Thank you for standing by, and welcome to Howard Hughes' first quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Joe Valene, General Counsel. Please go ahead.

Good morning and welcome to the Howard Hughes Holdings First Quarter 2026 Earnings Call. With me today are Bill Ackman, Executive Chairman, Ryan Israel, Chief Investment Officer, David O'Reilly, Chief Executive Officer, Carlos Olea, Chief Financial Officer, Jill Chapman, who leads Investor Relations at Pershing Square, and Mark Granderson, who joined the Howard Hughes Board just yesterday. Before we begin, I would like to direct you to our website, www.howardhughes.com, where you can download both our first quarter earnings press release and our supplemental package. The earnings release and supplemental package include reconciliations of non-GAAP financial measures that will be discussed today in relation to their most directly comparable GAAP financial measures. Certain statements made today that are not in the present tense or that discuss the company's expectations are forward-looking statements within the meaning of the federal securities laws. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved. Please see the forward-looking statement disclaimer in our first quarter earnings press release and the risk factors in our SEC filings for factors that could cause material differences between forward-looking statements and actual results. We are not under any duty to update forward-looking statements unless required by law. I will now turn the call over to our executive chairman, Bill Ackman.

Thank you, Joe. So those of you on the call probably have seen a presentation we put out providing some perspectives on how we think about Howard Hughes from a valuation perspective. The company is going through a transition in terms of its business model, and we think there's been a pretty meaningful transition, or at least the beginning of a transition in our shareholder base. We thought this was a good time for us to kind of share how we think about the company and to provide some, I would say, better metrics to think about valuation going forward. So our plan for the calls, we're going to start with David O'Reilly giving kind of a comprehensive but brief update on the quarter. I'll just talk a bit about, you know, kind of KPIs. Ryan will speak briefly about valuation. We'll introduce Mark to the group, and then we'll leave the substantial majority of the time for Q&A. So why don't we start with David?

