Financial Data and Key Metrics Changes - In Q4 2025, the company generated $58.7 million in net income, leading to an annual consolidated net income of $183.5 million, surpassing the previous record set in 2024 by approximately $6 million [4][21] - The company ended the year with cash of $425 million and total liquidity of $643 million, with a debt to total capitalization ratio of 16.3%, down from 9.6% at the end of 2024 [8][22] Business Line Data and Key Metrics Changes - The Great Park community closed sales on 13 different programs consisting of 920 home sites, while Valencia saw modest home sales with 70 new homes sold in Q4, up from 50 in Q3 [6][12] - The company closed an industrial land sale in Valencia for $42.5 million and reported a gross margin of 31.25% [20] Market Data and Key Metrics Changes - The housing market in 2025 faced challenges due to economic uncertainty, elevated interest rates, and affordability constraints, yet the company demonstrated resilience in its asset performance [5][6] - Demand for homes remained strong at The Great Park, while Valencia experienced more modest demand due to affordability issues [6] Company Strategy and Development Direction - The company's strategy focuses on maximizing the value of existing communities, maintaining a lean operating structure, matching development spending with revenue generation, and expanding through targeted growth initiatives [9] - The company aims to pursue growth opportunities while prioritizing its growth strategy to expand recurring revenues [8] Management's Comments on Operating Environment and Future Outlook - Management expects growing buyer confidence and moderating interest rates to improve demand for well-located home sites in 2026, projecting consolidated net income of approximately $100 million for the year [7][16] - The company anticipates a small loss in Q1 2026 due to no planned land sales, with the majority of income expected in the second half of the year [26] Other Important Information - The company successfully secured critical entitlement approvals in Valencia and The Great Park, enhancing long-term asset value and development potential [4][13] - Hearthstone, acquired in Q3 2025, contributed $11.8 million in management fee revenue and $3.5 million in net income, expanding the company's earnings profile [15][23] Q&A Session Summary Question: Development expenditures for Valencia and San Francisco in 2026 - Management indicated that development expenditures for both projects in 2026 would be similar to the current year's spending of about $125 million, maintaining a constant pace as development increases [32][34] Question: Clarification on entitlement approvals - Management clarified that the new entitlements in Great Park are additive to previously disclosed saleable acreage, with 100 acres of commercial land now redesignated as residential [39][42]

Financial Data and Key Metrics Changes - The company reported a net income of $60.6 million for Q1 2025, exceeding guidance by approximately $10 million [7][36] - Total liquidity at the end of the quarter was $653.3 million, consisting of $528.3 million in cash and cash equivalents, an increase of $97.5 million from year-end [9][40] - The company received a credit rating upgrade from S&P from B- to B, with senior notes upgraded from B to B+ [9] Business Line Data and Key Metrics Changes - The Great Park Venture generated $206.3 million in net income, with land sales revenue of $278.9 million and a gross margin of 75% [38] - Home sales in the Great Park communities increased to 233 homes in Q1 2025 from 143 homes in Q4 2024 [19] - Valencia community saw home sales of 69 homes in Q1 2025, slightly down from 74 in Q4 2024 [23] Market Data and Key Metrics Changes - The company noted a modest decline in the pace of sales due to rising mortgage rates and consumer sentiment issues [10][18] - California markets remain chronically undersupplied, which supports ongoing demand for home sites [11][18] Company Strategy and Development Direction - The company is focused on optimizing home site value within existing communities and managing fixed costs while pursuing growth opportunities [13][15] - Growth initiatives include new acquisitions, joint ventures, and strategic relationships to ensure sustainable long-term growth [15][30] - The company is actively exploring opportunities to convert commercial land to residential uses in response to market needs [21][64] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging economic environment due to tariff policies and higher mortgage rates but remains confident in meeting prior guidance for 2025 [10][16] - The company is monitoring evolving market conditions closely and expects to maintain its guidance for net income close to $200 million for the full year [16][43] Other Important Information - The company generated net cash flow of $97.5 million during the quarter, with significant inflows from the Great Park Venture [41] - The company is considering refinancing options for its senior notes as market conditions improve [44][82] Q&A Session Summary Question: Will regulatory changes benefit developments? - Management confirmed that any expedited processes in California would support housing delivery [47] Question: Any updates on CapEx plans for San Francisco? - Management indicated that insights on CapEx plans would be provided towards the end of the year [51] Question: Why not reduce debt with excess cash? - Management explained that the cost of paying down debt is currently not prudent due to market conditions, but they are monitoring the situation [56][57] Question: What is the expected price for future land sales? - Management stated that the blended number for recent sales is about $11.8 million per acre, with future sales expected to be consistent with this figure [62] Question: How much commercial land is left in Irvine? - Management confirmed there are 100 acres of commercial land between four sites available for potential residential conversion [70]