Greetings, and welcome to the Five Point Holdings Second 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 filings 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. Thank you, Paul.

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 update you on our Q2 results, which reflect the company's consistent cadence of quarterly profitability. I'll provide a snapshot of the status of the company's current operations, including our strategic priorities and expectations for the remainder of 2025. I'll also provide a brief update on our announced acquisition of 75% of the Hearthstone land banking and residential advisory platform. Additionally, I've asked Mike to discuss the Hearthstone acquisition and Five Point's growth strategy in more detail. And finally, Kim will give an overview of the company's financial performance and condition with updated guidance for the remainder of 2025. We will then open the line for questions. I would like to ask that you please limit yourself to one question and one follow-up. Turning to the second quarter. I'm pleased to report another profitable quarter for Five Point. We had anticipated that Q2 would be relatively quiet in comparison to the beginning and end of the year. However, we remained profitable and generated net income of $8.6 million, which is largely in line with our guidance for the quarter. The primary driver of this profitability was Great Park land sales. The Great Park Venture closed on a residential land sale consisting of 82 homesites on approximately 5.7 acres for an aggregate purchase price of $63.6 million. This enabled the Great Park Venture to generate net income of $48.4 million during the quarter, our share of which, adjusted for basis differences, was $16.7 million. From a balance sheet perspective, we finished the quarter with total liquidity of $581.6 million, comprised of cash and cash equivalents totaling $456.6 million and borrowing availability of $125 million under our unsecured revolving credit facility. Against that backdrop, residential markets in general have weakened as a result of higher interest rates and lower consumer confidence. This has been widely reported by many of our builder customers as they have reported in their earnings calls. Nevertheless, our results reflect our continued focus on generating revenue, controlling our expenses, and managing our capital spend. As we look at the remainder of the year, we expect a strong finish to 2025 with anticipated residential land sale closings at the Great Park in Q3 and Q4, notwithstanding current uncertainty in the homebuilding industry. While these challenges are leading to slower new home sales by many of the public builders, to our benefit, our existing communities are located in California markets that are chronically undersupplied. Even with the current market conditions, there is continued interest in our communities. On my last call, I indicated that we believe we were on track to meet our prior guidance with estimated earnings for 2025 that would exceed 2024's net income of $177.6 million. Even in light of the current market environment, we believe that we will end the year with net income consistent with last year's earnings. Obviously, the market is very dynamic at this moment, and we will continue to monitor evolving market conditions as the year progresses. Kim will provide more details on our guidance for the remainder of 2025 during his remarks. Now let me turn briefly to our current operating strategy. As a reminder, the key elements of this strategy are: first, optimizing home site value within our existing three premier master planned communities by matching home site sales to current homebuilder demand. As I mentioned, homebuilder demand is softening currently. Notwithstanding these current conditions, we are positioned to remain patient and continue to optimize the value in our uniquely positioned land, which should allow us to maintain the margins embedded in that value. Second, we are carefully managing our fixed costs and overhead even while we pursue growth opportunities. Although there are additional costs associated with our planned growth, we're maintaining our lean operating structure. We anticipate that our acquisition of Hearthstone will be accretive to earnings, notwithstanding additional labor costs associated with the acquisition. Third, we're continuing to match development expenditures with revenue generation to ensure that we are not deploying cash too far out in front of the needs of the development. And fourth, while we anticipate closing Hearthstone in the third quarter, and we'll be working to integrate its operations into our platform, we'll continue to seek growth opportunities on an opportunistic basis through new acquisitions, joint ventures, and strategic relationships. Our focus will remain on these strategic elements of our operating platform as we produce recurring earnings along with sustainable long-term growth. With that said, the members of our executive team have all been in this business long enough to know we will need to navigate through uncertainty from time to time. Let me now provide you with some updates on our communities. Of note, across both of our actively selling new home communities, Great Park and Valencia, we have seen a slowdown in new home sales since early April. At this time, given the housing shortage, we believe this is a temporary condition in the new home market, which will self-correct over the next quarters. As I mentioned earlier, the market is very dynamic at this moment, and we will continue to monitor and adjust as warranted by conditions at both the national and local levels. So let me turn first to our Great Park Neighborhoods community. During the second quarter, builders in this community sold 112 homes versus 233 homes in Q1 of 2025. We currently have 13 actively selling programs in the Great Park, roughly half of which we expect will be sold out by the end of 2025. Ten additional programs are anticipated to start sales later this year. I also previously reported the completion of bidding and contracting for a group of nine new residential programs at the Great Park, totaling 572 homesites, which are being sold to six builders. We still anticipate that these land sales will close either late third quarter or early fourth quarter of this year. We'll have more to report on these sales next quarter. I've also previously reported that the city of Irvine completed its state-mandated regional housing needs assessment, general plan, and zoning updates for the Great Park planning area, which will provide the Great Park Venture with the opportunity to convert some or substantial portions of its remaining commercial land holdings to residential uses. We continue to work with the city to expand our residential opportunities on our remaining land consistent with the Arena program adopted by the city. Now let me discuss Valencia, our other active community. As a reminder, Valencia is in the early stages of its development and still has many future phases of land delivery ahead of it, which will enable us to provide much-needed housing in the Los Angeles market. During the second quarter, our guest builders sold 49 new homes or 69 in quarter one. We currently have six active selling programs in Valencia with one of those expected to sell out before year-end. Additionally, we anticipate another four programs will open during the last half of 2025, providing a greater diversity of home offerings for prospective homebuyers. We're continuing to work with builders on the potential sale of two new communities. As I previously discussed, we also continue to work with Los Angeles County and other agencies on our regulatory approvals for future development areas in Valencia that will allow us to deliver thousands of additional homesites in the county's severely undersupplied market. In total, these developments are expected to consist of approximately 8,900 market-rate homesites and 183 net acres of commercial land, approximately 139 of which is expected to cater towards industrial-focused uses. Turning to San Francisco, we are currently working on our engineering for the next phase of infrastructure with the expectation of starting construction early next year. As we work on these plans, we continue to explore opportunities to bring in a strategic partner or other capital sources for this mixed-use Bayfront community. So let me now move to the Hearthstone acquisition. As we recently announced, Five Point entered into an agreement to acquire a controlling interest in a newly formed entity that will include substantially all the business and operations of Hearthstone, a provider of capital solutions to the U.S. homebuilding industry, a move that represents a meaningful step forward in our long-term growth strategy. We believe that this acquisition provides Five Point with a number of benefits and opportunities. First, it provides us with a platform to offer broader capital solutions for the many homebuilders that are already Five Point customers as they continue to adopt land-light strategies. We believe this will help fortify the already strong relationship with these customers and will add new ones. Second, this acquisition enhances Five Point's evolution into a capital allocator and manager of institutional capital through joint venture structures, which complements our deep land development expertise. Third, with a proven national platform, Hearthstone allows us to immediately expand our geographic reach, client relationships, and capabilities. Fourth and most importantly, it introduces recurring revenue streams while also connecting us to a broader network of institutional capital providers and builder clients. We're well on our way to obtaining all the necessary third-party consents, and we anticipate that the acquisition will close during the third quarter. Let me conclude by saying that while homebuilders are navigating the market uncertainty caused in part by reduced consumer confidence, our balance sheet and liquidity position allow us the flexibility to patiently optimize our land values while still working with our guest builders to ensure the prudent development of our master-planned communities. Fundamentally, land is still about location and scarcity. We have well-located land in extremely supply-constrained markets. Now let me turn it over to Mike, who will provide more information on the Hearthstone acquisition and will discuss Five Point's continued focus on additional growth opportunities.

