Howard Hughes
Release Details
Howard Hughes Holdings Inc. Reports First Quarter 2025 Results
First Quarter 2025 Highlights:
- Net income from continuing operations per diluted share of
$0.21 compared to a loss of$(0.42) in the prior-year period - Adjusted Operating Cash Flow of $63 million or
$1.27 per diluted share - Full-year 2025 guidance is unchanged in each segment with mid-point adjusted operating cash flow of $350 million or
$7.00 per diluted share - Total Operating Assets Net Operating Income (NOI) achieves a new quarterly record of
$72 million , increasing 9% year-over-year led by improved performance in office and multifamily Master Planned Community (MPC) EBT of $63 million increases sequentially and year-over-year, driven by the sale of 70 residential acres at an average price of$991,000 per acre- Contracted to sell 27 condo units in
Ward Village ® for a total value of$51 million , bringing the backlog of future condo revenues to$2.7 billion - Subsequent to quarter end,
Pershing Square Holdco, L.P. and its wholly owned subsidiary,Pershing Square Capital Management, L.P. (collectively, “Pershing Square”) purchased $900 million of newly issued HHH stock at$100 per share, providing capital to fund future acquisitions of high growth, public and private companies and transforming HHH into a diversified holding company
“We began 2025 on a strong note, reporting impressive results which place us firmly on track to achieve our 2025 full-year guidance,” commented David R. O’Reilly, Chief Executive Officer of Howard Hughes. “During the quarter, we experienced 9% year-over-year NOI growth in Operating Assets, solid residential land sales in our MPCs, and meaningful condo pre-sales, paving the way for what we anticipate will be another record year at Howard Hughes. Overall, we maintain our full-year guidance for Adjusted Operating Cash Flow—our new performance metric which provides enhanced visibility into the key drivers of our cash flow generation and self-funding business model—of approximately $350 million.
“In our Operating Assets segment, our exceptional leasing activity in office and multifamily during recent periods continued to produce positive results, contributing to record quarterly NOI of
“In our MPC segment, the strong momentum we experienced throughout 2024 continued with the sale of 70 residential acres at an average price just under
“Since the end of the year, we closed on several important financing deals—including a
“Finally, earlier this week, we announced our agreement with Pershing Square to invest $900 million of capital into the Company through the cash purchase of nine million newly issued shares of HHH stock at
Information provided in this press release does not take into account the anticipated changes in our business as a result of the shift in our strategic direction.
Click Here: First Quarter 2025 Howard Hughes Quarterly Spotlight Video
Click Here: First Quarter 2025 Earnings Call Webcast
Financial Highlights
- Net income from continuing operations was
$10.8 million , or$0.21 per diluted share in the quarter, compared to a loss of$21.0 million , or$(0.42) per diluted share in the prior-year period. - The year-over-year increase was primarily related to increased Operating Assets NOI and higher MPC land sales.
- The Company continued to maintain a strong liquidity position with
$493.7 million of cash and cash equivalents,$1.0 billion of undrawn lender commitments available to be drawn for property development, and limited near-term debt maturities. With the sale of additional Bridgeland MUD receivables subsequent to quarter end, liquidity has been further enhanced by approximately$180 million dollars . - In early May, the Company announced the purchase of 9,000,000 new shares of HHH stock by Pershing Square at a price of
$100 per share, or a 48% premium to the closing stock price onMay 2, 2025 . This capital infusion, which brings Pershing Square’s ownership in HHH to 46.9%, will be used to acquire high-quality, public and private companies and transform the Company into a diversified holding company.
Operating Assets
- Total Operating Assets NOI, including the contribution from unconsolidated ventures, totaled
$71.6 million in the quarter, representing a new segment record and a$6.0 million or 9% improvement compared to$65.6 million in the prior-year period. - Office NOI of
$32.9 million increased 8% year-over-year primarily due to strong leasing activity and abatement expirations at various properties inThe Woodlands ® and Summerlin®—most notably at 9950Woodloch Forest and 1700 Pavilion—partially offset by decreases related to lower occupancy at certain properties inDowntown Columbia ® andThe Woodlands . During the quarter, HHH executed new or expanded office leases totaling 114,000 square feet, and the stabilized office portfolio was 88% leased. - Multifamily NOI of
$15.8 million increased 14% compared to the first quarter of 2024 due to strong lease-up at Tanager Echo in Summerlin, Marlow inDowntown Columbia , and Wingspan in Bridgeland. At quarter end, the stabilized multifamily portfolio was 96% leased. - HHH’s share of NOI from unconsolidated ventures of
$7.5 million increased$2.3 million compared to the prior-year period primarily due to higher annual cash distributions from theSummerlin Hospital .
