Pure Cycle Corporation

Good morning, everyone, and welcome to PeerCycle's year-end investor presentation. If you please mute your line as Mark Harding goes through the presentation, and then at the end, we have a video, and then we'll open it up to Q&A. So with that, I'll hand it off to Mark Harding. Thank you.

Thank you, Mark. Welcome, everyone. We're delighted to share with you our fiscal 2025 earnings presentation this morning. uh with me today is our CFO Mark Spisali and our controller Serena Finnegan uh so if you have any tough questions we'll have them help weigh in on the uh on the answers for all that but uh we really are excited uh to give you kind of some insights as to how we were working through the fiscal year and it's been an exciting year and a couple of fronts that will detail First, I want to get the lawyers out of the room and remind everybody that this presentation includes forward-looking statements. I'm pretty sure you're all familiar with the forward-looking statement caveat in this. So with that, we'll get to highlighting the important thing. The most important thing is I get the privilege of working with just an outstanding team of professionals. Mark, together with Serena, and then, you know, those folks that kind of grind out day in and day out to make sure that we stay on track and really have a good customer experience in all three of our business segments. So great to work with them. And then I'll just to remind everybody that we punch above our weight with our advisors and our board of directors. We've got a great team, highly experienced and specialized boards of directors that continue to really emphasize you know, how best in class performance is for each of our business segments. So we're privileged to work with a great team and and you from a shareholder standpoint should get a lot of comfort as to the continuity and really the the caliber of the company's management and directors. Let me start out with kind of some of the themes for this presentation. And I'd say, you know, continued profitability. You know, we've got 25 straight quarters of profitability and this quarter and this year is no different. Really continued growth in each of the revenue segments, especially in the recurring revenue segments. And that's really one of the most important components of what it is that we're doing. Building a stable earnings from both water and wastewater, our land development side of rental income from our single family homes. So terrific continued growth in that. Also, you know, in our land development resiliency, our business model, and when you see changing market dynamics, as we've seen this year, you know, you stress test your business model. And one of the things that we're going to highlight is kind of the flexibility of our business model to be able to risk on, risk off, turn the volume up, turn the volume down to really match our customers' needs in that segment. And that's the most, that's the highest delivery segment for that. So that flexibility continues to demonstrate its use and its resiliency in our business model. And then our capital position and liquidity continued strong stewardship of shareholder capital. So we'll continue to emphasize those positions and make sure that, you know, we have a solid foundation for delivering results year over year. Okay, with that, Let's dive right into the Q4 results. And as all of you know, our Q4 is typically our strongest quarter, and that has a lot to do with seasonality and really how we deliver because of our weather conditions here in Colorado. concrete and asphalt paving really do cycle themselves into making sure that you get that down before winter season. You know, our perfect cycling would be kind of Q1, end of November, but our year end happens to be end of August. So sometimes that works our advantage. Sometimes things spill over from year over year. So revenue for Q4, again, it was our highest quarter, slightly down, mostly due to the housing headwinds and pushing some of that revenue recognition from our percent completion into Q1 2026. So both revenue and gross profit up, but slightly off from what we saw in 2024. Taking a look at net income and earnings per share, again, profit margins are still remaining. And really, that is some of the diversity to the company's revenue stream. So we'll talk a little bit more about that. But Q over Q in Q4, again, our highest quarter and solid performance on both our net income and earnings for the quarter. So let's take a look at kind of how that normalizes itself for the overall year-end performance. Year-end, slightly below expectations. And again, that was mostly due to the headwinds of housing pushing some of the percent complete. And so as most of you know, we operate on a percent complete because we develop lots over about a year's delivery schedule. Sometimes that works within our fiscal year, sometimes that carries over. And last summer, I think what we look to do is really dial up some of those deliveries. So we had as many as three different phases of our land development going on at the same time delivering What we were looking for in 2024 and then having two phases in 2025 and spilling over into 2026, delivering at the same time. So strong results again, but slightly below expectations on revenue and gross profit. But then moving into kind of the thing that matters the most. is our net income and earnings per share, which actually exceeded our expectations. So again, the most important metric is earnings per share, slightly above what our forecast was. And that's largely due to oil and gas royalty income coming in much stronger than projected. And the reason for that was we had the completion of an additional seven, six or seven wells into the largest portion of our royalty estate. And those wells came online and started producing in 2025. And that really did exceed that expectation. We knew that those were there, but you never have clear visibility as to the price of oil and then how that's going to result in. And so, you know, one of the things that we continue to show is