Greetings, and welcome to the Five Point Holdings, LLC Third Quarter 2025 Conference Call. As a reminder, this call is being recorded. Today's call may include forward-looking statements regarding Five Point's business, financial condition, operations, cash flow, strategy, acquisitions and prospects. Forward-looking statements represent 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 risks and uncertainties. Many factors could affect 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 Five Point's most recent annual report on Form 10-K filed with the SEC. Please note that Five Point assumes no obligation to update any forward-looking statements. Now I would like to turn the call over to Dan Hedigan, President and Chief Executive Officer. Over to you, sir.

Thank you. Good afternoon, and thank you for joining our call. I have with me today Mike Alvarado, our Chief Operating Officer and Chief Legal Officer; Kim Tobler, our Chief Financial Officer; and Leo Kij, our Senior Vice President of Finance and Reporting. Stuart Miller, our Executive Chairman, is joining us remotely. On today's call, I'll review our Q3 results, which reflect another profitable quarter for Five Point as we continue to build on our track record of consistent quarterly earnings. I'll also provide an update on our current operations and outline our strategic focus as we move towards the end of 2025. Then Mike will discuss the integration of Hearthstone into our platform. Finally, Kim will review the details of our financial results, address the successful refinancing of our senior notes and discuss our outlook for the balance of the year. After our prepared remarks, we'll open the line for questions. Turning to the third quarter. I'm pleased to report another profitable quarter for Five Point. We generated consolidated net income of $55.7 million, continuing our pattern of steady earnings performance. This quarter's results were primarily driven by strong performance from our Great Park Venture, which sold 326 homesites on 26.6 acres for an aggregate base purchase price of $257.7 million, resulting in net income for the venture of $201.6 million. Our share of those earnings was $69.5 million, and the Venture made distributions of $216 million, of which Five Point received $81.8 million. From a balance sheet perspective, we ended the quarter with total liquidity of $47.6 million, comprised of cash and cash equivalents of $351.1 million and borrowing availability of $125 million under our unsecured revolving credit facility. During the quarter, we also took significant steps to strengthen our capital structure and position the company for long-term…

Thanks, Dan. As Dan mentioned, the Hearthstone acquisition was not only a first step towards our growth strategy, but a meaningful one to set us up to be an institutional platform that can own, develop and finance land at various stages in the development cycle. Immediately after the closing of this acquisition, we focused on expanding Hearthstone's capital relationships, pulling resources and communication lines together to increase the builder deal flow to Hearthstone and enhancing its already strong operational controls. All of these efforts will be ones that we will remain focused on as we work through the integration, but we are off to a strong start. First, we are engaged in meaningful discussions with capital providers to continue to expand the assets under management for the Hearthstone Venture. When we first started talking with Hearthstone, they had approximately $2.6 billion of assets under management. And today, we are at approximately $3 billion and growing with ongoing discussions for additional investments from new capital sources of $300 million, which could grow to over $1 billion. As a reminder, a substantial majority of capital deployed through Hearthstone's land baking business will be provided by third-party capital sources, while Hearthstone's returns will largely be generated by recurring asset management fees. Hearthstone's current portfolio spans 16 states and approximately 33 market areas, geographically diversifying the investment base of Hearthstone's lot option program. Second, builders have been contacting us with an eye towards expanding their lot option financing deal flow. As I noted on our last call, it's been reported that over 70% of land pipelines for homebuilders are optioned rather than purchased outright and that the public homebuilders buy and develop over $35 billion in land per year. We believe our venture has the opportunity to capture a meaningful portion of that market,…

Thank you, Mike. Dan has provided a good summary of the financial results for the third quarter. I'm now going to review our results for the 9 months ending in the third quarter and provide some additional information about the Hearthstone venture since this is the first time that information will be included in our 10-Q. Then I will conclude by updating our earnings guidance for what we are expecting for the balance of 2025. We recognized $158.7 million -- excuse me, for the nine months ended September 30, we have recognized $124 million of net income. The nine months net income is made up of the following significant components. We recognized $158.7 million of equity and earnings from our unconsolidated entities, $157.1 million of which came from the Great Park Venture. The equity and earnings from the Great Park Venture was attributable to the venture's net income of $456.3 million, which resulted from land sales revenue of $613.6 million and at approximately a 75% gross margin. The sales revenue I just noted includes $13.3 million of price participation consideration. Additionally, the venture also had $17.1 million of profit participation revenue. Five Point added $32.3 million of management services revenue, $18.3 million of which is associated with the incentive compensation from the Great Park Venture and $3.4 million is associated with two months of the Hearthstone Venture operations. Our SG&A for the first nine months was $44.6 million. We had interest income of $13.5 million. And finally, we recognized $20.1 million of income tax for the nine months. Dan shared our liquidity and cash position and the improvements that we have accomplished this last quarter with the refinancing and $75 million reduction in our senior notes and the recent upsizing of our revolving credit facility. We have been working very…

[Operator Instructions] The first question comes from the line of Alan Ratner from Zelman & Associates.

Congrats on all of the progress in the quarter. Really great to see and thank you for all the information so far. Dan, I guess first question, obviously, Hearthstone is kind of the topic you guys spent a lot of time discussing. And I'm curious, since the deal closed, we've gone through a number of homebuilder earnings reports thus far. And we've seen a fair amount of walkaways on option deals from builders, and I know there's a distinction between land banking and traditional options. But I'm just curious, a, as you kind of jump in here into Hearthstone's business and begin to work with existing option deals and bank deals that were in place before you acquired them, how have those discussions been going? I'm assuming there are situations where builders are coming to you guys looking to either renegotiate terms or pricing, et cetera. So just curious if you can comment a little bit on how the existing book of business is going. And then I guess, just going forward, how should we think about the revenue and income stream? I mean I see the table in the release, it looks like roughly $1 million or so was the segment profitability for the two months or I'm guessing the two months that the deal closed. So is that fairly representative of how we should think about it, at least in the near term until you grow the assets under management?

