Thank you for standing by and welcome to Howard Hughes' third quarter 2026 earnings conference call. Currently, 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 the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Joe Valane, General Counsel. Please go ahead.

Good morning and welcome to the Howard Hughes Holdings Third Quarter 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 Grandison, 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 third quarter 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. 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 third quarter 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, Bill Ackman.

Thank you, Joe. Just going to highlight a few significant developments during the quarter, then turn it over to Mark. He's going to walk through the insurance portfolio. Ryan will speak to the investment assets, and David will update more detail on the real estate progress. With respect to Vantage, $76.6 million of net tax profit for insurance and reinsurance, including gains from the investment portfolio. Economically, $103 million operating profit. We're adding back purchase accounting adjustments relating to the purchase of Vantage at a premium to book value. That amortization, we believe, is a non-economic expense. In terms of Vantage progress, the most significant value during the quarter was Mark taking on the executive chair role, our recruiting David Gansberg as the CEO-elect to join no later than June when his non-compete and Mark continues to build out the senior leadership team, really taking advantage of his long-time relationships and network in the industry. We'll update you over time as we make more progress there. Real estate operation generated strong performance. Operating assets, same-store NOI growth of 9%. That's probably an industry-wide top number. On the land sale side, Also very strong numbers. We lapped a significant $100 million-plus bulk lot sale, but in terms of without the bulk lot sales year-on-year, we showed good progress. Importantly, what we focus on is really a couple of metrics. One is what's the pace of home sales. Summerlin was up 11% year-on-year. Woodland Hills up 5% year-on-year. Bridgeland down 9% year-on-year, but year-to-date up 7%. Over last year, lot sales are lumpy. It depends on our sort of auction process, etc. But we feel very good about that sort of leading indicator. And importantly, the land sales price per acre. One of our important metrics when we look at is what's the value, how much land did we sell over the last year, and what's the value of the land that we have remaining based on current prices. We've sold 398 acres over the last 12 months, generated $435 million of proceeds. Meanwhile, our residual value of land based on the current market value went up from $5,623,000,000 to $5,701,000,000. So in effect, we generated $435 million of proceeds plus an increase in our land values. The maintenance-free cash flow is up slightly with very significant same-store NOI growth. David will go into more detail there. We had a modest amount of condominium sales generating $0.8 million of profit. And we did two municipal utility district receivable sales. Let me explain what this is. Basically, as we build out the infrastructure for our MPCs, we recover the cost of that infrastructure in the form of what's called a municipal utility district receivable, which is paid down from taxpayers. Thank you for joining us. But what we're really doing is taking this zero coupon, which we're not going to collect, or an instrument we're not going to collect for four or five years, much as six years, and taking the cash today at a discount rate that we find attractive. The other significant development with respect to real estate during the quarter was our announcement in September at the annual meeting of a plan to go to an asset light model. We've made good progress in terms of recruiting the advisors and actually have already funded We've done discussions and received a number of significant offers for assets at the company. We'll report our progress over time, but we are strongly of the view that we're going to achieve our objectives in terms of generating material amounts of cash at what we believe to be very attractive valuations. A comment on the other metric to pay attention to, of course, is G&A. This is the first quarter that we're fully including the results of Vantage. are year-on-year increase from 34 million of G&A to 51.6 million. The components there basically are 13 million of incremental interest expense and about 4 to 5 million of G&A from Vantage that is now in our results. Okay, with that, I'm going to turn it over to Mark Branson. Thank you, Bill.