that diversity of revenues to the company where we have multiple shots on goal here and are able to drive revenue and earnings from our assets in a number of different ways. I mean, let me go over kind of the earnings bridge of water that where the Headwinds and tailwinds came in from each of the revenue sources. So our forecast at net income was right around 12.5. Slightly lower revenue from our land development segment. And that wasn't that we lost that revenue. It was really more that it was pushing into 2026. Some of that was Q1 2026. But some of that's going to be in the first half of 2026. slightly higher costs of revenue, and that's really driven by a little bit by tariffs, a little bit by inflation. So we saw a little bit of slightly higher costs on that, but then lower G&A expenses. So those things that we can control, particularly when we have a headwind type environment. We pay a lot of attention to SG&A, and then we're given a little bit of tailwind from royalties on the oil and gas to allow us to bring that net income even not only above, slightly above that forecast, but continuing to drive earnings to the company. Want to move into kind of taking the view up a few feet and really highlight each of the business segments so that you get a flavor for not only where our investments are going, but how each of these segments are performing. So in our water utility segments, really the main drivers there are where we get our revenue from. And so the recurring revenue side of it, we have a little over 1,600 commercial connection points on there out of a total of 60,000 potential given our water portfolio. So we're just getting started on that. Industrial water sales, so water sales to oil and gas customers And then connections, and that's largely driven by our land development business and we get tap fee revenue attributable to that and delivering high margins there as we continue to invest year over year into our water system and really deploy that capital that we're receiving from maybe some of the one-time sales to oil and gas to make sure that we get high margins and continue profitability into our tap fee connections. If you look at kind of how that portfolio, our water portfolio performs, we've talked about this a number of times we believe we can serve 60 000 connections probably can be a little bit stronger than that given the trending in the amount and water consumption per single family equivalent but we continue to really pace our guidance on this at 60 000 connections and as most of you know who are familiar with the company we get two fee increments from that we get a large upfront capital fee component. And our tap fees now, our combined water and wastewater tap fees are right around that $40,000 mark. So those continue to grow and appreciate based on the scarcity value of water and the cost of incrementally delivering those supplies, which are farther and farther out and harder and harder to bring on board. And then annual revenues and our annual revenues are pretty consistent. We're probably growing that a bit. That's about $1,600 per connection per year. And so when you take a look at that, you know, the connection of 60,000, that's about two and a half billion dollars worth of top line revenue. It costs us about a billion dollars to build that full system over time. And then our connections year over year revenue. So overall, we're still, very small fraction of our total capacity, close, a little over two and a half percent of what we're really deploying compared to our capital and our capacity. And then the production year over year, we continue to invest in that system. We had a pretty light year, which we knew that was a forecastable gap in oil and gas delivery. So we still have plenty of pedal on what we've developed in our production capacity to deliver that water as that water increases. And we look to see a bit of increase in that in 2026. As that applies to kind of fiscal year ends year over year. Really, the interesting thing about the water side is some of the diversity in the mix of customers. When you take a look at that, we're sort of looking at the domestic customers, which is that dark blue. And that'll be what we're delivering to that sixteen hundred connections year over year. Some of the oil and gas deliveries. and then the tap fee deliveries, which are attributable to our land development segment. And so while our overall revenues stay in line, the mix of that, as you can see, between year over year is variable. And so you're going to see, you know, diversity there that allows us to kind of continue to grow that asset base, not only from the recurring standpoint, but also in capitalizing on other business segments and being able to put some of that idle capacity to use either through oil and gas or in the development side. And then good customer growth. Again, we got about a 22% KGAR on our customer growth, so we continue to really leverage out building that recurring and perpetual customer growth in the recurring revenue side. Just a small snapshot of the oil and gas side. We did have a forecastable decline for oil and gas deliveries in 2025. And that was largely due to a strong push of permitting oil and gas wells on the Lowry Ranch in our service area. And oil and gas operators have close to 200 permits now that they're actually drilling. So we have a drill rig that is for the time being committed to drilling nothing but pad sites on the Lowry Ranch. And so we do see for 2026 a significant increase in oil and gas deliveries for that segment. So you'll look forward to seeing some of that action in 2026. Let me move over to the land development segment. Taking a look at each of the phases of that, one of the carryovers on Phase 2C, so we did deliver the 228 lots of Phase 2C that we had forecasted for 2025. And we had a small, about 800 grand of deferred revenues that spilled over into Q1. And that was a function of sort of the regulatory climate in permitting and getting some lot templates on some of the lots that we had for one of our builders. But that did come in in Q1. Overall