Good day, and thank you for standing by. Welcome to the Howard Hughes Holdings to Acquire Vantage Group Holdings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I will now like to turn the conference over to your speaker, David. Joe Valane, General Counsel, please go ahead. Good morning, and welcome to a special conference call for Howard Hughes Holdings. With me today are Bill Ackman, Executive Chairman; Ryan Israel, Chief Investment Officer; David O'Reilly, Chief Executive Officer; and Carlos Olea, Chief Financial Officer. Before we begin, I would like to remind everyone that 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. While we believe 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 this presentation 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. With that, I will turn the call over to Bill. Thank you, Joe. Why don't we really begin, excuse me, with very high level where we started, which is in May earlier this year, Pershing Square entered into a transaction to acquire a 15% stake in Howard Hughes as part of a plan to transform Howard Hughes into a diversified holding company. What we've shared since May is the initial part of our business plan was planned to build or acquire an insurance company that would become a base to build a diversified holding company. And we're taking a page from Mr. Buffett and Berkshire Hathaway. The early days of Berkshire, Buffett acquired a small insurance company and managed that insurance company in a very interesting manner, differently from other companies. Took very relatively low insurance risk with a goal of underwriting profitability as paramount. Used much less leverage than a typical insurance company, but invested a substantial portion of the investment portfolio in common stocks and created an insurance operation that generated 20% plus returns on equity over a 60-year period of time, building a substantial majority of the value of that company. Learning from Mr. Buffett, we've taken a similar approach, and we began a search for either a management team to hire and build a business behind or a company that we could acquire at a price that made sense for Howard Hughes that we could build into a core of this business, and we're delighted to report today that we've done the latter, which is certainly our preferred choice because building from scratch takes time. The company we're acquiring, Vantage, has been built from scratch. It's been a joint venture of two highly respected private equity firms, Hellman & Friedman and Carlyle, effectively a 50/50 joint venture. They recruited a very talented management team and built the company, the systems, really every element of the business with a plan eventually for a public offering. We were introduced to the Vantage team, actually by the team at Jefferies and the private equity owners, and that began a conversation that led to this transaction. The private equity strategy is one where ultimately they're seeking liquidity, and I think their business plan was to take the business public. What we offered is an all-cash execution at a full and fair price that enabled all parties to be excited about a potential transaction. The purchase price is $2.1 billion in cash. That price represents 1.5x this year, 2025, estimated book value. It's a lockbox transaction, so to speak. So the earnings accretion that takes place between the signing of the contract and closing inures to the benefit of Howard Hughes as the 100% owner of the business. That anticipated growth in book value between now and when we close the transaction should bring down the purchase price to effectively 1.4x book value, which we think is a very attractive price for the platform and team that we're acquiring as part of this transaction. We intend to close the transaction as promptly as practicable. Insurance companies have a significant regulatory review. This is both a Delaware and a Bermuda-based insurer. We require approvals from both jurisdictions. The sources for the transaction come from $1 billion too on Howard Hughes' balance sheet. That's some of the $900 million of capital we invested plus excess cash at Howard Hughes, still leaving a nice cash cushion in the real estate subsidiary to run that business. We provided an up to $1 billion-dollar backstop on extraordinarily favorable terms for Howard Hughes. And by the way, there's no commitment fee. If Howard Hughes were to find a superior form of financing, you could choose to pursue that financing. One of the things we committed to do when we did this transaction in May is bring the full resources of Pershing Square behind Howard Hughes, including myself and Ryan Israel, who became officers of the company, and the full Pershing Square team, which worked alongside the Howard Hughes team in executing upon this transaction, due diligence, and we'll continue. And we've really had a fabulous working relationship ever since. The terms of this preferred stock are basically mimicked. It's effectively what we're doing, is Pershing Square Holdings is going to own preferred stock that really behaves like common stock in all respects in this insurance subsidiary. And we've given Howard Hughes the ability to buy it back from us as quickly as they can, or it can. I'm speaking now from Pershing Square's perspective and the preferred holder's perspective at the same effective purchase price, the one and a half times book value. So since it's historically been a real estate company and real estate parlance, the way I would describe this is we're buying an insurer at kind of an earlier stage of its existence. It's a building in the process of being leased up and getting to a sort of full profitability. And we're going to improve that profitability by Pershing Square managing this asset. So we're sort of buying it at an 8% cap, and it's going to turn into a 5% cap asset. But we're giving Howard Hughes the ability to buy out our interest at that same going in multiple. And if we are successful as we expect to be here in Vantage continuing to be actually improving its profitability on the kind of liability side of the balance sheet on the insurance operation, and if we can prove the investment of the assets, this business will be worth considerably more than 1.5x book value over the next several years when Howard Hughes will likely exercise its option to buy out its interest from the company. What attracted us to Vantage, among other things, was a highly diversified portfolio of businesses, of business lines in which they write business that reduces its exposure to any one sort of sector of the market. What this means is that the company can be very opportunistic in writing the business that only makes sense, and that is what we mean by buying a platform. The insurance market is notable where different segments of the sort of different lines of business are. At times, the market is attractive. At other times, it's not, and the key to a successful and profitable operation is playing when the price is right and stepping aside when it's less attractive. Much easier to do so with a diversified portfolio of business. Management team is extremely experienced, decades of experience prior to forming this company. One of the benefits of buying a business that's only five years old is we don't have to worry about asbestos liabilities hidden that were entered into 30 years ago. It's a very clean portfolio, relatively easy for us to underwrite the liabilities, all the necessary