Delaware | 001-34856 | 36-4673192 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
13355 Noel Road, Suite 950, Dallas, Texas |
75240 |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |||
99.1 | Press release dated April 7, 2011 announcing the Companys
financial results for the fourth quarter and fiscal year ended
December 31, 2011. |
|||
99.2 | Press release dated April 7, 2011 containing a letter to the
Companys shareholders from the Chairman. |
|||
99.3 | Press release dated April 7, 2011 containing a letter to the
Companys shareholders from the CEO. |
The Howard Hughes Corporation |
||||
April 11, 2011 | By: | Grant Herlitz | ||
Name: | Grant Herlitz | |||
Title: | President | |||
Exhibit No. | Description | |||
99.1 | Press release dated April 7, 2011 announcing the Companys
financial results for the fourth quarter and fiscal year ended
December 31, 2011. |
|||
99.2 | Press release dated April 7, 2011 containing a letter to the
Companys shareholders from the Chairman. |
|||
99.3 | Press release dated April 7, 2011 containing a letter to the
Companys shareholders from the CEO. |
| Net loss attributable to common stockholders totaled $(4.6) million for fourth quarter
and $(69.4) million for full year 2010. |
||
| Impairment charges totaled $503.4 million for full year 2010. |
||
| Separation from General Growth Properties, Inc. (GGP) completed November 9, 2010. |
||
| The Howard Hughes Corporation raised $267 million from the issuance of common equity and
warrants during fourth quarter 2010. |
||
| New Executive Management Team appointed. |
||
| The Company entered into agreements with Richmond American Homes of Nevada, Inc. and
Pulte Homes of Nevada for the sale of lots in Summerlin for purchase prices of $22.2
million and $23 million, respectively. |
1
2
3
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: |
||||||||||||||||
Minimum rent |
$ | 16,577 | $ | 16,263 | $ | 66,926 | $ | 65,653 | ||||||||
Tenant recoveries |
4,676 | 4,815 | 18,567 | 19,642 | ||||||||||||
Master Planned Community land sales |
24,511 | 3,898 | 38,058 | 34,563 | ||||||||||||
Builder price participation |
781 | 1,867 | 4,124 | 5,687 | ||||||||||||
Other land sale revenues |
1,271 | 1,388 | 5,384 | 5,747 | ||||||||||||
Other rental and property revenues |
3,024 | 2,737 | 9,660 | 5,056 | ||||||||||||
Total revenues |
50,840 | 30,968 | 142,719 | 136,348 | ||||||||||||
Expenses: |
||||||||||||||||
Master Planned Community cost of sales |
16,387 | 1,871 | 23,388 | 22,020 | ||||||||||||
Master Planned Community sales operations |
5,388 | 6,611 | 29,041 | 27,042 | ||||||||||||
Rental property real estate taxes |
3,369 | 3,700 | 14,530 | 13,813 | ||||||||||||
Rental property maintenance costs |
1,729 | 1,941 | 6,495 | 5,586 | ||||||||||||
Other property operating costs |
10,698 | 9,220 | 37,893 | 34,810 | ||||||||||||
Provision for doubtful accounts |
681 | 1,358 | 1,782 | 2,539 | ||||||||||||
General and administrative |
9,076 | 4,260 | 21,538 | 23,023 | ||||||||||||
Provisions for impairment |
502,778 | 499,587 | 503,356 | 680,349 | ||||||||||||
