Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Q2 2020 Earnings Presentation
33 slides from Howard Hughes's earnings presentation, Aug 3, 2020
Slide 1: Supplemental Information Three months ended June 30, 2020
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 H
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 - 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 b
Slide 5: Company Profile - Summary & Results (cont'd)
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% Hote
Slide 6: Financial Summary
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 $5.
Slide 7: Financial Summary (con't)
Financial Summary (con't) Financial Summary ($ 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,
Slide 8: Balance Sheets
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
Slide 9: Statements of Operations
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
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) 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
Slide 11: NOI by Region, excluding the Seaport District
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) (Yea
Slide 12: NOI by Region, excluding the Seaport District (con't)
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. Unit
Slide 13: Stabilized Properties - Operating Assets Segment
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
Slide 14: Stabilized Properties - Operating Assets Segment (con't)
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% $ 3,58
Slide 15: Unstabilized Properties - Operating Assets Segment
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 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) Est. Develop. Est. Total Est. (Owned & Managed) Project % Est. Rentable Percent Pre- Const. Stabilized Costs Cost (Excl. Est. Stabilized Stab. Name Location Ownership
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) Q2 2020 Total
Slide 18: MPC Portfolio
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% ($
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 (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 - Stabi
Slide 20: Lease Expirations
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 R
Slide 21: Acquisition / Disposition Activity
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 Re
Slide 22: Master Planned Community Land
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 $16,43
Slide 23: Ward Village Condominiums
Ward Village Condominiums Waiea (a) Anaha (b) Ae‘o (c) Ke Kilohana (d) ‘A‘ali‘i (e) Kō'ula (f) Total Key Metrics ($ in thousands) Type of building Ultra-Luxury Luxury Upscale Workforce Upscale Upscale Number of units 177 317 465 423 750 565 2,697 Avg. unit Sq. Ft. 2,138 1,417 838 696 518 725 856 Con
Slide 24: Other/Non-core Assets
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 p
Slide 25: Debt Summary
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 p
Slide 26: Property-Level Debt
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
Slide 27: Property-Level Debt (con't)
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
Slide 28: Summary of Ground Leases
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-
Slide 29: Summary of Restructuring Expenses
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 Expense
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) 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
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) 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) $ (16,65
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 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