licenses in place, an A- S&P and AM Best Credit Ratings. The balance sheet is very well capitalized. The company really has made its focus really entirely on the insurance business and not on the management of the assets. All of the assets have been outsourced to, I think, a combination of BlackRock and Goldman Sachs. Think a highly rated fixed income portfolio with thousands of CUSIPs. It's not that the goal there was no surprises, not to achieve anything particularly interesting in terms of investment returns. And we start out with a great balance sheet and a portfolio that ultimately, under our management, we expect we can earn much more attractive returns. Lastly, we'd like the size of Vantage. A smaller company would have taken a lot longer to build into an interesting enterprise. Vantage is at a scale which enables it to write lots of different businesses and be attractive to its customers and is a very highly material transaction in the transformation of Howard Hughes. With that, Ryan, why don't you take us through some of the details on the company? Sure. So as Bill mentioned, Vantage is a leading specialty insurance, reinsurance, and third-party partnership capital platform. It was formed in 2020, as Bill mentioned, as a combination of two private equity firms and the founding management team, including the CEO, Greg Hendrick. In terms of some details, over the last 12 months, ending September, the company has written about $1.2 billion of premiums. That's roughly evenly balanced between the specialty insurance business, which is about 60% of that, and 40% in the reinsurance. And one point here, the reinsurance that the company does is much more specialty in nature and has almost no exposure to catastrophe insurance, which is what is typically thought of in the industry to be the primary focus of reinsurance. And so it really is differentiated both in its primary specialty insurance and the reinsurance portfolio, which we think is highly advantageous. Another thing that we like about the business is AdVantage, which is their third-party asset-light capital vehicle that does some reinsurance in the property in natural catastrophe space. What we like about that is for the business, it's actually a high-margin asset-light fee stream, and that deployed about $1.5 billion of capital this year. Overall, the book value is about $1.3 billion as of September. As Bill mentioned, we would be expecting that to increase going forward until we close the acquisition at some point next year in the first half. Very strong credit rating and just under 370 employees. The business is highly diversified both across its business lines and the duration of its reserves. As Bill mentioned, one of the things we really like about the business is a highly diversified insurer, which with Vantage has about two dozen different lines. We've shown about a dozen on the page just to give you a general flavor of the areas in which it participates. The advantage of that is you can play in the markets where the pricing is the best. At the same time, to the extent that in the insurance business, you inevitably get certain things wrong, no one mistake is going to have a huge impact on the company, which we think provides a better opportunity for growth while at the same time being less risky. Similar story with the duration of reserves. Very strongly balanced portfolio across short tail lines, medium tail lines, and longer, pretty evenly balanced between the shorter, medium, and longer tail lines of business. What's nice about that is ultimately the longer tail lines provide more float for investment income, but the shorter tail lines give you more certainty into making sure that the policies that you've written, if you've made any mistakes, you can quickly fix them. As I mentioned on the prior page, overall, a very important point for us is there is very limited catastrophe reinsurance exposure, less than 1% of overall gross written premiums this year. So the management team, as Bill mentioned, is also very strong. Greg Hendrick, who is a co-founder and has been with the company and helped create the company since it started five years ago, very good executive, had nearly a 35-year career in the space overall, working for several different companies. The last role that he had was the CEO of AXA XL before it was sold and very strong tenure and track record there, and has a very strong team underneath him as well. A nd I think one of the things that's important to point out on this page is actually a lot of the executives have been on this since Vantage started, but actually have worked with Greg at some prior companies before, so this is a team that, while the business has been around for five years and is very strong, also has a lot of prior experience in working together, which we think is an added benefit. Just to give you a few kind of key financials on the business, all of these numbers are kind of as of the end of September, the prior 12 months. We would expect, given the business is growing, that they will be increasing over the coming months and years. In terms of the overall business that has been written, the gross written premiums, the company is doing about $1.6 billion, but they don't maintain all of that business. And therefore, the net retention of those premiums is about $1.2 billion, just over 70% of what they write, they ultimately retain. And then what's earned on the income statement that you would see is just under $1 billion overall for the 12 months ending September 30th. The company's loss ratio is about 61.4% as of this period. Its expense ratio is just under 36% for a combined ratio of 97%. And one thing I would point out here is that when we look at a lot of different P&C companies over time that have achieved scale, that expense ratio is a fair amount lower than the 36%, which Vantage has. A lot of times, it gets close to that 30% or even sub-30% ratio. Vantage, because it was started just five years ago, is now getting to the point where we believe they have sort of the minimum efficient scale. They've made a lot of investments appropriately to get to this point. But we think going forward, as the company writes additional business, we'll see some real leverage in that expense ratio going forward because they've already made the necessary investments on which they can grow in a highly incremental way in the future. Overall, the company is showing about a return on equity this year of about 13%. We've quoted a pretax number because as of right now, the company is not paying taxes. We expect over time they are likely to pay. Still working on sort of the exact tax structure, which we'll have a better idea and finality on as we get closer to the close. In terms of the balance sheet on the right-hand side of the page, the company, as I mentioned, is about $1.3 billion of book value today. Its invested assets are a little over two times that level, just under $2.8 billion, as Bill mentioned, very safe in terms of its fixed income portfolio, very little credit risk, a lot of government securities, and about 10% cash. One thing I would point out is, in general, companies tend to pay 1%-2% and 10%-20% of the profits to have a manager like Pershing Square manage their assets for them. But under our services agreement with Howard Hughes, Pershing Square will be managing this $2.8 billion portfolio for free, so no incremental fees. Just on the management fees alone before any profits, that