Greetings, and welcome to the Five Point Holdings, LLC First Quarter 2024 Conference Call. As a reminder, this call is being recorded. Today's call may include forward-looking statements regarding Five Point's business, financial conditions, operations, cash flow, strategy and prospects. Forward-looking statements represent Five Point's estimates on the data of this conference call and are not intended to give any assurance 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, and thank you for joining our call. I have with me today Kim Tobler, our Chief Financial Officer; Mike Alvarado, our Chief Operating Officer and Chief Legal 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 Q1 results, on our team's focused during the quarter and the steps we are taking to implement our strategic priorities. Next, Kim will give an overview of the company's financial performance and condition with some limited guidance for the second quarter and the full year. We will then open the line for questions to our management team. So let's begin. I am very pleased to report another strong quarterly performance for Five Point as we continue to focus on fortifying our balance sheet, controlling our expenses and carefully managing our capital spend to match near-term revenues. Accordingly, we're happy to report a profitable first quarter, consistent with our expectations as we started the year. Our net income for the quarter was $6.1 million, which reflects the strength of the builder interest in our two active communities. Specifically, in February, we sold 11.6 acres of land at the Great Park for $6.4 million per acre for a total sales price of $74.6 million with a 60% profit margin. This sale contributed to the $17.7 million of equity and earnings from unconsolidated investments for the quarter. Additionally, consistent with our focus on holding down costs, we held our SG&A to $12.9 million, which is 6.5% less than the first quarter of last year. We achieved these results while there remains uncertainty around interest rates and inflation. We've been managing our business with the assumption that interest rates remain elevated for longer than…

Thank you, Dan. As Dan mentioned, we were pleased to see S&P upgrade both our issuer and instrument ratings to stable B- and B, respectively. We believe that this upgrade is reflective of our improved performance and S&P's mindful understanding of the company and its assets. Let me give you a little more background on our operating results. For the first quarter of 2024, we reported consolidated net income of $6.1 million, which included $9.9 million of revenue and $17.7 million of equity in earnings from our investment in the Great Park Venture. It also includes -- within the revenue, $8.7 million of the revenue was related to our management services. The equity and earnings from the Great Park Venture was generated primarily from a sale in February of 82 home sites on 11.6 acres of land, with a land sales price of $74.6 million and a profit margin of 60% before closing costs. This sale comes out to a $6.4 million per acre. The venture also recognized $17.6 million of profit participation or so-called PAPA (ph) revenue related to prior year land sales. Consistent with our continued focus on managing our costs, our SG&A expense was $12.9 million compared to the prior year of $13.8 million. Now let me turn to liquidity and cash. We ended the quarter with $232.7 million of cash, as well as $125 million of availability on a revolving credit facility, resulting in total liquidity of $357.7 million. At the end of the quarter, our debt to total capitalization was an improved 20.9%. The things that materially impacted our cash balance this quarter were: First, the $100 million payment to settle our very successful senior note exchange, together with $8.3 million of accrued interest and $7.6 million of transaction costs; second, we received $24 million…

Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Alan Ratner with Zelman & Associates. Please proceed with your question.

Hey, guys. Good afternoon. Thanks for all the details so far. Appreciate it. Dan, I guess, my question is more around some of the near-term conversations you've had with builders. It sounds like you've got a number of parcels out for bidding. And I think we're -- unfortunately, probably three months ago, we were all hopeful that the rate outlook would look a bit better than it does today. And with rates climbing higher, I certainly, the equity markets are beginning to price in some risk of a slowdown. I'm curious if there's anything you're seeing in your communities, either on the home sale side or in terms of the conversations with builders that would suggest any of that concern or cautiousness we're seeing in the market is beginning to filter through to the housing side of things?

Thanks, Alan. Always good to hear from you. Interesting, Alan is, and I think I mentioned in my remarks, what we're really seeing here is the chronic shortage of land and in particular, builder land, and title land, and home sites is really driving what we're seeing as we're talking to and actually actively bidding with builders. And that shortage of housing is actually seeing extremely strong bids and active participation by multiple builders on everything we're taking to market right now. And once again, I think it's -- I know that California is in such a unique place, there is no new home inventory or limited -- sorry, limited resale inventory and limited entitled land and lots. So we are not seeing any drop off kind of due to the current financial market. And as I say, the new homebuilders are uniquely positioned to keep sales going. And so that is -- that's exactly what we're experiencing in the market.

Great. That's encouraging to hear. On the Great Park sale in the quarter, so if I look at the price per acre, $6.4 million, well above the sales you recorded last year, I think the average was about $4.3 million per acre and I know that's a lumpy number. It looks like there might have been one other sale that was in a similar range back -- all the way back in 2019. But I think the average has been more in the 5s over the last few years. So is there anything unique to this parcel that would command the premium or do you feel like this is fairly representative of broader inflation on prices that you're seeing in the community right now?

