Howard Hughes Holdings Inc. · NYSE:HHH

Howard Hughes — Q2 2022 Earnings Presentation

36 slides from Howard Hughes's earnings presentation, Aug 3, 2022

  1. Slide 1: Supplemental Information Three Months Ended June 30, 2022

    The Howard Hughes Corporation Supplemental Information Three Months Ended June 30, 2022 NYSE: HHC Exhibit 99.2

  2. Slide 2: Cautionary Statements

    HOWARD HUGHES 2 Cautionary StatementsCautionary 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

  3. Slide 3: Table of Contents

    3 Table of Contents Table of Contents FINANCIAL OVERVIEW Definitions 4 Company Profile 5 Financial Summary 7 Balance Sheets 9 Statements of Operations 10 OPERATING PORTFOLIO PERFORMANCE Same Store Metrics 11 NOI by Region 13 Stabilized Properties 15 Unstabilized Properties 17 Under Construction Prop

  4. Slide 4: Definitions

    HOWARD HUGHES 4 Stabilized - Properties in the Operating Assets and Seaport segments that have been in service for more than 36 months or have reached 90% occupancy, whichever occurs first. If an office, retail or multi-family property has been in service for more than 36 months but does not exceed

  5. Slide 5: Recent Company Highlights

    HOWARD HUGHES 5 ‘A‘ali‘i 35% Kō'ula 63%Victoria Place 2% Bridgeland 29% Summerlin 68% The Woodlands/ Woodlands Hills 3% Recent Company Highlights NEW YORK, April 4, 2022 (PRNewswire) - The Howard Hughes Corporation (HHC) and world-renowned chef Jean-Georges Vongerichten announced that HHC has invest

  6. Slide 6: Path to Projected Annual Stabilized NOI

    HOWARD HUGHES 6 Office 27% Multi-family 69% Retail 4% Office 76% Retail 24% Office 48% Multi-family 25% Retail 20% Other 7% Office 45% Multi-family 22% Retail 24% Other 9% Office 91% Retail 9% Q2 2022 Path to Projected Annual Stabilized NOI Currently Under Construction Currently Unstabilized Current

  7. Slide 7: Company Profile

    HOWARD HUGHES 7 thousands except share price and billions Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 YTD Q2 2022 YTD Q2 2021 Company Profile Share price (a) $ 68.05 $ 103.61 $ 101.78 $ 87.81 $ 97.46 $ 68.05 $ 97.46 Market Capitalization (b) $3.4b $5.4b $5.5b $4.8b $5.4b $3.4b $5.4b Enterprise Value (c)

  8. Slide 8: Financial Summary

    HOWARD HUGHES 8 Financial Summary (a) Operating Assets NOI includes 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 presentati

  9. Slide 9: Balance Sheets

    HOWARD HUGHES 9 thousands except par values and share amounts June 30, 2022 December 31, 2021 ASSETS Unaudited Unaudited Investment in real estate: Master Planned Communities assets $ 2,383,096 $ 2,282,768 Buildings and equipment 3,939,573 3,962,441 Less: accumulated depreciation (800,872) (743,311)

  10. Slide 10: Statements of Operations

    HOWARD HUGHES 10 thousands except per share amounts Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 REVENUES Unaudited Unaudited Unaudited Unaudited Condominium rights and unit sales $ 21,420 $ 12,861 $ 41,036 $ 50,028 Master Planned Communities land sales 84,979 58,342 146,447 95,819 Rental revenue 104,055

  11. Slide 11: Same Store NOI - Operating Assets Segment

    HOWARD HUGHES 11 thousands Q2 2022 Q2 2021 $ Change % Change YTD Q2 2022 YTD Q2 2021 $ Change % Change Same Store Office Houston, TX $ 19,402 $ 16,569 $ 2,833 17 % $ 35,477 $ 35,030 $ 447 1 % Columbia, MD 6,573 6,120 453 7 % 12,378 10,062 2,316 23 % Las Vegas, NV 3,764 3,594 170 5 % 7,061 7,023 38 1

  12. Slide 12: Same Store Metrics

    HOWARD HUGHES 12 thousands Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Same Store Metrics Stabilized Leasing Percentages Office 88 % 90 % 91 % 88 % 89 % Retail 93 % 91 % 92 % 91 % 93 % Multi-Family 96 % 98 % 99 % 97 % 97 % Unstabilized Leasing Percentages Office 64 % 52 % 52 % 45 % 43 % Retail 78 % 72 %

  13. Slide 13: NOI by Region - Stabilized Properties

    HOWARD HUGHES 13 thousands except Sq. Ft. and units % Ownership (a) Total Q2 2022 Occupied (#) Q2 2022 Leased (#) Q2 2022 Occupied (%) Q2 2022 Leased (%) Q2 2022 Annualized NOI (b) Stabilized NOI (c) Time to Stabilize (Years) (d)Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units S

