Attached files
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| EX-99.1 - EXHIBIT 99.1 - Howard Hughes Corp | hhcearningsreleaseq32018.htm |
| 8-K - 8-K - Howard Hughes Corp | form8kq32018.htm |
Seaport District Hughes Landing Three Merriweather New York, NY Houston, TX Columbia, MD Supplemental Information Three months ended September 30, 2018 NYSE: HHC The Howard Hughes Corporation, 13355 Noel Road, 22nd Floor, Dallas, TX 75240 HowardHughes.com 214.741.7744
Cautionary Statements Cautionary Statements Forward Looking Statements 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 such as “anticipate,” “estimate,” “expect,” “project,” “forecast,” “plan,” “intend,” "believe," “likely,” “may,” “realize,” “should,” “transform,” “would” and other statements of similar 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, as filed with the Securities and Exchange Commission on February 26, 2018. 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. Non-GAAP Financial Measures 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 accordance with NAREIT’s definition. Since FFO excludes depreciation and amortization, 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. 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. Additional Information 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 documents are available and may be accessed free of charge through the “Investors” section of our website under the "SEC Filings" 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. HowardHughes.com 214.741.7744 2
Table of Contents Table of Contents FINANCIAL OVERVIEW PORTFOLIO OVERVIEW PORTFOLIO PERFORMANCE DEBT & OTHER Company Profile 4 MPC Portfolio 12 Lease Expirations 14 Debt Summary 23 Financial Summary 6 Portfolio Key Metrics 13 Stabilized Properties 15 Property-Level Debt 24 Balance Sheets 7 Unstabilized Properties 17 Ground Leases 26 Statements of Operations 8 Under Construction Properties 18 Definitions 27 Income Reconciliations 9 Acquisitions / Dispositions 19 Reconciliations of Non-GAAP 28 NOI by Region 10 MPC Land 20 Ward Village Condos 21 Other Assets 22 HowardHughes.com 214.741.7744 3
Company Profile - Summary & Results Company Profile - Summary & Results Company Overview - Q3 2018 Recent Company Highlights DALLAS--(PRNewswire)--Sept. 24, 2018-- The Howard Hughes Corporation announced that it has Exchange / Ticker NYSE: HHC closed on a secured, non-recourse corporate credit facility with loan proceeds of up to $700 million, comprised of a $615 million term loan and an $85 million revolver. Additionally, The Howard Hughes Corporation will have the right to increase the revolver by $50 million through the facility's accordion Share Price - September 30, 2018 $ 124.22 feature. LAS VEGAS--(PRNewswire)--Sept. 18, 2018--The Howard Hughes Corporation, owner of the Las Vegas 51s, announced today a two-year Player Development Contract (PDC) between the Las Vegas Diluted Earnings / Share $ 0.54 51s and the Oakland A's. The Las Vegas 51s, the city's professional Triple-A baseball team and a member of the Pacific Coast League (PCL), will begin the 2019 season in their new stadium the Las Vegas Ballpark, which is currently under construction in Downtown Summerlin. FFO / Diluted Share $ 1.24 NEW YORK--(PRNewswire)--Sept. 12, 2018--The Howard Hughes Corporation celebrated last week the opening of 10 Corso Como in the historic Seaport District, marking a milestone in the Lower Core FFO / Diluted Share $ 1.67 Manhattan neighborhood's ongoing transformation into a fashion, cultural, culinary and entertainment hub. Formally opened on Friday, September 7 in conjunction with New York Fashion Week, the store is the only U.S. location for the iconic Milan-based fashion destination and features an Italian café and restaurant, fashion, design objects and books, beauty, a garden, as well as an art gallery. AFFO / Diluted Share $ 1.63 Operating Portfolio by Region Q3 2018 MPC & Condominium Results $ in millions $ in millions Q3 2018 MPC EBT Q3 2018 Condo Gross Profit Bridgeland $ 13.0 Waiea $ 2.0 Columbia (0.4) Anaha (0.1) Summerlin 77.8 Ke Kilohana — The Woodlands/The Woodlands Hills (1.5) Ae`o — Total $ 88.9 Total $ 1.9 HowardHughes.com 214.741.7744 4
Company Profile - Summary & Results (con't) Company Profile - Summary & Results (cont'd) Path to Projected Annual Stabilized NOI Currently Under Construction Currently Unstabilized Currently Stabilized Total $ in millions $ in millions $ in millions $ in millions Retail & Office S.F. 2,430,200 Retail & Office S.F. 1,438,691 Retail & Office S.F. 5,171,937 Retail & Office S.F. 9,040,828 Multifamily Units 1,639 Multifamily Units 437 Multifamily Units 1,622 Multifamily Units 3,698 Hotel Keys 66 Hotel Keys 705 Hotel Keys 205 Hotel Keys 976 Other Units — Other Units 1,408 Other Units — Other Units 1,408 Projected Stabilized NOI $ 85.1 Projected Stabilized NOI $ 66.6 Projected Stabilized NOI $ 165.9 Projected Stabilized NOI $ 317.6 Q3 2018 - Operating Results by Property Type Currently Under Construction Currently Unstabilized Currently Stabilized Total $ in millions $ in millions $ in millions $ in millions 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 3Q18 Operating Results by Property Type. See page 18 for Stabilized NOI Yield and other project information HowardHughes.com 214.741.7744 5
Financial Summary Financial Summary Company Profile Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 YTD Q3 2018 YTD Q3 2017 Share price1 $124.22 $132.50 $139.13 $131.27 $117.93 $124.22 $117.93 Market Capitalization2 $5.4b $5.7b $6.0b $5.9b $5.1b $5.4b $5.1b Enterprise Value3 $8.2b $8.3b $8.3b $7.9b $7.5b $8.2b $7.5b Weighted avg. shares - basic (in thousands) 43,066 42,573 42,976 42,860 42,845 43,023 40,860 Weighted avg. shares - diluted (in thousands) 43,317 42,942 43,363 43,120 43,267 43,281 43,098 Total diluted share equivalents outstanding (in thousands)1 43,194 43,325 43,301 44,917 43,380 43,080 43,380 Earnings Profile (in thousands except for Avg. NOI margin) Operating Segment Income Revenues $96,528 $89,752 $87,525 $80,727 $77,651 $273,805 $237,582 Expenses ($58,728) ($44,231) ($43,988) ($45,566) ($41,492) ($146,947) ($123,019) Company's Share of Equity Method Investments NOI and Cost Basis Investment $891 $664 $4,010 $1,084 $1,186 $5,565 $6,700 Net Operating Income4 $38,691 $46,185 $47,547 $36,245 $37,345 $132,423 $121,263 Avg. NOI margin 40% 52% 54% 45% 48% 48% 51% MPC Segment Earnings Total revenues $143,135 $62,765 $55,765 $87,832 $64,929 $261,665 $211,711 Total expenses5 ($70,316) ($37,088) ($36,449) ($43,300) ($37,299) ($143,853) ($113,418) Interest (expense) income, net6 $6,626 $6,808 $6,392 $6,390 $6,355 $19,826 $17,902 Other (loss) income, net $18 $— $— $— $— $18 $— Equity in