Q2 2026 Howard Hughes Holdings Inc Earnings Call

August 6, 2026

Operator: Good day, and thank you for standing by. Welcome to the Howard Hughes Q2 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during that session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Joseph Valane, General Counsel and Secretary. Please go ahead.

Speaker #1: a listen-only mode. After the 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again.

Speaker #1: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Joe Valane.

Speaker #1: General counsel and secretary, please go ahead.

Speaker #2: Thank you. Good morning, and welcome to the Howard Hughes Holdings Q2, 2026 earnings call. With me today are Bill Ackman, executive chairman; Ryan Israel, chief investment officer; David O'Reilly, chief executive officer; Carlos Olea, chief financial officer; and Mark Granderson, Vantage executive chair and Howard Hughes Holdings director.

Joseph Valane: Thank you. Good morning, and welcome to the Howard Hughes Holdings Q2 2026 earnings call. With me today are William Ackman, Executive Chairman, Ryan Israel, Chief Investment Officer, David O'Reilly, Chief Executive Officer, Carlos Olea, Chief Financial Officer, and Marc Grandisson, Vantage Executive Chair, and Howard Hughes Holdings Director. Before we begin, I would like to direct you to our website, www.howardhughes.com, where you can download both our Q2 earnings press release and our supplemental package. The earnings release and supplemental package include reconciliations of non-GAAP financial measures that will be discussed today in relation to their most directly comparable GAAP financial measures. Certain statements made today that are not in the present tense or that discuss the company's expectations are forward-looking statements within the meaning of the federal securities laws.

Speaker #2: Before we begin, I would like you to direct you to our website, www.howardhughes.com, where you can download both our Q2 earnings press release and our supplemental package.

Speaker #2: The earnings release and supplemental package include reconciliations of non-GAAP financial measures that will be discussed today. In relation to their most directly comparable GAAP financial measures, certain statements made today that are not in the present tense or that discuss the company's expectations are forward-looking statements within the meaning of the Federal Securities Laws.

Speaker #2: Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved.

Joseph Valane: Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved. Please see the forward-looking statement disclaimer in our Q2 earnings press release, and the risk factors in our SEC filings for factors that could cause material differences between forward-looking statements and actual results. We are not under any duty to update forward-looking statements unless required by law. I will now turn the call over to our Executive Chairman, William Ackman.

Speaker #2: Please see the forward-looking statement disclaimer in our Q2 earnings press release, and the risk factors in our SEC filings, for factors that could cause material differences between forward-looking statements and actual results.

Speaker #2: We are not under any duty to update forward-looking statements unless required by law. I will now turn the call over to our executive chairman, Bill Ackman.

Speaker #3: Thank you, Joe. Before we talk about the quarter, I thought, in light of the significance of events over the last few months for the company, I just want to give a little background on how we got here.

William Ackman: Thank you, Joe. Before we talk about the quarter, I thought in light of the significance of events over the last few months for the company, I just want to give a little background on how we got here. In May of last year, Pershing Square acquired $900 million of stock at Howard Hughes at $100 a share, increasing our ownership to 47% of the company. I became Executive Chair. Ryan became Chief Investment Officer of the company, and we said, look, our goal is to turn Howard Hughes, a kind of pure-play real estate company, into a diversified holding company. Our business plan was to acquire an insurance operation, to find a platform that we believed that we could build into a highly profitable and very successful company, and one where Pershing Square's investment capability could add material value.

Bill Ackman: Thank you, Joe. Before we talk about the quarter, I thought in light of the significance of events over the last few months for the company, I just want to give a little background on how we got here. In May of last year, Pershing Square acquired $900 million of stock at Howard Hughes at $100 a share, increasing our ownership to 47% of the company. I became Executive Chair. Ryan became Chief Investment Officer of the company, and we said, look, our goal is to turn Howard Hughes, a kind of pure-play real estate company, into a diversified holding company. Our business plan was to acquire an insurance operation, to find a platform that we believed that we could build into a highly profitable and very successful company, and one where Pershing Square's investment capability could add material value.

Speaker #3: In May of last year, Pershing Square acquired $900 million of stock at Howard Hughes at $100 a share, increasing our ownership to 47% of the company.

Speaker #3: I became executive chair, Ryan became chief investment officer of the company, and we said, "Look, our goal is to turn Howard Hughes a kind of pure-play real estate company into a diversified holding company." And our business plan was to acquire an insurance operation, to find a platform that we believed that we could build into a highly profitable and very successful company, and one where Pershing Square's investment capability could add material value.

Speaker #3: Within about six months or so, we identified and, over most recently, closed the transaction to acquire Vantage Holdings and purchased the company at a fair price.

William Ackman: Within about six months or so, we identified and most recently closed the transaction to acquire Vantage Holdings. We purchased the company at a fair price. It was not a bargain purchase. It was a platform that had been built over the previous five years, led by two very successful private equity firms. We had an opportunity to acquire it, and it fit very well with our kind of long-term ambitions. Our initial thoughts on going into the insurance business were really driven by what Warren Buffett and what Berkshire Hathaway has achieved over a very long period of time. As part of that thinking, we reached out to a guy named Marc Grandisson, who we had met maybe two and a half or almost three years ago, and someone we had greatly admired in the insurance business.

Bill Ackman: Within about six months or so, we identified and most recently closed the transaction to acquire Vantage Holdings. We purchased the company at a fair price. It was not a bargain purchase. It was a platform that had been built over the previous five years, led by two very successful private equity firms. We had an opportunity to acquire it, and it fit very well with our kind of long-term ambitions. Our initial thoughts on going into the insurance business were really driven by what Warren Buffett and what Berkshire Hathaway has achieved over a very long period of time. As part of that thinking, we reached out to a guy named Marc Grandisson, who we had met maybe two and a half or almost three years ago, and someone we had greatly admired in the insurance business.

Speaker #3: It was not a bargain purchase. It was a platform that had been built over the previous five years led by two very successful private equity firms.

Speaker #3: We had an opportunity to acquire it, and it fit very well with our kind of long-term ambitions. Our initial thoughts on going into the insurance business were really driven by what Warren Buffett and what Berkshire Hathaway has achieved over a very long period of time.

Speaker #3: And as part of that thinking, we reached out to a guy named Mark Granderson, who we had met maybe two and a half or almost three years ago, and someone we had greatly admired in the insurance business.

Speaker #3: And we thought, when we're trying to make a decision whether to acquire a company or to build one from scratch, we looked to Mark for advice.

William Ackman: We thought when we're trying to make a decision whether to acquire a company or to build one from scratch, we looked to Marc for advice. Marc was sort of on the beach. He wasn't sure whether he was prepared to go back into the business. He gave us excellent advice, but we went sort of our own way in acquiring Vantage. Since the acquisition, Marc has furthered in his retirement and we got him to join the board of Howard Hughes. It was very clear from the first day he joined the board meeting his passion for the industry. It's been a cultivation, is how I would or a seduction, maybe a better word, to try to get Marc a little bit more involved.

Bill Ackman: We thought when we're trying to make a decision whether to acquire a company or to build one from scratch, we looked to Marc for advice. Marc was sort of on the beach. He wasn't sure whether he was prepared to go back into the business. He gave us excellent advice, but we went sort of our own way in acquiring Vantage. Since the acquisition, Marc has furthered in his retirement and we got him to join the board of Howard Hughes. It was very clear from the first day he joined the board meeting his passion for the industry. It's been a cultivation, is how I would or a seduction, maybe a better word, to try to get Marc a little bit more involved.

Speaker #3: Mark was sort of on the beach. He wasn't sure whether he was prepared to go back into the business. He gave us excellent advice.

Speaker #3: But we went sort of our own way in acquiring Vantage. Since the acquisition, Mark has furthered in his retirement, and we got him to join the board of Howard Hughes.

Speaker #3: And it was very clear from the first day he joined the board meeting his passion for the industry. So it's been a cultivation, is how I would, or a seduction, it would be a better word, to try to get Mark a little bit more involved.

Speaker #3: And then we had a stroke of luck. Which is that David Gansberg, who was kind of a co-president of Arch, someone who was in line, the potential CEO role at the company, was actually let go by Arch.

William Ackman: Then we had a stroke of luck, which is that David Gansberg, who was kind of a co-president of Arch, someone who was in line for the potential CEO role at the company, was actually let go by Arch. He did not win the battle for CEO, but he was a favored choice of Marc, and that created really an opportunity for us. Where Marc was not prepared to come in and be CEO of an insurance company with effectively his right-hand guy stepping in as CEO, he was prepared to take a more significant role in the company. With that, we announced Marc became Executive Chair of the company. David has a non-compete until June, or I guess early June of 10 months from today. We now had really our dream team in the insurance industry.

Bill Ackman: Then we had a stroke of luck, which is that David Gansberg, who was kind of a co-president of Arch, someone who was in line for the potential CEO role at the company, was actually let go by Arch. He did not win the battle for CEO, but he was a favored choice of Marc, and that created really an opportunity for us. Where Marc was not prepared to come in and be CEO of an insurance company with effectively his right-hand guy stepping in as CEO, he was prepared to take a more significant role in the company. With that, we announced Marc became Executive Chair of the company. David has a non-compete until June, or I guess early June of 10 months from today. We now had really our dream team in the insurance industry.

Speaker #3: He did not win the battle for CEO, but he was a favored choice of Mark. And that created really an opportunity for us. Mark was not prepared to come in and be CEO of an insurance company, with effectively his right-hand guy stepping in as CEO.

Speaker #3: He was prepared to take a more significant role in the company. And with that, we announced Mark became Executive Chair of the company. David has a non-compete until June, or I guess early June, of about 10 months from today.

Speaker #3: And we now had really our dream team in the insurance industry. And that's not to diminish in any way Greg Hendrick or anyone in the Vantage operation.

William Ackman: That's not to diminish in any way Greg Hendrick or anyone in the Vantage operation. If you look at the 25-year history of Arch, where from 2001, Marc, an important younger member of the team, and to all the value and learnings over that period of time to his becoming CEO and building one of the best records in the insurance industry. If you look at Pershing Square over time, our most successful investments have been finding a great business and then finding the best person in the world to run that company. When we've combined those two things, whether it was at Chipotle or at Canadian Pacific or other businesses, that's really when the magic happens. We couldn't resist the opportunity to recruit David and to get Marc in place at the company. It's a very material announcement.

Bill Ackman: That's not to diminish in any way Greg Hendrick or anyone in the Vantage operation. If you look at the 25-year history of Arch, where from 2001, Marc, an important younger member of the team, and to all the value and learnings over that period of time to his becoming CEO and building one of the best records in the insurance industry. If you look at Pershing Square over time, our most successful investments have been finding a great business and then finding the best person in the world to run that company. When we've combined those two things, whether it was at Chipotle or at Canadian Pacific or other businesses, that's really when the magic happens. We couldn't resist the opportunity to recruit David and to get Marc in place at the company. It's a very material announcement.

Speaker #3: But if you look at the 25-year history of Arch, we're from 2001, Mark an important younger member of the team, and to all the value and learnings over that period of time to his becoming CEO and building one of the best records in the insurance industry, this was if you look at Pershing Square over time, our most successful investments have been finding a great business and then finding the best person in the world to run that company.

Speaker #3: And when we've combined those two things, whether it was at Chipotle or at Canadian Pacific or other businesses, that's really when the magic happens.

Speaker #3: And we couldn't resist the opportunity to recruit David. And to get Mark in place at the company. So it's a very, very material announcement.

Speaker #3: The other thing that I have experienced over time when you get someone who's run a large enterprise, or, for example, someone who's managed a large investment portfolio, and then you've given them a operation, the magic they can achieve from that kind of base level is really remarkable.

William Ackman: The other thing that I have experienced over time, when you get someone who has run a large enterprise or, for example, someone who has managed a large investment portfolio, then you give them a much smaller operation, the magic they can achieve from that kind of base level is really remarkable. I think the same thing really applies here. We have a senior leadership team with enormous horsepower stepping into a very small, very young operation, we are very excited about what can be achieved. The market does not yet understand the significance of this announcement. Now, the other important fact is now that we have, if you will, the dream team in place, we need to do everything we can to inject more and more capital into Vantage so it can exploit the opportunity created by the team that we have built.

Bill Ackman: The other thing that I have experienced over time, when you get someone who has run a large enterprise or, for example, someone who has managed a large investment portfolio, then you give them a much smaller operation, the magic they can achieve from that kind of base level is really remarkable. I think the same thing really applies here. We have a senior leadership team with enormous horsepower stepping into a very small, very young operation, we are very excited about what can be achieved. The market does not yet understand the significance of this announcement.

Speaker #3: And I think the same thing really applies here. We have a team a senior leadership team with enormous horsepower stepping into a very small, very young operation.

Speaker #3: And we're very, very excited about what can be achieved. So the market does not yet understand the significance of this. Announcement. Now, the other important fact is now that we have if you will, the dream team in place, we need to do everything we can to raise to inject more and more capital into Vantage so it can exploit the opportunity created by the team that we've built.

Bill Ackman: Now, the other important fact is now that we have, if you will, the dream team in place, we need to do everything we can to inject more and more capital into Vantage so it can exploit the opportunity created by the team that we have built. Vantage benefits by beginning with a highly diversified kind of portfolio of lines of business. You will see that expand. Marc will find other areas of opportunity expansion for the company that will allow us to deploy capital in a market which is patchy in terms of opportunity, but that is really in Marc's expertise.