go ahead david thank you bill um good morning everyone i'm going to start with the first half of the presentation and as you probably saw it's organized into two parts uh the first part it really focuses on the first quarter results of howard use communities real estate business using the slides from the supplemental i'm going to be covering the four key performance areas of our communities master plan communities operating assets condominiums and then other expenses along with our debt and liquidity position as you saw we're introducing several new KPIs this quarter, and we believe these better reflect how we manage the business and how long-term value accrues within each segment. I'll reference those as I cover the results. Then we'll turn to the second half of the presentation, where, as Bill mentioned, he and Ryan will do a deeper dive in what those new metrics reveal about our current valuation and the long-term growth of this platform. The goal is always to give investors a more complete picture of where Howard Hughes is is headed, and why we believe the stock represents a compelling opportunity. I'm also sure you notice that our earnings release no longer includes annual guidance. Given the pending acquisition advantage, we've elected to remove annual guidance expectations and will instead shift our focus to longer-term objectives by platform, consistent with how we allocate capital and measure success internally. With that said, the first quarter results I'm about to review, and specifically our land sales and MPC-EBT were ahead of our expectations. And if not for the transaction, we would have increased MPC-EBT guidance for the year. With that, let's talk about the first quarter performance, starting on slide four with the company highlights. It was a strong start to 2026. The real estate engine did exactly what we needed to do. It grew cash, it provided pricing power and it converted more land into long duration income. We saw strong MPC earnings growth, continued leasing momentum across the operating assets, and the company ended the quarter with substantial liquidity. On five, as part of this new supplemental, we're providing a simpler roadmap to show how performance of our communities connects to the overall valuation of this platform. We'll be focusing on the following four key areas that we'll step through in turn, master plan community ZBT, and margin affected residual land value, operating asset adjusted maintenance-free cash flow, condo gross profit, and other expenses, which includes G&A and end interest expense. So let's start on slide six with the MPCs. Earnings before taxes was $84 million in the first quarter, up 33% year-over-year, driven by higher residential land sales. In Bridgeland, we closed 62 acres at an average price of $688,000 per acre. That compares to 37 acres and $605,000 per acre last year, with net new home sales in Bridgeland up 12%. In Summerlin, custom lots averaged $7.2 million per acre, and super pads averaged $1.8 million per acre, and new home sales in Summerlin were up 6%. The point, it's not just that volumes were higher. The point is that we're converting scarce, entitled, developer-ready land into cash at an increasingly attractive price in markets where we effectively control supply. We're not selling land. We're harvesting scarcity. As our communities mature, price becomes a primary driver of MPC value, which means we can generate more cash from fewer acres while protecting the long-term economics of the land bank. Shifting to operating assets on slide seven, our operating asset NOI grew 2% year-over-year and 7% on a trailing 12-month same-store basis. Within the portfolio, multifamily and office were the primary drivers of same-store growth, supported by continuing leasing activity and the burn-off of rent abatements. More important than the quarterly print is what this segment represents for the holding company we're building. Operating assets are the steady cash flow engine. As we move land into vertical development and lease up, we convert one-time MPC proceeds into a growing, recurring base of NOI, diversified by asset type, tenant, and market. This quarter, we're also introducing adjusted maintenance-free cash flow because we believe this metric gives a cleaner read on the recurring property level cash flow that is actually available to redeploy. Turning to condos on slide 8, at Ward Village we completed Ulana and broke ground on Lanoue, which is already 70% pre-sold. Across the platform we have approximately $5 billion of estimated future GAAP revenue at sell-out. Condo gross profit was roughly break-even in the first quarter, as expected, and will increase meaningfully in the second quarter with Park Ward Village closings. Condo profit is always going to be recognized in large blocks when towers deliver, so the quarterly pattern is going to remain lumpy, even though the underlying economics are largely locked in through pre-sales. These projects are largely de-risked well in advance of gap recognition. We typically pre-sell the majority of the units, fund construction with buyer deposits and non-recourse construction loans, and lock in our margins years before delivery. Estimated future condo gross profit, the total projected gross profit from condo towers under construction or in active pre-development, the vast majority of which are already pre-sold, highlights the embedded condo cash flow well ahead of when it appears on the income statement. I want to spend a minute because I think the capital mechanics here are worth walking through. They make these economics of condo development unusually compelling. Our primary contribution to these projects is land, along with a modest amount of cash. We contribute that land, and that modest cash is our equity. From there, buyer deposits are collected at signing, often years before towers deliver, and they fund a meaningful portion of construction costs. Non-recourse construction financing covers a majority of the remaining required capital. The result is that we're delivering towers worth hundreds of millions of dollars, with very little of our own cash actually at risk. When units close, buyers pay the full purchase price, we've repaid the construction loan, and the profit flows to us. It's a model where our buyers and lenders are essentially financing the construction, and we collect the upside at the end. That's what we mean when we say condos are a self-financing capital recycling tool. And it's why this business generates returns that are difficult to replicate. Beyond condos, projects like One Riva Row, One Bridgling Green, and others in our pipeline follow that same land-to-income pattern. Convert entitled land into durable NOI, grow the recurring cash engine, and raise the long-term earnings power of the platform. On slide nine, we'll turn to other expenses. G&A expense was $25.8 million in the quarter, including $3.8 million of purging fees and $3.4 million of vantage-related transaction costs. And net interest expense declined year over year due primarily to the amount of interest income we've received from our invested cash balances during the quarter and on a trailing 12-month basis. On slide 10, I'll turn to the balance sheet, and wrap up. We completed a $1 billion refinancing at the tightest credit spreads in the company's history during the first quarter. Importantly, this execution occurred after announcing the Vantage acquisition, which we view as a strong external validation of both our balance sheet and our strategy. The transaction extended our maturities and added $230 million of incremental liquidity. We also closed on a $300 million mortgage at downtown Summerlin. At the end of the quarter, we finished with $1.8 billion of cash, comprised of $907 million at the HHH level and $929 million at the HHC level, and significant additional liquidity. That position, combined with the Pershing Preferred Commitment, fully funds advantage acquisition and supports our current development pipeline, while continuing to preserve our flexibility for future capital allocation decisions. So the overall takeaway for the quarter, I think it's the real estate foundation of Howard Hughes is doing its job. It's generating strong cash flow, demonstrating pricing power in our MPCs and expanding our base of recurring NOI and recycling capital in a way that supports our evolution into a multi-engine holding company. The first quarter performance primarily reflects the resilient demand in our communities that lead to bottom line results. MPC earnings will continue to be lumpy quarter to quarter depending on when large parcels close, but what matters for us and what I encourage you to focus on is the multi-year growth and recurring cash flow and the value embedded in the land and condo pipeline rather than the precise results of any given quarter. The new metrics Bill and Ryan are going to walk through in a minute are designed with exactly that in mind to make it easier to connect reported results to intrinsic value. And with that, I'll