  14. Slide 14: NOI by Region, excluding Seaport (cont.)

    HOWARD HUGHES 14 NOI by RegionNOI by Region, excluding Seaport (cont.) (a) Includes our share of NOI for our joint ventures. (b) To better reflect the full-year performance of the properties, the impacts of certain prior period accruals and adjustments included in Q2 2022 NOI were not annualized. An

  15. Slide 15: Stabilized Properties - Office and Retail

    HOWARD HUGHES 15 thousands except Sq. Ft. and units Location % Ownership Rentable Sq. Ft. Q2 2022 % Occ. (a) Q2 2022 % Leased (a) Annualized Q2 2022 NOI (b) (c) Est. Stabilized NOI (b) Office One Hughes Landing Houston, TX 100 % 197,719 55 % 55 % $ 2,844 $ 6,170 Two Hughes Landing Houston, TX 100 %

  16. Slide 16: Stabilized Properties - Multi-family

    HOWARD HUGHES 16 Q2 2022 % Occ.(a) Q2 2022 % Leased (a) thousands except Sq. Ft. and units Location % Ownership Rentable Sq. Ft. Units Rentable Sq. Ft. Units Rentable Sq. Ft. Units Annualized Q2 2022 NOI (b) (c) Est. Stabilized NOI (b) Multi-family Creekside Park Apartments Houston, TX 100 % — 292 n

  17. Slide 17: Unstabilized Properties

    HOWARD HUGHES 17 Q2 2022 % Occ.(a) Q2 2022 % Leased (a) Develop. Costs Incurred Est. Total Cost (Excl. Land) Annualized Q2 2022 NOI Est. Stabilized NOI (b) Est. Stab. Date Est. Stab. Yield thousands except Sq. Ft. and units Location % Ownership Rentable Sq. Ft. Units Rentable Sq. Ft. Units Rentable

  18. Slide 18: Under Construction Properties

    HOWARD HUGHES 18 Under Construction Properties thousands except Sq. Ft. and units Location % Ownership Est. Rentable Sq. Ft. Percent Pre- Leased (a) Const. Start Date Est. Stabilized Date (b) Develop. Costs Incurred Est. Total Cost (Excl. Land) Est. Stabilized NOI Est. Stab. Yield Office Creekside P

  19. Slide 19: Seaport Operating Performance

    HOWARD HUGHES 19 NOI by Region Q2 2022 Landlord Operations (a) Managed Businesses (b) Events, Sponsorships & Catering Business (c) Q2 2022 Totalthousands except sq. ft. and percentages Historic District & Pier 17 Multi-Family (d) Historic District & Pier 17 Tin Building (e) Revenues Rental revenue (

  20. Slide 20: Ward Village - Sold Out Condominiums

    HOWARD HUGHES 20 As of June 30, 2022 Anaha Ae‘o Ke Kilohana (a) Victoria Place Total Key Metrics ($ in thousands) Type of building Luxury Upscale Workforce Luxury Number of units 317 465 423 349 1,554 Avg. unit Sq. Ft. 1,417 838 696 1,164 991 Condo Sq. Ft. 449,205 389,663 294,273 406,351 1,539,492 S

  21. Slide 21: Ward Village - Condominiums to be Sold

    HOWARD HUGHES 21 As of June 30, 2022 Waiea ‘A‘ali‘i Kō'ula Total Key Metrics ($ in thousands) Type of building Luxury Upscale Upscale Number of units 177 750 565 1,492 Avg. unit Sq. Ft. 2,138 520 725 790 Condo Sq. Ft. 378,488 390,097 409,612 1,178,197 Street retail Sq. Ft. (a) 7,716 11,117 36,800 55

  22. Slide 22: Summary of Remaining Development Costs

    HOWARD HUGHES 22 As of June 30, 2022 thousands Location Total Estimated Costs (a) Costs Paid Through June 30, 2022 Estimated Remaining to be Spent Remaining Buyer Deposits/ Holdback to be Drawn Debt to be Drawn (b) Costs Remaining to be Paid, Net of Debt and Buyer Deposits/ Holdbacks to be Drawn (c)

  23. Slide 23: Portfolio Key Metrics

    HOWARD HUGHES 23 MPC Regions Non-MPC Regions The Woodlands The Woodlands Hills Bridgeland Summerlin Douglas Ranch Trillium Columbia Total Hawai‘i Seaport Total As of June 30, 2022 Houston, TX Houston, TX Houston, TX Las Vegas, NV Phoenix, AZ Phoenix, AZ Columbia, MD MPC Regions Honolulu, HI New York

