Howard Hughes Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: Pershing Square invested $900 million for 9 million shares, backing a transformation into a diversified holding company.
  • Positive Sentiment: Q2 delivered $91 million of adjusted operating cash flow ($1.64 per diluted share) and record MPC land-sale prices at an average of $1.35 million per acre (up 29% YoY).
  • Positive Sentiment: Full-year adjusted operating cash flow guidance was raised to $385 million–$435 million (midpoint $410 million), driven by MPC land sales and operating asset NOI strength.
  • Positive Sentiment: Operating assets set a quarterly NOI record of $69 million (up 5% YoY), led by office (6% growth) and multifamily (19% growth), plus acquisition of 7 Waterway.
  • Neutral Sentiment: Q2 new home sales totaled 487 homes, down from last year due to low inventory in Summerlin and regulatory delays in Bridgeland, with a rebound expected in H2.
AI Generated. May Contain Errors.
Earnings Conference Call
Howard Hughes Q2 2025
00:00 / 00:00

There are 11 speakers on the call.

Operator

Good day, and thank you for standing by. Welcome to the Howard Hughes Holdings Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I would now like to hand the conference over to your speaker today, Joe Valane, General Counsel. Please go ahead.

Speaker 1

Good morning, and welcome to the Howard Hughes Holdings Second Quarter twenty twenty five Earnings Call. With me today are Bill Ashman, executive chairman David O'Reilly, chief executive officer and Carlos Olaia, chief financial officer. Before we begin, I would like to direct you to our website, ww.howardhughes.com, where you can download both our second 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.

Speaker 1

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 second 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 CEO, David O'Reilly.

Speaker 2

Thank you, Joe, and good morning. On our call today, I'm going begin with a recap of the second quarter and cover segment highlights from the master plan communities, operating assets, and strategic developments. Carla will review our updated full year guidance and balance sheet. Following our comments on the operating results for HHC, we'll hand the call over to Bill Ackman, our Executive Chairman, who will discuss HHH's future strategic direction before we open the lines for Q and A. As we discussed on our last earnings call, the second quarter marked a significant milestone for Howard Hughes Holdings, with Pershing Square investing $900,000,000 in exchange for 9,000,000 shares of HHH stock.

Speaker 2

These funds will be strategically used to transform Howard Hughes from a pure play real estate company to a premier diversified holding company. Before Bill discusses this in a few minutes, I'm gonna shift to talk about the results for HHH's real estate development business, the Howard Hughes Corporation, in more detail. The second quarter was another exceptional quarter for Howard Hughes, as our team delivered outstanding results across our business segments, highlighting the strong demand in our portfolio of master plan communities and further solidifying our strong 2025 outlook. For the second quarter, we delivered adjusted operating cash flow of $91,000,000 or $1.64 per diluted share. Our MPCs continue to see strong homebuilder demand, executing land sales at record prices per acre in both Summerlin and Bridgeland.

Speaker 2

Operating assets also set a new record quarterly NOI across office and multifamily with solid year over year segment growth of 5%. In strategic development, condo presales remain strong at the Lanoux, and we've launched presales at Malia and Olima, which are undoubtedly two of the most anticipated luxury residential towers ever to come to market in Honolulu. With these strong results, we are raising our full year guidance for adjusted operating cash flow, driven by the current and expected strength in our MPC land sale business and operating asset NOI. Carlos will discuss guidance in a few minutes. Turning to our MPC segment, we delivered solid MPC EBT of $102,000,000 in the second quarter, fueled by the sale of 111 acres of residential land across our communities at a new record high average price per acre of $1,350,000, a 29 increase over last year.

Speaker 2

Land sales were led by Summerlin with two super pad sales totaling 65 acres, achieving a record average price per acre of $1,600,000 We also sold two custom lots in Astro, Summerlin's newest luxury community, for an impressive average price of $7,700,000 per acre. Looking at new home sales, we continue to see solid demand across our MPCs with a total of four eighty seven homes sold in the second quarter. While this was a decline from last year, the reduction was due to a reduced new home inventory in summer and regulatory delays in Bridgeland. As both of these issues are currently being resolved, we expect to see home sales for the second half of the year remain strong. While the national housing market has shown signs of softening during the quarter, our record price per acre highlights the strength and desirability of our MPCs.

Speaker 2

We're seeing steady demand for new homes across our communities. We believe this demand will drive home builders to look for more land to develop in our communities. This will drive what we expect to be a continued record residential land sales, price per acre, and MPC EBT for the full year in 2025. In our operating asset segment, we delivered NOI of $69,000,000 representing a 5% increase compared to last year, driven primarily by a record breaking quarterly NOI in our office and multifamily portfolios. Looking closer at office, we reported NOI of $35,000,000 or 6% year over year increase.

Speaker 2

As we previously mentioned, this growth was primarily the result of last year's strong lease up activity at 9950 Woodlock Forest, 6100 Merriweather, and 1700 Pavilion, which ended the quarter 99%, 98%, and 92% leased respectively. During the quarter, we acquired 7 Waterway, a 186,000 square foot class a office building and adjacent structured parking located in the Woodlands Town Center for approximately $16,000,000. This acquisition increases our already strong market share of the Woodlands Town Center submarket. With this market share, exceptional basis, and net rents in the high twenties, this asset is expected to provide outsized risk adjusted returns upon stabilization. Our multifamily portfolio also performed well, delivering record NOI of $17,000,000 or a 19% increase year over year, driven by strong lease up efforts at our recently completed assets and improved overall leasing at our stabilized properties, which were 97% leased at quarter end.

Speaker 2

In our retail portfolio, NOI was $13,000,000 which reflected a 7% year over year reduction, primarily due to nonrecurring collections of tenant reserves at Ward Village in the prior year. Excluding this impact in 2024, our NOI would have seen a modest increase year over year. In Downtown Summerlin, we continue to make progress on our tenant upgrades and recently signed new leases with Viore and Paris Baguette. At quarter end, we had only five retail spaces available, most of which are currently in negotiations, representing only 17,000 square feet. Turning to our strategic developments.