earnings in Real Estate and Other Affiliates $9,454 $14,100 $11,128 $1,682 $6,480 $34,682 $21,552 MPC Segment EBT6 $88,917 $46,585 $36,836 $52,604 $40,465 $172,338 $137,747 Condo Gross Profit Revenues7 $8,045 $20,885 $10,837 $122,043 $113,852 $39,767 $342,208 Expenses7 ($6,168) ($28,816) ($6,729) ($85,152) ($86,531) ($41,713) ($253,209) Condo Net Income $1,877 ($7,931) $4,108 $36,891 $27,321 ($1,946) $88,999 Debt Summary (in thousands except for percentages) Total debt payable8 $3,296,486 $3,163,771 $2,915,220 $2,877,789 $3,014,280 $3,296,486 $3,014,280 Fixed rate debt outstanding at end of period $1,651,695 $1,643,194 $1,522,488 $1,526,875 $1,508,746 $1,651,695 $1,508,746 Weighted avg. rate - fixed 4.60% 4.60% 4.98% 5.04% 4.99% 4.60% 4.99% Variable rate debt outstanding at end of period, excluding condominium financing $1,411,932 $1,355,523 $1,299,119 $1,317,311 $1,310,265 $1,411,932 $1,310,265 Weighted avg. rate - variable 4.78% 3.37% 4.32% 4.10% 3.67% 4.78% 3.67% Condominium debt outstanding at end of period $232,859 $165,054 $93,613 $33,603 $195,269 $232,859 $195,269 Weighted avg. rate - condominium financing 6.04% 5.93% 5.78% 4.49% 7.98% 6.04% 7.98% Leverage ratio (debt to enterprise value) 39.54% 37.59% 34.92% 36.20% 39.90% 39.61% 39.90% (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. Prior periods have been adjusted to be consistent with fiscal 2018 presentation. (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 on debt held in other segments and at corporate. (7) Revenues in 2018 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 year periods are presented based on the percentage of completion method ("POC") and are therefore not comparable to the current period. (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. HowardHughes.com 214.741.7744 6
Balance Sheets Balance Sheets (In thousands, except shares and par value amounts) Q3 2018 Q3 2017 FY 2017 FY 2016 ASSETS Unaudited Unaudited Investment in real estate: Master Planned Communities assets $ 1,621,168 $ 1,667,496 $ 1,642,278 $ 1,669,561 Buildings and equipment 2,510,945 2,155,071 2,238,617 2,027,363 Less: accumulated depreciation (359,445) (303,887) (321,882) (245,814) Land 302,858 314,383 277,932 320,936 Developments 1,825,847 1,124,079 1,196,582 961,980 Net property and equipment 5,901,373 4,957,142 5,033,527 4,734,026 Investment in real estate and other affiliates 107,720 89,155 76,593 76,376 Net investment in real estate 6,009,093 5,046,297 5,110,120 4,810,402 Cash and cash equivalents 454,080 601,934 861,059 665,510 Restricted cash 158,468 360,281 103,241 249,629 Accounts receivable, net 15,437 9,608 13,041 9,883 Municipal Utility District receivables, net 237,567 193,100 184,811 150,385 Notes receivable, net 40,220 46 5,864 155 Deferred expenses, net 95,811 76,692 80,901 64,531 Prepaid expenses and other assets, net 286,194 435,738 370,027 416,887 Total Assets $ 7,296,870 $ 6,723,696 $ 6,729,064 $ 6,367,382 LIABILITIES AND EQUITY Liabilities Mortgages, notes and loans payable $ 3,261,210 $ 2,993,448 $ 2,857,945 $ 2,690,747 Deferred tax liabilities 148,770 237,013 160,850 200,945 Warrant liabilities — — — 332,170 Accounts payable and accrued expenses 705,864 462,853 521,718 572,010 Total Liabilities $ 4,115,844 $ 3,693,314 $ 3,540,513 $ 3,795,872 Equity Common stock: $.01 par value; 150,000,000 shares authorized, 43,538,420 shares issued and 43,033,127 outstanding as of September 30, 2018 and 43,300,253 shares issued and 43,270,880 outstanding as of December 31, 2017 $ 436 $ 433 $ 433 $ 398 Additional paid-in capital 3,318,747 3,295,586 3,302,502 2,853,269 Accumulated deficit (157,602) (258,629) (109,508) (277,912) Accumulated other comprehensive income (loss) 4,450 (9,017) (6,965) (6,786) Treasury stock, at cost, 505,293 and 29,373 shares as of September 30, 2018 and December 31, 2017, respectively (60,743) (1,763) (3,476) (1,231) Total stockholders' equity 3,105,288 3,026,610 3,182,986 2,567,738 Noncontrolling interests 75,738 3,772 5,565 3,772 Total Equity $ 3,181,026 $ 3,030,382 $ 3,188,551 $ 2,571,510 Total Liabilities and Equity $ 7,296,870 $ 6,723,696 $ 6,729,064 $ 6,367,382 Share Count Details (In thousands) Shares outstanding at end of period (including restricted stock) 43,033 43,207 43,271 39,790 Dilutive effect of stock options1 114 171 200 277 Dilutive effect of warrants2 47 2 1,446 2,894 Total Diluted Share Equivalents Outstanding 43,194 43,380 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. HowardHughes.com 214.741.7744 7
Statements of Operations Comparative Statements of Operations: Total Portfolio (In thousands, except share amounts) Q3 2018 Q3 2017 YTD Q3 2018 YTD Q3 2017 Revenues: Unaudited Unaudited Unaudited Unaudited Condominium rights and unit sales $ 8,045 $ 113,852 $ 39,767 $ 342,208 Master Planned Communities land sales 127,730 54,906 226,727 177,531 Minimum rents 53,244 44,654 153,156 136,053 Tenant recoveries 12,806 11,586 37,808 34,627 Hospitality revenues 19,108 17,776 64,738 57,190 Builder price participation 8,685 5,472 19,394 14,613 Other land revenues 7,145 4,561 15,988 19,606 Other rental and property revenues 20,397 5,929 42,266 17,309 Total revenues 257,160 258,736 599,844 799,137 Expenses: Condominium rights and unit cost of sales 6,168 86,531 41,713 253,209 Master Planned Communities cost of sales 57,183 29,043 109,609 88,288 Master Planned Communities operations 13,044 8,180 33,956 24,881 Other property operating costs 42,942 21,354 91,847 60,153 Rental property real estate taxes 8,519 7,678 24,148 21,765 Rental property maintenance costs 4,456 3,380 11,604 10,016 Hospitality operating costs 14,723 13,525 45,707 41,534 Provision for doubtful accounts 2,282 448 4,417 1,728 Demolition costs 2,835 175 16,166 303 Development-related marketing costs 7,218 5,866 20,484 14,787 General and administrative 20,645 22,362 71,795 63,423 Depreciation and amortization 31,123 35,899 88,398 96,193 Total expenses 211,138 234,441 559,844 676,280 Operating income before other items 46,022 24,295 40,000 122,857 Other: Gains on sales of properties — 237 — 32,452 Other (loss) income, net (3,710) (160) (3,444) 750 Total other (3,710) 77 (3,444) 33,202 Operating Income 42,312 24,372 36,556 156,059 Interest income 2,080 1,764 6,759 3,171 Interest expense (21,670) (17,241) (57,182) (49,547) Loss on redemption of senior notes due 2021 — — — (46,410) Warrant liability loss — — — (43,443) Gain on acquisition of joint venture partner's interest — — — 5,490 Equity in earnings from real estate and other affiliates 8,612 7,467 39,297 25,821 Income before taxes 31,334 16,362 25,430 51,141 Provision for income taxes 7,487 5,846 5,628 31,846 Net income 23,847 10,516 19,802 19,295 Net income attributable to noncontrolling interests (482) (12) (51) (12) Net income attributable to common stockholders $ 23,365 $ 10,504 $ 19,751 $ 19,283 Basic income per share $ 0.54 $ 0.25 $ 0.46 $ 0.47 Diluted income per share $ 0.54 $ 0.24 $ 0.46 $ 0.45 The Company's 2018 three and nine month results are presented in accordance with Topic 606, the new revenue standard adopted January 1, 2018. Please refer to Note 2 in the Company's Form 10-Q for further information. HowardHughes.com 214.741.7744 8
