attributable to noncontrolling interests totaled $7.6 million, resulting in net income attributable to the Company of $4.8 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, October 17, 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 13749390. The telephonic replay will be available until 11:59 p.m. Eastern Time on October 26, 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 REVENUES: Land sales $ 372 $ 60,694 $ 1,214 $ 60,685 Land sales—related party — — — 595 Management services—related party 16,030 4,502 75,035 29,512 Operating properties 611 727 1,891 2,181 Total revenues 17,013 65,923 78,140 92,973 COSTS AND EXPENSES: Land sales — 38,967 — 38,967 Management services 4,256 2,371 19,467 14,419 Operating properties 1,231 1,351 4,099 4,321 Selling, general, and administrative 11,911 11,938 37,013 38,400 Total costs and expenses 17,398 54,627 60,579 96,107 OTHER INCOME (EXPENSE): Interest income 2,595 2,413 8,575 4,542 Miscellaneous 24 1,074 (5,857 ) 1,033 Total other income 2,619 3,487 2,718 5,575 EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES 11,987 (622 ) 45,071 52,554 INCOME BEFORE INCOME TAX PROVISION 14,221 14,161 65,350 54,995 INCOME TAX PROVISION (1,886 ) (3 ) (8,705 ) (16 ) NET INCOME 12,335 14,158 56,645 54,979 LESS NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 7,579 7,555 34,841 29,341 NET INCOME ATTRIBUTABLE TO THE COMPANY $ 4,756 $ 6,603 $ 21,804 $ 25,638 NET INCOME ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE Basic $ 0.07 $ 0.10 $ 0.31 $ 0.37 Diluted $ 0.07 $ 0.09 $ 0.31 $ 0.37 WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING Basic 69,279,028 68,865,783 69,192,620 68,794,915 Diluted 146,565,417 145,312,266 146,394,307 145,064,113 NET 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, 2024 December 31, 2023 ASSETS INVENTORIES $ 2,340,031 $ 2,213,479 INVESTMENT IN UNCONSOLIDATED ENTITIES 210,763 252,816 PROPERTIES AND EQUIPMENT, NET 29,466 29,145 INTANGIBLE ASSET, NET—RELATED PARTY 11,535 25,270 CASH AND CASH EQUIVALENTS 224,521 353,801 RESTRICTED CASH AND CERTIFICATES OF DEPOSIT 992 992 RELATED PARTY ASSETS 121,829 83,970 OTHER ASSETS 10,327 9,815 TOTAL $ 2,949,464 $ 2,969,288 LIABILITIES AND CAPITAL LIABILITIES: Notes payable, net $ 524,909 $ 622,186 Accounts payable and other liabilities 100,135 81,649 Related party liabilities 72,618 78,074 Deferred income tax liability, net 14,382 7,067 Payable pursuant to tax receivable agreement 173,351 173,208 Total liabilities 885,395 962,184 REDEEMABLE NONCONTROLLING INTEREST 25,000 25,000 CAPITAL: Class A common shares; No par value; Issued and outstanding: September 30, 2024—69,358,504 shares; December 31, 2023—69,199,938 shares Class B common shares; No par value; Issued and outstanding: September 30, 2024—79,233,544 shares; December 31, 2023—79,233,544 shares Contributed capital 594,204 591,606 Retained earnings 110,584 88,780 Accumulated other comprehensive loss (2,313 ) (2,332 ) Total members’ capital 702,475 678,054 Noncontrolling interests 1,336,594 1,304,050 Total capital 2,039,069 1,982,104 TOTAL $ 2,949,464 $ 2,969,288 FIVE POINT HOLDINGS, LLC SUPPLEMENTAL DATA (In thousands) (Unaudited) Liquidity September 30, 2024 Cash and cash equivalents $ 224,521 Borrowing capacity (1) 125,000 Total liquidity $ 349,521 (1) As of September 30, 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 September 30, 2024 Debt (1) $ 524,994 Total capital 2,039,069 Total capitalization $ 2,564,063 Debt to total capitalization 20.5 % Debt (1) $ 524,994 Less: Cash and cash equivalents 224,521 Net debt 300,473 Total capital 2,039,069 Total net capitalization $ 2,339,542 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 tables reconcile the results of operations of our segments to our consolidated results for the three and nine months ended September 30, 2024 (in thousands): Three Months Ended September 30, 2024 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 $ 372 $ — $ 58,291 $ — $ 58,663 $ — $ 58,663 $ (58,291 ) $ 372 Land sales—related party — — 3,221 — 3,221 — 3,221 (3,221 ) — Management services—related party (2) — — 15,915 115 16,030 — 16,030 — 16,030 Operating properties 440 171 — 2,229 2,840 — 2,840 (2,229 ) 611 Total revenues 812 171 77,427 2,344 80,754 — 80,754 (63,741 ) 17,013 COSTS AND EXPENSES: Land sales — — 8,088 — 8,088 — 8,088 (8,088 ) — Management services (2) — — 4,256 — 4,256 — 4,256 — 4,256 Operating properties 1,231 — — 965 2,196 — 2,196 (965 ) 1,231 Selling, general, and administrative 2,407 1,232 3,144 1,059 7,842 8,272 16,114 (4,203 ) 11,911 Management fees—related party — — 18,790 — 18,790 — 18,790 (18,790 ) — Total costs and expenses 3,638 1,232 ... 