The Howard Hughes Corporation® Reports First Quarter 2022 Results
HHC's momentum carries into the first quarter of 2022 with robust Operating Asset NOI growth, continued land price appreciation and increased profit from condo sales
First Quarter 2022 Highlights Include:
- First quarter net income of
$2.1 million , or$0.04 per diluted share. - Total Operating Asset net operating income (NOI), including the contribution from equity investments, totaled
$57.3 million in the quarter, an 18.6% increase over the prior-year period. The strong performance of our Operating Asset portfolio was attributable to the continued lease-up of our latest multi-family assets with quarterly NOI from these properties rising 94.3% year-over-year, improvements in retail and the absence of net operating losses from110 North Wacker Drive following the sale of this asset during the first quarter. -
Master Planned Community (MPC) earnings before taxes (EBT) totaled$59.7 million in the quarter with a noticeably higher price-per-acre achieved across each of HHC's MPCs as residents continue to migrate to HHC's communities situated in low-cost, business-friendly regions. Another driver to these strong results was due to a 17-acre commercial land sale in Summerlin® whereRoseman University will develop its next medical school campus. - Contracted 61 condo units in the quarter. Additionally, we closed on 24 units at 'A'ali'i®—the latest completed tower at
Ward Village ®—generating$19.6 million in condo sales revenue. 'A'ali'i ended the quarter 92.7% sold with 55 units remaining to be sold. In March, HHC launched its pre-sales campaign through a lottery system at Ulana—Ward Village's ninth condo tower that will be fully dedicated to workforce housing. As ofMay 5, 2022 , Ulana is already 82.8% pre-sold. - Sold equity stake in 110 North Wacker Drive—a Class-A, 1.5-million-square-foot office tower in Chicago—generating net proceeds of
$168.9 million . - Acquired a minority stake in
Jean-Georges Restaurants for$45.0 million and purchased a$10.0 million warrant for the option to acquire additional ownership interest at a later date. This investment offers the unique opportunity to own part of an asset-light business with the ability to grow both in our MPCs and globally. - Repurchased 1,750,668 shares of common stock funded with
$170.7 million of cash on hand at an average price of$97.49 per share. Subsequent to the end of the quarter, HHC repurchased an additional 1,079,000 shares of common stock for$109.0 million at an average price of$100.98 per share.
"We began 2022 with a strong performance out of the gate as our first quarter results highlighted the strength and uniqueness of HHC's business model. Our communities are positioned to outperform through various market cycles and today we are seeing that play out in our favor. We continue to see positive net migration to our MPCs in
"Outside of our strong operating performance, we sold our equity stake in 110 North Wacker Drive—one of the last non-core assets in HHC's portfolio remaining to be sold. We have now substantially completed the disposition of our non-core assets with the sale of this 1.5 million-square-foot tower. We sold this asset at an implied valuation of
"During the quarter we continued to buy back our shares which currently trade at a wide discount to intrinsic value. As we outlined at our 2022 Investor Day in April, we believe the equity value of HHC is worth
Click Here: First Quarter 2022 Howard Hughes Quarterly Spotlight
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First Quarter 2022 Highlights
- Net income increased to
$2.1 million , or$0.04 per diluted share, in the quarter, compared to a net loss of$66.6 million , or$(1.20) per diluted share, in the prior-year period due to strong land sales, increased Operating Asset NOI and higher profitability from condo sales, as well as the absence of losses on the extinguishment of debt compared to$35.9 million in the prior-year period. - This positive performance included Operating Asset NOI of
$57.3 million , a$9.0 million increase; MPC EBT of$59.7 million , a$3.7 million decrease; and condominium profit of$5.4 million , a 102% improvement, compared to the prior-year period. - Ended the first quarter with
$688.0 million of cash on the balance sheet and total debt of$4.7 billion , with 76% of the balance maturing in 2026 or later.
