Attached files
| file | filename |
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| EX-99.1 - EXHIBIT 99.1 - Howard Hughes Corp | hhc8-kq1.htm |
| 8-K - 8-K - Howard Hughes Corp | form8k.htm |
The Howard Hughes Corporation
13355 Noel Road, 22nd Floor Phone: 214.741.7744
Dallas, TX 75240 www.howardhughes.com
Supplemental Information
For the quarterly period ended March 31, 2018
NYSE: HHC
Seaport District
New York, NY
110 North Wacker
Chicago, IL
Downtown Columbia
Columbia, MD
Forward Looking Statements
Non-GAAP Financial Measures
Additional Information
1 www.howardhughes.com
Cautionary Statements
Our website address is www.howardhughes.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other publicly filed or furnished
ngs" subsection, as soon as reasonably practicable after those
documents are filed with, or furnished to, the SEC. Also available through the Investors section of our website are beneficial ownership reports filed by our directors, certain officers and
shareholders on Forms 3, 4 and 5.
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP); however, we use certain non-GAAP performance
measures in this presentation, in addition to GAAP measures, as we believe these measures improve the understanding of our operational results and make comparisons of operating results
among peer companies more meaningful. Management continually evaluates the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to
determine how best to provide relevant information to the public, and thus such reported measures could change. The non-GAAP financial measures used in this presentation are funds from
operations, or FFO, core funds from operations, or Core FFO, adjusted funds from operations, or AFFO, and net operating income, or NOI.
FFO is defined by the National Association of Real Estate Investment Trusts (NAREIT) as net income calculated in accordance with GAAP, excluding gains or losses from real estate
dispositions, plus real estate depreciation and amortization and impairment charges (which we believe are not indicative of the performance of our operating portfolio). We calculate FFO in
gains and losses from depreciable property dispositions, and impairments, it can provide a
performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition, development activities
and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Core FFO is calculated by
adjusting FFO to exclude the impact of certain non-cash and/or nonrecurring income and expense items, as set forth in the calculation herein. These items can vary greatly from period to
period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core FFO serves as a useful, supplementary
measure of the ongoing operating performance of the core operations across all segments, and we believe it is used by investors in a similar manner. Finally, AFFO adjusts our Core FFO
operating measure to deduct cash expended on recurring tenant improvements and capital expenditures of a routine nature to present an adjusted measure of Core FFO. Core FFO and AFFO
are non-GAAP and non-standardized measures and may be calculated differently by other peer companies.
Herein, we define NOI as operating revenues (rental income, tenant recoveries and other revenue) less operating expenses (real estate taxes, repairs and maintenance, marketing and other
property expenses), plus our share of NOI from equity investees. NOI excludes straight-line rents and amortization of tenant incentives, net interest expense, ground rent amortization,
demolition costs, amortization, depreciation, development-related marketing costs and Equity in earnings from Real Estate and Other Affiliates. We use NOI to evaluate our operating
performance on a property-by-property basis because NOI allows us to evaluate the impact that factors which vary by property, such as lease structure, lease rates and tenant bases, have on
our operating results, gross margins and investment returns. We believe that NOI is a useful supplemental measure of the performance of our Operating Assets because it provides a
performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating real estate properties and the impact on
operations from trends in rental and occupancy rates and operating costs.
While FFO, Core FFO, AFFO and NOI are relevant and widely used measures of operating performance of real estate companies, they do not represent cash flows from operations or net income
as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity or operating performance. FFO, Core FFO, AFFO and NOI do not purport to be
indicative of cash available to fund our future cash requirements. Further, our computations of FFO, Core FFO, AFFO and NOI may not be comparable to FFO, Core FFO, AFFO and NOI reported
by other real estate companies. We have included in this presentation a reconciliation from GAAP net income to FFO, Core FFO and AFFO, as well as a reconciliation of our GAAP Operating
Assets Earnings Before Taxes ("EBT") segment measure to NOI. Non-GAAP financial measures should not be considered independently, or as a substitute, for financial information presented in
accordance with GAAP.
This presentation includes forward-looking statements. Forward-looking statements give our current expectations relating to our financial condition, results of operations, plans, objectives,
future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to current or historical facts. These statements may include words
"believe,"
expression. Forward looking statements give our expectations about the future and are not guarantees. These statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance and achievements to materially differ from any future results, performance and achievements expressed or implied by such forward-looking
statements. We caution you not to rely on these forward-looking statements. For a discussion of the risk factors that could have an impact on these forward-looking statements, see our
Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The statements made herein speak only as of the date of this presentation and we do not undertake to update this
information except as required by law. Past performance does not guarantee future results. Performance during time periods shown is limited and may not reflect the performance for the full
year or future years, or in different economic and market cycles.
FINANCIAL OVERVIEW PORTFOLIO OVERVIEW PORTFOLIO PERFORMANCE DEBT & OTHER
Company Profile 3 MPC Portfolio 10 Lease Expirations 12 Debt Summary 21
Financial Summary 5 Portfolio Key Metrics 11 Stabilized Properties 13 Property-Level Debt 22
Balance Sheets 6 Unstabilized Properties 15 Ground Leases 23
Statements of Operations 7 Under Construction Properties 16 Definitions 24
Income Reconciliation 8 Acquisitions / Dispositions 17 Reconciliation of Non-GAAP 25
NOI by Region 9 MPC Land 18
Ward Village Condos 19
Other Assets 20
www.howardhughes.com2
Table of Contents
Bridgeland $5.3 Waiea $3.5
Columbia (0.1) Anaha 0.6
Summerlin 32.1 Ke Kilohana -
The Woodlands / The Woodlands Hills (0.5) Ae`o -
Total $36.8 Total $4.1
3 www.howardhughes.com
1Q18 MPC EBT 1Q18 Condo Gross Profit
Company Profile - Summary & Results
Company Overview - 1Q18 Recent Company Highlights
$ in millions $ in millions
1Q18 MPC & Condominium ResultsOperating Portfolio by Region
NEW YORK--(PRNewswire)--March 21, 2018--Live Nation Entertainment, Inc. (NYSE: LYV) and The
Howard Hughes Corporation® (NYSE: HHC) announced today that the Pier 17 Rooftop Concert Series at
the Seaport District will be programmed exclusively by Live Nation. The highly anticipated 1.5-acre
rooftop is a 3,400-standing, 2,400-seated capacity open-air venue which will feature unmatched views of
the Brooklyn Bridge, the Statue of Liberty, and the city skyline. The concert series will bring elite artists to
New York's newest entertainment destination, with the musical lineup to be announced May 7. Pier 17
stands as a prominent highlight of the revitalized district. The first two floors of the four-story building
will include waterfront restaurants from culinary powerhouses such as Andrew Carmellini, David Chang of
the Momofuku Group, and Jean-Georges Vongerichten. Pier 17 will also include ESPN's new live
broadcast studios, which will launch in early April. Poised to become an iconic entertainment destination,
the Pier 17 rooftop will be one of the most unique venues in the world.
LAS VEGAS--(PRNewswire)--February 26, 2018--The Howard Hughes Corporation® (NYSE: HHC), the Las
Vegas Convention and Visitors Authority (LVCVA), community leaders, Major League Baseball (MLB)
executives, and hundreds of loyal fans broke ground on Friday, February 23 on the Las Vegas Ballpark, a
10,000-person capacity baseball stadium that will be the future home of the Las Vegas 51s ®, the city's
professional baseball team. The team, a member of the Pacific Coast League (PCL) and a Triple-A affiliate
of the New York Mets, is wholly owned by The Howard Hughes Corporation.
DALLAS--(BUSINESS WIRE)--February 23, 2018--The Howard Hughes Corporation® (NYSE: HHC)
announced today that it has repurchased 475,920 shares of its common stock, par value $0.01 per share,
in a private transaction with an unaffiliated entity at a purchase price of $120.33 per share, or
approximately $57,267,453 in the aggregate. The repurchase transaction was consummated on February
21, 2018, and was funded with cash on hand.
Bridgeland
14%
Summerlin
87% The Woodlands-1%
1Q18
MPC
EBT
$36.8M Waiea
85%
Anaha
15%1Q18
Condo
Gross Profit
$4.1M
Exchange / Ticker NYSE: HHC
Share Price - March 31, 2018 139.13$
Diluted Earnings / Shar 0.03$
FFO / Diluted Share 0.68$
Core FFO / Diluted Share 1.02$
AFFO / Diluted Share 0.91$
For more press releases, please visit www.howardhughes.com/press
Retail & Office S.F. Retail & Office S.F. Retail & Office S.F. Retail & Office S.F.
