Greetings, and welcome to the Five Point Holdings, LLC First Quarter 2023 Conference Call. As a reminder, this call is being recorded. Today's conference may include forward-looking statements regarding Five Point's business, financial condition, operations, cash flow, strategy 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, Chief Executive Officer.

Thank you. Good afternoon, everyone, and thank you for joining our call. I have with me today Leo Kij, our Interim Chief Financial Officer; Mike Alvarado, our Chief Legal Officer; Greg McWilliams, our Chief Policy Officer; and Kim Tobler, our Vice President, Treasury and Tax. Stuart Miller, our Executive Chairman, is joining us remotely. I'm pleased to update you today on the progress of the company through the first quarter of this year. I will also update you on our team's focus during the quarter, as we work through a complicated real estate market and the steps we are taking to implement our strategic focus in 2023. Next, Leo will give an overview of the company's financial performance and condition. We will then open the line for questions to our management team. With that said, our financial results for the first quarter of 2023 reflect continued progress and improvement for Five Point in what have been challenging economic conditions. While for the quarter, although we had a consolidated net loss of $9.7 million, we continue to carefully manage cash outflows and our SG&A continue to shrink to $13.8 million which is 18.1% lower than Q1 of 2022. Our first quarter is typically a weak quarter for revenues and bottom line, we have positioned the company for substantial cash flow in the second quarter, with the sizeable land sale and other cash generation is a great part that we anticipate will result in a meaningful distribution of the partnership in the quarter. We also expect to increase our cash flow and bottom line over the course of the year, to additional sales that are positioned for closing before year-end. At the end -- at the quarter end, our balance sheet reflected $106.6 million of cash on hand and $0 drawn on…

Thanks, Dan. A summary of our financial results was included in the earnings release issued earlier today in which we reported consolidated net loss of $9.7 million for the quarter. We recognized $5.7 million in revenue that was primarily from management services provided by our management company. Selling, general and administrative expenses were $13.8 million, which represents a reduction of 18% or $3 million compared to the same quarter last year. The decrease reflects our reduction in headcount as previously reported, as well as a reduction in selling and marketing expenses. Equity and earnings from our unconsolidated entities for the quarter was $1 million and primarily represents our interest in net income generated at the Great Park Venture. Turning to the balance sheet and liquidity, our net increase in inventory for the quarter was $21.5 million. This increase includes accrued capitalized interest on our senior notes of $12.3 million, and a decrease of $17.7 million through reimbursement from a Communities Facilities District or CFD, for certain public infrastructure costs that have been incurred as part of the development process at our Valencia segment. Excluding capitalized interest and CFT reimbursement, the resulting increase in inventory of $26.9 million was consistent with the prior quarter and 24% lower than the prior year increase of $35.6 million. During the quarter, we paid $1.4 million in addition to $700,000 of interest against our related party EB-5 reimbursement obligation. Approximately $9 million of this reimbursement obligation that was previously expected to be paid in the first quarter has been deferred to the first quarter of 2024. Our related party has a history of receiving maturity date extensions, and we expect additional deferrals during 2023. However, such further extensions are not within our control, and there can be no assurance that any such extensions will be…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question is from Jesse Lederman with Zelman Associates. Please proceed with your question.

Hello Jesse.

Hey Dan, Leo and team thanks for taking my question. Yeah, so nationally, we're seeing new home prices down anywhere from 5% to 20% based on what homebuilders are telling us from the peak last year, which would, of course imply a hit to residual land values. And I understand you guys can be more patient in terms of waiting for a stronger market to sell land in and question is, what kind of pressure are you seeing in your communities on pricing? And are you holding firm at peak prices for lot values?