turn it over to Bill. Thanks, David. So what we've, what we're doing here, maybe just to back up for a second, I think historically the company has tried to create kind of a quarterly number that shareholders could annualize and maybe put a multiple on. You know, the vast majority of companies are valued that way. You know, analysts estimate earnings, the market assigns a multiple based on, you know, the inherent growth and predictability of that earning stream, and that helps people come to a value. The problem with that metric is it doesn't really work for Howard Hughes. We really have three different segments, perhaps one of them, the operating asset segment, you could certainly value out of multiple of a metric. But the other two are a bit unusual. So our MPC business is really a business of owning land. And the goal of these communities is to make them really attractive places to live. And we've developed assets to meet that demand in our operating asset segment. And over time, what that's done is brought more residents into the communities, increases the demand for land. That's led to, you know, continuous, well in excess of inflation increases in the value of our land portfolio. But putting a multiple on the profit, the gap profit from a portion of the land sale for a quarter is not a particularly helpful metric. What really matters is, well, how much cash do we generate from our land sales during the quarter? And what's the value of our remaining land? And so our new metric is going to focus on those two levels. What's interesting about these communities is every acre of land we know for a certainty we're going to sell. We don't know precisely which quarter we're going to sell it in. And so what matters to you is what do we generate during the quarter? What price do we achieve? And what's the value of the remaining land that we own. So that will play into the metrics we're talking about. With respect to operating asset NOI as a metric, well, net operating income is a metric that's used by really every real estate company. At the end of the day, what we focus on is the cash that's generated from this portfolio. So you start with NOI, but you've got to take off their costs associated with maintaining those assets, with putting tenants in those assets, and we want to reflect those costs, we get to a cash flow metric. Our condominium business. So we don't have an infinite supply of land in Honolulu. We've got a finite supply of land. We have an amazing team, and that team is actually a valuable asset of the company that we're not today assigning value to. We do think over time we'll have more opportunities to access more land and continue that business. But today, for the purpose of we want these metrics to be simple to understand and also conservative. And so what we're saying is, look, we've got a finite amount of land today, and the basis of that finite amount of land, we intend to build a certain number of condominiums, we estimate a gross profit, and that's how we get, and we present value that today to kind of keep track of the remaining value of that portfolio. So if we go to page 13 on the new metrics, so what we're going to give you is kind of the residual value of our remaining acreage, undiscounted and uninflated. What we mean to say is we sell, you know, lots for $1,800,000 or acres for $1,800,000 in Summerlin. We're going to use that to value the remaining residential land portfolio at the end of the quarter. Now, that I believe is a conservative metric because land values have compounded at rates well in excess of the cost of capital that you should discount them at at Howard Hughes. And let me just make my case for that for a second. We've Compounded land values in the teens in Summerlin, correct? So let's pick a number.

It's been what over the last five years? Fifteen percent? Five years, it's been just under 15% in Summerlin, and it's been 68% Woodland Hills in Bridgeland.

So in Summerlin, which is a further built-out community, you've got land that's appreciated at 15% per annum. Again, because it's a certainty we will sell this land because these are fully developed communities, the discount rate I would use there would be relatively modest spread over treasuries. So using today's value for the land is one that I think is a very conservative measure of remaining land. If the land continues to appreciate at these kind of levels and you discount them back at lower levels, the land values are even greater than what we're showing. Operating asset, adjusted maintenance, free cash flow, what are we doing here? We're starting with NOI, and we're getting to an actual free money we can spend metric after all the costs associated with owning these assets. And then we project the profits from our remaining condominium deliveries. You know, it's pretty straightforward to do this because, you know, for example, for units that we have under contract, we know exactly what price we're selling for. We generally have GMP contracts. We lock in, for the most part, the cost to build them, and then it's a present value calculation. With that, let me just – we're not going to take you through every page of the deck because we want to leave a lot of time for answering questions. Ryan's just going to just focus on some summary evaluation pages. We'll start with today's value and how we get to what's possible over the next five years. Sure, thank you. So what we wanted

