Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Howard Hughes Corp | hhcearningsreleaseq22020.htm |
| 8-K - 8-K - Howard Hughes Corp | form8kq22020.htm |
Exhibit 99.2 Seaport District HughesThe Woodlands Landing Towers at the Waterway 6100 Merriweather New York, NY Houston,The Woodlands, TX TX Columbia, MD Supplemental Information Three months ended June 30, 2020 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, 2019, as filed with the Securities and Exchange Commission ("SEC") on February 27, 2020 as amended and supplemented by any risk factors contained in our quarterly reports on Form 10-Q, which have been subsequently filed with the SEC. 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 ("FFO"), core funds from operations ("Core FFO"), adjusted funds from operations ("AFFO") and net operating income ("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, gain on sale or disposal of real estate and other assets, net, provision for impairment, 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 and Seaport District segments 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 reconciliations of our GAAP Operating Assets segment Earnings Before Taxes ("EBT") to NOI and Seaport District segment EBT 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, officers and certain shareholders on Forms 3, 4 and 5. HowardHughes.com 214.741.7744 2
Table of Contents Table of Contents FINANCIAL OVERVIEW OPERATING PORTFOLIO PERFORMANCE OTHER PORTFOLIO METRICS Company Profile 4 NOI by Region 11 MPC Portfolio 18 Financial Summary 6 Stabilized Properties 13 Portfolio Key Metrics 19 Balance Sheets 8 Unstabilized Properties 15 Lease Expirations 20 Statements of Operations 9 Under Construction Projects 16 Acquisitions / Dispositions 21 Income Reconciliations 10 Seaport District Operating Performance 17 Master Planned Community Land 22 Ward Village Condominiums 23 Other/Non-core Assets 24 Debt Summary 25 Property-Level Debt 26 Ground Leases 28 Restructuring Expenses 29 Definitions 30 Reconciliations of Non-GAAP Measures 31 HowardHughes.com 214.741.7744 3
Company Profile - Summary & Results Company Profile - Summary & Results Company Overview - Q2 2020 Recent Company Highlights Exchange / Ticker NYSE: HHC THE WOODLANDS, Texas, June 25, 2020 (PRNewswire) -- The Howard Hughes Corporation (HHC) announced that Chief Financial Officer David O'Reilly has been appointed President of the Company. Mr. O'Reilly will also continue to serve as the Share Price - June 30, 2020 $ 51.95 Company's CFO, a position he has held since joining The Howard Hughes Corporation in 2016. As President, he will take an expanded role in the leadership of the publicly Diluted Earnings / Share $ (0.61) traded, award-winning real estate development company. FFO / Diluted Share $ 0.22 Core FFO / Diluted Share $ 0.19 AFFO / Diluted Share $ 0.22 Operating Portfolio by Region Q2 2020 MPC & Condominium Results $ in millions Woodlands/ Woodlands Hills 9% ‘A‘ali‘i 100% Summerlin 2Q20 2Q20 57% MPC Condo EBT sales $42.2M 2 units Bridgeland 34% Q2 2020 MPC EBT Q2 2020 Condo Units Contracted (a) Bridgeland $ 14.2 Waiea — Columbia (0.2) Anaha — Summerlin 24.5 ‘A‘ali‘i 2 Woodlands/Woodlands Hills 3.7 Kō'ula — Total $ 42.2 Total 2 (a) Excludes Victoria Place as construction has not yet commenced. HowardHughes.com 214.741.7744 4
Company Profile - Summary & Results (cont'd) Company Profile - Summary & Results (con't) Q2 2020 Path to Projected Annual Stabilized NOI Under Construction Unstabilized Stabilized Total $ in millions $ in millions $ in millions $ in millions Other Retail Other Retail Hotel 6% 9% 7% Hotel 3% 15% Hotel 8% 9% Projected Projected Projected Projected Multi- Stabilized Stabilized Stabilized Office Stabilized Office Retail family NOI NOI NOI 47% NOI 47% 33% Office Multi- Retail 21% $24.9M $70.2M Office 58% family 45% 27% $267.2M $362.3M 37% Multi- Multi-family family 17% 11% Retail & Office S.F. 1,558,450 Retail & Office S.F. 1,224,175 Retail & Office S.F. 7,858,591 Retail & Office S.F. 10,641,216 Multi-family Units 523 Multi-family Units 1,347 Multi-family Units 2,330 Multi-family Units 4,200 Hotel Keys — Hotel Keys 302 Hotel Keys 607 Hotel Keys 909 Other Units — / — Other Units — / — Other Units 135,801 / 1,374 Other Units 135,801 / 1,374 Projected Stabilized NOI $ 24.9 Projected Stabilized NOI (a) $ 70.2 Projected Stabilized NOI $ 267.2 Projected Stabilized NOI $ 362.3 Q2 2020 Operating Results by Property Type Under Construction Unstabilized Stabilized Total (a) $ in millions $ in millions $ in millions $ in millions Other Other 2% 2% Office 2Q20 27% Multi- Office Office Under family 2Q20 2Q20 65% 2Q20 65% Unstabilized 32% Retail Stabilized Total Construction Retail NOI 20% NOI NOI NOI 21% $43.3M $0.0M -$2.5M $40.8M Multi- Hotel family Multi-family 41% 14% 12% Path to Projected Annual Stabilized NOI charts exclude Seaport NOI, units, and square footage until we have greater clarity with respect to the performance of our tenants. See page 17 for Seaport project information. See page 30 for definitions of "Under Construction," "Unstabilized," "Stabilized" and "Net Operating Income (NOI)." (a) As a result of COVID-19, our Hospitality assets were temporarily shut down beginning in March 2020 and were gradually reopened in a phased approach starting May 2020. Additionally, our other operating assets were impacted by revenue deferrals and additional expenses directly associated with COVID-19. HowardHughes.com 214.741.7744 5
Financial Summary Financial Summary ($ in thousands, except share price and billions) Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 YTD Q2 2020 YTD Q2 2019 Company Profile Share price (a) $51.95 $50.52 $126.80 $129.60 $123.84 $51.95 $123.84 Market Capitalization (b) $2.9b $2.8b $5.4b $5.6b $5.4b $2.9b $5.4b Enterprise Value (c) $6.5b $6.3b $9.3b $8.8b $8.3b $6.5b $8.3b Weighted avg. shares - basic 55,530 43,380 43,190 43,134 43,113 49,455 43,109 Weighted avg. shares - diluted 55,530 43,380 43,356 43,428 43,271 49,455 43,263 Total diluted share equivalents outstanding 54,931 54,939 42,673 43,426 43,223 54,931 43,223 Debt Summary Total debt payable (d) $ 4,439,153 $ 4,345,066 $ 4,138,618 $ 3,665,263 $ 3,465,714 $ 4,439,153 $ 3,465,714 Fixed-rate debt $ 1,902,175 $ 1,906,187 $ 1,908,660 $ 2,011,626 $ 1,904,165 $ 1,902,175 $ 1,904,165 Weighted avg. rate - fixed 5.06% 5.06% 5.05% 5.11% 5.18% 5.06% 5.18% Variable-rate debt, excluding condominium financing $ 2,411,620 $ 2,362,424 $ 2,199,241 $ 1,625,792 $ 1,561,549 $ 2,411,620 $ 1,561,549 Weighted avg. rate - variable 3.44% 3.91% 4.32% 4.54% 4.79% 3.44% 4.79% Condominium debt outstanding at end of period $ 125,358 $ 76,455 $ 30,717 $ 27,846 $ — $ 125,358 $ — Weighted avg. rate - condominium financing 3.22% 4.29% 4.83% 5.12% N/A 3.22% N/A Leverage ratio (debt to enterprise value) 67.61% 68.40% 44.19% 41.17% 41.17% 67.58% 41.17% (a) Presented as of period end date. (b) 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. (c) Enterprise Value = Market capitalization + book value of debt + noncontrolling interest - cash and cash equivalents. (d) 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