Thanks, Alan. Appreciate the questions. I'm going to split these up. I'm going to talk about the contracts on your first part, and I'll give it to Kim to talk about the numbers. But one of the things when we made a decision to buy in, partner up with Mark Porath at Hearthstone, we did a lot of diligence, and they have a 30-year history of -- in this business. And one of the most important aspects is their underwriting discipline and their structure and their deals and the deposits that they get. So as far as the question of their current existing book of business, it has some of the best underwriting, I think, in the industry, and we have not seen any issues there at all, and we don't expect to see any issues there because of that disciplined underwriting that is really their hallmark. So, and Kim, do you want to take the second part about numbers?

Yes. Alan, as it relates to the representation there, I think that the $1 million for two months is accurate in the sense of looking forward in the near term, we're expecting that to grow as we move into later in the year, next year. So I think you'll see that we'll continue that, and then it will start to get a little velocity as we get into the later part of the second quarter and moving forward.

Great. I appreciate that. Thank you both for those responses. Very helpful. Second question, obviously, land sale activity has been pretty robust in Great Park, and you're continuing to do great there. I didn't hear any mention of any residential lot sales in Valencia, and it's -- I think it's been about a year or so since your last transaction there. So curious if you can give just a rough time line on when we should expect to see the next residential lot sale coming in Valencia.

Yes, Alan, good question. And we actually are looking very carefully at Valencia. The kind of short answer is it's going to be in 2026 because as we've said, one of the things we don't want to do is push lots out if there's not a market for it. And in Valencia, we're monitoring that market very carefully. We've kind of got a steady flow of sales quarter-to-quarter. But on the other hand, we have looked at some additional transactions there and decided based on the current pace in the market that we should probably wait on those because we think we get better pricing by waiting, and there's enough inventory in the market to keep the master plan moving forward. But on the other hand, we actually have programs ready to go, and we can enter the market quickly if we start seeing the market having more demand. So, but right now, the direct answer to your question is we think it'd be 2026. We aren't looking at closing anything else there on the residential side this year.

[Operator Instructions] We take the next question from the line of [ David Langran ], who is a private investor.

Hi, Dan. Thanks for taking my question. Congratulations on the quarter. I'm trying to understand from your balance sheet and the number of outstanding shares, you have like 69 million roughly basic Class A shares, 149 million diluted. And so trying to understand from your balance sheet, what would you say is your book value per share?

Well, David, I'm going to turn that one to Kim, if you don't mind.

Sure.

Yes, David, I would say that our book value per share is about between $8 and $10 a share.

Okay. So that's different than what I calculated because the way I would look at it is you have like $11.5 would be the book value per share. If you look at -- if you have 69 million basic and then from the balance sheet, total members' capital is $803 million, I guess, and then the noncontrolling interests are $1.476 billion. So I guess there's some -- at least for me, trying to calculate it's kind of confusing. Can you give -- can you elaborate on how you came up with the between $8 and $10 per share book value?

That's what I just -- I mean, I had it in my head from the standpoint of when I'm going through the numbers, I'll have to get back to you on that.

Okay. Yes, I appreciate it because I mean, it's a struggle for me as I try to calculate it myself, and that's why I wanted to ask that question just so I have some clarity. But thank you for taking my question. Congratulations on the quarter. Good luck with the next quarter.

Thank you. And Kim will follow up with you.

We take the next question from the line of Alan Ratner from Zelman & Associates.

I'm back again with another -- the prior question just kind of spurred another thought. I noticed on your balance sheet, the -- I think the nonredeemable line -- equity line on your balance sheet, it increased by about $40 million from last quarter, $45 million. Can you explain exactly what's driving that?

Kim, I'll let you answer that.

Yes, Alan, that's the temporary equity associated with the Hearthstone transaction. We have -- there's a put call on the remaining 25% that we didn't acquire. And so that's temporary equity.

I see. So is that going to remain on the balance sheet, I guess, until if that call is ever made?

It will. And then there are certain other interests that may, over time, simply amortize off.

Got it. And I guess just going back to that last question because I know I get this question a lot from investors. Correct me if I'm wrong, but that 149 million diluted share count, that's going to be pretty close adding up your various kind of Class A, Class B shares. So kind of thinking about the overall equity of the company, assuming those other classes ultimately convert to common Class A. I've always thought about that being the ultimate denominator in terms of calculating your book value per share. Is that something you would agree with?

Yes. I would agree with that.

Okay. Yes. So I think that probably -- I get to a slightly higher number than the range that you discussed. I think it's maybe north.

You know what. Yes, I hear. Just the number actually as of the end of '25, I mean, the September '25 is actually $15 -- about $15.5.

Yes. Okay. That's what I was getting, which is, I guess, just the total shareholders' equity of $2.2 billion, $2.3 billion divided by the 149 million or so.

Yes. That's right.

Ladies and gentlemen, as there are no further questions, I will now hand the conference over to Dan Hedigan for his closing comments.

Thank you. On behalf of our management team, we thank you for joining us on today's call, and we look forward to speaking with you next quarter.

Thank you. Ladies and gentlemen, the conference of Five Point Holdings has now concluded. Thank you for your participation. You may now disconnect your lines.