MPC
- MPC EBT, which totaled
$63 .3 million in the first quarter, increased 161% compared to$24 .3 million in the prior-year period. Land sales are expected to materially increase during the remainder of 2025, resulting in a strong EBT outlook of $375 million at the mid-point for the full year. - Land sales increased
$39 .2 million year-over-year, primarily due to the sale of two superpads totaling 29 acres in Summerlin and increased lot sales in Bridgeland andThe Woodlands Hills ®. During the quarter, 70 residential acres were sold compared to 31 acres in the prior-year period. - The average price per acre of residential land sold was approximately
$991,000 during the first quarter, representing a 65% year-over-year increase which was primarily driven by the timing of two superpad sales in Summerlin at an average price per acre of$1 .5 million which were not present in the prior-year period. - In Teravalis, 11 acres of residential land in Floreo were sold at an average price per acre of
$793,000 . - HHH’s share of equity earnings from unconsolidated ventures increased
$11 .3 million primarily due to prior year changes in the Summit joint venture’s development model. - New homes sold in HHH’s communities totaled 543 units, representing a 6% sequential increase. Compared to the prior-year period, which saw outsized results and represented a three-year high, new home sales declined by 17%.
Strategic Developments
- Contracted to sell 27 condominium units in Hawai‘i and
Texas representing$51.0 million of future revenue, including 26 units at The Launiu, making this development project 64% pre-sold at quarter end. - Total pre-sales at HHH’s condominium projects under construction were unchanged in the first quarter, with Ulana 100% pre-sold,
The Park Ward Village 97% pre-sold, Kalae 93% pre-sold, and TheRitz-Carlton Residences ,The Woodlands 70% pre-sold. - In January, the Governor of Hawai’i approved amendments to the HCDA Mauka Area Rules to include updated guidelines for smart growth in areas including
Ward Village . The Company estimates this amendment will increase its potential residential entitlements inWard Village to between 2.5 to 3.5 million gross square feet, which could be used for the development of additional condominium towers in future years.
Financing Activity
- Closed on an upsize and extension of the non-consolidated credit facility for the Floreo joint venture in Teravalis. The loan’s capacity increased from
$165 .0 million to$365 .0 million, and the maturity was extended by two years toDecember 2029 . - Subsequent to quarter end, the Company closed on a
$19 .5 million construction loan for a new build-to-suit medical office building in Bridgeland for Memorial Hermann. The 50-month loan bears interest at SOFR + 2.9%. Construction on this project is expected to begin in the second quarter. - Subsequent to quarter end, the Company extended the Marlow construction loan to
April 2027 . The loan extension will bear interest at SOFR + 1.85% compared to the previous spread of 3.05%. - Subsequent to quarter end, the Company sold the reimbursement rights for additional existing and future MUD receivables in Bridgeland for total cash consideration of approximately
$180 million .
Full Year 2025 Guidance
The Company’s guidance relates solely to its existing real estate development and Master Planned Communities business and does not reflect the expected shifts in strategy following the recently announced transaction with Pershing Square. To the extent such shifts result in changes to guidance, the Company expects to provide revised information once it is developed.
- MPC EBT is projected to be strong in 2025 and aided by solid demand for new homes, continued tight supply of existing homes on the market, and low inventories of vacant developed lots in our MPCs. As a result, HHH anticipates continued strong homebuilder demand for residential land throughout 2025. Residential land sales are expected to occur throughout the year, but the second and third quarters will likely see a higher concentration of superpad sales in Summerlin. Overall, 2025 MPC EBT is expected to be up 5% to 10% year-over-year with a mid-point of approximately $375 million.