Operating Assets
- Total Operating Assets NOI, including the contribution from equity investments, totaled
$57.3 million in the quarter, an 18.6% increase compared to$48.3 million in the prior-year period. - Multi-family NOI increased 94.3% to
$11.1 million compared to the first quarter of 2021 due to continued strength in the lease-up of our latest multi-family developments including The Lane at Waterway, Two Lakes Edge andCreekside Park ® The Grove inThe Woodlands ® andJuniper Apartments inDowntown Columbia that are all at or near full occupancy. - Retail NOI increased 12.3% to
$13.5 million over the prior-year period due to better performance at our retail assets predominantly inWard Village as the impacts from COVID-19 continue to subside. First quarter retail NOI atWard Village increased 53.3% year-over-year with additional room for improvements as this asset works its way back towards pre-pandemic levels. - Company's share of NOI grew by 63.1% to
$6.8 million compared to the prior-year period. This increase was attributed to a larger distribution received from HHC's stake in theSummerlin Hospital and benefited from no operating losses incurred from110 North Wacker Drive as we sold this asset during the first quarter. This is in comparison to110 North Wacker Drive's $1.6 million operating loss during lease-up during the first quarter of 2021. - Office NOI decreased 2.8% to
$25.1 million compared to the prior-year period largely due to abatements on recent lease renewals and certain lease expirations inThe Woodlands that have since been backfilled with new tenants subsequent to the end of the first quarter. This was offset by increased NOI inDowntown Columbia following the burn-off of free rent at 6100 Merriweather.
MPC
- MPC EBT totaled
$59.7 million in the quarter, a 5.8% decrease compared to EBT of$63.4 million in the prior-year period. - Despite selling fewer acres compared to the prior-year period, MPC land sales revenue of
$61.5 million was 64% higher compared to the prior-year period as the price per acre of land sold in each of our communities meaningfully increased. - Builder price participation revenue rose to
$14.5 million during the quarter—an increase of over two times from the prior-year period as home prices in our communities continue to escalate. - Earnings at The Summit decreased 79.7% year-over-year due to fewer unit closings in the first quarter compared to the same period last year as this private Summerlin community moves closer to selling out its remaining inventory.
- A total of 604 new homes were sold in HHC's MPCs during the quarter, a 35% decline compared to the prior-year period as home sales in the first quarter of 2021 surged with the economy beginning to emerge from the pandemic. Sequentially, new homes sales increased marginally compared to 597 new homes sold during the fourth quarter of 2021.
Strategic Developments
- Closed on 24 units at 'A'ali'i, generating
$19.6 million in net revenue. As of the end of the first quarter, 'A'ali'i was 92.7% sold. - Contracted to sell 14 units at our two towers under construction—Kō'ula and Victoria Place—which ended the quarter 91.5% and 99.7% pre-sold, respectively. Subsequent to quarter end, we contracted the remaining unit at
Victoria Place , resulting in that tower being completely sold. - Since the launch of its pre-sales campaign in
July 2021 ,The Park Ward Village is now 88.6% pre-sold with construction expected to begin in the second half of 2022. - Commenced construction during the quarter on Creekside Park Medical Plaza—the new 33,000 square-foot medical office building in
The Woodlands .
Seaport
- The Seaport reported an
$8.3 million loss in NOI in the quarter, a$3.9 million decline compared to the prior-year period partly as a result of higher operating expenses from HHC's managed businesses related to the opening of new restaurants atPier 17 and pre-opening costs for theTin Building by Jean-Georges. - Seaport revenue of
$10.0 million rose 44.4% compared to revenue of$6.9 million during the first quarter of 2021 as activity continues to grow. - Progress of the interior construction at the
Tin Building remains on schedule and is expected to have its grand opening during the second quarter of 2022. - Expect to break ground at
250 Water Street during the second quarter of 2022 following the approval by theCity of New York inDecember 2021 for the transformation of this one-acre parking lot into a mixed-use development.
Financing Activity
- Closed on a
$40.8 million non-recourse financing for Two Summerlin—a 144,615 square-foot office building in Downtown Summerlin® that was previously unencumbered. The loan bears interest at SOFR plus 1.75% with an initial maturity ofFebruary 2027 and two one-year extension options. - Closed on a
$49.8 million non-recourse, interest-only financing for One Merriweather—a 206,632 square-foot office building inDowntown Columbia . The loan bears interest at 3.525% and matures inFebruary 2032 . Proceeds were used to pay a portion of the Senior Secured Credit Facility. - Closed on a
$25.6 million non-recourse, interest-only financing for Two Merriweather—a 124,016 square-foot office building inDowntown Columbia that was previously unencumbered. The loan bears interest at 3.825% and matures inFebruary 2032 . - Closed on a
$12.8 million construction loan forMemorial Hermann Health System build-to-suit and Creekside Park Medical Plaza—two of the latest medical office buildings under construction inThe Woodlands . The three-year financing includes two one-year extensions and bears interest at SOFR plus 2.05% and reduces to SOFR plus 1.85% upon stabilization.