sales and land development were off then from our expectations. And that was largely attributable to some of the headwinds that we're seeing in housing and really trying to provide that customer service to our home builders and making sure that we're pairing inventories at appropriate levels where we're not over-investing in roads, curbs and gutters, and they're not inventorying finished lots beyond sort of those annual increments that we like to deliver them to and they like to receive in. Taking a look at 2026, we're working on completing phase 2D. And so we'll see we're about 43% on that. So that was some of the red rec in 2025, but you'll see the completion of that rolling into 2026. And then visibility from there, taking a look at not only 2D, but 2E, which is going to be the next phase. On the land development side, this is kind of a breakout of which phase is contributing to the revenue streams. As we had this phase two, we sub-phased that out. We initially had that sub-phased into four sub-phases, but we were able to add a fifth one with that, with this 2E. But it really does show you that bulk of 25 deliveries was from phase 2C, and some of those uh forecastable revenues that we had that we were able to dial down just a bit because of the housing ed winds will push into the first half of phase two too deep on that and so gives you kind of the total land development revenues and how those are occurring uh for the trailing three fiscal years So it kind of gives you a profile of some of the development and really how that's maturing. And you're seeing this slide where we're carrying it forward on not only the land development side, but then kind of how that vertically integrates ourselves into the water side from the tap fees. You know, we haven't fully received all the tap fees from Phase 2B, so we still have some contribution on those from those deliveries, which were in 2024, that'll come in in 26. and then taking a look at 2c and 2d on the tap piece for that and then also single family rentals and and last year was a bit of a struggle for us on single family rentals again another regulatory issue for us as the county which is our jurisdiction updated their building codes and really had a difficult time processing home builder permits on that. And so we're through that phase. Most of our home builders have got what we call masters approved. So each housing plan will be approved. And then they can build that same house, different elevations so that they change the look of that. But the building department's approval of that master allows them to build that on any number of different lots. And so each of our builders have got their master's approves, which they'll accelerate into our single family rentals. So you'll see a substantial increase. in the number of single-family rentals in 2026 and into 2027. I'll highlight a little bit more of that later. What I wanted to do is this will help illustrate kind of how our percent completion works. And most of our builder contracts are structured in a flow funding agreement where we get paid in three installments. We get paid once we do the plat, which is a recordable property interest to an individual lot. It's a paper lot, but it is that they own that address lot. And then we use those funds to be able to really do the land development side. So we're really working in partnership with our homebuilder partners to be able to deliver these on a real-time basis as we complete the wet utilities, which includes the overlock grading and the over excavation for the soils. Then we make that second payment. And then as we deliver the roads, curbs and gutters, we get that finished lot payment. And so this kind of shows you some of the timing of how those do, how those payments go and really that work product over the POC. And sometimes those will span quarters. Sometimes those spans year end. And when you take a look at, you know, delivering each of these individual increments of lots, it's not always clean enough to deliver in one fiscal year. but it does deliver in a year and that year may be 12 month period as opposed to matching with our fiscal year. But that kind of gives you an illustration of how some of that, how we can dial up and dial down to the market, depending on how the strength of that market goes. This is kind of a location of where our next phase is going to be. So it's going to be directly across that phase 2E. And that's about another 150 lots that'll be directly across from the high school. The important component of this is We're really almost complete with most of the major infrastructure on that. The roadways were complete pursuant to some of the other phases. So this should be a high margin area because most of the offsites and arterials are all completed and the roadways are completed. The water, sewer, all that system expansions are already to this property. So that'll be a nice phase for us. One of the key milestones for 2025 was really groundbreaking for high school. And as you can see from that aerial drone shot, it's right adjacent to our primary school. So it's a full campus. It's a full K-12 campus. And really excited to continue to work with the National Heritage Academy. They're our charter partner and really That's one of the high value commodities for our development here is that we've got a full walkable K-12 campus right on site for the developments and outstanding delivery of education here at Sky Ranch. So we're very grateful for that. We're very grateful for our charter, which is the Bennett School District and our partnership with Bennett School District on bringing this education system to Sky Ranch. uh i continue to want to kind of illustrate our service area and and kind of where sky ranch is in the metropolitan area and so the the map on the right here the black line at the top of that really is the i-70 corridor and sky ranch is the the development in the blue there and that kind of illustrates really where we are you know we we talk often about the fact that that denver really situates itself on kind of an ocean-like framework