could result in a kind of $30-$60 million annual savings, which we think is a very valuable thing for Vantage and ultimately Howard Hughes shareholders and really highlights what we think is a very attractive services agreement for the Howard Hughes shareholders overall and in particular with this transaction. So now I'll turn it over to Bill, who can kind of walk through some of the key value drivers for Vantage under Howard Hughes' ownership. So we think Vantage is a very attractive insurance company on a standalone basis, but one that becomes an even better business when it becomes part of Howard Hughes and part of a diversified holding company. Among other things, Howard Hughes provides incremental credit support and just overall kind of a reduction in risk by virtue of being part of a holding company type system. Howard Hughes has other sources of cash that the real estate business over time we expect to be a major driver of cash flow that we will not be able to invest in the communities, sort of excess cash that will go to the holding company. Those are resources that could be deployed in the insurance business. Of course, as Ryan mentioned, the fact that we're going to manage the assets for free, that's the best deal ever in the insurance industry. And the business itself, we think just the natural operating leverage of getting to scale, we think will make Vantage a much more profitable insurer. And there are meaningful differences between an owner like Howard Hughes, which views Vantage as a permanent lifelong holding, if you will, than a firm, private equity firms. And again, two of the most talented firms in the industry are the buyers here. But their business model requires returning capital to investors within a finite period of time. When you're building a business with a goal of returning capital in seven years, the way you think about that business is different than if you were to own that business with a forever time frame. One of the first things we're going to really make clear to the Vantage management team and something we've spoken to them about over time is our focus here is going to be on profitability, not rapid growth. We're not looking for an exit. This is an important core holding of Howard Hughes, and we want to build one of the best insurance operations in the world. One of the other benefits of being part of a consolidated enterprise, even if Vantage were an independent public company, would have the normal pressures associated with meeting analyst expectations, and typically, that comes with expectations of premium growth, and the nature of the insurance business, as we've learned over time, following many successful and some unsuccessful companies, is you never want to be under pressure to write business. You want to pursue the business that makes sense, and you want to step aside when there's nothing to do. It's much harder to do that if insurance is your only source of profitability. Howard Hughes does not have any. The team has not historically been a real estate company. It was really important to us that we bought a business with a highly experienced team. And we spent a fair amount of time with the Vantage team over the last several months, and we're very excited about the opportunity to work with them, to learn from them, and to work on building a business with them. And I think our sense is, obviously, the full Vantage management team didn't hear about this transaction until late yesterday. But this is a very, very comfortable home for Vantage and for its team. We're very excited to have the opportunity to meet all of them and work with them over time. Pershing Square's ownership of Howard Hughes, we think, is another important leg to the stool. Pershing Square today and affiliates own 47% of Howard Hughes. That also gives the company the flexibility to not be focused on kind of short-term objectives, but to build value for the very long term. Insurance companies fundamentally make promises, some of which extend many years into the future. The creditworthiness of an insurer is critically important. Vantage starts with an A-rated balance sheet. We think that credit profile improves materially by becoming part of the Howard Hughes family. And then the fact that Howard Hughes is backed by Pershing Square, while it's not technically a subsidiary, because a technical subsidiary would be a 50+% ownership. We think of Howard Hughes really much the same way as a majority owner would think of a business, hence our willingness to provide $1 billion of effectively bridge equity here without a commitment fee. And over the last 15 years, we've been very supportive of Howard Hughes' business and stepping in periodically when capital was required. We don't think that capital will be required here other than with respect to this transaction. But having a very strong, well-capitalized owner, Pershing Square owns Howard Hughes in two pieces. About two-thirds of our ownership is through a company called Pershing Square Holdings, which is a London Stock Exchange-listed entity with $20 billion or so of assets, also an S&P A- rated company. And then we also have the other piece is held by the Pershing Square Management Company, what some people call the GP, the entity that receives the fees from the funds that we manage. That is also a very valuable net debt-free enterprise. We have not yet sought a credit rating, but I think it would be likely in excess or certainly in the A category as an unlevered, highly profitable business with recurring cash flows. So Howard Hughes has the benefit of a very creditworthy 47% owner, and that inures to the benefit ultimately of Vantage and its policyholders. We have sort of graphically reflected this on this page, sort of two layers of support supporting Vantage, which itself, on a standalone basis, is an A- rated company. So following the transaction close, we expect to invest additional primary capital in Vantage. This will delever the company's balance sheet. One of the things we've talked about that was sort of unusual that Buffett did, but we certainly today understand the logic. Most insurance companies operate. Let's say they have a billion of capital. They'll typically write a billion of premium a year. Buffett, with a billion of capital, would write 3, 400, maybe 500 million of premium a year. So much lower leverage insurance operation, and a typical insurance company might invest as much as three times their capital, so in that example, the billion capital example, might invest 3 billion, but would have a portfolio very much like the Vantage portfolio, almost entirely fixed income. What Buffett did was took 100% of the float, invested in short-term treasuries where he took no risk, and then he invested about approaching 100% of the equity in common stocks, and he managed the insurance company in a very low leverage fashion. We think that approach, a low leverage insurance operation coupled with a low leverage investment operation with a portion of the portfolio in common stocks, yields a higher return, lower risk overall operation. We have not yet begun the conversation with regulators. Of course, the Vantage team reached out or will be shortly reaching out to the various regulators and rating agencies, but we'll begin a dialogue about our business plan, and the plan is to gradually increase Vantage's allocation to common stocks, and this is where Pershing Square can bring significant additional value to