Financial Summary (con't) Financial Summary ($ in thousands) Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 YTD Q2 2020 YTD Q2 2019 Earnings Profile Operating Assets Segment Income Revenues $ 81,004 $ 111,170 $ 93,639 $ 101,694 $ 106,604 $ 192,174 $ 195,711 Expenses (42,007) (53,264) (48,414) (48,571) (47,899) (95,271) (90,653) Company's Share NOI - Equity investees 1,836 5,961 2,123 2,043 1,688 7,797 6,777 Operating Assets NOI (a) 40,833 63,867 47,348 55,166 60,393 104,700 111,835 Avg. NOI margin 50% 57% 51% 54% 57% 54% 57% MPC Segment Earnings Total revenues 68,913 50,446 170,739 92,287 72,859 119,359 123,755 Total expenses (b) (32,061) (23,813) (73,886) (43,251) (38,927) (55,874) (66,158) Interest income, net (c) 8,303 8,554 7,643 8,550 8,283 16,857 15,826 Equity in (losses) earnings in real estate and other affiliates (2,968) 8,934 9,477 4,523 6,499 5,966 14,336 MPC Segment EBT (c) 42,187 44,121 113,973 62,109 48,714 86,308 87,759 Seaport District Segment Income (d) Revenues 2,653 8,736 11,550 22,389 11,389 11,389 18,911 Expenses (6,093) (12,626) (16,802) (25,281) (14,276) (18,719) (25,783) Company's Share NOI - Equity investees (305) (376) (325) (148) (42) (681) (237) Seaport District NOI (e) (3,745) (4,266) (5,577) (3,040) (2,929) (8,011) (7,109) Avg. NOI margin (141%) (49%) (48%) (14%) (26%) (70%) (38%) Condo Gross Profit Revenues — 43 5,009 9,999 235,622 43 433,932 Expenses (6,348) (97,901) (4,435) (7,010) (220,620) (104,249) (358,314) Condo Net Income (f) $ (6,348) $ (97,858) $ 574 $ 2,989 $ 15,002 $ (104,206) $ 75,618 (a) Operating Assets NOI = Operating Assets NOI excluding properties sold or in redevelopment + the Howard Hughes Corporation's (the "Company" or "HHC") share of equity method investments NOI and the annual distribution from our cost basis investment. Prior periods have been adjusted to be consistent with current period presentation. (b) Expenses include both actual and estimated future costs of sales allocated on a relative sales value to land parcels sold, including Master Planned Communities ("MPC")-level G&A and real estate taxes on remaining residential and commercial land. (c) 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. (d) Starting in the first quarter of 2019, the Seaport District has been moved out of our other segments and into a stand-alone segment for disclosure purposes. Segment information for all periods presented has been updated to reflect this change. (e) Seaport District NOI = Seaport District NOI excluding properties sold or in redevelopment + Company's share of equity method investments NOI. Prior periods have been adjusted to be consistent with fiscal 2019 presentation. (f) As a result of significantly lower available inventory, we closed on zero condominium units during the three and six months ended June 30, 2020, The Company closed a portion of Ae‘o in early 2019, with no new condominium towers delivered in 2020. However, as highlighted on page 23 of this presentation, overall progress at our condominium projects remains strong. Additionally, during the first quarter of 2020, the Company recorded a $97.9 million charge for the estimated costs related to construction defects at the Waiea tower. The Company expects to recover all the repair costs from the general contractor, other responsible parties and insurance proceeds. HowardHughes.com 214.741.7744 7
Balance Sheets (In thousands, except par values and share amounts) Q2 2020 Q2 2019 FY 2019 FY 2018 Assets: Unaudited Unaudited Unaudited Unaudited Investment in real estate: Master Planned Communities assets $ 1,670,375 $ 1,675,536 $ 1,655,674 $ 1,642,660 Buildings and equipment 4,033,449 3,136,130 3,813,595 2,932,963 Less: accumulated depreciation (571,752) (444,461) (507,933) (380,892) Land 361,081 303,384 353,022 297,596 Developments 1,498,478 1,349,855 1,445,997 1,290,068 Net property and equipment 6,991,631 6,020,444 6,760,355 5,782,395 Investment in real estate and other affiliates 119,706 117,821 121,757 102,287 Net investment in real estate 7,111,337 6,138,265 6,882,112 5,884,682 Net investment in lease receivable 2,754 — 79,166 — Cash and cash equivalents 930,597 650,702 422,857 499,676 Restricted cash 257,687 197,898 197,278 224,539 Accounts receivable, net 17,711 19,980 12,279 12,589 Municipal Utility District receivables, net 320,439 273,169 280,742 222,269 Notes receivable, net 56,511 300 36,379 4,694 Deferred expenses, net 146,550 108,198 133,182 95,714 Operating lease right-of-use assets, net 57,882 71,176 69,398 — Prepaid expenses and other assets, net 343,090 249,490 300,373 411,636 Total assets $ 9,244,558 $ 7,709,178 $ 8,413,766 $ 7,355,799 Liabilities: Mortgages, notes and loans payable, net $ 4,401,063 $ 3,422,490 $ 4,096,470 $ 3,181,213 Operating lease obligations 69,607 71,125 70,413 — Deferred tax liabilities 131,691 166,033 180,748 157,188 Accounts payable and accrued expenses 902,494 697,763 733,147 779,272 Total liabilities 5,504,855 4,357,411 5,080,778 4,117,673 Equity: Preferred stock: $.01 par value; 50,000,000 shares authorized, none issued — — — — Common stock: $.01 par value; 150,000,000 shares authorized, 55,981,559 issued and 54,931,299 outstanding as of June 30, 2020, and 150,000,000 shares authorized, 43,635,893 shares issued and 42,585,633 outstanding as of December 31, 2019 561 437 437 436 Additional paid-in capital 3,941,516 3,329,062 3,343,983 3,322,433 Accumulated deficit (205,621) (75,043) (46,385) (120,341) Accumulated other comprehensive loss (61,111) (28,542) (29,372) (8,126) Treasury stock, at cost, 1,050,260 shares as of June 30, 2020 and December 31, 2019 (120,530) (62,190) (120,530) (62,190) Total stockholders' equity 3,554,815 3,163,724 3,148,133 3,132,212 Noncontrolling interests 184,888 188,043 184,855 105,914 Total equity 3,739,703 3,351,767 3,332,988 3,238,126 Total liabilities and equity $ 9,244,558 $ 7,709,178 $ 8,413,766 $ 7,355,799 Share Count Details (In thousands) Shares outstanding at end of period (including restricted stock) 54,931 43,142 42,586 42,992 Dilutive effect of stock options (a) — 81 88 117 Dilutive effect of warrants (b) — — 4 — Total diluted share equivalents outstanding 54,931 43,223 42,678 43,109 (a) Stock options assume net share settlement calculated for the period presented. (b) Warrants assume net share settlement and incremental shares for dilution calculated as of the date presented. HowardHughes.com 214.741.7744 8
Statements of Operations Comparative Statements of Operations: Total Portfolio (In thousands, except per share amounts) Q2 2020 Q2 2019 YTD Q2 2020 YTD Q2 2019 Revenues: Unaudited Unaudited Unaudited Unaudited Condominium rights and unit sales $ — $ 235,622 $ 43 $ 433,932 Master Planned Communities land sales 57,073 58,321 96,805 99,633 Minimum rents 61,469 54,718 132,456 108,804 Other land, rental and property revenues 11,447 59,774 46,344 101,253 Tenant recoveries 17,202 13,512 38,077 27,020 Builder price participation 8,947 9,369 16,706 14,564 Interest income from sales-type leases 35 — 917 — Total revenues 156,173 431,316 331,348 785,206 Expenses: Condominium rights and unit cost of sales 6,348 220,620 104,249 358,314 Master Planned Communities cost of sales 25,875 28,006 42,661 44,824 Operating costs 45,885 72,989 110,491 140,300 Rental property real estate taxes 15,199 9,674 28,777 19,505 Provision for (recovery of) doubtful accounts 1,866 (86) 3,567 (88) Demolition costs — 550 — 599 Development-related marketing costs 1,813 5,839 4,629 11,541 General and administrative 22,233 31,551 61,314 58,331 Depreciation and amortization 46,963 38,918 108,600 75,049 Total expenses 166,182 408,061 464,288 708,375 Other: Provision for impairment — — (48,738) — Gain (loss) on sale or disposal of real estate and other assets, net 8,000 (144) 46,124 (150) Other income (loss), net 1,607 10,288 (2,077) 10,461 Total other 9,607 10,144 (4,691) 10,311 Operating (loss) income (402) 33,399 (137,631) 87,142 Interest income 404 2,251 1,550 4,824 Interest expense (32,397) (24,203) (66,845) (47,529) Equity in (losses) earnings from real estate and other affiliates (8,552) 6,354 2,797 16,305 (Loss) income before taxes (40,947) 17,801 (200,129) 60,742 (Benefit) provision for income taxes (6,844) 4,473 (40,944) 15,489 Net (loss) income (34,103) 13,328 (159,185) 45,253 Net loss (income) attributable to noncontrolling interests 19 149 (33) 45 Net (loss) income attributable to common stockholders $ (34,084) $ 13,477 $ (159,218) $ 45,298 Basic (loss) income per share: $ (0.61) $ 0.31 $ (3.22) $ 1.05 Diluted (loss) income per share: $ (0.61) $ 0.31 $ (3.22) $ 1.05 HowardHughes.com 214.741.7744 9