Good morning, everyone. As Bill noted, this is our first full quarter of as part of Howard Hughes, and I'm pleased to report that Vantage delivered solid quarter with earnings, underwriting income, and returns all generally moving in the right direction. A quick reminder, Bill alluded to it already with respect to presentation, Howard Hughes consolidated results include purchase accounting adjustments, largely the amortization of the VOBA. On that basis, Vantage's third quarter combined ratio was 101.8%. and the pre-tax income was $77 million. As in the second quarter, everything I discussed today and the Vantage Supplemental is on a historical gap basis, excluding purchase accounting adjustments, which gives a clearer picture of how the business is actually performing consistent with historical reporting. On that basis, third quarter net income was approximately $80 million, up 22% from the prior year quarter, and pre-tax income of $103 million was more than double last year. Year-to-date net income is $166 million up 51%. In the quarter, the combined ratio was 94.9% in line with 95% a year ago and 95.4% year-to-date versus 96% last year. Underwriting income grew 19% in the quarter to $16 million and 38% year-to-date to $41 million. Gross written premiums grew 4% to $386 million, and net earned premium grew 17% to $316 million. Year-to-date, gross written premium is $1.4 billion, up 11%. Insurance-related gross written premiums grew 8%, led by construction, casualty, and financial lines. Reinsurance-related gross written premiums were down 9% as we deliberately wrote less property and specialty where pricing no longer meets our return hurdles. That is cycle management in practice. We grow where the margin of safety is there, and we step back where it is not. The G&A expense ratio improved to 13.9% from 15.8% a year ago and to 14.3% from 16.9% year-to-date. as net earned premiums continue to outpace expense growth. As was mentioned at HHH's Annual General Meeting, we expect to invest more over the next several quarters and we expect the G&A ratio to be a little bit more volatile. Let me spend a moment on underwriting quality. The accident year combined ratio excluding catastrophes was 96.2% versus 96.8% last year and 92.5% year to date versus 94.8%. I do want to be transparent that the quarter is above the 91.4% we reported in the second quarter. The difference is a single large energy loss in our reinsurance specialty book. There were no significant catastrophe losses in the third quarter. Reinsurance also absorbed about four points of adverse prior development, which we have addressed conservatively. Excluding those items, reinsurance remains profitable with a 92.2% accident-year ratio ex-cat in a quarter and 84.4% combined ratio year-to-date. Large losses are part of a specialty underwriter, and as I said last quarter, we expect some fluctuation from quarter to quarter. Insurance made real progress. Its combined ratio improved to 96% from 102.6%, and underwriting income was $7 million versus a loss of $4 million a year ago. with favorable prior year development of three points. This is the trend we want to see and we expect it to continue as the book scales. Net fee income was $13 million and a quarter up from $9 million and is $47 million year to date versus a loss last year. This comes from our advantage ILS structure and reflects strong outcomes on recent property cap business we wrote for third party partners. Turning to investments, the transition of the portfolio is now largely complete. We hold $1.3 billion of common equities, $2.4 billion of cash and short-term treasuries, and only $11 million of fixed-income securities. Next, net investment results were $77 million for the quarter, driven by $55 million of unrealized gain on equities, a reversal of the second quarter's mark-to-market loss. Net investment income was $23 million versus $30 million last year, reflecting the move out of fixed income. Equity markets will move in both directions, so please judge this portfolio over years, not quarters. We are investing for long-term compounding with expert management by Pershing Square. That brings me to returns and capital. Trading 12 months after tax return on equity was 16% compared to 15.9% for 2025 and 9.2% for 2024. That is consistent with our goal to deploy capital at a target return on equity at or above mid-teens over the cycle. Gap equity rose to $1.9 billion, up 44% year-over-year, including the $300 million contribution from Howard Hughes combined with earned profits. Our capital remains strong and AMBEST continues to rate us A- with a positive outlook. On the market, our review is unchanged from last quarter. We remain primarily in Stage 3 of the cycle. Property rates, particularly in the United States, continue to soften and a few short tail lines are moving towards Stage 4. Casualty remains more constructive. Though uncertainty around development of earlier years and loss trend require a thoughtful approach. Broadly, competition has increased, but pockets of attractive returns remain, and a diversified platform lets us move quickly to them. Our priorities are the same, underwriting profit over volume, conservative reserving, a margin of safety in pricing, discipline management of aggregations, conservative prudential capital management, and investment in data and talent. In closing, we are still in the very early chapters of a multi-year story. The permanent capital is in place, the portfolio transition is behind us, and the underlying trend in underwriting expenses and returns is positive. I look forward to updating you on our progress in the future. With that, I will turn the call over to Ryan.