the company. This, I guess, anticipating my words on the previous page are sort of the bullet points, but the beauty of a low leverage insurance operation is that when the business is really good, you can put the pedal down and pursue those opportunities, but you can also comfortably step away. It's a win for the policyholders because the company has much more underwriting capacity and creditworthiness, and managing the assets in a less leverage fashion and a higher return fashion, we think, will ultimately lead to kind of a better long-term outcome, but these are sort of the key prongs to kind of the asset liability strategy for the company. Last but not least, on the investment of the assets, as many of the people on this call understand, we entered into an arrangement that was somewhat unusual in May with Howard Hughes, where I became Executive Chair, Ryan became CIO. We take no cash or equity compensation or options or otherwise. The full Pershing Square team from finance, accounting, legal, transaction execution, make your list, capital markets, etc., we make available to the company. We receive a management fee, base management fee, and a management fee, variable fee from Howard Hughes. In exchange for that, we bring all of those services. One of the important services we're bringing here is the management of Vantage's assets for no fee. That will enable the company to earn a much more attractive return. We highlight on this page kind of the long-term record of Pershing Square if we didn't charge fees to our investors. It's been a 21.5% compounded return for the last 22 years. That's 1,080 basis points per annum above the S&P. Many people think beating the S&P by 100 basis points over a 20-year period of time would be a major accomplishment. There are very few investors in the world who've beaten the S&P by 1,100 basis points per annum over that period in a largely unlevered or very modestly levered strategy in recent years. Our business model began as a traditional hedge fund with open-ended funds where money could come and money could go. As we've described in our insurance presentation at our annual meeting, over the course of that history in the 2016 timeframe, we made a very unfortunate investment in a company where we lost money, which itself is a bad thing. But what compounded the mark-to-market losses for the firm is that investors, we had a perception that investors would redeem, and people started betting against the firm by shorting our portfolio. And then investors did redeem, which required us to liquidate assets. Having been through that experience, we made a decision to become really an effectively entirely permanent capital firm, so today, 95% of the assets of Pershing Square are in public vehicles in which we're the controlling shareholder. And the beauty of that is we're not subject to the risk of capital flows coming in, which in the earlier years of Pershing Square were highly dilutive, capital kind of a run at the bank, so to speak, which was the experience we had in the kind of beginning in 2016, 2017 timeframe. S o by the end of 2017, we exited the open-ended effectively exited. We didn't force anyone to leave, but every investor who wanted their capital, we gave them their money back, and we've managed for the last eight years with a permanent capital base, and our results have improved significantly. On a gross basis, again, gross fee basis, which we think is a relevant metric here because we'll be charging no fees to Vantage, we've earned a 28% compounded return for the last eight years. That's 1,360 basis points above the S&P at a time when the S&P has been a very strong performer. A mid-teens return for the S&P is pretty extraordinary. Our returns have been approximately double that on an annual basis with a vastly larger margin. I attribute some of that, obviously, to the permanent capital, but also a lot of it to the fact that we have a team that's worked very closely together over more than a decade. Ryan and I, Ryan joined Pershing Square 17 years ago, and the investment team has an average tenure of comfortably more than a decade working together, which is also very unusual in our industry. We also show the last five years, which is the period that people often focus on. We show net returns here, one, because regulators require you to show both gross and net, even if the relevant metric here is gross, but to point out that the fee savings is highly material. We charge effectively 510 basis points of fees with a management fee and incentive fee over the 22-year history of the firm. We will not be charging the power of compounding. That 5% is a very material difference. The difference, I think, has been a 70-fold return had you invested in Pershing Square at the beginning of time and paid no fees. Net of fees, that number is more like 27-fold. It's a very material benefit that we were bringing to the Vantage transaction and ultimately to Howard Hughes. I want to turn it over to Ryan to talk a little bit about plans to how the company is going to improve its operating profitability. Yeah, so as I mentioned before, the company right now is expecting a combined ratio for this year of 96% versus on the prior page, as I said, something closer to 97% for the 12 months ended September 30th, and really, we believe that there's an opportunity to bring down that combined ratio into the future, and it really relates to the company scaling up more. We think, as I mentioned, the company's achieved minimum efficient scale, which is allowing it to write at a 96% ratio, which is pretty good overall relative to the peer set. That said, given the company's focus on specialty lines and its diversified business and really just the strength of the team, we actually think as the company grows, there can be some real improvement in that combined ratio going forward. We also think at the same time, one of the benefits to Vantage of the Howard Hughes acquisition is being inside of the holding company as a subsidiary gives the company the ability to write business at the right time and the right way, removing some of the pressures that it has when it's not right to write that business. We think that the combination of sort of improved scale over time as well as being part of a holding company, which allows it to candidly just operate, we think, in a better way than it could as a standalone public company or under ownership in the private equity markets, is something that will help the business improve its underwriting profitability, both of which will ultimately lead to an improved return on equity in the future under Howard Hughes' ownership. So the way that ultimately we think we see the future for Vantage under Howard Hughes' ownership is a business which can earn even higher returns on equity than what it's currently doing. As I mentioned, right now, the business is about a 13% return on equity. We believe over time due to the combination of improved underwriting results and then everything coming from the holding company structure and Pershing Square's fee-free investment performance with a greater allocation of common stocks can allow the business to ultimately achieve a high teens or even greater return on equity over time while doing so with much lower risk, which we think is a very attractive and valuable proposition in the public markets. To sort of highlight that, we've shown on this page sort of how insurers are valued in the public markets based upon