Depreciation and amortization |
4,028 | 4,620 | 16,563 | 19,841 | ||||||||||||
Total expenses |
554,134 | 533,168 | 654,586 | 829,023 | ||||||||||||
Operating loss |
(503,294 | ) | (502,200 | ) | (511,867 | ) | (692,675 | ) | ||||||||
Interest income |
251 | 1,202 | 369 | 1,689 | ||||||||||||
Interest expense |
(534 | ) | (209 | ) | (2,422 | ) | (977 | ) | ||||||||
Warrant liability expense |
(140,900 | ) | | (140,900 | ) | | ||||||||||
Loss before income taxes, equity in income (loss) from
Real Estate Affiliates, reorganization items and
noncontrolling interests |
(644,477 | ) | (501,207 | ) | (654,820 | ) | (691,963 | ) | ||||||||
Benefit from (provision for) income taxes |
651,062 | (841 | ) | 633,459 | 23,969 | |||||||||||
Equity in income (loss) from Real Estate Affiliates |
3,019 | (30,326 | ) | 9,413 | (28,209 | ) | ||||||||||
Reorganization items |
(14,153 | ) | (2,843 | ) | (57,282 | ) | (6,674 | ) | ||||||||
Income (loss) from continuing operations |
(4,549 | ) | (535,217 | ) | (69,230 | ) | (702,877 | ) | ||||||||
Discontinued operations loss on dispositions |
| (939 | ) | | (939 | ) | ||||||||||
Net income (loss) |
(4,549 | ) | (536,156 | ) | (69,230 | ) | (703,816 | ) | ||||||||
Allocation to noncontrolling interests |
(81 | ) | 304 | (201 | ) | 204 | ||||||||||
Net income (loss) attributable to common stockholders |
$ | (4,630 | ) | $ | (535,852 | ) | $ | (69,431 | ) | $ | (703,612 | ) | ||||
Basic and Diluted Income (Loss) Per Share: |
||||||||||||||||
Continuing operations |
$ | (0.12 | ) | $ | (14.19 | ) | $ | (1.84 | ) | $ | (18.64 | ) | ||||
Discontinued operations |
| (0.02 | ) | | (0.02 | ) | ||||||||||
Total basic and diluted income (loss) per share |
$ | (0.12 | ) | $ | (14.21 | ) | $ | (1.84 | ) | $ | (18.66 | ) | ||||
Weighted Average Shares of Common Stock: |
||||||||||||||||
Basic |
37,753 | 37,716 | 37,726 | 37,716 | ||||||||||||
Diluted |
37,753 | 37,716 | 37,726 | 37,716 |
4
December 31, | ||||||||
2010 | 2009 | |||||||
(Consolidated) | (Combined) | |||||||
Assets: |
||||||||
Investment in real estate: |
||||||||
Master Planned Community assets |
$ | 1,350,648 | $ | 1,742,226 | ||||
Land |
180,976 | 193,130 | ||||||
Buildings and equipment |
343,006 | 451,279 | ||||||
Less accumulated depreciation |
(83,390 | ) | (85,639 | ) | ||||
Developments in progress |
293,403 | 300,621 | ||||||
Net property and equipment |
2,084,643 | 2,601,617 | ||||||
Investment in and loans to/from Real Estate Affiliates |
149,543 | 140,558 | ||||||
Net investment in real estate |
2,234,186 | 2,742,175 | ||||||
Cash and cash equivalents |
284,682 | 3,204 | ||||||
Accounts receivable, net |
8,154 | 9,145 | ||||||
Notes receivable |
38,954 | 8,214 | ||||||
Tax indemnity receivable, including interest |
323,525 | | ||||||
Deferred expenses, net |
6,619 | 7,444 | ||||||
Prepaid expenses and other assets |
126,587 | 135,045 | ||||||
Total assets |
$ | 3,022,707 | $ | 2,905,227 | ||||
Liabilities: |
||||||||
Liabilities not subject to compromise: |
||||||||
Mortgages, notes and loans payable |
$ | 318,660 | $ | 208,860 | ||||
Deferred tax liabilities |