Speaker 2

In the second quarter, condo presales were solid with 17 units contracted, representing incremental future revenue of approximately $35,000,000. Nearly all of these presales were at the LNU, bringing this tower to 67% presold. We expect to break ground later this year with an anticipated delivery in 2028. Presales at our condo projects under construction, which are 96% presold on average, were largely unchanged in the second quarter, and we remain on track to deliver Luana, a workforce housing development that's a 100% sold in the fourth quarter of this year. At the June, we launched presales for Malia and Alima, Ward Village's twelfth and thirteenth condo developments.

Speaker 2

We've seen exceptional demand for these towers in a very short period of time, and we look forward to discussing these results as soon as the launch is completed and the presold units are beyond their rescission period. With that, I'll turn the call over to Carlos to discuss our updated full year guidance and our balance sheet.

Speaker 3

Thank you, David, and good morning, everyone. Today, we are increasing our adjusted operating guidance driven by current and expected continued strength in our MPC and operating asset segments, as well as reiterating our condo sales and G and A guidance for the year. As David mentioned earlier, this was an excellent quarter led by the outperformance of our MPC and operating asset segments and we now project our adjusted operating cash flow will range between $385,000,000 and $435,000,000 in 2025 with a midpoint of approximately $410,000,000 or approximately $7.32 per share. This represents an increase of $60,000,000 at the midpoint compared to the original guidance, with a corresponding increase of 32¢ per share despite a higher share count resulting from the Pershing Square transaction. In our MPC segment, led by robust demand from homebuilders and continued low inventory of vacant developed lots, we now expect full year MPC EBT to be approximately $430,000,000 at the midpoint, reflecting an increase of $55,000,000 compared to our prior guidance, driven by strong anticipated superfast sales in Summerlin and improved residential lot deliveries in Richland in the second half of the year.

Speaker 3

In operating assets, we are increasing full year guidance from our previous $262,000,000 midpoint to $267,000,000 led by the strong leasing activity of our office and multifamily portfolios. This guidance would represent a new full year record. We are reiterating both our cash G and A and condo sales guidance for the year. Cash G and A is expected to be in the range of $76,000,000 to $86,000,000 with a midpoint of $81,000,000 As always, our guidance excludes non cash stock compensation and one time items, representing approximately $15,000,000 and 10,000,000 certain expenses respectively. Our guidance also excludes the Pershing Square variable advisory fee.

Speaker 3

However, it does include $10,000,000 for Pershing Square base advisory fee, which we have substantially offset by future savings resulting from a reduction in our workforce and other cost reduction initiatives we have recently implemented. Condo revenues remain projected at approximately $375,000,000 for 2025, reflecting the scheduled closings at Luana in the fourth quarter, with no gross profit expected from this workforce housing tower. Turning to our balance sheet, we had $1,400,000,000 of cash and $515,000,000 of undrawn lines of credit. Combined, we had approximately $2,000,000,000 of available liquidity. Together with our strong guidance expectations for the full year, we are well positioned to further strengthen our balance sheet and deploy capital appropriately.

Speaker 3

At the June, the remaining equity contribution needed to fund our current project, which will not all be spent in 2025, was approximately $279,000,000 From a debt perspective, we had $5,200,000,000 outstanding at quarter end, of which 92% was fixed or hedged at an average rate of 5.1%. During the quarter, we made meaningful headway on reducing our near term maturities, successfully completing two major financings to lower our 25 maturities to $282,000,000 Notably, we extended the construction loan on our Marlow multifamily properties to April 2027 and secured a new $75,000,000 five year fixed rate mortgage for 1700 Pavilion, replacing a construction loan previously scheduled to mature later this year. With this extension completed, our remaining maturities for this year primarily consists of Merriweather Row, 6100 Merriweather, and Tana Jerreco. We expect all of this will be successfully refinanced during this year with advanced discussions already underway. And finally, we closed on the sale of MUD receivables during the quarter generating cash proceeds of $180,000,000 These funds were used to pay down the Bridgeland notes, reducing their balance to $85,000,000 at quarter end and leaving $515,000,000 available for drawing the facility.

Speaker 3

With that, I will now turn the call over to our Executive Chairman, Bill Ackman, to provide an update on Howard Hughes holding strategy.

Speaker 4

Thank you, Carlos.

Speaker 5

I'm here with Ryan Israel, who is our, as you know, our CIO. We wanted to give kind of a report on what we've been up to for the last couple of, last few months since the transaction, closed. Our principal focus has been identifying and doing due diligence on a potential insurance company acquisition. Just to give you sort of context, you know, if you look at Berkshire Hathaway, you know, sort of, if you will, the model here, a major part of the success of Berkshire has come from, the acquisition beginning in the nineteen sixties of an insurance operation and the growth of that business over the ensuing, sixty years. What's interesting about insurance, it's a cash generative business.

Speaker 5

Generally, write premium, you receive cash upfront that you can, invest. And if you run a profitable insurance operation and you invest the capital well, you can earn very attractive returns on equity. You know, we want Howard Hughes to grow its intrinsic value per share at a high rate over a long period of time. The beauty of a successful insurance operation is it's a business where we can, you know, grow at a very nice rate over time without having to issue or raise, equity capital in order to, grow our business model? So that's been a very high priority for us.

Speaker 5

If you were to examine Berkshire over the last sort of sixty years, what's interesting is Buffett took a very different approach to the way he managed his insurance operation. A typical insurance company writes about as much premium as equity capital every year, and then, invests, the float in, you know, fixed income investments principally, but uses a fair amount of leverage to get an attractive return. So about three times the assets relative to equity is a typical, balance sheet structure for insurance operation with those assets invested principally in low risk fixed in income, securities. What Buffett did is he ran a very low leverage insurance company. Instead of writing, you know, premiums equal to equity every year, he wrote he's written premiums equal to about a third or anywhere between 2040% of equity in any one year.

Speaker 5

So very, very underlevered in terms of, you know, the the risks assumed in the insurance operation. He took a 100% of that float, from writing premium and invested in very short term US treasuries, basically taking no risk on the insurance company float. But then he invested about a 100% of the equity of the insurance operation in common stocks. And Buffett's been a good stock picker. And the result has been an insurance company that's earned, you know, well into a 20%, return on equity over a very long period of time.

Speaker 5

And the power of compounding is built, really led to the success of Berkshire Hathaway. It's really been driven off of the insurance operations and the investment operations associated with that, business. We've taken a page from Berkshire. We are looking to acquire a diversified insurance operation, and we intend to run it in a similar fashion. Low leverage in terms of the premiums written relative to equity.