their return on equity and where they sit within certain categories. So if you look, the first handful of companies are kind of pure play specialty providers, which earn attractive high teens to low 20s ROEs. And those companies actually trade anywhere between two and three times book value. At the bottom of the page are a couple of insurers, Arch and AXIS, which traded at lower than 2x book value multiple, but have a lot more exposure to the natural catastrophe reinsurance markets, of which Vantage has very limited exposure, as we talked about before. Stepping away from the complexity of different types of business models and all the comps that we've shown here, we think it's reasonable to think that companies that earn a high teens to 20% type return on equity in the public markets, despite some differences in business mix, tend to trade north of two times book value. Which, of course, makes the effective acquisition price of 1.4x, obviously, we think, very appealing in light of our business plan for the company. And so, as we mentioned here, the effective purchase multiple at the time of the close is about 1.4. As Bill mentioned earlier, we believe that we will likely invest additional primary capital. And what's nice about that is you're providing that capital book value, which means that pro forma for kind of incremental capital, we would expect that the overall multiple going in would be something lower than 1.4 x. And if ultimately we're successful in achieving that improved return on equity over time, we believe that that could be something that's worth more than 2x book value in the future. Right. So a way to think about this investment is we're creating the company at something like less than 1.4 x book value. The plan is to grow book value at a higher compound rate, achieve a return on equity of high teens or in excess of 20%. And then the business becomes worth a higher multiple. So you get the benefit of growth in book value plus a higher multiple. The combination leads to a very attractive return for Howard Hughes. Again, no plans to sell the business, but we expect the market to recognize these elements reflected in the valuation of overall Howard Hughes. So, let me just comment on the preferred stock arrangement that we entered into with Howard Hughes. The preferred is non-interest-bearing preferred. It's treated as pari passu with Howard Hughes' common stock. It doesn't have a fixed term where it's required to be redeemed at some point in the future. It's broken up into 14 tranches, enabling the company to kind of buy it back in sort of pieces over time. Howard Hughes is given effectively 14 call options to buy back the preferred. It's really meant as a bridge equity commitment where we're paying the same price as Howard Hughes is for our security that ultimately is convertible into Vantage. And then we're giving Howard Hughes the ability to buy back. We expect Howard Hughes to buy back this investment. I think the half-life of this security we expect is something less than probably less than two years. We've given Howard Hughes seven years, however, to buy it back, after which point Pershing Square has the right, or Pershing Square Holdings, which is the Pershing Square Fund that owns this instrument, the right to convert the preferred into Vantage ownership and then ultimately require Vantage to be listed on an exchange. The purchase price for each of the call options is struck at this time going in one and a half times multiple of book value. If we achieve our objectives for the company, book value is going to grow at a very nice rate. The business is going to become much more profitable. It will be worth substantially more than 1.5x book. Howard Hughes gets the right to buy back the interest at that same negotiated price that we are acquiring the business for. The security itself is subject to a mandatory repurchase in the event of a change of control of either Howard Hughes or Vantage. So just very high level, we think this is a truly transformational transaction for Howard Hughes. It begins our journey now as a diversified holding company. It's obviously a business that is largely uncorrelated with Howard Hughes' core real estate operation. It's a business. The nature of insurance is insurance generates a lot of cash for investment. We're enhancing Vantage in a couple of ways. One, just the combination with Howard Hughes, the nature of a permanent owner, and the flexibility it gives the company to pursue only the business that makes sense, I think, is on its own a very powerful contributor to Vantage's future profitability. The enhancement to Vantage's credit profile, our plans to add additional primary capital to the business will make this a much stronger company, which, of course, insurance is a very credit-sensitive enterprise. We think that's a very meaningful contribution to the business. As Howard Hughes' real estate operation generates more and more cash, we have a natural place to deploy that excess cash first in redeeming the preferred stock, and if all we did at Howard Hughes was reinvest all of our free cash flow and building a very, very profitable insurance operation, that would on its own transform Howard Hughes into, we believe, an enormously valuable company over time. Higher return, faster growing business is going to meaningfully accelerate the company's overall growth profile, and Howard Hughes gets material benefits in Pershing Square taking over the investment operation of the company. With that, operator, I'd like to turn it over to shareholders to ask some questions or analysts as well. Thank you. Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered and you wish to move yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Alexander Goldfarb with Piper Sandler. Your line is open. Oh, great. Thank you. And I guess congrats, Bill, on this. I know you've been working hard. Two questions. The first is clearly a lot of macro uncertainty right now in the markets, concern about AI valuations, S&P, etc. How do we get comfortable, you guys, transitioning the Vantage portfolio and putting money to work right now when certainly all the talking heads have diverging opinions on the state of the markets today? Sure. So one, I would say we've kind of been in this business a long time. Pershing Square's got a 22-year track record. And we've had lots of interesting and challenging, we've had a financial crisis. We had a COVID crisis. We had a 9% interest rate Federal Reserve. And we've done very well over a very long period of time. And that's because we're not investing in index funds here. So we're not betting on what the stock market's going to be in the next six months or 12 months. We invest in generally the strategy of Pershing Square on the equity side is to invest in the highest quality durable growth companies in the world, businesses that we believe over many, many years and decades will be valuable companies, really regardless of what people are saying on CNBC this morning. So I would say I think the long-term record speaks for itself. But our strategy is a pretty concentrated one. So if you look at our record over time and there are various ways to see our public record, I think it's really been pretty uncorrelated to the markets generally. And we've done a good job over time buying these very resilient businesses. The kind of companies we like to own are sort of large, even mega-cap durable growth companies with very strong