Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Q2 2018 Earnings Presentation
27 slides from Howard Hughes's earnings presentation, Aug 6, 2018
Slide 1: Supplemental Information Three months ended June 30, 2018
NYSE: HHC Supplemental Information Three months ended June 30, 2018 Seaport District Two Lakes Edge Three Merriweather New York, NY Houston, TX Columbia, MD The Howard Hughes Corporation 13355 Noel Road, 22nd Floor Phone: 214.741.7744 Dallas, TX 75240 www.howardhughes.com
Slide 2: 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 can identify forward-lo
Slide 3: Table of Contents
Table of Contents FINANCIAL OVERVIEW PORTFOLIO OVERVIEW PORTFOLIO PERFORMANCE DEBT & OTHER Company Profile 4 MPC Portfolio 11 Lease Expirations 13 Debt Summary 22 Financial Summary 6 Portfolio Key Metrics 12 Stabilized Properties 14 Property-Level Debt 23 Balance Sheets 7 Unstabilized Properties 16
Slide 4: Company Profile - Summary & Results
Company Profile - Summary & Results Company Overview - 2Q18 Recent Company Highlights CHICAGO--(PRNewswire)--June 15, 2018--The Howard Hughes Corporation® (NYSE: HHC) and Riverside Investment & Development, along with Mayor Rahm Emanuel, Alderman Brendan Reilly, Commissioner David Reifman, Chicago P
Slide 5: Company Profile - Summary & Results (cont'd)
Company Profile - Summary & Results (cont'd) Path to Projected Annual Stabilized NOI Currently Under Construction Currently Unstabilized Currently Stabilized Total Retail & Office S.F. 2,330,200 Retail & Office S.F. 1,181,570 Retail & Office S.F. 5,171,895 Retail & Office S.F. 8,683,665 Multifamily
Slide 6: Financial Summary
Financial Summary Company Profile Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 YTD Q2 2018 YTD Q2 2017 Share price1 $132.50 $139.13 $131.27 $117.93 $122.84 $132.50 $122.84 Market Capitalization2 $5.7b $6.0b $5.9b $5.1b $5.3b $5.7b $5.3b Enterprise Value3 $8.3b $8.3b $7.9b $7.5b $7.7b $8.3b $7.7b Weighted
Slide 7: Balance Sheets
Balance Sheets (In thousands, except shares and par value amounts) Q2 2018 Q2 2017 FY 2017 FY 2016 ASSETS Unaudited Unaudited Investment in real estate: Master Planned Communities assets $ 1,640,298 $ 1,676,263 $ 1,642,278 $ 1,669,561 Buildings and equipment 2,390,097 2,152,915 2,238,617 2,027,363 L
Slide 8: Comparative Statements of Operations: Total Portfolio
Comparative Statements of Operations: Total Portfolio (In thousands, except share amounts) Q2 2018 Q2 2017 YTD Q2 2018 YTD Q2 2017 Revenues: Condominium rights and unit sales $ 20,885 $ 148,211 $ 31,722 $ 228,356 Master Planned Communities land sales 52,432 69,144 98,997 122,625 Minimum rents 50,509
Slide 9: 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 2018 Q2 2017 YTD Q2 2018 YTD Q2 2017 RECONCILIATIONS OF NET INCOME TO FFO Net (loss) income attributable to common shareholders $ (5,088) $ 3,120 $ (3,614) $ 8,779 Add: Segment real estate related depreci
Slide 10: NOI by Region
NOI by Region % Total 2Q18 Occupied (#) 2Q18 Leased (#) 2Q18 Occupied (%) 2Q18 Leased (%) 2Q18 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) Stabilized Properties Office - Houston 100% 1,47
Slide 11: MPC Portfolio
MPC Portfolio ($ in thousands) Nevada Texas Maryland Total (c) MPC Performance - 2Q18 & 2Q17 MPC Net Contribution (2Q18) (b) $31,596 $(20,682) $(183) $10,731 MPC Net Contribution (2Q17) (b) $23,637 $1,133 $244 $25,014 Operating Asset Performance - 2018 & Future Annualized 2Q18 In-Place NOI $32,052 $
Slide 12: Portfolio Key Metrics
Portfolio Key Metrics MPC Regions Non-MPC Regions Woodlands Woodlands Hills Bridgeland Summerlin Columbia Total Hawaii Seaport Other Total Houston, TX Houston, TX Houston, TX Las Vegas, NV Columbia, MD MPC Regions Honolulu, HI New York, NY Non-MPC Operating - Stabilized Properties Office s.f. 1,477,
Slide 13: Lease Expirations
Lease Expirations Office Expirations (a) Retail Expirations (a) Annualized Cash Rent Percentage of Wtd. Avg. Annualized Cash Annualized Cash Rent Percentage of Wtd. Avg. Annualized Cash Expiration Year (In thousands) Annualized Cash Rent Rent Per Leased Sq. Ft. (In thousands) Annualized Cash Rent Re
Slide 14: Stabilized Properties
