Greetings and welcome to the Five Point Holdings LLC Fourth Quarter and Year End 2023 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, 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 the 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 factor 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. Please go ahead.

Thank you. Good afternoon and thank you for joining our call. I'm going to start off by telling you that I have picked up the cold that seems to be going around to a lot of people. So if I don't sound like myself, that's the reason. I have with me today, Kim Tobler, our Chief Financial Officer; Mike Alvarado, our Chief Legal Officer; and Leo Kij, our Senior Vice President of Finance and Reporting; Stuart Miller, our Executive Chairman, is joining us remotely. In my remarks, I'll update you on our Q4 and year-end results, on our team's focus during the quarter and on the steps we are taking to implement our strategic priorities. Next, Kim will give an overview of the company's financial performance and condition. We'll then open the line for questions to our management team. So let's begin. First, let me congratulate our team on a very strong quarter and year. We started the year [Technical Difficulty] but there's still somewhat uncertain about the market and reluctant to make commitments to acquire additional home sites. And we finished the year with capital markets making it more difficult for commercial developers to pursue new speculative development projects. Yet, despite those headwinds, we ended the year strongly with consolidated net income of $58.7 million in the fourth quarter, resulting in a net income for the year of $113.7 million. We're able to accomplish these results by continuing to focus on our three main priorities, generating revenue and positive cash flow, controlling SG&A costs and probably most importantly, this past year, managing capital spend to match near-term revenue opportunities. Second, I would like to take a moment to note that this is the most consolidated net income that Five Point has generated in a single year since its formation.…

Thank you, Dan. A summary of our financial results was included in the earnings release issued earlier today. And as Dan mentioned, we reported consolidated net income of $58.7 million for the quarter and $113.7 million for the year. Since the guidance we gave for the second half of the year was $50 million to $70 million, I wanted to note that we are reporting $72.9 million in consolidated net income for the second half of the year, slightly higher than we had anticipated, and that contributed to our record full year earnings for the company. I'm now going to review the sources of revenue, our SG&A and other costs the impacts of our equity and earnings for our unconsolidated entities, our development spend, our recent senior note exchange and liquidity for the quarter and for the full year. In the course of the discussion, I will give some high-level guidance, and we'll finish with an outlook for 2024. First, revenue. In Q4, we recognized $100.1 million in land sales revenue, which was primarily generated by the $101.8 million sale of 46 acres of land entitled for 583 home sites to a single homebuilder at our Valencia community. We recognized a 34.7% gross margin on that sale. For the full year, we recognized $161.4 million in land sales revenue which was primarily generated by the sale of 72 acres of land entitled for 729 home sites to three different homebuilders at our Valencia community. In addition, we recognized $18.1 million of management services revenue for the quarter, which was comprised of $3.1 million in base fee payments and $15 million in incentive compensation revenue. And for the year, $47.6 million, which was comprised of $12.4 million in base fee payments and $35.2 million in incentive compensation revenue. The Great Park…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question will come from the line of Alan Ratner with Zelman & Associates. Please proceed with your question.

Hey, guys. Good afternoon. Congrats on all of the progress you made this year. It was a busy one for you guys, but certainly entering '24 in a much stronger financial shape than '23. So congrats on all the great work there. First, Dan, you ran through a lot of detail, which I appreciate. Can you just reiterate what I think you mentioned there's two sales expected, I think, in the first quarter. Can you just repeat what those sales expected are? Was it the 35 acres in Valencia that you were referring to?

The two sales in the first quarter, Alan, first of all, how you doing, Alan? Actually, it's good to hear from you. But those first two sales are in the Great Park. It's 187 home sites and approximately 24 acres.

Got it. Okay. So the -- and so you're referring to the cash flow and the profitability is specific to that transaction occurring?

Yes.

The guidance? Got it. Second question, I don't know if you'll be able to help us with this, but there's been a lot of moving pieces especially in Valencia and Great Park over the last year or two, with land transactions and maybe some rezoning or thoughts of rezoning. Is it possible just to provide a snapshot of where you sit in both of those projects today in terms of kind of lots still yet to be sold both in the residential and the commercial arenas?

And Alan, let me ask you to kind of repeat that. You're saying that in Valencia. And which areas are you focused on in Valencia, on Mission Village or?

I'm just referring to the, no, the project as a whole, just in terms of current lot count that you, obviously, Valencia is still much earlier on, but just trying to figure out kind of what the runway is ahead of us for both of those projects?

Well, so there's the -- overall Valencia and I can -- I think we're currently saying there's about 17,000 lots up in Valencia, is that?