Multifamily Units Multifamily Units Multifamily Units Multifamily Units
Hotel Keys Hotel Keys Hotel Keys Hotel Keys
Other Units Other Units Other Units Other Units
Projected Stabilized NOI Projected Stabilized NOI Projected Stabilized NOI Projected Stabilized NOI
4 www.howardhughes.com
$ in millions $ in millions $ in millions $ in millions
$ in millions$ in millions$ in millions$ in millions
1Q18 - Operating Results by Property Type
Currently Under Construction Currently Unstabilized Currently Stabilized
Currently Unstabilized
Total
-
$291.0$67.7
-
8,684,792
Note: Path to Projected Annual Stabilized NOI charts exclude Seaport NOI until we have greater clarity with respect to the performance of our tenants; however, the operating portion of Seaport is included in
1Q18 Operating Results by Property Type. See page 16 for Stabilized NOI Yield and other project information.
$153.6$69.7
2,330,200
941
66
Company Profile - Summary & Results (cont'd)
1,205,435
827
705
1,438
5,149,157
1,233
205
3,001
976
1,438
Path to Projected Annual Stabilized NOI
Currently Under Construction Currently Stabilized Total
Office
40%
Multifamily
9%
Retail
40%
Hotel
4%
Other
7%
Office
40%
Multifamily
10%
Retail
42%
Hotel
3%
Other
5%
Office
43%
Multifamily
15%
Retail
25%
Hotel
11%
Other
6%
Projected
Stabilized
NOI
$291.0MOffice59%
Multifamily
25%
Retail
4%
Hotel
2% Other
10%
Projected
Stabilized
NOI
$69.7M
Projected
Stabilized
NOI
$67.7M
Projected
Stabilized
NOI
$153.6M
Office
16%
Multifamily
13%
Retail
6%
Hotel
64%
Other
1%
1Q18
Under Construction
NOI
$0.0M
1Q18
Unstabilized
NOI
$9.8M
1Q18
Stabilized
NOI
$37.0M
Office
35%
Multifamily
10%
Retail
33%
Hotel
17%
Other
5%
1Q18
Total
NOI
$46.8M
Office
35%Multifamily
17%
Retail
6%
Hotel
40%
Other
2%
Company Profile Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2017 FY 2016
Share price1 $139.13 $131.27 $117.93 $122.84 $117.25 $131.27 $114.10
Market Capitalization2 $6.0b $5.9b $5.1b $5.3b $5.1b $5.9b $4.9b
Enterprise Value3 $8.3b $7.9b $7.5b $7.7b $7.3b $7.9b $6.9b
Weighted avg. shares - basic (in thousands) 42,976 42,860 42,845 40,373 39,799 41,364 39,492
Weighted avg. shares - diluted (in thousands) 43,363 43,120 43,267 43,051 42,757 43,089 42,729
Total diluted share equivalents outstanding (in thousands) 1 43,301 44,917 43,380 43,401 43,194 44,917 42,961
Earnings Profile (in thousands except for Avg. NOI margin )
Operating Segment Income
Revenues $87,535 $80,727 $77,651 $79,643 $79,640 $317,661 $282,196
Expenses ($44,773) ($45,566) ($41,492) ($42,154) ($39,223) ($168,435) ($150,908)
Company's Share of Equity Method Investments NOI and Cost Basis Investment $4,010 $1,084 $1,186 $1,385 $4,129 $7,784 $7,685
Net Operating Income4 $46,772 $36,245 $37,345 $38,874 $44,546 $157,010 $138,973
Avg. NOI margin 53% 45% 48% 49% 56% 49% 49%
MPC Segment Earnings
Total revenues $55,765 $87,832 $64,929 $78,076 $68,706 $299,543 $253,304
Total expenses5 ($36,449) ($43,300) ($37,299) ($40,762) ($35,357) ($156,718) ($138,409)
Interest income, net6 $6,392 $6,390 $6,355 $5,990 $5,557 $24,292 $21,085
Equity in earnings in Real Estate and Other Affiliates $11,128 $1,682 $6,480 $9,792 $5,280 $23,234 $43,501
MPC Segment EBT6 $36,836 $52,604 $40,465 $53,096 $44,186 $190,351 $179,481
Condo Gross Profit
Revenues7 $10,837 $122,043 $113,852 $148,211 $80,145 $464,251 $485,634
Expenses7 ($6,729) ($85,152) ($86,531) ($106,195) ($60,483) ($338,361) ($319,325)
Condo Net Income $4,108 $36,891 $27,321 $42,016 $19,662 $125,890 $166,309
Debt Summary (in thousands except for percentages )
Total debt payable8 $2,915,220 $2,877,789 $3,014,280 $3,023,122 $2,771,492 $2,877,789 $2,708,460
Fixed rate debt outstanding at end of period $1,522,488 $1,526,875 $1,508,746 $1,514,192 $1,324,634 $1,526,875 $1,184,141
Weighted avg. rate - fixed 4.98% 5.04% 4.99% 5.06% 4.94% 5.04% 5.89%
Variable rate debt outstanding at end of period, excluding condominium financing $1,299,119 $1,317,311 $1,310,265 $1,324,125 $1,309,169 $1,317,311 $1,363,472
Weighted avg. rate - variable 4.32% 4.10% 3.67% 3.64% 3.45% 4.10% 3.33%
Condominium debt outstanding at end of period $93,613 $33,603 $195,269 $184,805 $137,689 $33,603 $160,847
Weighted avg. rate - condominium financing 5.78% 4.49% 7.98% 7.92% 7.68% 7.11% 7.47%
Leverage ratio (debt to enterprise value) 34.92% 36.20% 39.90% 39.10% 38.04% 36.20% 38.80%
(1) Presented as of period end date.
(2) Market capitalization = Closing share price at of the last trading day of the respective period times total diluted share equivalents outstanding as of the date presented.
(3) Enterprise Value = (Market capitalization+ book value of debt + noncontrolling interest) - cash and equivalents.
(4) Net Operating Income = Operating Assets NOI excluding properties sold or in redevelopment + Company's Share of Equity Method Investments NOI and the annual Distribution from our Cost Basis Investment.
(5) Expenses include both actual and estimated future costs of sales allocated on a relative sales value to land parcels sold, including MPC-level G&A and real estate taxes on remaining residential and commercial land.
(6) MPC Segment EBT (Earnings before tax, as discussed in our GAAP financial statements), includes negative interest expense relating to capitalized interest for the segment relating to debt held in other segments and at corporate.
(8) Represents Total mortgages, notes, and loans payable, as stated in our GAAP financial statements as of the respective date, excluding unamortized deferred financing costs and bond issuance costs.
5 www.howardhughes.com
(7) Revenues in the current period represent "Condominium rights and unit sales" and expenses represent "Condominium rights and unit cost of sales" as stated in our GAAP financial statements, based on the new revenue
standard adopted January 1, 2018. Prior periods are presented based on the percentage of completion method ("POC").
Financial Summary
(In thousands, except share amounts)
ASSETS
Investment in real estate:
Master Planned Community assets $ 1,633,492 $ 1,672,484 $ 1,642,278 $ 1,669,561
Buildings and equipment 2,365,773 2,131,973 2,238,617 2,027,363
Less: accumulated depreciation (325,026) (266,260) (321,882) (245,814)
Land 273,444 314,259 277,932 320,936
Developments 1,412,153 994,864 1,196,582 961,980
Net property and equipment 5,359,836 4,847,320 5,033,527 4,734,026
Investment in Real Estate and Other Affiliates 85,911 70,381 76,593 76,376
Net investment in real estate 5,445,747 4,917,701 5,110,120 4,810,402
Cash and cash equivalents 632,838 541,508 861,059 665,510
Restricted cash 132,105 212,450 103,241 249,629
Accounts receivable, net 14,384 10,117 13,041 9,883
Municipal Utility District receivables, net 203,436 160,189 184,811 150,385
Notes receivable, net 8,310 60 5,864 155
Deferred expenses, net 90,839 64,155 80,901 64,531
Prepaid expenses and other assets, net 210,327 501,962 370,027 416,887
Total Assets $ 6,737,986 $ 6,408,142 $ 6,729,064 $ 6,367,382
LIABILITIES AND EQUITY
Liabilities
Mortgages, notes and loans payable, net $ 2,895,771 $ 2,750,254 $ 2,857,945 $ 2,690,747
Deferred tax liabilities 143,581 210,043 160,850 200,945
Warrant liabilities 313,797 332,170
Accounts payable and accrued expenses 619,271 516,742 521,718 572,010
Total Liabilities $ 3,658,623 $ 3,790,836 $ 3,540,513 $ 3,795,872
Equity
Common stock: $.01 par value; 150,000,000 shares authorized, 43,491,595 shares issued and 42,986,302 outstanding as of
March 31, 2018 and 43,300,253 shares issued and 43,270,880 outstanding as of December 31, 2017 436 404 433 398
Additional paid-in capital 3,310,421 2,893,042 3,302,502 2,853,269
Accumulated deficit (175,879) (272,253) (109,508) (277,912)
Accumulated other comprehensive loss (797) (6,428) (6,965) (6,786)
Treasury stock, at cost, 505,293 and 29,373 shares as of March 31, 2018 and December 31, 2017, respectively (60,743) (1,231) (3,476) (1,231)
Total stockholders' equity 3,073,438 2,613,534 3,182,986 2,567,738
Noncontrolling interests 5,925 3,772 5,565 3,772
Total Equity $ 3,079,363 $ 2,617,306 $ 3,188,551 $ 2,571,510
Total Liabilities and Equity $ 6,737,986 $ 6,408,142 $ 6,729,064 $ 6,367,382
Share Count Details (in thousands)
Shares outstanding at end of period (including restricted stock) 42,986 40,312 43,271 39,790
Dilutive effect of stock options1 146 241 200 277
Dilutive effect of warrants2 169 2,641 1,446 2,894
Total Diluted Share Equivalents Outstanding 43,301 43,194 44,917 42,961
(1) Stock options assume net share settlement calculated for the year-to-date period presented.
