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Pure Cycle (PCYO)

Participants
Mark Harding President, Chief Financial Officer and Director
John Rosenberg Loughlin Water
Bill Cunningham Private Investor
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Pure Cycle Corporation Fiscal Year and Fourth Quarter Ended 2019 Fiscal Result Call. All lines have been placed in a listen-only mode, and the floor will be opened for questions and comments following the presentation. [Operator Instructions]

At this time, it is my pleasure to turn the floor over to your host, Mark Harding, President, CFO and Director. Sir, the floor is yours.

Mark Harding

you. Thank welcome our to earnings year-end all call. you like fiscal to XXXX I’d

We slide have presentation. housekeeping do Some matters. a deck this for

So presentation. year-end Investor track I to you on deck along that see if and at you slide then you if the work you show purecyclewater.com, follow fiscal there our a as go and and through with tab website the me will the then slides you’ll into log can

of transition the as I’ll try the So note through progress presentation. slides the and we

with our of some the So references our first which forecasts forward-looking filings is is our that, our which Safe which some had we that include that slide, statement discussions today. actual and also – in just slide, a we’ll start forward-looking recently statement, Harbor this with the presentation, reports second is will second which

So of Harbor I think most statement. are familiar Safe the with you

activity specific kind some our assets get accomplish down just the for for we do what revenue of overview the for from what of then it the forward to drill the to get where and quick as like company, look time, first hope is brief the to or I’d company some of overview give you of we is of What a a do, and kind year-end to to going listening maybe on we’re that new in those in XXXX.

water-short segments. two substantial utility really a at revenue generate that they water at business DNA region. of from while a a different water-in portfolio have we’re We segments And two level, distinct owns

long use identify Planned developed interstate. on in of the most as Community, Denver attractive It’s land what what we and side, utility addition a really area. do we metropolitan to the the primary submarkets one we also Master mixed In

deliver also amount and two interests finally our some the – front gas the And portion then gas from a oil oil corridor, some we one interstates And is of a that we bisect and property. mineral to where I-XX through which have that is royalties significant generate some cross industry. we from oil gas leaks. city, of East-West, the water own which then we revenue and We

XX,XXX everything about use we supply use we that That we do, have water. or domestic water portfolio sales. water customers we we feet industrial in acre to of for that So provide water or irrigation almost our that whether

use water outdoor facilities, each we to wastewater collect water home through collect wastewater business. If resource that to treat reclamation us then the wastewater you through our to customers We as that and that of move at it, supply. treat that it for itself. irrigation or Slide utility, of deliver reuse meter that we a diversion will back. that our a that store this They we the and customers, cradle to we structures, we water distribute produce overview a as We that an it, own to They we we where purposes. on pay water kind look back. X, water and water individual of for pay us water our grave, wells We

So are reuse a system. we use really and

that advanced be water through flow through So processes. systems an look irrigation us directly but our system, to reuse credit come return don’t those and to we to back flows return treatment use able

overview the Slide assets, water X, X of give of amount utility If will you move an the water. of you kind to Slide

XX,XXX We acre have water. about of feet

number have wells. aquifer wells We of deeper a surface and

water water and storage raw have treated storage, both storage. We

in you water distribution We accompanies a of miles have a number utility. that two reclamation would normally and facilities, water lines, and stations everything of pump find what

entire reach the of Arapahoe sort span County assets of Our the area.

service of service being of and County areas have we’re and franchise developing Land what area Range then on exclusive as XX we So State we’re miles property really with called the XX,XXX the more Sky working than width Ranch. that Arapahoe to own of well as Lowry acres the property about at

How generate on a through paid one we side onetime utility If and our we Slide fee, water wastewater get connection systems. revenue generate move our connect sources; two X, to the revenue? we so is you to to