Speaker 5

Low leverage in terms of, the amount of assets, relative to equity. You know, call it, one and a half times versus three times for a typical insurer, investing a 100% of the float in, short term US treasuries and taking no risk on kind of float balances and then investing common stocks in very high quality durable growth companies of the kind that Pershing Square, has identified and invested in, over time. You know, one sort of interesting question would be why don't more, insurance companies operate this way? And the answer is what was unique to Buffett is he brought, investment skills that really are generally absent, certainly on the common stock side, of an insurance operation. You know, insurance companies today really focus on maximizing the profitability of their insurer.

Speaker 5

And I would say the asset side of the balance sheet is a bit of an afterthought. And part of that is insurance companies have difficulty recruiting, kind of best in class talent to run a successful, investment operation, particularly one that invests in equities. One of the things that we bring to this, transaction with Howard Hughes is an investment operation, and that investment operation comes for free, if you will, to the insurance, subsidiary. So the plan would be we acquire insurer, we run it at a low leverage insurer. We're conservative, extremely conservative in the way we invest the insurance company float.

Speaker 5

And then Pershing Square, Pershing Square team invests, the, assets of that insurance the assets equal to about the equity of the insurer, in a common stock portfolio that we manage for the company, for free. We are looking at a number of potential, transactions. We hope to be in a position if we find the right company at the right price, to have a transaction we can announce, we would hope, by the fall, and at which point, obviously, we'll be able to share sort of more information. We have our our annual meeting will be on September 30. We're hosting it this year in New York City.

Speaker 5

It will be at, the Pershing Square Signature Center on 40 Second Street. It's a theater complex for Signature Theater. It'll be in the morning. And we really encourage you to attend. We're gonna give a very detailed presentation on our plans for the insurance operation.

Speaker 5

We're gonna talk more about the overall strategy of the company. David O'Reilly is gonna update shareholders who are kinda less familiar with the real estate story of Howard Hughes. We've had some you know, as we spent more time thinking about the business, we think, we will be able to kinda present some metrics that, you know, people should be focusing on as we kind of build this company over time to kinda measure our progress and measure our success, over time. So really encourage you to come to that, meeting. We're also gonna have, you know, an open q and a session, where Ryan, myself, David will be available to answer really any questions you have.

Speaker 5

And I think it'll be really a fun, interesting session. So we really, think it would be a great way for you to learn more about our plans going forward. One last comment with respect to, what I sort of failed to mention as I described, our plans for the insurance company. One of the other benefits, that this insurance operation, VirTra, had is it was part of a diversified holding company. And the result of that is that incremental credit support that came from the holding company gave the insurance operation more, flexibility in terms of its ability to invest, its assets.

Speaker 5

We believe we offer something quite similar here in the sense that, one, we have Howard Hughes Holdings, as the owner of this insurance subsidiary in a completely unrelated business that will start to spin off, substantial amounts of cash, over time, really unrelated to the insurance operation. And then Howard Hughes itself is owned 47%, by the Pershing Square funds, namely, Pershing Square Holdings, which is an a minus rated company with about 15,000,000,000 of equity. And the Pershing Square management company, which is a basically unlevered business, very profitable unlevered business, that is not currently rated that we do intend to rate the business, but was valued in transaction last year at about 10 and a half billion dollars. So you have about 25,000,000,000 of equity in terms of the 47% owner of Howard Hughes, a very high, you know, creditworthy, enterprise and unrelated business, to insurance, and then Howard Hughes itself owning, you know, hopefully insurance operation in the relative short term that we will run-in a similar fashion, in term of similar approach, that Berkshire has taken over time in terms of, low leverage on both the asset and liability side of the balance sheet and a higher return strategy with respect to the assets of the company.

Speaker 5

With that, we would be happy to open it up, for questions. And if operator, you could, take the questions, please.

Operator

As a reminder to ask a question, please press 11 Our first question comes from the line of Alexander Goldfarb from Piper Sandler.

Speaker 6

Hey, morning down there. Two questions. The first one is going be on the MPC business and then I'll get to the bigger picture. David, your land sales, the volumes have increased that despite what we're all reading about challenges in the single family market. Obviously, you have the premium product that you guys sell, but there's also a wider array.

Speaker 6

So can you just give some more granularity on it's impressive what you guys deliver, but still against the higher interest rates, housing affordability, etcetera. What how do we think about your properties, the price points, the diversity of buyers versus what's going on in the broader market and your confidence that this can endure, can continue to endure even in the face of elevated interest rates and sort of all the macro concerns?

Speaker 2

Good morning, Alex. It's a great question, and one that we've spent a lot of time discussing. We go through in excruciating detail our communities with the teams and track, as you know, home sales within our communities maniacally. And we see those home sales as a leading indicator for what the home builders will need in land purchases on a go forward basis. To date, our home sales have been incredibly resilient.

Speaker 2

And I think that is due to the quality of assets that we have. Our MPCs have the best schools, amenities, quality of life. They're attractive for residents and home builders. The homebuilders are building homes, they sell at a premium relative to those areas around them. And as a result, our land remains incredibly attractive.

Speaker 2

And our communities, I've been saying for years, we're not immune, but we're insulated. And there's always a flight to quality in markets when there is perhaps a little bit of a reduction in price in homes. And now it's my chance to get into Bridgeland. Now it's my chance to get into Summerlin. And we see residents continue to come in and buy homes.

Speaker 2

The home prices that we're seeing the transactions at vary across the spectrum. In Bridgeland, our homes are in the 3 hundreds to the 5 hundreds. In Summerlin, they're in the 400s to the $10,000,000 range. So we're seeing it with your first time homebuyer, your move up homebuyer, and your luxury buyer. It has been pretty consistent across the board.

Speaker 2

It has been even somewhat surprising to those of us in the room, given the national headlines. I wake up, I read the headlines, I think, my god, today's the day the music stops. And gosh darn it, if the report doesn't come in on Monday morning that says we sold another 20 homes in each of our communities, which incredible pace. So we're thrilled with the results. We see continued strength for the balance of the year.