Full-Year 2022 Guidance
- Full-year 2022 guidance remains unchanged from the prior reporting period.
- Operating Asset NOI is projected to experience strong leasing activity at our latest multi-family developments, offset by no hospitality NOI in 2022 and less non-recurring income received from COVID-related tenant payments compared to 2021. We expect 2022 Operating Asset NOI to decline 0% to 2% year-over-year.
- MPC EBT range is projected to remain higher compared to the earnings we have generated on average over 2017 to 2020. In 2021, we experienced outsized land sales, particularly due to the closing of a 216-acre superpad in Summerlin. Superpad sales of this size do not occur every year which is reflective of the projected EBT decline in 2022. We expect 2022 MPC EBT to decline 25% to 30% year-over-year.
- Condo sales are projected to range between
$650 million to$700 million , with gross margins between 26.5% to 27.5%. Projected condo sales are driven by the closing of units at Kō'ula during the third quarter of 2022 and additional closings at 'A'ali'i. - Cash G&A is projected to range between
$75 million to$80 million , which excludes anticipated non-cash stock compensation of$10 million to$15 million .
Conference Call & Webcast Information
We are primarily focused on creating shareholder value by increasing our per-share net asset value. Often, the nature of our business results in short-term volatility in our net income due to the timing of MPC land sales, recognition of condominium revenue and operating business pre-opening expenses, and, as such, we believe the following metrics summarized below are most useful in tracking our progress towards net asset value creation.
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Three Months Ended |
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$ in thousands |
|
2022 |
|
2021 |
|
$ Change |
% Change |
Operating Assets NOI (1) |
|
|
|
|
|
|
|
Office |
$ 25,118 |
|
$ 25,832 |
|
$ (714) |
(3) % |
|
Retail |
13,477 |
|
12,003 |
|
1,474 |
12 % |
|
Multi-family |
11,142 |
|
5,735 |
|
5,407 |
94 % |
|
Other |
789 |
|
816 |
|
(27) |
(3) % |
|
Redevelopments and Dispositions |
(12) |
|
(247) |
|
235 |
95 % |
|
Operating Assets NOI |
50,514 |
|
44,139 |
|
6,375 |
14 % |
|
Company's share NOI (a) |
6,754 |
|
4,140 |
|
2,614 |
63 % |
|
Total Operating Assets NOI (b) |
$ 57,268 |
|
$ 48,279 |
|
$ 8,989 |
19 % |
|
|
|
|
|
|
|
|
|
Projected stabilized NOI Operating Assets ($ in millions) |
$ 356.3 |
|
$ 364.8 |
|
$ (8.5) |
(2) % |
|
|
|
|
|
|
|
|
|
MPC |
|
|
|
|
|
|
|
Acres Sold - Residential |
44 |
|
54 |
|
(10) |
(19) % |
|
Acres Sold - Commercial |
26 |
|
18 |
|
8 |
47 % |
|
Price Per Acre - Residential (b) |
$ 562 |
|
$ 647 |
|
$ (85) |
(13) % |
|
Price Per Acre - Commercial |
$ 1,083 |
|
$ 130 |
|
$ 953 |
733 % |
|
MPC EBT (1) |
$ 59,678 |
|
$ 63,355 |
|
$ (3,677) |
(6) % |
|
|
|
|
|
|
|
|
|
Seaport NOI (1) |
|
|
|
|
|
|
|
Landlord Operations - |
$ (2,855) |
|
$ (3,240) |
|
$ 385 |
12 % |
|
Multi-family |
(132) |
|
92 |
|
(224) |
(243) % |
|
Managed Businesses - |
(2,630) |
|
(660) |
|
(1,970) |
(298) % |
|
Events, Sponsorships & Catering Business |
(125) |
|
(436) |
|
311 |
71 % |
|
Seaport NOI |
(5,742) |
|
(4,244) |
|
(1,498) |
(35) % |
|
Company's share NOI (a) |
(2,575) |
|
(135) |
|
(2,440) |
(1,807) % |
|
Total Seaport NOI |
$ (8,317) |
|
$ (4,379) |
|
$ (3,938) |
(90) % |
|
|
|
|
|
|
|
|
|
Strategic Developments |
|
|
|
|
|
|
|
Condominium units contracted to sell (c) |
37 |
|
46 |
|
(9) |
(20) % |
|
|
(a) |
|
(b) |
Decrease in total company residential price per acre due to the impact of fewer acres sold in 2022 related to |
(c) |
Includes units at our buildings that are open or under construction as of |
|
|
Financial Data
|
|
(1) |
See the accompanying appendix for a reconciliation of GAAP to non-GAAP financial measures and a statement |
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 and Section 21E of the Exchange Act. 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. Those 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) the impact of the COVID-19 pandemic on the Company's business, tenants and the economy in general, including the measures taken by governmental authorities to address it; (ii) general adverse economic and local real estate conditions; (iii) potential changes in the financial markets and interest rates; (iv) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business; (v) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms, if at all; (vi) ability to compete effectively, including the potential impact of heightened competition for tenants and potential decreases in occupancy at our properties; (vii) ability to successfully dispose of non-core assets on favorable terms, if at all; (viii) ability to successfully identify, acquire, develop and/or manage properties on favorable terms and in accordance with applicable zoning and permitting laws; (ix) changes in governmental laws and regulations; (x) increases in operating costs, including construction cost increases as the result of trade disputes and tariffs on goods imported in
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.