  24. Slide 24: MPC Performance

    HOWARD HUGHES 24 Master Planned Community Land Consolidated MPC Segment EBT The Woodlands The Woodlands Hills Bridgeland Summerlin Douglas Ranch Columbia Total Trillium (a) thousands Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 20

  25. Slide 25: MPC Land Key Performance Metrics

    HOWARD HUGHES 25 Master Planned Community Land Consolidated MPC Segment The Woodlands The Woodlands Hills Bridgeland Summerlin Douglas Ranch Columbia Trillium (a) thousands Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Key Performance

  26. Slide 26: Lease Expirations

    HOWARD HUGHES 26 Office Expirations (a) Retail Expirations (a) Expiration Year Annualized Cash Rent ($ in thousands) Percentage of Annualized Cash Rent Wtd. Avg. Annualized Cash Rent Per Leased Sq. Ft. Annualized Cash Rent ($ in thousands) Percentage of Annualized Cash Rent Wtd. Avg. Annualized Cash

  27. Slide 27: Acquisition / Disposition Activity

    HOWARD HUGHES 27 Acquisition / Disposition Activity thousands except rentable Sq. Ft. / Units / Acres Q2 2022 Acquisitions Date Acquired Property % Ownership Location Acres Acquisition Price No acquisition activity to report for Q2 2022 Q2 2022 Dispositions Date Sold Property % Ownership Location Ac

  28. Slide 28: Other Assets

    HOWARD HUGHES 28 Other Assets Property Name City, State % Ownership Acres Notes West End Alexandria (formerly Landmark Mall) Alexandria, VA 58.33% 41.1 In June 2021, a Contribution Agreement was executed by and between affiliates of HHC, Seritage, and Foulger-Pratt which establishes a framework for

  29. Slide 29: Debt Summary

    HOWARD HUGHES 29 thousands June 30, 2022 December 31, 2021 Fixed-rate debt Unsecured 5.375% Senior Notes due 2028 $ 750,000 $ 750,000 Unsecured 4.125% Senior Notes due 2029 650,000 650,000 Unsecured 4.375% Senior Notes due 2031 650,000 650,000 Secured mortgages, notes and loans payable 1,206,451 1,0

  30. Slide 30: Property-Level Debt

    HOWARD HUGHES 30 thousands Q2 2022 Principal Balance Contract Interest Rate Interest Rate Hedge Current Annual Interest Rate Initial / Extended Maturity (a) Operating Assets Lake Woodlands Crossing Retail $ 12,164 4.61 % Floating/Swap 4.61 % (d) Jan-23 Senior Secured Credit Facility 242,174 4.61 % F

  31. Slide 31: Property-Level Debt Notes

    HOWARD HUGHES 31 (a) Extended maturity assumes exercise of all extension options. (b) The following properties are included as collateral for the credit facility: 10-70 Columbia Corporate Center, One Mall North, 1701 Lake Robbins, Creekside Village Green, Lakeland Village Center at Bridgeland and ce

  32. Slide 32: Summary of Ground Leases

    HOWARD HUGHES 32 Minimum Contractual Ground Lease Payments (thousands) Future Cash Payments Pro-Rata Three months ended Remaining Year Ended Ground Leased Asset Share Expiration Date June 30, 2022 2022 December 31, 2023 Thereafter Total Seaport 100% 2072 (b) 604 1,231 2,491 244,916 248,638 Kewalo Ba

  33. Slide 33: Reconciliation of Non-GAAP Measures

    HOWARD HUGHES 33 Reconciliation of Non-GAAP Measures (a) EBT excludes corporate expenses and other items that are not allocable to the segments. (b) The Company's share of NOI related to 110 North Wacker in 2021 is calculated using our stated ownership of 23% and does not include the impact of the p

  34. Slide 34: Reconciliation of Seaport segment EBT to Total NOI

    HOWARD HUGHES 34 Reconciliation of Seaport segment EBT to Total NOI thousands Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 YTD Q2 2022 YTD Q2 2021 Seaport segment EBT (a) $ (12,573) $ (20,714) $ (18,146) $ (14,929) $ (12,869) $ (33,287) $ (25,343) Add back: Depreciation and amortization 7,720 7,823 7,941

  35. Slide 35: Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue

    HOWARD HUGHES 35 Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue Three Months Ended June 30, Six Months Ended June 30, thousands 2022 2021 2022 2021 Total residential land sales closed in period $ 84,041 $ 56,525 $ 108,638 $ 91,262 Total commercial land sales closed in period 1,39

  36. Slide 36: Reconciliations of Net Income to FFO

    HOWARD HUGHES 36 RECONCILIATIONS OF NET INCOME TO FFO Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 thousands except share amounts Unaudited Unaudited Unaudited Unaudited Net income attributable to common shareholders $ 21,564 $ 4,841 $ 23,686 $ (61,753) Adjustments to arrive at FFO: Segment real estate r

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