Reconciliations of Net Income to FFO, Core FFO and AFFO (In thousands, except share amounts) Q3 2018 Q3 2017 YTD Q3 2018 YTD Q3 2017 RECONCILIATIONS OF NET INCOME TO FFO Unaudited Unaudited Unaudited Unaudited Net income attributable to common stockholders $ 23,365 $ 10,504 $ 19,751 $ 19,283 Add: Segment real estate related depreciation and amortization 28,880 33,979 82,085 90,342 Gains on sales of properties — (237) — (32,452) Income tax expense (benefit) adjustments - deferred Gains on sales of properties — 83 — 12,164 Reconciling items related to noncontrolling interests 482 12 51 12 Our share of the above reconciling items included in earnings from unconsolidated joint ventures 1,186 963 3,871 2,896 FFO $ 53,913 $ 45,304 $ 105,758 $ 92,245 Adjustments to arrive at Core FFO: Acquisition expenses $ — $ — $ — $ 32 Loss on redemption of senior notes due 2021 — — — 46,410 Gain on acquisition of joint venture partner's interest — — — (5,490) Warrant loss — — — 43,443 Severance expenses 139 361 420 2,449 Non-real estate related depreciation and amortization 2,243 1,920 6,313 5,851 Straight-line amortization (3,676) (2,257) (10,104) (6,903) Deferred income tax expense (benefit) 7,179 6,897 4,621 19,280 Non-cash fair value adjustments related to hedging instruments (394) 68 (1,262) 399 Share based compensation 2,877 1,663 8,231 5,352 Other non-recurring expenses (development related marketing and demolition costs) 10,053 6,041 36,650 15,090 Our share of the above reconciling items included in earnings from unconsolidated joint ventures 191 132 441 423 Core FFO $ 72,525 $ 60,129 $ 151,068 $ 218,581 Adjustments to arrive at AFFO: Tenant and capital improvements $ (1,519) $ (3,541) $ (10,684) $ (10,156) Leasing Commissions (244) (738) (1,694) (2,027) AFFO $ 70,762 $ 55,850 $ 138,690 $ 206,398 FFO per diluted share value $ 1.24 $ 1.05 $ 2.44 $ 2.14 Core FFO per diluted share value $ 1.67 $ 1.39 $ 3.49 $ 5.07 AFFO per diluted share value $ 1.63 $ 1.29 $ 3.20 $ 4.79 HowardHughes.com 214.741.7744 9
NOI by Region NOI by Region % Total 3Q18 Occupied (#) 3Q18 Leased (#) 3Q18 Occupied (%) 3Q18 Leased (%) 3Q18 Time to Ownership Annualized Stabilized Stabilize Property (a) Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units NOI (b) NOI (c) (Years) Stabilized Properties Office - Houston 100% 1,477,006 — 1,413,335 — 1,424,820 — 96% —% 96% —% $38,743 $40,060 — Office - Columbia 100% 1,049,790 — 979,785 — 992,426 — 93% —% 95% —% 16,725 17,678 — Office - Summerlin 100% 206,279 — 197,307 — 203,271 — 96% —% 99% —% 5,507 5,700 — Retail - Houston 100% 292,652 — 282,054 — 285,106 — 96% —% 97% —% 9,636 9,903 — Retail - Columbia 100% 89,199 — 89,199 — 89,199 — 100% —% 100% —% 2,066 2,200 — Retail - Hawaii 100% 918,669 — 854,884 — 864,142 — 93% —% 94% —% 21,744 21,421 — Retail - Other 100% 265,021 — 256,820 — 256,820 — 97% —% 97% —% 5,648 6,500 — Retail - Summerlin 100% 823,450 — 727,740 — 731,443 — 88% —% 89% —% 20,648 26,300 — Multi-Family - Houston (d) 100% 23,280 1,097 23,126 1,019 23,126 1,054 99% 93% 99% 96% 12,584 16,600 — Multi-Family - Columbia (d) 50% 13,591 380 13,591 358 13,591 365 100% 94% 100% 96% 2,728 3,500 — Multi-Family - Summerlin 100% — 124 — 120 — 120 —% 97% —% 97% 2,154 2,200 — Multi-Family - New York (d) 100% 13,000 21 13,000 21 13,000 21 100% 100% 100% 100% 435 600 — Hospitality - Houston 100% — 205 — 169 — 169 —% 82% —% 82% 5,151 4,500 — Other Assets (e) — — — — — — — —% —% —% —% 8,549 8,775 — Total Stabilized Properties (f) $152,318 $165,937 — Unstabilized Properties Office - Houston 100% 909,594 — 485,433 — 528,631 — 53% —% 58% —% $7,114 $20,958 2.3 Office - Columbia 100% 330,727 — 248,516 — 248,516 — 75% —% 75% —% 2,298 8,600 2.4 Retail - Houston (g) 100% 83,497 — 67,138 — 69,534 — 80% —% 83% —% 1,180 1,700 0.0 Retail - Hawaii 100% 86,847 — 70,301 — 80,164 — 81% —% 92% —% 922 2,709 1.0 Multi-Family - Columbia (d) 50% 28,026 437 6,672 292 6,672 309 24% 67% 24% 71% 1,382 4,000 1.0 Hospitality - Houston 100% — 705 — 454 — 454 —% 64% —% 64% 19,290 27,000 2.0 Self Storage - Houston 100% — 1,408 — 826 — 826 —% 59% —% 59% 273 1,600 2.0 Total Unstabilized Properties $32,459 $66,567 2.0 HowardHughes.com 214.741.7744 10
NOI by Region (con't) NOI by Region % Total 3Q18 Occupied (#) 3Q18 Leased (#) 3Q18 Occupied (%) 3Q18 Leased (%) 3Q18 Time to Ownership Annualized Stabilized Stabilize Property (a) Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units NOI (b) NOI (c) (Years) 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 — — — 225,335 — —% —% 69% —% (5) 7,600 1.5 Office - Other 33% 1,500,000 — — — 584,664 — —% —% 39% —% — 22,441 5.0 Retail - Houston 100% 60,300 — — — 46,825 — —% —% 78% —% (4) 1,668 2.0 Retail - Hawaii 100% 21,900 — — — 21,900 — —% —% 100% —% — 1,081 2.0 Multi-Family - Houston 100% — 990 — — — — —% —% —% —% 1 15,904 4.4 Multi-Family - Columbia 100% — 382 — — — — —% —% —% —% — 9,162 5.0 Multi-Family - Summerlin 100% — 267 — — — — —% —% —% —% — 4,400 2.0 Hospitality - New York 35% — 66 — — — — —% —% —% —% (381) 1,300 0.0 Other - Houston 100% — — — — — — —% —% —% —% — 217 1.0 Other - Summerlin 100% — — — — — — —% —% —% —% — 7,000 1.0 Total Under Construction Properties ($389) $85,073 3.7 Total/ Wtd. Avg. for Portfolio $184,388 $317,577 3.3 (a) Includes our share of NOI for our joint ventures. (b) Annualized 3Q18 NOI includes distribution received from cost method investment in 1Q18. For purposes of this calculation, this one time annual distribution is not annualized. (c) Table above excludes Seaport NOI until we have greater clarity with respect to the performance results of our tenants. See page 18 for Stabilized NOI Yield and other project information. (d) Multi-Family square feet represent ground floor retail whereas multi-family units represent residential units for rent. (e) Other assets are primarily made up of our share of equity method investments not included in other categories. These assets can be found on page 15 of this presentation. (f) For Stabilized Properties, the difference between 3Q18 Annualized NOI and Stabilized NOI is attributable to a number of factors which may include timing, free rent or other temporary abatements, tenant turnover and market factors. (g) Retail - Houston in the Unstabilized Properties section is inclusive of retail in Bridgeland. (h) Office - Other in the Under Construction Properties section is inclusive of 110 North Wacker in Chicago. HowardHughes.com 214.741.7744 11