Speaker 2

The record price per acre, I think, speaks to the quality of our communities, the desirability of our land. And at the end of the day, that land we have is the precious raw material that the homebuilders need to keep to stay in business and remain profitable. And if you have the opportunity to buy land as a homebuilder in a cuspy market where you're not sure if you can generate a great margin, or buy land in Summerlin that for twenty five years has demonstrated success and outperformance, I still believe that those homebuilders will buy land in our communities.

Speaker 6

Okay. And then the second question is for Bill. Bill, when we met with you a few months ago, you spoke about the potential for creating your own insurance entity, hiring an individual and creating homegrown. It sounds like now you're thinking more on acquiring an outside entity. So one is your thoughts on homegrown versus acquiring.

Speaker 6

And then two, as you ramp up the Howard Hughes and that investment cash flows, it almost sounds like from the outside, like we should think about this to be two to three years before those cash flows really start to ferment. But just curious if we should be thinking longer or you think that the accretion could be sooner.

Speaker 5

Sure. So our thinking on building versus buying is, if we can find the right asset and we're, I would say, increasingly confident we can, there are a number of potential transactions of a size and a, I think, quality that would be a great start for us. And, you know, again, it's gonna come down to terms and price and and, work, but I think, we've got a number of potential things that we're looking at. So that gives us some confidence there's a deal to be done. And there's a big advantage, to, you know, starting from truly scratch, you know, the issues in terms of licensing, building an organization, technology.

Speaker 7

It's not report it this way. It's not

Speaker 5

a running start. Whereas we actually buy an existing well run insurance operation, then you're, you know, you're often, know, off the ground and running, you know, sort of immediately. You know, our expectation, based on the things that we're looking at is this would be a material transaction to Howard Hughes, assuming we do one of the transactions we're looking at, meaning it would very quickly represent an important part of the business. If you know? And a successfully run insurance operation the way that we identify is a business that can consistently over time earn, I would say, returns on equity, that are, you know, meaningfully higher than and even the best run, as kind of real estate operations.

Speaker 5

So we do expect insurance, in the relative intermediate term, to become, you know, very material, to the company to the point that people will probably stop thinking about Howard Hughes as a real estate company with a little insurance operation. I think they'll think of it in the way that we, you know, sort of our business plan as a perhaps an insurance holding company or a diversified holding company with a major insurance operation. But that's that's the business plan. But, again, it's all subject to our ability to find the right company, the right price, you know, and that we won't know until we get a transaction done. But I would say we are cautiously optimistic, that there are a number of potential candidates, and we're working hard to do a transaction.

Speaker 6

Okay. And then if I could just add, when we think about the earnings potential, we should think about a significant part coming from the insurance business or that the stock portfolio is going to be more of the generation of the earnings contribution?

Speaker 5

Sure. So, you know, again, going into the Berkshire model, I would say the investment part of the insurance operation has been more materially more important to the profitability of the insurer than the insurance company itself. You know? But and I think, you know, when you run us a if you will, a pedal to the metal, if you will, in Berkshire's insurance operation comes from the fact that he's investing in assets that can earn, you know, equity type returns. And the insurance company itself is focused on profitability.

Speaker 5

You know, the the typical insurance operation is pretty aggressive in making as much money as possible from insurance and using leverage to get an adequate return on assets. You know, we we we think this approach is both lower risk and kind of higher return. So I think the way you should look at the insurance operation over time is, you know, how are we gonna you know, if we had a billion dollars of equity invested in insurance, let's say, and we can compound that equity at 20% or more over time, it will become very, very material to the overall intrinsic value of Howard Hughes. I think that's the way to look at it. As opposed to earnings, I think you're gonna gonna want to focus you on, you know, the growth in the, you know, the equity value of this insurance company over time.

Speaker 5

And and, you know, I the Howard Hughes has tried over time to come up with sort of a per share kind of cash flow or earnings metric, to try to fit in with, you know, other, you know, the conventional real estate companies that have an FFO or other metric. I think that's frankly a mistake. And,

Speaker 7

you know, and I don't I don't

Speaker 5

know that the market's actually really given us credit for that. So we're gonna come back. We were working with the team, on giving you some kind of KPIs that you can think about in looking at our business. Like, if you think about, you know, Howard Hughes, you know, today. Right?

Speaker 5

You've got, obviously, you know, the most straightforward part of the business is, you know, net operating income we generate from a, you know, a a portfolio of of real estate assets. We have a condo business that you can think of in a fairly straightforward way. Right? We've got, you know, a certain amount of profits we're gonna generate from each of these various towers kind of over time. And then we have land holdings, both commercial and residential.

Speaker 5

And, you know, what the intrinsic value of Howard Hughes depends on kind of growing, you know, the cash flows from the real estate operation. They and they relate to what price we're monetizing land and what the value of our remaining holdings are. You know, those are kind of the key sort of metrics that we're gonna look at. But we think people over time, particularly as the insurance operation becomes a bigger part of the business, we'll be focused on kind of overall the growth of the intrinsic value of the company over years as opposed to, you know, a quarterly metric, of a cash that I think is very challenging to do for business, you know, as you know, that has everything from land sales to development, stabilized assets.

Speaker 6

Having covered Howard Hughes for a long time, I appreciate that. So, thank you, Bill. Thank you, David.

Speaker 5

Sure.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Ray Zhong from JPMorgan.

Speaker 8

Hi, good morning. Thanks for taking my question. My first question is on the leverage side. Bill, as you look at the leverage as of today for Howard Hughes and the target that you're trying to go after, how should we think about a pro form a on leverage? And given that, what are the deal size that you think we should be expecting?

Speaker 8

Would it be a 100% stake or something in in something or a smaller stake, but a larger company? How should we think about that?

Speaker 5

Sure. So, you know, we we think that Howard Hughes's real estate operation is kind of appropriately financed, and we don't intend to kind of, you know, lever it up any kind of material way. You know, we we like the business the way it's being managed, today. We have today excess cash of certainly the 900,000,000 and pay maybe another 100 or a couple $100,000,000 of excess cash in the overall company called a billion dollars. That's sort of in the realm of the amount of capital that we would intend to use if we were to invest in insurance operation.

Speaker 5

If that business, if the check size was larger, we would, raise, capital or, you know, partner with, other Pershing Square, affiliates, in doing a transaction. But the the goal would be for the company we acquire to be controlled, by Howard Hughes. And, yeah, that that's an important element. Ronnie wants to add something. Go ahead.