Thanks, Dan. Let me briefly provide some additional information about our vision for the possibilities with a new Hearthstone venture as well as our continued efforts to pursue additional growth opportunities. As Dan mentioned, this represents a targeted acquisition for Five Point and is the realization of our efforts to better serve the land-light strategy that a number of publicly traded homebuilders have gravitated towards in recent years. 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. For those of you who may not be familiar with Hearthstone, they are a market leader in providing these off-balance sheet capital solutions to U.S. homebuilders with current assets under management of approximately $2.6 billion. Hearthstone started its lot option program back in 1996, and we believe they are the only lot option investor operating today that has been through multiple business cycles, including the great financial crisis. Over time, the land banking space has become increasingly important as homebuilders have strategically sought to avoid holding land on their balance sheets and have come to rely upon land banking and capital partnerships to secure homesites. Hearthstone's model is perfectly aligned with this shift, and a proven platform provides Five Point with immediate scale and credibility in this space. Hearthstone's disciplined underwriting and our focus on risk-managed and capital deployment align with Five Point's commitment to delivering strong long-term returns for shareholders. Hearthstone's experienced team, combined with Five Point's public company infrastructure and development capabilities will allow us to grow the new venture efficiently and responsibly. For Five Point, this venture helps our transition into an asset-light structure, where almost all of the capital for the lot option investments will be provided by third-party capital sources through a joint venture arrangement. Hearthstone serves as the operator in these joint ventures and earns asset management fees that are payable monthly and additional performance-based fees when certain financial hurdles are met, while typically only having to contribute 1% of the venture's equity needs. Beyond the immediate financial benefits, we believe that Hearthstone's relationships with capital providers and builders across the country will complement Five Point's existing relationships and will unlock additional strategic growth opportunities for Five Point. As part of that growth, we see a major opportunity in the midterm land market, a segment currently underserved by traditional capital providers. We have already had conversations with capital providers and builders who have expressed an interest in discussing joint ventures or acquisition opportunities for land that does not fit in the shorter-term land banking model. These are the types of assets that fit into the core of what we do as a land development company. In sum, this is not just an acquisition. It's a strategic move that reinforces our position in the evolving housing ecosystem and positions us for long-term sustainable growth. Now let me turn it over to Kim to report on our financial results for the quarter.