Reconciliations of Net Income to FFO, Core FFO and AFFO (In thousands, except share amounts) Q2 2020 Q2 2019 YTD Q2 2020 YTD Q2 2019 RECONCILIATIONS OF NET INCOME TO FFO Unaudited Unaudited Unaudited Unaudited Net (loss) income attributable to common stockholders $ (34,084) $ 13,477 $ (159,218) $ 45,298 Adjustments to arrive at FFO: Segment real estate related depreciation and amortization 45,512 37,037 105,328 71,554 (Gain) loss on sale or disposal of real estate and other assets, net (8,000) 144 (46,124) 150 Income tax expense adjustments: Gain on sale or disposal of real estate and other assets, net 1,680 — 9,686 — Impairment of depreciable real estate properties — — 48,738 — Reconciling items related to noncontrolling interests (19) (149) 33 (45) Our share of the above reconciling items included in earnings from unconsolidated joint ventures 7,053 896 8,200 1,758 FFO $ 12,142 $ 51,405 $ (33,357) $ 118,715 Adjustments to arrive at Core FFO: Severance expenses (841) 69 1,637 923 Non-real estate related depreciation and amortization 1,451 1,881 3,272 3,495 Straight-line amortization (2,029) (2,020) (4,996) (4,154) Deferred income tax (benefit) expense (7,076) 4,118 (41,701) 14,821 Non-cash fair value adjustments related to hedging instruments 3,227 (92) 4,320 (220) Share-based compensation 1,768 2,928 2,577 5,653 Other non-recurring expenses (development-related marketing and demolition costs) 1,813 6,389 4,629 12,140 Our share of the above reconciling items included in earnings from unconsolidated joint ventures 52 48 144 77 Core FFO $ 10,507 $ 64,726 $ (63,475) $ 151,450 Adjustments to arrive at AFFO: Tenant and capital improvements $ (1,971) $ (2,753) $ (5,560) $ (3,795) Leasing commissions (1,314) (370) (2,236) (788) Condominium inventory writedown 5,078 — 5,078 — AFFO $ 12,300 $ 61,603 $ (66,193) $ 146,867 FFO per diluted share value $ 0.22 $ 1.19 $ (0.67) $ 2.74 Core FFO per diluted share value $ 0.19 $ 1.50 $ (1.28) $ 3.50 AFFO per diluted share value $ 0.22 $ 1.42 $ (1.34) $ 3.39 HowardHughes.com 214.741.7744 10
NOI by Region, excluding the Seaport District % Total Q2 2020 Occupied (#) Q2 2020 Leased (#) Q2 2020 Occupied (%) Q2 2020 Leased (%) Q2 2020 Est. 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% 3,195,219 — 2,992,673 — 2,996,401 — 94% —% 94% —% $ 77,641 $ 86,028 — Office - Columbia 100% 1,393,546 — 1,258,785 — 1,263,612 — 90% —% 91% —% 23,060 25,579 — Office - Summerlin 100% 532,428 — 528,148 — 528,148 — 99% —% 99% —% 13,866 13,700 — Retail - Houston 100% 436,401 — 386,864 — 400,357 — 89% —% 92% —% 12,219 13,271 — Retail - Columbia 100% 89,199 — 89,199 — 89,199 — 100% —% 100% —% 2,415 2,200 — Retail - Hawaii 100% 1,036,363 — 896,725 — 897,653 — 87% —% 87% —% 11,160 23,559 — Retail - Other 100% 273,096 — 266,028 — 268,887 — 97% —% 98% —% 774 6,500 — Retail - Summerlin 100% 837,442 — 746,393 — 777,182 — 89% —% 93% —% 8,503 26,300 — Multi-Family - Houston (d) 100% 23,280 1,389 22,180 1,189 22,180 1,232 95% 86% 95% 89% 15,773 19,800 — Multi-Family - Columbia (d) 50% 41,617 817 25,015 777 39,497 799 60% 95% 95% 98% 6,264 6,700 — Multi-Family - Summerlin (d) 100% — 124 — 110 — 114 —% 89% —% 92% 1,882 2,200 — Hospitality - Houston (e) 100% — 607 — 90 — — —% 15% —% —% 10,674 21,000 — Self-Storage - Houston 100% — 1,374 — 1,109 — 1,131 —% 81% —% 82% 524 600 — Other - Summerlin 100% — — — — — — —% —% —% —% 6,930 12,282 — Other Assets (f) 100% 135,801 — 135,801 — 135,801 — 100% —% 100% —% 5,604 7,502 — Total Stabilized Properties (g) $ 197,289 $ 267,221 — Unstabilized Properties Office - Houston 100% 764,069 — 299,619 — 488,535 — 39% —% 64% —% $ (426) $ 22,300 2.6 Office - Columbia 100% 319,002 — 159,900 — 159,900 — 50% —% 50% —% (297) 9,200 3.0 Retail - Houston 100% 72,973 — 42,389 — 49,922 — 58% —% 68% —% 263 2,200 2.0 Multi-Family - Houston (d) 100% 11,448 698 — 253 6,146 304 —% 36% 54% 44% (1,002) 12,404 3.1 Multi-Family - Columbia (d) 100% 56,683 382 — 101 11,080 145 —% 26% 20% 38% (518) 9,162 3.0 Multi-Family - Summerlin (d) 100% — 267 — 193 — 207 —% 72% —% 78% 2,742 4,400 0.3 Hospitality - Houston (e) 100% — 302 — — — — —% —% —% —% 4,518 10,500 0.3 Total Unstabilized Properties $ 5,280 $ 70,166 2.7 HowardHughes.com 214.741.7744 11
NOI by Region, excluding the Seaport District (con't) NOI by Region % Total Q2 2020 Occupied (#) Q2 2020 Leased (#) Q2 2020 Occupied (%) Q2 2020 Leased (%) Q2 2020 Est. 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 - Other 23% 1,500,000 — — — 1,110,000 — —% —% 74% —% N/A $ 14,421 3.0 Retail - Columbia 100% 10,700 — — — 10,700 — —% —% 100% —% N/A 400 1.0 Retail - Hawaii 100% 47,750 — — — 1,688 — —% —% 4% —% N/A 1,918 2.7 Multi-Family - Houston (d) 100% — 523 — — — — —% —% —% —% N/A 8,197 2.2 Total Under Construction Properties N/A 24,936 2.5 Total/ Wtd. Avg. for Portfolio $ 202,569 $ 362,323 2.6 (a) Includes our share of NOI for our joint ventures. (b) Annualized Q2 2020 NOI includes distribution received from cost method investment in Q1 2020. For purposes of this calculation, this one time annual distribution is not annualized. (c) Table above excludes Seaport District NOI, units, and square feet until we have greater clarity with respect to the performance of our tenants. See page 17 for Seaport District Est. stabilized yield and other project information. (d) Multi-Family square feet represent ground floor retail whereas multi-family units represent residential units for rent. (e) Hospitality percentage occupied is the average for Q2 2020. As a result of COVID-19, our Hospitality assets were temporarily shut down beginning in March 2020, and were gradually reopened in a phased approach starting May 2020. (f) 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 14 of this presentation. (g) For Stabilized Properties, the difference between 2Q20 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. HowardHughes.com 214.741.7744 12
Stabilized Properties - Operating Assets Segment ($ in thousands) Rentable Q2 2020 Q2 2020 Annualized Q2 Est. Stabilized Property Location % Ownership Sq. Ft. % Occ. % Leased 2020 NOI NOI Office 3 Waterway Square Houston, TX 100% 232,021 96% 96% $ 6,893 $ 6,900 4 Waterway Square Houston, TX 100% 218,551 100% 100% 6,786 6,856 1201 Lake Robbins Tower (a) Houston, TX 100% 807,586 100% 100% 25,307 25,000 1400 Woodloch Forest Houston, TX 100% 95,667 48% 48% 942 1,900 1725 Hughes Landing Houston, TX 100% 331,754 94% 95% 6,180 6,900 1735 Hughes Landing Houston, TX 100% 318,170 100% 100% 8,078 7,696 2201 Lake Woodlands Drive Houston, TX 100% 24,119 100% 100% 256 410 3831 Technology Forest Houston, TX 100% 95,078 100% 100% 2,491 2,268 9303 New Trails Houston, TX 100% 97,967 77% 77% 1,600 1,800 Lakefront North Houston, TX 100% 258,058 92% 92% 2,286 6,458 One Hughes Landing Houston, TX 100% 197,719 94% 94% 5,224 6,240 Two Hughes Landing Houston, TX 100% 197,714 83% 83% 4,051 6,000 Three Hughes Landing Houston, TX 100% 320,815 89% 89% 7,548 7,600 10-70 Columbia Corporate Center Columbia, MD 100% 898,548 88% 89% 13,598 14,330 Columbia Office Properties Columbia, MD 100% 62,038 89% 89% 411 1,402 One Mall North Columbia, MD 100% 98,673 95% 95% 1,824 1,947 One Merriweather Columbia, MD 100% 206,865 99% 99% 5,326 4,800 Two Merriweather Columbia, MD 100% 127,422 87% 87% 1,902 3,100 Aristocrat Las Vegas, NV 100% 181,534 100% 100% 4,299 4,500 One Summerlin Las Vegas, NV 100% 206,279 98% 98% 6,134 5,700 Two Summerlin Las Vegas, NV 100% 144,615 100% 100% 3,431 3,500 Total Office 5,121,193 114,567 125,307 Retail 20/25 Waterway Avenue Houston, TX 100% 50,062 76% 91% 960 2,013 1701 Lake Robbins Houston, TX 100% 12,376 100% 100% 488 400 2000 Woodlands Parkway Houston, TX 100% 7,900 100% 100% 266 217 Creekside Village Green Houston, TX 100% 74,670 88% 88% 2,126 2,097 Hughes Landing Retail Houston, TX 100% 126,131 99% 100% 4,645 4,375 Lakeland Village Center Houston, TX 100% 83,488 88% 88% 1,810 1,700 Lake Woodlands Crossing Retail Houston, TX 100% 60,261 87% 87% 1,672 1,668 Waterway Garage Retail Houston, TX 100% 21,513 58% 78% 250 800 Columbia Regional Columbia, MD 100% 89,199 100% 100% 2,415 2,200 Ward Village Retail Honolulu, HI 100% 1,036,363 87% 87% 11,160 23,559 Downtown Summerlin Las Vegas, NV 100% 837,442 89% 93% 8,503 26,300 Outlet Collection at Riverwalk New Orleans, LA 100% 273,096 97% 98% 776 6,501 Total Retail 2,672,501 $ 35,071 $ 71,830 HowardHughes.com 214.741.7744 13
