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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 growth. We closed the acquisition of a 75% ownership interest in our new Hearthstone Residential Holdings land banking venture for $57.6 million. We issued $450 million in new 8% senior notes due 2030, and we used the proceeds from the offering, along with cash on hand to fund the repurchase and redemption of our prior $523.5 million, 10.5% senior notes due 2028. The prior notes were due to step up to 11% coupon in November. The step down in coupon will benefit the future cash flows for the company. Additionally, Moody's upgraded our corporate credit rating and senior notes rating to B2 with a stable outlook, underscoring our financial resilience and improving credit profile. And last week, we upsized our revolving credit facility from $125 million to $217.5 million and extended the maturity by two years to July 2029. Reducing the outstanding principal on our notes while maintaining substantial liquidity to allow us to operate our business and execute on our growth strategy were important goals for us this year, and we're pleased to have been able to achieve them as planned. Let me now share our outlook on the market. Our third quarter performance was underpinned by resilient homebuyer and builder demand at the Great Park, which remains solid despite continuing pressure from higher interest rates and affordability headwinds. While buyers remain somewhat cautious, the underlying imbalance between housing supply and demand in this core California market continue to support our land sale activity and our disciplined lot sales strategy allowed us to capitalize on that environment. Looking ahead to the rest of 2025 and into 2026, we remain cautiously optimistic. We expect improvement in buyer confidence if mortgage rates ease and affordability begins to loosen. Given the structural undersupply in our markets, we believe the long-term fundamentals remain in our favor. We anticipate a gradual rebound in home sales activity as the rate environment normalizes, which we believe will result in demand from builders seeking to maintain a pipeline of home sites. On my last call, I indicated that we expected to end the year with net income consistent with our 2024 earnings, and we still believe we're on track to meet that guidance. That said, the housing landscape continues to evolve, and we are closely watching how shifting economic factors may influence buyer sentiment and buyer activity. Kim will provide more details on our guidance for the remainder of 2025 during his remarks. Our performance in the third quarter demonstrates the strength of our operating model and the effectiveness of our disciplined approach. As we move into the final quarter of the year, we remain focused on the same four key strategic priorities that have guided our progress throughout 2025. First, optimizing the value of our home sites within our premier master planned communities by aligning land sales with homebuilder demand. Even as national housing demand has moderated amid higher interest rates, our California markets remain chronically undersupplied, sustaining long-term builder interest. That said, because we don't have to sell when home sales absorption slows, optimization sometimes means moderating land sales with the goal of maintaining long-term value in these communities. Second, maintaining our lean operating structure by carefully managing fixed costs and overhead. We continue to demonstrate the growth and efficiency can go hand-in-hand even as we integrate Hearthstone into our platform. Third, matching development expenditures with revenue generation, ensuring that capital deployment remains disciplined and aligned with near-term monetization. And fourth, pursuing selective growth opportunities through acquisitions, joint ventures and strategic relationships like our Hearthstone investment, which we expect to be accretive to earnings. Let me now provide you with some updates on our communities, starting with our Great Park neighborhoods community. At the Great Park, builders sold 187 homes during the quarter, an increase from the 112 homes sold in quarter 2. We currently have six active selling programs with several expected to sell out by early 2026. 10 additional new programs are anticipated to start sales either later this year or in early 2026. I previously reported that we had completed bidding and contracting for nine new residential programs totaling 572 homesites. We closed the sale of five of those programs consisting of 326 homesites in the third quarter. Shortly following quarter end, we closed the sale of another two programs consisting of 113 home sites. We anticipate one other program to close later in the fourth quarter. We anticipate the final program consisting of 59 homesites will close in early 2026. These recently closed land sales were modified to include base purchase price paid at closing range from approximately $8.5 million to $11 million per acre, plus price participation rights that can allow us to capture upside in the event there is an improving market at the time of the home sales, the homes are sold to homebuyers. Now let me discuss Valencia, our other active community. In Valencia, builders sold 50 homes during the quarter compared to 47 homes in the second quarter. We currently have eight actively selling programs with eight new programs anticipated to open over the next few quarters. On the commercial side of our Valencia community, following the end of the quarter, we closed on the sale of a 15.8-acre industrial site. We also continue to advance regulatory approvals for our next phase of development are expected to add approximately 8,900 homesites and 183 net acres of commercial land. These approvals will allow us to continue delivering much needed housing to one of California's most supply-constrained housing markets. Turning to San Francisco. We are finalizing engineering for the next phase of infrastructure and expect to begin construction in the first half of 2026. We are very focused on optimizing product design for the San Francisco market and remain engaged in discussions with potential capital sources to advance development of our Candlestick and Shipyard communities. As I mentioned earlier, we closed the Hearthstone acquisition in July, marking a major milestone of Five Point's strategic evolution. I want to welcome the Hearthstone team to the Five Point family. We are generally excited to have them join Five Point as this acquisition gives us an established national platform providing capital solutions to homebuilders. Mike will discuss Hearthstone further in his remarks. Let me conclude by saying that we are very pleased with our progress through the first nine months of 2025. Our third quarter results reflect strong execution, continued profitability, balance sheet strength and meaningful strategic advancement through the addition of the Hearthstone platform. Even as the broader housing market continues to adapt to interest rates and affordability challenges, Five Point remains well positioned financially, operationally and strategically to continue creating long-term value for our shareholders. With that, I'll turn it over to Mike to provide more color on how Hearthstone fits into our long-term vision.