Our water about connection fees connection $XX,XXX and about sewer our are are $X,XXX. fees

connection what the business a combined single about amount to they Whether family connection, of standard or that residential water we a and we the be that to recurring connection revenue. add. all So per get connection would $XX,XXX be that a is equate for home then we out

from that that annual sort connection is we about get look if – serve with connections capacity we water per get per year and about can sewer year per our we XX,XXX and have, So water wastewater year per annuity we $X,XXX water And excuse connection. you estimate that of delivering per $XXX this that the at $X,XXX service. portfolio. We about me,

a connection kind you both the the of in as as gives of terms charges well usage charges. annual line capacity that top So

got miles the XXX about X a miles wrong about my If of about Slide Sky is interstate. the XX I’ve the that half to sure is do of South Sky overview of International development we kind East along – own. Denver along X that. move a our Denver, got think you want Make Downtown right mile Ranch I’ve It’s I’m Airport. land numbering We to about acres Ranch, here. I frontage directly property sorry, got segment. Slide located a It’s X, What own interstate. I of

space retail Our about million along light residential of the for X.X interstate. about zoning is units X,XXX and square industrial feet commercial

to in how that connections translate world, us many into serve. try allow will And that our and we

area. absorption do in to other about a lots It’s to worth, differently of land the square per So They square and develop for where we that look terms commercial then land to price you X,XXX service connections bit can you for how that little likely water terms development monetize we that like lots use us. that number We X,XXX lots translate of will a connections, see property commercial. at good that and kind also that then can in that the in as at way look that residential alone in being you connections of feet not correlate outlet. of a as would X,XXX commercial may may foot that go the

The We’ve next one slide, access Denver of employment where near one communities the in at in that attractive It’s metro areas in land development. we’re the can terrific area. Denver submarket. kind provide of find metropolitan transportation most of define in centers. got major the affordable ourselves families, the We more

our they can build or in, entry ranging anywhere X,XXX that target families where level back about with open of lots a the buy product feet can for special come of and $XXX,XXX. level in prices our homes from area our on so walkout maybe some X,XXX And of – are tri-level metro market basement feet, entry the areas, is really to a square at up some buyer, are Denver square

most Communities So the affordable one region. Planned Master this is the in of

Communities. they the all And update it because is the with what Denver slide. recently what’s tracking the they last next wanted the two area’s quarterly MSA, the there Master information I here include updates they I What estate metropolitan study the in just subscribed came Metrostudy to come Communities And a called the area. Master some is on do in they Planned Greater in Master in does Planned real the was quarterly top out and in about wanted happening to weeks. relate market we And reported service with some to with statistics Moving a statistics Communities. and out the XX to you for did to Denver share Planned Denver

statistics Communities the of are interesting the What nearly are Master Planned of the Master most Communities. of built And out. Planned seeing they’re these maturity is majority these

that can built And real Master so is of really Planned that’s top here. Community of XX kind out. them of And all the lack stunning are there’s and XX% than what see new they of you the top find and a statistic XX more starting a

If XX, to are out. get those average be to maybe next XX% going the built to you out

Crossing red location. be actually our out We’d at Tollgate Traditions indication. been for this Planned in what in look new right-hand towards that Plans those there, page. all really start slow of neighboring if and graphic and year. really which – are that’s Reach, there’s graphic Master these Master means as an going And area our closing next Planned So those there kind Master you is Tallyn’s are the kind that of is That Communities. to Communities Communities you at And that Planned so this to that it’s Ranch right start submarket, to bubble area, side Sky the are other give that will of is just of of look Master these bubble light

at And this our online to so in very timely the overall market submarket this time. seems particular and bringing be product

to a stunning with was So I share to statistic be want that you released. that just did I recently that because found

