Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Q4 2019 Earnings Presentation
33 slides from Howard Hughes's earnings presentation, Feb 27, 2020
Slide 1: Supplemental Information Three Months Ended December 31, 2019
Exhibit 99.2 Seaport District The Woodlands Towers at the Waterway 6100 Merriweather New York, NY The Woodlands, TX Columbia, MD Supplemental Information Three Months Ended December 31, 2019 NYSE: HHC The Howard Hughes Corporation, 13355 Noel Road, 22nd Floor, Dallas, TX 75240 HowardHughes.com 214.7
Slide 2: Cautionary Statements
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 c
Slide 3: Table of Contents
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 St
Slide 4: Company Profile - Summary & Results
Company Profile - Summary & Results Company Profile - Summary & Results Company Overview - Q4 2019 Recent Company Highlights Exchange / Ticker NYSE: HHC THE WOODLANDS, Dec. 30, 2019 (PRNewswire) -- The Howard Hughes Corporation (HHC) announced the acquisition of two Class AAA office towers, warehous
Slide 5: Company Profile - Summary & Results (cont'd)
Company Profile - Summary & Results (cont'd) Company Profile - Summary & Results (con't) Q4 2019 Path to Projected Annual Stabilized NOI Currently Under Construction Currently Unstabilized Currently Stabilized Total $ in millions $ in millions $ in millions $ in millions Hotel Retail Other 2% Other
Slide 6: Financial Summary
Financial Summary Financial Summary ($ in thousands, except share price and billions) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 YTD 2019 YTD 2018 Company Profile Share price (a) $ 126.80 $ 129.60 $ 123.84 $ 110.00 $ 97.62 $ 126.80 $ 97.62 Market Capitalization (b) $ 5.4b $ 5.6b $ 5.4b $ 4.8b $ 4.2b $
Slide 7: Financial Summary (con't)
Financial Summary (con't) Financial Summary ($ in thousands) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 FY 2019 FY 2018 Earnings Profile Operating Assets Segment Income Revenues $ 93,639 $ 101,694 $ 106,604 $ 89,107 $ 80,940 $ 391,044 $ 335,145 Expenses (47,363) (47,408) (47,899) (42,754) (37,807) (185
Slide 8: Balance Sheets
Balance Sheets (In thousands, except par values and share amounts) FY 2019 FY 2018 Assets: Unaudited Unaudited Investment in real estate: Master Planned Communities assets $ 1,655,674 $ 1,642,660 Buildings and equipment 3,813,595 2,932,963 Less: accumulated depreciation (507,933) (380,892) Land 353,
Slide 9: Statements of Operations
Statements of Operations Comparative Statements of Operations: Total Portfolio (In thousands, except per share amounts) Q4 2019 Q4 2018 FY 2019 FY 2018 Revenues: Unaudited Unaudited Unaudited Unaudited Condominium rights and unit sales $ 5,009 $ 317,953 $ 448,940 $ 357,720 Master Planned Communities
Slide 10: Reconciliations of Net Income to FFO, Core FFO and AFFO
Reconciliations of Net Income to FFO, Core FFO and AFFO (In thousands, except share amounts) Q4 2019 Q4 2018 FY 2019 FY 2018 RECONCILIATIONS OF NET INCOME TO FFO Unaudited Unaudited Unaudited Unaudited Net income attributable to common shareholders $ (1,100) $ 37,261 $ 73,956 $ 57,012 Adjustments to
Slide 11: NOI by Region, excluding the Seaport District
NOI by Region, excluding the Seaport District ($ in thousands, except Sq. Ft. and units) % Total Q4 2019 Occupied (#) Q4 2019 Leased (#) Q4 2019 Occupied (%) Q4 2019 Leased (%) Q4 2019 Time to Ownership Annualized Stabilized Stabilize Property (a) Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Un
Slide 12: NOI by Region, excluding the Seaport District (con't)
NOI by Region, excluding the Seaport District (con't) NOI by Region ($ in thousands, except Sq. Ft. and units) % Total Q4 2019 Occupied (#) Q4 2019 Leased (#) Q4 2019 Occupied (%) Q4 2019 Leased (%) Q4 2019 Time to Ownership Annualized Stabilized Stabilize Property (a) Sq. Ft. Units Sq. Ft. Units Sq
Slide 13: Stabilized Properties - Operating Assets Segment
Stabilized Properties - Operating Assets Segment Stabilized Properties ($ in thousands, except Sq. Ft. and units) Rentable Q4 2019 Q4 2019 Annualized Q4 Est. Stabilized Property Location % Ownership Sq. Ft./Units % Occ. % Leased 2019 NOI NOI Office 3 Waterway Square Houston, TX 100% 232,021 100% 100
Slide 14: Stabilized Properties - Operating Assets Segment (con't)
Stabilized Properties - Operating Assets Segment (con't) Stabilized Properties (cont'd) ($ in thousands, except Sq. Ft. and units) Rentable Sq. Ft. / Q4 2019 % Occ. Q4 2019 % Annualized Est. Stabilized Property Location % Ownership Units (b) (b) Leased (b) Q4 2019 NOI NOI Multi-family Millennium Six
Slide 15: Unstabilized Properties - Operating Assets Segment
Unstabilized Properties - Operating Assets Segment ($ in thousands, except Sq. Ft. and units) Est. % Rentable Sq. Q4 2019 % Q4 2019 % Develop. Costs Est. Total Cost Annualized Stabilized Est. Stab. Est. Stab. Project Name Location Ownership Ft. / Units Occ. (a) Leased (a) Incurred (Excl. Land) Q4 20
Slide 16: Under Construction Projects - Strategic Developments Segment
