Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Q4 2017 Earnings Presentation
26 slides from Howard Hughes's earnings presentation, Feb 26, 2018
Slide 1: Forward Looking 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-looking statements by th
Slide 2: Table of Contents
FINANCIAL OVERVIEW PORTFOLIO OVERVIEW PORTFOLIO PERFORMANCE DEBT & OTHER Financial Summary 5 Portfolio Key Metrics 11 Stabilized Properties 13 Property-Level Debt 22 Balance Sheet 6 Unstabilized Properties 15 Ground Leases 23 Statement of Operations 7 Under Construction Properties 16 Definitions 24
Slide 3: Company Overview - 4Q17
DALLAS--(BUSINESS WIRE)--Jan. 11, 2018--The Howard Hughes Corporation® (NYSE: HHC) announced today that Ward Village®, its 60-acre master planned community in Honolulu’s urban core, was named “Master Planned Community of the Year” at The NationalsSM Awards gala held on January 9 in Orlando, Florida.
Slide 4: Operating Portfolio by Region
$ in millions $ in millions $ in millions $ in millions Hotel 4% Hotel 43% Retail 41% Retail 28% Retail 13% Hotel 13% Hotel Projected Stabilized NOI $40.5M Retail 6% Projected Stabilized NOI $63.1M Projected Stabilized NOI $151.5M Projected Stabilized NOI $255.1M 3% Other 6% Other 3% Other 4% Office
Slide 5: Company Profile
Company Profile Share price1 Market Capitalization2 Enterprise Value3 Weighted avg. shares - basic (in thousands) Weighted avg. shares - diluted (in thousands) Total diluted share equivalents outstanding (in thousands) 1 $131.27 $5.9b $7.9b 42,860 43,120 44,917 $117.93 $5.1b $7.5b 42,845 43,267 43,3
Slide 6: Balance Sheet
(In thousands) ASSETS Investment in real estate: Master Planned Community assets Buildings and equipment Less: accumulated depreciation Land Developments Net property and equipment Investment in Real Estate and Other Affiliates Net investment in real estate Cash and cash equivalents Accounts receiva
Slide 7: Statement of Operations
(In thousands) Revenues: Condominium rights and unit sales Master Planned Community land sales Minimum rents Tenant recoveries Hospitality revenues Builder price participation Other land revenues Other rental and property revenues Total revenues Expenses: Condominium rights and unit cost of sales Ma
Slide 8: Income Reconciliation
8www.howardhughes.com (In thousands) RECONCILIATION OF NET INCOME TO FFO Net income attributable to common shareholders $ 149,121 $ 43,595 Add: Segment real estate related depreciation and amortization 33,612 22,608 (Gain) loss on disposal of operating assets (3,868) 1,117 Gains on sales of properti
Slide 9: NOI by Region
Dollars in thousands Property Ownership Annualized Stabilize Stabilized Properties Office - Houston Office - Columbia Office - Other (d) Office - Summerlin Retail - Houston Retail - Columbia Retail - Hawaii Retail - Other (e) Retail - Summerlin Multi-Family - Houston Multi-Family - Columbia Multi-Fa
Slide 10: MPC Portfolio
Commercial 19% Commercial 37% Master Planned Communities - ReRmeaminianigniSnagleSaable AbclreesA(car)es Commercial 100% Residential 63% Residential 81% Unstabilized 24% InIcnocmoemPer-oPdruocdinugciAnsgsAetsss-ets Stabilized & Unstabilized Unstabilized 51% Stabilized 49% Stabilized 50% Unstabilized
Slide 11: Portfolio Key Metrics
MPC Regions Non-MPC Regions Operating - Stabilized Properties Office s.f. Retail s.f. Multifamily units Hotel Rooms Self Storage Units Operating - Unstabilized Properties Office s.f. Retail s.f. (a) Multifamily units Hotel rooms Self Storage Units Operating - Under Construction Properties Office s.f
Slide 12: Office and Retail Lease Expirations
Office and Retail Lease Expirations Total Office and Retail Portfolio as of December 31, 2017 30% 25% 20% Blended - 10 years 15% 10% 5% 0% Office Expirations Retail Expirations Wtd. Avg. Wtd. Avg. Annualized Cash Rent Per Leased Sq. Ft. Annualized Cash Rent Per Leased Sq. Ft. Annualized Cash Rent ($
Slide 13: Stabilized Properties
Dollars in thousands Office 100% 197,714 96% 98% 5,840 6,000 Two Hughes Landing Houston, TX 100% 24,119 100% 100% (23) 410 2201 Lake Woodlands Drive Houston, TX 100% 95,078 100% 100% 2,268 2,268 3831 Technology Forest Houston, TX 100% 218,551 100% 100% 5,687 6,856 4 Waterway Square Houston, TX 100%
Slide 14: Stabilized Properties (continued)
