Five Point (FPH) Q4 2020 earnings summary

Executive summary

• 2020 revenue declined to $153.6M from $184.4M, while net income was $1.1M and net loss attributable to shareholders was $0.4M; commercial asset-sale gains and Valencia land sales were key drivers.

• Liquidity stood at $298.1M cash, with no revolver borrowings; development spending was curtailed early in the pandemic and later resumed as housing demand strengthened.

Financial highlights

• Revenue was $153.6M versus $184.4M in 2019; fewer Valencia land sales were the primary reason for the decline.

• Net income was $1.1M versus $22.3M; the 2019 result included a $64.9M gain on settlement of contingent consideration.

• Net loss attributable to shareholders was $0.4M versus net income of $9.0M; basic and diluted Class A EPS were both $(0.01), versus $0.13 in 2019.

• Equity earnings from unconsolidated entities rose to $42.4M from $2.3M, mainly reflecting Gateway Commercial Venture asset-sale gains, partly offset by a $26.9M Great Park investment impairment.

Outlook and guidance

• Valencia land development resumed as housing demand improved; homesales by guest builders were expected to begin in Summer 2021.

• Great Park homesite sales were deferred from 2020; the stated 2021 target was approximately 800–900 homesites, with sales momentum carrying into early 2021.

• Cash was expected to cover requirements for at least 12 months, supported by Valencia land-sale proceeds, unconsolidated-entity distributions and management fees; horizontal development funding was expected to cover several years.

• Planned 2021 cash needs included $49.2M of senior-note interest and $35.5M of related-party reimbursement principal payments, which may be deferred if the associated EB-5 loan maturities are extended.