Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Q3 2019 Earnings Presentation
33 slides from Howard Hughes's earnings presentation, Nov 4, 2019
Slide 1: Supplemental Information Three months ended September 30, 2019
Exhibit 99.2 Seaport District Hughes Landing 6100 Merriweather New York, NY Houston, TX Columbia, MD Supplemental Information Three months ended September 30, 2019 NYSE: HHC The Howard Hughes Corporation, 13355 Noel Road, 22nd Floor, Dallas, TX 75240 HowardHughes.com 214.741.7744
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 19 Financial Summary 6 Stabilized Properties 13 Portfolio Key Metrics 20 Balance Sheets 8 Unstabilized Properties 15 Lease Expirations 21 St
Slide 4: Company Profile - Summary & Results
Company Profile - Summary & Results Company Profile - Summary & Results Company Overview - Q3 2019 Recent Company Highlights LAS VEGAS, Sept. 16, 2019 (PRNewswire) -- The Howard Hughes Corporation (HHC) celebrated Exchange / Ticker NYSE: HHC Las Vegas Ballpark being named "Ballpark of the Year" and
Slide 5: Company Profile - Summary & Results (cont'd)
Company Profile - Summary & Results (cont'd) Company Profile - Summary & Results (con't) Q3 2019 Path to Projected Annual Stabilized NOI Currently Under Construction Currently Unstabilized Currently Stabilized Total $ in millions $ in millions $ in millions $ in millions Other Other Retail Other 2%
Slide 6: Financial Summary
Financial Summary Financial Summary ($ in thousands, except share price and billions) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 YTD Q3 2019 YTD Q3 2018 Company Profile Share price (a) $129.60 $123.84 $110.00 $97.62 $124.22 $129.60 $124.22 Market Capitalization (b) $5.6b $5.4b 4.8b 4.2b $5.4b $5.6b $5.
Slide 7: Financial Summary (con't)
Financial Summary (con't) Financial Summary ($ in thousands) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 YTD Q3 2019 YTD Q3 2018 Earnings Profile Operating Assets Segment Income Revenues $ 101,694 $ 106,604 $ 89,107 $ 80,940 $ 83,676 $ 297,405 $ 254,205 Expenses (47,410) (47,901) (42,754) (41,348) (42,7
Slide 8: Balance Sheets
Balance Sheets (In thousands, except par values and share amounts) Q3 2019 Q3 2018 FY 2018 FY 2017 Assets: Unaudited Unaudited Unaudited Unaudited Investment in real estate: Master Planned Communities assets $ 1,683,224 $ 1,621,168 $ 1,642,660 $ 1,642,278 Buildings and equipment 3,268,926 2,510,945
Slide 9: Statements of Operations
Statements of Operations Comparative Statements of Operations: Total Portfolio (In thousands, except per share amounts) Q3 2019 Q3 2018 YTD Q3 2019 YTD Q3 2018 Revenues: Unaudited Unaudited Unaudited Unaudited Condominium rights and unit sales $ 9,999 $ 8,045 $ 443,931 $ 39,767 Master Planned Commun
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) Q3 2019 Q3 2018 YTD Q3 2019 YTD Q3 2018 RECONCILIATIONS OF NET INCOME TO FFO Unaudited Unaudited Unaudited Unaudited Net income attributable to common stockholders $ 29,758 $ 23,365 $ 75,056 $ 19,751 Adjustm
Slide 11: NOI by Region, excluding the Seaport District
NOI by Region, excluding the Seaport District % Total Q3 2019 Occupied (#) Q3 2019 Leased (#) Q3 2019 Occupied (%) Q3 2019 Leased (%) Q3 2019 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) S
Slide 12: NOI by Region, excluding the Seaport District (con't)
NOI by Region, excluding the Seaport District (con't) NOI by Region % Total Q3 2019 Occupied (#) Q3 2019 Leased (#) Q3 2019 Occupied (%) Q3 2019 Leased (%) Q3 2019 Time to Ownership Annualized Stabilized Stabilize Property (a) Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units NOI
Slide 13: Stabilized Properties - Operating Assets Segment
Stabilized Properties - Operating Assets Segment Stabilized Properties ($ in thousands) Rentable Q3 2019 Q3 2019 Annualized Est. Stabilized Property Location % Ownership Sq. Ft./Units % Occ. % Leased Q3 2019 NOI NOI Office 3 Waterway Square Houston, TX 100 % 232,021 100 % 100 % $ 6,716 $ 6,900 4 Wat
Slide 14: Stabilized Properties - Operating Assets Segment (con't)
Stabilized Properties - Operating Assets Segment (con't) Stabilized Properties (cont'd) ($ in thousands) % Rentable Sq. Ft. / Q3 2019 % Q3 2019 % Annualized Est. Stabilized Property Location Ownership Units (a) Occ. (a) Leased (a) Q3 2019 NOI NOI Multi-family Millennium Six Pines Apartments Houston,
Slide 15: Unstabilized Properties - Operating Assets Segment
Unstabilized Properties - Operating Assets Segment ($ in thousands) Est. % Rentable Sq. Q3 2019 % Q3 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) Q3 2019 NOI NOI (b) Date Yield
Slide 16: Unstabilized Properties - Operating Assets Segment (cont.)