Media Contact
Senior Vice President, Head of Corporate Communications
cristina.carlson@howardhughes.com
Investor Relations
Chief of Staff
john.saxon@howardhughes.com
Chief Financial Officer
carlos.olea@howardhughes.com
THE HOWARD HUGHES CORPORATION
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|
Three Months Ended |
||
thousands except per share amounts |
2022 |
|
2021 |
REVENUES |
|
|
|
Condominium rights and unit sales |
$ 19,616 |
|
$ 37,167 |
Master Planned Communities land sales |
61,468 |
|
37,477 |
Rental revenue |
95,109 |
|
85,899 |
Other land, rental and property revenues |
19,537 |
|
23,243 |
Builder price participation |
14,496 |
|
6,794 |
Total revenues |
210,226 |
|
190,580 |
|
|
|
|
EXPENSES |
|
|
|
Condominium rights and unit cost of sales |
14,180 |
|
54,968 |
Master Planned Communities cost of sales |
24,686 |
|
15,651 |
Operating costs |
65,555 |
|
58,598 |
Rental property real estate taxes |
15,182 |
|
13,991 |
Provision for (recovery of) doubtful accounts |
844 |
|
(578) |
General and administrative |
25,891 |
|
21,766 |
Depreciation and amortization |
48,593 |
|
49,308 |
Other |
2,409 |
|
1,644 |
Total expenses |
197,340 |
|
215,348 |
|
|
|
|
OTHER |
|
|
|
Gain (loss) on sale or disposal of real estate and other assets, net |
(9) |
|
— |
Other income (loss), net |
(221) |
|
(10,308) |
Total other |
(230) |
|
(10,308) |
|
|
|
|
Operating income (loss) |
12,656 |
|
(35,076) |
|
|
|
|
Interest income |
24 |
|
41 |
Interest expense |
(27,438) |
|
(34,210) |
Gain (loss) on extinguishment of debt |
(282) |
|
(35,915) |
Equity in earnings (losses) from real estate and other affiliates |
17,912 |
|
15,796 |
Income (loss) before income taxes |
2,872 |
|
(89,364) |
Income tax expense (benefit) |
701 |
|
(21,205) |
Net income (loss) |
2,171 |
|
(68,159) |
Net (income) loss attributable to noncontrolling interests |
(49) |
|
1,565 |
Net income (loss) attributable to common stockholders |
$ 2,122 |
|
$ (66,594) |
|
|
|
|
Basic income (loss) per share |
$ 0.04 |
|
$ (1.20) |
Diluted income (loss) per share |
$ 0.04 |
|
$ (1.20) |
|
|||
|
|||
thousands except par values and share amounts |
|
|
|
ASSETS |
|
|
|
Investment in real estate: |
|
|
|
Master Planned Communities assets |
$ 2,313,497 |
|
$ 2,282,768 |
Buildings and equipment |
3,990,267 |
|
3,962,441 |
Less: accumulated depreciation |
(785,831) |
|
(743,311) |
Land |
322,439 |
|
322,439 |
Developments |
1,354,619 |
|
1,208,907 |
Net property and equipment |
7,194,991 |
|
7,033,244 |
Investment in real estate and other affiliates |
246,362 |
|
369,949 |
Net investment in real estate |
7,441,353 |
|
7,403,193 |
Net investment in lease receivable |
2,901 |
|
2,913 |
Cash and cash equivalents |
688,037 |
|
843,212 |
Restricted cash |
365,483 |
|
373,425 |
Accounts receivable, net |
86,810 |
|
86,388 |
|
409,390 |
|
387,199 |
Notes receivable, net |
7,192 |
|
7,561 |
Deferred expenses, net |
120,559 |
|
119,825 |
Operating lease right-of-use assets, net |
56,175 |
|
57,022 |
Prepaid expenses and other assets, net |
289,787 |
|
300,956 |
Total assets |
$ 9,467,687 |
|
$ 9,581,694 |
|
|
|
|
LIABILITIES |
|
|
|
Mortgages, notes and loans payable, net |
$ 4,674,950 |
|
$ 4,591,157 |
Operating lease obligations |
69,157 |
|
69,363 |
Deferred tax liabilities |
203,429 |
|
204,837 |
Accounts payable and accrued expenses |
966,753 |
|
983,167 |
Total liabilities |
5,914,289 |
|
5,848,524 |
|
|
|
|
Redeemable noncontrolling interest |
— |
|
22,500 |
|
|
|
|
EQUITY |
|
|
|