balance sheets. And they tend to be the dominant company in their respective sector or industry. We are also a very influential investor. As you know, we buy minority stakes in companies. And then even with those minority stakes, we were able to get a very large amount of influence on companies, which helps us steer them the right way or, if necessary, recruit the right management teams to run them. We've stepped into situations where the company was challenged, and we've helped kind of fix the benefit. It's a strategy that's not particularly correlated with, for example, what people are thinking about with respect to AI. All of that being said, I'm actually pretty bullish about markets generally. There are some enormously powerful forces that are coming into play. Among them, just even from the Biden administration, people have almost forgotten about a trillion, whatever, 500 billion of infrastructure investments that are shovels just going into the ground. We have the chips, Bill. We have this massive, to your point, AI investment, data centers, and otherwise power. We have the productivity enhancements of AI, which are clearly real. I'm sure in your business you're seeing it. We certainly are seeing it here. Just talking to a lawyer last night about how AI has made her massively more productive. All of those benefits will accrue to companies and operating margins. So I'm quite bullish on markets. We have a Fed with an easing posture. We have a president who wants the midterms to go well. And we've got the most pro-business president in America. So I do think there are a lot of very powerful forces that are supportive of equity markets. But we don't, to my point, what people pay for when they invest with Pershing Square is our differentiated performance. And we're giving that to Vantage and Howard Hughes for free. And I think that's going to endear. Did you want to add something? Yeah. And I think I agree with everything Bill said. I would add, Alex, just when you think about the investment portfolio specifically. First of all, this is a transaction we think is going to close by the second quarter of 2026. There will be no change in the investment portfolio until that period of time. So I'm sure there will be macro narratives that may even change by that time. But there won't be any short-term change in the portfolio until the close. And then secondly, as we mentioned, we plan to gradually move the investment portfolio towards common stocks. But we will always be keeping a very short-term treasury, think kind of 30-day treasuries with zero credit risk, zero investment risk relative to the amount of reserves or float that is in the business. So when you look at the portfolio overall, the way I would think about it is there's going to be up to half of that portfolio long-term that is still going to be in basically cash without any risk. And then I think over time, we're going to be gradually building up the rest of that portfolio towards common stocks. So one of the things I think is interesting, aside from just Pershing Square's ability to kind of navigate these macro and micro narratives successfully over time, is there is a nice staging and sequencing of this. So the way I think about it is we have the ability over time to deploy into specific situations very attractive capital. But we also have, if you want to think about it almost as dollar-cost averaging effective, we will be gradually deploying the portfolio towards common stocks. So whether markets are up or down from the Vantage perspective over the next several years, we believe that we have balancing and checks and balances in there to help us be making attractive investments. Okay. And then the second question is David and his team have done a phenomenal job on the MPCs defying the high interest rates, etc. But that said, can the real estate compete with the investment returns? Meaning from a capital perspective, will the real estate still be able to get Howard Hughes capital? Or the way that you guys look at it, the insurance business is so much more productive from an ROI perspective that we'll see less capital to real estate, more to insurance? Yeah. The good news about Howard Hughes today, 15 years in, if we had done this transaction, I don't know, seven years ago, there would be a battle between where capital should go because the real estate business itself didn't generate excess cash. And is that your background noise? Maybe you can mute because we're hearing a lot of background noise on the call. Sorry. Today, we have a real estate business where the communities have reached a degree of maturity where we believe over the next number of years, we're going to generate cash well in excess of what is needed to keep these as the best places to live in the country. We've got a massive investment in land. One of the key objectives of Howard Hughes' communities business is to grow the value of that property. The way you grow the value of that property is you make these more and more desirable communities. When we think about building the marginal apartment complex, it's not just the return we earn, the unlevered return on or the ROE on that development, which can be very attractive and it can be competitive, certainly in the middle teens with the insurance operation. We also think about the benefit to all the land we own in the community, which is very material. For example, in Summerlin, where we own billions of dollars of unencumbered land, when we built the downtown a number of years ago, it led to something like a 15%-16% compound annual increase in land value. The return on the mall we built was modest, I would say, typical for not a mall, but for the downtown retail district. It was probably in the 5% range. But the real return to the Howard Hughes community business was many multiples of that because of the impact it had on making Summerlin a more desirable place to live. So all of those things still apply. We have $10 billion-$11 billion of real estate that are moving the needle on that portfolio is incredibly important to us. Now, the other thing you should know as a guy who follows the company, we also have $4 billion of condominiums with $800 million of hard deposits that are going to close over the next several years. So we're going through a period of time where we have a massive amount of cash kind of coming into the company from that business. And in light of the maturity of the communities, the amount of cash generated from condos, we're going to have cash we can't find a use for in our small cities. So that's kind of the problem. And if we were just a standalone real estate company, we'd have to "buy another MPC" to deploy that capital. Or we could have used it, I guess, to just buy in shares. Here now, we have a place to put that capital where we can earn a very high return. And I think that is really going to serve to the benefit of the company. But maybe David, do you want to add anything to what I've said on that? I mean, Bill, I think you summarized it incredibly well, and Alex, I read your note this morning, and I think it was pretty much spot on. The only thing I would clarify is that the Vantage team, one of the things we love about this acquisition, is the quality of management, and I think for that management team to be most successful, it needs to report to those that know the business best, which are without a doubt Bill and Ryan, but I think that Bill summarized the capital allocation