Unstabilized Properties - Operating Assets Segment (cont.) ($ in thousands) Est. % Rentable Sq. Q3 2019 % Q3 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) Q3 2019 NOI NOI (b) Dat
Slide 17: 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 18: 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 (d) Hospitality (e) Pier 17 (f) Tin Building (g) Catering Business (c) Q3 2019 Total
Slide 19: MPC Portfolio
MPC Portfolio Commercial 20% Commercial Master Planned 40% Commercial Communities- Remaining Residential 100% Saleable Acres (a) Residential 60% 80% Unstabilized 14% Stabilized Income Producing Assets - Stabilized Unstabilized 44% Stabilized and Unstabilized 46% Unstabilized 54% 56% Stabilized 86% (
Slide 20: 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 21: Lease Expirations
Lease Expirations Lease Expirations Office and Retail Lease Expirations Total Office and Retail Portfolio as of September 30, 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% Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Offic
Slide 22: Acquisition / Disposition Activity
Acquisition / Disposition Activity Acquisition / Disposition Activity (In thousands, except rentable Sq. Ft. / Units / Acres) Q3 2019 Acquisitions Rentable Date Acquired Property % Ownership Location Sq. Ft. / Units / Acres Acquisition Price No acquisition activity in Q3 2019 Q3 2019 Dispositions Re
Slide 23: Master Planned Community Land
Master Planned Community Land Master Planned Community Land The Woodlands The Woodlands Hills Bridgeland Summerlin Maryland Total ($ in thousands) Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Revenues: Residential land sale revenues $ 11,722 $ 7,205
Slide 24: 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 (g) 317 465 423 750 565 2,697 Avg. unit Sq. Ft. 2,138 1,417 838 696 518 725 856
Slide 25: Other Assets
Other 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
Slide 26: Debt Summary
Debt Summary Debt Summary (In thousands) September 30, 2019 December 31, 2018 Fixed-rate debt: Unsecured 5.375% Senior Notes $ 1,000,000 $ 1,000,000 Secured mortgages, notes and loans payable 997,243 648,707 Special Improvement District bonds 14,382 15,168 Variable-rate debt: Mortgages, notes and lo
Slide 27: Property-Level Debt
Property-Level Debt Property-Level Debt ($ in thousands) Q3 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 $ 150,000 L+275 Floating/Cap 4.77% Apr-20 /
Slide 28: Property-Level Debt (con't)
Property-Level Debt (con't) ($ in thousands) Q3 2019 Principal Asset Balance Contract Interest Rate Interest Rate Hedge Current Annual Interest Rate Initial / Extended Maturity (a) Seaport District 250 Water Street $ 99,723 6.00% Fixed 6.00% Jun-20 Seaport District (c) 250,000 6.10% Fixed to Floatin
Slide 29: 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 September 30, 2019 2019 2020 Thereafter Total Riverwalk (a) 100%
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) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 YTD Q3 2019 YTD Q3 2018 Total Operating Assets segment EBT (a) $ 19,825 $ 12,628 $ 5,686 $ (5,793) $ (4,115) $ 3
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) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 YTD Q3 2019 YTD Q3 2018 Total Seaport District segment EBT (a) $ (16,656) $ (14,270) $ (15,852) $ (15,66
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 September 30, Nine Months Ended September 30, Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue 2019 2018 2019 2018 Total residential land sales closed in period $ 84,6