to do, as Bill mentioned, in the pages that we've provided that we won't walk through all the detail on this call, is we wanted to show you how using the metrics that we believe are the right way to think about long-term value when we make our own internal valuation, as well as tracking our progress over time, I'll just highlight on page 27 kind of the takeaway. We believe today using those metrics, and as Bill mentioned, conservatively trying to come up with a value for HHH, we think that the intrinsic value of the business based on those metrics is about $104 a share, which is more than 60% higher than the roughly $65 share price today. And when you look at that in detail, nearly 80% of that is coming from the Howard Hughes Community's real estate business, and about 20% of that is coming from the economic ownership percentage that Howard Hughes will have advantage, which we are on track to close very shortly. So we believe that the shares are very undervalued relative to our estimate today. But if you go to page 42, what you'll see is really our benchmark for how we believe we can grow the intrinsic value of Howard Hughes over the next five years. And we actually think that we have the ability, and that's one of the reasons we're so excited to have Mark come join us, is he'll be very helpful as we achieve these metrics to grow the intrinsic value of the business to roughly more than $200 a share. We have about 211 that we've derived conservatively for our valuation in 2030, which is about 3.3 times the current share price, 65 or 233% increase. And what's interesting about that metric is today, nearly 80% of the value of Howard Hughes coming from the real estate business. But we actually think over the next five years, we're going to have much more of the value coming from Vantage, other insurance and some of the high durable growth companies we seek to acquire. So that ratio will shift to about two-thirds coming from things that are not related to real estate. And the way that we get there at a very high level is that we will be looking at the Howard Hughes community's real estate business, and we will be using a lot of the excess cash that we do not think is needed for reinvestment to the communities that could be allocated higher returns in other parts of the business, particularly the insurance. We have about $2.5 to $3 billion of cash that we're expecting, will be able to generate over the next five years, which could be somewhere in the order of 65 to 80 percent of the current market cap of the company. And we believe the insurance business, particularly having Mark's help, will be a very valuable place to put that. With Vantage, which we're very excited about, given the business and given the team that's there, we believe we can improve the returns on equity from something in the kind of low to mid-teens to something that could be in the high teens or even better. If we can do that, we can allocate a significant portion of that $2.5 to $3 billion of free cash flow over the next five years to build up the capital base. And as the returns on equity advantage improve, the multiple that the market and we would assign advantage for being a higher return on equity business should also increase. As a reminder, we're buying this business a headline purchase price of 1.5 times book value, but we believe by the time we close, given the accretion of the book value, it'll be about 1.4. But we think we can increase the intrinsic value of this business as something that's worth north of two times over the next five years. And so that's going to be a significant reason why the value advantage will be growing so quickly over the next five years and will really help become the driving force of the increase in the intrinsic value of how it refuses equity over time and make Vantage really the leading assets that will have an insurance, a key focus of that business.

Thank you, Ryan. So I thought to introduce Mark Grandison, and he'll be available, obviously to answer questions. So we actually began a conversation with Mark well more than actually a couple of years ago in connection with an investment that Arch made in the Pershing Square management company. So we got to know Mark a bit there. Then we learned of his departure when we read about it in the press when Mark stepped down from being CEO of Arch Capital Group. And in light of our plans for Howard Hughes, a year ago, we started at least a conversation with Mark. He was still otherwise encumbered at the time, and he was trying to decide what he wanted to do with his life and thinking about all kinds of different things. We kind of kept the conversation going. We took a very significant step in signing an agreement to acquire Vantage, and we kept talking to Mark. And, you know, our thoughts here are, well, you know, Brian and I, other members of the Pershing Square team have, you know, analyzed insurance companies from a perspective of an investor, neither one of us has any operating experience in the insurance industry. And it's an industry where you can make a lot of money, and it's an industry where you can lose a lot of money if you don't know what you're doing. And while we're buying a company with a very capable team, I think it's as important that at a board level, we have one or more directors who really understand the industry. And Mark was by far our number one choice. There really wasn't a close second in terms of, without embarrassing him, really the iconic executive of the last, you know, I would say a couple decades, spent almost 25 years at Arch building one of the most profitable, most successful insurance platforms. And we just thought that experience was incredibly relevant. And we We're delighted to bring Mark to Howard Hughes. So maybe, Mark, you can just give a little background, because not everyone knows who you are, and then we'll open it up for questions for the group. Well, thanks, Bill, for all the wonderful comments.