(2) Warrants assume net share settlement and incremental shares for dilution calculated as of the date presented.
6 www.howardhughes.com
Q1 2018
Unaudited
Balance Sheets
FY 2016FY 2017Q1 2017
Unaudited
(In thousands, except per share amounts)
Revenues:
Condominium rights and unit sales $ 10,837 $ 80,145 $ 464,251 $ 485,634
Master Planned Community land sales 46,565 53,481 248,595 215,318
Minimum rents 49,395 46,326 183,025 173,268
Tenant recoveries 12,760 11,399 45,814 44,330
Hospitality revenues 23,061 19,711 76,020 62,252
Builder price participation 5,081 4,661 22,835 21,386
Other land revenues 4,131 10,582 28,166 16,232
Other rental and property revenues 9,849 5,457 31,414 16,585
Total revenues 161,679 231,762 1,100,120 1,035,005
Expenses:
Condominium rights and unit cost of sales 6,729 60,483 338,361 319,325
Master Planned Community cost of sales 26,043 25,869 121,116 95,727
Master Planned Community operations 10,325 9,394 38,777 42,371
Other property operating costs 23,175 18,508 91,729 65,978
Rental property real estate taxes 8,127 7,537 29,185 26,847
Rental property maintenance costs 3,197 3,028 13,432 12,392
Hospitality operating costs 15,567 13,845 56,362 49,359
Provision for doubtful accounts 776 535 2,710 5,664
Demolition costs 6,671 65 1,923 2,212
Development-related marketing costs 6,078 4,205 20,504 22,184
General and administrative 24,264 18,117 89,882 86,588
Depreciation and amortization 28,188 25,524 132,252 95,864
Total expenses 159,140 187,110 936,233 824,511
Operating income before other items 2,539 44,652 163,887 210,494
Other:
Provision for impairment (35,734)
Gains on sales of properties 32,215 51,367 140,549
Other income, net 687 3,248 11,453
Total other 32,902 54,615 116,268
Operating Income 2,539 77,554 218,502 326,762
Interest income 2,076 622 4,043 1,359
Interest expense (16,609) (17,858) (64,568) (65,724)
Loss on redemption of senior notes due 2021 (46,410) (46,410)
Warrant liability loss (12,562) (43,443) (24,410)
Gain on acquisition of joint venture partner's interest 5,490 23,332 27,088
Gain (loss) on disposal of operating assets 3,868 (1,117)
Equity in earnings from Real Estate and Other Affiliates 14,386 8,520 25,498 56,818
Income before taxes 2,392 15,356 120,822 320,776
Benefit (Provision) for income taxes (558) (9,697) 45,801 (118,450)
Net income 1,834 5,659 166,623 202,326
Net loss (income) attributable to noncontrolling interests (360) 1,781 (23)
Net income attributable to common stockholders $ 1,474 $ 5,659 $ 168,404 $ 202,303
Basic income per share $ 0.03 $ 0.14 $ 4.07 $ 5.12
Diluted income per share $ 0.03 $ 0.13 $ 3.91 $ 4.73
7 www.howardhughes.com
Comparative Statements of Operations: Total Portfolio
Q1 2018 FY 2016FY 2017Q1 2017
Unaudited Unaudited
(In thousands, except per share amounts)
RECONCILIATION OF NET INCOME TO FFO
Net income attributable to common shareholders $ 1,474 $ 5,659 $ 168,404 $ 202,303
Add:
Segment real estate related depreciation and amortization 26,319 23,549 123,954 89,368
(Gain) loss on disposal of operating assets (3,868) 1,117
Gains on sales of properties (32,215) (51,367) (140,549)
Income tax expense (benefit) adjustments - deferred
(Gain) loss on disposal of operating assets 1,424 (419)
Gains on sales of properties 12,081 19,127 52,706
Impairment of depreciable real estate properties 35,734
Reconciling items related to noncontrolling interests 360 (1,781) 23
Our share of the above reconciling items included in earnings from unconsolidated joint ventures 1,513 830 4,385 4,305
FFO $ 29,666 $ 9,904 $ 260,278 $ 244,588
Adjustments to arrive at Core FFO:
Acquisition expenses $ $ 32 $ 109 $ 526
Loss on redemption of senior notes due 2021 46,410 46,410
Gain on acquisition of joint venture partner's interest (5,490) (23,332) (27,088)
Warrant loss 12,562 43,443 24,410
Severance expenses 261 828 2,525 453
Non-real estate related depreciation and amortization 1,869 1,975 8,298 6,496
Straight-line amortization (3,340) 1,961 (7,782) (10,861)
Deferred income tax expense (benefit) 246 (3,193) (64,014) 61,411
Non-cash fair value adjustments related to hedging instruments 216 (198) 905 1,364
Share based compensation 2,526 1,906 8,211 7,343
Other non-recurring expenses (development related marketing and demolition costs) 12,749 4,270 22,427 24,396
Our share of the above reconciling items included in earnings from unconsolidated joint ventures 94 75 502 677
Core FFO $ 44,287 $ 71,042 $ 297,980 $ 333,715
Adjustments to arrive at AFFO:
Tenant and capital improvements $ (4,532) (4,328) $ (15,803) $ (14,224)
Leasing Commissions (399) (686) (2,995) (3,189)
AFFO $ 39,356 $ 66,028 $ 279,182 $ 316,302
FFO per diluted share value $ 0.68 $ 0.23 $ 6.04 $ 5.72
Core FFO per diluted share value $ 1.02 $ 1.66 $ 6.92 $ 7.81
AFFO per diluted share value $ 0.91 $ 1.54 $ 6.48 $ 7.40
8 www.howardhughes.com
Reconciliation of Net Income to FFO, Core FFO and AFFO
Q1 2018 Q1 2017 FY 2017 FY 2016
Dollars in thousands
Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units
Stabilized Properties
Office - Houston 100% 1,477,006 1,396,543 1,428,129 95% 97% $38,699 $40,060
Office - Columbia 100% 1,049,724 973,706 996,139 93% 95% $14,992 $15,295
Office - Summerlin 100% 206,279 197,963 201,138 96% 98% $5,367 $5,700
Retail - Houston 100% 292,651 284,169 285,603 97% 98% $9,554 $9,903
Retail - Columbia 100% 89,199 89,199 89,199 100% 100% $2,086 $2,200
Retail - Hawaii 100% 918,669 815,308 876,782 89% 95% $19,297 $19,297
Retail - Other 100% 264,971 259,299 264,179 98% 100% $6,862 $6,500
Retail - Summerlin 100% 824,067 728,974 783,378 88% 95% $21,845 $26,300
Multi-Family - Houston 100% 707 684 702 97% 99% $7,600 $9,100
Multi-Family - Columbia (d) 50% 13,591 380 13,591 342 13,591 356 100% 90% 100% 94% $2,682 $3,500
Multi-Family - New York (d) 100% 13,000 22 13,000 20 13,000 21 100% 91% 100% 95% $418 $600
Multi-Family - Summerlin 100% 124 117 123 94% 99% $2,774 $2,200
Hospitality - Houston 100% 205 166 81% 81% $6,173 $4,500
Other Assets (e) $8,368 $8,464
Total Stabilized Properties (f) $146,719 $153,619
Unstabilized Properties
Office - Houston 100% 652,569 386,437 426,182 59% 65% $5,561 $14,500 2.0
Office - Columbia 100% 331,223 210,261 241,277 63% 73% $1,310 $8,700 2.4
Retail - Houston (g) 100% 83,497 62,452 67,138 75% 80% $1,149 $1,700 0.0
Retail - Hawaii 100% 86,337 62,371 71,380 72% 83% $1,121 $2,709 1.0
Multi-Family - Houston 100% 23,280 390 21,552 380 23,126 386 93% 97% 99% 99% $6,563 $7,500 1.6
Multi-Family - Columbia 50% 28,529 437 97 122 0% 22% 0% 28% ($347) $4,000 1.0
Hospitality - Houston 100% 705 453 453 64% 64% $25,309 $27,000 2.0
Self Storage - Houston 100% 1,438 551 551 38% 38% $231 $1,600 2.0
Total Unstabilized Properties $40,896 $67,709 1.8
Under Construction Properties
Office - Houston 100% 203,000 203,000 100% $5,100 1.0
Office - Columbia 100% 320,000 150,000 47% $9,200 5.0
Office - Summerlin 100% 325,000 216,250 67% $7,600 1.5
Office - Other 33% 1,400,000 493,797 38% $19,641 5.0
Retail - Houston 100% 60,300 45,000 75% $1,668 2.0
Retail - Hawaii 100% 21,900 21,900 100% $1,081 2.0
Multi-Family - Houston 100% 292 $3,500 2.0
Multi-Family - Columbia 100% 382 $9,162 5.0
Multi-Family - Summerlin 100% 267 $4,400 2.0
Hospitality - New York 35% 66 $1,300 0.0
Other - Summerlin 100% $7,000 1.0
Total Under Construction Properties $0 $69,653 3.7
Total/ Wtd. Avg. for Portfolio $187,614 $290,980 3.0
Notes
(a) Includes our share of NOI for our joint ventures.