Speaker 9

And to clarify just your question, we don't need to own a 100%. As Bill mentioned, we would like to own more than 50% of it for control. But when we talk about raising capital, one of the values that we believe Pershing Square is providing to Howard Hughes in our arrangement is we have the ability and have demonstrated over time at Pershing Square to be able to raise capital externally. And we have a large and deep network of partners who have partnered with us very successfully in the past. And so we bring we have the opportunity if we were to decide to do a larger transaction beyond the cash on the balance sheet, we could partner in a way that would be very accretive to Howard Hughes shareholders while at the same time still allowing us to be able to control the entity in terms of the daily operation.

Speaker 5

Yeah. Just to to further, you know, to Ryan's point, you know, if we were to buy a business, insurance operation for a billion and a half dollars, a billion, check written by Howard Hughes, and let's say 500,000,000 by a co investment vehicle. It's an attractive co investment for someone where Howard Hughes is sort of the likely ultimate buyer when the company sort of gets to a scale where it can buy out sort of the minority partners. So there's a interesting potential partnership opportunity. But, you know, we're not talking about buying a $5,000,000,000 asset and owning 20% of it.

Speaker 5

What we're really focused on is something order of magnitude in the billion, 2,000,000,000 ish, you know, kind of, you know, whatever. It could be a billion to theoretically 3,000,000,000, you know, something along those lines, where Howard Hughes is sort of the the control, owner.

Speaker 8

Gotcha. Understood. Thank you. And the second question is on, you know, as as Bill and your team has, you know, gotten into the day to day in the organization, you know, what are the things that you guys have changed so far? Obviously, you know, on on the GNA side, we see that.

Speaker 8

Maybe just give us some thoughts on things that you have changed and what else are you looking at to change at this point? Should we expect this is more or less the stable status? And also, you mentioned the mix of it moving forward strategically, you want bigger part of the business mix to be towards insurance. So, does that change the remainder real estate portfolio? Do you look for, you know, changing the mix between operating assets, MPC and condo?

Speaker 8

Like, how should we think about those as well looking out?

Speaker 5

Sure. So I would say we've changed nothing with respect to Howard Hughes' real estate operation. I do think it would be helpful. You know, the the g and a initiative was something that, you know, David had sort of underway in planning prior to our transaction. And there there was a very thoughtful, I would say, strategic logic for the changes that were made organizationally.

Speaker 5

Think it'd be useful for David if you you describe where those g and a savings came from, why we made those changes. We don't and then we don't have any plans to change the way Howard Hughes we we really like obviously, we've been involved with this business for fourteen years. We've had a board presence. I was chair for whatever thirteen or something of those years. So we're very happy with where the real estate business is and the way it's currently being managed.

Speaker 5

I think the only difference today versus before would be, you know, maybe if some of the world's greatest MPC assets showed up, you know, across the street I mean, across the street, like, I don't know. Some other market, like another, you know, Phoenix type transaction were to show up, I would say we're less likely to do that today. We feel like we have enough exposure to sort of

Speaker 3

the MPC business,

Speaker 5

but there's a ton of work to do in the in the existing assets. And the idea is just to continue to develop the Howard Hughes communities in sort of small cities and make them the most desirable places to live in America. And I think they're, you know, the fact that the the, home sales performance, lot sales performance kind of speaks in a more as a maybe increasingly challenged, residential, market, kind of speaks to the power of those communities. But no real change to that business, and the the team's doing a great job of running it. But David, maybe you should comment on some of the changes you've made organizationally and how they generated G and A benefits.

Speaker 2

Absolutely, Bill. It's a good question, Ray. I appreciate it. What we really did is we took a step back long before the Pershing Square announcement was made in terms of how we operate this business. And given the changing market environment where development returns are tighter, costs are up, rents have not kept up with it, we thought about a rationalization of the overall organization and a focus of that development platform into more rifle shot opportunities where we can generate the highest and best risk adjusted returns rather than taking a more scatter plot approach.

Speaker 2

As a result, we centralized a lot of our development expertise here in the corporate office, taking a lot of the the developers out of the regions, knowing that there would be fewer projects to do on a go forward basis. And at the end of the day, when you think about it this way, there was a point in time where we had multifamily developers, office developers, retail developers in multiple regions. And it became largely redundant because the velocity of development, as you noted in our results, has slowed. So we've been able to centralize and bring that talent into one place where we can use that talent across regions, partner with our regional presidents to execute, and I think operate in a much more efficient way, delivering greater free cash flow to the bottom line. I I don't want it to be lost on our investors and our analysts that in Carlos's prepared remarks, we left our g and a guidance unchanged despite the the transaction with Pershing and the inclusion of their fixed fee in that g and a guidance.

Speaker 2

I think our ability to do that and maintain G and A neutrality and get the ability to leverage the incredible amount of expertise that's at Pershing Square, shouldn't be lost on our investors. I think it's an incredible benefit.

Speaker 5

Yeah. The other thing I would say, you know, investing real estate development and running a profitable insurance company have sort of the same thing in common. You wanna do business when the returns are attractive and you wanna step away when they're not. And the problem of having kinda, you know, soup to nut development teams at each of these various locations is if you're a developer, you just wanna do stuff. And that's when people get into trouble in kinda real estate development.

Speaker 5

And, you know, it's also not great to have headquarters always turning down transactions you propose because they don't offer attractive enough returns. And so, you know, you can actually have an absolutely best in class team. You can take the best and brightest of all the various regions and and centralize them in one location. You can take the skills like you know, we have an incredible team, marketing team that has run the, the condo program, for example, in, Hawaii, led by Bonnie. And, you know, when Howard Hughes, decided to build a condo in The Woodlands, we had, you know, all of that expertise and development expertise, that we could apply, to what what is going to be an enormously successful what is already enormously successful, development, in The Woodlands.

Speaker 5

So there's a G and A savings, and it actually is it makes it a it's a much more attractive place to work in the sense that in our various developments, there's probably always gonna be something interesting to do in a certain property type. So we got a GNA savings. We got a a best in class team. We leverage all the learnings from the various, communities, and and there's less pressure, you know, to to do business. Ryan, you wanna add something?