Stabilized Properties - Operating Assets Segment (con't) ($ in thousands) Rentable Sq. Ft. / Units Q2 2020 % Occ. Q2 2020 % Annualized Q2 Est. Stabilized Property Location % Ownership (b) (b) Leased (b) 2020 NOI NOI Multi-family Millennium Six Pines Apartments Houston, TX 100% — / 314 83% 86% $ 3,580 $ 4,500 Millennium Waterway Apartments Houston, TX 100% — / 393 83% 87% 3,281 4,600 One Lakes Edge Houston, TX 100% 23,280 / 390 95% / 87% 95% / 89% 6,105 7,200 Creekside Park Apartments Houston, TX 100% — / 292 90% 93.49% 2,807 3,500 The Metropolitan Downtown Columbia Columbia, MD 50% 13,591 / 380 84% / 97% 84% / 100% 3,044 2,900 m.flats & TEN.M Columbia, MD 50% 28,026 / 437 48% / 94% 100% / 96% 3,220 3,800 Constellation Las Vegas, NV 100% — / 124 89% 92% 1,882 2,200 Total Multi-family 64,897 / 2,330 23,919 28,700 Hotel Embassy Suites at Hughes Landing (c) Houston, TX 100% 205 20% —% 2,994 4,500 The Woodlands Resort & Conference Center Houston, TX 100% 402 12% —% 7,680 16,500 Total Hotel 607 10,674 21,000 Other Hughes Landing Daycare Houston, TX 100% 10,000 / — 100% / —% 100% / —% 79 260 The Woodlands Warehouse Houston, TX 100% 125,801 / — 100% / —% 100% / —% 765 1,200 Self-Storage 242 & 2978 Houston, TX 100% — / 1,374 81% 82% 524 600 Sarofim Equity Investment Houston, TX 20% NA NA NA 2,120 2,202 Stewart Title of Montgomery County, TX Houston, TX 50% NA NA NA 840 1,117 Woodlands Ground Leases Houston, TX 100% NA NA NA 1,792 1,662 Kewalo Basin Harbor Honolulu, HI 100% NA NA NA 913 1,100 Hockey Ground Lease Las Vegas, NV 100% NA NA NA 526 458 Summerlin Hospital Medical Center Las Vegas, NV 5% NA NA NA 3,724 3,724 Las Vegas Ballpark (d) (e) Las Vegas, NV 100% NA NA NA 2,680 8,100 Other Assets Various 100% NA NA NA (905) (39) Total Other 135,801 / 1,374 13,058 20,384 Total Stabilized $ 197,289 $ 267,221 (a) 1201 Lake Robbins Tower and 9950 Woodloch Forest Tower, collectively known as The Woodlands Towers at the Waterway, were acquired on December 30, 2019. 9950 Woodloch Forest Tower is an unstabilized property as of June 30, 2020. See page 15 for further details. (b) For instances with two sets of rentable sq. ft/units, % occupied and % leased relate to multi-family assets with a retail component. In these cases, the first set of numbers relate to the retail asset and the second set relate to the multi-family asset. (c) Hotel property percentage occupied is the average for Q2 2020. (d) Annualized NOI for these properties are based on a trailing 12-month calculation due to seasonality of the respective businesses. (e) The Las Vegas Ballpark presentation is inclusive of the results from both the stadium operations and those of our wholly-owned team, the Las Vegas Aviators. HowardHughes.com 214.741.7744 14
Unstabilized Properties - Operating Assets Segment ($ in thousands, except Sq. Ft. and units) Est. % Rentable Sq. Ft. / Q2 2020 % Q2 2020 % Develop. Costs Est. Total Cost Annualized Stabilized Est. Stab. Est. Stab. Project Name Location Ownership Units Occ. (a) Leased (a) Incurred (Excl. Land) Q2 2020 NOI NOI (b) Date Yield Office 9950 Woodloch Forest Tower (c) (d) Houston, TX 100% 584,069 51% 53% 131,614 210,571 (73) 17,900 2023 9% 8770 New Trails Houston, TX 100% 180,000 —% 100% 37,750 45,985 (353) 4,400 2021 10% 6100 Merriweather Columbia, MD 100% 319,002 50% 50% 99,787 138,221 (297) 9,200 2023 7% Total Office 1,083,071 269,151 394,777 (723) 31,500 Retail Creekside Park West Houston, TX 100% 72,973 58% 68% 18,095 22,625 263 2,200 2022 10% Total Retail 72,973 18,095 22,625 263 2,200 Multi-family Juniper Apartments Columbia, MD 100% 56,683 / 382 —% / 26% 20% / 38% 92,312 116,386 (518) 9,162 2023 8% Lakeside Row Houston, TX 100% 312 63% 72% 41,133 48,412 52 3,875 2021 8% Two Lakes Edge Houston, TX 100% 11,448 / 386 —% / 15% 54% / 21% 89,780 107,706 (1,054) 8,529 2024 8% Tanager Apartments Las Vegas, NV 100% 267 72% 78% 52,266 59,276 2,742 4,400 Q3 2020 7% Total Multi-family 68,131 / 1,347 275,491 331,780 1,222 25,966 Hotel The Westin at The Woodlands Houston, TX 100% 302 —% n.a. 98,215 98,215 4,518 (e) 10,500 Q3 2020 11% Total Hotel 302 98,215 98,215 4,518 10,500 Total Unstabilized $ 660,952 $ 847,397 $ 5,280 $ 70,166 (a) With the exception of Hotel properties, Percentage Occupied and Percentage Leased are as of June 30, 2020. Each Hotel property Percentage Occupied is the average for Q2 2020. For instances with two sets of rentable sq. ft/units, % occupied and % leased relate to multi-family assets with a retail component. In these cases, the first set of numbers relate to the retail asset and the second set relate to the multi-family asset. (b) Company estimates of stabilized NOI are based on current leasing velocity, excluding inflation and organic growth. (c) Lakefront North and 9950 Woodloch Forest Tower development costs incurred and estimated total cost are inclusive of acquisition and tenant lease-up costs. (d) 1201 Lake Robbins Tower and 9950 Woodloch Forest Tower, collectively known as The Woodlands Towers at the Waterway, were acquired on December 30, 2019. 1201 Lake Robbins Tower is a stabilized property as of June 30, 2020, and 9950 Woodloch Forest Tower is unstabilized as Occidental Petroleum’s lease in this building expired in the second quarter of 2020. Occidental Petroleum has leased 100% of 1201 Lake Robbins Tower through 2032. See page 13 for further details. (e) Annualized NOI for these properties are based on a trailing 12-month calculation due to seasonality of the hotel business. HowardHughes.com 214.741.7744 15
Under Construction Projects - Strategic Developments Segment Under Construction Properties ($ in thousands, except Sq. Ft. and units) Est. Develop. Est. Total Est. (Owned & Managed) Project % Est. Rentable Percent Pre- Const. Stabilized Costs Cost (Excl. Est. Stabilized Stab. Name Location Ownership Sq. Ft. Leased (a) Project Status Start Date Date (b) Incurred Land) NOI Yield Office 110 North Wacker (c) Chicago, IL 23% 1,500,000 74% Under Construction Q2 2018 2023 $ 16,078 $ 16,078 $ 14,421 8% Total Office 1,500,000 16,078 16,078 14,421 Retail Merriweather District Area 3 Retail Columbia, MD 100% 10,700 100% Under Construction Q3 2019 2021 2,622 5,680 400 7% A'ali'i (d) Honolulu, HI 100% 11,336 —% Under Construction Q4 2018 2022 — — 637 —% Kō'ula (d) Honolulu, HI 100% 36,414 5% Under Construction Q3 2019 2023 — — 1,281 —% Total Retail 58,450 2,622 5,680 2,318 Monthly Est. Est. Develop. Est. Total Est. % Rent Per Const. Stabilized Costs Cost (Excl. Est. Stabilized Stab. Project Name Location Ownership Units Unit Project Status Start Date Date (b) Incurred Land) NOI Yield Multi-family Millennium Phase III Apartments Houston, TX 100% 163 2,595 Under Construction Q2 2019 2021 20,433 45,033 3,500 8% Creekside Park Apartments Phase II Houston, TX 100% 360 1,744 Under Construction Q3 2019 2023 11,629 57,472 4,697 8% Total Multi-family 523 32,062 102,505 8,197 Total Under Construction $ 50,762 $ 124,263 $ 24,936 (a) Represents leases signed as of June 30, 2020, and is calculated as the total leased square feet divided by total leasable square feet, expressed as a percentage. (b) Represents management's estimate of the first quarter of operations in which the asset may be stabilized. (c) 110 North Wacker represents our member only. We are not including overhead allocations, development fees and leasing commissions in Develop. Costs Incurred and Est. Total Cost (Excl Land). Est. Total Cost (Excl. Land) represents HHC's total cash equity requirement. Develop. Costs Incurred represent HHC's equity in the project at June 30, 2020. Est. 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. (d) Condominium retail Develop. Cost Incurred and Est. Total Costs (Excl. Land) are combined with their respective condominium costs on page 23 of this supplement. HowardHughes.com 214.741.7744 16