So for increasingly water and annexations go let highlights land some the the new But and creates detail segment you that property how anytime Denver do add demonstrate about we little look me before not the more only legacy it development there and land utility to far for at a what side zoning in segment. we water becomes not that for that use that front bit the really to and availability. only what of and value that the difficult value in the also the to to have water our annexed one also metropolitan entitlements. water one but a existing land, you the areas may statistics area, of relationship tie up an at area, you And is in is you the do, right a to land any thing were dilemmas face as have have water look want in land we really and availability

can. inventories develop whether large they’re advantage. we as so manage two much our on a and big, – both, how to to in available you delivery inventories to concurrently online, those allows both how you capacity community how investments, or allows It system, lots a water such of where much basis on water in many basis of capacity our can optimize that’s a And you ability you of system very those utility, as on the the and in bring a then water our have both ability on control investments manage delivery us build nice those gives land scale real-time utilities wastewater we to concurrent with because our we

per Ranch, at – connections a taking our the the $XX,XXX million tap represents per $X,XXX in In Sky revenue and $XXX $XXX about And revenue, million water take that wastewater $X.X those revenue. in fee, of just connection water the And that about look at we year-over-year we this water year. where connections, million tap control. tap then per generates wastewater so fee utility, X,XXX what is combined serving $XXX got in revenue connection million it’s about and X,XXX fee from

we utility vertically the We’re own own we of delivery so and that those land, the this, customers. water water integrated to in

deliver component the developers synergistic for time that’s in that third-party So waiting not we’re significant for to to the the very where the market utility capacity the waiting demand to for developer be deliver deliver to that for Very utilities. a that on market, and deliver able not in a relationship. and continue us in to and land

better on builder’s Now Slide about of as of classify our have, we’ve we delivery projections. well bit forecasted, rollout. our let’s of opening, the a done very first to the talk I three little of phase all first this and on probably guess ahead move I What than XX kind

to in well And we’re with also what and not but very our thing, this pleased have to sure contractors make house, doing subcontractors delivery in our only delivering so in as the of all utility development we’re of that as land side the managing results team’s that project the side. we’re our the lots, aspects worked hard very and on this

lots. of fully And lots, so today, That’s to we’ve this. have that’s approximately as and attributable lots XXX finished delivered finished everything

with contracts XX finished and plotted for another have water builders. types utility we So full lots lots. the we’ve And lots. then our paid two And of been

where lot, full lot other progress the of a get for just building We on to our finished us for. ready two one us to pay permit basis. the builders have a our And one payment contract pays builders build, finished then ready

pays one we’ve of builders us that. And so the that with is and lots milestone two XX that deliveries gotten of

since that fiscal of deliver what kind the did we XXX, As this of is done year-end. but year-end, we’ve really fiscal

got going amount we’ve year. this in a on So segment the land tremendous finishing of calendar and activity out

and taps. got and addition application. tap The wastewater builders wastewater their of In which we’ve building got building water must to pay deliveries, XXX water permits, means time at the we’ve XXX the

connection of in we’re got fee And So number probably seeing nice dozen just finished a sales, a completely really we’ve and tap of homes occupied. the because revenues. absorption our

residents have homes construction. there and we plus So under nearly XX out

be absorption the month, or eight on or depending so less And a this little a homes bit about builders. needs on to more seven the

really with absorption, as so asked us have forward deliveries that of as all three our our kind And we can. to of quickly lot roll builders

lots some contractual that as end being takedown lots and may and XXXX. had all maybe complete should far as are of our the And a so XXXX, rolled year by have forward we of of fiscal out

going remaining. we’re to roll So the

finished XXXX. at look XXX have you other our year-end roll end the we by of finished If We’ll forward August XXX report, lots. lots the

in bit area. home occurring next move to little sales is some there’s of very the our fluid And you what’s number. you a a kind If aerial of gives It a of metric. slide, the shots

we As XX homes were reporting approximately of sold. year-end,

number probably eight we’re per This of per I close to builder And defines averaging to now. kind sales. month. closer up think XXX is that the homes lot six,

we from lots. the on depending our and size builder lot of paid our average the and contracts of builder that’s on So location about customers, XX,XXX, the home get the for