Jesse, each of the builders get to price their own homes. And I actually, today was actually looking at some of the sales over the last week, because I was somewhat curious what you're saying. And the thing that surprised me is how little concessions are being given to sell homes, especially at the Great Park. I think what -- we've had that conversation many times about pricing, at least in California, it weakens first in the inland and then it moves towards the coast and it recovers first in the coast and moves out. And while the builders are definitely pricing to meet the market, a lot of that actually occurred in January and prices have been coming up again. So, at this point -- and the builders, as you can tell from the -- we've had over like a 125% increase in sales from Q4 to Q1. So, as you can see, there is still a lot of interest in our Irvine market. And so when I look at the pricing there, everyone kind of was meeting the market in January. But today, they're really actually starting to raise prices again because there's so much demand in the market. In Valencia, we've seen more increase there. The biggest challenge we have there is that the limited inventory that we have. We don't have it across all price points. So, we have fewer sales there. But once again, there's not so much -- there's still obviously some concessions in the market without a doubt, but we're not seeing a whole lot of downward pressure at this moment on prices. I think whatever pressure there was it's already occurred. And let's say, really -- we really saw most of it in January. And now we actually have builders that have raised prices phase-over phase in some of the new releases. So, once again, we're in a very unique market in California, really truly supply constrained. And the buyers are solely adjusting to interest rates, and we're seeing that kind of increase in sales and so from the standpoint of going to land, your question on land, we actually are seeing -- we've really gotten back into the conversation with builders again, especially this month. And we're actually seeing land prices consistent with what we were selling for a couple of years ago.

Got it. So, -- but how does -- so I guess a follow-up on that is with no land sales in the first quarter, you talked about you're in active negotiation now and you expect some imminent sales in the next quarter or so. Is the gap now -- is that kind of because homebuilders were sitting on the sidelines kind of waiting to see how resilient and how sustainable the demand would be, or is -- was the gap with no land sales in the first quarter and with builders pulling back? Was that more so just a wide bid-ask brand pricing where you were maybe holding firm at peak a lot values and they were looking to get some of the deal?

It really -- the builders really got out of the land business in -- and so the -- and so obviously, to close something, you got to have an escrow beforehand the whole process. And they were all really -- I think they're all looking to see what would happen in the market, what would happen in sales. And as I've said, literally, there's 400 homes available in our Irvine communities. And so we're now in a situation where they were on the sidelines and they're waiting to see it was going on. And now we are literally competitively bidding and builders are actually raising their bids as we go back and say, sorry, you didn't get it. Or wait a minute, let me try again. So there really was a true movement to be on the sidelines, especially in December and January and even February. But it is really clear to us that builders are coming back now. And we've -- what we're sending out to market, we're getting four and five builders bidding on it.

Got it. That's really helpful. Can you just talk a little bit about what you're seeing on the cost on the development side?

Well, on the land development side, we have had a lot of our land ready to go. We had just 1 small underground job. We actually rebid it and we saved $0.5 million. So, on the land development side we're seeing those costs go down also. Now we don't have a lot of active construction right now, because of where we were in our inventory cycle. But that was one small thing we needed to complete it and decided to rebid it. And we -- that was a meaningful reduction in the cost. So we're actually feeling pretty good about land development costs at this moment that certainly, they're off of their peak.

Got it. Thanks so much for taking my questions. I appreciate it.

Thanks Jasse.

Thank you. Our next question comes from Ben Fader-Rattner with Space Summit Capital. Please proceed with your question.

Hi. Thanks for taking my question. You have a bond maturity in 2025. And I assume you want to get your balance sheet in a certain spot in advance of that refinancing exercise. I was just curious if you could comment on, where you want your balance sheet to be specifically in advance of that bond maturity to give the company the best execution around that refi. Thank you.

Yeah. Ben, I appreciate your question, and we definitely know that we have that bond maturity coming. But I don't think we actually have sat around and said we need to have a particular -- being a particular spot on what we're looking for our balance sheet. We don't have a specific target, because there are so many factors that are going to play into it over the next couple of years. So I mean I'm struggling, because I would love to be able to give you really a fine line answer, but it really is going to be -- so many things are going to be market dependent. And we haven't set a particular number, but we're really -- one of the things we're focused on is maximizing our cash position. And we know that we're going to be able to make strong progress in that over the next couple of years. So I guess maybe that's the best answer I'd give you right now is that we know it's there, and we're really focused on our cash position, and that's one of the reason we start the call talking about, we're really looking at cash. So I hope that helps you a little bit.

No. I mean, look, that's very helpful. Thank you very much. I appreciate you don't want to give too much away specifics. Thank you.

All right. There are no further questions at this time. I would like to turn the floor back to Dan Hedigan, for 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.

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