Speaker #3: And Vantage benefits by beginning with a highly diversified kind of portfolio, lines of business, and you'll see that expand. Mark will find other areas of opportunity expansion for the company that will allow us to deploy capital in a market which is patchy in terms of opportunity.

William Ackman: Vantage benefits by beginning with a highly diversified kind of portfolio of lines of business. You will see that expand. Marc will find other areas of opportunity expansion for the company that will allow us to deploy capital in a market which is patchy in terms of opportunity, but that is really in Marc's expertise. I have to say that we are incredibly excited about Marc and David. We are excited about the synergies created to combining with the Vantage team and what has been built over the last five years, but still at a very early stage. That is what kind of gives me an opportunity to segue to real estate. As kind of proven by this quarter, this is a time where rates have risen very significantly.

Speaker #3: But that's really Mark's expertise. So I have to say that we're incredibly excited about Mark and David. We're excited about the synergies created to combining with the Vantage team and what's been built over the last five years.

Bill Ackman: I have to say that we are incredibly excited about Marc and David. We are excited about the synergies created to combining with the Vantage team and what has been built over the last five years, but still at a very early stage. That is what kind of gives me an opportunity to segue to real estate. As kind of proven by this quarter, this is a time where rates have risen very significantly.

Speaker #3: But still at a very early stage, and that's what kind of gives me an opportunity to segue to real estate. As kind of proven by this quarter, this is a time where rates have risen very significantly.

Speaker #3: You read all kinds of stuff about the housing market here and there. And quarter after quarter, it continues to be enormous demand for real estate in our communities.

William Ackman: You read all kinds of stuff about the housing market here and there, quarter after quarter, it continues to be enormous demand for real estate in our communities. The reason for this is in part political. I am unfortunately living in a city where the city is not run in a particularly pro-business fashion. Taxes are high and going higher. Whereas in Texas, in Las Vegas, kind of our core MPC markets, these are states, cities, and communities where safe people like to live and very conducive to business, kind of quality of life, I think that is a great competitive advantage for us. We believe that our real estate assets are phenomenal assets.

Bill Ackman: You read all kinds of stuff about the housing market here and there, quarter after quarter, it continues to be enormous demand for real estate in our communities. The reason for this is in part political. I am unfortunately living in a city where the city is not run in a particularly pro-business fashion. Taxes are high and going higher. Whereas in Texas, in Las Vegas, kind of our core MPC markets, these are states, cities, and communities where safe people like to live and very conducive to business, kind of quality of life, I think that is a great competitive advantage for us. We believe that our real estate assets are phenomenal assets.

Speaker #3: And the reason for this is in part political. I'm fortunately living in a city where the city is not run in a by a particularly pro-business fashion.

Speaker #3: It's very taxes are high and going higher. Whereas in Texas, in Las Vegas, kind of our core MPC markets these are state cities and communities where safe people like to live and very conducive to business and kind of quality of life.

Speaker #3: And I think that is a great competitive advantage for us. And so we believe that our real estate assets are phenomenal assets. Now, in light of the fact we're no longer a pure-peg real estate company, we can take a much harder look at the portfolio and say, which are assets that are kind of strategic and critical for the long term?

William Ackman: Now, in light of the fact we are no longer a pure-play real estate company, we can take a much harder look at the portfolio and say, which are assets that are kind of strategic and critical for the long term? Think land holdings, kind of, sort of core MPC assets, which are assets where there is a better owner who are prepared to buy the asset at a very full price. The team has begun to prune the portfolio and generate cash, freeing up liquidity that can be reinvested in real estate. Now, the nature of our real estate business is that it is effectively, in large part, self-liquidating. You have seen significant condominium closings during the quarter, significant lot sales. Over time, we will sell all of our residential lots. We will sell all of our condominium assets. We will sell all of our non-core real estate assets.

Bill Ackman: Now, in light of the fact we are no longer a pure-play real estate company, we can take a much harder look at the portfolio and say, which are assets that are kind of strategic and critical for the long term? Think land holdings, kind of, sort of core MPC assets, which are assets where there is a better owner who are prepared to buy the asset at a very full price. The team has begun to prune the portfolio and generate cash, freeing up liquidity that can be reinvested in real estate. Now, the nature of our real estate business is that it is effectively, in large part, self-liquidating. You have seen significant condominium closings during the quarter, significant lot sales.

Speaker #3: Think land holdings, kind of sort of core MPC assets. And which are assets where there's a better owner who can pay who are prepared to buy the asset at a very full price?

Speaker #3: And the team has begun to prune the portfolio and generate cash, freeing up liquidity that can be reinvested in real estate. Now, the nature of our real estate business is that it's effectively in large parts self-liquidating.

Speaker #3: You've seen significant condominium closings. During the quarter, significant lot sales. Over time, we will sell all of our residential lots. We will sell all of our condominium assets.

Bill Ackman: Over time, we will sell all of our residential lots. We will sell all of our condominium assets. We will sell all of our non-core real estate assets. Beyond that, we're going to look at historically, we sort of owned and financed 100% of everything ourselves. We're going to look at joint venture structures. We're going to look at ways to bring in capital. The Howard Hughes platform, number one, we have a phenomenal team. They've done an incredible job building out these communities. A lot of skills honed over time in real estate development. Unlike a typical developer who's got to find a piece of land, we have decades of value. That being said, we have very high-cost capital, certainly as the market assigns it to us. We're not a REIT. We're kind of an unusual company.

Speaker #3: We will sell all of our non-core real estate assets. And then beyond that, we're going to look at historically, we sort of owned and financed 100% of everything ourselves.

William Ackman: Beyond that, we're going to look at historically, we sort of owned and financed 100% of everything ourselves. We're going to look at joint venture structures. We're going to look at ways to bring in capital. The Howard Hughes platform, number one, we have a phenomenal team. They've done an incredible job building out these communities. A lot of skills honed over time in real estate development. Unlike a typical developer who's got to find a piece of land, we have decades of value. That being said, we have very high-cost capital, certainly as the market assigns it to us. We're not a REIT. We're kind of an unusual company. Bringing in third-party capital where we're a really attractive platform, and much lower cost capital will enable us to earn much higher returns on our real estate assets and also free up additional significant capital.

Speaker #3: We're going to look at joint venture structures. We're going to look at ways to bring in capital Howard Hughes the Howard Hughes platform, number one, we have a phenomenal team.

Speaker #3: They've done an incredible job building out these communities a lot of skills honed over time in real estate development. And we have unlike a typical developer who's got to find a piece of land, we have decades of value.

Speaker #3: That being said, we have very high-cost capital, certainly as the market assigns it to us. We're not a REIT. We're kind of an unusual company.

Speaker #3: So bringing in third-party capital where we're a really attractive platform and much lower-cost capital will enable us to earn much higher returns on real estate assets and also free up additional significant capital.

Bill Ackman: Bringing in third-party capital where we're a really attractive platform, and much lower cost capital will enable us to earn much higher returns on our real estate assets and also free up additional significant capital. What you should expect to see over the next several years is the inherent self-liquidating nature of condos and lot sales, but also an acceleration in the monetization of what you think of as more stabilized type assets and maybe more partnership type opportunities for the company. Maybe even we'll raise a pool of capital that management can deploy in these assets on behalf of pension funds or other investors who love to own the kind of assets that Howard Hughes owns. Let's call that the backdrop of what we're trying to achieve.

Speaker #3: So what you should expect to see over the next several years is the inherent self-liquidating nature of condos and lot sales. But also an acceleration in the monetization of what you think of as more stabilized-type assets and maybe more partnership-type opportunities for the company and maybe even will raise a pool of capital that management can deploy in these assets on behalf of pension funds or other investors who love to own the kind of assets that Howard Hughes owns.

William Ackman: What you should expect to see over the next several years is the inherent self-liquidating nature of condos and lot sales, but also an acceleration in the monetization of what you think of as more stabilized type assets and maybe more partnership type opportunities for the company. Maybe even we'll raise a pool of capital that management can deploy in these assets on behalf of pension funds or other investors who love to own the kind of assets that Howard Hughes owns. Let's call that the backdrop of what we're trying to achieve.

Speaker #3: So let's call that the backdrop of what we're trying to achieve. And the result of that will be as the insurance operation compounds its capital, ideally a high rate over time, as we invest more capital in that business, as the real estate business in effect self-liquidates and/or we bring in third-party capital to reduce our capital commitment to that business, we're going to become disproportionately an insurance holding company as opposed to a real estate company with an insurance operation.

William Ackman: The result of that will be, as the insurance operation compounds its capital at ideally a high rate over time, as we invest more capital in that business, as the real estate business in effect self-liquidates and/or we bring in third-party capital to reduce our capital commitment to that business, we're going to become disproportionately an insurance holding company as opposed to a real estate company with an insurance operation. That's what you're going to see, and we're going to work to achieve that as rapidly as possible. With that, I'm going to introduce Marc Grandisson. Marc, why don't you take it away? I think it would be very interesting to the people on the call, give us some of your first impressions arriving at Vantage, meeting the team, and then maybe give us a little color on the quarter, et cetera. Thank you.

Bill Ackman: The result of that will be, as the insurance operation compounds its capital at ideally a high rate over time, as we invest more capital in that business, as the real estate business in effect self-liquidates and/or we bring in third-party capital to reduce our capital commitment to that business, we're going to become disproportionately an insurance holding company as opposed to a real estate company with an insurance operation.

Speaker #3: And that's what you're going to see and you're going to we're going to work to achieve that as rapidly as possible. That I'm going to introduce Mark Grandison, Mark, why don't you take it away and I think it would be very interesting to the people on the call give us some of your first impressions arriving at Vantage, meeting the team, and then maybe give us a little color on the quarter, etc.

Bill Ackman: That's what you're going to see, and we're going to work to achieve that as rapidly as possible. With that, I'm going to introduce Marc Grandisson. Marc, why don't you take it away? I think it would be very interesting to the people on the call, give us some of your first impressions arriving at Vantage, meeting the team, and then maybe give us a little color on the quarter, et cetera. Thank you.

Speaker #3: Thank you.

Speaker #2: Thank you, Bill. It's great to be here today. My role as executive chairman of Vantage Risk. While it's still early days, since the deal closed, it's been a fair amount of time, Bill, with the Vantage Risk team.

Marc Grandisson: Thank you, Bill. It's great to be here today. My role as Executive Chairman of Vantage Risk. While it's still early days since the deal closed, I spent a fair amount of time, Bill, with the Vantage Risk team, and I want to thank them all for helping me get up to speed on the business. I'm very confident Vantage has a solid foundation to build and build out the vision that we've outlined already. I especially want to thank Greg Hendrick, who continues to lead the team. I want to remind that. Through this transition period, until David Gansberg, our CEO-Designate, joins the company. As you may know, Vantage was founded in late 2020 with about $1 billion of capital. Over the next 5 years, the team has built a diversified specialty platform and a culture that is conducive for profitable growth and expansion.

Speaker #2: And I want to thank them all for helping me get up to speed on the business. I'm very confident that Vantage has a solid foundation to build and build out the vision that we've highlighted already.

Speaker #2: Especially, I want to thank Greg Hendrick. I know he continues to lead the team. I want to remind that. And through this transition period, until David Gainsburg, our CEO designate, joins the company.

Marc Grandisson: Through this transition period, until David Gansberg, our CEO-Designate, joins the company. As you may know, Vantage was founded in late 2020 with about $1 billion of capital. Over the next 5 years, the team has built a diversified specialty platform and a culture that is conducive for profitable growth and expansion. This acquisition that we just made, the incremental $300 million capital contribution, and the fee-free investment management by Pershing Square open the next chapter for Vantage.

Speaker #2: As you may know, Vantage was founded in late 2020 with about $1 billion of capital. Over the next five years, the team has built a diversified specialty platform and a culture that is conducive for profitable growth and expansion.

Speaker #2: This acquisition that we just made, the incremental $300 million capital contribution, and the fee-free investment management by Pershing Square open the next chapter for Vantage.

Marc Grandisson: This acquisition that we just made, the incremental $300 million capital contribution, and the fee-free investment management by Pershing Square open the next chapter for Vantage. Permanent capital allows us to underwrite for multi-year risk-adjusted returns that should generate top-tier growth and book value. Given our current size, we have ample room to grow selectively. The Howard Hughes consolidated financial results for Q2 include only the stub period from 4 June, the date of closing of the acquisition, through 30 June. However, everything I discussed today, in the event of supplemental information that has been disclosed, covers full Q2 and H1 results for Vantage on a historical GAAP basis, excluding acquisition accounting, which provides a clearer picture of the business. Turning to our Q2 results, the group's combined ratio was 101.6% versus 94% a year ago.

Speaker #2: Permanent capital allows us to underwrite for multi-year risk-adjusted returns that should generate top-tier growth in both value. Given our current size, we have ample room to grow selectively.

Marc Grandisson: Permanent capital allows us to underwrite for multi-year risk-adjusted returns that should generate top-tier growth and book value. Given our current size, we have ample room to grow selectively. The Howard Hughes consolidated financial results for Q2 include only the stub period from 4 June, the date of closing of the acquisition, through 30 June. However, everything I discussed today, in the event of supplemental information that has been disclosed, covers full Q2 and H1 results for Vantage on a historical GAAP basis, excluding acquisition accounting, which provides a clearer picture of the business. Turning to our Q2 results, the group's combined ratio was 101.6% versus 94% a year ago.

Speaker #2: The Howard Hughes consolidated financial results for the second quarter include only the stub period from June 4th, the day of the closing of the acquisition, through June 30th.