municipal in public drainage constructing are taxing to They’re entails roads, addition reimburse turned home developed that for those with that reimbursables. we public what we municipality improvements, include for and bonds another by And have the ways, to reimbursables. we and they are which will what have then the issue to of And we a a us. us collect portion from qualify gutters. improvement entity And builders, curbs those And governmental is public improvement reimbursable. over entity

of from – improvements total So public revenue the the to on if we bonds. portion and being you lot that they take about some that, And development a lot. received closer this comes a a issue that municipal $XX,XXX, at $XXX,XXX land segment, sales look when that’s those from

light the first stand bit larger office take we – in to at bit, a you because bit look a if at we see be little about this drain improvements might because a little bit public with low phase because the that weighted more bit drainage little had So is $XX infrastructure. million, look phase, a a spot. this little site We were little we might first infrastructure a some in the

reclamation to to being started going that So be. low that with wanted the we spot we be wastewater where facility’s

bit higher investment so that. in And a we little had

So a to we’ll extra see little bit maybe attributable revenue that.

as money up as bit get maybe much we’ll little So a first from weighted our some builders $XX as million more of the public because of in to to investment well more in that infrastructure. phase $XX as closer money, million

billion. would that equate if $X.X you units, the X,XXX we kept be about if then the out And to number same, that price all

I start think we do successful leverage. pricing thing. have got a some We’ve very this to

very doing builders think well. home the are I

that we’ve And that now sharper we’ll little through in the look so established a next our – take phase pencil a market.

if we’re turn the well to I’ll phase, and which additional going to Slide phase, commercial. units next residential the in will take talk as about of XX, that as be Speaking next you

to product It’s and it’ll because really that have and range there. this product types of XXX So segmentation the first where we’re attached inventory commercial includes have the detached too acres in inventorying might we phase homebuilders three-year of inventorying And there, maybe more retail, builder to three number six here. that may the some that XXX as they’re want that which be light of multi-family per shaded builders holding industrial. some level diversify to offerings uses keep product, five capacity. the not product next have XXX in not single-family about different about multiple so in some two- in much that depending aside single-family We’ll maybe area of phase then we and acres, and and We on many of or acres, interest. some

for of XXX in space It’ll square kind we’re of the terrific area, lot, all maybe a foot. million and then at that So to square selling because or of commercial we’re maybe opportunity a a as feet opposed that land space. residential X.X by the while absorb, presents total but looking that some to XXX take in the commercial this selling units

in In attractive So as many mechanism second may equivalent as connections. of that’s we single-family seeing an X,XXX be for our that. this us phase, some to X,XXX

in So the that that equate the pairing some fees. out would water we terms how tap give you of in terms – of

page, next activities. XX, we’ll talk oil a some the little to our on gas Moving bit Slide about and of

got oil interest for shale We’ve for of So area purposes. Niobrara the we as water do formation. here known and a oil gas provide fracking industry that’s the

a it’s infrastructure it has area. and more about very of $X this the and tremendous the in developing capacity. leasing, is our water spent lot shale prolific area pipelines a sits So this and rock interesting is. exploring, top right wells have on in oil where billion Operators than And it thing

looking effective our it’s pad So us cost way from obtain to to very for transfer supplies, for water water a their sites. operators to system

So on are we intensive because water. it’s water There are active, relationship use very long good of that. a very water

XXX been beginning I’d just wells probably and that’s to very drilled of a the very, about date say field. There’s

And a they’re collection XXX oil gas getting has have square been wells there, been lot miles money over when that’s this. and really you and look on out so And XXX of started systems. just spent spent at that on

and field. confident a with yield the very the it’s confidence this So rich the put oil oil that of they’ve play very that in of that investment – there they’re