(b) Annualized 1Q18 NOI includes distribution received from cost method investment in 1Q18. For purposes of this calculation, this one time annual distribution is not annualized.
(c) Table above excludes Seaport NOI until we have greater clarity with respect to the performance of our tenants. See page 16 for Stabilized NOI Yield and other project information.
(d) Multi-Family square feet represent ground floor retail whereas multi-family units represent residential units for rent.
(e) Other assets are primarily made up our share of equity method investments not included in other categories. These assets can be found on page 14 of this presentation.
(f) For Stabilized Properties, the difference between 1Q18 Annualized NOI and Stabilized NOI is attributable to a number of factors which may include timing, free rent or other temporary abatements, tenant turnover and market factors.
(g) Retail - Houston in the Unstabilized Properties section is inclusive of retail in Bridgeland.
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1Q18 Leased (%) 1Q18
Annualized
NOI (b)
Stabilized
NOI (c)
Time to
Stabilize
(Years)
9
NOI by Region
Property
Total%
Ownership
(a)
1Q18 Occupied (#) 1Q18 Leased (#) 1Q18 Occupied (%)
MPC Performance - 1Q18 & 1Q17
Note
(a) Commercial acres may be developed internally or sold.
(b) Reconciliation from GAAP MPC segment earnings before tax (EBT) measure to MPC Net Contribution for the three months ended March 31, 2018 is found under Reconciliation of Non-GAAP Measures on page 25.
(c) Total excludes NOI from non-core operating assets, and NOI from core assets within Hawaii and New York as these regions are not defined as MPCs.
(d) Est. Stabilized NOI (Future) represents all assets within the respective MPC regions, inclusive of stabilized, unstabilized, and under construction.
10 www.howardhughes.com
MPC Portfolio
MPC Net Contribution (1Q18) (b) $13,819 ($7,810) ($160)
Remaining Saleable Acres
Income-Producing Assets
Nevada Texas Maryland($ in thousands)
$57,124
$105,140 $20,722
Operating Asset Performance - 2018 & Future
$20,395 $2,487 ($303)MPC Net Contribution (1Q17) (b)
$239,613
Total (c)
$5,849
$22,579
$159,677
1.9 4.2
$130,432 $52,057
Annualized 1Q18 In-Place NOI
Wtd. Avg. Time to Stab. (yrs.)
$33,815
1.6
Est. Stabilized NOI (Future) (d)
Residential
82%
Commercial
18%
Residential
62%
Commercial
38%
Commercial
100%
Stabilized
67%
Unstabilized
33%
Stabilized
52%
Unstabilized
48%
Stabilized
40%
Unstabilized
60%
Master Planned Communities -
Remaining Saleable Acres (a)
Income Producing Assets -
Stabilized & Unstabilized
Woodlands Woodlands Hills Bridgeland Summerlin Columbia Total Hawaii Seaport Other Total
Houston, TX Houston, TX Houston, TX Las Vegas, NV Columbia, MD MPC Regions Honolulu, HI New York, NY Non-MPC
Operating - Stabilized Properties
Office s.f. 1,477,006 - - 206,279 1,049,724 2,733,009 - - - -
Retail s.f. 292,651 - - 824,067 102,790 1,219,508 918,669 - 264,971 1,183,640
Multifamily units 707 - - 124 380 1,211 - 22 - 22
Hotel Rooms 205 - - - - 205 - - - -
Self Storage Units - - - - - - - - - -
Operating - Unstabilized Properties
Office s.f. 652,569 - - - 331,223 983,792 - - - -
Retail s.f. (a) 23,280 - 83,497 - 28,529 135,306 86,337 - - 86,337
Multifamily units 390 - - - 437 827 - - - -
Hotel rooms 705 - - - - 705 - - - -
Self Storage Units 1,438 - - - - 1,438 - - - -
Operating - Under Construction Properties
Office s.f. 203,000 - - 325,000 320,000 848,000 - - 1,400,000 1,400,000
Retail s.f. (b) 60,300 - - - - 60,300 21,900 - - 21,900
Multifamily units 292 - - 267 382 941 - - - -
Hotel rooms - - - - - - - 66 - 66
Self Storage Units - - - - - - - - - -
Residential Land
Total gross acreage/condos (c) 28,475 ac. 2,055 ac. 11,470 ac. 22,500 ac. 16,450 ac. 80,950 ac. 1,381 n.a. n.a. 1,381
Current Residents (c) 116,000 - 8,800 108,000 112,000 344,800 n.a. n.a. n.a. -
Remaining saleable acres/condos 223 1,414 2,425 3,523 n.a. 7,585 56 n.a. n.a. 56
Estimated price per acre (d) $697 $270 $369 $647 n.a. n.a. n.a. n.a. -
Commercial Land
Total acreage remaining 743 171 1,535 793 97 3,339 n.a. n.a. n.a. -
Estimated price per acre (e) $945 $552 $470 $759 $576 n.a. n.a. n.a. -
Notes
Portfolio Key Metrics herein include square feet, units and rooms included in joint venture projects. Sq. ft. and units are not shown at share.
(a) Retail s.f. within the Summerlin region excludes 381,767 sq. ft. of anchors.
(b) Retail s.f. within New York region excludes Pier 17 and Uplands, pending final plans for this project.
(c) Acreage and current residents shown as of December 31, 2017.
(d) Residential pricing represents average price per acre achieved in 1Q18.
(e) Commercial pricing represents average price per acre in 2017. These estimates of current value are based upon recent sales, third party appraisals and third party MPC experts.
11 www.howardhughes.com
MPC Regions Non-MPC Regions
Portfolio Key Metrics
12 www.howardhughes.com
Lease Expirations
Houston Las Vegas Columbia Hawaii Other
Office
Retail
Weighted Avg. Lease Term
D.C. - 7 Years
N.Y. - 12 Years
Blended - 10 years
0%
5%
10%
15%
20%
25%
30%
Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028+
%
o
f A
nn
ua
liz
ed
C
as
h
R
en
t E
xp
ir
in
g
Office and Retail Lease Expirations
Total Office and Retail Portfolio as of March 31, 2018
Office Expirations Retail Expirations
$31.50 $39.54
29.58 41.31
30.65 53.04
32.37 27.28
32.77 48.49
29.83 52.91
29.70 36.97
33.73 55.25
33.29 36.80
28.95 40.93
Thereafter 44.13 25.35
Total
5,154 4.87%
25,802 24.38%
5,294 5.00%
5,376 5.08%
22,179 20.96%
8,559 8.09%
6,600 6.24%
Annualized Cash Rent
($ in thousands)
Percentage of
Annualized Cash Rent
$3,754 3.55%
6,586 6.22%
6,260 5.92%
12.21%
13.98%
1.71%
10,255 9.69%
$105,819 100.00%
12,405
$101,578 100.00%
7,746
2024
2025
2026
2027
2019
2020
2021
2022
1,739
14,204
0 3
8,499
14,559
12,922
1.94%
Annualized Cash Rent
($ in thousands)
Percentage of
Annualized Cash Rent
2018
Wtd. Avg.
Annualized Cash
Rent Per Leased Sq.
Ft.
6,377
Wtd. Avg.
