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 reflects 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 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,…

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…

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 6 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…

[Operator Instructions] Our first question is from Alan Ratner with Zelman & Associates.

Congrats on the Hearthstone deal, exciting growth opportunity for the company. I know you'll give more '26 color in a few months, but I just -- I'm curious, in terms of the economics of it, should we just think broadly as that business kind of being a percentage of assets under management less some type of personnel expense? Is that the right way to think about modeling that longer term?

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 2, 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?

Thanks, Alan, for that question. It's a very good question. You're right. There is a lot of, say, movement in this space right now. But what I think what we see out there is that demand is much greater than current supply. So we don't need to really make any changes from what we're currently or what Hearthstone is currently doing. Working with them, we're going to hopefully expand their capital base, and there should be a lot more -- there's a lot of need in this space, in the homebuilding world. So we don't think we have to change anything. Hearthstone has got a great platform and business model, and we think we can stay 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 actually reading the same things you've been reading, but California is so supply constrained and unique. They can't really -- they can't replace the land that's here. But we are not -- we will work with our builder partners to the extent that they reach out to us. But I think at this point, we do think that we've got the ability to let this market kind of settle down, hopefully, and move our -- still move our land forward as we are planning. But at this point, I think that the uncertainty in the market is just going to have to play out just a little bit longer. And so we are, at this point, are thinking more about just trying to work with our existing builders and keep our land sales moving forward.

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 2 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 really try to be able to 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 is some technology 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.

[Operator Instructions] Our next question is from David Lundgren, private investor.

I had a question about the -- 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. And then, I mean, I guess the elephant in the room that rarely gets discussed on these calls is that the stock price being well below book value. And I've been a shareholder for many years. And I'm curious like if you're ever going to try to address that or look into reasons why the market isn't valuing you where you should be. And I think as an investor, I think one of the reasons you're not valued at the appropriate stock prices because of your corporate structure, which is very confusing. And this recent deal to buy Hearthstone is making everything more confusing because you're buying 75%. So now you have -- you're adding like another serpentine layer. So I don't think that this new transaction helps with the corporate structure. I think if you could somehow simplify the corporate structure, maybe that might help the share price. But as a long-term shareholder, I'm just wondering if you're -- is this a concern for you that the stock price doesn't reflect the true value, the fact that you're well below book value?

David, I appreciate that question. First of all, I want to answer directly about Hearthstone. Hearthstone, when it -- since it will consolidate, it 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. And 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.