When and this amount Getting of a on a talk for they’re using being these bit about next I’ll a sort a supplying water spacing the bit little tremendous ahead, play. water. stack slide, we’re of fracs, but pat little more

for $XXX,XXX million water for frac of And well. usually about designs generates that are they about the XX their that well So to the company they do. per gallons or every every fracs that current

to and water in really field of have this different that operators. in We for see really as sales So opportunity drill for to foreseeable extend opportunity look operators be and to probably now as This that we’re area decade’s to four could the continue this this multiple to excited us they worth expect have as we field. service future. in many continue

of move to the some on let’s number So crunching.

years, Cycle. of is about million, a almost tipping than those for the candidly million moving revenues and you XXXX%. say our increased more We following then to Pure company XXX%, of For so $XX $XX point are be that XXXX, income number for a almost I’d to increased our $X going million a from little

– So to in $X in XXXX million, from XXXX. we’re million moving $XXX,XXX more modest was $X revenue five what in than almost

in at those coming for in substantial from, XXX the Taking deliver revenues lots where of development delivery to lots the remaining a look land we down XXXX. revenues break expect segment, these are

if of take be on may look our So $XX that million year. a $XX you that runway $XX,XXX, of coming average for million, fiscal at price worth

the fiscal probably we’d then, at well. We’ve XXX of revenue, I’d as had tap a say XXX municipal Since look take year-end we total taps. of about a taps. quite done at Taking a look

continues along. sales, for is XXX taps XXXX, for bump If look guidance tortured Colorado industrial the of go to water XXXX. a our And you’re that taking at a looking relationship. kind some for

We’re get companies. trying way oil and in the gas of to

of separate now and independent to oil ability jurisdictions and their down and Colorado of gas for gas the the wells the so pushed legislature where the local regulate regulatory opportunities And commission. state some oil

bit So permit seeing a we’re to it’s little wells. what is longer

that’s in oil friendly. we ourselves gas a find Fortunately, and county

of one a what we XXXX. we’ll and we in with was maybe XXXX, think think, that XX opportunity. one in dedicated wells number the did softening I area. But sort be did for see, presents XXXX, probably operator or and at a while probably the for you’re this next forecast But we’ll of rigs did XX field, maybe So well what more think see XX maybe say, of in years that to over little that we think us. in XXXX getting I than maybe maybe wells line in two I decades could of I is so this sort looking each and you number And substantial

our and about $XX,XXX oil a we then And are gas generating month. royalties, still

have got pad wells. but modest, into site grant our only the relatively we that still and we’ve one for well did So a relationship XX a operator we an with formation additional

those some construct timelines we’ve and requirements to wells. So some them for got XX

balance the The XX, share two after give on very really per diluted sheets, I’ll we’re Taking of $X.X growing the taxes. that income sheet, total assets you income the the about statement, company. proud income statement, a million share of the XXXX at next income overall look $X.XX a

some And it prepared remarks. so that’ll do up conclude like answers. to kind open the audience of for is I’d the to and What question

how to you and to if So give as some happy in dial be questions, the can moderator questions. instructions some ask take I’d to some

Operator

And of questions. now have course. Polak [ph]. The Thank we our first do you. is open state questions. for Yes, Please floor Instructions] Anthony from [Operator your question

Unidentified Analyst

Hi, couple numbers. on the A Congratulations of Mark. questions. quick

are work? can the does municipalities the yourself? the Cycle they First, between that the Are billing? in that with billing contact and that they Do do legal you relationship this Pure for back customers? are the Do the be paying How you do reimbursables? you to direct going ones describe

Mark Harding

utility as me side development between the So that side. land well the as bifurcate out let

we’re called Rangeview then political contracts district District. and Rangeview subdivision with to wholesaler of the the So quasi a operate, water Metro And municipal us all do a maintain rebilling. the to

get that fee to we XXX% we XX% usage those So of the of all of do and customers revenue. and the revenue billing tap

that So side. relationship that’s the water how works with

the developer we call land districts. in what side, have what development is Colorado On we

references Ranch Sky Ranch you’ll statements, When cab. metropolitan that’s have see authority and those our Ranch we So then the consolidate we And those. Sky into you to read districts districts those. a so community through board, number have Sky the of financial

ownership on of those by the of but is a political Board for land the that, of Directors subdivision State a And of we Boards we control virtue provision. And sit it Colorado.