Seaport District Operating Performance NOI by Region Real Estate Managed Operations (Landlord) (a) Businesses (b) Events, Sponsorships Historic District & Historic District & & ($ in thousands) Pier 17 Multi-Family (c) Hospitality (d) Pier 17 (e) Tin Building (f) Catering Business (g) Q2 2020 Total Revenues Rental revenue (h) $ 1,245 $ 241 $ 25 $ — $ — $ — $ 1,511 Tenant recoveries 208 — — — — — 208 Other rental and property revenue 55 — — — — 905 960 Total Revenues 1,508 241 25 — — 905 2,679 Expenses Other property operating costs (h) (3,119) (131) (141) (1,457) — (1,576) (6,424) Total Expenses (3,119) (131) (141) (1,457) — (1,576) (6,424) Net Operating (Loss) Income - Seaport District (i) $ (1,611) $ 110 $ (116) $ (1,457) $ — $ (671) $ (3,745) Project Status Unstabilized Stabilized Unstabilized Unstabilized Under Construction Unstabilized Rentable Sq. Ft / Units Total Sq. Ft. / units 305,265 13,000 / 21 66 73,488 53,396 21,077 Leased Sq. Ft. / units (j) 125,374 — / 21 — 73,488 53,396 21,077 % Leased or occupied (j) 41% —% / 100% —% 100% 100% 100% Development (k) Development costs incurred $ 532,851 $ — $ — $ — $ 89,453 $ — $ 622,304 Estimated total costs (excl. land) $ 594,368 $ — $ — $ — $ 173,452 $ — $ 767,820 (a) Real Estate Operations (Landlord) represents physical real estate developed and owned, either wholly or through joint ventures, by HHC. (b) Managed Businesses represents retail and food and beverage businesses that HHC owns, either wholly or through joint ventures, and operates, including license and management agreements. For the three months ended June 30, 2020, our managed businesses include, among others, The Fulton, SJP by Sarah Jessica Parker, R17, Cobble & Co. and Malibu Farm. (c) Multi-Family represents 85 South Street which includes base level retail in addition to residential units. (d) Hospitality represents Mr. C Seaport, of which HHC has a 35% ownership interest as of June 30, 2020. On July 16, 2020, HHC completed the sale of its equity investment in Mr. C Seaport. Percentage occupied is the average for Q2 2020. (e) Includes our 90% share of NOI from Bar Wayō. (f) Represents the food hall by Jean-Georges. As a result of potential impacts related to COVID-19, including the halting of construction on the Tin Building, we are uncertain as to the timing of construction completion and the opening of the Tin Building. (g) Events, Sponsorships & Catering Business includes private events, catering, sponsorships, concert series and other rooftop activities. (h) Rental revenue and expense earned from and paid by businesses we own and operate is eliminated in consolidation. (i) See page 33 for the reconciliation of Seaport District NOI. (j) The percent leased for Historic District & Pier 17 landlord operations includes agreements with terms of less than one year and excludes leases with our managed businesses. (k) Development costs incurred and Estimated total costs (excl. land) are shown net of insurance proceeds of approximately $64.7 million. HowardHughes.com 214.741.7744 17
MPC Portfolio Commercial 22% Commercial Master Planned 41% Commercial Communities- Remaining Residential 100% 59% Saleable Acres (a) Residential 78% Unstabilized 7% Unstabilized Unstabilized 12% 13% Income-Producing Assets - Stabilized and Unstabilized Stabilized Stabilized Stabilized 93% 88% 87% ($ in thousands) Nevada Texas Maryland Total MPC Performance - 2Q20 & 2Q19 MPC Net Contribution (2Q20) (b) $17,802 $8,175 $(236) $25,741 MPC Net Contribution (2Q19) (b) $18,190 $(10,679) $(329) $7,182 Operating Asset Performance - 2020 & Future Annualized 2Q20 in-place NOI $32,182 $126,953 $30,908 $190,043 Est. stabilized NOI (future) (c) $58,882 $202,720 $53,223 $314,825 Wtd. avg. time to stab. (yrs.) 0.3 2.2 2.7 — (a) Commercial acres may be developed by us or sold. (b) Reconciliation of GAAP MPC segment EBT to MPC Net Contribution for the three months ended June 30, 2020, is found under Reconciliation of Non-GAAP Measures on page 33. (c) Est. Stabilized NOI (Future) represents all assets within the respective MPC regions, inclusive of stabilized, unstabilized and under construction. HowardHughes.com 214.741.7744 18
Portfolio Key Metrics Portfolio Key Metrics MPC Regions Non-MPC Regions The The Woodlands Woodlands Hills Bridgeland Summerlin Columbia Total Hawai‘i (a) 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 Sq.Ft. 3,195,219 — — 532,428 1,393,546 5,121,193 — — — — Retail Sq. Ft. (b) 376,193 — 83,488 837,442 130,816 1,427,939 1,036,363 13,000 273,096 1,322,459 Multifamily units 1,389 — — 124 817 2,330 — 21 — 21 Hotel Rooms 607 — — — — 607 — — — — Self-Storage Units 1,374 — — — — 1,374 — — — — Other Sq. Ft. 135,801 — — — — 135,801 — — — — Operating - Unstabilized Properties Office Sq.Ft. 764,069 — — — 319,002 1,083,071 — 146,935 — 146,935 Retail Sq.Ft. 84,421 — — — 56,683 141,104 — 252,895 — 252,895 Multifamily units 386 — 312 267 382 1,347 — — — — Hotel rooms 302 — — — — 302 — 66 — 66 Self-Storage Units — — — — — — — — — — Other Sq. Ft. — — — — — — — — — — Operating - Under Construction Properties Office Sq.Ft. — — — — — — — — 1,500,000 1,500,000 Retail Sq.Ft. — — — — 10,700 10,700 47,750 53,396 — 101,146 Other Sq. Ft. — — — — — — — — — — Multifamily units 523 — — — — 523 — — — — Hotel rooms — — — — — — — — — — Self-Storage Units — — — — — — — — — — Residential Land Total gross acreage/condos (c) 28,505 ac. 2,055 ac. 11,506 ac. 22,500 ac. 16,450 ac. 81,016 ac. 2,697 n.a. n.a. 2,697 Current Residents (c) 118,000 300 12,550 113,000 112,000 355,850 n.a. n.a. n.a. — Remaining saleable acres/condos 46 ac. 1,332 ac. 2,088 ac. 2,953 ac. n.a. 6,419 ac. 262 n.a. n.a. 262 Estimated price per acre (d) $ 1,068 $ 274 $ 422 $ 676 n.a. — n.a. n.a. n.a. $ — Commercial Land Total acreage remaining 722 ac. 175 ac. 1,527 ac. 831 ac. 96 ac. 3,351 ac. n.a. n.a. n.a. — Estimated price per acre (d) $ 1,147 $ 515 $ 543 $ 1,125 $ 580 — 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 Sq. Ft. includes multi-family Sq. Ft. (a) Excludes Victoria Place as construction has not yet commenced. (b) Retail Sq. Ft. within the Summerlin region excludes 381,767 Sq. Ft. of anchors. (c) Acreage shown as of June 30, 2020; current residents shown as of December 31, 2019. (d) Residential and commercial pricing represents the Company's estimate of price per acre per its 2020 land models. HowardHughes.com 214.741.7744 19
Lease Expirations Lease Expirations Office and Retail Lease Expirations Total Office and Retail Portfolio as of June 30, 2020 54% g n 48% i r i p x 42% E t n e 36% R h s 30% a C d 24% e z i l a 18% u n n A 12% f o 6% % 0% Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030+ | Houston Summerlin Columbia Hawaii Other 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. 2020 $ 3,309 1.37% $ 20.61 $ 4,648 6.13% $ 36.71 2021 5,482 2.27% 19.92 4,819 6.36% 32.27 2022 18,122 7.51% 11.54 4,810 6.34% 44.81 2023 13,483 5.58% 26.43 4,494 5.93% 43.40 2024 15,212 6.30% 23.21 6,725 8.87% 41.65 2025 14,223 5.89% 20.84 22,053 29.08% 49.53 2026 6,952 2.88% 33.86 4,789 6.32% 39.45 2027 15,551 6.44% 27.37 4,440 5.86% 55.54 2028 9,705 4.02% 37.64 3,467 4.57% 39.51 2029 8,066 3.34% 16.23 3,419 4.51% 37.66 Thereafter 131,337 54.40% 44.49 12,161 16.03% 49.20 Total $ 241,442 100.00% $ 75,825 100.00% (a) Excludes leases with an initial term of 12 months or less. Also excludes Seaport leases. HowardHughes.com 214.741.7744 20
Acquisition / Disposition Activity Acquisition / Disposition Activity (In thousands, except rentable Sq. Ft. / Units / Acres) Q2 2020 Acquisitions Rentable Date Acquired Property % Ownership Location Sq. Ft. / Units / Acres Acquisition Price No acquisition activity in Q2 2020 Q2 2020 Dispositions Rentable Date Sold Property % Ownership Location Sq. Ft. / Units / Acres Sale Price No disposition activity in Q2 2020 HowardHughes.com 214.741.7744 21