Preferred stock: |
— |
|
— |
Common stock: |
564 |
|
563 |
Additional paid-in capital |
3,964,412 |
|
3,960,418 |
Accumulated deficit |
(14,334) |
|
(16,456) |
Accumulated other comprehensive income (loss) |
(6,103) |
|
(14,457) |
|
(391,655) |
|
(220,073) |
Total stockholders' equity |
3,552,884 |
|
3,709,995 |
Noncontrolling interests |
514 |
|
675 |
Total equity |
3,553,398 |
|
3,710,670 |
Total liabilities and equity |
$ 9,467,687 |
|
$ 9,581,694 |
Appendix – Reconciliation of Non-GAAP Measures
Below are GAAP to non-GAAP reconciliations of certain financial measures, as required under Regulation G of the Securities Exchange Act of 1934. Non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. The non-GAAP financial information presented may be determined or calculated differently by other companies and may not be comparable to similarly titled measures.
As a result of our four segments—Operating Assets, Master Planned Communities (MPC), Seaport and Strategic Developments—being managed separately, we use different operating measures to assess operating results and allocate resources among these four segments. The one common operating measure used to assess operating results for our business segments is earnings before tax (EBT). EBT, as it relates to each business segment, represents the revenues less expenses of each segment, including interest income, interest expense and equity in earnings of real estate and other affiliates. EBT excludes corporate expenses and other items that are not allocable to the segments. We present EBT because we use this measure, among others, internally to assess the core operating performance of our assets. However, segment EBT should not be considered as an alternative to GAAP net income.
|
Three Months Ended |
||||
thousands |
2022 |
|
2021 |
|
$ Change |
Operating Assets Segment EBT |
|
|
|
|
|
Total revenues (a) |
$ 99,687 |
|
$ 96,439 |
|
$ 3,248 |
Total operating expenses (a) |
(46,615) |
|
(47,234) |
|
619 |
Segment operating income (loss) |
53,072 |
|
49,205 |
|
3,867 |
Depreciation and amortization |
(38,430) |
|
(39,651) |
|
1,221 |
Interest income (expense), net |
(20,118) |
|
(19,000) |
|
(1,118) |
Other income (loss), net |
(169) |
|
(10,098) |
|
9,929 |
Equity in earnings (losses) from real estate and other affiliates |
15,175 |
|
(11,404) |
|
26,579 |
Gain (loss) on extinguishment of debt |
(282) |
|
(836) |
|
554 |
Operating Assets segment EBT |
9,248 |
|
(31,784) |
|
41,032 |
|
|
|
|
|
|
Master Planned Communities Segment EBT |
|
|
|
|
|
Total revenues |
80,692 |
|
48,287 |
|
32,405 |
Total operating expenses |
(36,896) |
|
(23,267) |
|
(13,629) |
Segment operating income (loss) |
43,796 |
|
25,020 |
|
18,776 |
Depreciation and amortization |
(90) |
|
(72) |
|
(18) |
Interest income (expense), net |
10,422 |
|
10,757 |
|
(335) |
Equity in earnings (losses) from real estate and other affiliates |
5,550 |
|
27,650 |
|
(22,100) |
MPC segment EBT |
59,678 |
|
63,355 |
|
(3,677) |
|
|
|
|
|
|
Seaport Segment EBT |
|
|
|
|
|
Total revenues |
9,376 |
|
7,453 |
|
1,923 |
Total operating expenses |
(18,859) |
|
(12,506) |
|
(6,353) |
Segment operating income (loss) |
(9,483) |
|
(5,053) |
|
(4,430) |
Depreciation and amortization |
(7,823) |
|
(6,835) |
|
(988) |
Interest income (expense), net |
(47) |
|
102 |
|
(149) |
Other income (loss), net |
350 |
|
(336) |
|
686 |
Equity in earnings (losses) from real estate and other affiliates |
(3,711) |
|
(352) |
|
(3,359) |
Seaport segment EBT |