Speaker #2: However, everything I discussed today in the Vantage supplemental information that has been disclosed covers full second quarter and first half of the year results for Vantage.

Speaker #2: On a historical gap basis, excluding acquisition accounting, which provides a clearer picture of the business. Turning to our second quarter results, the group's combined ratio was 1:1.6% versus 94% a year ago.

Speaker #2: Gross and net between premium in the second quarter, each rose 29% to $473,325,000,000 respectively. Net earned premium of $295,000,000 was up 22% year over year.

Marc Grandisson: Gross and net written premium in Q2 each rose 29% to $473 million and $325 million respectively. Net earned premium of $295 million was up 22% year over year. We had an $18 million of cat losses tied to the conflict in Iran and $19 million of adverse prior development, largely in the discontinued transactional liabilities line, totaling a 10.2% impact on the combined ratio. The combined ratio for H1 was 96.1%, and on a trailing 12-month basis, the combined ratio was 94.7%, both considerable improvements from the previous periods. Year-to-date net income increased to $86 million, up 94%. Year-to-date underwriting income grew to $23 million, roughly double from the prior year. In Q2, significant levels of fee income added to these improvements, in total, more than offset the short-term volatility in the new equity portfolio.

Speaker #2: And we had a $18,000,000 of cap losses tied to the conflict in Iran and $19,000,000 of adverse prior development, largely in the discontinued transaction liabilities line, totaling a $10.2% impact on the combined ratio.

Speaker #2: The combined ratio for the first half of the year was 96.1. And on a trading 12-month basis, the combined ratio was 94.7. Both considerable improvements from the previous periods.

Speaker #2: Year-to-date net income increased to $86,000,000 up 94%. Year-to-date underwriting income grew to $23,000,000, roughly double from the prior year. In the second quarter, significant levels of fee income added to these improvements and in total more than offset the short-term volatility in the new equity portfolio.

Speaker #2: The first half and trading 12-month results showed a trend toward the longer-term results that was laid out in the Howard Hughes valuation supplement that was discussed on last quarter's earnings call.

Marc Grandisson: The H1 in trailing 12-month results show the trend toward the longer-term result that was laid out in the Howard Hughes valuation supplement that was discussed on last quarter's earnings call. While we expect reduced volatility in results over the long term as we build scale, quarter-on-quarter movements will always have some degree of variability commensurate with our book of business. Importantly, the best metric to assess the underlying health of our underwriting is the current accident year combined ratio excluding catastrophes, which improved to 91.4% in Q2 from 96.2% in Q2 of last year. On a year-to-date basis, the same ratio improved to 90.9% from 94.6%, again, showing a positive trend. Let me now highlight what shareholders should expect from Vantage as we look ahead. Vantage's core operating principles are right out of best-in-class performers in the property casualty insurance space.

Speaker #2: While we expect reduced volatility in results over the long term as we build scale, quarter-on-quarter movements will always have some degree of variability commensurate with our book of business.

Speaker #2: Importantly, the best metric to assess the underlying health of our underwriting is the current accident year combined ratio excluding catastrophes which improved to 91.4 the second quarter from 96.2 in the second quarter of last year.

Speaker #2: On a year-to-date basis, the same ratio improved to 90.9 from 94.6, again showing a positive trend. Let me now highlight some of what shareholders should expect from Vantage as we look ahead.

Marc Grandisson: On a year-to-date basis, the same ratio improved to 90.9% from 94.6%, again, showing a positive trend. Let me now highlight what shareholders should expect from Vantage as we look ahead. Vantage's core operating principles are right out of best-in-class performers in the property casualty insurance space. One, we're going to prioritize underwriting profit over volume with proper alignment of incentives between shareholders and management. Two, we maintain a conservative reserving approach. Three, we take a long-term, data-driven perspective on loss expectancy and profit margin. Four, we are disciplined in our decision-making.

Speaker #2: Vantage's core operating principles are right out of best-in-class performers in the property casualty insurance space. One, we're going to prioritize underwriting profit over value.

Marc Grandisson: One, we're going to prioritize underwriting profit over volume with proper alignment of incentives between shareholders and management. Two, we maintain a conservative reserving approach. Three, we take a long-term, data-driven perspective on loss expectancy and profit margin. Four, we are disciplined in our decision-making. Strategically, we will execute our vision by retaining and attracting top talent, expanding and diversifying our platform so that our ability to capture hardening pockets is nimble and fast. We'll be investing in data to improve the quality of our decisions and better serve our customers. We'll be seeking a margin of safety in pricing. We'll be managing aggregation risk conservatively, and we will be leveraging our underwriting expertise whenever possible. We know that excellent execution of this strategy by the best people will generate return on equity at or above mid-teens over the cycle. Turning to current P&C market conditions.

Speaker #2: With proper alignment of incentives, between shareholders and management. Two, we maintain a conservative reserving approach. Three, we take a long-term data-driven perspective on loss expectancy and profit margin.

Speaker #2: And four, we are disciplined in our decision-making. Strategically, we will execute our vision by retaining and attracting top talent. Expanding and diversifying our platform so that our ability to capture hardening pockets is nimble and fast.

Marc Grandisson: Strategically, we will execute our vision by retaining and attracting top talent, expanding and diversifying our platform so that our ability to capture hardening pockets is nimble and fast. We'll be investing in data to improve the quality of our decisions and better serve our customers. We'll be seeking a margin of safety in pricing. We'll be managing aggregation risk conservatively, and we will be leveraging our underwriting expertise whenever possible. We know that excellent execution of this strategy by the best people will generate return on equity at or above mid-teens over the cycle. Turning to current P&C market conditions.

Speaker #2: We'll be investing in data to improve the quality of our decisions and better serve our customers. We'll be seeking a margin of safety in pricing.

Speaker #2: We'll be managing aggregation risk conservatively and we will be leveraging our underwriting expertise whenever possible. We know that excellent execution of this strategy by the best people will generate return on equity as or above mid-teens over the cycle.

Speaker #2: Turning to current P&C market conditions. In the past, I have described the insurance cycles as having broadly four stages. As a reminder, stage one is where the hard market is starts, rates rise sharply, capacity withdraws.

Marc Grandisson: In the past, I have described the insurance cycle as having broadly 4 stages. As a reminder, stage 1 is where the hard market starts. Rates rise sharply, capacity withdraws. Stage 2 is a restoration phase where further rate increases and reserves are replenished. Stage 3, where rates moderate or decline while hard market profits continue to flow, allowing disciplined underwriters to still grow profitably. Finally, stage 4, the industry abandons discipline and chases volume as rates fall further. Today, we are primarily in stage 3, with casualty seemingly stalled in stage 2 and a few property and short tail lines already entering stage 4. Broadly, rates are down from peak and competition has increased, but pockets of attractive returns remain as many lines still show rate level adequacy despite the initial market softening.

Speaker #2: Stage two is a restoration phase where further rate increases and reserve are replenished. Then stage three where rates moderate or decline while hard market profits continue to flow.

Speaker #2: Allowing disciplined underwriters to still grow profitably. And finally, stage four, the industry abandons discipline and chases volume as rates fall further. Today, we are primarily in stage three, with casualties seemingly stalled in stage two and a few property and short-date lines already entering stage four.

Speaker #2: Broadly, rates are down from peak and competition has increased, but pockets have attracted returns remain. As many lines still show rate level adequacy, during despite the initial market softening.

Speaker #2: Our capital position is strong and remains well in excess of grading and regulatory requirements. As an example of the relative strength of our capital, book value ended the second quarter as 1.8 billion dollars versus roughly 1.2 billion of trading 12 months net written premium, a conservative low premium to surplus ratio of 0.7.

Marc Grandisson: Our capital position is strong and remains well in excess of rating and regulatory requirements. As an example of the relative strength of our capital, book value ended Q2 as $1.8 billion versus roughly $1.2 billion of trailing 12 months net written premium, a conservative low premium to surplus ratio of 0.7. Accordingly, AM Best affirmed our A-minus rating with an upgrade to positive outlook. On the other hand, S&P's rating action reflected its group methodology, which included Howard Hughes, as opposed to the standalone quality of Vantage, for which the anchor rating remains A-minus. We plan to work with S&P and other rating agencies as we progress with our strategy and its benefits, as they can be seen more clearly as they develop. In summary, over the next 12 months, we will deepen our underwriting expertise and data focus

Speaker #2: Accordingly, AM Best affirmed our A-minus rating with an upgrade to positive outlook. On the other hand, S&P's rating action reflected its group methodology, which included Howard Hughes as opposed to the standalone quality of Vantage, for which the anchor rating remained A-minus.

Speaker #2: We plan to work with S&P and other rating agencies as we progress with our strategy and its benefits as you can see can be seen more clearly as they develop.

Speaker #2: In summary, over the next 12 months, we will deepen our underwriting expertise and data focus expand the diversification of our product offerings and establish Vantage as a preferred home for best-in-class underwriting talent.

David O'Reilly: Expand the diversification of our product offerings and establish Vantage as a preferred home for best-in-class underwriting talent. We are in the early innings of a multi-year story. The permanent capital structure is in place. Underwriting discipline is at the center of everything we do, and the platform is being built out to solidify our principles. We're focused on taking the company to the next level. I look forward to updating you on the progress in the future. With that, I will turn it over to Ryan.

Marc Grandisson: Expand the diversification of our product offerings and establish Vantage as a preferred home for best-in-class underwriting talent. We are in the early innings of a multi-year story. The permanent capital structure is in place. Underwriting discipline is at the center of everything we do, and the platform is being built out to solidify our principles. We're focused on taking the company to the next level. I look forward to updating you on the progress in the future. With that, I will turn it over to Ryan.

Speaker #2: We are in the early innings of a multi-year story. The permanent capital structure is in place. Underwriting discipline is at the center of everything we do.

Speaker #2: And the platform is being built out to solidify our principles. We're focused on taking the companies to the next level, I look forward to a bidding you on the progress in the future.

Speaker #2: With that, I will turn it over to Ryan.

Speaker #3: Thanks, Mark. As Bill talked about earlier in the call and really the thesis we've laid out since we announced our transaction with Howard Hughes a little over a year ago is that we think the insurance business is a very great and unique business that can offer the opportunity to generate incredibly high and sustained returns on equity over the long term if you do two things.

Ryan Israel: Thanks, Marc. As Bill talked about earlier in the call, and really the thesis we've laid out since we announced our transaction with Howard Hughes a little over a year ago, was that we think the insurance business is a very great and unique business that can offer the opportunity to generate incredibly high and sustained returns on equity over the long term if you do two things. First, you optimize the liability side of your balance sheet by bringing in world-class talent to have profitable underwriting growth, which with the addition of Marc, and then the incoming CEO and future, David, we think we've accomplished.

Speaker #3: First, you optimize the liability side of your balance sheet by bringing in world-class talent to have profitable underwriting growth, which is the addition of Mark and then the incoming CEO and future David.

Speaker #3: We think we've accomplished. Second is by optimizing the asset side of the balance sheet by bringing in a much higher rate of return strategy than what would typically be a fixed income only portfolio at relatively low rates of return that's subject to a lot of interest rate risk.

Ryan Israel: The second is by optimizing the asset side of the balance sheet by bringing in a much higher rate of return strategy than what would typically be a fixed income only portfolio at relatively low rates of return that is subject to a lot of interest rate risk. That is really what we have been seeking to do on the Pershing Square side in managing this investment portfolio for Vantage. If you look at what has happened since we closed Vantage in early June, we have about a $3.4 billion portfolio that was entirely allocated to fixed income securities at a relatively low rate, with a duration profile of three to four years, which meant there was a fair amount of longer term interest rate risk there.

Speaker #3: And that's really what we've been seeking to do on the Pershing Square side in managing this investment portfolio for Vantage. If you look at what's happened since we closed Vantage in early June, we have about a 3.4 billion dollar portfolio that was entirely allocated to fixed income securities a relatively low rate with a duration profile three to four years, which meant there was a fair amount of longer-term interest rate risk there.

Speaker #3: We moved very quickly to rebalance that portfolio to a barbell approach where we have as of the end of the quarter, which is really just a few weeks after we closed, more than 60% of the overall portfolio allocated to short-term US treasuries where we take no duration risk, no credit risk.

Ryan Israel: We moved very quickly to rebalance that portfolio to a barbell approach, where we have, as of the end of the quarter, which was really just a few weeks after we closed, more than 60% of the overall portfolio allocated to short-term US Treasuries, where we take no duration risk, no credit risk. The goal of that portfolio is really to balance all of the reserves that we have so that there is no risk in funding those reserves into the future. Then we also have about a $1.1 billion equity portfolio that we established, which is about a third of the overall portfolio, in just a few weeks.

Speaker #3: And the goal of that portfolio is really to balance all of the reserves that we have. So there is no risk in funding those reserves into the future.

Speaker #3: And then we also had about a 1.1 billion dollar equity portfolio that we established, which is about a third of the overall portfolio and just a few weeks.

Speaker #3: We think moving quickly to establish that was a very good strategy because interest rates longer-term interest rates had risen very rapidly over the ensuing months since we closed Vantage.

Ryan Israel: We think moving quickly to establish that was a very good strategy because longer term interest rates had risen very rapidly over the ensuing months since we closed Vantage, and we have avoided what would have otherwise been some losses on that portfolio. Subsequent to the quarter, though, we have continued over the last month to increase the allocation of equities, and it is now about 40% of the overall investment portfolio. Over time, we will continue to increase that percentage as we think we have the opportunity to invest in some of the world's best businesses, led by great management teams that productively use their free cash flow to create shareholder value. That barbell approach of taking no risk on the insurance liabilities, having a short-term treasury portfolio combined with buying businesses where we can achieve high rates of return, can allow for a very attractive and low risk result.