78,680 | 782,817 | ||||||
Warrant liability |
227,348 | | ||||||
Uncertain tax position liability |
140,076 | 66,129 | ||||||
Accounts payable and accrued expenses |
78,836 | 68,062 | ||||||
Liabilities not subject to compromise |
843,600 | 1,125,868 | ||||||
Liabilities subject to compromise |
| 275,839 | ||||||
Total liabilities |
843,600 | 1,401,707 | ||||||
Equity: |
||||||||
Common stock: $.01 par value; 100,000,000 shares
authorized,
37,904,506 shares issued as of December 31, 2010 |
379 | | ||||||
Additional paid-in capital |
2,708,036 | | ||||||
GGP equity |
| 1,504,364 | ||||||
Accumulated deficit |
(528,505 | ) | | |||||
Accumulated other comprehensive loss |
(1,627 | ) | (1,744 | ) | ||||
Total stockholders equity |
2,178,283 | 1,502,620 | ||||||
Noncontrolling interests in consolidated ventures |
824 | 900 | ||||||
Total equity |
2,179,107 | 1,503,520 | ||||||
Total liabilities and equity |
$ | 3,022,707 | $ | 2,905,227 | ||||
5
Three Months Ended | ||||||||||||||||
December 31, | Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(In thousands) | ||||||||||||||||
Operating Assets |
||||||||||||||||
Ward Centers |
$ | 5,761 | $ | 4,598 | $ | 22,980 | $ | 22,152 | ||||||||
110 N. Wacker |
2,039 | 1,417 | 6,628 | 4,988 | ||||||||||||
South Street Seaport |
946 | 890 | 3,898 | (1) | 4,524 | |||||||||||
Columbia Office Properties |
602 | 834 | 2,765 | 2,880 | ||||||||||||
Rio West Mall |
419 | 503 | 1,899 | 2,040 | ||||||||||||
Landmark Mall |
370 | 538 | 1,519 | 2,372 | ||||||||||||
Riverwalk Marketplace |
350 | 694 | 955 | 868 | ||||||||||||
Cottonwood Square |
111 | 92 | 484 | 507 | ||||||||||||
Park West |
112 | (66 | ) | 366 | 138 | |||||||||||
Other properties |
94 | 108 | 1,058 | 1,667 | ||||||||||||
Total operating assets NOI |
$ | 10,804 | $ | 9,608 | $ | 42,552 | $ | 42,136 | ||||||||
Straight-line and market lease amortization rent |
(480 | ) | (492 | ) | (142 | ) | (199 | ) | ||||||||
Provisions for impairment |
(80,401 | ) | (50,541 | ) | (80,923 | ) | (50,964 | ) | ||||||||
Depreciation and amortization |
(3,909 | ) | (4,338 | ) | (16,017 | ) | (17,367 | ) | ||||||||
Interest, net |
(3,132 | ) | (3,203 | ) | (16,145 | ) | (13,957 | ) | ||||||||
Operating assets EBT |
$ | (77,118 | ) | $ | (48,966 | ) | $ | (70,675 | ) | $ | (40,351 | ) | ||||
(1) | Includes a $1.2 million provision for bad debt expense related to a single tenant. |
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(In thousands) | ||||||||||||||||
Real estate property EBT: |
||||||||||||||||
Operating Assets segment |
$ | (77,118 | ) | $ | (48,966 | ) | $ | (70,675 | ) | $ | (40,351 | ) | ||||
MPC segment |
(395,230 | ) | (11,797 | ) | (385,242 | ) | (55,409 | ) | ||||||||
Strategic Developments segment |
(18,901 | ) | (469,841 | ) | (26,458 | ) | (603,802 | ) | ||||||||
Less: Real Estate Affiliates |
(3,252 | ) | 33,657 | (10,007 | ) | 30,622 | ||||||||||
Consolidated properties |
(494,501 | ) | (496,947 | ) | (492,382 | ) | (668,940 | ) | ||||||||
General and administrative |
(9,076 | ) | (4,260 | ) | (21,538 | ) | (17,643 | ) | ||||||||
Strategic Initiatives |