strategy of the company perfectly. Thank you, Alex. Thank you. Thank you. One moment for our next question. Our next question comes from Anthony Paolone with JPMorgan. Your line is open. Yeah, thanks. And congrats on getting this announced. I guess first question is just when I step back, a lot of what you talked about was buying a business that over the next few years, as you execute your plan, will be worth a lot more than what you paid for it. I think you can probably say the same thing about a lot of the real estate investments you made. But the stocks still never really seem to reflect credit for that. I mean, what in your mind do you think will change it with this and stands out to you as something the market will latch onto and give you more credit in the future than what you've gotten in the past on the real estate side? Sure. Look, I think the nature of Howard Hughes' business is it's not your conventional real estate company. It's not a real estate investment trust. It's not invested in one real estate asset class like the vast majority of other kind of comparable companies. It's a company that does a lot of real estate development. It owns a lot of land. Land is probably half the value of the enterprise. And it's a C Corp. And it doesn't pay a dividend. And we think because of all of those aspects, the discount rate, if you will, that the market has assigned to Howard Hughes has been well above what it would be for a traditional sort of REIT or even a public company. And ultimately, stocks trade on the basis of does the company earn a return above its cost of capital. I think we think the market has assigned too high a cost of capital to Howard Hughes, which is why we felt the business was not making stock market progress despite good underlying business progress. With the transaction that we announced in May, our business plan was we're going to become a diversified holding company. We're going to invest in a business that can earn even higher sustained returns on equity versus Howard Hughes. That business itself is going to diversify the overall platform. What we've done here is we've begun that journey with a fairly large-scale acquisition relative to even the market value of market cap of Howard Hughes today. So, a $2.1 billion acquisition of a what we expect to be a high-return specialty insurance company will, one, I think, meaningfully improve our return on capital, but also have the effect of bringing down the discount rate that people assign to the business. One, we've become more diversified. Two, insurance companies generally have a much lower cost of capital than a real estate development company. And I would say lastly, stocks trade on the basis of supply and demand. We think the universe of people who can own a small-cap real estate MPC company is very small relative to the universe of people who can own a diversified holding company or an insurance operation. If Berkshire today has a $1 trillion or so market cap, a very small percentage of those shareholders think that investing in Howard Hughes at the beginning of its diversified holding company journey, the base of demand here for a stock that is a relatively small public float, there's 53% of the shares actually trade. There's only a $2.5 billion float for the company. That alone, we think, could cause a meaningful re-rating of the stock. Yeah. And I would just add there is a very successful company, Berkshire Hathaway, arguably one of the most successful companies ever created that has followed this playbook. So certainly, it's our job and duty to try to redeploy the capital at the highest rates of return. But I think in the public markets, there is very much an analog for if you get this correct, that the market will over time appreciate the deployment of capital at high rates of return and how valuable a diversified holding company that has the ability to shift capital between different verticals can be. Yeah. And remember that Berkshire started out. Berkshire Hathaway was a textile business. And it was a textile business that manufactured everything in the northeast or south of the country. And in America, when people were shifting manufacturing to Asia and other places in the world, it was really a dying business that couldn't compete because the costs of operating in the United States were not competitive. And it was also a business that was unrecognized by Wall Street. And that enabled Buffett to buy ultimately control of that company in the public market. And then he bought a smallish insurance company. Actually, we can kind of check the math, but actually maybe similar in size as a percentage of its book value to what Vantage is to Howard Hughes. And then he began a journey of building a valuable company over time. So now, I would say the big difference is Howard Hughes is not a dying textile company. It's an incredibly profitable business that for all the attributes we've talked about for years, we own property where people are moving in America. And the small cities that we effectively manage are among the most desirable places to live in the country. We really dominate the condominium business and one of the most beautiful places to live in America on Waikiki Beach. And we've got many decades. And of course, our new community in Phoenix, there's decades of profitable growth and cash flows from this business. So I think we're starting from a much, much better place than a crappy textile company. And we have the benefit of Mr. Buffett's playbook. And we have a very strong Buffett, actually, in the early years did not do so well in his insurance business. Over time, he kind of learned that business. We have the benefit of those learnings. We have the benefit of a very capable team that have been building Vantage over the last five years. You combine Pershing Square's investment track record with Vantage's management team's track record with the credit support from Howard Hughes, the cash flows, the excess cash flows that will come over time from the real estate operation. I think you have the makings for a pretty interesting story. Got it. Thank you for that. And then just one maybe follow-up more technically, perhaps for Carlos. Just what should we expect to see when you give guidance? And how do we think about what you'll be guiding to with this transaction in motion for 2026? I'm going to jump in on that one. And Carlos, of course, feel free to fill in. One of the things that we've been talking about is exactly that question. So why don't we punt that one to the new year? But look, I think that if you follow the Berkshire playbook, Mr. Buffett doesn't kind of give guidance. He gives you all the information you need to kind of build projections of what the future might look like. So we have to now that we're becoming effectively a diversified holding company. We want to think about the kind of key performance indicators that we want, that we think that shareholders should be thinking about as they think about this business. So we're going to do kind of a complete rethink on KPIs and try to be helpful to shareholders so they can think about the progress of the business over time. So why don't we just wait on that one? Yeah. No, that sounds fair. Okay. Thank you. Thank you. One moment for our next question. Our next question comes from Meyer Shields with KBW. Your line is open. Great. Thanks so much and good morning. I was hoping you'd share how you're thinking about maybe using additional