that that’s Ranch Boards. land us sit entity. Sky those we taxing on within allows the And So the own to

must And Colorado pay growth mechanism we have its whereby is what a in way. own so

have it will So homes providing the every will the that and the drainage, in to like that’s we where the have gutters, build development curbs, roads, everything to it be something will area. what area areas have going here, the attributable jurisdictional

assessed And for qualified then those public mill from and improvements, then those homes value are reimbursables. for the levees value, improvement the the

And districts so that’s and out, governance elected municipality, the the are those the builds back need mill taxing ability to districts. entity, where us predetermined and electric have have the then on participate an that then we with relationship legal then increase not the them, from in set and entity customers customers the And have we’re they to electorate those. we increase levees legal a to and a our as area. those officials as voter go community of it’s the become to on they can If those

that’s the and so us kind the And of the land municipalities. relationship side on between development

Unidentified Analyst

there timing charging the do they they estate taxes we What’s they raise debt that? a a start then and Is And can you that little understand can real lag? when better? bit against reimburse when how –

Mark Harding

question. great That’s a

where up And in of at so oftentimes look doesn’t – to They I’ll break financings, it start development. where can the to have early those three be this. the capital there’s kind into very areas developer people

say, that this have they to in I’m of way they would years. is would going going and a so build I’m do the assessed couple to And value

market risk plow that they be that bond then get infrastructure. of some high rate the very to high and into that go And bond. they those a they would is use do proceeds early they interest to what because So

And They’ve I the would until So the the built, an got developer bonded value, they say assessed interest a very a would early then get built homes all a and kind then got project rate. wait would there’s they’ve late-stage is financing. low that’s financing, then out. of they where and all

is optimum so And the one. those between somewhere

so optimum the looked your to your scale get along to same going be while interest And out. it being time to at development you’ll value is at rate a the favorable very we’re say, for able we where into the leverage that’s from far that total assessed be that’s enough build okay,

going municipal listen, analysis district what give so, here. this they And a the the division was of came for is successful. that Corp back we and And of what a very City to City and come thing The opportunity saw to absorption said, able Corp, financial this be terrific, was bonding in is. retained

not can any a by to and improve got you’re momentum go interest market of because to couple going a holding years your going. time You at lot of just rate you’ve

them that process the of Board in so them And and ahead And elected of Directors that process. to to they’re now. sort have engage start go right

of a see those this about pending reimbursables us to coming So, conclusion successful within you’ll that process, an announcement some year. back of fiscal

Unidentified Analyst

we clear. first then then one all, much XXX thank Awesome. XXXX connections? should fiscal And and did you tap unrelated of you unrelated – And expect question, I hear say in that

Mark Harding

Yes.

Unidentified Analyst

concludes my questions. That right. All Thanks. Okay.

Operator

Dorsey our state your from Thank you. question questions. next [ph]. Gardner comes And Please

Unidentified Analyst

it’s Dorsey. Mark, Hi,

Mark Harding

Hi, Dorsey.

Unidentified Analyst

comment what’s You the Hi. situation? Will have carry tax forward on the situation or you there? loss a

Mark Harding

high that problem. in quality We’re

using to some have We’re going start to of those.

some have So, yes, carry do NOLs we forward. that

about about $X million left? million, $X is right? Okay. have We $X million? that

we’ll down over think have And forward, the the XXXX and provision tax so carrying I using left. years. net of willing been in few then be $X in that we’ve last So XXXX million we’ll some Yes.

Okay.

– to the use almost think $X million. we’ll I up we’re $X million So going

had going we’ll to left. our then million up we’ll the where $X and then some $X I of placeholders million, for million, $X less send And $X about about that checks million got them that’s XXXX, like have over we use to our we’re that’s that president. So had just

Unidentified Analyst

Thank Okay. you.

