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The Howard Hughes Corporation® Reports Full-Year and Fourth Quarter 2019 Results

Exceptional full-year results across the Company, including 20% growth in Operating Assets NOI, record MPC land sales and meaningful progress on our Transformation Plan

DALLAS , Feb. 27, 2020 /PRNewswire/ -- The Howard Hughes Corporation ® (NYSE: HHC) (the "Company," "HHC" or "we") announced today operating results for the year and fourth quarter ended December 31, 2019 . The financial statements, exhibits and reconciliations of non-GAAP measures, as available through the Investors section of our website, provide further details of these results.

(PRNewsfoto/The Howard Hughes Corporation)

Full-Year Highlights

  • Net income attributable to common stockholders increased to $74.0 million , or $1.71 per diluted share, for the year ended December 31, 2019 , compared to $57.0 million , or $1.32 per diluted share, for the year ended December 31, 2018 . This increase is despite approximately $34.3 million , or $0.79 per diluted share, of one-time expenses associated with retention and severance in connection with management changes and a corporate relocation.
  • 20% in total net operating income ("NOI") growth from Operating Assets for the year ended December 31, 2019 , over the prior year when including our share of NOI from equity investments.
  • Experienced best year in the Company's history in MPC segment with land sales of $330.1 million and 26.9% growth in MPC earnings before tax ("EBT") to $257.6 million driven by a record number of acres sold and price per acre.
  • Significant progress on announced Transformation Plan highlighted by:
  • Commenced construction on $154.1 million of multi-family, retail and office properties which, at stabilization, are expected to contribute $14.3 million to our projected annual stabilized NOI.
  • In Ward Village , Hawaii , we broke ground on KM'ula, which is 74.3% pre-sold, contracted to sell 467 condominium units during the year and, subsequent to year-end, launched public pre-sales of our newest project, Victoria Place , where as of February 21, 2020 , we have executed contracts for 185 condominium units, or 53.0% of total units.
  • Increased Seaport District segment revenues by $23.0 million to $55.6 million as of December 31, 2019 , compared to the prior year period due to increases in both our existing businesses and new business openings such as The Fulton and Malibu Farm , as well as sponsorship and summer concert series revenue.

Highlights of our results for the years and three months ended December 31, 2019 and 2018 are summarized below. 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 are most useful in tracking our progress towards net asset value creation.

...


Year Ended December 31,






Three Months Ended
December 31,





($ in thousands)


2019


2018


Change


%
Change


2019


2018


Change


%
Change

Operating Assets NOI

















Office


$

85,773



$

67,530



$

18,243



27

%


$

22,692



$

17,394



$

5,298



30

%

Retail


62,568



63,846



(1,278)



(2)

%


14,612



15,290



(678)



(4)

%

Multi-family


18,062



15,206



2,856



19

%


4,336



4,021



315



8

%

Hospitality


28,843



25,371



3,472



14

%


5,424



4,935



489



10

%

Other


10,374



146



10,228



7,005

%


(788)



1,493



(2,281)



(153)

%

Company's share NOI (a)


10,943



8,096



2,847



35

%


2,123



1,952



171



9

%

Total Operating Assets NOI (b)


$

216,563



$

180,195



$

36,368



20

%


$

48,399



$

45,085



$

3,314



7

%


















Projected stabilized NOI Operating
Assets ($ in millions)


$

367.3



$

315.9



$

51.4



16

%


























MPC

















Acres Sold - Residential


571



456



115



25

%


234



72



162



225

%

Acres Sold - Commercial




10



(10)



(100)

%




6



(6)



(100)

%

Price Per Acre - Residential


$

571



$

515



$

56



11

%


$

610



$

418



$

192



46

%

Price Per Acre - Commercial


$



$

517



$

(517)



(100)

%


$



$

399



$

(399)



(100)

%

MPC EBT


$

257,586



$

202,955



$

54,631



27

%


$

112,117



$

30,617



$

81,500



266

%


















Seaport District NOI

















Historic District & Pier 17 -
Landlord


$

(8,147)



$

(2,039)



$

(6,108)



(300)

%


$

(2,991)



$

707



$

(3,698)