Speaker #3: And we've avoided what could have otherwise been some losses on that portfolio. Subsequent to the quarter, though, we've continued over the last month to increase the allocation of equities.

Speaker #3: And it's now about 40% of the overall investment portfolio and over time we'll continue to increase that percentage as we think we have the opportunity to invest in some of the world's best businesses led by great management teams that productively use their free cash flow to create shareholder value.

Speaker #3: And that barbell approach of taking no risk on the insurance liabilities having a short-term treasury portfolio combined with buying businesses where we can achieve high rates of return can allow for a very attractive and low-risk result.

Ryan Israel: That barbell approach of taking no risk on the insurance liabilities, having a short-term treasury portfolio combined with buying businesses where we can achieve high rates of return, can allow for a very attractive and low risk result. Now, to give you a little bit of a flavor, I will describe sort of the businesses that we buy, which are effectively what we like to say royalty-like businesses with strong secular growth opportunities.

Speaker #3: Now, to give you a little bit of a flavor, I'll describe sort of the businesses that we buy, which are effectively what we like to say royalty-like businesses with strong secular growth opportunities.

Ryan Israel: Now, to give you a little bit of a flavor, I will describe sort of the businesses that we buy, which are effectively what we like to say royalty-like businesses with strong secular growth opportunities. They are what we call simple, predictable, free cash flow generative businesses run by great management teams, minimal financial leverage, no capital markets dependency. It has been the approach that we have taken at Pershing Square for over two decades and has led to really good results, and we believe it will also lead to similarly positive results with Vantage in the future by continuing to do that approach. We are going to have our Pershing Square, our publicly traded asset manager earnings call next Thursday, which we would encourage you to listen to.

Speaker #3: So they're what we call simple, predictable, free cash flow generative businesses run by great management teams, minimal financial leverage, no capital markets dependency. It's been the approach that we've taken at Pershing Square for over two decades and has led to really good results.

Ryan Israel: They are what we call simple, predictable, free cash flow generative businesses run by great management teams, minimal financial leverage, no capital markets dependency. It has been the approach that we have taken at Pershing Square for over two decades and has led to really good results, and we believe it will also lead to similarly positive results with Vantage in the future by continuing to do that approach. We are going to have our Pershing Square, our publicly traded asset manager earnings call next Thursday, which we would encourage you to listen to. At that point, we will be describing some of the new investments that we've made, which are applicable to Vantage portfolio, as well as providing an update on the existing investments that we've had in the portfolio.

Speaker #3: And we believe it will also lead to similarly positive results with Vantage in the future by continuing to do that approach. We're going to have our Pershing Square, our publicly traded asset manager, earnings call next Thursday, which we'd encourage you to listen to.

Speaker #3: And at that point, we will be describing some of the new investments that we've made, which are applicable to the Vantage portfolio, as well as providing an update on the existing investments that we've had in the portfolio.

Ryan Israel: At that point, we will be describing some of the new investments that we've made, which are applicable to Vantage portfolio, as well as providing an update on the existing investments that we've had in the portfolio. At a high level, the way to think about it, before we get into those details next week, is we will have a dozen to 15 different investments that we believe are ones that we could hold for long periods of time that will generate high rates of return based on their structural competitive positions, management teams, and strong levels of earnings growth. Before I close on portfolio, just to acknowledge one thing, which is as we were establishing the portfolio through June to the end of the quarter, that several week period of time, due to some broader market weakness, the portfolio on the stocks was down about 3%.

Speaker #3: But at a high level, the way to think about it, before we get into those details next week, is we will have a dozen to 15 different investments that we believe are ones that we could hold for long rates a long periods of time that will generate high rates of return based on their structural competitive positions, management teams, and strong levels of earnings growth.

Ryan Israel: At a high level, the way to think about it, before we get into those details next week, is we will have a dozen to 15 different investments that we believe are ones that we could hold for long periods of time that will generate high rates of return based on their structural competitive positions, management teams, and strong levels of earnings growth. Before I close on portfolio, just to acknowledge one thing, which is as we were establishing the portfolio through June to the end of the quarter, that several week period of time, due to some broader market weakness, the portfolio on the stocks was down about 3%.

Speaker #3: Before I close, the were establishing the portfolio through June to the end of the quarter, that's our wait period of time, due to some broader market weakness, the portfolio on the stocks was down about 3%.

Speaker #3: It's already in the last month recovered and is up between 4 and 5%. And while we're not focused on the short-term results that equity portfolio, I do think it's just interesting to point out that the amount that we've made in the equity portfolio in just a couple of months is already exceeded what we would have expected a fixed income only portfolio to earn for the entire year.

Ryan Israel: It's already, in the last month, recovered and is up between 4% and 5%. While we're not focused on the short term results of equity portfolio, I do think it's just interesting to point out that the amount that we've made in the equity portfolio in just a couple of months has already exceeded what we would've expected a fixed income only portfolio to earn for the entire year. I think we're off to a very good start, and we'll continue reshaping that portfolio over time. With that, I'll turn it over to David to talk about the real estate business.

Speaker #3: So I think we're off to a very good start and we'll continue reshaping that portfolio over time. And with that, I'll turn it over to David to talk about the real estate business.

Speaker #1: Thank you so much, Ryan. After listening to Bill and Mark and Ryan, I think it's clear one of the reasons Vantage is such a great fit for Howard Hughes is that both businesses reward patience, discipline, and thoughtful capital allocation.

David O'Reilly: Thank you so much, Ryan. After listening to Bill and Marc and Ryan, I think it's clear one of the reasons Vantage is such a great fit for Howard Hughes is that both businesses reward patience, discipline, and thoughtful capital allocation. Completely different industries, but we share many of the same economic characteristics. That mindset has guided our real estate business for over a decade and continues to be reflected in the results we delivered this quarter. As I walk through the results this morning, now that the supplemental has been out for over a quarter, I'm going to spend less time going through the numbers of the supplemental and more time discussing what they tell us about the business and why they matter to shareholders. The headline from the quarter is simple. Our real estate platform is doing exactly what we designed it to do.

Speaker #1: Completely different industries, but we share many of the same economic characteristics. And that mindset has guided our real estate business for over a decade.

Speaker #1: It continues to be reflected in the results we delivered this quarter. As I walk through the results this morning, now that the supplemental has been out for over a quarter, I'm going to spend less time going through the numbers of the supplemental and more time discussing what they tell us about the business and why they matter to shareholders.

Speaker #1: The headline from the quarter is simple. Our real estate platform is doing exactly what we designed it to do. Our master plan communities continue to monetize scarce land at attractive values.

David O'Reilly: Our real estate platform is doing exactly what we designed it to do. Our Master Planned Communities continue to monetize scarce land at attractive values. Our operating assets continue to grow recurring cash flow. Our condominium platform converted years of development work into substantial cash proceeds. Together, those businesses generated the capital and financial flexibility that helped fund the most important strategic transaction in our company's history. Those aren't isolated accomplishments. They're all connected parts of a capital allocation system. Starting with our Master Planned Communities NPC earnings before taxes increased 32% year-over-year to $134.7 million, driven primarily by strong residential and commercial land sales. More importantly, demand remained healthy across the portfolio. New home sales increased 12%, including 34% at The Woodlands Hills, 17% at Bridgeland, and continued growth in Summerlin.

David O'Reilly: Our Master Planned Communities continue to monetize scarce land at attractive values. Our operating assets continue to grow recurring cash flow. Our condominium platform converted years of development work into substantial cash proceeds. Together, those businesses generated the capital and financial flexibility that helped fund the most important strategic transaction in our company's history. Those aren't isolated accomplishments. They're all connected parts of a capital allocation system. Starting with our Master Planned Communities NPC earnings before taxes increased 32% year-over-year to $134.7 million, driven primarily by strong residential and commercial land sales. More importantly, demand remained healthy across the portfolio. New home sales increased 12%, including 34% at The Woodlands Hills, 17% at Bridgeland, and continued growth in Summerlin. The number I think investors should focus on isn't simply quarterly earnings, it's a combination of pricing, power, and demand.

Speaker #1: Our operating assets continue to grow recurring cash flow. Our condominium platform converted years of development work into substantial cash proceeds. And together, those businesses generated the capital and financial flexibility that helped fund the most important strategic transaction in our company's history.

Speaker #1: Those aren't isolated accomplishments. They're all connected parts of a capital allocation system. Starting with our master plan communities, NPC earnings before taxes increased 32% year over year to $134.7 million.

Speaker #1: Driven primarily by strong residential and commercial land sales. More importantly, demand remained healthy across the portfolio. New home sales increased 12%, including 34% at Woodland Hills, 17% at Bridgeland, and continued growth in Summerlin.

Speaker #1: The number I think investors should focus on isn't simply quarterly earnings. It's a combination of pricing power and demand. We continue to convert entitled developer-ready land into cash.

David O'Reilly: The number I think investors should focus on isn't simply quarterly earnings, it's a combination of pricing, power, and demand. We continue to convert entitled developer-ready land into cash at increasingly attractive values while maintaining strong demand from home builders. We've often said that we're not selling land, we are harvesting scarcity. This quarter is another example of that principle. Every acre we develop leaves fewer remaining. Every new neighborhood enhances the value of the next one. Over time, price becomes a much more important driver of value than volume. That's why we encourage investors not to judge this business by any single quarter.

David O'Reilly: We continue to convert entitled developer-ready land into cash at increasingly attractive values while maintaining strong demand from home builders. We've often said that we're not selling land, we are harvesting scarcity. This quarter is another example of that principle. Every acre we develop leaves fewer remaining. Every new neighborhood enhances the value of the next one. Over time, price becomes a much more important driver of value than volume. That's why we encourage investors not to judge this business by any single quarter. Land sales are going to be lumpy. Instead, look at the long-term trajectory of pricing, demand, and earnings. Those indicators continue to move in the right direction. Our remaining wholly owned land bank represents approximately $5.6 billion of projected margin affected residual value, excluding the substantial future opportunity embedded in Teravalis and Floreo. That land represents decades of future capital generation.

Speaker #1: It increasingly attracts values, while maintaining strong demand from home builders. We've often said that we're not selling land. We are harvesting scarcity. In this quarter is another example of that principle.

Speaker #1: Every acre we develop, we've fewer remaining. Every new neighborhood enhances the value of the next one. Over time, price becomes a much more important driver of value than volume.

Speaker #1: That's why we encourage investors not to judge this business by any single quarter. Land sales are going to be lumpy. Instead, look at the long-term trajectory of pricing, demand, and earnings.

David O'Reilly: Land sales are going to be lumpy. Instead, look at the long-term trajectory of pricing, demand, and earnings. Those indicators continue to move in the right direction. Our remaining wholly owned land bank represents approximately $5.6 billion of projected margin affected residual value, excluding the substantial future opportunity embedded in Teravalis and Floreo. That land represents decades of future capital generation.

Speaker #1: Those indicators continue to move in the right direction. Our remaining wholly-owned land bank represents approximately 5.6 billion of projected margin-affected residual value, excluding the substantial future opportunity embedded in Terra Valis and Floreo.

Speaker #1: That land represents decades of future capital generation. Turning to operating assets. NOI continued to grow during the quarter as leasing momentum remained healthy across the portfolio.

David O'Reilly: Turning to operating assets. NOI continued to grow during the quarter as leasing momentum remained healthy across the portfolio. While adjusted maintenance free cash flow declined modestly during the quarter because we invested in leasing activity and incurred higher interest expense, I actually view those investments as encouraging. We're deploying capital today to increase occupancy and strengthen future recurring cash flow. I think the more important point is what this business has become inside of Howard Hughes. Operating assets are no longer simply stabilized real estate. They're generating recurring cash flow while creating additional opportunities to unlock and redeploy capital. They provide predictable cash generation, gives us flexibility during market cycles, supports new investment opportunities, and reduces our dependence on capital markets. We also demonstrated our commitment to disciplined capital recycling.

Speaker #1: While adjusted maintenance-free cash flow declined modestly during the quarter because we invested in leasing activity and incurred higher interest expense, I actually view those investments as encouraging.

Speaker #1: We're deploying capital today to increase occupancy and strengthen future recurring cash flow. I think the more important point is what this business has become inside of Howard Hughes.

Speaker #1: Operating assets are no longer simply stabilized real estate. They're generating recurring cash flow while creating additional opportunities to unlock and redeploy capital. They provide predictable cash generation, gives us flexibility during market cycles, supports new investment opportunities, and reduces our dependence on capital markets.

Speaker #1: We also demonstrated our commitment to disciplined capital recycling. We sold Creekside Park and Creekside Park to Grove generating approximately $30 million of net proceeds after debt repayment, while achieving approximately a 30% project-level IRR over the life of those investments.

David O'Reilly: We sold Creekside Park and Creekside Park The Grove, generating approximately $30 million of net proceeds after debt repayment, while achieving approximately a 30% project level IRR over the life of those investments. Those transactions also illustrate how we think about our real estate portfolio going forward. As Bill mentioned, while we maintain and want to remain committed to the long-term oversight of our Master Planned Communities, we've significantly expanded our toolkit for creating shareholder value. As assets mature, we'll continually evaluate whether our shareholders are best served by continuing to own them outright or pursuing alternative structures, including selective asset sales, joint ventures, recapitalizations, or other strategic transactions, all of which that could unlock embedded value while preserving the long-term advantages of our platform. The objective isn't monetization for its own sake, it's disciplined capital allocation.