Annualized Cash
Rent Per Leased Sq.
Ft.
9,864 9.71%
11,290
$1,974
7.63%
8.37%
6.28%
14.33%
12.72%
11.11%
Expiration Year
`
Dollars in thousands
Office
3 Waterway Square
4 Waterway Square
1400 Woodloch Forest
1735 Hughes Landing Boulevard
2201 Lake Woodlands Drive
3831 Technology Forest
9303 New Trails
One Hughes Landing
Two Hughes Landing
10-70 Columbia Corporate Center
Columbia Office Properties
One Mall North
One Summerlin
Total Office
Retail
20/25 Waterway Avenue Houston, TX
1701 Lake Robbins Houston, TX
2000 Woodlands Parkway Houston, TX
Creekside Village Green Houston, TX
Hughes Landing Retail Houston, TX
Waterway Garage Retail Houston, TX
Columbia Regional Columbia, MD
Ward Village Retail Honolulu, HI
Downtown Summerlin Las Vegas, NV
Outlet Collection at Riverwalk New Orleans, LA
Total Retail
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6,861
5,700
2,200
100% 824,067 88% 95%
800
2,097
6,500
93%
26,300
100% 89,199 100% 100%
100% 918,669 89% 95% 19,297 19,297
100% 12,376
13
Las Vegas, NV 100% 206,279 96% 98% 5,366
2,086
100% 21,513 100% 100% 658
2,093
100% 264,971 98% 100%
21,845
1,861
2,389,557 $59,643 $64,200
$61,0552,733,009 $59,059
100% 126,131 99% 99% 4,375 4,375
100% 74,669 91%
100% 100% 1,311
Columbia, MD 100% 98,607 97% 97% 1,856
% Rentable 1Q18 1Q18 1Q18 Stabilized
Property Location Ownership Sq. Ft. / Units % Occ. % Leased NOI NOI
Stabilized Properties
Annualized Est.
6,240
Houston, TX 100% 197,714 95% 95% 5,825 6,000
Houston, TX 100% 197,719 99% 100% 6,440
Houston, TX 100% 232,021 100% 100% $7,018 $6,900
Houston, TX 100% 218,551 100% 100% 6,735 6,856
Houston, TX 100% 24,119 0% 100% (46) 410
Houston, TX 100% 95,078 100% 100% 2,371 2,269
Houston, TX 100% 318,170 100% 100% 7,251 7,696
Houston, TX 100% 95,667 97% 97% 2,075 1,890
Houston, TX 100% 97,967 57% 63% 1,031 1,800
100% 50,062 100% 100% $2,013 $2,013
12,615Columbia, MD 100% 889,079 92% 94% 11,826
818Columbia, MD 100% 62,038
100% 100% 444 400
100% 7,900 100% 100% (29) 218
Dollars in thousands
Residential
Millennium Six Pines Apartments
Millennium Waterway Apartments
The Metropolitan Columbia, MD
Constellation
85 South Street
Total Residential
Hotel
Embassy Suites at Hughes Landing (a)
Total Hotel
Other
Sarofim Equity Investment
Stewart Title of Montgomery County, TX
Woodlands Ground Leases
Hockey Ground Lease
Summerlin Hospital Distribution
Other Assets Various
Total Other
Total Stabilized
Notes
(a) Hotel property Percentage Occupied is the average for 1Q18.
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Houston, TX
Las Vegas, NV
Houston, TX
100%
20%
Las Vegas, NV 5%
$153,619
490 100%
NA NA
NA NA
NA 1,617
NA NA NA $8,369
$146,719
334
$8,464
14
239 100% NA NA NA
NA 490
Houston, TX 50% NA NA NA 514
Houston, TX 100% 205 81% NA $6,173 $4,500
205 $6,173
% Rentable 1Q18 1Q18 1Q18 Stabilized
Property Location Ownership Sq. Ft. / Units % Occ. % Leased NOI NOI
Las Vegas, NV 100% 124 94% 99% 2,774
NA
Stabilized Properties (cont'd)
Annualized Est.
$4,500
Houston, TX 100% 393 96% 99% 3,483 4,600
Houston, TX 100% 314 98% 99% $4,118
600New York, NY 100% 13,000 / 22 100% / 91% 100% / 95% 418
$4,500
26,591 / 1,233
514
NA NA 3,435 3,435
1,617
50% 13,591 / 380 100% / 90% 100% / 94% 2,682 3,500
$13,475 $15,400
$2,074NA NA $2,074NA
2,200
Dollars in thousands
Office
Three Hughes Landing
1725 Hughes Landing
One Merriweather
Two Merriweather
Total Office
Retail
Lakeland Village Center at Bridgeland
Anaha - Retail (c)
Ae`o - Retail (c)
Total Retail
Residential
One Lakes Edge
m.flats / TEN.M (d)
Total Residential
Hotel
The Woodlands Resort & Conference Center
The Westin at The Woodlands
Total Hotel
Other
HHC 242 Self-Storage
HHC 2978 Self-Storage
Total Other
Total Unstabilized
Notes
(a) With the exception of Hotel properties, Percentage Occupied and Percentage Leased are as of March 31, 2018. Each Hotel property Percentage Occupied is the average for 1Q18.
(b) Company estimates of stabilized NOI are based on current leasing velocity, excluding inflation and organic growth.
(c) Condominium retail Develop. Cost Incurred and Est. Total Costs (Excl. Land) are combined with their respective condominium costs on page 19 of this supplement.
(d) Total Develop. Costs Incurred, Est. Total Cost (Excl. Land), and Est. Stabilized NOI are shown at share.
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$40,896 $67,709
169,834 $15,779 $15,779 $2,270 $4,409
$11,500
NA
$1,600
705 $164,571 $169,740 $25,309 $27,000
33% 7,778 8,476 127 800
42% / 58% 45% / 61%51,809 / 827 $132,384 $136,402
983,792 $222,597 $284,284
$103
$72,360
97,380
$72,360
92,211
$15,918
$6,216
50,655 54,673 (347)
88%
15
Houston, TX
Houston, TX 100% 403 56%
1,438
100% 654 45%
Houston, TX
$8,174
$15,952 $17,083 $230
$8,607
100% 784 33%
$551,283 $623,288
2020
$800 2020
Houston, TX 100% 302 75% 9,391
45%
NA
Houston, TX 100% 23,280 / 390 93% / 97% $6,563$81,729 $81,72999% / 99%
100% 320,815 48% $61 $7,600
Houston, TX 100% 83,497 75% $1,149
Columbia, MD 100% 206,588 67% 1,530
80%
5,100
Columbia, MD 100% 124,635 58% 58% 40,941 (220)
1Q18
Project Name Location Ownership Sq. Ft. / Units % Occ. (a)
82%
Unstabilized Properties
Annualized Est.
% Rentable 1Q18 1Q18 Stabilized Est.
Develop.
Costs
Est.
Total Cost
(Excl. Land) NOI NOI (b) Stab. Date
Houston, TX 100% 331,754 70% 5,500 6,900 2020
% Leased (a)
60%
70%
2020
Incurred
$69,650
54,847
$90,162
74,994
Houston, TX
2020
2018$15,779
2021
2020
2019
$1,700
$16,500 2020
$7,500 2020
10,500
68,701 78,187
$15,779
$6,871 $23,200
29,399 3,600
4,000 2019
86 1,152 2019Honolulu, HI 100% 16,137 21% 59%
Columbia, MD 50% 28,529 / 437 0% / 22% 0% / 28%
Honolulu, HI 100% 70,200 84% 1,035 1,557
Dollars in thousands, except per sq. ft. and unit amounts
Owned & Managed
Office
110 North Wacker3
100 Fellowship Dr
Aristocrat
Two Summerlin
Three Merriweather
Total Office
Retail
Seaport - Uplands / Pier 174
Lake Woodlands Crossing
Total Retail
Other
Summerlin Ballpark5
Total Other
Multifamily
Columbia Multifamily
Creekside Apartments
Downtown Summerlin Apartments
Total Multifamily
Total Under Construction
(2) Represents management's estimate of the first quarter of operations in which the asset may be stabilized.
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$9,162 8%Columbia, MD 100% 382 $2,053 Pending construction Q2 2018 2023 $7,385 $116,386
$7,000 6%
$3,475 $114,670 $7,000
n.a. Under construction
8%Chicago, IL 33% 1,400,000 38% Under construction Q1 2018 2023 $39,033 $48,918 $19,641
StabilizedConst. Est. Develop. Est.
Incurred (Excl. Land) Yield
Start Stabilized Costs Total Cost NOI
Est.
Stabilized
NOI
Project City, % Est. Rentable Percent
(4) Seaport - Uplands / Pier 17 Estimated Rentable sq. ft. and costs are inclusive of the Tin Building, the plans for which are being finalized. Develop. Costs Incurred and Est. Total Costs are shown net of insurance proceeds of
approximately $55 million.
