Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Investor Presentation (May 2012)
47 slides from Howard Hughes's investor presentation, May 15, 2012
Slide 1: Grant Herlitz, President; Andrew C. Richardson, CFO – May 15, 2012
Grant Herlitz, President May 15, 2012 Andrew C. Richardson, CFO
Slide 2: Disclaimer and Safe Harbor Statement
Disclaimer and Safe Harbor Statement 2 The Howard Hughes Corporation (“HHC”) cautions that statements in this presentation that are forward-looking and provide other than historical information involve risks and uncertainties that may impact actual results and any future performance suggested by the
Slide 3: The Howard Hughes Corporation
The Howard Hughes Corporation 3 Mission Statement: “The Howard Hughes Corporation's mission is to be the preeminent developer and operator of master planned communities and mixed-use properties. We create timeless places and memorable experiences that inspire people while driving sustainable, long-t
Slide 4: GGP Bankruptcy & HHC Spinoff
GGP Bankruptcy & HHC Spinoff 4 Merged with The Rouse Company in 1996. (Seaport, Columbia, Woodlands, Bridgeland, etc.) GGP acquired Rouse in 2004. (Victoria Ward, Cottonwood, Elk Grove, etc.) GGP bankruptcy and subsequent spinoff of select assets as The Howard Hughes Corporation. Land encompassing S
Slide 5: On an Extraordinary Coast-to-Coast Journey
ON AN EXTRAORDINARY OASTTO-COAST-IO-COAS
Slide 6: What Makes HHC a Compelling Investment?
What Makes HHC a Compelling Investment? 6 Note Segment Basis Net Debt and book value as of March 31, 2012. Please refer to 10-Q for three months ended March 31, 2012. Represents stock and warrants held by investors. Please refer to DEF 14A dated April 26,2012. Assets World-class trophy assets with s
Slide 7: HHC is Positioned to Unlock the Value of Its Assets
7 HHC is Positioned to Unlock the Value of Its Assets
Slide 8: 2011 Highlights
2011 Highlights 8 Acquisitions Acquired partner’s interest in The Woodlands MPC for $117.5 million. Development Partnered with local investors to develop luxury condominium tower at Ala Moana Center in Honolulu. Partnered with Kettler/Orchard to develop multi-family project in downtown Columbia, MD.
Slide 9: Strong Liquidity & Cash Flow to Support Predevelopment
Strong Liquidity & Cash Flow to Support Predevelopment 9 Note Please refer to 10-K for the year ended December 31, 2011. Unrestricted cash as of Q1 2012. Please refer to 10-Q for three months ended March 31, 2012. ($ in millions) Acreage Sales Revenue Income-Producing Property NOI Robust Access to C
Slide 10: Unlocking Value
10 Unlocking Value
Slide 11: Victoria Ward – Ocean-Front Acres, ~$22mm NOI
Victoria Ward – 60 Ocean-Front Acres, ~$22mm NOI 11
Slide 12: Fully Entitled – Approved 9+ million SF Master Plan
Fully Entitled – Approved 9+ million SF Master Plan 12 4,500+ Condominium units 1+ Million SF of Retail
Slide 13: Ala Moana Tower and Ala Moana Mall
Ala Moana Tower – 210 Luxury Condominium Units 13 Ala Moana Mall – Retail Sales over $1,000 a square foot Luxury Product Trading at $1,200/SF
Slide 14: South Street Seaport – 9+ Million Annual Visitors
South Street Seaport – 9+ Million Annual Visitors 14 $4.7 billion Annual Buying Power $30 billion infrastructure & real estate investments in Lower Manhattan since 2002.
Slide 15: Lower Manhattan - Population Doubled Since 2001
Lower Manhattan - Population Doubled Since 2001 15 Pier 17 – 210,000 SF of GLA Uplands – 175,000 SF of GLA
Slide 16: Downtown Columbia – 10+ Million SF Redevelopment
Downtown Columbia – 10+ Million SF Redevelopment 16 5th Wealthiest County in the United States Premier Outdoor Concert Center & 1.2 million SF Mall at Development’s Center
Slide 17: Kettler/Orchard Joint Venture – Residential Units + Retail
Kettler/Orchard Joint Venture – 375 Residential Units + Retail 17
Slide 18: Our MPC Business
Our MPC Business 18 Community Location Gross Acres Community Population Remaining Saleable Acres Bridgeland Houston, TX 11,400 4,750 5,023 Maryland Howard/Prince George’s County, MD 16,450 104,700 202 Summerlin Las Vegas, NV 22,500 100,000 6,771 The Woodlands Houston, TX 28,400 101,000 2,125 Total 7
Slide 19: Bridgeland – Before Capital Invested
Bridgeland – Before Capital Invested 19
Slide 20: Bridgeland – Over $325 Million in Capital Later
Bridgeland – Over $325 Million in Capital Later 20 Don’t be the 1st to Own an MPC
Slide 21: 19,000 Residential Lots; 1,226 Commercial Acres Remaining
19,000 Residential Lots; 1,226 Commercial Acres Remaining 21 Grand Pkwy Fry Rd 290
Slide 22: World-Class Master Planning
22 World-Class Master Planning 3,669 Residential Lots & 961 Commercial Acres Remaining1 Note (1) As of December 31, 2011. Please reference 10k.