34,278 2,024 41,172 8,272 49,444 (32,046 ) 17,398 OTHER INCOME (EXPENSE): Interest income — 19 1,912 73 2,004 2,576 4,580 (1,985 ) 2,595 Interest expense — — — (694 ) (694 ) — (694 ) 694 — Miscellaneous 24 — — — 24 — 24 — 24 Total other income (expense) 24 19 1,912 (621 ) 1,334 2,576 3,910 (1,291 ) 2,619 EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 211 — — — 211 — 211 11,776 11,987 SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION (2,591 ) (1,042 ) 45,061 (301 ) 41,127 (5,696 ) 35,431 (21,210 ) 14,221 INCOME TAX PROVISION — — — — — (1,886 ) (1,886 ) — (1,886 ) SEGMENT (LOSS) PROFIT/NET INCOME $ (2,591 ) $ (1,042 ) $ 45,061 $ (301 ) $ 41,127 $ (7,582 ) $ 33,545 $ (21,210 ) $ 12,335 (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, 2024 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 $ 1,214 $ — $ 273,747 $ — $ 274,961 $ — $ 274,961 $ (273,747 ) $ 1,214 Land sales—related party — — 19,846 — 19,846 — 19,846 (19,846 ) — Management services—related party (2) — — 74,679 356 75,035 — 75,035 — 75,035 Operating properties 1,384 507 — 7,002 8,893 — 8,893 (7,002 ) 1,891 Total revenues 2,598 507 368,272 7,358 378,735 — 378,735 (300,595 ) 78,140 COSTS AND EXPENSES: Land sales — — 67,062 — 67,062 — 67,062 (67,062 ) — Management services (2) — — 19,467 — 19,467 — 19,467 — 19,467 Operating properties 4,099 — — 2,805 6,904 — 6,904 (2,805 ) 4,099 Selling, general, and administrative 8,116 3,661 8,708 3,107 23,592 25,236 48,828 (11,815 ) 37,013 Management fees—related party — — 91,422 — 91,422 — 91,422 (91,422 ) — Total costs and expenses 12,215 3,661 186,659 5,912 208,447 25,236 233,683 (173,104 ) 60,579 OTHER INCOME (EXPENSE): Interest income — 51 5,062 166 5,279 8,524 13,803 (5,228 ) 8,575 Interest expense — — — (2,078 ) (2,078 ) — (2,078 ) 2,078 — Miscellaneous 71 — — — 71 (5,928 ) (5,857 ) — (5,857 ) Total other income (expense) 71 51 5,062 (1,912 ) 3,272 2,596 5,868 (3,150 ) 2,718 EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES 470 — — — 470 — 470 44,601 45,071 SEGMENT (LOSS) PROFIT/INCOME BEFORE INCOME TAX PROVISION (9,076 ) (3,103 ) 186,675 (466 ) 174,030 (22,640 ) 151,390 (86,040 ) 65,350 INCOME TAX PROVISION — — — — — (8,705 ) (8,705 ) — (8,705 ) SEGMENT (LOSS) PROFIT/NET INCOME $ (9,076 ) $ (3,103 ) $ 186,675 $ (466 ) $ 174,030 $ (31,345 ) $ 142,685 $ (86,040 ) $ 56,645 (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 statements of operations for the three and nine months ended September 30, 2024 (in thousands): Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 Segment profit from operations $ 45,061 $ 186,675 Less net income of management company attributed to the Great Park segment 11,659 55,212 Net income of the Great Park Venture 33,402 131,463 The Company’s share of net income of the Great Park Venture 12,526 49,299 Basis difference amortization, net (438 ) (4,081 ) Equity in earnings from the Great Park Venture $ 12,088 $ 45,218 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 and nine months ended September 30, 2024 (in thousands): Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 Segment loss from operations $ (301 ) $ (466 ) Less net income of management company attributed to the Commercial segment 115 356 Net loss of the Gateway Commercial Venture (416 ) (822 ) Equity in loss from the Gateway Commercial Venture $ (312 ) $ (617 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20241017633901/en/ Contacts Investor Relations: Kim Tobler, 949-425-5211 Kim.Tobler@fivepoint.com or Media: Eric Morgan, 949-349-1088 Eric.Morgan@fivepoint.com View Comments Terms and Privacy Policy WA Consumer Health Privacy Policy Your privacy controls Recommended Stories
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