Thanks, Mark. I thought this quarter what we could do is talk a little bit more about the investment portfolio and Pershing Square's overall philosophy on the management of that portfolio. And for those of you following along the slides, I'll kind of be referencing page 23 as we go along. So to start with, our total invested assets grew to about $3.7 billion this quarter. And as we've talked about before, we really employ a barbell strategy. So just over 65% of those invested assets will ultimately be in cash or short-term U.S. Treasuries where we're taking no credit risk, no duration risk. And then we will be investing the bulk of the excess beyond what we would be generating through float over time in our common equities. Today, we actually have a lot more of a cushion relative to the float that we've invested in short-term treasuries. Over time, we probably will have a little bit more matching between the short-term investments and our float, and therefore the percentage of our invested assets that would be in common equities would go up. The way we sort of think about that 65% of the portfolio today that's invested in short-term treasuries, at current interest rates, that should be yielding around 4% based on the market rates for a 30-day U.S. treasury to the extent that interest rates stay the same. for the roughly 35% of our portfolio that's invested in stocks. What we wanted to provide today was really the investments that we make. And at Pershing Square, and for those of you who follow us, we've really written about this in our latest quarterly letters, one of which at PS Inc. we released earlier this week. We really talk about we're looking for what we call durable growth businesses, some of the world's great businesses where we believe that through the strength of the secular trends they have, their competitive moats, the great decisions management is making in their capital allocation strategies, Thank you so much for joining us. will ultimately assign a higher multiple of earnings to these companies than what we've paid for them. And so when we kind of take that framework overall of what we're looking for, and we see that's represented very well in the portfolio, we have 12 to 15 investments in Vantage that really do represent these durable growth companies, some of the world's great businesses that are generally growing their earnings between 15 and 25% a year over time in our estimation, where we think there's upside from the multiples. Collectively, this portfolio, roughly the way we think about it as it is today, we expect should be growing its earnings about 20% a year over the next three to five years based upon our best estimates. And what that sort of means is every quarter, if the multiples stay the same that investors assign to these companies, we would generally get about one-fourth of that 20% growth or about 5% each quarter. And you can actually see this quarter in aggregate, that's exactly what happened. We had a 4.7% return on our common equities just under that 5% threshold. Well, you may want to point to the page you're referring to. Yeah, page 23, exactly, for those who are following along. And the way we sort of think about that is that's at the portfolio in aggregate. But when you look at the specific holdings, obviously, there's a lot more volatility. So to point out a couple of the companies that drove our results this quarter were really our investments in Microsoft and Meta, which were our largest investments. And those collectively returned about 35%. So 38% for Microsoft and 29% for Amazon. And while their earnings grow on the higher end, so of that kind of 20% to 25% level, these businesses also had a lot of multiple expansion this quarter as people became more excited about their prospects. And the rest of the portfolio, I would say there was a little bit a different result where some of them had their earnings growth and their share price in line. And some of them actually, for example, a company like Brookfield, or Uber actually had a share price decline, even though they had very healthy earnings growth as investors assigned a lower multiple to those businesses. So I just wanted to give you a little bit of insight as to how we're thinking about the stock portfolio that we have. And going forward, our goal is to continue to provide some insights each quarter on how we think about the overall investment portfolio. With that, I'll turn it over to David to talk about the real estate results.

