Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — Q1 2018 Earnings Presentation
26 slides from Howard Hughes's earnings presentation, May 1, 2018
Slide 1: Supplemental Information for the quarterly period ended March 31, 2018
The Howard Hughes Corporation 13355 Noel Road, 22nd Floor Phone: 214.741.7744 Dallas, TX 75240 www.howardhughes.com Supplemental Information For the quarterly period ended March 31, 2018 NYSE: HHC Seaport District New York, NY 110 North Wacker Chicago, IL Downtown Columbia Columbia, MD
Slide 2: Cautionary Statements
Forward Looking Statements Non-GAAP Financial Measures Additional Information 1 www.howardhughes.com Cautionary Statements Our website address is www.howardhughes.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other publicly filed or furnished ng
Slide 3: Table of Contents
FINANCIAL OVERVIEW PORTFOLIO OVERVIEW PORTFOLIO PERFORMANCE DEBT & OTHER Company Profile 3 MPC Portfolio 10 Lease Expirations 12 Debt Summary 21 Financial Summary 5 Portfolio Key Metrics 11 Stabilized Properties 13 Property-Level Debt 22 Balance Sheets 6 Unstabilized Properties 15 Ground Leases 23 S
Slide 4: Company Profile - Summary & Results
Bridgeland $5.3 Waiea $3.5 Columbia (0.1) Anaha 0.6 Summerlin 32.1 Ke Kilohana - The Woodlands / The Woodlands Hills (0.5) Ae`o - Total $36.8 Total $4.1 3 www.howardhughes.com 1Q18 MPC EBT 1Q18 Condo Gross Profit Company Profile - Summary & Results Company Overview - 1Q18 Recent Company Highlights $
Slide 5: 1Q18 Operating Results by Property Type
Retail & Office S.F. Retail & Office S.F. Retail & Office S.F. Retail & Office S.F. Multifamily Units Multifamily Units Multifamily Units Multifamily Units Hotel Keys Hotel Keys Hotel Keys Hotel Keys Other Units Other Units Other Units Other Units Projected Stabilized NOI Projected Stabilized NOI Pr
Slide 6: Company Profile
Company Profile Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2017 FY 2016 Share price1 $139.13 $131.27 $117.93 $122.84 $117.25 $131.27 $114.10 Market Capitalization2 $6.0b $5.9b $5.1b $5.3b $5.1b $5.9b $4.9b Enterprise Value3 $8.3b $7.9b $7.5b $7.7b $7.3b $7.9b $6.9b Weighted avg. shares - basic (in t
Slide 7: Balance Sheets
(In thousands, except share amounts) ASSETS Investment in real estate: Master Planned Community assets $ 1,633,492 $ 1,672,484 $ 1,642,278 $ 1,669,561 Buildings and equipment 2,365,773 2,131,973 2,238,617 2,027,363 Less: accumulated depreciation (325,026) (266,260) (321,882) (245,814) Land 273,444 3
Slide 8: Statements of Operations
(In thousands, except per share amounts) Revenues: Condominium rights and unit sales $ 10,837 $ 80,145 $ 464,251 $ 485,634 Master Planned Community land sales 46,565 53,481 248,595 215,318 Minimum rents 49,395 46,326 183,025 173,268 Tenant recoveries 12,760 11,399 45,814 44,330 Hospitality revenues
Slide 9: Income Reconciliation: Net Income to FFO
(In thousands, except per share amounts) RECONCILIATION OF NET INCOME TO FFO Net income attributable to common shareholders $ 1,474 $ 5,659 $ 168,404 $ 202,303 Add: Segment real estate related depreciation and amortization 26,319 23,549 123,954 89,368 (Gain) loss on disposal of operating assets (3,8
Slide 10: MPC Portfolio / NOI by Region
Dollars in thousands Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Sq. Ft. Units Stabilized Properties Office - Houston 100% 1,477,006 1,396,543 1,428,129 95% 97% $38,699 $40,060 Office - Columbia 100% 1,049,724 973,706 996,139 93% 95% $14,992 $15,295 Office - Summerlin 100% 206,279 197,96
Slide 11: MPC Performance - 1Q18 & 1Q17
MPC Performance - 1Q18 & 1Q17 Note (a) Commercial acres may be developed internally or sold. (b) Reconciliation from GAAP MPC segment earnings before tax (EBT) measure to MPC Net Contribution for the three months ended March 31, 2018 is found under Reconciliation of Non-GAAP Measures on page 25. (c)
Slide 12: Portfolio Key Metrics
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. 1,477,006 - - 206,279 1,049,724 2,733,009 - - - - Retail
Slide 13: Lease Expirations
12 www.howardhughes.com Lease Expirations Houston Las Vegas Columbia Hawaii Other Office Retail Weighted Avg. Lease Term D.C. - 7 Years N.Y. - 12 Years Blended - 10 years 0% 5% 10% 15% 20% 25% 30% Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Office Retail Offic
Slide 14: Stabilized Properties: Office and Retail