Speaker 5

Yeah.

Speaker 9

And I'll just add, I think one of the most important things that we're focused on now and where you will ultimately see over time the value creation from the addition of the Pershing Square team to Howard Hughes is in capital allocation broadly. And as both David mentioned in his comments on real estate and taking a rifle approach to get to the highest return projects. And as Bill mentioned, we are opening the aperture in the ways in which we can deploy capital. So we've put a lot of capital on the balance sheet three months ago that can be deployed. And if you think about it now, going forward, we have an opportunity to take the highest return real estate projects and be able to focus on those, take the excess cash that may have otherwise been deployed towards somewhat attractive but still lower returning real estate projects and put those towards other things.

Speaker 9

Every time you write an insurance policy, that is a capital allocation decision. The way you invest the cash from the float, that's a capital allocation decision. We have historically had in our Pershing Square investment strategy arguably among the highest returns that you could find amongst most capital allocation strategies, and insurance gives us a pathway to continue that. In addition, though, we have the ability to ultimately over time look to acquire other businesses, which will both provide a diversification of the cash flows beyond insurance and real estate, but at the same time, us another, arrow in our quiver to be able to take advantage of high return opportunities. And if you look at, as as Bill had mentioned, Berkshire as an example, we think one of the reasons, why Berkshire has been so attractive is that there were a number of ways in which they could deploy a lot of capital into the highest return opportunity at that moment.

Speaker 9

And that's really the value that we're trying to add to Howard Hughes as we transition it to a diversified holding company.

Speaker 5

Yeah. One more sort of the other benefit we have is we own 47% of the company. We are under no pressure to deliver an outcome next quarter, this year, and we can, as a result, be super thoughtful, about how we think about deploying capital, and that carries over to the entire Howard Hughes sort of organization. You know, if you as a pure play real estate community developer, all the cash that we generated over time, we really had no place to put it other than in our various communities or in, you know, buying a new, sort of MPC. Now we have, you know, the whole world, if you will, as our as our oyster.

Speaker 5

The reason why we're focusing on insurance first is a well run insurance operation is a great platform for a successful investment strategy. And you know, our favorite version of Howard Hughes is we build this very, very valuable company and the shares outstanding, you know, don't change, or if anything, they shrink over time. And the ability to do that, is much greater in insurance than if we were running around doing, you know, acquisitions one deal at a time. But over time, the goal is, you know, as as the real estate operation generates more and more cash, we'll have more cash for investment. The holding company, the insurance operation itself, we expect to generate a lot of cash that we reinvested in equities, at least beyond the piece that we need to put aside for in the insurance business, know, the the claims potential claims in the future.

Speaker 5

And that's how we we build some a company that's very valuable on a per share basis.

Speaker 8

Thank you so much for, from all three of you. This is, very, thoughtful. Thank you so much. Sure.

Operator

Thank you. One moment for our next question. Our next question comes from the line of John Kim from BMO Capital Markets.

Speaker 10

Thank you. Bill, in your commentary earlier, I think you mentioned that you were looking at a number of potential transactions. And I just wanted to clarify that ultimately you'll just be acquiring one insurance company and not a series of acquisitions. And then secondly, for the companies that you're considering to acquire, do they already operate the way that you prefer in terms of being conservative and low levered, or do you anticipate changing how they're run? And if that's the case, how difficult is that to implement?

Speaker 5

Sure. So the what we're focused on now is buying one business run by an excellent management team, that's, you know, done a very good job in the, you know, writing writing business, over time. All of the companies we're looking at are operated as conventional insurance companies, I would say, in terms of the amount of premium they write relative to capital and the way they invest their assets. Our plan would be to, you know, change that, you know, over time. You know, Berkshire is pretty much, it's almost unique.

Speaker 5

You know, there are a couple of other examples of insurers that have taken kind of a somewhat similar approach. I think it's the it's the exemplar, sort of, example. But, you know, the, you know, the it it it helps enormously. There are very few insurance companies that are part of diversified holding companies, basically. And so that's why, the targets we're looking at are operated conventionally, I would say.

Speaker 10

Okay. That's helpful. Maybe turning to David, you talked about the record price per acre that you achieved this quarter. In page 23 of your supplement, you have an estimated price per acre and that didn't change sequentially, for Summerlin or Bridgeland. Is that policy not to change that figure since it's an estimate, or do you anticipate that number going up?

Speaker 2

John, I think conservatism is always the best policy, and incredible as our results have been this quarter and the past several quarters, for me to try to extrapolate that to the moon over the next thirty years, I think would be a little bit cavalier. So we take a conservative approach. We don't use one quarter's results to impact the future per sale acres on a daily basis. We look on a trailing 12, trailing 24, and if we feel that it's appropriate to apply that price break across the remaining, we will.

Speaker 10

Okay. If I could just squeeze one more in on, Ritz Carlton, the condo sales have sort of stalled over the last, couple quarters.

Speaker 2

Intentionally. Actually, let let me let me let

Speaker 8

me jump in there. Okay.

Speaker 5

So so I it it's largely because of me. And, you know, I the the team sold out the first half of the project despite raising prices on a, you know, weekly basis, because of, demand. And I said, look. We're you know, this is a unique, incredible asset. It's like a really an amazing, I would say it's a the highest end equivalent of a of the best of New York City type projects, and I see us selling at prices that seem to me really, really cheap.

Speaker 5

And I said, look. Let's just sell half, and let's let's deliver the product, and then we'll we'll get, you know, the the the price that we deserved. And then I made the mistake of of stepping off the board and not being chairman anymore, and David snuck out another, like, 20% of the project, because, you know, because that's his instinct. But, you know, the bottom line is, we could sell the entire project out if we wanted to. But, you know, our goal is to maximize the, you know, the profitability, you know, for the project.

Speaker 5

So, you know, I guess what the current approach is, if someone desperately wants to buy something, you know, we maybe we find a way to make a deal with them. But, you know, we think that act since, again, it's a first of its kind, in The Woodlands, and really truly breaking new ground here, we're definitely leaving a lot of money on the table in the initial units that we've sold. It's still prudent to do so. So I'm obviously supportive of everything that management has done, so far, but it it behooves us to leave, you know, a nice piece of the project as it gets as people can actually see the finished product.

