Five Point Holdings, LLC (NYSE:FPH) Q3 2019 Earnings Conference Call - Final Transcript

Nov 08, 2019 • 01:00 pm ET

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Five Point Holdings, LLC (NYSE:FPH) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Emile Hadad

create high demand for our retail and hospitality development to be located across the street, but will also add tremendous value to our residential neighborhoods.

In San Francisco, we received approval for the revised plans for our first phase at Candlestick. This first phase is comprised of approximately 1,600 homes, 750,000 square feet of office and 300,000 square feet of lifestyle retail focused mainly on food and beverage.

As we look ahead, we believe that we are in a unique position to capitalize on some of the best assets in the country and some of the most dynamic markets. Our balance sheet and liquidity afford us the ability to opportunistically build millions of square feet of commercial space in our communities in the near future that complement our existing Five Point Gateway Campus in Irvine.

During the past 18 months, we have seen a big disconnect between the value of our assets and the price of our stock. We acknowledge there are a variety of factors that have created frustration for our shareholders. 2020 will be a pivot year for the Company. In the early part of the year, we will hold an Investor Day, shed more light on what's ahead, answer any questions you have and show the real value of the Company. More information will be forthcoming, but I can speak for our whole team when I say that we are looking forward to sharing more fully the vision to which we have dedicated most of our careers.

Eric?

Executive
Erik Higgins

Thanks, Emile. A summary of our financial results was included in the earnings release issued earlier this morning. Our financial performance in the third quarter reflects continued investment in horizontal development at Valencia and the recognition of management fees. The Great Park Venture closed on 89 homesites, representing the final take down of a land sale that was announced in the first quarter. Additionally, as previously announced, the Company closed on a $125 million add-on to its 2025 senior notes in July.

I'll start with our consolidated results and then address each of our four segments and then conclude with some comments about our balance sheet and liquidity position. The Company's consolidated revenues for the third quarter totaled $12 million and primarily reflect recognition of revenue generated from management services. Revenues from land sales at Great Park Venture and rental income from the commercial -- from the Gateway Commercial Venture are not reflected in our consolidated revenues as we account for our investment in both ventures using the equity method of accounting. However, due to our role in managing both ventures' operations, we include these revenues in our segment results, which I'll discuss shortly.

Equity and our loss -- equity and loss from our two unconsolidated entities was $1.8 million for the quarter. We recognized $0.7 million in loss due to our proportionate share of the Great Park Ventures' net loss of $2.4 million for the quarter, after adjusting for the amortization and the accretion of the basis difference.