Speaker #1: Those transactions also illustrate how we think about our real estate portfolio going forward. And as Bill mentioned, while we maintain and want to remain committed to the long-term oversight of our master plan communities, we've significantly expanded our toolkit for creating shareholder value.

Speaker #1: As assets mature, we'll continually evaluate whether our shareholders are best served by continuing to own them outright or pursuing alternative structures, including selective asset sales, joint ventures, recapitalizations, or other strategic transactions, all of which that could unlock embedded value while preserving the long-term advantages of our platform.

Speaker #1: The objective isn't monetization for its own sake; it's disciplined capital allocation. If we can realize the value we've created in a lower-turn asset and redeploy that capital into opportunities with higher expected returns—whether that's expanding Vantage or advancing transformational developments like the Toro District—we believe that's a better outcome for our shareholders.

David O'Reilly: If we can realize the value we've created in a lower return asset and redeploy that capital into opportunities with higher expected returns, whether that's expanding Vantage or advancing transformational developments like the Toro District, we believe that's a better outcome for our shareholders. Our holding company structure gives us greater flexibility to make those decisions than ever before, while remaining committed to the principles that have made Howard Hughes successful for decades. When we believe capital can earn a higher return elsewhere, we'll recycle it. That discipline is just as important as developing great assets. Turning to condos, they delivered exactly what we expected. The completion of The Park Ward Village generated meaningful cash flow of about $227 million of net proceeds after repayment of the construction loan. Those proceeds are the result of work that began years ago.

Speaker #1: Our holding company structure gives us greater flexibility to make those decisions than ever before, while remaining committed to the principles that have made Howard Hughes successful for decades.

Speaker #1: When we believe capital can earn a higher return elsewhere, we'll recycle it. And that discipline is just as important as developing great assets. Turning to condos.

Speaker #1: They delivered exactly what we expected. The completion of the Park Ward Village generated meaningful cash flow of about $227 million of net proceeds after repayment of the construction loan.

Speaker #1: Those proceeds are the result of work that began years ago. Because our projects are substantially pre-sold before construction is complete, the accounting appears lumpy, while the economics are remarkably predictable.

David O'Reilly: Because our projects are substantially pre-sold before construction is complete, the accounting appears lumpy, while the economics are remarkably predictable. I often describe our condominium platform as self-financing. We contribute irreplaceable land. Buyer deposits and non-recourse construction financing fund the majority of the development. We largely lock in our margins years before delivery. Today, we have more than $4 billion of future expected condominium revenue, with roughly 78% already under contract. That pipeline provides excellent visibility into future cash generation while maintaining a conservative risk profile. Finally, on our balance sheet, following the close of the Vantage acquisition, we continue to maintain significant liquidity, modest corporate leverage, and substantial capacity to fund future growth. That financial flexibility matters because it allows us to continue investing through market cycles while maintaining discipline around capital allocation.

Speaker #1: I often describe our condominium platform as self-financing. We contribute irreplaceable land, while buyer deposits and non-recourse construction financing fund the majority of the development. We largely lock in our margins a year before delivery.

Speaker #1: And today, we have more than $4 billion of future expected condominium revenue with roughly 78% already under contract. That pipeline provides excellent visibility into future cash generation while maintaining a conservative risk profile.

Speaker #1: Finally, on our balance sheet, following the close of the Vantage acquisition, we continue to maintain significant liquidity. Modest corporate leverage and substantial capacity to fund future growth.

Speaker #1: That financial flexibility matters because it allows us to continue investing through market cycles while maintaining discipline around capital allocation. Look, taking a step back to wrap it up, I think the broader takeaways from the quarter are these:

David O'Reilly: Look, taking a step back to wrap it up, I think the broader takeaways from the quarter are these. The communities are demonstrating pricing power. The operating assets are growing recurring cash flow. Our condominium platform continues to recycle capital, and together, those businesses generated the strength that enabled Howard Hughes to successfully begin its next chapter as a diversified holding company. Our real estate platform continues to create intrinsic value, generate capital, and provide the foundation for which we're going to build Howard Hughes for decades to come. With that, I'll turn it back over to Bill for any remarks before Q&A.

Speaker #1: The communities are demonstrating pricing power. The operating assets are growing recurring cash flow. Our condominium platform continues to recycle capital and together, those businesses generated the strength that enabled Howard Hughes to successfully begin its next chapter as a diversified holding company.

Speaker #1: Our real estate platform continues to create intrinsic value, generate capital, and provide the foundation for which we're going to build Howard Hughes for decades to come.

Speaker #1: With that, I'll turn it back over to Bill for any remarks before Q&A.

Speaker #2: I think we should just go to Q&A. So operator, why don't you go ahead and give us some questions?

William Ackman: I think we should just go to Q&A. Operator, why don't you go ahead and give us some questions?

Bill Ackman: I think we should just go to Q&A. Operator, why don't you go ahead and give us some questions?

Speaker #3: Sure. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. Do withdraw your question.

Operator: Sure. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question will come from the line of Anthony Paolone of J.P. Morgan. Anthony, your line is open.

Speaker #3: Please press star 11 again. Please stand by while we compile our Q&A roster. And our first question will come from the line of Anthony Pallone of JPMorgan.

Speaker #3: Anthony, your line is open.

Daniella Diaz Masrestales: Hi, it's Daniella Diaz Masrestales on Anthony Paolone's line here. Maybe for Bill, Pershing Square stepped up with $1 billion of preferred equity on Vantage. How should we think about the financial capacity of Howard Hughes right now beyond what the balance sheet allows? Is there more support from Pershing Square that can be garnered to make other acquisitions? Thank you.

Daniella Masrestales: Hi, it's Daniella Diaz Masrestales on Anthony Paolone's line here. Maybe for Bill, Pershing Square stepped up with $1 billion of preferred equity on Vantage. How should we think about the financial capacity of Howard Hughes right now beyond what the balance sheet allows? Is there more support from Pershing Square that can be garnered to make other acquisitions? Thank you.

Speaker #4: Hi, it's Danielle Diermas or Salas on Anthony Pallone's line here. Maybe for Bill, Pershing Square stepped up with $1 billion of preferred equity on Vantage.

Speaker #4: So how should we think about the financial capacity of Howard Hughes right now beyond what the balance sheet allows? And is there more support from Pershing Square that can be garnered to make other acquisitions?

Speaker #4: Thank you.

Speaker #2: Yeah. Well, Pershing Square is obviously very much committed to Howard Hughes. We think the billion of incremental capital is, I would say, what is needed for the company to execute on its plan.

William Ackman: Yeah. Well, Pershing Square is obviously very much committed to Howard Hughes. We think the $1 billion of incremental capital is, I would say, what is needed for the company to execute on its plan. We think within the existing kind of resources, asset base of the real estate operation, as I mentioned in my commentary and as David alluded to as well, one of the great things about real estate is they're all different kinds of investors with different risk and return kind of thresholds. Howard Hughes is a very experienced team and an incredible platform, and we've not historically looked to monetize joint venture, partner, raise funds, things like this. I expect any incremental capital that comes to Howard Hughes will come from just the existing assets. Most likely in bringing in outside partners, raising third-party capital, that kind of thing.

Bill Ackman: Yeah. Well, Pershing Square is obviously very much committed to Howard Hughes. We think the $1 billion of incremental capital is, I would say, what is needed for the company to execute on its plan. We think within the existing kind of resources, asset base of the real estate operation, as I mentioned in my commentary and as David alluded to as well, one of the great things about real estate is they're all different kinds of investors with different risk and return kind of thresholds. Howard Hughes is a very experienced team and an incredible platform, and we've not historically looked to monetize joint venture, partner, raise funds, things like this. I expect any incremental capital that comes to Howard Hughes will come from just the existing assets. Most likely in bringing in outside partners, raising third-party capital, that kind of thing.

Speaker #2: We think within the existing kind of resources, asset base, of the real estate operation, as I mentioned in my commentary, and as David alluded to as well, we have a lot of one of the great things about real estate is they're all different kinds of investors with different risk and return kind of thresholds.

Speaker #2: Howard Hughes is a very experienced team and an incredible platform. And we've not historically looked to monetize joint venture, partner, raise funds, things like this.

Speaker #2: I expect any incremental capital that comes to Howard Hughes will come from just the existing assets, but most likely from bringing in outside partners, raising third-party capital, that kind of thing.

Speaker #1: And I would just add, that is on top of the two and a half to $3 billion that we've talked about that the company should naturally be generating is excess free cash flow over the next five years.

Ryan Israel: I would just add, that is on top of the $2.5 to $3 billion that we've talked about that the company should naturally be generating as excess free cash flow over the next five years. To Bill's point, we have, over time, more than sufficient capital to be able to meet all of our objectives, both for the real estate business and for its very quickly growing Vantage portfolio. We also have opportunities in the shorter term to be able to supplement that in a very quick way based upon opportunistically monetizing real estate as well.

Speaker #1: So to Bill's point, we have over time more than sufficient capital to be able to meet all of our objectives, both for the real estate business and for the very quickly growing Vantage portfolio.

Speaker #1: But we also have opportunities in the shorter term to be able to supplement that in a very quick way, based upon opportunistically monetizing real estate as well.

Speaker #2: Yeah. Don't be misled by our $4 billion market cap and thinking about the actual underlying resources of the company. The market cap only reflects an underappreciation of the intrinsic value of the company.

William Ackman: Yeah. Don't be misled by our $4 billion market cap in thinking about the actual underlying resources of the company. The market cap only reflects an underappreciation of the intrinsic value of the company. It doesn't reflect the capital resources of the business.

Bill Ackman: Yeah. Don't be misled by our $4 billion market cap in thinking about the actual underlying resources of the company. The market cap only reflects an underappreciation of the intrinsic value of the company. It doesn't reflect the capital resources of the business.

Speaker #2: It doesn't reflect the capital resources of the business.

Daniella Diaz Masrestales: That's helpful. Thank you. Then I have my second question. I know it's a smaller piece, but it looked like The Park Ward Village outperformed the original guidance you guys gave back in Q4. What drove that? It was pretty much pre-sold. Is there anything we should be expecting from the condo business in H2?

Speaker #4: That's helpful. Thank you. And then I have my second question. I know it's a smaller piece, but it looked like Park Ward Village outperformed the original guidance you guys gave back in 4Q.

Daniella Masrestales: That's helpful. Thank you. Then I have my second question. I know it's a smaller piece, but it looked like The Park Ward Village outperformed the original guidance you guys gave back in Q4. What drove that? It was pretty much pre-sold. Is there anything we should be expecting from the condo business in H2?

Speaker #4: What drove that? It was pretty much pre-sold. And is there anything we should be expecting from the condo business in the second half?

Speaker #1: I'm happy to take that question. This is David. I think it performed exactly as we expected. I think with the amount of pre-sales that we had, the amount of net proceeds that came in was very consistent with our expectations.

David O'Reilly: Happy to take that question. This is David. I think it performed exactly as we expected. I think with the amount of pre-sales that we had, the amount of net proceeds that came was very consistent with our expectations. There's typically a handful of things that come in at closing that could round the number up a little bit, like the sale of storage or upgrades to units, but those are typically minor. I would say that this is pretty consistent with our expectations. If anything, we're thrilled to see it all close within one quarter in one fell swoop.

Speaker #1: There's typically a handful of things that come in at closing that could round the number up a little bit, like the sale of storage or upgrade to units, but those are typically minor.

Speaker #1: I would tell you that this is pretty consistent with our expectations, and if anything, we're thrilled to see it all closed within one quarter in one fell swoop.

Speaker #4: Thank you. That's helpful. Thank you.

Daniella Diaz Masrestales: Thank you. That's helpful. Thank you.

Daniella Masrestales: Thank you. That's helpful. Thank you.

Speaker #3: Thank you.

Operator: Thank you.

Speaker #2: Our next question, please.

William Ackman: Next question, please.

Bill Ackman: Next question, please.

Operator: Our next question will-

Speaker #3: Our next question. That's okay. Our next question will be coming from Alexander Goldfarb of Piper Sandler. Alexander, your line is open.

William Ackman: Sorry, Operator.

Bill Ackman: Sorry, Operator.

Operator: That's okay. Our next question will be coming from Alexander Goldfarb of Piper Sandler. Alexander, your line is open.

Speaker #5: Hey, good morning down there. And congrats to everyone on getting the Vantage and everything. closed. A few questions here. First, I'm going to go to David.

Alexander Goldfarb: Hey. Good morning down there. Congrats to everyone on getting the Vantage and everything closed. A few questions here. First I'm going to go to David. The beauty of Howard Hughes, and I know we've had this discussion before, but the beauty of Howard Hughes versus when it was owned by prior companies is the holistic approach, the value that's created by not allowing competitors to come on to your MPCs and be bidding against you, whether it's on a shopping center or office, et cetera. As you guys refine the monetization approach, are you thinking about having competitors come on, or I know you sold some peripheral apartments, but how do you figure out which parts of Howard Hughes now you want to monetize versus previous?

Speaker #5: The beauty of Howard Hughes—and I know we've had this discussion before—but the beauty of Howard Hughes, versus when it was owned by prior companies, is the holistic approach.

Speaker #5: The value that's created by not allowing competitors to come on to your MPCs and be bidding against you, whether it's on a shopping center or office, etc.

Speaker #5: So as you guys refine the monetization approach, are you thinking about having competitors come on, or how do you figure out I know you sold some peripheral apartments, but how do you figure out which parts of Howard Hughes now you want to monetize versus previous?