22,016 63,278 8%
14,789
Name
Houston, TX 100% 203,000 100% Under construction Q2 2017
Project Status Date Date2
Q4 2019
State Ownership Sq. Ft. Pre-Leased1
5,062
New York, NY 100% 449,527 60% Under construction
Under construction Q2 2017 Q1 2019 46,661
Las Vegas, NV 100% 145,000 25% Under construction Q2 2017 2020
16
509,827
Project
Name
City,
State
%
Ownership
Est. Number
of Units
Est. Rent
Per Unit
Houston, TX 292
Monthly
Project Status
941
Under construction
Under Construction Properties
$466,933 $746,381
Q4 2020 2,777 15,381 11%Houston, TX 100% 60,300 75% Under construction Q4 2017
9%Las Vegas, NV 100% 180,000 100%
3,500 7%
6% - 8%
4,071
$43,000 - $58,000
$17,061
Yield
1,700
$44,700 - $59,700
Est.
Stabilized
NOI
3,499
$217,773
Stabilized
Total Cost NOI
4,400 7%
7%
$114,670
18,124 49,320
Date2
Develop. Est.
Incurred (Excl. Land)
Start Costs
Est.
Stabilized
Q4 2013 Q1 2021 $464,156 $731,000
2019 $3,475Q1 2018
59,276
21,099
(3) 110 North Wacker Est. Total Cost (Excl. Land) represents HHC's total cash equity requirement. Develop. Costs Incurred represent HHC's equity in the project as of March 31, 2018. Stabilized NOI Yield is based on the projected
building NOI at stabilization and our percentage ownership of the equity capitalization of the project. It does not include the impact of the partnership distribution waterfall.
2,248,000 $99,656 $346,398 $41,474
8%$1,538 Q1 2017
Q3 2020
Q4 2019
$1,924 Under construction Q1 2018
Las Vegas, NV 100% n.a.
(5) Est. Total Cost (Excl. Land) and Stabilized NOI Yield are exclusive of $27 million of costs to aquire the franchise.
9,200
$604,130 $1,425,222 $110,235 - $125,235
Date
Const.
(1) Represents leases signed as of March 31, 2018 and is calculated as the total leased square feet divided by total leasable square feet, expressed as a percentage.
Las Vegas, NV 100% 267
Columbia, MD 100% 320,000 50% Pending construction Q1 2018 2023 5,694 138,221
100%
$34,066
42,111
5,582
In thousands, except rentable SF / Units / Acres
1Q18 Acquisitions
Date Acquired % Ownership Location
Rentable
SF / Units / Acres
Acquisition
Price
1Q18 Dispositions
Date Sold
Rentable
SF / Units / Acres
Sale Price
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Acquisition / Disposition Activity
Property
Property % Ownership Location
No acquisition activity in 1Q18
No disposition activity in 1Q18
Dollars in thousands 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017
Revenues:
Residential land sale revenues $5,639 $2,361 $2,854 $5,419 $7,256 $32,638 $38,536 $46,550 $48,153
Commercial land sale revenues 3,799 2 1,467 13 62 15 5,328
Builder price participation 16 274 96 15 4,969 4,372 5,081 4,661
Other land sale revenues 1,196 1,909 2 10 32 6,629 2,561 2,014 327 2 4,118 10,564
Total revenues $6,851 $8,343 $2,856 $10 $5,549 $15,367 $40,181 $44,984 $327 $2 $55,765 $68,706
Expenses:
Cost of sales - residential land ($2,846) ($1,127) ($1,524) ($1,474) ($2,251) ($20,192) ($21,140) ($26,036) ($24,518)
Cost of sales - commercial land (900) (1) (424) (7) (27) (8) (1,351)
Real estate taxes (1,519) (1,264) (85) (75) (460) (331) (623) (590) (153) (164) (2,840) (2,424)
Land sales operations (2,854) (3,005) (417) (62) (1,293) (1,372) (2,596) (2,410) (321) (123) (7,481) (6,972)
Depreciation and amortization (35) (31) (24) (35) (21) (23) (1) (3) (81) (92)
Total Expenses ($7,254) ($6,327) ($2,026) ($137) ($3,252) ($4,413) ($23,439) ($24,190) ($475) ($290) ($36,449) ($35,357)
Net interest capitalized (expense) (1,108) (912) 195 142 2,964 2,462 4,341 3,868 (3) 6,392 5,557
Equity in earnings from real estate affiliates 11,128 5,280 11,128 5,280
EBT ($1,511) $1,104 $1,025 $15 $5,261 $13,416 $32,211 $29,942 ($148) ($291) $36,836 $44,186
Key Performance Metrics:
Residential
Total acres closed in current period 8.1 4.5 10.6 14.7 18.6 44.7 37.7 NM NM
Price per acre achieved $697 $525 $270 NM $369 $390 $647 $697 NM NM
Avg. gross margins 50% 52% 47% NM 73% 69% 38% 45% NM NM
Commercial
Total acres closed in current period 10.4
Price per acre achieved NM $365 NM NM NM (a) NM (a) NM (a) NM (a) NM NM
Avg. gross margins NM 76% NM NM 50% 71% 46% 56% NM NM
Avg. combined before-tax net margins 50% 67% 47% NM 73% 69% 38% 45% NM NM
Key Valuation Metrics:
Remaining saleable acres
Residential
Commercial
Projected est. % superpads / lot size 0% / 0% / 0% / 88% / 0.25 ac
Projected est. % single-family detached lots / lot size 70% / 0.29 ac 87% / 0.29 ac 89% / 0.16 ac 0% /
Projected est. % single-family attached lots / lot size 30% / 0.08 ac 13% / 0.13 ac 10% / 0.12 ac 0% /
Projected est. % custom homes / lot size 0% / 0% / 1% / 1.0 ac 12% / 0.45 ac
Estimated builder sale velocity (blended total - TTM) (c)
Gross margin range (GAAP), net of MUDs (d)
Gross margin range (Cash), net of MUDs (d)
Residential sellout / Commercial buildout date estimate
Residential
Commercial
Notes
(a) Price per acre achieved is not applicable as commercial land sale revenues represent deferred income.
(b) Does not include 31 commercial acres held in the Strategic Development segment in Downtown Columbia.
(c) Represents the average monthly builder homes sold over the last twelve months ended March 31, 2018.
(e) Represents commercial sale gross margin from 4Q17.
18 www.howardhughes.com
NM
NM
NM
NM
45.0% (e)
2021
NM
2026
2029
2028
2023
75.4%
47.0%
85.9%
50.0%
SummerlinBridgelandWoodlands Maryland
MarylandWoodlands
223
743
1,414
171
2,425
1,535
38.0%
75.4%
73.0%
32 47 102
3,523
793
2039
2039
2034
2045
Woodlands Hills
Woodlands Hills
97 (b)
(d) GAAP gross margin is based on GAAP revenues and expenses which exclude revenues deferred on sales closed where revenue did not meet criteria for recognition, and includes revenues previously deferred that met criteria for recognition in the current
period. Gross margin for each MPC may vary from period to period based on the locations of the land sold and the related costs associated with developing the land sold. Projected cash gross margin includes all future projected revenue less all future
projected development costs, net of expected reimbursable costs, and capitalized overhead, taxes and interest.
Master Planned Community Land
99.4% NM
Bridgeland Summerlin
Total
Key Metrics
Type of building
Number of units
Avg. unit s.f.
Condo s.f.
Street retail s.f.
Stabilized retail NOI ($ in thousands)
Stabilization year
Development progress
Status
Start date (actual or est.)
Completion date (actual or est.)
Total development cost ($m)
Cost-to-date ($m)
Remaining to be funded ($m)
Financial Summary (Dollars in thousands, except per sq. ft.)
Units closed (through 1Q18)
Units under contract (through 1Q18)
Total % of units closed or under contract
Units closed (current quarter)
Units under contract (current quarter)
Square footage closed or under contract (total)
Total % square footage closed or under contract
Target condo profit margin at completion (excl. land cost)
Total cash received (closings & deposits)
Total GAAP revenue recognized
Expected avg. price per sq. ft.
Expected construction costs per retail sq. ft.
Deposit Reconciliation (Dollars in thousands)
Deposits from sales commitment
spent towards construction
held for future use (d)
Total deposits from sales commitment
Notes
(a) We began delivering units at Waiea in November 2016. As of March 31, 2018, we've closed 160 units, we have 6 under contract, and 8 units remaining to be sold.
(b) We began delivering units at Anaha in October 2017. As of March 31, 2018, we've closed 310 units, we have 2 under contract, and 5 units remaining to be sold.