MPC Portfolio MPC Portfolio ($ in thousands) Nevada Texas Maryland Total (c) MPC Performance - 3Q18 & 3Q17 MPC Net Contribution (3Q18) (b) $90,697 $547 $(395) $90,849 MPC Net Contribution (3Q17) (b) $30,727 $(11,439) $(313) $18,975 Operating Asset Performance - 2018 & Future Annualized 3Q18 In-Place NOI $32,120 $98,814 $25,063 $155,997 Est. Stabilized NOI (Future) (d) $57,105 $150,058 $54,341 $261,504 Wtd. Avg. Time to Stab. (yrs.) 1.6 2.5 4.0 — (a) Commercial acres may be developed by us or sold. (b) Reconciliation from GAAP MPC segment earnings before tax (EBT) measure to MPC Net Contribution for the three months ended September 30, 2018 is found under Reconciliation of Non-GAAP Measures on page 29. (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. HowardHughes.com 214.741.7744 12
Portfolio Key Metrics Portfolio Key Metrics MPC Regions Non-MPC Regions The The 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 1,049,790 2,733,033 — — — — Retail s.f. 315,932 — — 823,450 102,790 1,242,172 918,669 13,000 265,021 1,196,690 Multifamily units 1,097 — — 124 380 1,601 — 21 — 21 Hotel Rooms 205 — — — — 205 — — — — Self Storage Units — — — — — — — — — — Operating - Unstabilized Properties Office s.f. 909,594 — — — 330,727 1,240,321 — — — — Retail s.f. (a) — — 83,497 — 28,026 111,523 86,847 — — 86,847 Multifamily units — — — — 437 437 — — — — Hotel rooms 705 — — — — 705 — — — — Self Storage Units 1,408 — — — — 1,408 — — — — Operating - Under Construction Properties Office s.f. 203,000 — — 325,000 320,000 848,000 — — 1,500,000 1,500,000 Retail s.f. (b) 60,300 — — — — 60,300 21,900 — — 21,900 Multifamily units 678 — 312 267 382 1,639 — — — — 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. 1,379 n.a. n.a. 1,379 Current Residents (c) 116,000 — 8,800 108,000 112,000 344,800 n.a. n.a. n.a. — Remaining saleable acres/condos 184 1,399 2,345 3,324 n.a. 7,252 9 n.a. n.a. 9 Estimated price per acre (d) 677 273 382 589 n.a. n.a. n.a. n.a. — Commercial Land Total acreage remaining 762 171 1,533 793 97 3,356 n.a. n.a. n.a. — Estimated price per acre (e) 873 n.a. 583 n.a. n.a. n.a. n.a. n.a. — Portfolio Key Metrics herein include square feet, units and rooms included in joint venture projects. sq. ft. and units are not shown at share. Retail s.f. includes multi-family s.f. (a) Retail Sq. ft. within the Summerlin region excludes 381,767 sq. ft. of anchors. (b) Retail Sq. ft. within New York region excludes 449,527 sq. ft for Pier 17, Uplands and Tin Building, pending final plans for this project. (c) Acreage shown as of September 30, 2018; current residents shown as of December 31, 2017. (d) Residential pricing represents average price per acre in 2018. (e) Commercial pricing: estimate of current value based upon recent sales, third party appraisals and third party MPC experts. At all MPCs except Bridgeland, commercial pricing represents average price per acre in 2017. Bridgeland and The Woodlands were the only MPCs with commercial sales in 2018; the sale of 1.56 acres in The Woodlands did not cause the average price to change. HowardHughes.com 214.741.7744 13
Lease Expirations Lease Expirations Office and Retail Lease Expirations Total Office and Retail Portfolio as of September 30, 2018 Office Expirations (a) Retail Expirations (a) Annualized Cash Rent Percentage of Wtd. Avg. Annualized Cash Annualized Cash Rent Percentage of Wtd. Avg. Annualized Cash Expiration Year (In thousands) Annualized Cash Rent Rent Per Leased Sq. Ft. (In thousands) Annualized Cash Rent Rent Per Leased Sq. Ft. 2018 $ 524 0.50% $ 28.90 $ 1,163 0.97% $ 29.49 2019 7,538 7.25% 29.15 6,103 5.10% 43.05 2020 8,678 8.34% 30.88 8,790 7.35% 51.26 2021 6,511 6.26% 32.23 7,600 6.36% 28.42 2022 14,558 14.00% 32.77 5,954 4.98% 48.12 2023 13,356 12.84% 29.50 10,551 8.82% 49.91 2024 12,363 11.89% 30.03 7,129 5.96% 42.41 2025 8,479 8.15% 33.68 25,259 21.13% 55.33 2026 1,990 1.91% 33.41 4,985 4.17% 35.87 2027 13,949 13.42% 28.91 5,198 4.35% 40.46 Thereafter 16,048 15.44% 42.00 36,830 30.81% 34.75 Total $ 103,994 100.00% $ 119,562 100.00% (a) Excludes leases with an initial term of 12 months or less HowardHughes.com 214.741.7744 14
Stabilized Properties Stabilized Properties (Dollars in thousands) Rentable Q3 2018 Q3 2018 Annualized Est. Stabilized Property Location % Ownership Sq. Ft./Units % Occ. % Leased Q3 2018 NOI NOI Office 3 Waterway Square Houston, TX 100 % 232,021 96 % 100 % $ 6,913 $ 6,900 4 Waterway Square Houston, TX 100 % 218,551 100 % 100 % 6,752 6,856 1400 Woodloch Forest Houston, TX 100 % 95,667 92 % 92 % 1,756 1,890 1735 Hughes Landing Boulevard Houston, TX 100 % 318,170 100 % 100 % 7,522 7,696 2201 Lake Woodlands Drive Houston, TX 100 % 24,119 100 % 100 % (60) 410 3831 Technology Forest Houston, TX 100 % 95,078 100 % 100 % 2,333 2,268 9303 New Trails Houston, TX 100 % 97,967 63 % 64 % 1,089 1,800 One Hughes Landing Houston, TX 100 % 197,719 99 % 100 % 6,443 6,240 Two Hughes Landing Houston, TX 100 % 197,714 95 % 95 % 5,994 6,000 10-70 Columbia Corporate Center Columbia, MD 100 % 889,145 93 % 94 % 13,586 14,330 Columbia Office Properties Columbia, MD 100 % 62,038 100 % 100 % 1,343 1,402 One Mall North Columbia, MD 100 % 98,607 92 % 92 % 1,795 1,947 One Summerlin Las Vegas, NV 100 % 206,279 96 % 99 % 5,507 5,700 Total Office 2,733,075 $ 60,973 $ 63,439 Retail 20/25 Waterway Avenue Houston, TX 100 % 50,062 100 % 100 % $ 1,751 $ 2,013 1701 Lake Robbins Houston, TX 100 % 12,376 100 % 100 % 563 400 2000 Woodlands Parkway Houston, TX 100 % 7,900 100 % 100 % 57 217 Creekside Village Green Houston, TX 100 % 74,670 90 % 90 % 2,127 2,097 Hughes Landing Retail Houston, TX 100 % 126,131 99 % 100 % 4,312 4,375 Waterway Garage Retail Houston, TX 100 % 21,513 93 % 100 % 825 800 Columbia Regional Columbia, MD 100 % 89,199 100 % 100 % 2,066 2,200 Ward Village Retail Honolulu, HI 100 % 918,669 93 % 94 % 21,744 21,421 Downtown Summerlin Las Vegas, NV 100 % 823,450 88 % 89 % 20,648 26,300 Outlet Collection at Riverwalk New Orleans, LA 100 % 265,021 97 % 97 % 5,648 6,500 Total Retail 2,388,991 $ 59,741 $ 66,323 HowardHughes.com 214.741.7744 15