- Operating Assets NOI, including the contribution from unconsolidated ventures, is projected to benefit from continued growth in multifamily driven by increased occupancy at new multifamily developments. Office is also expected to improve year-over-year due to strong leasing momentum and expiring rent abatements across the portfolio. This improvement will likely be partially offset by lower occupancy at various office properties in
Downtown Columbia , some tenant turnover inThe Woodlands , and initial operating losses from our newest developments. Retail is expected to see a modest reduction in NOI during 2025, primarily due to non-recurring collections of tenant reserves inWard Village during 2024 and the impact of some turnover resulting from tenant upgrades in Downtown Summerlin as this property reaches its 10-year anniversary. Overall, 2025 Operating Assets NOI is expected to be flat to up 4% year-over-year with a mid-point of approximately $262 million. - Condo sales revenues are projected to be approximately $375 million in 2025, driven entirely by the closing of units at Ulana—a 696-unit development in
Ward Village which is 100% pre-sold and expected to be completed in the fourth quarter. Because Ulana is a workforce housing tower, the Company does not expect to recognize any gross profit from the project. The Park Ward Village—HHH’s next condo tower which comprises 545 market rate units—is already 97% pre-sold and expected to contribute meaningful revenues and gross profit in 2026. - Cash G&A is projected to range between $76 million and $86 million in 2025—or a mid-point of $81 million—excluding both approximately $9 million of anticipated non-cash stock compensation as well as all non-recurring charges including those in connection with Pershing Square’s recent purchase of HHH stock.
- Overall, Adjusted Operating Cash Flow is projected to range between $325 million and $375 million in 2025 with a mid-point of approximately $350 million or
$7.00 per share.
Conference Call & Webcast Information
We are primarily focused on creating shareholder value by increasing our per-share net asset value. Often, the nature of our business results in short-term volatility in our net income due to the timing of MPC land sales, recognition of condominium revenue and operating business pre-opening expenses, and, as such, we believe the following metrics summarized below are most useful in tracking our progress towards net asset value creation.
| Three Months Ended |
|||||||||||
| $ in thousands | 2025 | 2024 | $ Change | % Change | |||||||
| Operating Assets NOI(1) | |||||||||||
| Office | $ | 32,903 | $ | 30,598 | $ | 2,305 | 8 | % | |||
| Retail | 13,810 | 14,153 | (343 | ) | (2)% | ||||||
| Multifamily | 15,763 | 13,777 | 1,986 | 14 | % | ||||||
| Other | 1,542 | 1,466 | 76 | 5 | % | ||||||
| Dispositions (a) | — | 359 | (359 | ) | (100)% | ||||||
| Operating Assets NOI | 64,018 | 60,353 | 3,665 | 6 | % | ||||||
| Company’s share of NOI from unconsolidated ventures | 7,548 | 5,222 | 2,326 | 45 | % | ||||||
| Total Operating Assets NOI | $ | 71,566 | $ | 65,575 | $ | 5,991 | 9 | % | |||
| Projected stabilized NOI Operating Assets ($ in millions) | $ | 353.3 | $ | 348.7 | $ | 4.6 | 1 | % | |||
| MPC | |||||||||||
| Acres Sold – Residential | 70 | 31 | 39 | 126 | % | ||||||
| Acres Sold – Commercial | — | 4 | (4 | ) | (100)% | ||||||
| Price Per Acre – Residential | $ | 991 | $ | 600 | $ | 391 | 65 | % | |||
| Price Per Acre – Commercial | $ | — | $ | 801 | $ | (801 | ) | (100)% | |||
| MPC EBT | $ | 63,264 | $ | 24,251 | $ | 39,013 | 161 | % | |||
| Strategic Developments | |||||||||||
| Condominium rights and unit sales | $ | 342 | $ | 23 | $ | 319 | NM | ||||
(a) Properties that were transferred to our Strategic Developments segment for redevelopment and properties that were sold are shown separately for all periods presented.
NM – Not Meaningful
Financial Data
(1) See the accompanying appendix for a reconciliation of GAAP to non-GAAP financial measures and a statement indicating why management believes the non-GAAP financial measure provides useful information for investors.