Speaker #2: It's a great question, Alex. I appreciate you asking. Look, I don't think the strategy has changed. And for the assets that we believe we have a competitive advantage by having a disproportionate amount of ownership or market share within our communities, we're going to continue to own those.

David O'Reilly: It's a great question, Alex. I appreciate you asking. Look, I don't think the strategy's changed. For the assets that we believe we have a competitive advantage by having a disproportionate amount of ownership or market share within our communities, we're going to continue to own those. When I say own, I don't necessarily mean we have to own 100%. I think there are ways, as Bill talked about and I talked about, through joint ventures and different monetization strategies, where we can still own, manage, and control the destiny that creates that competitive advantage without having 100% ownership of every asset. Then there are those assets that are on the periphery, on the edge, that are assets that don't give us a competitive advantage. For those, we're always looking to monetize at the right time when prices are appropriate.

Speaker #2: And when I say own, I don't necessarily mean we have to own 100%. I think there are ways, as Bill talked about and I talked about, through joint ventures and different monetization strategies where we can still own, manage, and control the destiny that creates that competitive advantage.

Speaker #2: Without having 100% ownership of every asset. And then there are those assets that are on the periphery, on the edge—assets that don't give us a competitive advantage.

Speaker #2: And for those we're always looking to monetize at the right time when prices are appropriate.

Speaker #5: Okay. And then Ryan, appreciate the update on the book and congrats to you guys for moving quickly before rates moved too much. But can you just recap?

Alexander Goldfarb: Okay. Then Ryan, appreciate the update on the book and congrats to you guys for moving quickly before rates move too much. Can you just recap, you mentioned a lot of moving pieces. It sounds now like the investment portfolio is 40% treasuries. It sounded like 60% equities, but then you also mentioned businesses, which I didn't know if that meant stock positions that are royalty companies or if you're investing privately in royalty companies.

Speaker #5: You mentioned a lot of moving pieces. It sounds now like the investment portfolio is 40% treasuries, it sounded like 60% equities, but then you also mentioned businesses, which I didn't know if that meant stock positions that are royalty companies or if you're investing privately in royalty companies.

Speaker #1: Sure. Yeah. And let me clarify. It's a good question. So what I was saying is at the end of the quarter, we had about a third of the overall portfolio in marketable securities or common stocks.

Ryan Israel: Sure. Yeah. Let me clarify. It's a good question. What I was saying is, at the end of the quarter, we had about a third of the overall portfolio in marketable securities or common stocks. We have increased that subsequently over effectively the last five weeks to about 40%. We are not investing and have not invested in private companies. This is just common stocks. What I was trying to describe were some of the characteristics of the businesses that we're looking for, which are some of the world's best businesses, where they have great management teams, royalty-like in their nature, strong secular growth opportunities. Effectively, businesses where we believe over the coming many years or decades can compound their earnings at very high rates of return.

Speaker #1: We have increased that subsequently over effectively the last five weeks to about 40%. We are not investing and have not invested in private companies.

Speaker #1: This is just a common stocks. What I was trying to describe were some of the characteristics of the businesses that we're looking for, which are some of the world's best businesses.

Speaker #1: Where they have great management teams, royalty like in their nature, strong secular growth opportunities, effectively businesses where we believe over the coming many years or decades can compound their earnings at very high rates of return.

Speaker #1: And over time, by doing so, we believe the investment returns will be very similar to these high-growth earnings per share businesses that we own.

Ryan Israel: Over time, by doing so, we believe the investment returns will be very similar to these high growth earnings per share businesses that we own. Best part about it is we don't need to negotiate private transactions because the public markets, particularly at this moment, it's our view, are giving us an opportunity to buy some wonderful businesses at discounted prices.

Speaker #1: Best part about it is we don't need to negotiate private transactions because the public markets, particularly at this moment, it's our view, are giving us an opportunity to buy some wonderful businesses at discounted prices.

Speaker #2: And Ryan, why don't you just speak to at "almost like stabilization." What should the portfolio look like in terms of percentage? By the way, we have no plans to invest in private assets in Vantage.

Alexander Goldfarb: Ryan, why don't you just speak to at, quote-unquote, almost like stabilization, what should the portfolio look like in terms of percentage? By the way, we have no plans to invest in private assets in Vantage. These are the most liquid large cap companies in the world. Again, next week, we'll go into some detail. You can look at the existing Pershing Square portfolio, the names that have, I would say most of the names that you've read about publicly, we own the portfolio. We've got an additional group of names that we'll talk about next week. What should be the ultimate plus or minus mix treasuries versus-

Speaker #2: So again, these are the most liquid large-cap companies in the world. Next week, we'll go into some detail. You can look at the existing Pershing Square portfolio—the names that, I would say, most of the names that you've read about publicly, we own in the portfolio.

Speaker #2: We've got an additional group of names that we'll talk about next week. What should be the ultimate plus or minus mix—treasuries versus?

Ryan Israel: Yes. The way to think about it at a very high level is we want to make sure that our float or sort of the insurance reserves, the net insurance reserves, are backed by short-dated US Treasuries so there's no duration, no credit risk on that, plus a cushion. The balance of that is going to be common stocks over time. Our view is that we can ultimately get to somewhere north of 50%. We're still evaluating-

Speaker #1: Yes. And so the way to think about it at a very high level is we want to make sure that our float or sort of the insurance reserves, the net insurance reserves, are backed by short-dated US treasuries.

Speaker #1: So there's no duration, no credit risk on that. Plus a cushion. The balance of that is going to be common stocks over time. Our view is that we can ultimately get to somewhere north of 50%.

Speaker #1: We're still evaluating. Of the overall investment portfolio.

Alexander Goldfarb: 50%

Ryan Israel: of the overall investments, invested portfolio.

Speaker #2: In? Okay.

Alexander Goldfarb: In?

Ryan Israel: In common stocks.

Alexander Goldfarb: Okay.

Speaker #1: And it could be a little bit higher than that based exactly on what how much float is generated. So the way to think about it is it looks like we're already getting pretty close to those targets after having moved relatively quickly.

Ryan Israel: It could be a little bit higher than that based exactly on how much float is generated. The way to think about it is, it looks like we're already getting pretty close to those targets after having moved relatively quickly. We'll continue to evaluate to see what the right amount is over time. The way to think about it is at least 50% of the overall invested assets should be going to common stocks over time, and it could be a little bit higher than that based upon the particulars of how much float is being generated.

Speaker #1: But we'll continue to evaluate to see what the right amount is over time. But the way to think about it is at least 50% of the overall invested assets should be going to common stocks over time.

Speaker #1: And it could be a little bit higher than that, based upon the particulars of how much float is being generated.

Speaker #5: And so to be clear, I think Bill, you said previously like Vantage was like thousands of positions. So you've effectively gone through the entire Vantage portfolio and converted all those thousands of QSIPs to treasuries and equities?

Alexander Goldfarb: To be clear, I think, Bill, you said previously Vantage was like thousands of positions. You've effectively gone through the entire Vantage portfolio and converted all those thousands of CUSIPs to Treasuries and equity?

Ryan Israel: Yeah. Sure. It was externally managed portfolio by, I think BlackRock and Goldman Sachs. We liquidated the portfolio very quickly. I think there was a small residual, maybe 7% of the assets that we had not sold by the end of the quarter with an expectation you should expect that those will likely be gone over time. It's effectively, it's a very, very simple portfolio. 100% Treasuries, short-term Treasuries for the float, plus a cushion, and the balance in large cap, very high quality common stocks.

Bill Ackman: Yeah. Sure. It was externally managed portfolio by, I think BlackRock and Goldman Sachs. We liquidated the portfolio very quickly. I think there was a small residual, maybe 7% of the assets that we had not sold by the end of the quarter with an expectation you should expect that those will likely be gone over time. It's effectively, it's a very, very simple portfolio. 100% Treasuries, short-term Treasuries for the float, plus a cushion, and the balance in large cap, very high quality common stocks.

Speaker #2: Yeah. Sure. It was externally managed portfolio. I think BlackRock and Goldman Sachs. We liquidated the portfolio very quickly. I think there was a small residual not sold by the end of the quarter.

Speaker #2: With an expectation you should expect that those will likely be gone over time. So it's effectively it's a very, very simple portfolio. 100% treasuries short-term treasuries for the float.

Speaker #2: Plus a cushion, and the balance in large-cap, very high-quality common stocks.

Speaker #5: Okay. And then appreciate just one final question. Ryan, I think one of the things, and obviously coming from real estate guy talking about insurance a little dangerous, but I think what you've said, what you guys have said before is in general, insurance companies do not need to liquidate their investment books to pay out on claims.

Alexander Goldfarb: Okay. Appreciate just one final question. Ryan, I think one of the things, coming from real estate guy talking about insurance, a little dangerous, what you guys have said before is in general, insurance companies do not need to liquidate their investment books to pay out on claims. The point is that you guys want to maintain sort of that 50% treasury cushion to allow for any excessive claims. Is that correct? Or do you envision that you would actually have to dip into the treasury?

Speaker #5: But the point is that you guys want to maintain sort of that 50% treasury cushion to allow for any excessive claims. Is that correct?

Speaker #5: Or do you envision that you would actually have to dip into the treasuries?

Ryan Israel: Think of the treasury portfolio as cash that we have available to pay claims as they come due. We do expect claims. Okay? The treasury book is effectively cash available to pay claims as they come due. What many insurance companies do is they kind of ladder out their fixed income maturities to kind of duration match with how they expect claims to come in. They take more risk, if you will, on the fixed income term structure to get more yield. They're able to do that because of the nature of insurance company float business. We're really not taking advantage of duration of float at all. We're taking the most conservative approach, which is to put aside a 100% US Treasury portfolio to meet any claims as they come in, plus a cushion. On top of that, we own large cap common stocks.

Speaker #1: I think of the treasury portfolio as cash. That we have available to pay claims as they come due. We do expect claims. Okay. The treasury book is effectively a is cash available to pay claims as they come due.

Speaker #1: What many insurance companies do is they kind of ladder out their fixed income maturities to kind of duration match with how they expect claims to come in.

Speaker #1: And that's so they go they take more risk, if you will, on the fixed income term structure to get more yield and they're able to do that because of the nature of insurance company float business.

Speaker #1: We're really not taking advantage of duration of float at all. We're taking the most conservative approach, which is to put aside a 100% US treasury portfolio to meet any claims as they come in.

Ryan Israel: We're really not taking advantage of duration of float at all. We're taking the most conservative approach, which is to put aside a 100% US Treasury portfolio to meet any claims as they come in, plus a cushion. On top of that, we own large cap common stocks. We would not expect to be forced to liquidate a common stock portfolio to meet a claim because we have a margin of safety in the US Treasury portfolio we hold.

Speaker #1: Plus a cushion and then on top of that, we own large-cap common stocks. We would not expect to be forced to liquidate a common stock portfolio to meet a claim because we have a margin of safety in the US treasury portfolio that we hold.

Ryan Israel: We would not expect to be forced to liquidate a common stock portfolio to meet a claim because we have a margin of safety in the US Treasury portfolio we hold.

Speaker #5: Thank you.

Alexander Goldfarb: Thank you.

Speaker #1: Thank you.

Ryan Israel: Thank you.

Speaker #3: And our next question will come from the line of Meyer Shields of Keith Briet and Woods. Your line is open, Meyer.

Operator: Our next question will come from the line of Meyer Shields of Keefe, Bruyette & Woods. Your line is open, Meyer.

Speaker #5: Oh, great. Thanks so much. I guess a couple of questions for Mark if I can. First, very basically, are the is the expected return from the equity component of the investment portfolio does that factor into the underwriting margin targets in your long-term ROE goal?

Meyer Shields: Great. Thanks so much. I guess a couple of questions for Marc, if I can. First, very basically, is the expected return from the equity component of the investment portfolio, does that factor into the underwriting margin targets in your long-term ROE goal?

Speaker #2: No. It doesn't. No.

Marc Grandisson: No, it doesn't. No.

Speaker #5: Okay. Second, I guess on the cycle, you've talked about how we're in phase three. I completely get that. But it does seem like it's a much more abrupt and it has been in the past.

Meyer Shields: Okay. Second, I guess on the cycle, you've talked about how we're in phase III. It does seem like it's much more abrupt than it has been in the past, maybe because of MGAs or access to third-party capital or whatever. Does that impact near-term planning?

Speaker #5: Maybe because of MGAs, or access to third-party capital, or whatever. Does that impact near-term planning?

Speaker #2: Near-term what? My opinion to repeat? Not near-term what?

Marc Grandisson: Near term what? Meyer, please repeat. Near term what?

Meyer Shields: Near-term planning in terms of just building the business.

Speaker #5: Near-term planning. Near-term planning in terms of just building the business.

Speaker #2: I mean, not really. I think the go back to what I said in my remarks. I think that we're undersized for what we can in terms of capability.

Marc Grandisson: Not really. I think. Go back to what I said in my remarks. I think that we're undersized for what we can in terms of capabilities. We can definitely pick our spots a bit better than otherwise, and not overly concerned by that. There's always competition, Meyer, as you know. You've heard me talk about this in the past. I think we're a bit more nimble, a bit more on the edges and find our way around that. No concern at this point in time. If we were multiple this size, we would have probably different conversations, although there are ways to address that, as you know. Right now where we are, I feel very good about our opportunities despite some of the lines of business transitioning into stage 3 and then actually stage 4, which there's only a few of them.

Speaker #2: So we can definitely pick our spots a bit better than otherwise. And now that we're really concerned by that, there's always competition, Meyer, as you know.

