Five Point Holdings, LLC, owner and developer of large mixed-use, master-planned communities in California, late Wednesday reported equity in loss from unconsolidated entities of $3.5 million for the three months ended December 31, 2018.
The loss was primarily due to its share of the Great Park Venture’s net loss during the quarter of $9.6 million. After adjusting for amortization and accretion of the basis difference, equity in loss from its 37.5% percentage interest in the Great Park Venture was $2.3 million. Equity in loss from our 75% interest in the Gateway Commercial Venture was $1.3 million for the three months ended December 31, 2018.
Emile Haddad, chairman and CEO, said, “We are pleased by the steady operational progress that we made in 2018 and expect it to continue in 2019. Ongoing land development activity at Valencia in Los Angeles County continues. Despite inclement weather, we anticipate delivering home sites and generating revenue sometime toward the end of this year.”
He continued, “2019 is off to a great start. In San Francisco, infrastructure development at Candlestick continues. We are no longer pursuing the construction of a regional mall but instead are working closely with the City on a plan that envisions an integrated office and residential mixed-use development that encompasses lifestyle retail and entertainment. Finally, at the Great Park, we sold 41 acres for approximately $218 million. Separately, home buyer activity, as reported by our guest builders, has remained consistent with normal seasonal patterns. The combination of steady operational progress, a healthy economy supported by seven years of consistent job growth, and a pronounced imbalance between supply and demand in our markets bodes well for 2019.”
Fourth Quarter 2018 Consolidated Results
Liquidity and Capital Resources
As of December 31, 2018, total liquidity of $619.7 million was comprised of cash and cash equivalents totaling $495.7 million and borrowing availability of $124.0 million under our $125.0 million unsecured revolving credit facility. Total capital was $1.8 billion, reflecting $2.9 billion in assets and $1.1 billion in liabilities.
Results of Operations for the Three Months Ended December 31, 2018
Revenues. Revenues of $7.9 million for the three months ended December 31, 2018 were primarily generated from management services.
Selling, general, and administrative. Selling, general, and administrative expenses were $15.2 million for the three months ended December 31, 2018.
Income tax provision. Income tax provision was $9.2 million for the three months ended December 31, 2018. Notwithstanding our consolidated net loss, the income tax provision is the result of an increase in our valuation allowance against deferred tax assets associated with changes contained in the Tax Cuts and Jobs Act limiting the utilization of net operating losses.
Net loss. Consolidated net loss for the quarter was $20.4 million. The net loss attributable to noncontrolling interests totaled $6.1 million, resulting in a net loss attributable to the company of $14.3 million.
Newhall Segment. Total segment revenues were $0.9 million for the fourth quarter of 2018 and were derived from agricultural leasing and the sale of citrus crops. Selling, general, and administrative expenses were $3.3 million for the three months ended December 31, 2018.
San Francisco Segment. Total segment revenues were $1.1 million for the fourth quarter of 2018. Revenues during the quarter were mostly attributable to fees generated from management agreements. Selling, general, and administrative expenses were $4.8 million for the three months ended December 31, 2018.
Great Park Segment. Total segment revenues were $8.5 million for the fourth quarter of 2018. Revenues were mainly attributable to management services we provide to the Great Park Venture. The Great Park segment’s net loss for the quarter was $7.6 million, which included net loss of $9.6 million attributed to the Great Park Venture that is not consolidated in our financial statements. After adjusting to account for a difference in investment basis, the company’s equity in loss from the Great Park Venture was $2.3 million for the three months ended December 31, 2018.
Commercial Segment. For the three months ended December 31, 2018, the Commercial segment recognized $8.0 million in revenues from tenant leases at the Five Point Gateway Campus and property management services provided by us to the Gateway Commercial Venture. Segment expenses were mostly comprised of depreciation, amortization and interest expense totaling $7.1 million. Segment net loss was approximately $1.0 million. Our share of equity in loss from the Gateway Commercial Venture totaled $1.3 million for the three months ended December 31, 2018.