Thank you, Mike. As Dan and Mike have shared, we are very excited about the progress Five Point is making and executing on our strategic priorities, including the Hearthstone transaction and the potential it provides to drive revenue growth for the company. I'm now going to review our second quarter financial results and some information about our expectations for the Hearthstone venture. Then I will conclude by updating the guidance of what we are expecting in 2025. In the second quarter, we recognized $8.6 million of net income, bringing us to $69.2 million for the six months ended June 30. The quarter's net income is made up of the following two components: We recognized $17.1 million of equity and earnings from our unconsolidated entities, $16.7 million of which came from the Great Park Venture. The equity and earnings from the Great Park Venture was attributable to net income of $48.4 million, which resulted from land sales revenue of $63.6 million and a 75% gross margin. The venture also had $8.6 million of price participation and profit participation revenue in the aggregate as the venture enjoys revenue streams that come from these different types of land sale structures. Five Point added $7 million of management services revenue, $30.6 million of which is associated with incentive compensation from the Great Park Venture. Our second quarter SG&A was $15.6 million. And finally, we recognized $1.3 million of tax expense. Now let me provide a little detail about our liquidity and cash. As Dan mentioned, we ended the quarter with $456.6 million of cash as well as $125 million of availability on our revolving credit facility, resulting in total liquidity of $581.6 million. At the end of the quarter, our debt to total capitalization was 19.1%, and our net debt was $68.4 million. During the quarter, our cash went down by $71.7 million. This was largely attributable to $32 million of development costs at Valencia and interest on our senior notes of $27.5 million. While we had a sale at the Great Park Venture, the venture did not make a distribution this quarter and had a cash balance of $168.2 million at quarter end. While Dan and Mike have shared a great deal about the Hearthstone transaction and the transformative nature of this acquisition, I thought I would give some limited information about the expected financial implications to Five Point. First, I want to emphasize that we haven't completed our accounting analysis for the transaction. So what I share is subject to the completion of that analysis after we close the transaction. Since Five Point will own 75% of the common units in the Hearthstone venture and will control the executive committee that manages the business and affairs of the venture, we will be expecting to consolidate the activities of the Hearthstone venture in our financial statements. These activities include asset management and co-investment with the managed capital that is raised. As Mike mentioned, the venture generally expects to invest 1% of the required capital alongside the capital that is raised to finance the lot option fund joint venture structures that it is managing. Please note that these fund structures are not expected to consolidate with Five Point. Some of those fund structures currently use limited amounts of borrowed capital to augment the equity capital. That indebtedness is not expected to be consolidated on Five Point's balance sheet. As I mentioned, this treatment is all subject to our final accounting analysis. Now if you reviewed our 8-K announcing the transaction, you may have noted that in addition to the $56.3 million acquisition price, Five Point expects to contribute an additional $37.5 million over time in order to fund the co-investment as the assets under management grow, which, as I mentioned, is generally 1% of invested capital. Depending upon the amount of leverage that is utilized in the new funds, this would suggest that we can grow the assets under management from the current $2.6 billion to $7 billion or $8 billion. We believe that this growth can occur over the next two to three years and that we can achieve that growth without materially increasing the personnel required to service those funds. The Hearthstone joint venture is expected to be profitable this year. However, we do not expect it to materially contribute to our results for 2025, but expect a larger contribution in 2026 and I will be giving more guidance in that regard at year-end. I'd like to now update our guidance for the balance of 2025. We currently believe that we will end the year with net income consistent with last year's net income of $177.6 million. This change largely reflects the possibility that certain land sales might close in 2026 rather than 2025. As we mentioned last quarter, we continue to monitor the debt markets and remain ready to consummate a refinance transaction for our senior notes, including a paydown of some amount of principal when we determine it is prudent to do so. With that, let me turn it back to the operator, who will now open it up for questions.

Our first question comes from Alan Ratner with Zelman & Associates.

Congratulations on the Hearthstone deal; it's an exciting growth opportunity for the company. I know you'll provide more details for 2026 in a few months, but I'm curious about the economics. Should we consider that business as a percentage of assets under management minus some form of personnel expense? Is that the correct way to approach long-term modeling for it?

Yes. Yes, Alan. That's the way you should look at that.