Under Construction Projects - Strategic Developments Segment Under Construction Properties ($ in thousands, except Sq. Ft. and units) (Owned & Managed) Project % Est. Rentable Percent Pre- Const. Est. Stabilized Develop. Est. Total Cost Est. Stabilized Est. Stab. Name Location Ownership Sq. Ft. Leas
Slide 17: Seaport District Operating Performance
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) Q4 2019 Total
Slide 18: MPC Portfolio
MPC Portfolio Commercial 22% Commercial Master Planned 40% Commercial Communities- Remaining Residential 100% Saleable Acres (a) Residential 60% 78% Unstabilized 14% Stabilized Income Producing Assets - Stabilized Unstabilized 44% Stabilized and Unstabilized 46% Unstabilized 54% 56% Stabilized 86% (
Slide 19: Portfolio Key Metrics
Portfolio Key Metrics Portfolio Key Metrics MPC Regions Non-MPC Regions The The Woodlands Woodlands Hills Bridgeland Summerlin Columbia Total Hawai‘i Seaport Other Total Houston, TX Houston, TX Houston, TX Las Vegas, NV Columbia, MD MPC Regions Honolulu, HI New York, NY Non-MPC Operating - Stabilize
Slide 20: Lease Expirations
Lease Expirations Lease Expirations Office and Retail Lease Expirations Total Office and Retail Portfolio as of December 31, 2019 30% g n i r i p x 24% E t n e R 18% h s a C d e 12% z i l a u n n A 6% f o % 0% 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030+ 2020 | 2021 | 2022 | 2023 | 2024 |
Slide 21: Acquisition / Disposition Activity
Acquisition / Disposition Activity Acquisition / Disposition Activity (In thousands, except rentable Sq. Ft. / Units / Acres) Q4 2019 Acquisitions Rentable Date Acquired Property % Ownership Location Sq. Ft. / Units / Acres Acquisition Price 12/30/2019 The Woodlands Towers at The Waterway 100% The W
Slide 22: Master Planned Community Land
Master Planned Community Land Master Planned Community Land The Woodlands The Woodlands Hills Bridgeland Summerlin Columbia Total ($ in thousands) Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Revenues: Residential land sale revenues $11,427 $ 9,435
Slide 23: Ward Village Condominiums
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 (g) 177 317 465 423 750 565 2,697 Avg. unit Sq. Ft. 2,138 1,417 838 696 518 725 856
Slide 24: Other/Non-core Assets
Other/Non-core Assets Other Assets Property Name City, State % Own Acres Notes 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
Slide 25: Debt Summary
Debt Summary Debt Summary (In thousands) December 31, 2019 December 31, 2018 Fixed-rate debt: Unsecured 5.375% Senior Notes $ 1,000,000 $ 1,000,000 Secured mortgages, notes and loans payable 884,935 648,707 Special Improvement District bonds 23,725 15,168 Variable-rate debt: Mortgages, notes and loa
Slide 26: Property-Level Debt
Property-Level Debt Property-Level Debt ($ in thousands) Q4 2019 Principal Asset Balance Contract Interest Rate Interest Rate Hedge Current Annual Interest Rate Initial / Extended Maturity (a) Operating Assets Three Hughes Landing $ 59,822 L+260 Floating 4.33% Mar-20 The Woodlands Towers at the Wate
Slide 27: Property-Level Debt (con't)
Property-Level Debt (con't) ($ in thousands) Q4 2019 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 $ 107,500 L+250 Floating/Cap 4.23% Oct-22 / Oct-23 Brid
Slide 28: Summary of Ground Leases
Summary of Ground Leases Minimum Contractual Ground Lease Payments ($ in thousands) Future Cash Payments Pro-Rata Three months ended Year Ended Year Ending December 31, Ground Leased Asset Share Expiration Date December 31, 2019 December 31, 2019 2020 Thereafter Total Riverwalk (a) 100% 2045-2046 $
Slide 29: Summary of Restructuring Expenses
Summary of Restructuring Expenses ($ in thousands) Three Months Ended Restructuring Expenses December 31, 2019 Settled in 2019 To be Settled in 2020 Known Expenses Former executive severance and other benefits $ 23,600 $ 23,600 $ — Employee severance 5,639 1,003 4,636 Loss on sale of corporate aircr
Slide 30: Definitions
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
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of Non-GAAP Measures Reconciliation of Operating Assets segment EBT to Total NOI: (In thousands) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 FY 2019 FY 2018 Total Operating Assets segment EBT (a) $ (3,507) $ 19,825 $ 12,628 $ 5,686 $ (5,799) $ 34,632 $
Slide 32: Reconciliation of Non-GAAP Measures (con't)
Reconciliation of Non-GAAP Measures (con't) Reconciliation of Non-GAAP Measures Reconciliation of Seaport District segment EBT to Total NOI: (In thousands) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 FY 2019 FY 2018 Total Seaport District segment EBT (a) $ (12,464) $ (16,656) $ (14,270) $ (15,852) $ (15
Slide 33: Reconciliation of Non-GAAP Measures (con't)
Reconciliation of Non-GAAP Measures (con't) Reconciliations of Non-GAAP Measures (In thousands) Three Months Ended December 31, Year Ended December 31, Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue 2019 2018 2019 2018 Total residential land sales closed in period $ 142,537 $ 30,