I feel very honored and privileged to be part of that group. I'm very happy that we got to this landing, and really looking forward to help the whole team, really develop your vision, your collective vision of having a diversified platform with insurance being an anchor. I think, like you, I firmly believe if you do it well, you can really lead to wonderful results. And I also like the fact that you are collectively wanting to wait for it. There's a timing issue going along, and it's not a quick hit, and it's really, if we deliberately build it the right way, this could be a formidable, and it will be a formidable business. I've been 35 years in the business. I was most recently a CGL CEO. I was one of the founding members back in 2001 after the terrible events of 9-11 with a very similar vision that you would hear me talk about all the time, which is about underwriting excellence, focusing on the cycle, focusing on allocating capital to the right places where it gives good returns, and really surrounding yourself with a good team, good, talented individuals, and focusing on underwriting expertise. The difference between a top quartile performer in insurance and the bottom quartile is 20%, 30% difference, meaning the ones at the bottom are actually losing and actually going by the wayside. And we've seen many of them, Bill just alluded to that. I'm excited to join because I like the vision, like I said. I'm here to help the board understand the business, demystify some of the things. I know it's not as easy to understand from the outside world. It could be opaque. Most, you know, a lot of the investors and shareholders of a hardware user have little to know, perhaps, you know, expertise or exposure to insurance, and I'm going to make sure or we're trying to make sure collectively that we're bringing you along into that journey all together. What else I'm going to bring to the table, I'm looking forward to work with everyone here, obviously, and also with Greg and his team. I've known Greg for 25 years. We were, you know, neighbors in Bermuda. So he's a great executive. And the platform they built at the right time, right after the market turned in 2019, beautiful timing, hardly any legacy. It was highlighted in the package before. And it's really hard to create that kind of platform. And they did a very, very good job. It's both insurance and reinsurance. So it allows us to, the company, to really participate across the board in as many opportunities as possible. And, again, being selective on the underwriting. So I'm very looking forward to help demystify, help, you know, teach the board and the investors. And it's going to be a long-term play for everyone here. And I've seen it before. And I think the playbook is there. It's worked. I've seen it work. And I think, you know, we have all the elements to make it, you know, one of the best, you know, emerging and surging, you know, insurance platform alongside with the real estate platform. and whatever else Bill and Ryan will find along the way to create something very unique and once-in-a-lifetime. So I'm very excited to be here. So thanks for having me here, Bill.

Thank you, Mark. So with that, Operator, why don't we open it for questions?

As a reminder, to ask a question, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Anthony Paolone of J.P. Morgan. Your line is open, Anthony.

Great. Thanks. Good morning. My first question, maybe for Bill, just help me understand. I'm not that close to all the different things happening at Pershing Square and the specifics around that. So can you maybe just talk to whether anything on the capital-raising side there has any direct implications back to HHH, whether mechanically you've got to buy shares or whether there's a greater commitment or just anything we should think about there related to HHH from the activities of Pershing Square?

Sure. So last week, we did two listing transactions, an IPO of an entity called Pershing Square USA, which is a U.S.-listed closed-end investment company listed on New York Stock Exchange. And we also did a direct listing, in effect, of the management company that some people might call the GP of Pershing Square, the entity that receives fees from various funds that we manage. As part of the IPO pitch for Pershing Square, Inc., we pointed out that it's a bit of an unusual alternative asset management company. I think analogies would be Blackstone or KKR or others in that, one, we're small relative to others in terms of scale, but the capital base is very unusual in that 98% of our assets are in, so to speak, permanent capital vehicles. The three examples we gave are London-listed entity, an entity called Pershing Square Holdings, Persians Square USA, which is this new entity we launched. And then Howard Hughes, we put in the same camp. It's not an investment company per se. It's an operating company, a C-Corp. But it's a very important, I would say, leg to a three-legged stool. So I would say the significance of that transaction is we actually can't buy more stock in Howard Hughes. We're contractually, our agreement with the board is to stop at 47%. But I would say, you know, the importance of Howard Hughes to the Pershing Square platform was, you know, something we emphasized to a great degree as part of the IPO transaction. And, you know, this is, we describe Pershing Square, you know, this is a permanent holding. We intend to be a forever owner of Howard Hughes. And our goal is to build a valuable, you know, diversified holding company led by this insurance platform over the next, you know, many decades. That's the idea.

Okay. Thanks for that. And then my second question is, you show just the demonstration of value and how much insurance plays a role in that. So my question is, with it being such a big driver, why continue to hold things like multifamily or some of the other assets in real estate? And should we see that kind of move over to potentially add more to the insurance side over time?

