Five Point Holdings, LLC (NYSE:FPH) Q1 2020 Earnings Conference Call - Final Transcript

May 21, 2020 • 05:00 pm ET


Five Point Holdings, LLC (NYSE:FPH) Q1 2020 Earnings Conference Call - Final Transcript


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Good day, everyone. Welcome to the Five Point Holdings' First Quarter 2020 Conference Call. [Operator Instructions]

Today's conference may include forward-looking statements regarding Five Point's business, financial condition, operations, cash flow, strategy and prospects. Forward-looking statements represent only Five Point's estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risk and uncertainties. Many factors could affect the future results and may cause Five Point's actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described in today's press release and Five Point's SEC filings, including those in the Risk Factors section of the most recent Annual Report on Form 10-K and quarterly report on form 10-Q filed with the SEC. Please note that Five Point assumes no obligation to update any forward-looking statements.

And now, I'd like to turn the call over to Mr. Emile Haddad, Chairman and CEO of Five Point. Please go ahead, sir.

Emile Haddad

Thank you very much. Good afternoon and thank you for joining us. I hope that everyone on your side is healthy. Today I'm joined by Lynn Jochim, our Chief Operating Officer; by Erik Higgins, our Chief Financial Officer; and by Mike Alvarado our Chief Legal Officer.

On March 16th we had our fourth quarter call and I shared with you that the previous Friday we had asked all of our associates to work from home. I also told you that we always ran the Company with the plan which is ready to be implemented in case of any unexpected event which creates a major sudden shift. On that day we started implementing that plan which is comprised of the following.

One, considering the potential for no land sales in Valencia and the Great Park for the remainder of 2020, we are managing land development operations to support, to only support the efforts of our guest builders, who are still moving forward with construction activity. If there is demand for builders earlier, we need approximately 45 days to finish development of concerts at the Great Park. And at Valencia, we have inventory early for sale. We have benefited from the fact that approximately two-thirds of our total expenditures are variable costs.

Two, we also said in the past that 50% of our G&A related to our employment costs, our discretionary bonuses we pay in January. That gives us the ability to reduce G&A significantly without the need to reduce our workforce if we elect not to pay or reduce our discussion bonuses.

Three, we amended our internal financial authority policies to limit the ability to commit the Company to buy new contracts or approve invoices. The only people who have that authority since then are our CFO, COO, CLO, and me.

Four, since March 16, the four of us have been at the office every day making