Stabilized Properties (con't) Stabilized Properties (cont'd) (Dollars in thousands) Rentable Sq. Ft. / Q3 2018 % Annualized Est. Stabilized Property Location % Ownership Units Q3 2018 % Occ. Leased Q3 2018 NOI NOI Residential Millennium Six Pines Apartments Houston, TX 100% 314 95 % 97% $ 3,718 $ 4,500 Millennium Waterway Apartments Houston, TX 100% 393 92 % 96% 2,633 4,600 One Lakes Edge Houston, TX 100% 23,280 / 390 99% / 92% 99% / 95% 6,233 7,500 The Metropolitan Columbia, MD 50% 13,591 / 380 100% / 94% 100% / 96% 2,728 3,500 Constellation Las Vegas, NV 100% 124 97% 97% 2,154 2,200 85 South Street New York, NY 100% 13,000 / 21 100% / 100% 100% / 100% 435 600 Total Residential 49,871 / 1,622 $ 17,901 $ 22,900 Hotel Embassy Suites at Hughes Landing (a) Houston, TX 100% 205 82% 82% $ 5,151 $ 4,500 Total Hotel 205 $ 5,151 $ 4,500 Other Sarofim Equity Investment Houston, TX 20% NA NA NA $ 2,200 $ 2,200 Stewart Title of Montgomery County, TX Houston, TX 50% NA NA NA 1,034 1,034 Woodlands Ground Leases Houston, TX 100% NA NA NA 1,662 1,662 Hockey Ground Lease Las Vegas, NV 100% NA NA NA 470 470 Summerlin Hospital Distribution Las Vegas, NV 100% NA NA NA 3,435 3,435 Other Assets Various 100% NA NA NA (253) (27) Total Other NA $ 8,548 $ 8,774 Total Stabilized $ 152,314 $ 165,936 (a) Hotel property Percentage Occupied is the average for Q3 2018. HowardHughes.com 214.741.7744 16
Unstabilized Properties Unstabilized Properties (Dollars in thousands) Annualized % Rentable Sq. Q3 2018 Q3 2018 % Develop. Est. Total Cost Q3 2018 Est. Stabilized Est. Stab. Est. Stab. Project Name Location Ownership Ft. / Units % Occ. (a) Leased (a) Costs Incurred (Excl. Land) NOI NOI (b) Date Yield Office Three Hughes Landing Houston, TX 100% 320,815 63% 68 % $ 75,461 $ 90,162 $ 2,482 $ 7,600 2020 8% 1725 Hughes Landing Houston, TX 100% 331,754 71% 78 % 55,688 74,994 4,776 6,900 2020 9% Lakefront North (c) Houston, TX 100% 257,025 19% 19 % 55,070 77,879 (144) 6,458 2021 8% One Merriweather Columbia, MD 100% 206,588 85% 85 % 72,819 78,187 2,578 5,100 2020 7% Two Merriweather Columbia, MD 100% 124,139 58% 58 % 32,030 40,941 (280) 3,500 2021 9% Total Office 1,240,321 $ 291,068 $ 362,163 $ 9,412 $ 29,558 Retail Lakeland Village Center Houston, TX 100% 83,497 80% 83 % $ 14,183 $ 16,274 $ 1,180 $ 1,700 2019 10% Anaha & Ae`o Retail (d) Honolulu, HI 100% 86,847 81% 92 % — — 922 2,709 2019 n.a. Total Retail 170,344 $ 14,183 $ 16,274 $ 2,102 $ 4,409 Residential m.flats/TEN.M (d) Columbia, MD 50% 28,026 / 437 24% / 67% 24% / 71% $ 53,400 $ 54,673 $ 1,382 $ 4,000 2019 7% Total Residential 28,026/ 437 $ 53,400 $ 54,673 $ 1,382 $ 4,000 Hotel The Woodlands Resort & Conference Center Houston, TX 100% 403 58% 58 % $ 72,360 $ 72,360 $ 11,721 $ 16,500 2020 13% The Westin at The Woodlands Houston, TX 100% 302 77% 77 % 93,443 98,444 7,569 10,500 2020 11% Total Hotel 705 $ 165,803 $ 170,804 $ 19,290 $ 27,000 Other HHC 242 Self-Storage Houston, TX 100% 654 62% 62 % $ 8,216 $ 8,607 $ 156 $ 800 2020 9% HHC 2978 Self-Storage Houston, TX 100% 754 56% 56 % 7,828 8,476 116 800 2020 9% Total Other 1,408 $ 16,044 $ 17,083 $ 272 $ 1,600 Total Unstabilized $ 540,498 $ 620,997 $ 32,458 $ 66,567 (a) With the exception of Hotel properties, Percentage Occupied and Percentage Leased are as of September 30, 2018. Each Hotel property Percentage Occupied is the average for Q3 2018. (b) Company estimates of stabilized NOI are based on current leasing velocity, excluding inflation and organic growth. (c) Lakefront North development costs incurred and estimated total cost are inclusive of acquisition and tenant lease-up costs. (d) Condominium retail Develop. Cost Incurred and Est. Total Costs (Excl. Land) are combined with their respective condominium costs on page 21 of this supplement. HowardHughes.com 214.741.7744 17
Under Construction Projects Under Construction Properties Dollars in thousands, except per sq. ft. and unit amounts Owned & Managed % Est. Rentable Percent Pre- Const. Est. Stabilized Develop. Est. Total Cost Stabilized Project Name City, State Ownership Sq. Ft. Leased1 Project Status Start Date Date2 Costs Incurred (Excl. Land) Est. Stabilized NOI NOI Yield Office 110 North Wacker3 Chicago, IL 33% 1,500,000 39% Under construction Q1 2018 2023 15,589 51,428 22,441 8% 100 Fellowship Dr Houston, TX 100% 203,000 100% Under construction Q2 2017 Q4 2019 42,069 63,278 5,100 8% Aristocrat Las Vegas, NV 100% 180,000 100% Under construction Q2 2017 Q1 2019 26,151 46,661 4,100 9% Two Summerlin Las Vegas, NV 100% 145,000 55% Under construction Q2 2017 2020 30,145 49,320 3,500 7% 6100 Merriweather4 Columbia, MD 100% 320,000 47% Under construction Q1 2018 2023 18,315 138,221 9,200 7% Total Office 2,348,000 $ 132,269 $ 348,908 $ 44,341 Retail Seaport - Uplands / Pier 175 New York, NY 100% 449,527 66% Under construction Q4 2013 Q1 2021 476,360 731,000 43,000 - 58,000 6% - 8% Ke Kilohana6 Honolulu, HI 100% 21,900 100% Under construction Q4 2016 2019 — — 1,081 —% Lake Woodlands Crossing Houston, TX 100% 60,300 78% Under construction Q4 2017 Q4 2020 8,523 15,381 1,668 11% Total Retail 531,727 $ 484,883 $ 746,381 $45,749 - 60,749 Other Summerlin Ballpark7 Las Vegas, NV 100% n.a. n.a. Under construction Q1 2018 2019 27,246 114,670 7,000 6% Hughes Landing Daycare Houston, TX 100% n.a. n.a. Under construction Q3 2018 2019 141 2,706 217 8% Total Other n.a. $ 27,387 $ 117,376 $ 7,217 % Est. Number Monthly Est. Const. Est. Stabilized Develop. Est. Total Cost Stabilized Project Name City, State Ownership of Units Rent Per Unit Project Status Start Date Date2 Costs Incurred (Excl. Land) Est. Stabilized NOI NOI Yield Multi-family Columbia Multi-family Columbia, MD 100% 382 $2,053 Under construction Q2 2018 2023 $ 14,426 $ 116,386 $ 9,162 8% Creekside Apartments Houston, TX 100% 292 $1,538 Under construction Q1 2017 Q4 2019 33,212 42,111 3,500 8% Tanager Apartments8 Las Vegas, NV 100% 267 $1,924 Under construction Q1 2018 Q3 2020 15,573 59,276 4,400 7% Two Lakes Edge Houston, TX 100% 386 $2,690 Under construction Q3 2018 2024 2,638 107,706 8,529 8% Bridgeland Apartments Houston, TX 100% 312 $1,686 Under construction Q2 2018 2021 5,529 48,412 3,875 8% Total Multi-family 1,639 $ 71,378 $ 373,891 $ 29,466 Total Under Construction $ 715,917 $ 1,586,556 $126,734 - $141,774 (1) Represents leases signed as of September 30, 2018 and is calculated as the total leased square feet divided by total leasable square feet, expressed as a percentage. (2) Represents management's estimate of the first quarter of operations in which the asset may be stabilized. (3) 110 North Wacker represents our member only. We are not including OH allocations, Development Fees and Leasing Commissions in Costs Incurred and Est. Total Cost (Excl Land). Est. Total Cost (Excl. Land) represents HHC's total cash equity requirement. Development costs incurred represent HHC's equity in the project at September 30, 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. In Q3 2018, an additional 58,000 rentable square feet were added to 110 North Wacker. This decreased the overall Percent Pre-Leased to 39% from the prior quarter's 42%, however there has been no decrease in the actual square footage pre-leased. (4) Three Merriweather was renamed to 6100 Merriweather in Q3 2018. (5) 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 $54 million. (6) Condominium retail Develop. Cost Incurred and Est. Total Costs (Excl. Land) are combined with their respective condominium costs on page 21 of this supplement. (7) Est. Total Cost (Excl. Land) and Stabilized NOI Yield are exclusive of $27 million of costs to acquire the franchise. (8) Downtown Summerlin Apartments was renamed to Tanager Apartments in Q3 2018. HowardHughes.com 214.741.7744 18