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, and our recent communications with builders appear to justify that belief. Third, we have already started integrating our public company level controls of our financial and operational reporting into the Hearthstone venture, and we intend to bring technological enhancements to the platform to allow us to grow this business in an efficient and effective manner. Capital providers are selective when choosing to invest with operators, emphasizing strong risk mitigation controls over growth at an all-cost approach. Hearthstone has a proven track record of disciplined underwriting and their focus on risk managed capital deployment aligns with Five Point's commitment to delivering strong long-term returns for shareholders. While we intend to scale this business, we intend to do so with the same discipline that Hearthstone has done for many years and to bring the full scale of our public company platform to Hearthstone's operations. Five Point now has two legs of the land development cycle stool. We have top-tier master planned communities in supply-constrained markets that will generate revenue for decades. And now we have a short-term land financing program through Hearthstone that we anticipate will increase our fee-based income substantially in the coming years. Next, we intend to focus on our midterm land strategy, where we will continue to take an asset or investment-light approach, bringing in capital partners to acquire residential land that is neither generational in nature nor short term that fits the typical land bank model. This midterm land is what the homebuilders have traditionally held on their balance sheets as a necessary element of their inventory in key markets. As we have already reported, this is a market segment currently unserved by traditional capital providers. With the undersupply of homes and home sites in this country, particularly in the metropolitan areas that are experiencing growth, we believe that capital will be available to pursue and execute on these opportunities. In short, we are extremely excited about welcoming the Hearthstone team to Five Point and to taking the next steps to position Five Point to be a meaningful participant in the land development ecosystem and to generating long-term sustainable growth for our company. Now let me turn it over to Kim to report on our financial results for the quarter.

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 hard to position the company for long-term growth and flexibility. Our new senior note covenant package is substantially similar to our prior notes with the exception that the prohibition against dividends and stock buybacks has been removed. Those actions are now subject to common covenant limitations. I'd like to emphasize that with the rate improvement and reduced principal, we are saving over $20 million a year in cash flow. I'd also like to note that in September, we received initial senior notes and corporate ratings of BB- and B, respectively, from Fitch Ratings. Moody's ratings upgraded us to B2 for both our senior notes and corporate ratings, as Dan noted, and S&P Global Ratings reaffirmed our ratings at B+B. Now let me turn to the Hearthstone transaction. On July 31, the company acquired substantially all of the assets associated with the asset and investment management business of Hearthstone Inc., a provider of capital solutions to the U.S. homebuilding industry. We purchased 75% of the outstanding Class A units of the Hearthstone Venture for an aggregate purchase price of $57.6 million, while Hearthstone Inc. and affiliate trust and certain employees of Hearthstone retained the remaining 25% of the outstanding Class A units all of the Class B units and certain other less significant distribution priority rights. The Class B units are temporary in nature and will be extinguished proportionally as and when the company contributes additional capital to the Hearthstone to grow its business. This acquisition represents a significant expansion of Hearthstone's capabilities, positioning Five Point as an active manager of capital solutions for the homebuilding industry through investment fund structures while positioning the Hearthstone Venture to scale its platform. We are accounting for the transaction as a business combination and have identified the assets acquired, liabilities assumed and noncontrolling interest held by the legacy Hearthstone owners of the acquiree and recorded them with limited exceptions at the fair market value on the acquisition date. You will note that we have preliminarily recorded $69.8 million of goodwill. The goodwill primarily represents the value of expected operational synergies, enhanced scale and market presence, the assembled workforce and other intangible benefits expected to be realized from integrating the Hearthstone Venture platform with Five Point's existing operations. While we don't expect any changes to the preliminary fair value recorded, the accounting rules allow for changes during the measurement period, which will not extend beyond one year from the acquisition date. We are excited about the growth opportunities that the Hearthstone Venture presents. As Dan mentioned, we continue to expect to close out 2025 with net income close to last year's income of $176.3 million. As he described in October, we already closed a commercial land sale in Valencia and residential land sales in the Great Park. And we have an additional land sale in the Great Park expected to close later in the fourth quarter. These sales, together with Five Point and Hearthstone's continuing management services revenues will all contribute to a strong finish in 2025. With that, let me turn it back to the operator, who will now open it up for questions.

[Operator Instructions] The first question comes from the line of Alan Ratner from

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

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.