Master Planned Community Land The Woodlands The Woodlands Hills Bridgeland Summerlin Columbia Total ($ in thousands) Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Revenues: Residential land sale revenues $11,930 $ 9,013 $ 2,364 $ 3,142 $16,455 $16,432 $ 26,324 $29,701 $ — $ — $ 57,073 $ 58,288 Commercial land sale revenues — — — — — 34 — — — — — 34 Builder price participation 237 89 28 44 530 280 8,152 8,956 — — 8,947 9,369 Other land sale revenues 80 1,884 — 1 25 71 2,788 3,212 — — 2,893 5,168 Total revenues 12,247 10,986 2,392 3,187 17,010 16,817 37,264 41,869 — — 68,913 72,859 Expenses: Cost of sales - residential land (6,812) (4,576) (898) (1,613) (5,364) (6,377) (12,800) (15,432) — — (25,875) (27,998) Cost of sales - commercial land — — — — — (8) — — — — — (8) Real estate taxes (1,079) (1,237) (45) (67) (576) (500) (587) (815) (136) (129) (2,423) (2,748) Land sales operations (1,045) (3,794) (405) (931) (545) (1,482) (1,571) (1,779) (106) (173) (3,672) (8,159) Depreciation and amortization (33) (34) — — (33) (33) (25) (19) — — (91) (86) Other income, net — 74 — — — — — — — — — 72 Total operating expenses (8,969) (9,567) (1,348) (2,611) (6,518) (8,400) (14,983) (18,045) (242) (302) (32,061) (38,927) Net interest capitalized (expensed) (849) (1,316) 257 303 3,731 3,971 5,164 5,325 — — 8,303 8,283 Equity in (losses) earnings from real estate affiliates — — — — — — (2,968) 6,499 — — (2,968) 6,499 EBT $ 2,429 $ 103 $ 1,301 $ 879 $14,223 $12,388 $ 24,477 $35,648 $ (242) $ (302) $ 42,187 $ 48,714 Key Performance Metrics: Residential Total acres closed in current period 7.2 ac. 16.1 ac. 7.6 ac. 11.1 ac. 38.4 ac. 40.7 ac. 37.4 ac. 44.3 ac. — — Price per acre achieved (a) $ 1,657 $ 560 $ 311 $ 283 $ 429 $ 404 $ 705 $ 692 NM NM Avg. gross margins 42.9 % 49.2 % 62.0 % 48.7 % 67.4 % 61.2 % 51.4 % 48.0 % NM NM Commercial Total acres closed in current period — — — — — — — — — — Price per acre achieved NM NM NM NM NM NM NM NM NM NM Avg. gross margins NM NM NM NM NM NM NM NM NM NM Avg. combined before-tax net margins 42.9 % 49.2 % 62.0 % 48.7 % 67.4 % 61.2 % 51.4 % 48.0 % NM NM Key Valuation Metrics The Woodlands The Woodlands Hills Bridgeland Summerlin Columbia Remaining saleable acres Residential (b) 46 ac. 1,332 ac. 2,088 ac. 2,953 ac. — Commercial (c) 722 ac. 175 ac. 1,527 ac. 831 ac. 96 ac. Projected est. % superpads / lot size —% / — —% / — —% / — 87% / 0.25 ac NM Projected est. % single-family detached lots / lot size 52% / 0.55 ac. 85% / 0.22 ac. 89% / 0.16 ac. —% / — NM Projected est. % single-family attached lots / lot size 48% / 0.12 ac. 15% / 0.13 ac. 10% / 0.10 ac. —% / — NM Projected est. % custom homes / lot size —% / — —% / — 1% / 1.00 ac. 13% / 0.45 ac NM Estimated builder sale velocity (blended total - TTM) (d) 24 17 81 104 NM Projected GAAP gross margin (e) 42.9% 62.0% 67.4% 51.4% NM Projected cash gross margin (e) 99.8% 92.2% 81.0% 70.2% NM Residential sellout / Commercial buildout date estimate Residential 2022 2031 2034 2039 — Commercial 2031 2030 2045 2039 2023 (a) The price per acre achieved for Summerlin residential lots is mostly attributable to custom lots sales. The price per acre achieved for The Woodlands residential lots is mostly attributable to the mix of lots sold. (b) The Woodlands Residential reports remaining saleable acres on a gross basis due to potential changes in land usage and the unknown acreage that may be set aside for drainage, parks and roads for undeveloped land. (c) Columbia Commercial excludes 31 commercial acres held in the Strategic Developments segment in Downtown Columbia. (d) Represents the average monthly builder homes sold over the last twelve months ended June 30, 2020. (e) Projected 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 revenues less all future projected development costs, net of expected reimbursable costs, and capitalized overhead, taxes and interest. NM Not meaningful. HowardHughes.com 214.741.7744 22
Ward Village Condominiums Waiea (a) Anaha (b) Ae‘o (c) Ke Kilohana (d) ‘A‘ali‘i (e) Kō'ula (f) Total Key Metrics ($ in thousands) Type of building Ultra-Luxury Luxury Upscale Workforce Upscale Upscale Number of units 177 317 465 423 750 565 2,697 Avg. unit Sq. Ft. 2,138 1,417 838 696 518 725 856 Condo Sq. Ft. 378,488 449,205 389,663 294,273 388,210 409,576 2,309,415 Street retail Sq. Ft. 7,716 16,048 70,800 28,386 11,336 36,414 170,700 Stabilized retail NOI $ 453 $ 1,152 $ 1,557 $ 1,081 $ 637 $ 1,281 $ 6,161 Stabilization year 2017 2020 2019 2020 2022 2023 Development progress ($ in millions) Status Opened Opened Opened Opened Under Construction Under Construction Start date 2Q14 4Q14 1Q16 4Q16 4Q18 3Q19 Completion date/status Complete Complete Complete Complete 2021 2022 Total development cost (g) $ 566 $ 401 $ — $ 219 $ 412 $ 487 $ 2,085 Cost-to-date (g) $ 424 $ 398 $ — $ 214 $ 191 $ 75 $ 1,302 Remaining to be funded $ 142 $ 3 $ — $ 5 $ 221 $ 412 $ 783 Financial Summary ($ in thousands, except per Sq. Ft.) Units closed (through Q2 2020) 170 315 465 423 — — 1,373 Units under contract (through Q2 2020) 2 1 — — 630 429 1,062 Total % of units closed or under contract 97.2% 99.7% 100.0% 100.0% 84.0% 75.9% 90.3% Units closed (current quarter) — — — — — — — Units under contract (current quarter) — — — — 2 — 2 Square footage closed or under contract (total) 360,161 443,386 389,663 294,273 307,639 319,947 2,115,069 Total % square footage closed or under contract 95.2% 98.7% 100.0% 100.0% 79.2% 78.1% 91.6% Target condo profit margin at completion (excl. land cost) ~30% Total cash received (closings & deposits) 656,355 493,067 513,176 215,947 82,148 100,005 $ 2,060,698 Total GAAP revenue recognized $ 1,877,148 Expected avg. price per Sq. Ft. $1,900 - $1,950 $1,100 - $1,150 $1,300 - $1,350 $700 - $750 $1,300 - $1,350 $1,500 - $1,550 $1,300 - 1,325 Expected construction costs per retail Sq. Ft. $~1,100 Deposit Reconciliation (in thousands) Spent towards construction $ — $ — $ — $ — $ 80,695 $ — $ 80,695 Held for future use (h) — — — — 1,453 100,005 101,458 Total deposits from sales commitment $ — $ — $ — $ — $ 82,148 $ 100,005 $ 182,153 (a) We began delivering units at Waiea in November 2016. As of June 30, 2020, we have closed on 170 units. We have two under contract, and five units remain to be sold. (b) We began delivering units at Anaha in October 2017. As of June 30, 2020, we have closed on 315 units. We have one unit under contract, and one unit remain to be sold. (c) We began delivering units at Ae‘o in November 2018. As of June 30, 2020, we have closed on all 465 units. (d) Ke Kilohana consists of 375 workforce units and 48 market rate units. As of June 30, 2020, we have closed on all 423 units. (e) We broke ground on ‘A‘ali‘i in the fourth quarter of 2018. As of June 30, 2020, we have entered into contracts for 630 of the units. (f) We broke ground on Kō'ula in the third quarter of 2019. During the second quarter of 2020, two purchasers defaulted on their obligations to purchase units. As of June 30, 2020, we have entered into contracts for 429 of the units. (g) Development cost and cost-to-date are included only if the project has more than $1.0 million of estimated costs remaining to be incurred. (h)Total deposits held for future use are presented above only for projects under construction and are included in Restricted cash on the balance sheet. HowardHughes.com 214.741.7744 23
Other/Non-core Assets Other Assets Property Name City, State % Own Acres Notes Planned Future Development The Elk Grove Collection Elk Grove, CA 100% 64 Sold 36 acres for $36 million in total proceeds in 2017. We are assessing our plans for the remaining acres. Previous development plans have been placed on hold as we believe we can allocate capital into core assets and achieve a better risk-adjusted return. Landmark Mall Alexandria, VA 100% 33 In January 2017, we acquired the 11.4-acre Macy's site for $22.2 million. 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. Monarch City Allen, TX 100% 238 Located 27 miles north of Downtown Dallas, this 261-acre mixed-use development received unanimous zoning approval June 26, 2019. Century Park Houston, TX 100% 63 In conjunction with the acquisition of the Occidental Towers in The Woodlands in December 2019, we acquired Century Park, a 63-acre, 1.3 million square foot campus with 17 office buildings in the West Houston Energy Corridor in Houston, TX. 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. HowardHughes.com 214.741.7744 24