because we can't grow west. And so all the growth is concentrated to the Eastern Plains area. And really our assets, whether it's our land development assets or our service area, are located in the most ideal section of the Denver metropolitan area. And the aerial to the right really kind of shows the encroachment of development on our service area. This is owned by the state of Colorado and its development and its revenue opportunities really benefit the education system here in Colorado, the K-12 education system, but you can continue to see all of the development that surrounds the service area for that. So our assets are ideally positioned in the right location, and we continue to really look forward to how these will grow and monetize over time, both for the state land board as well as to expand our systems. As I mentioned, we want to talk a little bit about single-family rentals. And so this kind of illustrates where that portfolio of single-family rentals are. A, that phase 2A really was where we had the 14 units. We had about four units in filing one, but then 10 units in A, and really the acceleration of how B, C, D, and E are gonna add to the portfolio. And so with that bit of a delay because of the building code upgrade, we have about 40 homes under contract now that are delivering from several of our home builders. And what we've tried to do is pace that out so that they can deliver those on five units a month. We had five units delivered in Q1 of 2026. And of the deliveries, those delivered in late October, I think we've got three of those leased. Two of them are on the market, but we're continuing to show strength in the rental market on single family rentals. And then those will pace out and deliver those units through fiscal 2026. Steady rental income stream from that. And we really like that asset light appreciation model where we can lever up the vertical costs of that and continue to keep our balance sheet clean and strong. So this is what you're going to see in 2026. And the real story for performance on 2026 is continued pacing with our land, our home builder partners and our land segment, and then acceleration of growth in the single family rental segment. It's a bit of the fiscal year performance year over year. So we're seeing, you know, slight increase in growth on the rents. But for the most part, our occupancy is very, very low. I think we've got a 97% occupancy for the portfolio to date. And then continued asset appreciation. The nice thing about this segment is we carry forward the equity of the lot as well as the water utility side. and then are leveraging up the vertical costs of that and really have a nice relationship on that because we have a high loan to value ratio there. And then that asset continues to appreciate together with the market. We're seeing continued growth in that, not only just because of housing growth, but also because of the continued investment that we have in the community. This will kind of show you the growth of each of the phases and how we do that. And so, that phase 2B, where we were looking for a stronger growth in 2025, really pushed over into 2026. So, we'll have a bit more than 31 homes. We'll probably have 40 homes accelerate in that area. And then, you know, how it continues to grow from phase 2B and C. So, those are where we're looking for for 2026. and then continuing on through this second phase. And if you take a look at this whole portfolio as it relates to the overall development, we're looking at being in that 8% to 10% of the total homes. And so if we have about 3,000 single family equivalent units out there, somewhere in that 250 to 300 homes would be our target for this portfolio. Talk a little bit about stewardship of shareholder capital and our balance sheet. You know, we continue to invest into these assets, so you'll see continued asset growth and strength to the company. You know, water segment is around $68 million, land development segment That continues to mature. So as we're bringing assets into the portfolio, we're also taking them off our balance sheet because we're selling them. But we continue to make sure that we maintain liquidity. And as our capital stack goes, we want to make sure that we're investing into monetizing these legacy assets that we acquired. over the years and really generate the high margin incomes from each of the segments and then continuing to build into our single family rental and continuing to maintain a strong liquidity portfolio, really balanced out between our cash, which is inclusive of restricted and unrestricted. And the restricted gas is really just letters of credit that we have for performance to the local municipality on the roads, curbs and gutters. It's how we warranty out those during our one-year warranty period. And then another receivable that we get as that comes in periodically in sort of increments as we build assessed value within the community, more homes, more assessed value, more tax revenue that's available for us to issue bonds through the local municipality and reimburse us for all of those receivables. And then, you know, a small amount of debt, our debt's really attributable to most of the uh single family home rental side of the business so continued strong uh balance sheet capital allocation if you take a look at you know how that composite makes itself well, cash and investments and the note receivable, and then just growth in the infrastructure, you know, making sure that our water systems continue to grow so that we can continue to add those recurring customers. And then, you know, we continue to reinvest in ourselves, probably a little more conservative in 2025 mostly because of the housing headwinds and wanting to make sure that we're pacing we had a lot of chips on the table last summer really dialing up the absorption of our lots and we wanted to make sure that we weren't pushing our home builder customers into a risk profile that really shifted most of that from our risk to their risk. So we wanted to balance that out. So we were a little bit more conservative than I