Howard Hughes Holdings Inc. · NYSE:HHH
Howard Hughes — JMP Securities Financial Services and Real Estate Conference 2013
23 slides from Howard Hughes's conference presentation, Oct 1, 2013
Slide 1: JMP Securities Financial Services and Real Estate Conference
JMP Securities Financial Services and Real Estate Conference October 1, 2013 Grant Herlitz, President Andrew C. Richardson, Chief Financial Officer
Slide 2: Disclaimer and Safe Harbor Statement
The Howard Hughes Corporation (“HHC”) cautions that statements in this presentation that are forward-looking and provide other than historical information involve risks and uncertainties that may impact actual results and any future performance suggested by the forward-looking statements. The forwar
Slide 3: The Howard Hughes Corporation Company overview
LTM total revenue The Howard Hughes Corporation Company overview .HHC’s mission is to be the preeminent real estate developer and operator of master planned communities and mixed use properties across the United States. .HHC owns a diversified and significantly undervalued portfolio of marquee asset
Slide 4: A distinguished legacy of more than six decades of real estate operations
A distinguished legacy of more than six decades of real estate operations 1973 The vast Hughes empire becomes the Summa Corporation 1994 The Summa Corporation becomes The Howard Hughes Corporation 1996 Merges with The Rouse Company 2009 GGP files for bankruptcy 1950s Howard Hughes acquires land enco
Slide 5: Seasoned senior management team with aligned incentives
Seasoned senior management team with aligned incentives David R. Weinreb Chief Executive Officer Grant Herlitz President Andrew C. Richardson Chief Financial Officer . Executive officers are equity owners having purchased $20 million of warrants and common equity . Deep commercial real estate experi
Slide 6: Steady cash flow base combined with meaningful value creation opportunities
Steady cash flow base combined with meaningful value creation opportunities ($ in millions) . Substantial cash generated from residential lot sales to homebuilders and commercial land sales to developers. . Meaningful growth upside from housing and economic rebound with over 62,000 remaining residen
Slide 7: Key investment highlights
Key investment highlights . Premier portfolio of master planned communities - Diverse collection of trophy MPC assets strategically located in Houston, Las Vegas and Columbia, MD. - Housing market and macroeconomic conditions stabilized and improving significantly in each market. . High-quality, geo
Slide 8: Premier portfolio of trophy master planned communities
Premier portfolio of trophy master planned communities Master planned community real estate overview Kayak-01Summerlin Bridgeland Source: 12/31/12 10-K. (1) Recorded impairment charges of $346 million for Summerlin South and $59 million for the Maryland MPCs in 2010. (2) Robert Charles Lesser annual
Slide 9: Robust performance throughout the MPC portfolio
Robust performance throughout the MPC portfolio Acreage sales revenue Market update Summerlin . Scarcity of attractive developable residential land in the market and improved new housing demand. - Summerlin commands premium pricing in Las Vegas metro area with ~10% historical capture rate on residen
Slide 10: Improving fundamentals in our key MPC markets
Improving fundamentals in our key MPC markets Houston Las Vegas 1 . First big metro to recover all jobs lost during the recession. . Woodlands MPC – 1.5x the size of Manhattan. . Bridgeland soon to be connected to Energy Corridor. Source: John Burns Real Estate Consulting. . New homes sale activity
Slide 11: Operating assets: high-quality, geographically diverse cash flows
Operating assets: high-quality, geographically diverse cash flows Segment overview . Proven stable of high-quality, cash flow generating assets. . HHC’s retail assets include 2.9 million total sq. ft. of leasable area. . These diversified operating assets have the potential for future growth through
Slide 12: Unlocking value at our strategic developments
Unlocking value at our strategic developments ONE Ala Moana . $240 million development with expected completion by end of 2014. . 18-story tower above existing parking structure at Ala Moana Center in Honolulu. . Sold out of all units at an average price ~$1,170 per sq. ft. South Street Seaport . Ph
Slide 13: The Woodlands commercial developments
The Woodlands commercial developments Overview . Strategy is to develop and hold commercial assets given the strong fundamentals with The Woodlands Town Center. - Non-strategic commercial land located on fringes of The Woodlands will likely be sold over time. . Existing Class A office space 99.5% oc
Slide 14: The Shops at Summerlin
The Shops at Summerlin Overview . First phase of a 326-acre mixed use urban town center that will include retail, office, hotel and multi-family residential components incorporated with social, civic and cultural activities to create a vibrant downtown in Summerlin. . ~$150 million infrastructure in
Slide 15: Ward Centers / Ward Village
Ward Centers / Ward Village Overview . Currently includes a 665,000 sq. ft. shopping district with seven specialty centers, ~140 unique shops, a variety of restaurants and an entertainment center, which generates $23 million of annual NOI. . In October 2012, HHC announced plans to create a world-cla
Slide 16: South Street Seaport
South Street Seaport Overview . Comprised of three mid-rise buildings and the Pier 17 pavilion shopping mall in historic waterfront district on Manhattan. - Ranked 26th among the most visited sites around the world by Travel+Leisure with over 9 million people visiting annually. . Received unanimous
Slide 17: Historical financial performance
Historical financial performance Acreage sales revenue by MPC (1) Operating Assets NOI (2)(3) Development costs ($ in millions) ($ in millions) (1) 2009-2011 include The Woodlands MPC assuming 100% ownership. (2) NOI negatively impacted at South Street Seaport and Riverwalk Marketplace. NOI at South
Slide 18: Historical financial summary
Historical financial summary Fiscal year ending December 31, LTM ($ in millions) 2010 2011 2012 6/30/13 Income Statement (1) MPC revenue $49 $132 $206 $241 Min. rents, recoveries, resort & other 93 122 170 169Condominium unit sales 1 22 0 30 Total revenues $143 $276 $377 $440 % growth 93.2% 36.7% Op
Slide 19: Key takeaways
Key takeaways . Premier portfolio of master planned communities . High-quality, geographically diverse income-producing real estate assets . Robust development pipeline with meaningful near-term opportunities . Conservative capital structure with low leverage and staggered debt maturities . Experien
Slide 20: Appendix
THE HOWARD HUGHES Mend ges, Appendix
Slide 21: Financial reconciliations
Financial reconciliations Year ended December 31, Six months ended june 30, Twelve months ended June 30, 2011 2012 2012 2013 2013 ($ in thousands) Consolidated properties Real estate affiliates Segment basis Segment basis segment basis segment basis segment basis Reconciliation of segment revenue to
Slide 22: Financial reconciliations (cont'd)
Financial reconciliations (cont’d) Twelve months Year ended December 31, Six months ended June 30, ended June 30. 2011 2012 2012 2013 2103 ($ in thousands) Reconciliation of total operating assets NOI to total operating assets REP EBT: Total operating assets NOI $55,121 $61,102 $34,973 $29410 $55,53
Slide 23: Financial reconciliations (cont'd)
Financial reconciliations (cont’d) ($ in thousands) year ended December 31, Six months june 30, 2011, 2012, 2012, 2013 reconciliation of net debt to GAAP Total debt mortage, notes and loans payable $606,477 $668,312 $659,307 $715,530 total debt $606,477 $688,312 $659,307 $715,530 less: Cash and cash
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