About
Safe Harbor Statement
Certain statements contained in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts, including, among others, statements regarding the Company’s future financial position, results or performance, are forward-looking statements. We claim the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. Forward-looking statements include statements regarding the intent, belief, or current expectations of the Company, members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “plan,” “project,” “realize,” “should,” “transform,” “will,” “would,” and other statements of similar expression. Forward-looking statements are not a guaranty of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond the Company’s abilities to control or predict. Some of the risks, uncertainties and other important factors that may affect future results or cause actual results to differ materially from those expressed or implied by forward-looking statements include: (i) our ability to realize the anticipated benefits of the transactions with Pershing Square and our new strategy; (ii) our inability to identify and consummate transactions as part of our new strategy of becoming a diversified holding company; (iii) risks inherent in acquiring or making investments in operating companies, especially companies in industries unrelated to our existing real estate business; (iv) our ability to realize the anticipated benefits of the spinoff of Seaport Entertainment Group Inc. that we completed in 2024, as well as other effects the spinoff may have on our ongoing business; (v) macroeconomic conditions such as volatility in capital markets, unstable economic and political conditions within the
Financial Presentation
As discussed throughout this release, we use certain non-GAAP performance measures, in addition to the required GAAP presentations, as we believe these measures improve the understanding of our operational results and make comparisons of operating results among peer companies more meaningful. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change. A non-GAAP financial measure used throughout this release is net operating income (NOI). We provide a more detailed discussion about this non-GAAP measure in our reconciliation of non-GAAP measures provided in the appendix in this earnings release.
Contacts
Media Relations:
Senior Vice President, Head of Corporate Communications
[email protected]
Investor Relations:
Senior Vice President, Investor Relations
[email protected]
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| UNAUDITED |
| Three Months Ended |
|||||||
| thousands except per share amounts | 2025 | 2024 | |||||
| REVENUES | |||||||
| Condominium rights and unit sales | $ | 342 | $ | 23 | |||
| Master |
71,642 | 32,415 | |||||
| Rental revenue | 108,413 | 101,369 | |||||
| Other land, rental, and property revenues | 9,644 | 10,111 | |||||
| Builder price participation | 9,287 | 12,566 | |||||
| Total revenues | 199,328 | 156,484 | |||||
| EXPENSES | |||||||
| Condominium rights and unit cost of sales | 242 | 3,861 | |||||
| Master |
25,214 | 12,904 | |||||
| Operating costs | 50,789 | 49,006 | |||||
| Rental property real estate taxes | 15,299 | 14,205 | |||||
| Provision for (recovery of) doubtful accounts | (156 | ) | (119 | ) | |||
| General and administrative | 22,436 | 21,712 | |||||
| Depreciation and amortization | 45,139 | 44,174 | |||||
| Other | 4,797 | 3,818 | |||||
| Total expenses | 163,760 | 149,561 | |||||
| OTHER | |||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | 13,729 | 4,794 | |||||
| Other income (loss), net | (1,367 | ) | 891 | ||||
| Total other | 12,362 | 5,685 | |||||
| Operating income (loss) | 47,930 | 12,608 | |||||