| | | (5,380 | ) | |||||||||||
Warrant liability expense |
(140,900 | ) | | (140,900 | ) | | ||||||||||
Benefit from (provision for) income taxes |
651,062 | (841 | ) | 633,459 | 23,969 | |||||||||||
Equity in income of unconsolidated Real Estate Affiliates |
3,019 | (30,326 | ) | 9,413 | (28,209 | ) | ||||||||||
Reorganization costs |
(14,153 | ) | (2,843 | ) | (57,282 | ) | (6,674 | ) | ||||||||
Loss from continuing operations |
$ | (4,549 | ) | $ | (535,217 | ) | $ | (69,230 | ) | $ | (702,877 | ) | ||||
6
Land Sales | Acres Sold | Number of Lots/Units | Price per acre | Price per lot | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||||||||||||||||||
Residential Land Sales |
|||||||||||||||||||||||||||||||||||||||||
Columbia |
Single Family - detached | $ | 2,400 | $ | 500 | 2 | 1 | 12 | 4 | $ | 1,275 | $ | 531 | $ | 200 | $ | 125 | ||||||||||||||||||||||||
Townhomes | 3,031 | 3,006 | 2 | 2 | 29 | 33 | 1,832 | 1,775 | 105 | 91 | |||||||||||||||||||||||||||||||
High/Mid Apartments | | 3,125 | | 8 | | 164 | | 379 | | 19 | |||||||||||||||||||||||||||||||
Single Family - detached (Fairwood) | | 15,000 | | 239 | | 636 | | 63 | | 24 | |||||||||||||||||||||||||||||||
Bridgeland |
Single Family - detached | 15,123 | 10,239 | 58 | 41 | 289 | 204 | 259 | 251 | 52 | 50 | ||||||||||||||||||||||||||||||
Summerlin |
Single Family - detached | 8,909 | | 17 | | 95 | | 519 | | 94 | | ||||||||||||||||||||||||||||||
Custom Lots | 2,252 | 550 | 2 | 0 | 4 | 1 | 1,204 | 1,618 | 563 | 550 | |||||||||||||||||||||||||||||||
Woodlands |
Single Family - detached | 65,230 | 47,917 | 181 | 135 | 737 | 557 | 360 | 354 | 89 | 86 | ||||||||||||||||||||||||||||||
Single Family - attached | 988 | | 4 | | 52 | | 279 | | 19 | | |||||||||||||||||||||||||||||||
Subtotal |
97,933 | 80,337 | 266 | 426 | 1,218 | 1,599 | |||||||||||||||||||||||||||||||||||
Commercial Land Sales |
|||||||||||||||||||||||||||||||||||||||||
Summerlin |
Retail | | 4,564 | | 4 | | | | 1,047 | | | ||||||||||||||||||||||||||||||
Bridgeland |
Not-for-Profit | 1,600 | 741 | 20 | 15 | | | 80 | 50 | | | ||||||||||||||||||||||||||||||
Woodlands |
Office and other | 10,597 | 3,603 | 21 | 49 | | | 496 | 74 | | | ||||||||||||||||||||||||||||||
Apartments and assisted living | 4,879 | 7,150 | 12 | 19 | | | 392 | 370 | | | |||||||||||||||||||||||||||||||
Retail | 5,843 | 674 | 20 | 3 | | | 290 | 261 | | | |||||||||||||||||||||||||||||||
Hotel | 2,331 | 3,379 | 3 | 5 | | | 719 | 672 | | | |||||||||||||||||||||||||||||||
Subtotal |
25,250 | 20,111 | 76 | 95 | |||||||||||||||||||||||||||||||||||||
Total acreage sales revenues | 123,183 | 100,448 | |||||||||||||||||||||||||||||||||||||||
Deferred Revenue | 3,994 | (3,409 | ) | ||||||||||||||||||||||||||||||||||||||
SID | 749 | 248 | |||||||||||||||||||||||||||||||||||||||
Venture partners share The Woodlands partnership acreage sales | (42,687 | ) | (29,794 | ) | |||||||||||||||||||||||||||||||||||||
Total MPC segment land sales revenues | $ | 85,239 | $ | 67,493 | |||||||||||||||||||||||||||||||||||||
7
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