Speaker #2: You've heard me talk about this in the past. But I think we're a bit more nimble and a bit more on the edges and find our way around that.

Speaker #2: So no concern at this point in time. If we were multiple the size, we would have probably different conversations. Although there are ways to address that, as you know.

Speaker #2: But right now, where we are, I feel very, very good about our opportunities despite some of the lines of business transitioning into stage three and eventually stage four, which is only a few of them.

Marc Grandisson: Right now where we are, I feel very good about our opportunities despite some of the lines of business transitioning into stage 3 and then actually stage 4, which there's only a few of them. The quickness by which things move, you're quite right, is a lot of it is short tail in nature, right? Certainly property is one prime example. We're not a huge property cat writer as you'll discover over the next several years. It has not as much of an impact for us.

Speaker #2: And the quickness by which things moved, you're quite right, is a lot of it is short tail in nature, right? Certainly, properties is one prime example.

Marc Grandisson: The quickness by which things move, you're quite right, is a lot of it is short tail in nature, right? Certainly property is one prime example. We're not a huge property cat writer as you'll discover over the next several years. It has not as much of an impact for us.

Speaker #2: But we're not a huge property cat rider, as you'll discover, over the next several years. So that's not as much of an impact for us.

Speaker #4: Okay. And then one final question. I don't know if it's numeric or otherwise, but how are you thinking about scale specifically on reinsurance at this point?

Meyer Shields: Okay. One final question. I don't know if it's numeric or otherwise, how are you thinking about scale specifically on reinsurance at this point?

Speaker #2: Right now, there's a couple of lines of business that I want to dispose here, but they're more lines of business that we could be doing and growing the portfolio.

Marc Grandisson: Right now, there's a couple of lines of business that I won't disclose here, there are more lines of business that we could be doing and growing the portfolio. Since we're also still building, we're still in the next chapter, which is also including building the portfolio. I would not be surprised if reinsurance will go a bit quicker because we're going to be adding new products, new lines of business. We may have a little bit more reinsurance for the short term to take advantage of some of the opportunities that are there as well on the insurance. As you know, it takes a bit longer to seize all these opportunities on the insurance side. I'll be front-running, if you will, some of the market opportunities on the reinsurance side. Over time, it will be very reflective of the opportunities, Meyer.

Speaker #2: And since we're also building, we're still in the next chapter, which is also including building the portfolio. I would expect I would not be surprised that reinsurance will go a bit quicker because we're going to be adding new products, new lines of business.

Speaker #2: So we may have a little bit more reinsurance for the short term to take advantage of some of the opportunities that are there as well on the insurance.

Speaker #2: But as you know, it takes a bit longer to seize on these opportunities on the insurance side. So I'll be front-running, if you will, some of the market opportunities on the reinsurance side.

Speaker #2: But over time, it will be really reflective of the opportunities, Meyer. So it's the same as before. The opportunities of the capital is dearer on the reinsurance and will be providing more reinsurance capacity in the market and vice versa with the insurance changes.

Marc Grandisson: Over time, it will be very reflective of the opportunities, Meyer. It's the same as before. If the opportunities of the capital is dearer on the reinsurance, we will be providing more reinsurance capacity in the market and vice versa when the insurance mode changes. I think the insurance is probably slow build, more steady as it goes, as we've seen in the past. I'll let the market dictate, if you will, the relative contribution of reinsurance versus insurance.

Marc Grandisson: It's the same as before. If the opportunities of the capital is dearer on the reinsurance, we will be providing more reinsurance capacity in the market and vice versa when the insurance mode changes. I think the insurance is probably slow build, more steady as it goes, as we've seen in the past. I'll let the market dictate, if you will, the relative contribution of reinsurance versus insurance.

Speaker #2: And I think the insurance is probably a slow build, more slowly steady as it goes, as we've seen in the past. But the market dictates, if you will, the relative contribution of reinsurance versus insurance.

Speaker #4: Okay. Perfect. It's great to hear from you again. And thanks so much.

Meyer Shields: Okay, perfect. It's great to hear from you again, and thanks so much.

Speaker #2: Thanks, Mike.

Marc Grandisson: Thanks, Meyer.

Speaker #3: And as a reminder, if you would like to ask a question, please press *11 on your telephone and wait for your name to be announced.

Operator: As a reminder, if you would like to ask a question, please press star 11 on your telephone and wait for your name to be announced. Our next question will come from the line of Eli Dashef of An Individual Investor. Your line is open, Eli.

Speaker #3: Our next question will come from the line of Eli Dashif of an individual investor. Your line is open, Eli.

Speaker #5: Hi. Thanks for taking my question. You describe Howard Hughes as built on this discipline capital allocation. Now that Vantage has closed, and you have more competing uses for capital than ever, what does that discipline look like in practice?

Eli Dashef: Hi. Thanks for taking my question. You describe Howard Hughes as built on disciplined capital allocation. Now that Vantage has closed and you have more competing uses for capital than ever, what does that discipline look like in practice? When opportunities compete for the same dollar, what does an opportunity have to clear to win that capital?

Speaker #5: And when opportunities compete for the same dollar, what does an opportunity have to clear to win that capital?

Speaker #1: So we believe that we've built we've acquired the great insurance platform. We've recruited a very talented very experienced senior leadership team to kind of oversee that platform.

William Ackman: We believe that we've acquired a great insurance platform. We've recruited a very talented, very experienced senior leadership team to kind of oversee that platform, we believe that capital in the insurance business can be put to work intelligently and earn high rates of return, both in terms of from an underwriting perspective and also from an investment perspective. The priority for every incremental dollar of free cash flow is to put it into Vantage, that's how we're thinking about it. Then within the asset side of Vantage, as Ryan spoke about, once we've covered kind of our insurance liabilities, the balance we think is a very opportune time to invest in the public markets. Volatility has increased enormously, as I'm sure you have noticed.

Bill Ackman: We believe that we've acquired a great insurance platform. We've recruited a very talented, very experienced senior leadership team to kind of oversee that platform, we believe that capital in the insurance business can be put to work intelligently and earn high rates of return, both in terms of from an underwriting perspective and also from an investment perspective. The priority for every incremental dollar of free cash flow is to put it into Vantage, that's how we're thinking about it. Then within the asset side of Vantage, as Ryan spoke about, once we've covered kind of our insurance liabilities, the balance we think is a very opportune time to invest in the public markets. Volatility has increased enormously, as I'm sure you have noticed.

Speaker #1: And we believe that capital in the insurance business can be put to work intelligently and earn high rates of return, both in terms of from an underwriting perspective and also from an investment perspective.

Speaker #1: So the priority for every incremental dollar of free cash flow is to put it into Vantage. And that's how we're thinking about it. And then within the asset side of Vantage, as we're Ryan spoke about, once we've covered kind of our insurance liabilities, the balance we think is a very opportune time to invest in the public markets.

Speaker #1: Volatility has increased enormously as I'm sure you have noticed. And also, the market's attention is drawn to, I would say, a smaller and smaller subset of there's a lot of FOMO going on where people pile into the same sort of sectors.

William Ackman: Also the market's attention is drawn to, I would say, a smaller and smaller. There's a lot of FOMO going on where people pile into the same sort of sectors, that's caused a meaningful number of businesses that we have followed for years to become available occasionally at very attractive prices. You wake up one day and stocks are down 25% based on a short-term factor that once, assuming we've done our due diligence correctly, we believe does not have a long-term impact on the business. It's allowed us to construct a very attractive portfolio. I encourage you to join the Pershing Square call next week. It's the 13th, I guess a week from today. We're going to go through that portfolio in detail, maybe be able to be more granular in your question.

Bill Ackman: Also the market's attention is drawn to, I would say, a smaller and smaller. There's a lot of FOMO going on where people pile into the same sort of sectors, that's caused a meaningful number of businesses that we have followed for years to become available occasionally at very attractive prices. You wake up one day and stocks are down 25% based on a short-term factor that once, assuming we've done our due diligence correctly, we believe does not have a long-term impact on the business. It's allowed us to construct a very attractive portfolio. I encourage you to join the Pershing Square call next week. It's the 13th, I guess a week from today. We're going to go through that portfolio in detail, maybe be able to be more granular in your question.

Speaker #1: And that's caused a meaningful number of businesses that we have followed for years to become available occasionally at very, very attractive prices. You wake up one day and stocks are down 25%.

Speaker #1: And based on a short-term factor that once assuming we've done our due diligence correctly, we believe it does not have a long-term impact on the business.

Speaker #1: It's allowed us to construct a very attractive portfolio. So I encourage you to join the Pershing Square call next week. It's the 13th. I guess a week from today.

Speaker #1: And we're going to go through that portfolio in detail, maybe be able to be more granular in your question.

Speaker #5: Okay, and thank you for that. And Bill, as a quick follow-up, you're a devoted disciple of Berkshire and Warren Buffett. As Howard Hughes grows into a larger holding company, what lessons from Berkshire's experience matter most here?

Eli Dashef: Okay.

William Ackman: Thank you.

Bill Ackman: Thank you.

Eli Dashef: Thank you for that. Bill, as a quick follow-up, you're a devoted disciple of Berkshire and Warren Buffett. As Howard Hughes grows into a larger holding company, what lessons from Berkshire's experience matter most there, and where, if anywhere, should Howard Hughes do it differently?

Speaker #5: And where, if anywhere, should Howard Hughes do it differently?

Speaker #1: Look, I think business quality is we've learned over time is the most important metric in our view in selecting securities for investment. Look at Berkshire over time.

William Ackman: Look, I think business quality is, we've learned over time, is the most important metric in our view in selecting securities for investment. Look at Berkshire over time. Excuse me. Warren Buffett, one of the greatest investors ever. If you go back and read the Berkshire letters to shareholders, Buffett talked about how great a business a World Book Encyclopedia was or the newspaper business, a whole host of various businesses that were disrupted by technology. I think the world has gotten even, I would say, more disruptive. AI is an incredibly disruptive, powerful force. I think the biggest takeaway from following 60 years of Berkshire on the allocation side is err for business durability and quality. I think there are a lot of lessons that we're just following very closely.

Bill Ackman: Look, I think business quality is, we've learned over time, is the most important metric in our view in selecting securities for investment. Look at Berkshire over time. Excuse me. Warren Buffett, one of the greatest investors ever. If you go back and read the Berkshire letters to shareholders, Buffett talked about how great a business a World Book Encyclopedia was or the newspaper business, a whole host of various businesses that were disrupted by technology. I think the world has gotten even, I would say, more disruptive. AI is an incredibly disruptive, powerful force. I think the biggest takeaway from following 60 years of Berkshire on the allocation side is err for business durability and quality. I think there are a lot of lessons that we're just following very closely.

Speaker #1: Excuse me. Warren Buffett, one of the greatest investors ever. But if you go back and read the Berkshire letters, the shareholders Buffett talked about how great a business, a world book encyclopedia was, or the newspaper business, a whole host of various businesses that were disrupted by technology.

Speaker #1: And I think the world has gotten even I would say more disruptive. AI is an incredibly disruptive, powerful force. So I think the biggest takeaway from following 60 years of Berkshire on the allocation side is error for business durability and quality.

Speaker #1: I think there are a lot of lessons that we're just following very closely. If you look at how Buffett operated first of all, the vast majority of value of Berkshire has been built in the insurance operations.

William Ackman: If you look at how Buffett operated, first of all, the vast majority of value in Berkshire has been built in the insurance operations. The combination of selective underwriting and intelligent investment of the capital, the assets of the insurer has driven the bulk of the value of that company over time. That's why we acquired Vantage. That's why we recruited Marc and David. That's why that's really going to be a big focus of the business going forward. I think the other thing that Berkshire did very well over time is all that value was created on largely a fixed share count. We could issue a ton of equity and raise capital. We don't think that's an intelligent approach, certainly at anything close to current share prices.

Bill Ackman: If you look at how Buffett operated, first of all, the vast majority of value in Berkshire has been built in the insurance operations. The combination of selective underwriting and intelligent investment of the capital, the assets of the insurer has driven the bulk of the value of that company over time. That's why we acquired Vantage. That's why we recruited Marc and David. That's why that's really going to be a big focus of the business going forward. I think the other thing that Berkshire did very well over time is all that value was created on largely a fixed share count. We could issue a ton of equity and raise capital. We don't think that's an intelligent approach, certainly at anything close to current share prices.

Speaker #1: The combination of selective underwriting and intelligent investment of the capital. The assets of the insurer is driven the bulk of the value of that company over time.

Speaker #1: That's why we acquired Vantage. That's why we recruited Mark and David. And that's why it's really going to be a big focus of the business going forward.

Speaker #1: I think the other thing that Berkshire did very well over time is all that value was created on largely a fixed share count. And so, while we could issue a ton of equity and raise capital, we don't think that's an intelligent approach, certainly at anything close to current share prices.

Speaker #1: And we think there's plenty of capital within this operation—it just needs to be redirected from kind of lower-returning assets into what we believe will be a high-returning asset over time.

William Ackman: We think there's plenty of capital within this operation that just needs to be redirected from lower returning assets into what we believe will be a high returning asset over time. I think if we follow those principles, we're going to build a very valuable company over time.

Bill Ackman: We think there's plenty of capital within this operation that just needs to be redirected from lower returning assets into what we believe will be a high returning asset over time. I think if we follow those principles, we're going to build a very valuable company over time.

Speaker #1: And I think if we follow those principles, we're going to build a very valuable company over time. Why don't we give another thank you for your question.