Debt Summary Debt Summary (In thousands) June 30, 2020 December 31, 2019 Fixed-rate debt: Unsecured 5.375% Senior Notes $ 1,000,000 $ 1,000,000 Secured mortgages, notes and loans payable 879,773 884,935 Special Improvement District bonds 22,402 23,725 Variable-rate debt: Mortgages, notes and loans payable, excluding condominium financing (a) 2,411,620 2,199,241 Condominium financing (a) (c) 125,358 30,717 Mortgages, notes and loans payable 4,439,153 4,138,618 Unamortized bond issuance costs (4,808) (5,249) Deferred financing costs (33,282) (36,899) Total mortgages, notes and loans payable, net $ 4,401,063 $ 4,096,470 Net Debt on a Segment Basis, at share as of June 30, 2020 (b) Master Non- Operating Planned Seaport Strategic Segment Segment (In thousands) Assets Communities District Developments Totals Amounts Total Mortgages, notes and loans payable (a) (c) $ 2,340,663 $ 266,988 $ 340,125 $ 398,784 $ 3,346,560 $ 1,054,503 $ 4,401,063 Mortgages, notes and loans payable of real estate and other affiliates (d) 79,331 6,205 14,350 — 99,886 — 99,886 Less: Cash and cash equivalents (42,161) (99,211) (4,221) (7,104) (152,697) (777,900) (930,597) Cash and cash equivalents of real estate and other affiliates (d) (3,118) (47,525) (834) (1,434) (52,911) — (52,911) Special Improvement District receivables — (40,963) — — (40,963) — (40,963) Municipal Utility District receivables — (320,439) — — (320,439) — (320,439) TIF Receivable — — — (4,032) (4,032) — (4,032) Net debt $ 2,374,715 $ (234,945) $ 349,420 $ 386,214 $ 2,875,404 $ 276,603 $ 3,152,007 Consolidated Debt Maturities and Contractual Obligations by Extended Maturity Date as of June 30, 2020 (e) Remaining (In thousands) in 2020 2021 2022 2023 2024 2025 Thereafter Total Mortgages, notes and loans payable $ 70,543 $ 570,267 $ 90,043 $ 1,102,548 $ 1,004,941 $ 1,105,179 $ 495,632 $ 4,439,153 Interest payments 87,611 162,056 154,721 142,546 95,063 33,348 108,264 783,609 Ground lease and other leasing commitments 3,056 7,184 6,507 6,464 6,432 5,047 261,805 296,495 Total consolidated debt maturities and contractual obligations $ 161,211 $ 739,507 $ 251,272 $ 1,251,557 $ 1,106,436 $ 1,143,573 $ 865,701 $ 5,519,257 (a) As of June 30, 2020, and December 31, 2019, $705.0 million and $630.1 million of variable‑rate debt has been swapped to a fixed rate for the term of the related debt, respectively. An additional $270.9 million and $184.3 million of variable-rate debt was subject to interest rate collars as of June 30, 2020, and December 31, 2019, respectively and $75.0 million of variable-rate debt was capped at a maximum interest rate as of June 30, 2020 and December 31, 2019. (b) Net debt is a non-GAAP financial measure that we believe is useful to our investors and other users of our financial statements as its components are important indicators of our overall liquidity, capital structure and financial position. However, it should not be used as an alternative to our debt calculated in accordance with GAAP. (c) As of June 30, 2020, $125.4 million of the Mortgages, notes and loans payable related to financing for the condominium towers at Ward Village in the Strategic Developments segment. (d) Each segment includes our share of related Mortgages, notes and loans payable and Cash and cash equivalents for all joint ventures included in Investments in real estate and other affiliates. (e) Mortgages, notes and loans payable and Condominium financing are presented based on extended maturity date. Extension periods generally may be exercised at our option at the initial maturity date, subject to customary extension terms that are based on property performance as of the initial maturity date and/or extension date. Such extension terms may include, but are not limited to, minimum debt service coverage, minimum occupancy levels or condominium sales levels, as applicable, and other performance criteria. We may have to pay down a portion of the debt if we do not meet the requirements to exercise the extension option. HowardHughes.com 214.741.7744 25
Property-Level Debt Property-Level Debt ($ in thousands) Q2 2020 Principal Asset Balance Contract Interest Rate Interest Rate Hedge Current Annual Interest Rate Initial / Extended Maturity (a) Operating Assets Three Hughes Landing $ 60,766 L+260 Floating 2.76% Sep-20 1201 Lake Robbins 273,070 L+235 Floating 2.51% Dec-20 / Jun-21 The Woodlands Warehouse 7,230 L+235 Floating 2.51% Dec-20 / Jun-21 Two Merriweather 30,553 L+250 Floating 2.66% Oct-20 / Oct-21 Outlet Collection at Riverwalk 29,647 L+250 Floating 2.66% Oct-21 20/25 Waterway Avenue 12,995 4.79% Fixed 4.79% May-22 Millennium Waterway Apartments 52,495 3.75% Fixed 3.75% Jun-22 HHC 242 Self-Storage 5,499 L+260 Floating 2.76% Dec-21 / Dec-22 HHC 2978 Self-Storage 5,395 L+260 Floating 2.76% Dec-21 / Dec-22 Lake Woodlands Crossing Retail 12,319 L+180 Floating 1.96% Jan-23 Downtown Summerlin 221,500 L+215 Floating 2.31% Jun-23 Lakeside Row 28,787 L+225 Floating 2.41% Jul-22 / Jul-23 Senior Secured Credit Facility 676,279 4.61% Floating/Swap 4.61% (b), (c) Sep-23 Two Lakes Edge 58,944 L+215 Floating 2.31% Oct-22 / Oct-23 The Woodlands Resort & Conference Center 62,500 L+250 Floating 2.66% Dec-21 / Dec-23 Lakefront North 39,865 L+200 Floating 2.16% Dec-22 / Dec-23 9303 New Trails 10,982 4.88% Fixed 4.88% Dec-23 4 Waterway Square 32,162 4.88% Fixed 4.88% Dec-23 Creekside Park West 14,338 L+225 Floating 2.41% Mar-23 / Mar-24 6100 Merriweather 52,665 L+275 Floating 2.91% Sep-22 / Sep-24 Juniper Apartments 61,750 L+275 Floating 2.91% Sep-22 / Sep-24 Tanager Apartments 39,323 L+225 Floating 2.41% Oct-21 / Oct-24 9950 Woodloch Forest Drive 63,500 L+195 Floating 2.11% Mar-25 Two Summerlin 32,803 4.25% Fixed 4.25% Oct-22 / Oct-25 3831 Technology Forest Drive 20,914 4.50% Fixed 4.50% Mar-26 Kewalo Basin Harbor 11,446 L+275 Floating 2.91% Sep-27 Millennium Six Pines Apartments 42,500 3.39% Fixed 3.39% Aug-28 3 Waterway Square 46,943 3.94% Fixed 3.94% Aug-28 One Lakes Edge 69,440 4.50% Fixed 4.50% Mar-29 Aristocrat 37,578 3.67% Fixed 3.67% Sep-29 Creekside Park Apartments 37,730 3.52% Fixed 3.52% Oct-29 One Hughes Landing 51,414 4.30% Fixed 4.30% Dec-29 Two Hughes Landing 48,000 4.20% Fixed 4.20% Dec-30 HowardHughes.com 214.741.7744 26
Property-Level Debt (con't) ($ in thousands) Q2 2020 Principal Asset Balance Contract Interest Rate Interest Rate Hedge Current Annual Interest Rate Initial / Extended Maturity (a) Operating Assets (cont.) 8770 New Trails 28,690 4.89% Floating/Swap 4.89% (d) Jun-21 / Jan-32 Constellation Apartments 24,200 4.07% Fixed 4.07% Jan-33 Hughes Landing Retail 34,667 3.50% Fixed 3.50% Dec-36 Columbia Regional Building 24,456 4.48% Fixed 4.48% Feb-37 Las Vegas Ballpark 50,494 4.92% Fixed 4.92% Dec-39 2,413,838 Master Planned Communities Bridgeland Credit Facility $ 125,000 L+250 Floating/Cap 2.66% Oct-22 / Oct-24 The Woodlands Master Credit Facility 125,000 L+250 Floating/Cap 2.66% Oct-22 / Oct-24 250,000 Seaport District 250 Water Street $ 100,000 L+350 Floating 3.66% Nov-22 / Nov-23 Seaport District 250,000 6.10% Fixed/Floating 6.10% (e) Jun-24 350,000 Strategic Developments A‘ali‘i $ 72,781 L+310 Floating 3.26% Jun-22 / Jun-23 Kō‘ula 52,577 L+300 Floating 3.16% Mar-23 / Mar-24 110 North Wacker 270,885 L+300 Floating/Collar 4.89% (f) Apr-22 / Apr-24 Millennium Phase III Apartments 6,669 L+175 Floating 1.91% Aug-23 / Aug-24 Creekside Park Apartments Phase II 1 L+175 Floating 1.91% Jan-24 / Jan -25 402,913 Total (g) $ 3,416,751 (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 $676.3 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 Center, One Mall North, One Merriweather, 1701 Lake Robbins, 1725-1735 Hughes Landing Boulevard, Creekside Village Green, Lakeland Village Center at Bridgeland, Embassy Suites at Hughes Landing, The Westin at The Woodlands and certain properties at Ward Village. (c) Balance includes $61.3 million drawn on the revolver portion of the loan that is intended for general corporate use. (d) Concurrent with the closing of the $35.5 million construction loan for 8770 New Trails on June 27, 2019, the Company entered into an interest rate swap which is designated as a cash flow hedge. The loan will bear interest at one-month LIBOR plus 2.45%, but it is currently swapped to a fixed rate equal to 4.89%. (e) The loan initially bears interest at 6.10% and will begin bearing interest at one-month LIBOR plus 4.10% subject to a LIBOR cap of 2.30% and LIBOR floor of 0.00%, at the earlier of June 20, 2021 or the date certain debt coverage ratios are met. (f) 100% of the $270.9 million outstanding principal is subject to fixed interest rate collar contracts for the remaining term of the debt. (g) Excludes JV debt, Corporate bond debt and SID bond debt related to Summerlin MPC and retail. HowardHughes.com 214.741.7744 27