Acquisition / Disposition Activity Acquisition / Disposition Activity In thousands, except rentable SF / Units / Acres 3Q 2018 Acquisitions Rentable Date Acquired Property % Ownership Location Sq. Ft. / Units / Acres Acquisition Price 9/7/2018 Lakefront North 100% Houston, TX 257,025 sq ft / 12.9 acres $ 53,000 3Q 2018 Dispositions Rentable Date Sold Property % Ownership Location Sq. Ft. / Units / Acres Sale Price No disposition activity in Q3 2018 HowardHughes.com 214.741.7744 19
Master Planned Community Land Master Planned Community Land The Woodlands The Woodlands Hills Bridgeland Summerlin Maryland Total (Dollars in thousands) Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Revenues: Residential land sale revenues $ 7,205 $ 7,493 $ 1,688 $ — $ 16,035 $ 6,458 $ 101,313 $ 38,521 $ — $ — $ 126,241 $ 52,472 Commercial land sale revenues 1,362 — — — 127 2,234 — 199 — — 1,489 2,433 Builder price participation 39 125 — — 225 49 8,421 5,298 — — 8,685 5,472 Other land sale revenues 1,893 1,738 10 7 1,055 162 3,349 2,231 413 413 6,720 4,551 Total revenues $ 10,499 $ 9,356 $ 1,698 $ 7 $ 17,442 $ 8,903 $ 113,083 $ 46,249 $ 413 $ 413 $ 143,135 $ 64,928 Expenses: Cost of sales - residential land $ (3,426) $ (3,722) $ (753) $ — $ (5,758) $ (2,187) $ (45,787) $ (22,373) $ — $ — $ (55,724) $ (28,282) Cost of sales - commercial land (1,426) — — — (32) (647) — (113) — — (1,458) (760) Real estate taxes (1,395) (1,493) (82) (24) (625) (582) (989) 1,671 (134) (154) (3,225) (582) Land sales operations (4,457) (3,366) (1,216) (239) (1,296) (1,203) (2,193) (2,241) (668) (549) (9,830) (7,598) Depreciation and amortization (34) (30) — — (37) (19) (8) (24) — (1) (79) (74) Total Expenses $(10,738) $ (8,611) $ (2,051) $ (263) $ (7,748) $ (4,638) $ (48,977) $ (23,080) $ (802) $ (704) $ (70,316) $ (37,296) Net interest capitalized (expense) (1,182) (1,092) 223 133 3,315 2,698 4,270 4,617 — — 6,626 6,356 Other income, net 18 — — — — — — — — — 18 — Equity in earnings from real estate affiliates — — — — — — 9,454 6,480 — — 9,454 6,480 EBT $ (1,403) $ (347) $ (130) $ (123) $ 13,009 $ 6,963 $ 77,830 $ 34,266 $ (389) $ (291) $ 88,917 $ 40,468 Key Performance Metrics: Residential Total acres closed in current period 13.3 11.1 5.6 — 42.4 17.5 160.8 57.7 NM NM Price per acre achieved $542 $675 $301 NM $378 $369 $572 $546 NM NM Avg. gross margins 52.0 % 50.0% 55.0% NM 64.0% 66.0% 55.0% 42.0% NM NM Commercial Total acres closed in current period 1.6(d) — — — — — — — — — Price per acre achieved $851 NM NM NM NM NM NM NM NM NM Avg. gross margins (5.0)% NM NM NM 75.0% 71.0% NM 39.0% NM NM Avg. combined before-tax net margins 43.0 % 50.0% 55.0% NM 64.0% 67.0% 55.0% 42.0% NM NM Key Valuation Metrics Woodlands The Woodlands Hills Bridgeland Summerlin Maryland Remaining saleable acres Residential 184 1,399 2,345 3,324 — Commercial 762 171 1,533 793 97 (a) Projected est. % superpads / lot size —% / — —% / — —% / — 88% / 0.25 ac NM Projected est. % single-family detached lots / lot size 66% / 0.30 87% / 0.29 ac 89% / 0.16 ac —% / — NM Projected est. % single-family attached lots / lot size 34% / 0.09 13% / 0.13 ac 10% / 0.12 ac —% / — NM Projected est. % custom homes / lot size —% / — —% / — 1% / 1.00 ac 12% / 0.45 ac NM Estimated builder sale velocity (blended total - TTM) (b) 33 — 50 113 NM Gross margin range (GAAP), net of MUDs (c) 43.0% 55.0% 64.0% 55.0% NM Projected gross margin range (Cash), net of MUDs (c) 99.4% 85.9% 75.4% 75.4% NM Residential sellout / Commercial buildout date estimate Residential 2023 2029 2034 2039 — Commercial 2026 2028 2045 2039 2021 (a) Does not include 31 commercial acres held in the Strategic Development segment in Downtown Columbia. (b) Represents the average monthly builder homes sold over the last twelve months ended September 30, 2018. (c) 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. (d) The 1.6 acre commercial site sold in Q3 2018 was reacquired in 2014 at market value as the original purchaser did not proceed with construction. Our cost basis plus holding costs slightly exceeded the Q3 2018 sale price. NM - Not meaningful. HowardHughes.com 214.741.7744 20
Ward Village Condominiums Ward Village Condominiums Waiea (a) Anaha (b) Ae'o Ke Kilohana (c) Total Key Metrics Type of building Ultra-Luxury Luxury Upscale Workforce Number of units 174 317 465 423 1,379 Avg. unit Sq. Ft. 2,174 1,417 834 696 1,095 Condo Sq. Ft. 378,238 449,205 388,039 294,273 1,509,755 Street retail Sq. Ft. 8,200 16,100 68,300 21,900 114,500 Stabilized retail NOI ($ in thousands) $453 $1,152 $1,557 $1,081 $4,243 Stabilization year 2017 2019 2019 2020 Development progress Status Opened Opened Under Construction Under Construction Start date 2Q14 4Q14 1Q16 4Q16 Completion date (actual or est.) Complete Complete 4Q18 2Q19 Total development cost ($m) $442.3 $401.3 $428.5 $218.9 $1,491.0 Cost-to-date ($m) $399.1 $385.9 $365.1 $146.1 $1,296.2 Remaining to be funded ($m) $43.2 $15.4 $63.4 $72.8 $194.8 Financial Summary (Dollars in thousands, except per sq. ft.) Units closed (through Q3 2018) 164 313 — — 477 Units under contract (through Q3 2018) 3 1 465 395 864 Total % of units closed or under contract 96.0% 99.1% 100.0% 93.4% 97.2% Units Closed (current quarter) 2 — — — 2 Units under contract (current quarter) — 1 1 — 2 Square footage closed or under contract (total) 347,082 434,157 388,039 264,488 1,433,766 Total % square footage closed or under contract 91.8% 96.7% 100.0% 89.9% 95.0% Target condo profit margin at completion (excl. land cost) — — — — ~30% Total cash received (closings & deposits) — — — — $1,284,319 Total GAAP revenue recognized — — — — $1,114,168 Expected avg. price per sq. ft. $1,900 - $1,950 $1,100 - $1,150 $1,300 - $1,350 (d) $700 - $750 $1,300 - $1,325 Expected construction costs per retail sq. ft. — — — — ~$1,100 Deposit Reconciliation (in thousands) Deposits from sales commitment Spent towards construction $117,916 $80,268 $68,241 $20,853 $287,278 Held for future use (e) $410 $3,376 $74,868 $1,251 $79,905 Total deposits from sales commitment $118,326 $83,644 $143,109 $22,104 $367,183 (a) We began delivering units at Waiea in November 2016. As of September 30, 2018, we have closed on 164 units. We have three under contract, and seven units remain to be sold. (b) We began delivering units at Anaha in October 2017. As of September 30, 2018, we have closed on 313 units. We have one unit under contract, and three units remain to be sold. (c) Ke Kilohana consists of 375 workforce units and 49 market rate units. As of September 30, 2018, we have entered into contracts for 395 of the units. (d) Pricing at Ae'o has benefited from the continued strong demand at Ward Village. (e) Total deposits held for future use are shown in Restricted cash on the balance sheet. HowardHughes.com 214.741.7744 21