| Interest income | 6,118 | 7,930 | |||||
| Interest expense | (41,094 | ) | (39,184 | ) | |||
| Equity in earnings (losses) from unconsolidated ventures | 1,320 | (8,855 | ) | ||||
| Income (loss) from continuing operations before income taxes | 14,274 | (27,501 | ) | ||||
| Income tax expense (benefit) | 3,436 | (6,501 | ) | ||||
| Net income (loss) from continuing operations | 10,838 | (21,000 | ) | ||||
| Net income (loss) from discontinued operations, net of taxes | — | (31,467 | ) | ||||
| Net income (loss) | 10,838 | (52,467 | ) | ||||
| Net (income) loss attributable to noncontrolling interests | (305 | ) | (10 | ) | |||
| Net income (loss) attributable to common stockholders | $ | 10,533 | $ | (52,477 | ) | ||
| Basic income (loss) per share — continuing operations | $ | 0.21 | $ | (0.42 | ) | ||
| Diluted income (loss) per share — continuing operations | $ | 0.21 | $ | (0.63 | ) | ||
| CONSOLIDATED BALANCE SHEETS |
| UNAUDITED |
| thousands except par values and share amounts | 2025 |
2024 |
|||||
| ASSETS | |||||||
| Master |
$ | 2,537,039 | $ | 2,511,662 | |||
| Buildings and equipment | 3,857,405 | 3,841,872 | |||||
| Less: accumulated depreciation | (982,602 | ) | (949,533 | ) | |||
| Land | 300,579 | 302,446 | |||||
| Developments | 1,535,514 | 1,341,029 | |||||
| Net investment in real estate | 7,247,935 | 7,047,476 | |||||
| Investments in unconsolidated ventures | 166,080 | 169,566 | |||||
| Cash and cash equivalents | 493,657 | 596,083 | |||||
| Restricted cash | 344,395 | 402,420 | |||||
| Accounts receivable, net | 120,521 | 105,185 | |||||
| 503,368 | 463,799 | ||||||
| Deferred expenses, net | 139,451 | 139,350 | |||||
| Operating lease right-of-use assets | 5,680 | 5,806 | |||||
| Other assets, net | 268,292 | 281,551 | |||||
| Total assets | $ | 9,289,379 | $ | 9,211,236 | |||
| LIABILITIES | |||||||
| Mortgages, notes, and loans payable, net | $ | 5,249,065 | $ | 5,127,469 | |||
| Operating lease obligations | 5,420 | 5,456 | |||||
| Deferred tax liabilities, net | 143,818 | 142,100 | |||||
| Accounts payable and other liabilities | 1,036,016 | 1,094,437 | |||||
| Total liabilities | 6,434,319 | 6,369,462 | |||||
| EQUITY | |||||||
| Preferred stock: |
— | — | |||||
| Common stock: |
569 | 566 | |||||
| Additional paid-in capital | 3,580,558 | 3,576,274 | |||||
| Retained earnings (accumulated deficit) | (175,460 | ) | (185,993 | ) | |||
| Accumulated other comprehensive income (loss) | 149 | 1,968 | |||||
| (617,654 | ) | (616,589 | ) | ||||
| Total stockholders’ equity | 2,788,162 | 2,776,226 | |||||
| Noncontrolling interests | 66,898 | 65,548 | |||||
| Total equity | 2,855,060 | 2,841,774 | |||||
| Total liabilities and equity | $ | 9,289,379 | $ | 9,211,236 | |||
Segment Earnings Before Taxes (EBT)
The Company has three business segments, Operating Assets, MPC, and Strategic Developments. EBT, as it relates to each business segment, includes the revenues and expenses of each segment, as shown below. EBT excludes corporate expenses and other items that are not allocable to the segments.
| Three Months Ended |
|||||||||||
| thousands | 2025 | 2024 | $ Change | ||||||||
| Operating Assets Segment EBT | |||||||||||
| Total revenues | $ | 114,002 | $ | 107,000 | $ | 7,002 | |||||
| Total operating expenses | (48,817 | ) | (46,154 | ) | (2,663 | ) | |||||
| Segment operating income (loss) | 65,185 | 60,846 | 4,339 | ||||||||
| Depreciation and amortization | (43,123 | ) | (41,840 | ) | (1,283 | ) | |||||
| Interest income (expense), net | (34,218 | ) | (32,942 | ) | (1,276 | ) | |||||
| Other income (loss), net | (196 | ) | 408 | (604 | ) | ||||||
| Equity in earnings (losses) from unconsolidated ventures | 4,643 | 5,817 | (1,174 | ) | |||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | 9,979 | 4,794 | 5,185 | ||||||||