(20,714) |
|
(12,474) |
|
(8,240) |
|
|
|
|
|
|
Strategic Developments Segment EBT |
|
|
|
|
|
Total revenues |
20,456 |
|
38,300 |
|
(17,844) |
Total operating expenses |
(18,077) |
|
(59,623) |
|
41,546 |
Segment operating income (loss) |
2,379 |
|
(21,323) |
|
23,702 |
Depreciation and amortization |
(1,332) |
|
(1,598) |
|
266 |
Interest income (expense), net |
3,989 |
|
1,101 |
|
2,888 |
Other income (loss), net |
(485) |
|
— |
|
(485) |
Equity in earnings (losses) from real estate and other affiliates |
898 |
|
(98) |
|
996 |
Gain (loss) on sale or disposal of real estate and other assets, net |
(9) |
|
— |
|
(9) |
Strategic Developments segment EBT |
5,440 |
|
(21,918) |
|
27,358 |
|
|
|
|
|
|
Consolidated Segment EBT |
|
|
|
|
|
Total revenues |
210,211 |
|
190,479 |
|
19,732 |
Total operating expenses |
(120,447) |
|
(142,630) |
|
22,183 |
Segment operating income (loss) |
89,764 |
|
47,849 |
|
41,915 |
Depreciation and amortization |
(47,675) |
|
(48,156) |
|
481 |
Interest income (expense), net |
(5,754) |
|
(7,040) |
|
1,286 |
Other income (loss), net |
(304) |
|
(10,434) |
|
10,130 |
Equity in earnings (losses) from real estate and other affiliates |
17,912 |
|
15,796 |
|
2,116 |
Gain (loss) on sale or disposal of real estate and other assets, net |
(9) |
|
— |
|
(9) |
Gain (loss) on extinguishment of debt |
(282) |
|
(836) |
|
554 |
Consolidated segment EBT |
53,652 |
|
(2,821) |
|
56,473 |
|
|
|
|
|
|
Corporate income, expenses and other items |
(51,481) |
|
(65,338) |
|
13,857 |
Net income (loss) |
2,171 |
|
(68,159) |
|
70,330 |
Net (income) loss attributable to noncontrolling interests |
(49) |
|
1,565 |
|
(1,614) |
Net income (loss) attributable to common stockholders |
$ 2,122 |
|
$ (66,594) |
|
$ 68,716 |
|
|
(a) |
Total revenues includes hospitality revenues of |
NOI
We believe that NOI is a useful supplemental measure of the performance of our Operating Assets and Seaport portfolio because it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating real estate properties and the impact on operations from trends in rental and occupancy rates and operating costs. 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, including our share of NOI from equity investees). NOI excludes straight-line rents and amortization of tenant incentives, net; interest expense, net; ground rent amortization, demolition costs; other income (loss); amortization; depreciation; development-related marketing cost; gain on sale or disposal of real estate and other assets, net; provision for impairment and equity in earnings from real estate and other affiliates. All management fees have been eliminated for all internally-managed 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 lease structure, lease rates and tenant base have on our operating results, gross margins and investment returns. Variances between years in NOI typically result from changes in rental rates, occupancy, tenant mix and operating expenses. Although we believe that NOI provides useful information to investors about the performance of our Operating Assets and Seaport assets, due to the exclusions noted above, NOI should only be used as an additional measure of the financial performance of the assets of this segment of our business and not as an alternative to GAAP Net income (loss). For reference, and as an aid in understanding our computation of NOI, a reconciliation of segment EBT to NOI for Operating Assets and Seaport has been presented in the tables below.