Thank you, Ryan. You know, against the backdrop of national housing, Thank you for joining us. So let's put the reported numbers in context. We reported 89.5 million of MPC EBT during the quarter, compared to 205 million a year ago. Two items drove that comparison. First, last year's quarter included a 231-acre bulk land sale in Summerlin for more than $100 million. Those transactions are strategic, but they don't occur every quarter. Second, we recorded a $19.4 million remeasurement loss related to the consolidation of Florio in Arizona. This is a non-cash accounting adjustment from taking control of the venture, not a change in what we expect the project to be worth. Adjusting for the bulk sale and the non-cash loss, MPC EBT would have been higher this quarter compared to last year. Demand and pricing in our communities are stronger than they were 12 months ago, not weaker. Our average residential land price was approximately $1.3 million per acre this quarter, an 18% increase over the trailing 12 months. Bill mentioned during the quarter that net new home sales increased in Summerlin and Woodland Hills. Bridgeland was down in the quarter but still up 7% for the year. What differentiates our communities isn't that we own a large amount of land. It's what we've built on that land over decades. We're not developing residential neighborhoods. We're creating complete communities that attract employers, businesses, retailers, and residents. We've proven that strategy in the Woodlands, and we're following that same playbook in Bridgeland with projects like the Houston Texans Anchored Toro District. As these communities mature, the jobs, amenities, and commercial development create additional demand for housing. That demand, combined with our finite land supply, supports pricing and increases the value of our remaining land over time. Thank you for joining us. We also completed the sale of two Mudd District reimbursements in Texas. Bill walked through the details of that. But at the end of the day, we generated more than $177 million in net cash proceeds, but also generated $105.4 million gap loss. The implied discount rate that we sold those receivables at on a blended basis is just over 6%. Accepting a discount today on cash that would otherwise have been collected for years. We expect to redeploy those proceeds at returns well above that rate, which is exactly why we did it. Turning to the operating assets, NOI increased 8% to $73 million, with same-store NOI growing at 9%. This growth is primarily resulting from the leasing efforts across our office portfolio, which has increased NOI 15% compared to last year on a same-store basis. Adjusted maintenance-free cash flow increased 10% over the trailing 12 months to $96.6 million, again boosted by leasing of both the office and multifamily portfolios as we've reached stabilization across the majority of our assets. These results reflect years of investment in commercial multifamily developments throughout our communities. Those assets provide growing, recurring cash flow and add value to the residential land around them. Our condominium business is another important source of future cash flow. We contracted 82 units during the quarter, including 66 at Mahana, our newest Ward Village tower in pre-development. As of September 30, Mahana was 15% pre-sold after only about a month of sales. We've continued to see sales activity since quarter end despite a challenging market. Located at the base of Victoria Ward Park, Mahana offers a distinct opportunity within Ward Village, and we're encouraged by the pricing and buyer interest we've seen. Sales remain in line with our expectations. Across the pipeline, we have 1,743 units under construction or in pre-development, with 62% pre-sold or under contract. That's more than $5 billion in expected future revenue, including approximately $3.6 billion already under contract. What makes this business especially attractive is its capital structure. Buyer deposits and non-recourse construction financing fund the majority of those development costs, Allowing us to deliver these projects with relatively limited corporate equity. Which brings me to something fundamental about Howard Hughes. The cash flow we generate isn't the end of our value creation. It's what funds the next generation of it. We reinvest a portion of that cash into projects like Malia and Aleema at Ward Village, One Riva Row in the Woodlands, and transformational developments like Toro District in Bridgeland. Those investments drive shareholder returns, make our communities more attractive, increase long-term net asset value, and create the next round of cash flow. And the cycle repeats. Which brings me to the evolving asset management strategy. As discussed at the shareholder meeting in September, we're increasingly looking to bring third-party capital into our real estate platform through joint ventures and other structures. We don't need to own 100% of every office building, apartment community, or commercial development to create value from those assets. By partnering with outside investors, we can unlock equity, grow our development and asset management fee business, and keep overseeing the communities we've spent the last 16 years building. We're in active discussions on our first joint venture and expect to make more in the coming quarters. The capital we free up gives us real flexibility. It can be used to redeem the preferred shares, invest in Vantage, or fund our current growth opportunities in Howard Hughes communities. Our master plan communities remain the foundation of the real estate business, and long-term control over their development remains central to the strategy. So when I look at the quarter, I see a real estate business performing exceptionally well in a challenging market. We're maintaining strong land pricing, growing recurring cash flow, and building a substantial pipeline of future condominium revenue. and as we evolve our capital structure, we have the opportunity to keep creating that value with significantly less capital tied up in individual assets. I am proud, I couldn't be more proud of what our team has accomplished this quarter in a challenging environment and confident in the long-term outlook for our communities. So with that, I'll turn it over to Bill for closing remarks.

My only remarks are that the real estate team did a great job. Really great quarter. Operator, let's open it for questions.

As a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Anthony Paolone. of J.P. Morgan. Your line is open, Anthony.