Slide 23: The Woodlands Town Center Concept – Napkin, 1972
The Woodlands Town Center Concept – Napkin, 1972 23 Note (1) Source: Robert Heineman, The Woodlands‘ original land planner.
Slide 24: The Woodlands Town Center - Today
The Woodlands Town Center - Today 24 97.5% Class A Office Occupancy Additional 5+ MSF of Office, 2,000+ Residential Units & 500k+ of Retail to be Built
Slide 25: The Woodlands – Waterway
The Woodlands – 3 Waterway 25
Slide 26: Waterway – 232,774 SF Class A Office Tower
3 Waterway – 232,774 SF Class A Office Tower 26
Slide 27: Waterway: 74% Preleased
3 Waterway: April 5, 2012 – 74% Preleased 27 Average $27/SF Net Rent on Signed Leases Implied $6 million of NOI at Stabilization Implied $36 million of Value Creation at a 7.0% Capitalization Rate $50 million Construction Cost Excluding Land
Slide 28: The Woodlands – Super Block
The Woodlands – Super Block 28
Slide 29: Super Block – Over One Million SF of Development
Super Block – Over One Million SF of Development 29
Slide 30: Super Block – Over One Million SF of Development
Super Block – Over One Million SF of Development 30
Slide 31: The Woodlands – Waterway Hotel & Condominiums
The Woodlands – Waterway Hotel & Condominiums 31
Slide 32: Waterway Hotel & Condominiums - Luxury & Location
Waterway Hotel & Condominiums - Luxury & Location 32
Slide 33: Waterway Hotel & Condominiums
Waterway Hotel & Condominiums 33
Slide 34: The Woodlands – Millennium Waterway Apartments
The Woodlands – Millennium Waterway Apartments 34
Slide 35: The Woodlands – Millennium Phase I
The Woodlands – Millennium Phase I 35
Slide 36: The Woodlands – Millennium Phase II
The Woodlands – Millennium Phase II 36
Slide 37: The Woodlands Economics
The Woodlands Economics 37 Master Plan Economics: Note (1) Source: CEO Letter to Shareholders dated February 29, 2012. (2) Net Debt is computed as $282M of debt, less $39M of cash and $46M of municipal utility district receivables as of December 31, 2011. ~$1 billion implied equity value excluding A
Slide 38: Summerlin – 5,880 Residential Lots, Commercial Acres Remain
Summerlin – 5,880 Residential Lots, 891 Commercial Acres Remain 38
Slide 39: Where Does Normalized Revenue Return To?
Where Does Normalized Revenue Return To? 39
Slide 40: Supply/Demand Rebalance is Well Underway
Supply/Demand Rebalance is Well Underway 40 Source Homebuilders Research, Inc.
Slide 41: Summerlin Centre – One of the Nation's Top Mall Sites
Summerlin Centre – One of the Nation’s Top Mall Sites 41
Slide 42: Summerlin Centre – Retail Sales Leaking Out of Summerlin
Summerlin Centre 42 Over $1.5 billion of Retail Sales “Leaking” Out of Summerlin1 Source (1) RCLCO research.
Slide 43: Summary
Summary 43 Trophy Assets Alignment of Interests: Management “pot committed” to moving assets to the point of creating maximum shareholder value Book Value significantly undervalues assets We believe market is not fully recognizing: Value of Future Development Return to Normalized Housing Market Upsi
Slide 44: Research Coverage: Compass Point Research & Trading
44 Research Coverage: Compass Point Research & Trading, LLC Contact: Wilkes Graham, wgraham@compasspointllc.com Expect more development announcements in 2012
Slide 45: Reconciliation of NOI to Net Income (Loss) from Continuing Operations
45 Reconcilation of Net Operating Income (NOI) to Net Income (Loss) from Continuing Operations ($ in millions) 2011 2010 2009 Income-Producing Operating Assets NOI - Consolidated (a) 51.7 $ 48.6 $ 47.3 $ Total other properties NOI (4.5) (1.2) (2.8) Straight line lease amortization 0.9 0.2 (0.1) Prov
Slide 46: Equity Method Operating Assets NOI Reconciliation
46 Equity Method Operating Assets NOI - Non-consolidated (a) 7.0 $ 4.2 $ 4.0 $ Adjustments to NOI (b) (3.9) (1.9) (0.5) Non-consolidated Equity Method Assets REP EBT 3.1 2.3 3.5 Less: Joint venture partners' share of REP EBT (3.1) (2.6) (2.6) Equity in earnings from real estate affiliates 0.0 (0.3)
Slide 47: Reconciliation of Total Acreage Land Sales Revenue to GAAP
47 Reconciliation of Total Acreage Land Sales Revenue to Total Land Sales Revenue - GAAP Basis ($ in millions) 2011 2010 2009 Total acreage land sales revenue 150.3 $ 124.3 $ 100.4 $ Deferred revenue (0.5) 4.0 (3.4) Deferred revenue - The Woodlands 6.2 - - Special Improvement District revenue 5.4 0.