Well, one thing I've mentioned to you, I know the sale that you're reflecting back to had a unique structure. And so you're looking at kind of the going in price. But the coming out price, we expect to be much higher. And then as to this specific sale, no, it really is reflective of the market. There's nothing unique about this. It really is just what we're seeing in the market today.

Got it. So as we think about the next two deals you've got under contract, obviously, it's going to be maybe a little volatile, but something in the current range, I guess, is where we should think about the future sales coming in at.

Yes, absolutely.

Right. Okay. Appreciate that. Thank you very much.

Thanks, Alan.

Our next question comes from the line of Myron Kaplan, a Private Investor. Please proceed with your question.

Yeah. Hi, gentlemen. Thanks for all the color and running things well with, I guess, you would say, with the SG&A under control and so forth.

Thank you.

Thanks, Myron. Appreciate it.

I guess the one thing I wanted to ask was with this distribution of the Great Park is the legacy interest paid out in the fall at this point?

It is not. We expect it to be paid out this year in total. So there's about $40 million left. So Myron, I'm sorry, there's only $10 million left.

$10 million left. So that's after this last distribution?

Yes.

So in Valencia, what's -- how can you -- if you haven't got inventory in Valencia in the end of the first village, how can you except for the mixed use? I mean you said at the end of the last call, I think that you had about 140 or 150 acres left. So how can you really do business? I mean talk about cash flow how can you close on it.

So Myron, one of the things that you're certainly right. The first group of lots we opened, we're down to a very small inventory there. But there's another area that there is ultimately going to be seven programs at, five are opened and those are actively selling, and we'll see more of those selling and closing later this year. And so there's two more to open there. There's two more communities opening there. And then we did six communities last year. And those -- the first one [indiscernible] at the end of this year and the remainder of [indiscernible] beginning of '25. So that inventory will -- those homes will keep selling, which is why we also -- as I mentioned, we have sites out to bid now with builders to keep that going. The 179 homes that you mentioned, those are going to lag the market, but those should be opening next year also.

If we ask where is the money, a lot of this is sort of off in the future, yes?

Not true. I mean, again, we're actively selling in Valencia this year and next year, and then we'll be announcing more about what's following that as we get closer to it, Myron.

So just one question -- one item that you mentioned, Luna Park, I didn't understand at all. What's the situation in Luna Park, I mean…

So Luna Park was the transaction we closed early last year, probably about this time last year when I think about it. And they've been working on the models. And there was 13 programs, it was 799 home sites, 13 programs. The first one was a very small program. It's opened and sold out. And they are now -- the next 12 are opening, they're starting to open this month, and they're going to continue opening and so we'll have all of those open sometime this year. And once again, it's -- we had Solis, which is winding down. Now Luna is another brand new community, large community like we do at the Great Park Neighborhoods and it is in the process of opening up all of its models.

So you'll be able to sell sites?

Yeah. Myron, we're still selling sites, yes.

So you can sell sites because it's like the builders are selling lots of homes, but you're not selling a lot of sites.

Yes. So Myron, to that point, I mean we always like to give the color on what the sales pace is of the builders. And then, we try to illustrate that we're still selling lots to them as well, that's why Dan mentioned those additional sales.

Prospective sales.

Prospective sales.

Yes. All right. Well, I guess, as you say, it's a long game. It certainly is.

Thanks, Myron.

[Operator Instructions] We have a question from the line of Ken Hansen with Stifel. Please proceed with your question.

Thanks for taking my question. Just for full disclosure on a CFA, but not representing Stifel on the call. I'm representing my own shareholder interest. I like the second priority that you've identified as the controlling of cost. And I know, Dan, when you came on Board, you had a significant reduction in employee count. I think it was maybe a 30% reduction, something like that. And that's been helpful, I think. I'm just wondering now what you think about the size of the Board? I think it was 11 when you came on Board and maybe it's down to nine. But when you think about the ratio of Board members and employees, it seems a bit heavy -- not a bit heavy, a lot heavy. Lunar has the same number of Board members, I think, and they have 12,000 employees. So I'm wondering if maybe just an optics thing, but maybe it's a flexibility thing as well and certainly would be a cost savings if the Board were smaller. So could you just comment on the size of the current Board and any interest you have in making it more nimble and responsive? Thanks.

Ken, thanks for your question. The Board has been nine as long as I've been here. I don't know if it was 11 that you mentioned, but certainly it's been nine as long as I've been here. And I can tell you that the Board actually does take a look at their function and operation every year. And at this point, the Board is functioning well. And I would -- I'd just have to defer, that's to the Board to make those types of decisions, not to me per se. But we have -- I think we have a very active Board that has been very supportive in my transition into this role.

And I know, I think Mr. Miller is on remote, can he respond to that?

Yeah. I don't think that would be appropriate to get into beating our Board on this call, but we appreciate the question.

Okay.

And I am on remote. I agree with Dan.

That concludes our question-and-answer session. I'd like to hand it back to Mr. Hedigan for closing remarks.

Thank you so much. 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.

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