(c) Ke Kilohana consists of 375 workforce units and 49 market rate units.
(d) Total deposits held for future use are shown in Restricted Cash on the balance sheet.
U/C = Under Construction
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6 2 452 395 855
$1,233,731
$1,093,097
$131,708 $82,656 $116,601 $20,257 $351,222
346,611 430,391 372,073 264,488 1,413,563
91.6% 95.8% 95.6%
~30%
89.9% 93.5%
$117,916 $79,872 $68,185 $19,849
$1,300 - $1,350 $700 - $750
95.4% 98.4% 97.0% 93.2% 95.9%
n.a. n.a. 30 5 35
1 3 4
160 310 470
$1,133.0
$30.4 $24.8 $146.7 $138.4 $340.3
$394.2 $376.5 $281.8 $80.5
$218.9 $1,473.3
Complete Complete 1Q19 2019
1,094
378,238 449,205 389,368 294,273 1,511,084
2,174 1,417 836 694
174 317 466 424 1,381
Luxury Upscale WorkforceUltra-Luxury
Ward Village Condominiums
Waiea (a) Anaha (b) Ae'o Ke Kilohana (c) Total
2Q14 4Q14 1Q16 4Q16
Opened Opened U/C U/C
$453
2017
114,5008,200 16,100 68,300 21,900
2019 2020
$424.6 $401.3 $428.5
$1,300 - $1,325
$13,792 $2,784 $48,416 $408 $65,400
$285,822
~$1,100
$4,243$1,152 $1,557 $1,081
2019
$1,900 - $1,950 $1,100 - $1,150
Notes
Planned Future Development
The Elk Grove Collection Plan to build a 400,000 Sq. Ft. outlet retail center. Sold 36 acres for $36 million in total proceeds in
2017.
Landmark Mall Plan to transform the mall into an open-air, mixed-use community. In January 2017, we acquired the
11.4 acre Macy's site for $22.2 million.
Cottonwood Mall Under contract to sell in separate parcels. First closing expected in 2018.
Circle T Ranch and Power Center 50/50 joint venture with Hillwood Development Company. In 2016, the joint venture sold 72 acres to
an affiliate of Charles Schwab Corporation.
West Windsor Zoned for approximately 6 million square feet of commercial uses.
AllenTowne Located 27 miles north of Downtown Dallas. Agricultural property tax exemptions are in place for
most of the property, which reduces carrying costs.
Bridges at Mint Hill Zoned for approximately 1.3 million square feet of commercial uses.
Maui Ranch Land Two, non-adjacent, ten-acre parcels zoned for native vegetation.
Fashion Show Air Rights Air rights above the Fashion Show Mall located on the Las Vegas Strip.
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Other Assets
Name State Own Acres
Property City, %
Alexandria, VA 100% 33
Elk Grove, CA 100% 64
Westlake, TX 50% 207
Holladay, UT 100% 54
West Windsor, NJ 100% 658
Maui, HI 100% 20
Charlotte, NC 91% 210
Allen, TX 100% 238
20
Las Vegas, NV 80% N/A
(In thousands)
Fixed-rate debt:
Unsecured 5.375% Senior Notes $ 1,000,000 $ 1,000,000
Secured mortgages, notes and loans payable 497,960 499,299
Special Improvement District bonds 24,528 27,576
Variable-rate debt:
1,299,119 1,317,311
Condominium financing (a) 93,613 33,603
Mortgages, notes and loans payable $ 2,915,220 $ 2,877,789
Unamortized bond issuance costs (6,701) (6,898)
Deferred financing costs, net (12,748) (12,946)
Total consolidated mortgages, notes and loans payable $ 2,895,771 $ 2,857,945
Total unconsolidated mortgages, notes and loans payable at pro-rata share $ 86,827 $ 84,983
Total Debt $ 2,982,598 $ 2,942,928
(In thousands)
Segment Basis (b)
Mortgages, notes and loans payable, excluding condominium financing (b) 10Q $ 235,045 $ 1,636,759 $ 11,116 c$ 1,882,920 $ 1,006,065 $ 2,888,985
Condominium financing 93,613 a, c 93,613 93,613
Less: cash and cash equivalents (b) (104,427) (72,703) (33,393) (210,523) (471,948) (682,471)
Special Improvement District receivables (26,371) (26,371) (26,371)
Municipal Utility District receivables (203,436) (203,436) (203,436)
Net Debt $ (99,189) $ 1,564,056 $ 71,336 $ 1,536,203 $ 534,117 $ 2,070,320
(In thousands)
Mortgages, notes and loans payable $ 89,556 $ 936,892 $ 528,415 $ 1,360,357 $ 2,915,220
Interest Payments 137,438 354,602 158,768 143,867 794,675
Ground lease and other leasing commitments 8,769 16,378 15,527 314,129 354,803
Total consolidated debt maturities and contractual obligations $ 235,763 $ 1,307,872 $ 702,710 $ 1,818,353 $ 4,064,698
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Mortgages, notes and loans payable, excluding condominium financing (a)
Debt Summary
March 31, December 31,
2018 2017
Consolidated Debt Maturities and Contractual Obligations by Extended Maturity Date as of March 31, 2018 (c)
(c) Mortgages, notes and loans payable and condominium financing are presented based on extended maturity date. Extension periods generally can be exercised at our option at the initial maturity date, subject to customary extension
terms that are based on property performance as of the initial maturity date and/or extension date. Such extension terms may include, but are not limited to, minimum debt service coverage, minimum occupancy levels or condominium
sales levels, as applicable, and other performance criteria. We may have to pay down a portion of the debt in order to obtain the extension if we are not in compliance with the covenants of the financing arrangement.
Net Debt on a Segment Basis, at share as of March 31, 2018
1 year 1-3 years 3-5 years 5 years and thereafter Total
Master
Planned
Communities
Operating
Assets
Strategic
Developments
Segment
Totals
Non-
Segment
Amounts Total
(b) Each segment includes our share of related cash and debt balances for all joint ventures included in Investments in Real Estate and Other Affiliates. Please see our Liquidity and Capital Resources discussion in the Form 10-Q for Q1
2018 for additional information.
(a) $409.4 million and $428.3 million of variable‑rate debt has been swapped to a fixed-rate for the term of the related debt as of March 31, 2018 and December 31, 2017, respectively.
Notes
(a) Extended maturity assumes all extension options are exercised if available based on property performance.
(b) Excludes JV debt, Corporate level debt, and SID bond debt related to Summerlin MPC & Retail.
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Property Level Debt
22
Asset
Contract
Interest Rate
Interest Rate
Hedge
Current Annual
Interest Rate
Initial / Extended
Maturity (a)
Master Planned Communities
The Woodlands Master Credit Facility $150,000 L+275 Floating/Cap 4.55% Apr-20 / Apr-21
Bridgeland Credit Facility $65,000 L+315 Floating 5.32% Nov-20 / Nov-22
$215,000
Operating Assets
Outlet Collection at Riverwalk $53,357 L+275 Floating 4.55% Oct-17 / Oct-18
1725-35 Hughes Landing Boulevard $118,377 L+165 Floating 3.45% Jun-18 / Jun-19
The Westin at The Woodlands $57,946 L+265 Floating 4.45% Aug-18 / Aug-19
Three Hughes Landing $45,058 L+260 Floating 4.40% Dec-18 / Dec-20
Lakeland Village Center at Bridgeland $11,688 L+235 Floating 4.15% May-18 / May-20
Embassy Suites at Hughes Landing $31,245 L+250 Floating 4.30% Oct-18 / Oct-20
The Woodlands Resort & Conference Center $64,000 L+325 Floating 5.05% Dec-18 / Dec-20
One Merriweather $43,892 L+215 Floating 3.95% Feb-20 / Feb-21
Downtown Summerlin $272,277 L+215 Floating / Swap 4.73% Sep-20 / Sep-21
Two Merriweather $20,952 L+250 Floating 4.30% Oct-20 / Oct-21
HHC 242 Self-Storage $6,354 L+260 Floating 4.40% Oct-19 / Oct-21
HHC 2978 Self-Storage $5,790 L+260 Floating 4.40% Jan-20 / Jan-22
70 Columbia Corporate Center $20,000 L+200 Floating 3.80% May-20 / May-22
One Mall North $14,463 L+225 Floating 4.05% May-20 / May-22
10-60 Corporate Centers $80,000 L+175 Floating / Swap 3.48% May-20 / May-22
20/25 Waterway Avenue $13,582 4.79% Fixed 4.79% May-22
Millennium Waterway Apartments $54,839 3.75% Fixed 3.75% Jun-22
Ward Village $238,718 L+250 Floating / Swap 3.97% Sep-21 / Sep-23
9303 New Trails $11,906 4.88% Fixed 4.88% Dec-23
4 Waterway Square $34,869 4.88% Fixed 4.88% Dec-23
3831 Technology Forest Drive $21,881 4.50% Fixed 4.50% Mar-26
Kewalo Basin Harbor L+275 Floating 4.55% Sep-27
Millennium Six Pines Apartments $42,500 3.39% Fixed 3.39% Aug-28
3 Waterway Square $50,003 3.94% Fixed 3.94% Aug-28
One Hughes Landing $52,000 4.30% Fixed 4.30% Dec-29
Two Hughes Landing $48,000 4.20% Fixed 4.20% Dec-30
One Lakes Edge $69,440 4.50% Fixed 4.50% Mar-29 / Mar-31
Constellation Apartments $24,200 4.07% Fixed 4.07% Jan-33
Hughes Landing Retail $35,000 3.50% Fixed 3.50% Dec-36
Columbia Regional Building $25,000 4.48% Fixed 4.48% Feb-37
$1,567,337
Strategic Developments
Ke Kilohana $2,201 L+325 Floating 5.05% Dec-19 / Dec-20
Ae'o $91,412 L+400 Floating/Cap 5.80% Dec-19 / Dec-21
100 Fellowship Drive $1 L+150 Floating 3.30% May-22
Aristocrat P+40 Floating 5.15% Oct-22
Two Summerlin P+40 Floating 5.15% Oct-22
Lake Woodlands Crossing Retail $1 L+180 Floating 3.60% Jan-23
Downtown Summerlin Apartments L+225 Floating 4.05% Oct-21 / Oct-24
$93,615
Total (b) $1,875,952
1Q18
Principal Balance
($ in thousands)
Minimum Contractual Ground Lease Payments ($ in thousands)
Pro-Rata Remaining
Ground Leased Asset Share 2018 2019 Thereafter Total
100% $1,633 $2,131 $57,455 $61,219
100% 1,199 1,636 204,078 206,913
100% 225 300 8,900 9,425
$3,057 $4,067 $270,433 $277,557
(a) Includes base ground rent, deferred ground rent and the participation rent, as applicable. Future payments of participation rent are calculated based on the floor only.