Okay. Great. And then just in terms of the business itself, there's been quite a few new entrants into the land banking space over the last year or two, and we've seen generally kind of terms and structures getting more competitive in that space, I'm thinking specifically with Millrose and smaller deposits and kind of smaller interest carry compared to what we've heard was kind of ongoing previously in the private arena. Have you given any contemplation to kind of products or new terms or financing vehicles that you're going to be offering the public community to get that assets under management up to $7 billion or $8 billion over the next few years?

Thank you for your question, Alan. It's a very good one. You're correct that there is a lot of activity in this area right now. However, what we observe is that demand significantly exceeds the current supply. Therefore, we don't need to make any changes to what Hearthstone is currently doing. By collaborating with them, we hope to expand their capital base, and there is substantial need in the homebuilding sector. We believe there is no need for any adjustments. Hearthstone has a solid platform and business model, and we plan to remain consistent with that.

Great. I appreciate that, Dan. So pivoting to, I guess, the core business, if you will, just on the land side. We've been hearing from a lot of public builders the last few days about their business. It seems like everybody is pulling back starts, they're pulling back land spend. Your projects are unique in that they're obviously very desirable in both good and bad markets. But a lot of management teams are talking about the possibility of achieving lower land prices from sellers and just getting some capitulation on that front. I'm curious, when you think about the guidance for the land sale later this year, I know you kind of mentioned the reduction is more, I think, a timing thing, maybe some of those deals get pushed out to '26. But are you contemplating the possibility of potentially lower pricing in either Great Park or Valencia either on a per lot basis or per acre basis compared to what you've achieved more recently given what we're hearing from the builders recently?

Alan, I've been reading the same information you have, but California has unique supply constraints that make it difficult to replace land. We will collaborate with our builder partners when they reach out, but we believe it's best to let the market settle down for now while we continue to advance our land plans. At this time, we anticipate that the market uncertainty will need a bit more time to play out. Therefore, our focus right now is on working with our existing builders and ensuring our land sales progress.

Got it. That's helpful, Dan. And then final one for me on the land development cost side. When you think about Valencia and the development work out ahead of you there and then hopefully, eventually San Francisco gets up and running. We've also heard a lot about the potential for driving land development costs lower kind of given everything that's going on in the market. And I know your Chairman, who's on the line, has talked a lot about potentially utilizing AI as a tool to also leverage that part of the business. So I'm curious if that longer term, you're kind of optimistic that, that might filter through to Five Point's business, specifically in the two projects that have a lot of development work out ahead of them.

I think, Alan, the broad answer to that is that as that technology progresses, we're hoping it really helps us manage our land development work better, analyze it better. Ultimately, still, we're going to be in a very kind of physical, moving dirt is not going to change. But hopefully, we can move it smarter and more efficiently. And I think there are some technologies that people are working on that can help us there. But for this point, we haven't changed any of our budgeting or our thoughts around that as we think about our future development. But we are hopeful that it can make us more efficient in moving the dirt.

Our next question is from David Lundgren, a private investor.

I had a question about using your cash. I don't know if you consider using some of the cash to buy back shares.

David, yes, thanks for asking. A number of people are interested in that question. Currently, under our senior note indenture, we are not able to do that. So that's part of what we're looking at as we look to perhaps refinance those notes.

Okay. The issue that often goes unaddressed in these calls is the stock price being significantly lower than book value. As a long-time shareholder, I'm curious if you plan to address this or investigate why the market isn't valuing the company appropriately. I believe one reason for the lower valuation is your complex corporate structure, which has become even more confusing with the recent acquisition of 75% of Hearthstone. This adds another complicated layer, and I feel that this transaction does not simplify the corporate structure. Perhaps if you could streamline it, it could positively impact the share price. As a long-term shareholder, I'm wondering if the fact that the stock price is below its true value is a concern for you.

David, I appreciate that question. First of all, I want to answer directly about Hearthstone. Hearthstone, since it will consolidate, will not add to any complication, if you will; we'll own 75%, but we'll report 100%. But as it relates overall to the concern about the difference between the book value and the fair market value of the stock at this time, I appreciate the difficult structure that exists, but there are advantages to it on the tax side and other elements that are very important to the company. Additionally, I think at another time, we might go through kind of the elements that are associated with the stock going down in value, but we see it rising and continuing to rise over the next several years.

I think you guys are executing really well. I'm just always wondering why the stock price doesn't reflect that.

Our next question is from Ben Fader-Rattner with Nexus Capital.

I just wanted to clarify something that you said. You said that there would be some debt paydown when you eventually refi the bonds. I think previously, you talked about $100 million to $200 million of debt paydown. Is that still the right number?

Ben, this is Kim. Thank you. That will be determined at the time when we enter into the transaction. I don't know what it will be at that time. Given that the market is changing daily, it's important for us to assess our needs and everything as that day comes.

There are no further questions at this time. I'd like to hand the floor back over to Dan Hedigan for any closing comments.

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

This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.