Yes, but I mean there's just, Alan, what I would tell you, what's ready and available, there's about 131 acres at Mission Village that's still available for sale. When you get past that, we're still land planning those other things. And so I would defer that to a future discussion. Everybody is anxious to get that information. I'm getting a lot of requests for that. And so internally, we're trying to figure out the best way to do it. But right now, what's available in the near term is 131 acres in Mission Village.

Okay. That's helpful. And that does not include the commercial site that you referenced earlier. Is that correct?

No, that would include, that's in its entirety. That includes that 34 acres.

Got it. Okay.

And again that could -- and that could become residential or could stay commercial. We're trying to figure out what's the best value per acre we can get.

Got it. Okay. That's really helpful. Thank you. And then do you have a similar number in Great Park just in terms of kind of lots that are on the ground ready to go? I know you mentioned the first quarter sales. Is that the entirety of it?

No. I mean, from a standpoint of Great Park and Great Park has a very specific entitlement for lots, about 10,500, including all the affordable. And I think right now, we probably have sold to builders and obviously, they've been sold to homeowners. But I think we're about -- we have about 2,000, I think, left to go. I think we're about, I think, I'm doing the math, I think we're probably about 7,000 lots sold. We have 9,500 market rate lots, so probably about -- we're probably right around 7,000 lots sold. But I think the thing that we need to understand about Great Park is that we really do have flexible zoning on our commercial land, and the City of Irvine is pushing hard in their arena process. So we have -- I think we -- once again, it's always about what's going to return the most to the land, and so we do have a real opportunity for real opportunity for having additional residential units in the Great Park. And but that's something again we're studying. And as we think -- you talk about the lots that we're closing in the first quarter, we have other land ready to sell this year that's entitled and ready to go and mass created. So we have a pipeline there. Once again, it's always about really trying to make sure we're maximizing the value as we go through there. But I think that RHNA we'll be talking about it this year. We're spending a lot of time with the City of Irvine. But I think RHNA will give us an opportunity to look at additional residential opportunities there. So that 10,500 number that we've always kind of looked at as our cap. We think there is a true opportunity this year to see that move. But we'll, once again, it's all about land value.

Got it. That's really helpful, guys. I appreciate all the detail and best of luck in the upcoming year. Thanks again.

Thank you. [Operator Instructions] Our next question comes from the line of Myron Kaplan with the Private Investor. Please proceed with your question.

Yeah. Hi, gentlemen.

Hi, Myron.

Thank you for taking my call. Yes. You really righted the ship Great Venture in the last two years when the stock was kicked out of the Morgan Stanley Index, and then you're subjected to all kinds of viral rumors of imminent bankruptcy because we've put that issue behind you and which is done absolutely shown that you can sail the ship to, you might say, ship shape and so forth. I have a couple of questions about the exchange offer is that you mentioned in the papers, what are the important ways that the company in which the company has released from what you consider overly-restricted covenants gives you -- now that you have more freedom.

Myron, can you just clarify that? I'm just not following what your question is.

There were some text in somewhere in the exchange offer. I believe that the management felt you were -- the corporation -- you were able to be able to -- in the new indenture, which is, I guess, the third that you were able to be released from some overly restrictive covenants.

No. I mean, no, we weren't released of any overly-restricted covenants. We didn't add any restricted covenants and the old notes had a covenant strip. Just to be clear, with the new notes, we did add a covenant that we will not make dividend payments or buy back stock while it's outstanding. We're investing in the company. So that's what we're doing there, but that was the only thing we added other than what was already existing.

I see. Okay. The other thing I wanted to ask you is you referred already to the state's drive, California's drive for affordable housing. I believe that there is going in the fall of referendum on the ballot for a $10 billion bond for affordable housing. Does that possibly help you deliver the kind of re-entitled properties to -- for such a program?

What I would tell you, Myron, is anything that the state does to improve the ability to provide low-income housing will ultimately provide some benefit to us in some way. We're having to explore how that will occur. And so -- but I wouldn't say that that's going to be a boon. We have already accounted for what it takes for us to do that, and most of that kind of governmental assistance would be on the margins.

The one question I had technically is this reimbursement that you get, what you call is called CRP?

CFD.

CFD, what -- why will the reimbursement go -- be cut in half this year?

Only because we have fewer costs that we have available to request at this time.

I see. Okay. Well, all I can say is that the prospect of shareholder value is way up in the blue given quality of your land and you seem to absolutely be managing it excellently. Thank you very much.

Thanks, Myron.

Thank you.

Thank you. We have reached the end of our question-and-answer session. I'd like to turn the floor back over to CEO, Dan Hanigan 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 to you next quarter.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.