|
Three Months Ended |
||
thousands |
2022 |
|
2021 |
Operating Assets segment EBT (a) |
|
|
|
Add back: |
|
|
|
Depreciation and amortization |
38,430 |
|
39,651 |
Interest (income) expense, net |
20,118 |
|
19,000 |
Equity in (earnings) losses from real estate and other affiliates |
(15,175) |
|
11,404 |
(Gain) loss on extinguishment of debt |
282 |
|
836 |
Impact of straight-line rent |
(2,438) |
|
(5,107) |
Other |
49 |
|
10,139 |
Operating Assets NOI |
50,514 |
|
44,139 |
|
|
|
|
Company's Share NOI - Equity Investees (b) |
2,116 |
|
385 |
Distributions from |
4,638 |
|
3,755 |
|
|
|
|
Total Operating Assets NOI |
|
|
|
|
|
|
|
Seaport segment EBT (a) |
|
|
|
Add back: |
|
|
|
Depreciation and amortization |
7,823 |
|
6,835 |
Interest (income) expense, net |
47 |
|
(102) |
Equity in (earnings) losses from real estate and other affiliates |
3,711 |
|
352 |
Impact of straight-line rent |
1,888 |
|
404 |
Other (income) loss, net |
1,503 |
|
741 |
Seaport NOI |
(5,742) |
|
(4,244) |
|
|
|
|
Company's Share NOI - Equity Investees |
(2,575) |
|
(135) |
|
|
|
|
Total Seaport NOI |
|
|
|
|
|
(a) |
Segment EBT excludes corporate expenses and other items that are not allocable to the segments. |
(b) |
The Company's share of NOI related to |
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 |
2022 |
|
2021 |
|
$ Change |
Same Store Office |
|
|
|
|
|
Houston, TX |
$ 16,075 |
|
$ 18,461 |
|
$ (2,386) |
Columbia, MD |
5,805 |
|
3,942 |
|
1,863 |
Las Vegas, NV |
3,297 |
|
3,429 |
|
(132) |
Total Same Store Office |
25,177 |
|
25,832 |
|
(655) |
|
|
|
|
|
|
Same Store Retail |
|
|
|
|
|
Houston, TX |
2,664 |
|
2,845 |
|
(181) |
Columbia, MD |
420 |
|
432 |
|
(12) |
Las Vegas, NV |
5,802 |
|
5,601 |
|
201 |
Honolulu, HI |
3,910 |
|
2,686 |
|
1,224 |
Other |
452 |
|
453 |
|
(1) |
Total Same Store Retail |
13,248 |
|
12,017 |
|
1,231 |
|
|
|
|
|
|
Same Store Multi-Family |
|
|
|
|
|
Houston, TX |
6,655 |
|
3,689 |
|
2,966 |
Columbia, MD |
1,613 |
|
375 |
|
1,238 |
Las Vegas, NV |
1,848 |
|
1,671 |
|
177 |
Company's Share NOI - Equity Investees |
1,744 |
|
1,612 |
|
132 |
Total Same Store Multi-Family |
11,860 |
|
7,347 |
|
4,513 |
|
|
|
|
|
|
Same Store Other |
|
|
|
|
|
Houston, TX |
1,745 |
|
1,546 |
|
199 |
Columbia, MD |
98 |
|
(82) |
|
180 |
Las Vegas, NV |
(1,096) |
|
(645) |
|
(451) |
Honolulu, HI |
13 |
|
(1) |
|
14 |
Company's Share NOI - Equity and Cost Investees |
5,010 |
|
4,135 |
|
875 |
Total Same Store Other |
5,770 |
|
4,953 |
|
817 |
Total Same Store NOI |
56,055 |
|
50,149 |
|
5,906 |
|
|
|
|
|
|
Non-Same Store NOI |
1,213 |
|
(1,870) |
|
3,083 |
Total Operating Assets NOI |
$ 57,268 |
|
$ 48,279 |
|
$ 8,989 |
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.
|
Three Months Ended |
||||
thousands |
2022 |
|
2021 |
|
$ Change |
General and Administrative |
|
|
|
|
|
General and administrative (G&A) |
$ 25,891 |
|
$ 21,766 |
|
$ 4,125 |
Less: Non-cash stock compensation |
(1,437) |
|
(2,533) |
|
1,096 |
Cash G&A (a) |
$ 24,454 |
|
$ 19,233 |
|
$ 5,221 |
|
|
(a) |
The first quarter of 2022 includes |
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