Other Assets Other Assets Property Name City, State % Own Acres Notes Planned Future Development The Elk Grove Collection Elk Grove, CA 100% 64 Plan to build a 400,000 sq. ft. outlet retail center. Sold 36 acres for $36 million in total proceeds in 2017. Landmark Mall Alexandria, VA 100% 33 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 Holladay, UT 100% 54 Under contract to sell in separate parcels. First closing expected in 2019. Circle T Ranch and Power Center Westlake, TX 50% 207 50/50 joint venture with Hillwood Development Company. In 2016, HHC sold 72 acres to an affiliate of Charles Schwab Corporation. West Windsor West Windsor, NJ 100% 658 Zoned for approximately 6 million square feet of commercial uses. Monarch City (formerly known as Allen, TX 100% 238 Located 27 miles north of Downtown Dallas. Agricultural property tax exemptions are in AllenTowne) place for most of the property, which reduces carrying costs. Bridges at Mint Hill Charlotte, NC 91% 210 Zoned for approximately 1.3 million square feet of commercial uses. Maui Ranch Land Maui, HI 100% 20 Two, non-adjacent, ten-acre parcels zoned for native vegetation. Fashion Show Air Rights Las Vegas, NV 80% N/A Air rights above the Fashion Show Mall located on the Las Vegas Strip. 250 Water Street New York, NY 100% 1 The one-acre site is situated at the entrance of the Seaport district. While the Company is in the initial planning stages for this strategic site, it will continue to be used as a parking lot. Sterrett Place Columbia, MD 100% 3 In November 2017, we acquired the note secured by the land and improvements for a purchase price of $5.3M. In 2018, we foreclosed on the property, resulting in the acquisition of the land and improvements. American City Building Columbia, MD 100% 3 On December 20, 2016, we acquired the American City Building, a 117,098 square foot building in Columbia, Maryland, for $13.5 million. We are in the process of formulating redevelopment plans for this property. HowardHughes.com 214.741.7744 22
Debt Summary Debt Summary September 30, December 31, (In thousands) 2018 2017 Fixed-rate debt: Unsecured 5.375% Senior Notes due 2025 $ 1,000,000 $ 1,000,000 Secured mortgages, notes and loans payable 635,637 499,299 Special Improvement District bonds 16,058 27,576 Variable-rate debt: Mortgages, notes and loans payable, excluding condominium financing (a) 1,411,931 1,317,311 Condominium financing (a) 232,860 33,603 Mortgages, notes and loans payable 3,296,486 2,877,789 Unamortized bond issuance costs (6,301) (6,898) Deferred financing costs, net (28,975) (12,946) Total consolidated mortgages, notes and loans payable 3,261,210 2,857,945 Total unconsolidated mortgages, notes and loans payable at pro-rata share 94,856 84,983 Total Debt $ 3,356,066 $ 2,942,928 Net Debt on a Segment Basis, at share as of September 30, 2018 (In thousands) Master Planned Operating Strategic Non- Segment Segment Basis (b) Communities Assets Developments Segment Totals Amounts Total Mortgages, notes and loans payable, excluding condominium financing (a) $ 229,934 $ 1,674,875 $ 214,582 $ 2,119,391 $ 1,003,814 $ 3,123,205 Condominium financing (a) — — 232,860 232,860 — 232,860 Less: cash and cash equivalents (b) (111,704) (91,095) (76,274) (279,074) (239,878) (518,952) Special Improvement District receivables (23,747) — — (23,747) — (23,747) Municipal Utility District receivables (237,567) — — (237,567) — (237,567) TIF receivable — — (6,048) (6,048) — (6,048) Net Debt $ (143,084) $ 1,583,780 $ 365,120 $ 1,805,816 $ 763,936 2,569,752 Consolidated Debt Maturities and Contractual Obligations by Extended Maturity Date as of September 30, 2018 (c) Remaining (In thousands) in 2018 2019 2020 2021 2022 2023 Thereafter Total Mortgages, notes and loans payable $ 57,418 $ 92,700 $ 277,397 $ 582,878 $ 207,312 $ 673,880 $ 1,391,597 $ 3,281,996 Interest Payments 41,371 161,344 151,204 129,272 108,276 90,345 155,635 847,631 Ground lease and other leasing commitments 2,024 8,119 8,259 8,097 7,430 40,673 306,944 348,058 Total consolidated debt maturities and contractual obligations $ 100,813 $ 262,163 $ 436,860 $ 720,247 $ 323,018 $ 804,898 $ 1,854,176 $ 4,477,685 (a) $654.0 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 September 30, 2018 and December 31, 2017, respectively. (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. (c) Mortgages, notes and loans payable and condominium financing are presented based on extended maturity date. Extension periods generally may 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 if we do not meet the requirements to exercise the extension option. HowardHughes.com 214.741.7744 23
Property-Level Debt Property-Level Debt (Dollars in thousands) Q3 2018 Principal Asset Balance 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 5.00% Apr-20 / Apr-21 Bridgeland Credit Facility 65,000 L+315 Floating 5.55% Nov-20 / Nov-22 215,000 Operating Assets Outlet Collection at Riverwalk 52,388 L+275 Floating 5.01% Oct-17 / Oct-18 250 Water Street 128,231 0%, 6.00% Fixed —% Dec-18 / Jun-20 Three Hughes Landing 51,526 L+260 Floating 4.86% Dec-18 / Dec-20 The Woodlands Resort & Conference Center 62,500 L+325 Floating 5.51% Dec-18 / Dec-20 Downtown Summerlin 268,609 L+215 Floating 4.41% Sep-20 / Sep-21 Two Merriweather 23,803 L+250 Floating 4.76% Oct-20 / Oct-21 HHC 242 Self-Storage 6,506 L+260 Floating 4.86% Oct-19 / Oct-21 HHC 2978 Self-Storage 5,943 L+260 Floating 4.86% Jan-20 / Jan-22 20/25 Waterway Avenue 13,459 4.79% Fixed 4.79% May-22 Millennium Waterway Apartments 54,341 3.75% Fixed 3.75% Jun-22 Aristocrat 11,247 P + 40 Floating 5.29% Oct-22 Two Summerlin 6,717 P + 40 Floating 5.29% Oct-22 Lake Woodlands Crossing Retail 8,427 L+180 Floating 4.06% Jan-23 Corporate Credit Facility 615,000 L+165 Floating/Swap (b) 4.61% Sep-23 9303 New Trails 11,710 4.88% Fixed 4.88% Dec-23 4 Waterway Square 34,292 4.88% Fixed 4.88% Dec-23 3831 Technology Forest Drive 21,678 4.50% Fixed 4.50% Mar-26 Kewalo Basin Harbor 1,297 L+275 Floating 5.01% Sep-27 Millennium Six Pines Apartments 42,500 3.39% Fixed 3.39% Aug-28 3 Waterway Square 49,346 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 $ 1,723,160 HowardHughes.com 214.741.7744 24