| Operating Assets segment EBT | $ | 2,270 | $ | (2,917 | ) | $ | 5,187 | ||||
| Master Planned Communities Segment EBT | |||||||||||
| Total revenues | $ | 84,454 | $ | 48,875 | $ | 35,579 | |||||
| Total operating expenses | (38,205 | ) | (25,049 | ) | (13,156 | ) | |||||
| Segment operating income (loss) | 46,249 | 23,826 | 22,423 | ||||||||
| Depreciation and amortization | (111 | ) | (110 | ) | (1 | ) | |||||
| Interest income (expense), net | 16,786 | 15,246 | 1,540 | ||||||||
| Equity in earnings (losses) from unconsolidated ventures | (3,410 | ) | (14,711 | ) | 11,301 | ||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | 3,750 | — | 3,750 | ||||||||
| MPC segment EBT | $ | 63,264 | $ | 24,251 | $ | 39,013 | |||||
| Strategic Developments Segment EBT | |||||||||||
| Total revenues | $ | 854 | $ | 593 | $ | 261 | |||||
| Total operating expenses | (4,366 | ) | (8,654 | ) | 4,288 | ||||||
| Segment operating income (loss) | (3,512 | ) | (8,061 | ) | 4,549 | ||||||
| Depreciation and amortization | (1,158 | ) | (1,419 | ) | 261 | ||||||
| Interest income (expense), net | 4,646 | 4,024 | 622 | ||||||||
| Other income (loss), net | (1,262 | ) | 3 | (1,265 | ) | ||||||
| Equity in earnings (losses) from unconsolidated ventures | 87 | 39 | 48 | ||||||||
| Strategic Developments segment EBT | $ | (1,199 | ) | $ | (5,414 | ) | $ | 4,215 | |||
Appendix – Reconciliation of Non-GAAP Measures
Below are GAAP to non-GAAP reconciliations of certain financial measures, as required under Regulation G promulgated by the
Net Operating Income (NOI)
We define NOI as operating revenues (rental income, tenant recoveries, and other revenue) less operating expenses (real estate taxes, repairs and maintenance, marketing, and other property expenses). NOI excludes straight-line rents and amortization of tenant incentives, net; interest expense, net; ground rent amortization; demolition costs; other income (loss); depreciation and amortization; development-related marketing costs; gain on sale or disposal of real estate and other assets, net; loss on extinguishment of debt; provision for impairment; and equity in earnings from unconsolidated ventures. This amount is presented as Operating Assets NOI throughout this document. Total Operating Assets NOI represents NOI as defined above with the addition of our share of NOI from unconsolidated ventures.
We believe that NOI is a useful supplemental measure of the performance of our Operating Assets segment because it provides a performance measure that reflects the revenues and expenses directly associated with owning and operating real estate properties. We use NOI to evaluate our operating performance on a property-by-property basis because NOI allows us to evaluate the impact that property-specific factors such as rental and occupancy rates, tenant mix, and operating costs have on our operating results, gross margins, and investment returns.
A reconciliation of segment EBT to NOI for Operating Assets is presented in the table below:
| Three Months Ended |
|||||||||||
| thousands | 2025 | 2024 | $ Change | ||||||||
| Operating Assets Segment | |||||||||||
| Total revenues | $ | 114,002 | $ | 107,000 | $ | 7,002 | |||||
| Total operating expenses | (48,817 | ) | (46,154 | ) | (2,663 | ) | |||||
| Segment operating income (loss) | 65,185 | 60,846 | 4,339 | ||||||||
| Depreciation and amortization | (43,123 | ) | (41,840 | ) | (1,283 | ) | |||||
| Interest income (expense), net | (34,218 | ) | (32,942 | ) | (1,276 | ) | |||||
| Other income (loss), net | (196 | ) | 408 | (604 | ) | ||||||
| Equity in earnings (losses) from unconsolidated ventures | 4,643 | 5,817 | (1,174 | ) | |||||||