think we would have otherwise been, but we continue to reinvest in the share repurchase program. Give you kind of a profile of how we were performing quarter over quarter in that. um and then you know the diversity i think one of the things that we want to continue to emphasize is the number of ways that we generate revenue from these assets whether that's on the utility segment where we have number of segments sub segments in there whether that's the domestic side of the business or the industrial side of the business um rental income revenue from our single family homes and you're going to see a strong acceleration of that land development and the synergies that we get on, you know, doing just a fantastic job of the master plan community and adding value to the community and really partnering with our home builder customers and then, you know, making sure that we are good stewards of your capital. Taking a look at kind of how we see things rolling out, not only this year, but then, you know, how it's going to roll out through a mid-year forecast as well as a builder forecast. I think we tried to foreshadow some of this last year, but 2026, if you take a look at the recurring, we do have an expectation of continued recurring revenue growth, not only from our water customers, but also some of our single family rental. And that's going to become a bidder a bigger component of our recurring revenue you can see that continue to accelerate where we're going up to you know 100 units uh in phase two and then maybe up as many as 250 to 300 units through build out and so that'll continue to add to the asset growth so when you take a look at you know how that translates that asset growth is a tremendous opportunity for the company And particularly compared to the percent of each of these assets that we're currently developing. And so as we can accelerate that development, we do that and we try and pace that with making sure that our inventories are appropriate. This is a little bit more highlight on kind of how the profitability trends from each of our business segments, the water, the land development, and then also kind of continued emphasis on recurring revenues. So you'll see that continued growth. We're looking at 2026, depending on sort of these housing headwinds, that might be slightly uh slightly down from 2025 um we do believe we have some pedal in the oil and gas deliveries this year so we'll see how that goes we didn't want to be overly optimistic just because of the visibility of the price of oil but we're really optimistic about continued monetization and continued growth in this segment and really the transition going up to you know this what would be a tantamount change to the the monetization of these assets are we continue to pace our growth on the residential side but moving into 2028 with the delivery of our interchange which we working through in the permit process but we're fairly close of getting that uh finalized and we'll work through the financing of that through the Metro District. So we've reserved some bonding capacity in that to make sure that we have the funds that are available to bond that out in 2026, start construction of that in 2027, and then really layer in and almost double the deliveries of our land development revenues, maintaining the same pace with our residential development, but then also delivering a like amount of equivalent lots for our commercial development. And then the valuation on those commercial lots, we're forecasting that to be about two times the valuation of our residential lots. So that's the real delta in how we look to change the composition of the land development. Now we're almost doubling that land, a little more than doubling that land development revenue is because of the bringing online that commercial lots. And that's a function of two things. One is going to be rooftops. Most of the commercial players are going to want a certain number of rooftops to be able to generate revenues from what their investments are going to be, but then also access and making sure that we have a large volume of transportation access and really capitalizing on our location being right on the interstate with an interchange, an exit ramp right where our project is. So that's kind of how we gain some leverageability and some scalability to the land development and the water development side of the businesses. Valuation sensitivity. So 2026 gross revenue, we're going to show range there of 26 to 30, and that's going to be a function of and some of that sensitivity is on lot deliveries as well as some of the industrial water sales activities, so range of earnings per share that corresponds to that. Upside and the timing of the acceleration is really going to be, you know, how we look to deliver and maintain those inventories of lots so that we're not investing into that the capital cost of delivering those in advance of having those deliveries for our home builder customers. And really, we started out with delivering this project with It started out with three builders, four builders, and now our portfolio is closer to seven builders. And so each of the builders would like to maintain a year's worth of inventory, which allow us to have a bit more of an acceleration to our land development side that serves more diversity of product mix. And so as the community continues to mature, we look forward to continuing to serve the whole portfolio of our builders. Short-term outlook, I don't spend a lot of time. I think we've covered a lot of what this is, but water segment growth, we're going to take a look at the three to five year period where we're going to get up to about half of our total water recurring customers. Sky Ranch in total will be about 5,000 total connections. So we look to see that come into about that 2,500 units. Land development side, we should get to, we're right around that 18 percent of completes will probably get closer to 30 percent. So we're looking at doubling of that. And then once we've got that commercial in play, you'll see that accelerate through the longer term. So