Speaker 10

And are the remaining units a higher floor or higher price points generally?

Speaker 2

I'd say the remaining units represent a good sample set of the overall units of the building. It's not as if the smaller units are left or the penthouses are left. I think we've sold a great range of units, from the smaller all the way up to some of the penthouses, and what remains is a representative sample set of the overall building.

Speaker 1

I mean, basically,

Speaker 5

every time David sells a unit, I tell him he sold it at a too cheaper price. And every time he hasn't sold a unit, I'm told him he's not selling quickly enough. So that's the nature of our relationship.

Speaker 10

Great color. Thanks.

Speaker 5

It's like in trading where you tell the trader, oh, we should have bought it. I would have bought it here, and I would have sold it here. You know, that's it's a good way to keep management. That's the their feet on the fire, so to speak.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Peter Abramovitz from Jefferies.

Speaker 7

Yes. Thank you very much for the time and for taking the questions. Just kind of a philosophical question, if I could, for Bill. I guess, what would you say to kind of some of the common pushback from the market and from investors on sort of complexity of the Howard Hughes story? It's maybe been a concern over time and been a challenge that you know, some of the feedback from the investment community is that it can be hard to underwrite or, you know, people struggle with some of the parts stories and kind of the long duration of capital required for unlocking value, the lack of comps.

Speaker 7

And, certainly, Berkshire is a good model to follow, but it is a bit of a unicorn in its success story in the public market. So I guess, just kind of philosophically, how do you get the market comfortable with some of those challenges that still exist in the stock? And kind of what would you say to some of that pushback?

Speaker 5

Sure. So look, I completely understand it, and it's something we struggled with as an independent public company focused on this business. And ultimately, you know, I think we collectively and certainly at Pershing Square came to the conclusion that we're never gonna be able to get the kind of respect we deserve, if you will, for management's accomplishments and and the quality of our assets as a pure play real estate company. And I think that's driven as much by complexity as actually, the market assigning a very high cost of capital to a business that's in real estate development, you know, land sales, condominium development, and multi geography, and it's unique and doesn't pay a dividend, etcetera. So we sort of said, you know what?

Speaker 5

We're never gonna overcome this. So now what what we should do instead is embrace embrace the complexity, so to speak. And what I mean by that is, you know, Howard Hughes, the core real estate business is a phenomenal business, and you'll understand that business, you know, over, you know, the next you'll you'll understand it even more over the next three, four, five years as it starts generating, you know, a ton of cash, and then even more so over a kind of a longer period of time. But we don't wanna double down in that business and just keep redeploying capital and buying more NPCs because we'll you know, it's a story that will never properly, be told. What we wanna do instead, while you're right, there there are the examples of successful diversified holding companies are limited.

Speaker 5

We do believe, that we have the kind of necessary collection of, skills, assets, and the kind of a starting base to do so. You know, if you look at Berkshire's success, a big part of it came from the fact that Buffett himself owned half the shares outstanding. So we could take a very long term view. Well, we own 47% of the shares outstanding. The second thing that Buffett brought to the table is he was a very talented investor, proven talented investor in the stock market and investing in common stocks.

Speaker 5

You know, we bring that, you know, we've got a twenty one year record at Pershing Square, of, you know, generating an excess of a 20% compounded return over that period of time. And and, you know, 27, 28% compounded since we've had permanent capital, over the last almost, kind of eight years. That's a, you know, that's unicorn record at least investing in common stocks, and we bring that to the table, you know, to this company. You know, the we spent a lot of time studying Berkshire over time. And, you know, without Berkshire's insurance operation, it wouldn't have been a particularly interesting business.

Speaker 5

That is a key part of our strategy here. We're cautiously optimistic, as I mentioned, that we can start in a good place with a good asset, with a great team, and build, you know, a profitable insurance operation. And we're gonna manage that insurance company's investment portfolio for free. Now I wanna very carefully distinguish. You've seen there are many examples of irregular way insurance companies that invest their assets principally in fixed income securities.

Speaker 5

And then there are a bunch of hedge funds, I would say, that kind of either built or acquired insurance companies for the purpose of creating permanent capital to invest in their funds. And the weight and and the track record of those entities is poor, I would say, generally. And the reason for that is, you know, one, they didn't focus as much as they should have on on actually having best in class teams running the insurance operation. And two, they invested their assets in their funds, and charged high fees. It was really a fee generating AUM kind of exercise.

Speaker 5

What we're doing here is the assets of Howard Hughes' insurance operation are gonna be invested directly in common stocks, not in Pershing Square funds, not charge fees. In fact, there will be you know, there's it will be the lowest cost investment operation of any insurance company because we literally will be doing that as part of our overall arrangement with Howard Hughes. So one of the interesting benefits to the management teams, that we the management team that runs our insurance operation is because the benefit of Pershing Square's investment acumen without any cost associated with it. And actually, obviously, it's beneficial to the ability to run that company kind of profitably. So while there's no guarantee we're gonna be successful taking this approach, I think we have, you know, the the sufficient degree of ownership, and understanding of the existing base business.

Speaker 5

We've got, you know, a balance sheet that will enable us to do initial transaction. The company has vastly more resources than it could afford because it has the entire Pershing Square organization working alongside Howard Hughes at a, you know, cost that is, you know, a fraction of what it costs. So these are significant competitive advantages. And I would say unlike Berkshire, our base business is a vastly more attractive one. You know, Buffett had an effect of liquidating insurance company that was his base asset and Textile.

Speaker 5

You know, which was basically a textile operation. And he redeployed that capital fairly quickly over time into much better businesses. We have the benefit of a real estate operation that we really like. And as long as we don't buy another MPC, it's it starts to in which we don't intend to. We can, it it will generate a lot of cash that we can redeploy in other businesses.

Speaker 5

And I think as this becomes a more diversified company, the kind of the very high cost of capital that shareholders assigned to the company is gonna come down. And and, you know, just from a technical perspective, I would say, the universe of investors who wanna invest in a pure play MPC company, we kinda know. Those are the investors that have kinda come and gone over time that have owned Howard Hughes over the last fourteen years. Mhmm. The universe of investors that can invest in diversified holding company is, you know, a thousand x the scale or infinite relative to what, are willing to invest in a diversified holding company.

