Five Point Holdings, LLC Reports Third Quarter 2024 Results

Rhea-AI Summary

Five Point Holdings, (NYSE:FPH) reported its third quarter 2024 results, highlighting strong performance and financial stability. The company achieved consolidated net income of $12.3 million, marking its sixth consecutive profitable quarter. Key highlights include:

- Great Park Venture closed two retail commercial land sales totaling 12.8 acres for $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 and Valencia builder sales of 89 homes
- Consolidated revenues of $17.0 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

The company renewed its development management agreement with Great Park Venture through December 31, 2026, and expects to close land sales in both active communities in Q4 2024.

Positive

• Achieved consolidated net income of $12.3 million, marking the sixth consecutive profitable quarter
• Great Park Venture closed two retail commercial land sales for $25.4 million
• Received $49.4 million in distributions and incentive compensation payments from Great Park Venture
• Maintained strong liquidity with $349.5 million, including $224.5 million in cash and cash equivalents
• Renewed development management agreement with Great Park Venture through December 31, 2026
• Expects to meet or exceed prior guidance of over $100 million in annual net income and over $300 million in cash and cash equivalents by year-end

Negative

• No residential land sale closings during the quarter

Insights

Financial Analyst

Five Point Holdings' Q3 2024 results show positive momentum despite no residential land sales. Key highlights include:

• Net income of $12.3 million, marking the sixth consecutive profitable quarter
• Strong liquidity position with $224.5 million in cash and cash equivalents
• Total liquidity of $349.5 million, including $125 million in available credit
• Low leverage with a debt-to-capitalization ratio of 20.5%

The company's focus on commercial land sales and management services is paying off, with two retail land sales totaling $25.4 million in the Great Park Venture. The renewal of the development management agreement through 2026 provides stable revenue streams. Management's optimistic outlook for Q4, projecting annual net income over $100 million and year-end cash above $300 million, indicates strong fundamentals and potential for growth. The company's strategic positioning in land-constrained markets bodes well for future demand and pricing power.

Real Estate Development Expert

Five Point's Q3 results underscore the company's resilience in a challenging real estate market. The lack of residential land sales this quarter is offset by strategic commercial transactions and strong builder demand. Key observations:

• Great Park Venture sold 12.8 acres of retail-use land for $25.4 million, demonstrating demand for commercial properties
• Builder sales remained robust with 166 homes at Great Park and 89 at Valencia
• Extension of the development management agreement through 2026 provides operational stability and recurring revenue

The company's focus on mixed-use communities in prime California locations positions it well for long-term value creation. The chronic shortage of developable land in these markets supports sustained demand and pricing power. Five Point's ability to generate profits without residential land sales this quarter showcases the strength of its diversified business model and the value of its management services. The company's strong liquidity and low leverage provide flexibility to capitalize on market opportunities and weather potential economic headwinds.

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.--(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.

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/

Investor Relations:

Kim Tobler, 949-425-5211

Kim.Tobler@fivepoint.com

or

Media:

Eric Morgan, 949-349-1088

Eric.Morgan@fivepoint.com

Source: Five Point Holdings, LLC

FAQ

What was Five Point Holdings' (FPH) net income for Q3 2024?

Five Point Holdings (FPH) reported a consolidated net income of $12.3 million for the third quarter of 2024.

How many homes were sold by builders in Five Point's (FPH) communities during Q3 2024?

During Q3 2024, Great Park builders sold 166 homes, while Valencia builders sold 89 homes in Five Point's (FPH) communities.

What was Five Point Holdings' (FPH) cash position as of September 30, 2024?

As of September 30, 2024, Five Point Holdings (FPH) had cash and cash equivalents of $224.5 million.

How much did Five Point (FPH) receive in distributions from Great Park Venture in Q3 2024?

Five Point (FPH) received $49.4 million in distributions and incentive compensation payments from Great Park Venture during Q3 2024.

What is Five Point Holdings' (FPH) total liquidity as of September 30, 2024?

Five Point Holdings (FPH) reported total liquidity of $349.5 million as of September 30, 2024, including cash and available credit.