Operator

our John Rosenberg [Loughlin And Water]. question Thank next you. from we your have Please questions. Instructions] [Operator do state

John Rosenberg

taking for afternoon. Thanks my Good Mark. Hi. Hi, Yes. question.

Mark Harding

Hi, John.

John Rosenberg

you the a or? issue. that will allowed like issuing? X% and we are talk Could CAB Are had what be me issues eighths – pulled you a coupon like you what back to you’re on financing. some Getting what information. a what bit – guys little are congratulations about you in to announced or five up I’m CAB, tell a at and seeing some about process looking now the I – looks seven

Mark Harding

Yes, been yes, you public tell the what’s I market. in filed can

John Rosenberg

Yes.

Mark Harding

preliminary limited a there’s memorandum. offering So

here. to So in have you’ve got acronyms

So about that’s excuse like cascading million senior the and be to then revenue filed. the mill are fund a $X.X are subordinate funded, subordinate and buildup. the we’ve subordinate was something senior the senior works, to they once And And got a fully fund bonds. me, of form those bond in really the bond $XX.X been million bonds between services And initial in ways flows the bonds. in forecast subordinate go then levees function the bonds. to the bonds Then relationship debt go as the

So bonds, all where would fully issued was those if be the bonds. late-stage out, senior you community built

they If would bonds, subordinate you existing issued all be mill no almost bonds because senior that there’s had levy. bonds early-stage

where that assessed allowed very senior out small have good that and So position kind of than connections relatively of found in good we the value. a us because position number that’s subordinate total a to build a then and of area visibility the ourselves to

they demand then these of to memorandum, that. where they’d things and the is that go, put they kind go marketing So, they market them, for build the see together all and market they got they once

kind And so the interest of rate sensitivities there estimates. are

looked I we then the some willing and the got we of I’d X%, if premium. I rate, I’d X%, a were at if if And was pay at to a to interest they project really more be than risk dialing kind that’s back if market and got maybe got at than it say little our we say, factor. we’re favor less look the my on X% weak then satisfied so expectations and say in world And with and market look

rates. actual that final plum those be prices come And will interest you’ll that out. the so see we’ll numbers to how see and And

John Rosenberg

see. I Thank Okay. you.

So know if different coupons at call with or coupons is don’t two fund one was call was One or the sinking I’m looking – five provision, ones. what to provision structures. the the I one’s looking and a – is dated… I I wondering prospective eighths, X%. has they’re others and seven same a the a they’re

Mark Harding

eighths. five and seven The

John Rosenberg

The month XXth the in of memorandum. this

Mark Harding

Yes. Right.

John Rosenberg

or and up, telling basically trade bit eighths. wondering looking go-to-market if above you’re the intend those if you’re to now. they But of those issued having money at with for if you’re there to even seven five And I out or come what was you a looking me little kind par did market if maybe markers bonds – less are the right come at X%

Mark Harding

are placeholders. That’s right. Those

John Rosenberg

Well, very of right. much you forward. luck All best you going very great. much. Thank Okay, and thank

Mark Harding

you. Thank

Operator

you. Thank

Our comes Investor]. next from questions [Private Bill your Cunningham question Please state

Bill Cunningham

Yes. Mark. Hi,

Mark Harding

Hi, Bill.

Bill Cunningham

does homeowners. being I impact have some the Pure rate. by the questions taxes the are well on that serviced How bonds the bonds I as the by Cycle? assume interest

manner. affect correct? things that Cycle rate doesn’t So the it if any seems that I’m understanding really interest correctly, in Is directly Pure

Mark Harding

That is correct.

capacity. interest not rate. a get bonding more rate. on that’s a to interest debt have lower because And municipality’s So effect interest going the the be value, it us they That’s they same rate if our debt to indirect does then have assessed

And more the then rate for they so down, reimbursables. pay and the the if interest with goes value can more of same money go assessed

Bill Cunningham

Okay.