Great, thanks. Good morning, everyone. My first question relates to just the planned either joint venture or sales of some of the real estate. Can you maybe give us a sense as to any particular areas you want to sell and maybe sizing of how much you expect to receive in proceeds over, I think, Bill, maybe on a prior... call you mentioned being done by the end of 27.

Yeah, I would say we're not going to be likely done by the end of 27. I think we're going to make very significant progress by the end of 27. The goal is to, we think there is value. Our whole strategy about MPCs is about control. Why do we have 9% same sort and why growth? Because the competitive dynamics of controlling the real estate in your communities enables you to maintain pricing and obviously quality, and this enables us to generate compound returns both in the value of commercial assets and the value of our land holdings. So we want to maintain control. So we're bringing in more passive partners that like the team with Howard. This is a team with incredible track record capability, resources, financial reporting, public company It's the ideal partner for pension fund family office that wants exposure to some of the best housing and real estate markets in the country. We have some assets that are kind of non-core that we might sell outright, but we've already been fielding offers on major assets that have come in the door since we announced this strategy, and I expect we'll have stuff to report on probably by the next time we have this call. So Thank you for joining us. would be a reasonable way to think about it. But that's an approximation. It could be more, it could be less.

Okay. And then if you think about as those proceeds come in, if we think about selling CRE, we think about sales cap rates and so losing some percentage of those assets as income, do you think the redeployment, should we think about that as going out at a higher return or how do we think about just what that trade is? looks like on a shorter-term basis as the money comes in and then what you do with it?

Sure. So I think real estate investors, if someone's buying an asset at a 6.5% return in a 5.5% financing market and putting up a third of the equity, that's not generally a high return. It's hard to generate very high return. I think people think of real estate as a, call it, I don't know, 8% to 12% return on equity kind of business, I would say, in terms of for stabilized assets, maybe somewhat higher for development type assets. We think we can generate, you know, Mark mentioned, in excess of a 15%, are we, you know, our ambitions are actually to generate in excess of a 20%, are we, both with a combination of strong profitability from the insurance side of the business and from strong investment results, particularly as we get the investment portfolio more invested in Common Equities and Lesson Treasury. So, you know, going from a, let's call it a 10% ROE business to a 20% ROE business, we think inherently it's a good thing. Now, our real estate operation, it takes place in a corporation where we have to pay corporate tax. You know, we have some depreciation shields, interest expense, et cetera, still pay taxes. So by bringing in, taking out, call it 80%, let's say, of the equity we have invested in an asset, and then getting paid fees for managing that assets that are paid by third parties, promotes, et cetera. We think we can take the ROE from our real estate portfolio from the maybe lower double digits to the high teens or potentially more. And so we think both the movement of the capital from real estate to insurance is a big step up in terms of ROE for the overall business. But by doing so, by bringing in a partner and by becoming more of a Thank you. Our next question comes from the line of Alexander Goldfarb of Piper Sandler. Your question, please, Alexander.

Yes. Hey, good morning. Good morning. And certainly congrats on having the first full period as a combined company. So a lot of work there. First, David, I'm going to go to Hawaii in the condos. You know I like to... complement you guys with how successful the pre-sales go. But this latest project, which I think was just 15 units or 15%, seems a little slower than historic. So just maybe a little bit more color if it's project specific or maybe just where interest rates are. It's finally countering what normally is a really strong residential sale market out at Ward Village.

Morning, Alex. Thanks for the question. I would say that over the past five years in Oahu and the condo market in general has been good. I wouldn't say super strong. Over the past five years, we've built or have under construction eight towers. The entire rest of Oahu has done two. We're 80% of the island's luxury condominium supply, and I think we've been spoiled by Bonnie Wedemeyer and her team's incredible success of delivering 60% or 70% pre-sold in 60 days. In a more normal market environment where we are today with higher interest rates, getting 15% in 30 days is a celebration, and I tip my cap to them. They've done a great job. Obviously, the last four towers are a little bit different than this one. They were all in the front row and right on the beach, and this is at the head of the park set back a little bit. So it was our expectation coming out of the gate that this wouldn't have that type of sales velocity that those front row towers did. and there is a little bit more headwinds with higher interest rates. With all that said, while 15% may be behind those other towers, for us it's still an exceptional result.