(b) Initial expiration is 12/30/2031 but subject to extension options through 12/31/2072.
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Summary of Ground Leases
Three months ended Year Ended December 31
Expiration Date March 31, 2018
Future Cash Payments
Kewalo Basin Harbor 2049 75
Riverwalk (a) 2045-2046 $819
Seaport 2031 (b) 393
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Definitions
Net Operating Income (NOI) - We define NOI as operating cash revenues (rental income, tenant recoveries and other revenue) less operating cash expenses (real
estate taxes, repairs and maintenance, marketing and other property expenses), including our share of NOI from equity investees. NOI excludes straight-line rents
and amortization of tenant incentives, net interest expense, ground rent amortization, demolition costs, amortization, depreciation, development-related marketing
costs and, unless otherwise indicated, Equity in earnings from Real Estate and Other Affiliates. We use NOI to evaluate our operating performance on a property-by-
property basis because NOI allows us to evaluate the impact that factors which vary by property, such as lease structure, lease rates and tenant bases, have on our
Operating Assets because it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with
owning and operating real estate properties and the impact on operations from trends in rental and occupancy rates and operating costs.
Under Construction - Projects in the Strategic segment for which construction has commenced as of March 31, 2018, unless otherwise noted. This excludes MPC
and condominium development.
Unstabilized - Properties in the Operating segment that have not been in service for more than 36 months and do not exceed 90% occupancy. If an office, retail or
multi-family property has been in service for more than 36 months but does not exceed 90% occupancy, the asset is considered underperforming and is included in
Stabilized.
Stabilized - Properties in the Operating segment that have been in service for more than 36 months or have reached 90% occupancy, which ever occurs first. If an
office, retail or multifamily property has been in service for more than 36 months but does not exceed 90% occupany, the asset is considered underperforming.
Reconciliation of Operating Assets segment EBT to Total NOI:
(In thousands)
Total Operating Assets segment EBT $ 7,175 $ (14,356) $ (13,162) $ (9,068) $ 7,922 $ (28,664) $ (22,985)
Straight-line lease amortization (3,690) (2,801) (1,421) (1,816) (1,961) (7,999) (10,689)
Demolition costs 1,443 34 63 65 1,605 194
Development-related marketing costs 1,029 1,067 832 418 3,346 947
Depreciation and Amortization 25,173 33,503 33,885 32,244 22,789 122,421 86,313
Provision for impairment 35,734
Write-off of lease intangibles and other 492 41 15 27 575 25
Other income, net 50 249 (162) 178 315 (4,601)
Equity in earnings from Real Estate Affiliates (2,583) 472 (317) (37) (3,385) (3,267) (2,802)
Interest, net 16,687 15,580 15,940 15,540 14,524 61,584 50,427
Total Operating Assets NOI - Consolidated 42,762 35,412 36,316 37,611 40,577 149,916 132,563
Redevelopments
Historic Area / Uplands (a) (589)
Landmark Mall (676)
Total Operating Asset Redevelopments NOI (1,265)
Dispositions
Cottonwood Square 250 165 161 174 750 705
Park West 1 (8) (39) (14) (60) 1,835
Total Operating Asset Dispositions NOI 251 157 122 160 690 2,540
Consolidated Operating Assets NOI excluding properties sold or in redevelopment $ 42,762 $ 35,161 $ 36,159 $ 37,489 $ 40,417 $ 149,226 $ 131,288
Company's Share NOI - Equity investees $ 575 $ 1,084 $ 1,186 $ 1,385 $ 746 $ 4,401 $ 5,069
Distributions from Summerlin Hospital Investment 3,435 3,383 3,383 2,616
Total NOI $ 46,772 $ 36,245 $ 37,345 $ 38,874 $ 44,546 $ 157,010 $ 138,973
Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue:
(In thousands)
Total residential land sales closed in period $ 42,778 $ 35,881 $ 189,017 $ 163,142
Total commercial land sales closed in period 3,799 18,254 10,753
Net recognized (deferred) revenue:
Bridgeland 2 1,467 6,722 3,780
Summerlin 753 9,712 20,063 29,596
Total net recognized (deferred) revenue 755 11,179 26,785 33,376
Special Improvement District bond revenue 3,032 2,622 14,539 8,047
Total land sales revenue - GAAP basis $ 46,565 $ 53,481 $ 248,595 $ 215,318
Total MPC segment revenue - GAAP basis $ 55,765 $ 68,706 $ 299,543 $ 253,304
Reconciliation of MPC segment EBT to MPC Net Contribution:
(In thousands)
MPC segment EBT $ 36,836 $ 44,186 $ 190,351 $ 179,481
Plus:
Cost of sales - land 26,043 25,869 121,116 95,727
Depreciation and amortization (2,624) 2,750 323 311
MUD and SID bonds collections, net 81 92 56,509 37,672
Distributions from Real Estate and Other Affiliates 10,000 22,900
Less:
MPC development expenditures (43,865) (43,623) (193,087) (149,592)
MPC land acquisitions 506 (1,415) (4,391) (94)
Equity in earnings in Real Estate and Other Affiliates (11,128) (5,280) (23,234) (43,501)
MPC Net Contribution $ 5,849 $ 22,579 $ 157,587 $ 142,904
Reconciliation of Segment EBTs to Net Income
(In thousands)
MPC segment EBT $ 36,836 $ 44,186 $ 190,351 $ 179,481
Operating Assets segment EBT 7,175 7,922 (28,664) (22,985)
Strategic Developments segment EBT 9,020 48,845 169,041 302,022
Corporate and other items (50,639) (85,597) (209,906) (137,742)
Income before taxes 2,392 15,356 120,822 320,776
Provision for income taxes (558) (9,697) 45,801 (118,450)
Net income 1,834 5,659 166,623 202,326
Net (loss) income attributable to noncontrolling interests (360) - 1,781 (23)
Net income attributable to common stockholders $ 1,474 $ 5,659 $ 168,404 $ 202,303
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Three Months Ended March 31, Year Ended December 31,
2018 2017 2017 2016
Reconciliation of Non-GAAP Measures
2017
Q1 2017
2017 2016
Three Months Ended March 31, Year Ended December 31,
Q1 2018 Q4 2016
Three Months Ended March 31, Year Ended December 31,
2018
Q4 2017 Q1 2018
(a) - Effective January 1, 2017, we moved South Street Seaport assets under construction and related activities out of the Operating Assets segment into the Strategic Developments segment. South Street Seaport operating properties and related operating results remain presented within the Operating
Assets segment. The respective segment earnings and NOI presented above in all 2016 periods to reflect this change.
Q4 2017
Q1 2017Q2 2017 FY 2017 FY 2016 (a)Q3 2017