Dollars in thousands Residential 100% 393 94% 96% 4,129 4,600 Millennium Waterway Apartments Houston, TX 50% 13,591 / 380 100% / 92% 100% / 95% 2,671 3,500 The Metropolitan Columbia, MD Total Residential 26,591 / 1,233 $12,347 $15,400 Hotel Total Hotel 205 $3,778 $4,500 Other 20% NA NA NA 2,047 2,04
Slide 15: Unstabilized Properties
Dollars in thousands Office 100% 331,754 70% 70% 54,810 74,994 3,311 6,900 2020 1725 Hughes Landing Houston, TX 100% 124,635 58% 58% 26,985 40,941 (141) 3,600 2021 Two Merriweather Columbia, MD Total Office 979,807 $216,834 $284,284 $4,603 $23,200 Retail 100% 83,466 70% 75% 13,658 16,274 1,062 1,700
Slide 16: Under Construction Properties
Dollars in thousands, except per sq. ft. and unit amounts Owned & Managed Office 180,000 100% Aristocrat Las Vegas, NV 100% Under construction Q2 2017 Q1 2019 6,691 46,661 4,071 9% 320,000 50% Three Merriweather Columbia, MD 100% Pending Construction Q1 2018 2023 4,426 138,221 9,200 7% Total Office
Slide 17: Acquisition / Disposition Activity
In thousands, except rentable SF / Units / Acres 4Q 2017 Acquisitions SF / Units / Acres Price $8,000(1) 12/28/2017 Constellation 100% Las Vegas, NV 124 Units 4Q 2017 Dispositions Property % Ownership Location Sale Price SF / Units / Acres 12/13/2017 Century Plaza 100% Birmingham, AL 59.00 AC $3,000
Slide 18: MPC Land
Woodlands Woodlands Hills Bridgeland Summerlin Maryland Total Dollars in thousands Revenues: Residential land sale revenues Commercial land sale revenues Builder price participation Other land sale revenues $13,114 — 49 1,274 $17,529 — 48 1,612 $1,282 — — 9 $ — — — 2 $7,341 1,745 102 4,111 $6,918 1,
Slide 19: Ward Village Condos
Key Metrics Development progress Fi Deposit Reconciliation (Dollars in thousands) Notes (a) We began delivering units at Waiea in November 2016. As of December 31, 2017, we've closed 159 units, we have 6 under contract, and 9 units remaining to be sold. (b) We began delivering units at Anaha in Octo
Slide 20: Other Assets - Planned Future Development
Planned Future Development Landmark Mall Alexandria, VA 100% 33 Plan to transform the mall into an open-air, mixed-use community. In January 2017, we acquired the 11.4 acre Macy's site for $22.2 million. 50/50 joint venture with Hillwood Development Company. In 2016, HHC sold 72 acres to an affiliat
Slide 21: Debt Summary
Fixed-rate debt: Unsecured 5.375% Senior Notes Unsecured 6.875% Senior Notes Secured mortgages, notes and loans payable Special Improvement District bonds Variable-rate debt: Mortgages, notes and loans payable, excluding condominium financing Condominium financing Mortgages, notes and loans payable
Slide 22: Property-Level Debt
The Woodlands Master Credit Facility $150,000 L+275 Floating 4.24% Apr-20 / Apr-21 $215,000 Outlet Collection at Riverwalk $53,841 L+275 Floating 4.24% Oct-17 / Oct-18 The Westin at The Woodlands $57,946 L+265 Floating 4.14% Aug-18 / Aug-19 Three Hughes Landing $45,058 L+235 Floating 3.84% Jan-18 /
Slide 23: Summary of Ground Leases
Minimum Contractual Ground Lease Payments ($ in thousands) Future Cash Payments Year Ended December 31 Pro-Rata Share Three months ended Ground Leased Asset Expiration Date December 31, 2017 2017 2018 Thereafter Total Riverwalk (a) Seaport Kewalo Basin Harbor $3,649 1,547 300 $2,453 1,593 300 $60,40
Slide 24: Definitions
Under Construction - Projects in the Strategic segment for which construction has commenced as of December 31, 2017, unless otherwise noted. This excludes MPC and condominium development. Unstabilized - Properties in the Operating segment that have not been in service for more than 36 months and do
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Operating Assets segment EBT to Total NOI: (In thousands) Total Operating Assets segment EBT $ (14,356) $ (13,162) $ (9,068) $ 7,922 $ 5,191 $ (28,664) $ (22,985) Straight-line lease amortization Demolition costs Development-related marketing costs Depreciation and Amortization Pro
Slide 26: Reconciliation of Non-GAAP Measures
Honned aghes Reconciliation of Non-GAAP Measures ‘Reconciliation of Operating Assets segment EBT to Total NOE tn thousands) aa aT, re FRET “etal Operaing Asses segment EST ¥ (ae) + Tae § ear | z 22.088) Sraghtinelease amorzaten| aor aan, oan (1957) (see) Demeiton cost rey 8 04 ry Developmentseated m