Property-Level Debt (con't) (Dollars in thousands) Q3 2018 Principal Asset Balance Contract Interest Rate Interest Rate Hedge Current Annual Interest Rate Initial / Extended Maturity (a) Strategic Developments Ke Kilohana $ 69,393 L+325 Floating 5.51% Dec-19 / Dec-20 Ae'o 163,467 L+400 Floating/Cap 6.26% Dec-19 / Dec-21 100 Fellowship Drive 31,908 L+150 Floating 3.76% May-22 Aristocrat 4,501 P+40 Floating 5.29% Oct-22 Two Summerlin 7,575 P+40 Floating 5.29% Oct-22 Bridgeland Apartments — L+225 Floating 4.51% Jul-22 / Jul-23 110 North Wacker 38,981 L+300 Floating/Collar 5.26% Apr-22 / Apr-24 6100 Merriweather (c) — L+275 Floating 5.01% Sep-22 / Sep-24 Columbia Multifamily (c) — L+275 Floating 5.01% Sep-22 / Sep-24 Tanager Apartments (d) — L+225 Floating 4.05% Oct-21 / Oct-24 Summerlin Ballpark 13,514 4.92% Fixed 4.92% Dec-39 329,339 Total (e) $ 2,267,499 (a) Extended maturity assumes all extension options are exercised if available based on property performance. (b) The credit facility bears interest at one-month LIBOR plus 1.65%, but the $615.0 million term loan is swapped to an overall rate equal to 4.61%. The following properties are included as collateral for the credit facility: 10-70 Columbia Corporate Centers, One Mall North, One Merriweather, 1701 Lake Robbins, 1725-1735 Hughes Landing Boulevard, Creekside Village, Lakeland Village, Embassy Suites at Hughes Landing, The Westin at The Woodlands and certain properties at Ward Village. (c) Formerly known as Three Merriweather. (d) Formerly known as Downtown Summerlin Apartments. (e) Excludes JV debt, Corporate level debt, and SID bond debt related to Summerlin MPC & Retail. HowardHughes.com 214.741.7744 25
Summary of Ground Leases Summary of Ground Leases Minimum Contractual Ground Lease Payments (dollars in thousands) Future Cash Payments Pro-Rata Three months ended Remaining Year Ending December 31, Ground Leased Asset Share Expiration Date September 30, 2018 2018 2019 Thereafter Total Riverwalk (a) 100% 2045-2046 $ 576 $ 564 $ 2,131 $ 57,455 $ 60,150 Seaport 100% 2031 (b) 403 403 1,636 204,078 206,117 Kewalo Basin Harbor 100% 2049 75 75 300 8,900 9,275 $ 1,054 $ 1,042 $ 4,067 $ 270,433 $ 275,542 (a) Includes base ground rent, deferred ground rent and 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. HowardHughes.com 214.741.7744 26
Definitions Definitions Under Construction - Projects in the Strategic Developments segment for which construction has commenced as of September 30, 2018, unless otherwise noted. This excludes MPC and condominium development. Unstabilized - Properties in the Operating Assets segment that have been in service for less than 36 months and do not exceed 90% occupancy. Stabilized - Properties in the Operating Assets segment that have been in service for more than 36 months or have reached 90% occupancy, whichever occurs first. If an office, retail or multifamily property has been in service for more than 36 months but does not exceed 90% occupancy, the asset is considered underperforming. 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 results, gross margins and investment returns. We believe that net operating income (“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. HowardHughes.com 214.741.7744 27
Reconciliation of Non-GAAP Measures Reconciliation of Non-GAAP Measures Reconciliation of Operating Assets segment EBT to Total NOI: (In thousands) Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 YTD Q3 2018 YTD Q3 2017 Total Operating Assets segment EBT (a) $ (9,415) $ 4,715 $ 7,269 $ (11,834) $ (12,061) $ 2,569 $ (11,829) Depreciation and amortization 28,329 25,688 25,173 33,503 33,885 79,190 88,918 Interest expense (income), net 18,891 17,308 16,687 15,580 15,940 52,886 46,004 Equity in earnings (loss) from real estate and other affiliates 529 1,001 (2,586) 472 (317) (1,056) (3,739) Straight-line rent revenue (3,632) (2,867) (3,052) (2,801) (1,421) (9,551) (5,198) Other 3,098 (324) 46 492 290 2,820 348 Total Operating Assets NOI - Consolidated 37,800 45,521 43,537 35,412 36,316 126,858 114,504 Dispositions Cottonwood Square — — — (250) (165) — — Park West — — — (1) 8 — (61) Total Operating Asset Dispositions NOI — — — (251) (157) — (61) Consolidated Operating Assets NOI excluding properties sold or in redevelopment 37,800 45,521 43,537 35,161 36,159 126,858 114,443 Company's Share NOI - Equity investees 891 664 575 1,084 1,186 2,130 3,315 Distributions from Summerlin Hospital Investment — — 3,435 — — 3,435 3,383 Total NOI $ 38,691 $ 46,185 $ 47,547 $ 36,245 $ 37,345 $ 132,423 $ 121,141 (a) EBT excludes corporate expenses and other items that are not allocable to the segments. Prior periods have been adjusted to be consistent with fiscal 2018 presentation. HowardHughes.com 214.741.7744 28
Reconciliation of Non-GAAP Measures (con't) Reconciliations of Non-GAAP Measures Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Total residential land sales closed in period $ 116,973 $ 45,467 $ 204,812 $ 133,258 Total commercial land sales closed in period 1,362 — 2,760 4,299 Net recognized (deferred) revenue: Bridgeland 127 2,234 131 7,356 Summerlin 1,345 3,166 5,232 22,333 Total net recognized (deferred) revenue 1,472 5,400 5,363 29,689 Special Improvement District bond revenue 7,923 4,039 13,789 10,285 Total land sales revenue - GAAP basis $ 127,730 $ 54,906 $ 226,724 $ 177,531 Total MPC segment revenue - GAAP basis $ 143,135 $ 64,929 $ 261,665 $ 211,711 Reconciliation of MPC segment EBT to MPC Net Contribution: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 MPC segment EBT $ 88,917 $ 40,465 $ 172,338 $ 137,747 Plus: Cost of sales - land 57,183 29,043 109,609 88,288 Depreciation and amortization 79 76 245 247 MUD and SID bonds collections, net (347) 1,643 (5,351) 1,961 Less: MPC development expenditures (45,444) (45,772) (136,705) (136,745) MPC land acquisitions (1,010) — (3,565) (1,415) Equity in earnings in Real Estate and Other Affiliates (8,529) (6,480) (31,012) (21,552) MPC Net Contribution $ 90,849 $ 18,975 $ 105,559 $ 68,531 Reconciliation of Segment EBTs to Net Income Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 MPC segment EBT $ 88,917 $ 40,465 $ 172,338 $ 137,747 Operating Assets segment EBT (9,415) (12,061) 2,569 (11,829) Strategic Developments segment EBT (3,196) 31,188 1,562 129,667 Corporate and other items (44,973) (43,229) (151,041) (204,444) Income before taxes 31,333 16,363 25,428 51,141 Provision for income taxes (7,487) (5,846) (5,628) (31,846) Net income 23,846 10,517 19,800 19,295 Net loss attributable to noncontrolling interests (482) (12) (51) (12) Net income attributable to common stockholders $ 23,364 $ 10,505 $ 19,749 $ 19,283 HowardHughes.com 214.741.7744 29