Stabilized Properties (Dollars in thousands) Rentable 2Q18 2Q18 Annualized Est. Stabilized Property Location % Ownership Sq. Ft./Units % Occ. % Leased 2Q18 NOI NOI Office 3 Waterway Square Houston, TX 100 % 232,021 100 % 100 % $ 6,928 $ 6,900 4 Waterway Square Houston, TX 100 % 218,551 100 % 100 % 6
Slide 15: Stabilized Properties (cont'd)
Stabilized Properties (cont'd) (Dollars in thousands) Rentable Sq. Ft. / 2Q18 % Annualized Est. Stabilized Property Location Ownership Units 2Q18 % Occ. Leased 2Q18 NOI NOI Residential Millennium Six Pines Apartments Houston, TX 100% 314 96% 98% $ 3,898 $ 4,500 Millennium Waterway Apartments Houston
Slide 16: Unstabilized Properties
Unstabilized Properties (Dollars in thousands) % Rentable Sq. 2Q18 % 2Q18 % Develop. Est. Total Cost Annualized Est. Stabilized Est. Stab. Est. Stab. Project Name Location Ownership Ft. / Units Occ. (a) Leased (a) Costs Incurred (Excl. Land) 2Q18 NOI NOI (b) Date Yield Office Three Hughes Landing Ho
Slide 17: Under Construction Properties
Under Construction Properties Dollars in thousands, except per sq. ft. and unit amounts Owned & Managed % Est. Rentable Percent Pre- Const. Start Est. Stabilized Develop. Costs Est. Total Cost Est. Stabilized Stabilized Project Name City, State Ownership Sq. Ft. Leased1 Project Status Date Date2 Inc
Slide 18: Acquisition / Disposition Activity
Acquisition / Disposition Activity In thousands, except rentable SF / Units / Acres 2Q 2018 Acquisitions Rentable Date Acquired Property % Ownership Location Sq. Ft. / Units / Acres Acquisition Price 6/8/2018 250 Water Street 100% New York, NY 1 acre $180,000 5/4/2018 Sterrett Place1 100% Columbia,
Slide 19: Master Planned Community Land
Master Planned Community Land Woodlands Woodlands Hills Bridgeland Summerlin Maryland Total (Dollars in thousands) 2Q 2018 2Q 2017 2Q 2018 2Q 2017 2Q 2018 2Q 2017 2Q 2018 2Q 2017 2Q 2018 2Q 2017 2Q 2018 2Q 2017 Revenues: Residential land sale revenues $ 10,910 $ 13,600 $ 2,273 $ — $ 9,011 $ 9,374 $
Slide 20: Ward Village Condominiums
Ward Village Condominiums Waiea (a) Anaha (b) Ae'o Ke Kilohana (c) Total Key Metrics Type of building Ultra-Luxury Luxury Upscale Workforce Number of units 174 317 465 424 1,380 Avg. unit Sq. Ft. 2,174 1,417 834 694 1,094 Condo Sq. Ft. 378,238 449,205 388,039 294,273 1,509,755 Street retail Sq. Ft.
Slide 21: Other Assets
Other Assets Property Name City, State % Own Acres Notes Planned Future Development The Elk Grove Collection Elk Grove, CA 100% 64 Plan to build a 400,000 Sq. Ft. outlet retail center. Sold 36 acres for $36 million in total proceeds in 2017. Landmark Mall Alexandria, VA 100% 33 Plan to transform the
Slide 22: Debt Summary
Debt Summary June 30, December 31, (In thousands) 2018 2017 Fixed-rate debt: Unsecured 5.375% Senior Notes due 2025 $ 1,000,000 $ 1,000,000 Secured mortgages, notes and loans payable 621,959 499,299 Special Improvement District bonds 21,235 27,576 Variable-rate debt: Mortgages, notes and loans payab
Slide 23: Property-Level Debt
Property-Level Debt ($ in thousands) Asset 2Q18 Principal 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 4.84% Apr-20 / Apr-21 Bridgeland Cred
Slide 24: 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 Ended December 31, Ground Leased Asset Share Expiration Date June 30, 2018 2018 2019 Thereafter Total Riverwalk (a) 100% 2045-2046 $ 499 $ 1,140 $ 2,131
Slide 25: Definitions
Definitions Under Construction - Projects in the Strategic segment for which construction has commenced as of June 30, 2018, unless otherwise noted. This excludes MPC and condominium development. Unstabilized - Properties in the Operating segment that have been in service for less than 36 months and
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of Operating Assets segment EBT to Total NOI: (In thousands) Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 YTD Q2 2018 YTD Q2 2017 Total Operating Assets segment EBT (a) $ 4,640 $ 7,180 $ (11,834) $ (11,812) $ (8,335) $ 11,820 $ 248 Depreciation and amort
Slide 27: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Total residential land sales closed in period $ 45,063 $ 51,909 $ 87,842 $ 87,791 Total commercial land sa