Mark Harding

in get phase. look in worth – taxes property when think going a in of me phase $XX let you Colorado, look we’ll won’t in you’re million if we of of at you we that’s a drill have we first And reimbursables next kind incentive I’m the this state. down are sure back back reimbursables sales phase, pretty question, phase about to of to that how this and may with going that get only back. ask get in $XX this what question bond. which tax is first the at Colorado is, and million much it, first And call We particular this them all We because first

tax, high sales have very relatively tax. property And income so tax, but very modest we modest

it’s you at And revenue commercial and to from that look weighted for municipalities, when where development. comes cities so

do times get same the revenue we than commercial in amount of four AV fact, residential. the we from in In

taxes. catch And so the that residential AV property up while very just the this of pays pay for first same large improvements, we pay to that money us of and phase have really is that by a won’t it all four were and the back the will then funded components tax on amount on times residential commercial public allow

Bill Cunningham

right. All

Mark Harding

So have accruing. we’ll balance still that

on million to this we for round back bond speaking will that’s as reimbursable inches million will phase. phase, still we million first just I’m $XX $XX crew first back they’re $XX phase, hypothetically, as million have offerings. that numbers, out we and that build So if get that continue future because phases this get we $XX a on if future first And just

Bill Cunningham

– this now sold And are Okay. Pure when reimbursed, get the first you is all bonds million, income to when $XX and reported you of that as Cycle?

Mark Harding

we then is. against met left extent taken If it haven’t out it in inventory, already inventory, that have the money’s still we out inventory amount. the we To it of

tax in taxable. wash some really are see – comes advantage that period we’re through, physical becomes year, if looking because But going will over of if it you’ll it period there. out all all it to So and

Bill Cunningham

Okay.

being number will be So million in ultimately whatever Pure right? to will full stay totality up the exact income the ends Cycle, $XX

Mark Harding

if lots, drops look in bases second so XXX% of at is first next you XX, to XX the all the so recorded Particularly, bottom second that income. Correct. we’ll the It have that XXX XX our line.

Bill Cunningham

Okay.

Okay. Thank you.

Operator

questions Thank be more time. appears And this you. Instructions] to at there [Operator no

Mark Harding

certainly I get a shareholder the reach had that to technical to difficulties Okay. me you of didn’t up in, Or of have out you’re question if meeting all Well, news. in a if listening give want this to or hesitate think on replay, coming you you in some don’t certainly our you some We’ll upcoming call. dialing encourage January.

next proxy probably January statement. the file of that So weeks. see you’ll XX our couple We’ll within

proxy meet sorts by We’d headed announcement location, you. through love meeting, on you’re those our things. to the And about an see you’ll the anywhere see come us. of the if shareholder time, and and by So Dodge, Dodge,

thank to really I say, a our want We’ve want executed Board. I then to well. for a effort to a just management really strong I our great very want thank putting together year-end. team And

certainly has Denver been that very Ranch splash our in look has think next to and from MSA certainly indication the locked first filing. any significant market in number we builder the I builders a our or phase I with biased. Sky the that of interests of If made this, get continue that success

sometime carry and get be and to the of breaking in permits late a be next our that to stages to with that spring position we’d late lots able on be a through spring in of then position of to those homes. of all for should and out build work lots get delivering of delivered, kind dirt, XXXX, those We’re sort in finished the ground the start of like the which

just forward like in but able and transition have builders the a to going We’re we’d to finish But lots to bit be little deliver day. take there. building next XXX seamless XXXX, out to carry to homes out the a

So very rewarding shareholders. exciting the for for company, very of exciting and our all

want for support. I all your So to thank you

all So up go to ahead catching with that, look I’ll with and out soon. forward you and sign

Operator

Thank you. teleconference. today’s participation. does We This thank your for you conclude

disconnect have your great time lines may and You at day. a this