| Gain (loss) on sale or disposal of real estate and other assets, net | 9,979 | 4,794 | 5,185 | ||||||||
| Operating Assets segment EBT | 2,270 | (2,917 | ) | 5,187 | |||||||
| Add back: | |||||||||||
| Depreciation and amortization | 43,123 | 41,840 | 1,283 | ||||||||
| Interest (income) expense, net | 34,218 | 32,942 | 1,276 | ||||||||
| Equity in (earnings) losses from unconsolidated ventures | (4,643 | ) | (5,817 | ) | 1,174 | ||||||
| (Gain) loss on sale or disposal of real estate and other assets, net | (9,979 | ) | (4,794 | ) | (5,185 | ) | |||||
| Impact of straight-line rent | (1,160 | ) | (847 | ) | (313 | ) | |||||
| Other | 189 | (54 | ) | 243 | |||||||
| Operating Assets NOI | 64,018 | 60,353 | 3,665 | ||||||||
| Company’s share of NOI from equity investments | 1,943 | 1,980 | (37 | ) | |||||||
| Distributions from |
5,605 | 3,242 | 2,363 | ||||||||
| Company’s share of NOI from unconsolidated ventures | 7,548 | 5,222 | 2,326 | ||||||||
| Total Operating Assets NOI | $ | 71,566 | $ | 65,575 | $ | 5,991 | |||||
Same Store NOI – Operating Assets Segment
The Company defines
We calculate Same Store Net Operating Income (Same Store NOI) as Operating Assets NOI applicable to
| Three Months Ended |
||||||||||
| thousands | 2025 | 2024 | $ Change | |||||||
| Same Store Office | ||||||||||
| $ | 21,668 | $ | 20,243 | $ | 1,425 | |||||
| 5,791 | 6,098 | (307 | ) | |||||||
| 5,648 | 4,258 | 1,390 | ||||||||
| Total Same Store Office | 33,107 | 30,599 | 2,508 | |||||||
| Same Store Retail | ||||||||||
| 2,814 | 2,625 | 189 | ||||||||
| 1,329 | 1,068 | 261 | ||||||||
| 6,019 | 5,987 | 32 | ||||||||
| 3,503 | 4,213 | (710 | ) | |||||||
| Total Same Store Retail | 13,665 | 13,893 | (228 | ) | ||||||
| Same Store Multifamily | ||||||||||
| 9,735 | 9,405 | 330 | ||||||||
| 3,357 | 2,612 | 745 | ||||||||
| 2,671 | 1,761 | 910 | ||||||||
| Company’s share of NOI from unconsolidated ventures | 1,721 | 2,001 | (280 | ) | ||||||
| Total Same Store Multifamily | 17,484 | 15,779 | 1,705 | |||||||
| Same Store Other | ||||||||||
| 1,067 | 955 | 112 | ||||||||
| (48 | ) | 451 | (499 | ) | ||||||
| 320 | 244 | 76 | ||||||||
| 24 | 81 | (57 | ) | |||||||
| Company’s share of NOI from unconsolidated ventures | 5,827 | 3,221 | 2,606 | |||||||
| Total Same Store Other | 7,190 | 4,952 | 2,238 | |||||||
| Total Same Store NOI | 71,446 | 65,223 | 6,223 | |||||||
| Non-Same Store NOI | 120 | 352 | (232 | ) | ||||||
| Total Operating Assets NOI | $ | 71,566 | $ | 65,575 | $ | 5,991 | ||||
Cash G&A
The Company defines Cash G&A as General and administrative expense less non-cash stock compensation expense. Cash G&A is a non-GAAP financial measure that we believe is useful to our investors and other users of our financial statements as an indicator of overhead efficiency without regard to non-cash expenses associated with stock compensation. However, it should not be used as an alternative to general and administrative expenses in accordance with GAAP.
| thousands | Three Months Ended |
Year Ended |
|||||
| General and administrative (G&A) | $ | 22,436 | $ | 91,752 | |||
| Less: Non-cash stock compensation | (2,751 | ) | (9,104 | ) | |||
| Cash G&A | $ | 19,685 | $ | 82,648 | |||
Adjusted Condo Gross Profit
Adjusted condo gross profit is a non-GAAP financial measure that we believe is useful to our investors and other users of our financial statements as an indicator of gross profit related to condominium sales closed in each period. This measure excludes costs in Condominium rights and unit cost of sales related to the remediation of construction defects at Waiea tower and costs related to a settlement agreement reached for the reimbursement of Waiea remediation costs.