M&A activity to either scale up Vantage or to just build a broader array of portfolio assets sort of similar to the way Berkshire Hathaway has done. I think our focus in the short to intermediate term at Howard Hughes is, today, Howard Hughes, once the transaction closes, will own 100% of Vantage from a legal point of view. But economically, Howard Hughes will own less than 100%. So the first priority for excess capital is to buy back this preferred or bridge equity that we've provided to the company. Once that's achieved and there's incremental excess cash flow, we'll look at, well, should that money be invested in the insurance operation? Or is there some other really attractive thing for us to do? But I think the point I made earlier is go back to the Berkshire model. We think the substantial majority of Berkshire's value has been created by these massive insurance operations that have been built over time and the intelligent investment of those assets. When Buffett announces acquisitions of common stocks, they're almost always really in the insurance operation. Over time, he bought some businesses outside in the holding company outside of the insurance operation. He even actually bought Burlington Northern inside the insurance company. The focus here for the next several years certainly is building out Vantage and investing that portfolio. Fantastic. Thank you so much. Thank you. One moment for our next question. Our next question comes from Devon Noble with B of A. Your line is open. Hi. This is Ryan Shelley from B of A. Thanks for the question. I just wanted to ask about the funding strategy going forward here. Obviously, you guys have a few tranches of unsecured outstanding at the HHH HoldCo level. Do you guys plan on continuing to issue there to fund both Vantage and Howard Hughes communities going forward? Just any thoughts about how we should be thinking about that from the credit side? Thanks. One, I would say we think this transaction is very credit positive for Howard Hughes overall. One, we have the nature of insurance, the balance sheet of insurance. We're adding several billion dollars of cash and marketable securities to the consolidated balance sheet of the company. We're buying an unlevered business and one that's well-managed, A-minus credit rating and with the prospect of that credit rating improving over time. The combination of the diversified improvement to diversification of the overall company, the indications of Pershing Square's incremental support for the company, for example, our purchase of this 0% preferred, I think all are suggestive of incremental credit support to the company. We'd like each of the subsidiaries, if you will, to stand on their own two feet. We do expect Howard Hughes communities to continue to finance itself independently of the holding company. And so I think we have no plans to change our unsecured bond program at the Howard Hughes community subsidiary. Carlos, do you want to add anything there? No, Bill. I think you said it very well. There's really nothing more to add to your response. Okay. Thank you. Got it. Thanks for the question. Again, ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. One moment for our next question. Our next question comes from Jon Petersen with Jefferies. Your line is open. Great. Congratulations, guys. Maybe just actually to continue on that last line of questioning, just to make sure I understand it. So because I'm not terribly familiar with the holding company strategy and how this works, the retained cash flow inside of each of these subsidiaries, will there be some kind of dividend that's paid to the holding company? Or will any of that cash flow move up to the holding company to fund future growth? Or do we think about it all staying inside the subsidiary? So our plan for Vantage is to reinvest all of the profits of Vantage into growing Vantage. We think there's a lot of that money can be put to good use over a long period of time. The demand for insurance is effectively infinite or nearly in the world. The real estate community's business is one. We don't have any plans to buy any other MPCs, if you will. Our plate is full with what we call Teravalis in Phoenix. It's the very beginning stages of a many multi-decade build-out of a community starting with lot sales quite recently. And then what we do have cities like small communities or small cities like The Woodlands, Summerlin, Bridgeland, etc., that are at a stage in their development where they're beginning to generate more cash. The business model of Howard Hughes is to sell lots to home builders, take that cash, and use it as equity in vertical real estate development to build out kind of the assets that make each of these communities a very attractive place to live and to make sure we have all of the other municipal, educational, religious, and other resources that make these communities a really attractive place to live. I would say the majority of our communities today are at a stage where they're starting to generate more cash, and they will over time. Then we can reinvest as equity in developments that make sense in these communities. To the extent we get to a place, which the other point I would make is, our condominium business itself is a very large generator of cash and requires a relatively small amount of cash equity. We've got about $4 billion of condominiums that will be delivered and closed as these projects get built over the next several years. That's a lot of cash coming into the real estate subsidiary. So to the extent there is excess cash beyond what is needed in that business, that cash will go to the holding company. It will be invested to kind of provide incremental capital for Vantage, or we may use it to go buy another business. But the first priority is for Howard Hughes to have 100% economic ownership of Vantage. So the first dollars of excess cash that we generate would go to repurchase the Pershing Square preferred stock. So it's a holding company today that has really not much going on upstairs. We'll have, when this transaction closes, two principal subsidiaries. The Vantage subsidiary, we expect will continue to reinvest all of its cash in the growth of the business, and the real estate sub, we expect over time to generate excess cash that will be repatriated to the holding company. I guess if we think about this business long term and you have multiple subsidiaries in here, is the right way to think about it? You have a balance of companies that generate a lot of excess cash flow to grow the holding company and then a balance of other companies that have a lot of reinvestment themselves like Vantage. Is that kind of the right way to think about the balance if we're thinking 10 years in the future? Sure. Absolutely. Absolutely. Okay. Sure. All right. Congrats then. Thanks. Thank you. I'm not showing any further questions at this time. I'd like to turn the call back over to Bill for any further remarks. Yes. Thank you. We're going to have spaces on X that you can find under my @BillAckman. We'll launch that within the next five or so minutes. And we'll allow any, w e'll take the questions in the order in which they appear. And we look forward to questions from Howard Hughes shareholders and people interested in this transaction. Thank you very much. And look forward to connecting soon. Thank you, ladies and gentlemen. This does conclude today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.