Sure. So the answer is, like, if you look at Howard Hughes over the last 15 years, we were a dedicated real estate company. And basically every dollar of cash we generated, we reinvested in real estate. You know, for example, we bought another MPC as a result of, you know, having excess cash that we actually couldn't deploy in our existing sort of MPCs. What the transaction accomplished a year ago to kind of widen the aperture of things that we could do, you know, I think what we've learned over time is a dedicated pure play real estate development MPC business is not one that the market assigns a high value to. Or another way to think about it, the market assigns a very high discount rate to those kinds of cash flows. All of that being said, as demonstrated by our expectations of $2.5 billion, $3 billion of cash that we're going to generate from that business over the next five years, it's a meaningful cash flow generator. So I think the pivot we're making is we're going to reinvest every dollar of excess cash into things other than real estate. But our definition of excess cash is not just free cash flow. What I mean to say is we intend to continue to build out – the golden goose here for the real estate company is that we want the woodlands, we want Summerlin, And we want these communities to continue to be amazing, you know, ranked in the top, you know, handful of places to live in America. And in order to do that, we're going to be building apartments when we need more apartment buildings. We're going to be building office buildings. We need more office buildings. But there are some number of assets that may be non-core that are not critical for us to own that we're going to look at and examine and say, does it make sense for us to own this asset forever because it's critically important to our market share in the woodlands and office space? Or is it a tertiary asset that a buyer will pay a much higher price for than our cost of capital would allow? And so that's an examination that we're going to do over time. But the nature of the Howard Hughes real estate business is it's sort of self-liquidating, in a manner of speaking, in that obviously we have a finite amount of land that over the next whatever number of decades we're going to sell. We have a finite amount of condominium development land, and we're going to build out those units and we're going to generate a bunch of cash. We have cash flows that come from our operating asset portfolio that we expect those cash flows to grow on a same-store basis. We expect them to grow because we're going to continue to develop, you know, whatever the communities need to make them really attractive places. But I would say on the margin, you know, if it doesn't, if it's not critical and core, it becomes something that some stabilized asset or better owned by someone else will sell it. That's helpful. Next question.

Thank you. Our next question comes from the line of Alexander Goldfarb of Piper Sandler. Your line is open, Alexander.

Hey, morning, Bill and David, and welcome, Boardmark. Not sure if we're limited to just two questions or not, if we are fine. But just first, I want to say, love the new disclosure, much more streamlined, much more to the point, and I think much easier, having covered this company for a long time, much easier to comprehend. So thank you. Bill, on the Vantage deal, is there anything that could delay a second quarter closing? I didn't know if any regulations, paperwork, anything like that, or we're on track that this will close in the second quarter?

This will close in the second quarter. We have a scheduled date, a hearing date, which is the 19th of May with the Delaware regulator. Transactions typically can close within actually a couple weeks of that hearing date. So I think we'll beat our quarter end estimate absent something unexpected happening. But I don't expect the unexpected here.

Second question is, I think you said the value of the company currently, as you do your math, is $104 a share. Bill, you bought your stock into the company at 100 a share. Is that the delta versus what you guys previously disclosed of 118 a share for the company's value? I was a little surprised by the 104, but maybe it's just the math and the dilution. And also, I would assume you guys have better insight into the value of the company versus what we estimate from the outside.

Yeah, I think, number one, we're being conservative because the way we're looking at the true value of the company, you'd build a DCF on the MPC community, and you'd compound the land values over time, you'd discount them back at a discount rate that I believe would be lower than the way where you would appreciate them. What we're saying is let's come up with a simple metric that's hard to argue against. You know, we're also, the value of the commercial land, we're assuming a sale to a third party. Obviously, when you sell land to a third party, you're giving up the – they build in an opportunity for a development profit and everything else. If we develop that land ourselves, we get the benefit of that development property. So this is, I think, quite a conservative way to think about the value of the company. There are obviously some dilution associated with our $100 a share primary investment. Ryan, do you want anything else?

Yeah, the one thing I would say, Alex, we try to give a very conservative snapshot for the 104-figure. Another way to look at this, which is outside of the Howard Hughes context, when we value businesses at Pershing Square, we often think about what the business will produce over the next five years, and then we think about that as a value, and we might discount that future value back to today. So one thing you would note on page 42, we conservatively estimate $104, but we also then roll forward that we believe by 2030 the value will grow to $211, which is a 16% growth rate and intrinsic value over that period of time. Another way to think about that is focus on the 211, discount that back. I think we would argue that you should discount that back at a substantially lower rate than 16%, given the high-quality nature and the increasing predictability and high growth of the business. That's another way to think about value. If you were to do something like that using a more modest discount rate, you could get to numbers that are easily 25%, 30% higher than that $104 figure. So to Bill's point, there's a lot of different ways to look at this, but I think that 104 would be by far the most conservative way to look. but we just wanted to lay out a very simple explanation for people as to how they could start to think about kind of the most conservative value for building a Howard Hughes relative to the current share price.