| thousands | Three Months Ended |
Year Ended |
|||||
| Condominium rights and unit sales | $ | 342 | $ | 778,616 | |||
| Condominium rights and unit cost of sales | (242 | ) | (582,574 | ) | |||
| Less: Waiea settlement and remediation cost | — | 15,091 | |||||
| Adjusted condo gross profit | $ | 100 | $ | 211,133 | |||
Adjusted Operating Cash Flow Performance Measure
We define Adjusted Operating Cash Flow as the sum of the following non-GAAP performance measures: MPC EBT, Operating Asset NOI, condo gross profit, and cash G&A expense—all of which we have been using to measure our performance and providing guidance on for several years—as well as net interest expense (adjusted for interest income already included in MPC EBT). We believe Adjusted Operating Cash Flow provides investors a straightforward measure to model the Company’s overall financial performance against guidance. Also, by focusing on the core business metrics of each segment, Adjusted Operating Cash Flow offers a straightforward reflection of our operational and cash generation capabilities while highlighting the key drivers of future growth.
| thousands | Three Months Ended |
Year Ended |
|||||
| Total Operating Assets NOI | $ | 71,566 | $ | 257,007 | |||
| MPC EBT | 63,264 | 349,134 | |||||
| Adjusted condo gross profit | 100 | 211,133 | |||||
| Interest income (expense), net | (34,976 | ) | (139,577 | ) | |||
| Less MPC Interest (income) expense, net (a) | (16,786 | ) | (60,473 | ) | |||
| Cash G&A | (19,685 | ) | (82,648 | ) | |||
| Adjusted Operating Cash Flow Performance Measure | $ | 63,483 | $ | 534,576 | |||
(a) Represents interest income for the MPC segment, which is included in MPC EBT.
A reconciliation of Net income (loss) from continuing operations attributable to common stockholders to Adjusted Operating Cash Flow is presented in the table below:
| Three Months Ended |
Year Ended |
|||||||||||
| thousands except per share amounts | (per diluted share) |
(per diluted share) |
||||||||||
| Net income (loss) from continuing operations attributable to common stockholders | $ | 10,533 | $ | 0.21 | $ | 285,926 | $ | 5.73 | ||||
| Adjustments to reconcile to Adjusted Operating Cash Flow Performance Measure: | ||||||||||||
| Corporate Adjustments | ||||||||||||
| Net (income) loss attributable to noncontrolling interests | 305 | (711 | ) | |||||||||
| Income tax expense (benefit) | 3,436 | 80,184 | ||||||||||
| Non-cash stock compensation expense | 2,751 | 9,104 | ||||||||||
| (Gain) loss on sale of MUD receivables | — | 48,651 | ||||||||||
| Other Corporate Items | 5,435 | 17,236 | ||||||||||
| Total | 11,927 | 0.24 | 154,464 | 3.09 | ||||||||
| Operating Assets Adjustments | ||||||||||||
| Depreciation and amortization | 43,123 | 169,040 | ||||||||||
| Equity in (earnings) losses from unconsolidated ventures | (4,643 | ) | (5,819 | ) | ||||||||
| (Gain) loss on sale or disposal of real estate and other assets, net | (9,979 | ) | (22,907 | ) | ||||||||
| (Gain) loss on extinguishment of debt | — | 465 | ||||||||||
| Impact of straight-line rent | (1,160 | ) | (4,770 | ) | ||||||||
| Other | 189 | (306 | ) | |||||||||
| Company’s share of NOI from unconsolidated ventures | 7,548 | 11,552 | ||||||||||
| Total | 35,078 | 0.70 | 147,255 | 2.95 | ||||||||
| Strategic Developments Adjustments | ||||||||||||
| Rental revenue | (59 | ) | (459 | ) | ||||||||
| Other land, rental, and property revenues | (453 | ) | (4,321 | ) | ||||||||
| Operating costs | 3,576 | 17,670 | ||||||||||
| Rental property real estate taxes | 548 | 2,480 | ||||||||||
| Depreciation and amortization | 1,158 | 7,255 | ||||||||||
| Other (income) loss, net | 1,262 | (90,534 | ) | |||||||||
| Equity in (earnings) losses from unconsolidated ventures | (87 | ) | (251 | ) | ||||||||
| Waiea settlement and remediation costs | — | 15,091 | ||||||||||
| Total | 5,945 | 0.12 | (53,069 | ) | (1.06 | ) | ||||||
| Adjusted Operating Cash Flow Performance Measure | $ | 63,483 | $ | 1.27 | $ | 534,576 | $ | 10.71 | ||||
Source: Howard Hughes Holdings Inc.