Speaker 5

You know, the, it takes only a small number of Berkshire shareholders, if you will, a tiny percentage of a trillion dollar market cap, to decide to be interested in Howard Hughes to buy the 53% of the float that's not held by us for the stock to do very well over time. So we think while there has been, you know, some, you know, sure a pretty material exit from the shareholder base of kind of dedicated pure play real estate investors, those investors have been replaced by investors who are betting on kind of the diversified holding company story, the the, you know, what we intend to do here. And I think, you know, what causes the stock price to go up over time? I think if we execute on what we hope to and starting with a great insurance operation, We start to, deploy that capital intelligently. People start to see results.

Speaker 5

They realize this is no longer the old Howard Hughes. We're gonna attract a much broader base of, investors, and and I think that becomes a pretty attractive, stock story.

Speaker 7

Yeah, I appreciate that. And certainly, can post 20 plus percent ROE on an annual basis. I think that's awful lot of problems. So and then maybe a micro question, and thank you for the color there. Just more kind of a micro question on the real estate side.

Speaker 7

David, could you just talk about just kind of leasing demand for the office asset you just acquired in The Woodlands, how that's sort of shaping up?

Speaker 2

Yeah, no, it's a great question. We couldn't be more excited because this is an asset that I'm looking out the window and I can see here right on the heart of the waterway. It's the first office building you come to as you Exit 45. And it's a pristine class A building that is entirely empty. It is the only vacancy in the waterway submarket of The Woodlands, as we've leased up all of the other assets that we've had almost entirely full.

Speaker 2

And it's a market where we're able to achieve on a building like that high 20 net rents, with a basis today of around $80 a foot. And after we put in TIs, we'll still be sub 200. And we think it's an outstanding opportunity to generate risk adjusted returns and allow us to meet the existing demand that we see in this submarket that we just currently can't accommodate because our assets in this submarket are full. So we're we're meeting the demand of office tenants that wanna be in this submarket. We're doing it in an outstanding basis.

Speaker 2

And I think that we have a really good opportunity here to lease this thing up quickly, similar to how we did this building here at 9950 that we acquired, know, if you recall right before the pandemic.

Speaker 7

All right. That's all for me. Thanks for taking the time.

Speaker 2

Thanks, Peter.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Josh Kaufman.

Speaker 4

Hello. Good morning. I just had a question about the macro hedging. Regarding hedging strategies, how will the positions be constructed, for example, in the scenario of the CDS trades that Pershing held? If HHH was to be in a situation now, would the trade be executed through both of them, or how would the sizing of those positions be constructed?

Speaker 4

And for future acquisitions, would similar approaches be used? Thank you.

Speaker 5

Sure. I think it's a very good question. So one of the things that Pershing Square has done over time with respect to our investment portfolio is the bulk of our assets have been invested in, you know, common stocks of high quality durable growth companies. Periodically, I would say episodically, we've identified what I would describe as black swan type risk in the market or cases where we've got a very, I would say, variant view on interest rates or commodity prices or you know, currencies. And the market offers us the opportunity, in the form of a option like instrument, to make a large profit relative to our investment if the expected, or the potential risk were to occur.

Speaker 5

And we've used that to kind of hedge risk and, in some cases, a little more opportunistically just to make money. You know, the, if we were to identify such a risk, and we thought it appropriate for Howard Hughes to hedge that risk, we would size a similar sized, hedge in Howard Hughes, by buying either an interest rate option or credit default swap at Howard Hughes like we like we do in the Pershing Square portfolio. And we'd size it relative to what we think is appropriate in light of how much equity or how much exposure we have to that, you know, particular kind of risk. And that would also be a strategy within the insurance company investment portfolio, that we would, you know, operate, similarly.

Speaker 9

Yeah, and I think the key to think about that, as Bill mentioned, is when we buy these typically options or option like instruments, if the risk that we're worried about doesn't come to fruition and the option doesn't pay off, we size into an amount where we like to think about it as effectively you don't notice it in the aggregate results because the amount of money you can lose will be small enough. At the same time, if the risk that we're worried about actually comes to fruition, the payoff from a relatively small investment will be large enough where it will have a very material impact. And those are really the only types of investments we make where they're very asymmetric so that when we're hedging something, if it doesn't work out, it will not be a material negative impact, to the Howard Hughes business. But it would be a very material positive if that risk were to come to fruition. That would be the key in how we size these, what we call asymmetric hedges, which is the way that we, have historically done inside of Pershing Square.

Speaker 9

And and just to give

Speaker 5

a very real life sort of example of this, at the February 2020 board meeting for Howard Hughes, I told the board one, I didn't actually travel to Dallas because I was concerned about the COVID, pandemic becoming, much more serious over the next, several weeks. And I, you know, I said, time to hunker down because, you know, things are gonna get complicated. What we were doing at Pershing Square at the time is we were buying sort of hand over fist, credit default swaps, investment grade CDS as a very low risk way to hedge a potential, deterioration in the credit markets and or deterioration, in the equity markets. Howard Hughes was not in a position, to do so. Didn't didn't have the expertise, wasn't set up in order to be able to write that insurance, didn't have arrangements in place with various, financial institutions.

Speaker 5

Howard Hughes didn't participate. We made a very large amount of money on a very small amount of a premium investment, you know, invested 27,000,000 premium. We made 2,600,000,000.0, ultimately, in in profit from that trade. You know, if we could have done 10,000,000 for Howard Hughes, or if we had done 5,000,000 for Howard Hughes at the same time, Howard Hughes would not have had to do a $600,000,000 equity offering a month later. You know, it's maybe a very real life example of, of, you know, what we'd hope to achieve, in the future.

Speaker 4

Awesome. Thank you, Bill. Thank you, Ryan.

Operator

Thanks. Thank you. At this time, I would like to turn the conference back over to David O'Reilly for closing remarks.

Speaker 2

Once again, thank you all for joining us. If there are additional questions or thoughts, we are always available to answer those. And I'll close by reiterating what Bill mentioned earlier, that we'd like to invite everyone to join us on September 30 in New York City for the Annual Shareholder Meeting. It will be on 40 Second Street, Manhattan. Information details and your ability to register will be available as soon as our proxy is filed beginning on August 18 on the Investor Relations page of our website, howarduse.com.

Speaker 2

Thank you again.

Operator

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

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