Dollars in thousands Office 3 Waterway Square 4 Waterway Square 1400 Woodloch Forest 1735 Hughes Landing Boulevard 2201 Lake Woodlands Drive 3831 Technology Forest 9303 New Trails One Hughes Landing Two Hughes Landing 10-70 Columbia Corporate Center Columbia Office Properties One Mall North One Summ
Slide 15: Stabilized Properties: Residential, Hotel, Other
Dollars in thousands Residential Millennium Six Pines Apartments Millennium Waterway Apartments The Metropolitan Columbia, MD Constellation 85 South Street Total Residential Hotel Embassy Suites at Hughes Landing (a) Total Hotel Other Sarofim Equity Investment Stewart Title of Montgomery County, TX
Slide 16: Unstabilized Properties
Dollars in thousands Office Three Hughes Landing 1725 Hughes Landing One Merriweather Two Merriweather Total Office Retail Lakeland Village Center at Bridgeland Anaha - Retail (c) Ae`o - Retail (c) Total Retail Residential One Lakes Edge m.flats / TEN.M (d) Total Residential Hotel The Woodlands Reso
Slide 17: Under Construction Properties
Dollars in thousands, except per sq. ft. and unit amounts Owned & Managed Office 110 North Wacker3 100 Fellowship Dr Aristocrat Two Summerlin Three Merriweather Total Office Retail Seaport - Uplands / Pier 174 Lake Woodlands Crossing Total Retail Other Summerlin Ballpark5 Total Other Multifamily Col
Slide 18: Acquisition / Disposition Activity
In thousands, except rentable SF / Units / Acres 1Q18 Acquisitions Date Acquired % Ownership Location Rentable SF / Units / Acres Acquisition Price 1Q18 Dispositions Date Sold Rentable SF / Units / Acres Sale Price www.howardhughes.com17 Acquisition / Disposition Activity Property Property % Ownersh
Slide 19: MPC Land
Dollars in thousands 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 Revenues: Residential land sale revenues $5,639 $2,361 $2,854 $5,419 $7,256 $32,638 $38,536 $46,550 $48,153 Commercial land sale revenues 3,799 2 1,467 13 62 15 5,328 Builder price pa
Slide 20: Ward Village Condos Key Metrics
Key Metrics Type of building Number of units Avg. unit s.f. Condo s.f. Street retail s.f. Stabilized retail NOI ($ in thousands) Stabilization year Development progress Status Start date (actual or est.) Completion date (actual or est.) Total development cost ($m) Cost-to-date ($m) Remaining to be f
Slide 21: Other Assets: Planned Future Development
Notes Planned Future Development The Elk Grove Collection Plan to build a 400,000 Sq. Ft. outlet retail center. Sold 36 acres for $36 million in total proceeds in 2017. Landmark Mall Plan to transform the mall into an open-air, mixed-use community. In January 2017, we acquired the 11.4 acre Macy's s
Slide 22: Debt Summary
(In thousands) Fixed-rate debt: Unsecured 5.375% Senior Notes $ 1,000,000 $ 1,000,000 Secured mortgages, notes and loans payable 497,960 499,299 Special Improvement District bonds 24,528 27,576 Variable-rate debt: 1,299,119 1,317,311 Condominium financing (a) 93,613 33,603 Mortgages, notes and loans
Slide 23: Property Level Debt
Notes (a) Extended maturity assumes all extension options are exercised if available based on property performance. (b) Excludes JV debt, Corporate level debt, and SID bond debt related to Summerlin MPC & Retail. www.howardhughes.com Property Level Debt 22 Asset Contract Interest Rate Interest Rate
Slide 24: Summary of Ground Leases
Minimum Contractual Ground Lease Payments ($ in thousands) Pro-Rata Remaining Ground Leased Asset Share 2018 2019 Thereafter Total 100% $1,633 $2,131 $57,455 $61,219 100% 1,199 1,636 204,078 206,913 100% 225 300 8,900 9,425 $3,057 $4,067 $270,433 $277,557 (a) Includes base ground rent, deferred grou
Slide 25: Definitions
24 www.howardhughes.com Definitions Net Operating Income (NOI) - We define NOI as operating cash revenues (rental income, tenant recoveries and other revenue) less operating cash expenses (real estate taxes, repairs and maintenance, marketing and other property expenses), including our share of NOI
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Operating Assets segment EBT to Total NOI: (In thousands) Total Operating Assets segment EBT $ 7,175 $ (14,356) $ (13,162) $ (9,068) $ 7,922 $ (28,664) $ (22,985) Straight-line lease amortization (3,690) (2,801) (1,421) (1,816) (1,961) (7,999) (10,689) Demolition costs 1,443 34 63