Summary of Ground Leases Summary of Ground Leases Minimum Contractual Ground Lease Payments ($ in thousands) Future Cash Payments Pro-Rata Three months ended Remaining Year Ending December 31, Ground Leased Asset Share Expiration Date June 30, 2020 2020 2021 Thereafter Total Riverwalk (a) 100% 2045-2046 $ 762 $ 459 $ 1,737 $ 40,448 $ 42,644 Seaport 100% 2031 (b) 544 1,110 2,243 218,777 222,130 Kewalo Basin Harbor 100% 2049 — 300 300 8,000 8,600 $ 1,306 $ 1,869 $ 4,280 $ 267,225 $ 273,374 (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 December 30, 2031 but subject to extension options through December 31, 2072. Future cash payments are inclusive of extension options. HowardHughes.com 214.741.7744 28
Summary of Restructuring Expenses Summary of Ground Leases ($ in thousands) Liability as of (Benefit) Expense Liability as of Restructuring Expenses March 31, 2020 Settled in Q2 2020 Recorded in Q2 2020 June 30, 2020 Known Expenses Employee severance $ 2,604 $ (1,719) $ (131) $ 753 Estimated Expenses Employee relocation 5,266 — (710) 4,557 Total Restructuring Expenses (a) $ 7,870 $ (1,719) $ (841) $ 5,310 (a) Does not include additional estimated $1.3 million - $2.3 million remaining restructuring expenses expected to be incurred in the remainder of 2020. HowardHughes.com 214.741.7744 29
Definitions Definitions Stabilized - Properties in the Operating Assets and Seaport District segments 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. Unstabilized - Properties in the Operating Assets and Seaport District segments that have been in service for less than 36 months and do not exceed 90% occupancy. Under Construction - Projects in the Strategic Developments and Seaport District segments for which construction has commenced as of June 30, 2020, unless otherwise noted. This excludes MPC and condominium development. Net Operating Income (NOI) - We define net operating income ("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, other (loss) income, depreciation, development-related marketing costs, gain on sale or disposal of real estate and other assets, net, provision for impairment 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 NOI is a useful supplemental measure of the performance of our Operating Assets and Seaport District segments 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 30
Reconciliation of Non-GAAP Measures Reconciliation of Non-GAAP Measures Reconciliation of Operating Assets segment EBT to Total NOI: (In thousands) Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 YTD Q2 2020 YTD Q2 2019 Total Operating Assets segment EBT (a) $ (17,342) $ (7,544) $ (3,507) $ 19,825 $ 12,628 $ (24,886) $ 18,314 Add back: Depreciation and amortization 36,995 37,089 30,609 28,844 28,938 74,084 56,046 Interest expense, net 23,103 26,193 20,334 21,645 20,059 49,296 39,050 Equity in earnings from real estate and other affiliates (475) (4,394) (477) (441) (45) (4,869) (2,754) Gain on sale or disposal of real estate and other assets, net — (38,124) — — — (38,124) — Selling profit from sales-type leases — — — (13,537) — — — Provision for impairment — 48,738 — — — 48,738 — Impact of straight-line rent (3,248) (3,103) (1,096) (2,529) (2,537) (6,351) (5,382) Other (119) 173 412 477 (340) 54 (218) Total Operating Assets NOI - Consolidated 38,914 59,028 46,275 54,284 58,703 97,942 105,056 Redevelopments 110 North Wacker 10 1 1 2 2 11 2 Total Operating Asset Redevelopments NOI 10 1 1 2 2 11 2 Dispositions 100 Fellowship Drive 73 (1,123) (1,051) (1,163) — (1,050) — Total Operating Asset Dispositions NOI 73 (1,123) (1,051) (1,163) — (1,050) — Consolidated Operating Assets NOI excluding properties sold or in redevelopment 38,997 57,906 45,225 53,123 58,705 96,903 105,058 Company's Share NOI - Equity investees 1,836 2,237 2,123 2,043 1,688 4,073 3,152 Distributions from Summerlin Hospital Investment — 3,724 — — — 3,724 3,625 Total Operating Assets NOI $ 40,833 $ 63,867 $ 47,348 $ 55,166 $ 60,393 $ 104,700 $ 111,835 (a) EBT excludes corporate expenses and other items that are not allocable to the segments. HowardHughes.com 214.741.7744 31
Reconciliation of Non-GAAP Measures (con't) Reconciliation of Non-GAAP Measures Reconciliation of Seaport District segment EBT to Total NOI: (In thousands) Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 YTD Q2 2020 YTD Q2 2019 Total Seaport District segment EBT (a) $ (24,636) $ (35,956) $ (12,464) $ (16,656) $ (14,270) $ (60,592) $ (30,122) Add back: Depreciation and amortization 6,776 20,875 6,668 6,767 6,753 27,651 12,946 Interest expense, net 4,626 5,053 4,425 4,984 1,924 9,679 3,456 Equity in losses from real estate and other affiliates 6,633 2,043 804 705 451 8,676 1,083 Loss on sale or disposal of real estate — — — — — — 6 Gain on extinguishment of debt — — (4,851) — — — — Impact of straight-line rent 1,208 125 (24) 412 491 1,333 1,246 Other loss, net (b) 1,953 3,970 190 896 1,764 5,923 4,513 Total Seaport District NOI - Consolidated (3,440) (3,890) (5,252) (2,892) (2,887) (7,330) (6,872) Company's Share NOI - Equity investees (305) (376) (325) (148) (42) (681) (237) Total Seaport District NOI $ (3,745) $ (4,266) $ (5,577) $ (3,040) $ (2,929) $ (8,011) $ (7,109) (a) EBT excludes corporate expenses and other items that are not allocable to the segments. (b) Includes miscellaneous development-related items as well as the loss related to the write-off of inventory due to the permanent closure of 10 Corso Como Retail and Café HowardHughes.com 214.741.7744 32
Reconciliation of Non-GAAP Measures (con't) Reconciliations of Non-GAAP Measures (In thousands) Three Months Ended June 30, Six Months Ended June 30, Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue 2020 2019 2020 2019 Total residential land sales closed in period $ 57,123 $ 59,247 $ 86,869 $ 98,726 Total commercial land sales closed in period — — 2,096 — Net recognized (deferred) revenue: Bridgeland — 34 (305) 34 Summerlin (839) (970) 7,354 475 Total net recognized (deferred) revenue (839) (936) 7,049 509 Special Improvement District bond revenue 789 10 791 398 Total land sales revenue - GAAP basis $ 57,073 $ 58,321 $ 96,805 $ 99,633 (In thousands) Three Months Ended June 30, Six Months Ended June 30, Reconciliation of MPC Segment EBT to MPC Net Contribution 2020 2019 2020 2019 MPC segment EBT $ 42,187 $ 47,235 $ 86,308 $ 84,832 Plus: Cost of sales - land 25,875 28,006 42,661 44,824 Depreciation and amortization 91 86 182 246 MUD and SID bonds collections, net 4,935 119 6,058 981 Distributions from real estate and other affiliates 1,173 1,306 2,345 2,741 Less: MPC development expenditures (51,488) (63,071) (116,384) (119,843) MPC land acquisitions — — — (752) Equity in losses (earnings) in real estate and other affiliates 2,968 (6,499) (5,966) (14,336) MPC Net Contribution $ 25,741 $ 7,182 $ 15,204 $ (1,307) (In thousands) Three Months Ended June 30, Six Months Ended June 30, Reconciliation of Segment EBTs to Net Income 2020 2019 2020 2019 Operating Assets segment EBT $ (17,342) $ 12,628 $ (24,886) $ 18,314 MPC segment EBT 42,187 48,714 86,308 87,759 Seaport District segment EBT (24,636) (14,270) (60,592) (30,122) Strategic Developments segment EBT (2,244) 13,345 (105,924) 73,989 Corporate income, expenses and other items (38,912) (42,616) (95,035) (89,198) (Loss) income before taxes (40,947) 17,801 (200,129) 60,742 Provision for income taxes 6,844 (4,473) 40,944 (15,489) Net (loss) income (34,103) 13,328 (159,185) 45,253 Net loss (income) attributable to noncontrolling interests 19 149 (33) 45 Net (loss) income attributable to common stockholders $ (34,084) $ 13,477 $ (159,218) $ 45,298 HowardHughes.com 214.741.7744 33