Okay, and then Ryan, a question on the securities portfolio and obviously we love the disclosure there in the supplemental. The markets have been crazy. We had the midterms. We've had some serious gyrations this week. as you guys think about your securities holdings and as we think about your you know seeking to outperform the market should we expect your book to change meaningfully quarter to quarter or in general when you guys make an investment you're making it through you look through like these the type of gyrations that we've had recently this sort of anti-ai anti-data center pushback like just trying to understand when we look at your prospects How it's going to look over time as you guys try to outperform to drive earnings to the bottom line at Howard Hughes?

Yeah, sure, Alex, and thanks for the question. The way that we think about it is there are really only a few hundred businesses in the world that we think are of the quality that we would want to own them for the long term. And so when we buy those businesses, we really are thinking with a multi-year, sometimes multi-decade perspective on where those businesses will develop. and so the opportunities to buy them, to have these businesses that grow at such a rapid rate and then to buy them at purchase prices where we can make a return that meets our thresholds which we talked about as being at least 20%, those aren't things that come up every day. So my expectation would be and our historical results at Pershing Square have suggested that we have multi-year holding periods, four plus years kind of on average even though some stocks we've held for decades at Pershing Square and I think that's likely going to continue. The one thing that's quite interesting is about investments in an insurance company versus if you think about investments in your typical manner outside of insurance is that the insurance business is cash generative. And it's cash generative in two ways. One, every time we have a combined ratio below 90, we're going to have profits. We have profits from the investment income we generate, whether it's off the cash portfolio or the common equities. Those are all things that are going to be allocated every quarter. We have more cash coming in to be invested. And we get to decide how much of those investments will go to equities, how much are going to go into cash. And so what's nice about market volatility, particularly inside of an insurance company like Vantage, is we can be leaning in and taking more advantage when we get more cash in to be buying additional securities in volatile market times. And so I think that that is something that's going to allow us to hold our positions for a long period of time while also being able to buy at moments when there's a lot of market volatility.

Bill, if you want to add anything. Yeah, just adding to what Ryan's saying, the big dynamic in markets that's sort of taken place over the last decade is increased sort of passive ownership of stocks. So index funds are now an increasing percentage, maybe 25%, 30% of almost every public company. That has the effect, as these are effectively permanent holders, at least for now, of removing float from the market. And then much bigger amounts of capital controlled by kind of the shorter-term, quantitatively driven investment firms that use a large amount of financial leverage, 8x, 10x, 12x, type leverage. And the huge moves you're seeing, you know, midterms going up, whatever, and then going, you know, big down day yesterday. Today, who knows? If you don't look in the last hour, you have no idea which direction the market's going. We are not trying to make money by figuring out which stock is going to go up tomorrow or which stock is going to go up in the next three months. What we're doing is we're finding businesses that we are very happy to own for years that earn very high returns on capital. They grow their Thank you for joining us. You know, plus or minus, you know, as the businesses progress, we expect the stocks to progress. And absent a change in our view of the business's long-term potential, we're likely to own it. So think of it as a long-dated portfolio that probably comps out at a 20% plus rate and will only make changes if we think on an after-tax basis it makes sense to sell, realize a gain, redeploy the capital in a new investment on an attractive basis.

Okay. And then just finally, a question for Mark. Mark, as you've gotten under the hood and looked at the business advantage, I'm sort of curious what your take is so far. Areas that you like, areas that you think could use some improvement, and maybe areas that you think should be exited. Just curious what your initial impressions are and how the business may evolve, especially between the insurance and the reinsurance.

I think, yeah, thankfully, I think at a high level, the company is extremely well positioned. The platform was perfect. Thank you for joining us. Thank you very much. I'm really, really impressed by the whole team. And one of the things that we've done over the last couple of months is to really transition from being a PE-owned company to now where it is now with having strong support from parent company to really build for the long-term top-notch underwriting company. And the whole team is raring to go and very happy about this. I'm very pleased with everything I'm seeing and hearing from the team. and the clients. The clients are really appreciative of what we provide to the marketplace.