Ryan Israel: Thank you.

Eli Dashef: Thank you.

William Ackman: Thank you for your question. Let's take, operator, next question.

Bill Ackman: Thank you for your question. Let's take, operator, next question.

Speaker #1: Let's take operate the next question.

Speaker #3: Our next question will come from the line of Josh Coffin of retail. Your line's open, Josh.

Operator: Our next question will come from the line of Josh Coffin of Retail. Your line's open, Josh.

Speaker #4: Hello. I know Ryan and Bill said that next week you guys will be touching more on the investment strategy, but I was wondering since the goal of Vantage is to kind of mirror Pershing's holdings, would it make sense to buy PSUS or one of those other Pershing holdings in order to take advantage of the discount to net asset value right now?

Josh Coffin: Hello. I know Ryan and Bill said that next week you guys will be touching more on the investment strategy, but I was wondering, since the goal of Vantage is to kind of mirror Pershing's holdings, would it make sense to buy PSUS or one of those other Pershing holdings in order to take advantage of the discount to net asset value right now?

Speaker #1: Yes. It's not the Pershing Square USA call, but Pershing Square USA is trading at about a 23% discount to its market value, its underlying holdings.

William Ackman: Yes. It's not the Pershing Square USA call, but Pershing Square USA is trading at about a 23% discount to the market value of its underlying holdings, and I view that as very favorable. We like the holdings at net asset value. To be able to buy them at a 23% discount we think is extremely attractive. Let's save that for next week's call.

Bill Ackman: Yes. It's not the Pershing Square USA call, but Pershing Square USA is trading at about a 23% discount to the market value of its underlying holdings, and I view that as very favorable. We like the holdings at net asset value. To be able to buy them at a 23% discount we think is extremely attractive. Let's save that for next week's call.

Speaker #1: And I view that as a very favorable we like the holdings at net asset value. To be able to buy them at a 23% discount, we think is extremely attractive.

Speaker #1: But let's save that for next week's call.

Speaker #2: And if I could, I would say I think just real quickly, Josh, to your question, the Howard Hughes stock and the Pershing Square US stock, they also reflect different things.

Ryan Israel: If I could, I would say, just real quickly, Josh, to your question, the Howard Hughes stock and the Pershing Square US stock, they also reflect different things. For example, PSUS is a pure play on publicly traded securities. What Howard Hughes offers is effectively two businesses right now, an increasingly and rapidly growing insurance business run by what we think is really the best insurance management team on the planet. It will also have access to what we believe will be very attractive long-term returns from Pershing Square's helping optimize the asset side of the insurance balance sheet, which should be very powerful.

Speaker #2: So for example, PSUS is a pure play on publicly traded securities. What Howard Hughes offers is effectively two businesses right now, an increasingly and rapidly growing insurance business run by what we think is really the best insurance management team on the planet.

Speaker #2: It will also have access to what we believe will be very attractive long-term returns from Pershing Square's helping optimize the asset side of the insurance balance sheet, which would be very powerful.

Speaker #2: And we have a very good real estate business led by a great team where we will have the opportunity to grow that business, but also increasingly redirect some of the excess cash flows and potential asset monetizations to help grow Vantage more quickly.

Ryan Israel: We have a very good real estate business led by a great team where we will have the opportunity to grow that business, but also increasingly redirect some of the excess cash flows and potential asset monetizations to help grow Vantage more quickly. I also look at them as two businesses. Much like you can observe the discount of the PSUS, you can calculate according to the supplement that we put out last quarter what we think the net asset value is of the business and how that will grow over time, which we highlighted, and you can compare that to the share price. Clearly, Howard Hughes is also trading at a very significant discount to what we conservatively calculate its net asset or its intrinsic value at. I would really view it as both are things that clearly we like.

Speaker #2: So I also look at them as two businesses much like you can observe the discount to PSUS, you can calculate according to the supplement that we put out last quarter, what we think the net asset value is of the business and how that will grow over time, which we highlighted.

Speaker #2: And you can compare that to the share pricing. Clearly, Howard Hughes is also trading at a very significant discount to what we conservatively calculate its net asset or its intrinsic value at.

Ryan Israel: Clearly, Howard Hughes is also trading at a very significant discount to what we conservatively calculate its net asset or its intrinsic value at. I would really view it as both are things that clearly we like. We are owners, both individually and through our firm, we also think they reflect different investment considerations based on the type of ultimate investment exposure that you're seeking.

Speaker #2: So I would really view it as both are things that clearly we like. We are owners of both individually and through our firm. But we also think they reflect different investment considerations based on the type of ultimate investment exposure that you're seeking.

Ryan Israel: We are owners, both individually and through our firm, we also think they reflect different investment considerations based on the type of ultimate investment exposure that you're seeking.

Speaker #5: Yeah. And just to add to what Ryan's saying, we paid $100 a share to buy a 15% stake in Howard Hughes 15 months ago.

William Ackman: Yeah. Just to add to what Ryan's saying, we paid $100 a share to buy a 15% stake in Howard Hughes 15 months ago. We've made a huge amount of progress since that time, and the stock price is about the same as it was then, which was in the middle 60s. I've checked real-time. This is a business that has, we think, not only increased intrinsic value over the last 15 months by generating cash and growing. More significantly, we're clearly on our way to building an interesting company with a great platform. The addition of Marc and David to that platform, the redeployment of the capital of that business into higher returning assets. We're excited about where we are. Thanks for your question, Josh, or whoever that was.

Bill Ackman: Yeah. Just to add to what Ryan's saying, we paid $100 a share to buy a 15% stake in Howard Hughes 15 months ago. We've made a huge amount of progress since that time, and the stock price is about the same as it was then, which was in the middle 60s. I've checked real-time. This is a business that has, we think, not only increased intrinsic value over the last 15 months by generating cash and growing. More significantly, we're clearly on our way to building an interesting company with a great platform. The addition of Marc and David to that platform, the redeployment of the capital of that business into higher returning assets. We're excited about where we are. Thanks for your question, Josh, or whoever that was.

Speaker #5: We've made a huge amount of progress since that time. And the stock price is about the same as it was then, which is in the middle 60s.

Speaker #5: I've injected real-time. This is a business that has we think not only increased intrinsic value over the last 15 months by generating cash and growing, but more significantly, we've acquired we've clearly on our way to building an interesting company with a great platform, the addition of Mark and David to that platform, the redeployment of the capital, of that business into higher returning assets.

Speaker #5: So we're excited about where we are. But thanks for your question, Josh. Or whoever that was.

Speaker #3: And our next question. We'll be coming from the line of Tucker Anderson of Above All Advisors. Tucker, your line is open.

Operator: Our next question will be coming from the line of Tucker Andersen of Above All Advisors. Tucker, your line is open.

Tucker Andersen: Thank you very much. I want to thank Marc as a long-term holder of Arch Capital. My question to Marc is, there's been a lot of discussion about how AI is going to affect the insurance business, particularly the P&C business and the underwriting side. I'm wondering how you view AI might change how you want to operate Vantage in the future and what you're doing to take advantage of it.

Speaker #6: Thank you very much. And I want to thank Mark as a long-term holder of our capital. My question to Mark is: there's been a lot of discussion about how AI is going to affect the insurance business—particularly the P&C business and the underwriting side.

Speaker #6: And I'm wondering how you view AI might change how you want to operate Vantage in the future, and what you're doing to take advantage of it.

Marc Grandisson: Great question. I think first things first is AI is being used across Vantage, knowing, testing it out and working with it, helping you with the coding. It's already helping us being a bit more efficient in many areas. It's still early stages, right? The way we look at AI right now is going to be a great tool for us to be better at execution of decision making and gathering data and then getting access to data. That's pretty going to be for first and foremost the companies really utilizing to leverage it for themselves to improve the flow and the processes and the decision making, which we're already doing it. Over time, it's very difficult to see, right?

Speaker #7: Great question. I think first things first, if AI is being used across Vantage, in testing it out and working with it, helping it with the coding, it's already helping us being a bit more efficient in many areas.

Speaker #7: But it's still early stages, right? The way we look at AI right now is that it's going to be a great tool for us to be better at execution of decision-making, gathering data, and getting access to data.

Speaker #7: So that's currently on the way. That's really going to be—so first and foremost, the company is really utilizing it, leveraging it for themselves to improve the flow and the processes and the decision-making, which—we're already doing it.

Speaker #7: Over time, it's very difficult to see, right? I think that there will be more and more automation across the supply chain, or how we go from the insured to the broker to the insurance company to the reinsurance company.

Marc Grandisson: I think that there'll be more and more automation across the supply chain or how we go from the insurer to the broker to the insurance company to the reinsurance company. There's going to be a lot more work. Over time, I could perceive possibly integration across the whole value proposition. We'll be positioned to take advantage of it, and it's going to be an industry-wide phenomenon, and we'll be participating like everyone else. Is there an opportunity for someone such as ourselves to be disruptor? Remains to be seen. There's a lot to happen. Clearly it's going to enable making better decision, and we're already using this as a tool to help our decision making.

Speaker #7: There's going to be a lot more work over time. I could perceive possibly integration across a whole value proposition. We'll be positioned to take advantage of it.

Speaker #7: And it's going to be an industry-wide phenomenon. And we'll be participating like everyone else. Is there an opportunity for someone such as ourselves to be disruptor?

Speaker #7: Remains to be seen. There's a lot to happen. It's really hard to see the future. But clearly, it's going to enable making better decisions.

Speaker #7: And we're already using this as a tool to help our decision-making.

Tucker Andersen: Thank you. A follow-on question would be, do you care to speculate at all on if it might change the nature and duration of the underwriting cycles as you describe them?

Speaker #6: Thanks. Thank you. And a follow-on question would be: do you care to speculate at all on if it might change the nature and duration of the underwriting cycles, as you described them?

Speaker #7: The one thing well, it could. The only thing I have historically, Tucker, that I can look back on is the when we had all the property-cap modeling that came to the marketplace, the big argument was supposed to be standardizing the way we look at risk.

Marc Grandisson: The only thing I have historically, Tucker, that I can look back on is when we had all the property cat modeling that came to the marketplace. The big argument was it was supposed to be standardizing the way we look at risk, and it would make soft market go away forever. I've used this or hard market for that matter. That was used, like in the mid '90s when the AIR, the RMS, all the cat modeling came up. Guess what? It didn't solve the cycles, what's happening in each cycle. I think it's because it's a human interest like everything else in between, it's a human system, right? It's one thing that the model's giving you a number, but it's another thing to actually act upon it and execute on that basis. Many reasons for that.

Speaker #7: And it would make soft market go away forever. And I've used this or our hard market for that matter. And that was used in the mid-90s when the AR, the RMS, all the cap modeling came up.

Speaker #7: And guess what? It didn't solve the cycles. What's happening in each cycle? And I think it's because it's a human interest like everything else in between the human system, right?

Speaker #7: It's one thing for the model to give you a number, but it's another thing to actually act upon it and execute on that basis. There are many reasons for that.

Speaker #7: One of which might be or has always been the way underwriting teams are compensated. So there's always these things really mucking around what ultimately the decision will be made.

Marc Grandisson: One of which might be, or has always been, the way underwriting teams are compensated. There's always these things really mucking around what ultimately the decision will be made. I'm not saying it's going to be the same thing, but the only one thing that I can remember in my lifetime, in my career, that it did not change the cyclical nature of the businesses because there's human intervention in there. When you're going to ask me when do you think we'll have no human interventions, I don't think I'm going to see this in my lifetime. It gives us plenty of opportunity to take advantage of the market.

Speaker #7: So I'm not saying it's going to be the same thing, but the only one thing that I can remember in my lifetime and my career that did not change the cyclical nature of the business is because there's human intervention in there.

Speaker #7: So when you're going to ask me, "When do you think we'll have no human interventions?" I don't. And so, that gives us plenty of opportunity to take advantage of the market.

Speaker #6: Thank you. I appreciate your insights as a former actuary. I remember the description of what happened—what happened well. That was my previous life.

Tucker Andersen: Thank you. I appreciate your insights. As a former actuary, I remember the description of what happened a while ago. That was my previous life, I'm just counting on you to reproduce what happened at Arch now that you're at Howard Hughes. Thank you very much and good luck.

Speaker #6: And I am just counting on you to reproduce what happened at Arch, now that you're at Howard Hughes. Thank you very much, and good luck.

Speaker #7: Thank you, Ryan. Thank you, Tucker.

Marc Grandisson: Thank you, Tucker.

Speaker #6: Yeah.

Tucker Andersen: Yep.

Speaker #3: And that would now like to turn the call back to Bill for closing remarks.

Operator: I would now like to turn the call back to Bill for closing remarks.

Speaker #2: Thank you. So thank you all for joining. ing. We're excited about the current state of play at Howard Hughes. And we look forward to being in touch next quarter.

William Ackman: Thank you. Thank you all for joining. We are excited about the current state of play at Howard Hughes, and we look forward to being in touch next quarter. If you care to join next week, we will be discussing the Vantage underlying portfolio in some detail. We welcome you to the Pershing Square call next week. Thanks very much.

Bill Ackman: Thank you. Thank you all for joining. We are excited about the current state of play at Howard Hughes, and we look forward to being in touch next quarter. If you care to join next week, we will be discussing the Vantage underlying portfolio in some detail. We welcome you to the Pershing Square call next week. Thanks very much.

Speaker #2: If you care to join next week, we will be discussing the Vantage underlying portfolio in some detail. We welcome you to the Pershing Square call next week.

Speaker #2: Thanks very much.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

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