Another way to say it is I think of 104 is basically like a liquidation value of a company. It's after tax, after all the various expenses associated, as opposed to almost like a going concern type value where the expectation would be we'd be building out all the commercial land, We'd be embedding a certain profit margin. We'd be assuming that we'd be selling land at higher prices in the future and discounting it back at a much lower discount rate. And those would all accrue to a higher value. But I think this is a very fair way to think about the company and provides kind of an easy, a relatively straightforward metric for us to judge the company every quarter. It makes everyone's life easier. And I think simplifying the way people think about the company, and particularly the real estate assets of the company, I think will go a long way to making this a more ownable stock by a broader array of investors. That's helpful. And then just the

final question for you. Obviously, data centers are a huge topic these days. You guys have a lot of land. I realize the value of Summerlin or the Houston portfolios may not make sense to add a data center to that. But when I think about West Phoenix, you have a huge amount of acreage and it would seem like that would be potential to have, you know, sort of co-located power generation, data center, et cetera. So Bill, as you look, or David, as you guys look at your land holdings and what is, you know, sellable for a residential versus potentially if there's a bid from a to-do data center or power plant, you know, combo, is that at all an option or the view is residential is still the highest and best use. And as far as maximizing the MPC, you want to stick with the formula that you have to date versus trying something new.

Yeah, I would say we have an extremely open mind with respect to West Phoenix. It's an amazing asset. It has all the attributes that you've talked about, access to power, access to water, in a very, I would say, pro-business, kind of favorable environment, and we have enormous scale. And we bring a lot of value to any one of those players. There are AI companies raising money at trillion-dollar valuations. In the context of that, you look at this very, very valuable land we own. It might be an interesting transaction to have someone not only where they want to build data centers or power, but there are some pretty aspirational people in the technology world that want to build cities, You know, and they want to build a community around the company, you know, that they're building. So and we would be, you know, one great outcome for us is we bring in a partner who writes a big check. And then we become there. We become an asset light, if you will, developer of whatever that community is. And we make it an ideal place to live in the way that the company has historically built communities like, for example, the Woodlands or Summerlin. We do the same in Phoenix, but the anchor is someone for whom having access to everything from nuclear power to these small nuclear reactors and all the interesting technology. And they do it with a blank sheet of paper. I think it's a pretty good opportunity. So that's something we're totally open to and something that could be transformational in terms of value creation for the company. We're valuing that asset at cost in this. We bought that asset, what, six years ago or so?

Just over three years ago.

Three years ago. Okay, times.

Three years ago.

But the world's changed, I would say. The world's moved at least six years in the last three years in terms of what that property can be used for.

Thank you.

Thank you, Bill. Okay, next question, please.

Once again, to ask a question, press star 11 on your telephone.

So feel free to come back for more if you have more questions.

Our next question comes from the line of John Kim of BMO Capital Markets. Please go ahead, John.

Thank you. I've had some technical issues, so apologies if you've already addressed this. But on the KPIs that you introduced as far as MPC residual value and the condo remaining profits, does that essentially incentivize you to maximize price going forward and not sell and, you know, in essence, not generate as much current cash flow?

A goal, I mean, maybe David can speak to our approach. We generally take an approach to optimize the combination of, I would say, volume and price and make sure that we're not stuffing, we don't want a bunch of home builders with excess land inventory. and we don't want to, you know, we want to manage the supply in a manner where we can continue to grow the per acre value of the asset. Actually, again, it's not critical to us whether we, you know, sell X dollars of land in any particular quarter. What matters to us is, you know, we're building these amazing communities and we're managing our scarce asset in a thoughtful way. But, David, maybe you want to speak to that.

I think, Bill, you summarized it perfectly, which is we're not selling assets to maximize any metric. we're selling assets to maximize the value of the company. And we do that by selling just enough land to home builders to keep up with underlying home sales. Sell them too much land and they're oversupplied and in a downturn they'll make a terrible decision that will negatively impact the rest of our dirt. Sell them too few and we're going to strangle affordability in our communities. So we are tracking underlying home sales in each of our communities daily, making sure that we're preparing the right amount of lots to keep up with those home sales to maintain equilibrium as best we can across our communities.

Yeah, so said it another way, simply because we're changing the KPI, that's really just to help the market better understand the company, understand our progress in creating intrinsic value, but it's really no impact on how we think about how we auction land each quarter.