Okay. Thank you. Thank you.

Sure. Thank you. Our next question comes from the line of Elise Greenspan of Wells Fargo. Mine is open, Elise.

Hi, thanks. Good morning. You know, my questions are going to be directed towards Mark on the insurance side. Mark, I was just hoping going back to some of your comments, right, you were, you know, alluding to, you know, softness on the property side, right, both primary and reinsurances is really what we've heard across the board. I guess, how are you thinking about pricing, you know, trending there into 27? And do you think, you know, what could, you know, cause a bottoming of the property rates? Do you think it's just a matter of waiting until we see, you know, some really large cat events for the industry or... Can you envision a scenario where kind of things hit a floor, you know, absent any significant losses?

Thank you, Elise. I think that the answer starts with where will the capital want to be, right? And we also have opportunities in the marketplace that may change the whole thing. But, frankly, people are sending on, you know, good results for the last two or three years. We haven't had a major cap for a while, and people are sort of getting ever more comfortable with it. I would echo what the other chief executives have said on the calls that properties is lining up to be fairly competitive. Where's the bottom? I don't know. That's the one thing that is always extremely difficult to pin down. And of course, at least as you know, if there was a major event, a major loss, it would definitely change what the market will think about. Our positioning right now is we were not and we're still not a big property cap, specifically for focusing on that line of business. And it is not our interest or focus right now going forward because of the softening and where it is relative to where it should be to provide decent return or acceptable returns for our shareholders. So our focus is probably more to be on the sideline right now, frankly. And we didn't see what happens. On the other property, the non-CAT property, I mean, you saw our announcement on the facultative side. I think there's always specialties and areas where we can play in property that are largely non-CAT exposed where we can still make money. And this is where we're going to be focusing our efforts going forward. So to have less volatility, but still have the knowledge and the expertise and the market knowledge to engage in the market if and when that happens on the property CAT. So how long is a piece of string, Elise? I don't know.

Thanks. And then my second question, you guys have spoken to wanting to grow Vantage. How does inorganic growth come into play to supplement potentially what you guys are doing on the organic side?

I think we have a lot going on right now from an organic perspective and hiring teams and different individuals with different expertise. This is really primarily our focus as we speak. I mean, of course, if things come from the outside, teams or smaller outfits or different, maybe some companies even, we're always open for business. This is how we think about the world, at least. But whatever comes to us, we'll have to be special, right? We'll have to bring something that's specialized, that's different, distinct, and also help diversify further what we have in terms of our insurance liability and insurance assets. So I think we're always open to hear. So I'm talking to the broad world right now. If there are people that want to find a new home with an economically rational executive team, we're always open for business. But first and foremost right now is focusing on what we have and maximizing and optimizing what we do with the current team that we have.

Thank you.

Thank you. Our next question comes from the line of Eric Borden of BMO Capital Markets. Your question, please, Eric.

Great. Thanks. Good morning, everyone. Mark, the construction business contributed to the insurance growth, premium growth this quarter. I'm just curious, you know, within that business, where are pricing in terms of keeping pace and then just, you Any thoughts on writing premiums for data centers specifically? How do you think about that asset class, just given the fluid environment there?

So our construction play is really a professional liability-led, which is a little bit unusual. So we do some just definitely general liability attached to it. It's not a property play at all. And the pricing is great. It's fine, actually. And it's really... There's a close relationship. It's a relationship business by and large. You really get close to the builders and the developers and you really get to know them very intimately. So it's a little bit stickier and not as open up to the market vagaries that we see out there.

Thank you. And then on the real estate side, as you look to unlock some capital there as proceeds arrive, what is the pecking or the current thinking on between redeeming the preferred, adding capital advantage, and then funding Howard Hughes Developments in the condo section? Thank you.