build out of Sky Ranch is in that seven to 10 year window. But in the short term, we look at kind of getting up to about that 30 percent and then having a faster acceleration once we're layering into the commercial component and then single family rentals. We see up to about 100 units in this short-term outlook. Longer term, you know, this kind of gives you a perspective of the total build-out. And then when you take a look at our build-out potential, really monetizing, you know, our net revenues from land development get close to 700 million. And, you know, the recurring revenue is going to be around that 15, 16 million. And that's really a function of kind of the, you know, you take a look at a $250 million market cap and really what we've got In production of our assets, it really is the story for us. We've got a tremendous asset here. We're very, you know, we're very aggressive about making sure that we're building this thing out and monetizing it and making sure we can do that as quickly and as profitably as we can. So one of the things we want to do is give you kind of a video tour here. And really, this will kind of give you a view. I'll probably try and stop and kind of highlight a couple of the areas on there. So if we want to get that started, this will be an aerial representation. As you can see, this is our first phase. And so this was the more mature side of the community. It really kind of gives you a stop it right here. gives you kind of a profile of where we're at relative to the metropolitan area and the growth of the metropolitan area. You see the mountains there in the background, and that's what we get to wake up to every day, which is wonderful. But the other key aspect here is if you see kind of at the top of the development there, hard to illustrate. I don't know if you can see the cursor where our wastewater treatment plant is right there. And really, that's a unique asset in and of itself because 100% of the water that comes from our community is treated and reused. And so you don't see any stream that's discharged to that. We bring that back. We reuse 100% of that water supply, either through irrigating our open space, which you can see our beautiful open space here for our community, or taking that back and selling that to our individual customers. So if you continue on on that, you'll see a panoramic view of kind of the continued growth. We'll stop it right here. And this kind of gives you a perspective of really the deliveries of the phases of the land development segment. Right to the left there where the cursor is, that was phase 2A, and that delivered in 2021. And then to the next side, that's 2B. And then what we delivered in 2026 was 2C. You can see the roads, finished lots. You can see some vertical homes just starting in that from one of our new builders. I think those are Taylor Morrison lots in there. And then you can kind of see 2D under construction where we're really starting. We're finishing up the wet utilities there, and we'll be moving into roads, curbs, and gutters on that. Continuing on, we'll see kind of that, all the land you can see that's farmed there, that continues to be our portfolio. So that's the continued growth of the project. And so that'll be our build out. Plenty of inventory of land that we have on the residential side. So that'll continue to grow on the residential side. And then you can kind of get a perspective of how our infrastructure is there. We've got most of the main roadways develop that's the boulevard area stop where the cursor is that's kind of the oil and gas um and that we bring all our water our treated water back to that reservoir there at the top and that maintains the flow for our irrigation system and and those are kind of some of our oil and gas wells that we have in the site so colorado has a rich history of coexisting with uh oil and gas and residential and commercial development We can see kind of rolling into phase 2E there right next to, oh, 2E rolling right, yeah, we're good there. Roll right into there. That's our water tank, but that's phase 2E will be between our water tank and the school. That gives you kind of a sense of, you know, there's our primary school and then the construction of the high school. And it kind of shows you, you know, we've got most of the road network developed for that. We'll have a little bit of extension on the road up through the high school and continuation of one of the boulevards. And so this kind of gives you a good feel for, you know, that campus is right in the middle of where we're looking to go, right in the middle of all of Sky Ranch. There you go. So really accessible for all the students to be able to walk there. This is kind of a view of the commercial area, right? So we're really flying into that 150 acres, which is adjacent to the interstate. It gives you a strong profile of what the transportation access is and the value of that transportation access. Up in the top of that is the airport. So it kind of gives you a feel for how close we are to the airport. We're four miles directly south of the airport. uh and then kind of where that interchange is going to go it's going to go straight along the alignment of the boulevard there where the yeah so where the existing interchange is we'll keep that up and operating we'll build the other interchange and then we'll ultimately remove the existing interchange but gives you kind of a flavor for really all of the physical features of the sky ranch developed So with that, what I'm going to do is kind of turn it over and see if there's any questions. We'll open up everybody's mic and I guess if you have a question, just shout it out. We can't mute them? Unmute them. Yeah, you have to unmute. So the technology here is just unmute your mic and then shout it out and we'll drill down on some of the details. Or raise a hand and you can type it in the comments section.

Yeah, if you're having any trouble, raise your hand. We'll try to assist you. But this concludes, obviously, our slides. So we'd like to provide this opportunity to anybody who has questions.