Okay, that makes sense. I mean, the KPIs, I mean, that information was already there before, but you just want us to focus more on the remaining values of your land and kind of profits.

One of the concerns I had is that people were looking at the company and saying, I want to put a multiple on, you know, like a next 12-month estimate of, you know, MPC EBIT. And it's really just not the right way to think about an asset like land, which you're going to sell over time and where the land values are going to appreciate over time. And the right way to think about an asset like that is either on a present value basis or maybe the simplest way to think about it is, okay, how much do we sell during the quarter? How much cash do we take in? And what's the remaining land worth? It's a bit like, you know, we're a bit like we've got oil on the ground. And unlike oil on the ground, which is incredibly volatile, our oil gets more valuable over time as people move into the communities. But there's a finite amount of it, and we want to be smart about we're kind of like OPEC. We don't want to dump it on the market at any one time. We want to be thoughtful about how we extract it and how we convert it into cash over time. But we don't want you to put a multiple on the amount of drilling that happens in any one quarter because that's really just a function of kind of sometimes it can be a function of rates. Sometimes rates back up a bit and there may be a pause in sales. So one thing is certainty. People want to live in the woodlands. People want to live in Summerlin. They want to live in our communities, which means this land – and the land just gets more desirable over time. We're at a place in the woodlands now where there's really no more residential lots. It's only commercial acreage. We'll get there at some point in Summerlin as well, which means we're going to sell every acre of residential land over time in Summerlin. I can't tell you exactly what date, but I'm confident that the land we sell in future years is going to be worth a lot more than land we sell today. And that's why we're never in a rush to meet. We would certainly not want management thinking about, oh, I put out a guidance number and I want to make the number by, well, let's just discount the land a bit. We want people to be focused on the things that matter for growing the value of the company. So these metrics are as much for internal use as they are for external observation.

And when you talk about allocating more capital to Vantage rather than reinvesting back into the MPCs, besides selling stabilized assets that you mentioned before, what are some of those investments that you would have made that are now either being deferred or removed going forward in the MPC business?

You know, I don't know that we had already arrived at a place where we had excess cash flow expected to be generated from condo sales, from other parts of our business, but if we were a pure play real estate company, we would have tried to figure out other places to put that money in real estate related assets. What we're doing now is we're saying, look, now we have a really good place to put that You know, we think, you know, the driver of value in the slide that Ryan showed you is, you know, one, we think, you know, the nature of the insurance business, a profitable insurance operation with assets managed by us for no cost we think is a you know approaching 20 plus percent roe business those are returns very hard to achieve in a relatively low leverage kind of real estate company so one the returns are higher two the business that we're buying buying here for effectively 1.4 times book value becomes worth you know something comfortably north two times book value if we can achieve our objectives and so every dollar we can put in kind of vantage appreciates both because the ROE is higher, and two, the value that the market will assign to that capital that's invested in vantage is much higher. Therefore, our incentive is to invest every marginal dollar in vantage as opposed to buy another MPC. If we had had this business plan three years ago, instead of buying West Phoenix, we would have put an extra $600 million into Vantage. Thanks.

Thank you. I would now like to turn the call back over to Bill Ackman for closing remarks, sir.

Ending early. I guess my closing remarks are, look, the company's going through an important transition that we think is going to create a lot more value for shareholders over time. We're incredibly excited about it uh we have the we think we have all of the things needed to achieve that objective um one we've got a great core very profitable business and i think the team has is thinking about the right way and and the and the numbers are are great and uh you know i would say uh we have mayors around the country that are great for including in new york city for sending people to communities that are pro-business and pro-capitalism, and we happen to own assets in states that are aligned with that objective. So I think Howard Hughes owns real estate assets in the right places, and we're going to generate a lot of cash from that business. And now we have a very good place to put that capital. Vantage transaction, I expect, will close earlier than the end of the quarter. We're excited about that. We're excited about the Vantage team. I think they're excited to be part of a permanent, you know, it's a lot more fun in insurance business to know kind of have a long-term business. You want to have a long-term owner, and we've achieved that. I think with Mark's addition to the board, I think the board is, you know, now very well positioned to help oversee this important transformation. I think the only thing that's missing in the share price is some new shareholders who, because I think we've scared away some of the real estate shareholders. and hopefully will start to attract people who are excited about the business plan going forward. And with that, absent any further questions, we'll end the call. Terry, no further questions. Thank you so much and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.