Yeah, I think the answer there is yes. I think we're going to look at that pretty carefully each time we have capital inflows into the business. Ultimately, because Pershing owns the preferred, it will be the board's decision as to whether they want to redeem preferred or just reinvest more capital in the business. I think on the margin, I think the company would like to redeem the preferred so that it owns more of this valuable business that Mark is really building. and we're very happy in that circumstance to have our preferred redeemed. We want the company to do what's ever in the best interest of the company. We own 47% of the company, so our interests are very much aligned with that outcome. But yeah, I think the goal is to generate enough capital that we both redeem the preferred and have excess capital for the insurance operation.

All right. Thank you very much. I'll leave it there.

Thank you. Once again, to ask a question, please press star 1-1 on your telephone. That's star 1-1 on your telephone to ask a question. Our next question comes from the line of Eli Dashef, an individual investor. Your line is open, Eli.

Hi. Good to be here. Mark, as you mentioned before, Vantage has an A-minus from Ambess with a positive outlook. and previously S&P downgraded Vantage and then withdraw its ratings at the company's request. What would it take to get upgraded by AMBEST and then re-rated by S&P? And then Bill and Ryan, given Pershing's investment in S&P Global, do you see any potential or perceived conflict if Vantage seeks a re-rating? Thanks.

So also with the rating agency question, and we were positive outlook, E-minus, as you noted. You know, there's a plan for an upgrade. We're working towards that. We have every confidence that it should happen over the next, you know, several quarters. You know, we've looked upon favorably. This is where we're positive outlook. On the S&P, listen, it's also a very, you know, different structure that they're probably used to. There's a lot of discussions, a lot of Thank you for joining us. But, you know, over time, I'm confident that we'll get to what we need to get to with every agency. I'll turn it over to Bill.

Yeah, so basically, S&P downgraded Vantage because of almost a formulaic approach that they take because Howard Hughes' rating, the S&P rating of Howard Hughes at the time of the transaction was double B. And so when a double B company buys an A-minus company, you know, they... They have a formula, and on that basis, they downgraded. Now, our view is that our involvement, or Howard Hughes' involvement here, is actually meaningfully credit positive for Vantage. And we don't approach, we think substantively, not formulaically here. And our job is to work with rating agencies so they really understand the real credit story here. I think the steps that we're taking to bring in third-party capital here bring in third-party capital, take capital out of the Howard Hughes business, deploy it into the Vantage operation, then it's really going to look like a Vantage insurance company that has a real estate subsidiary as opposed to a real estate company that has a Vantage subsidiary. I think as we make progress toward that goal, I think that's going to be materially helpful in terms of improving both the actual and perceived creditworthiness of this insurer. Obviously, putting more capital in Thank you for joining us. We'll be right back. That would actually be bad for their stock investment because the company would lose credibility in the ratings business, which is the majority of their profits. So with that, let's take the next question.

Once again, to ask a question, please press star 1-1 on your touchtone telephone. As there appear to be no further questions in queue, I would now like to turn the call Back over to Bill Ackman for closing remarks. Sir?

I just want to make one point, which I think, you know, our stock price seems to be very much driven by the short-term movements in rates. I just want to make a few points there. So number one, one of the first things we did when we acquired Vantage was we sold its fixed income portfolio. It was not exposed to interest rates. We own short-term treasuries. If anything, if short-term rates were to go up, actually it would increase the profitability of our All things staying the same, increase the profitability of our insurance company. Howard Hughes financed itself largely with fixed rate debt, although we have some floating rate debt in the condominium construction-related obligations. But even Howard Hughes, what we've experienced is over the long term, the pace of lot sales has been excellent, and it's driven by home sales, and we've seen pretty steady home sales. However, during periods of volatility, when rates spike up, you do see a short-term pause in home sales because people lining up to sign a contract, they're pricing a home on the basis of a monthly payment. And if rates spike up and they can't get them where they want, they'll pause until rates stabilize. And we've seen a pretty consistent, if you look over time, we've generated continued large amounts of Thank you for joining us. and as we have, again, less exposure to, we have less equity invested in the real estate company, more fee income there, more in insurance operation. I think people, you know, I think we still trade with the home builder kind of universe and I think one of the other benefits of this strategy is that I think the market will look at us more in terms of the value of our insurance operations and our long-term investment results. So that was my sort of last comment. Grateful for your time and thank you and look forward to talking after the year results report. Thanks so much.

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