SEGMENTS

6 Months Ended

Jun. 30, 2019

The Company has four business segments which offer different products and services. HHC's four segments are managed separately because each requires different operating strategies or management expertise and are reflective of management’s operating philosophies and methods. As further discussed in Item 2. -Management’s Discussion and Analysis of Financial Condition and Results of Operations, one common operating measure used to assess operating results for the Company's business segments is earnings before taxes ("EBT"). The Company's segments or assets within such segments could change in the future as development of certain properties commences or other operational or management changes occur. All operations are within the United States. The Company's reportable segments are as follows:


•	Operating Assets – consists of retail, office, hospitality and multi-family properties along with other real estate investments. These assets are currently generating revenues and are comprised of commercial real estate properties recently developed or acquired, and properties with an opportunity to redevelop, reposition or sell to improve segment performance or to recycle capital.


•	MPC – consists of the development and sale of land in large‑scale, long‑term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Columbia, Maryland.


•	Seaport District - consists of approximately 450,000 square feet of restaurant, retail and entertainment properties situated in three primary locations in New York, New York: Pier 17, Historic Area/Uplands and Tin Building. While the latter is still under development and will comprise about 53,000 square feet when completed, the two operating locations consist

of third party tenants, tenants either directly or jointly owned and operated by the Company, and businesses owned and operated by the Company under licensing agreements.


•	Strategic Developments – consists of residential condominium and commercial property projects currently under development and all other properties held for development which have no substantial operations.

Effective January 1, 2019, the Company moved the Seaport District out of its existing segments and into a stand-alone segment for disclosure purposes. The respective segment earnings and total segment assets presented in the Condensed Consolidated Financial Statements and elsewhere in this Quarterly Report have been adjusted in all periods reported to reflect this change. See the Seaport District section of Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

Segment operating results are as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2019			2018			2019			2018
Operating Assets Segment EBT
Total revenues	$	109,219		$	88,808		$	201,172		$	176,555
Total operating expenses	(48,727		)	(40,988		)	(91,639		)	(82,999		)
Segment operating income	60,492			47,820			109,533			93,556
Depreciation and amortization	(28,938		)	(24,198		)	(56,046		)	(47,558		)
Interest expense, net	(20,059		)	(17,308		)	(39,050		)	(33,995		)
Other income, net	1,088			71			1,123			164
Equity in earnings from real estate and other affiliates	45			(1,000		)	2,754			1,583
Segment EBT	12,628			5,385			18,314			13,750

MPC Segment EBT
Total revenues	72,859			62,765			123,755			118,530
Total operating expenses	(40,392		)	(37,003		)	(68,906		)	(73,371		)
Segment operating income	32,467			25,762			54,849			45,159
Depreciation and amortization	(86		)	(86		)	(246		)	(167		)
Interest income, net	8,283			6,808			15,826			13,200
Other income, net	72			—			67			—
Equity in earnings from real estate and other affiliates	6,499			14,100			14,336			25,228
Segment EBT	47,235			46,584			84,832			83,420

Seaport District Segment EBT
Total revenues	12,891			4,500			19,921			8,011
Total operating expenses	(17,972		)	(6,441		)	(32,405		)	(9,976		)
Segment operating loss	(5,081		)	(1,941		)	(12,484		)	(1,965		)
Depreciation and amortization	(6,753		)	(1,953		)	(12,946		)	(4,197		)
Interest (expense) income, net	(1,924		)	3,278			(3,456		)	6,995
Other loss, net	(61		)	—			(147		)	—
Equity in losses from real estate and other affiliates	(451		)	(240		)	(1,083		)	(240		)
Loss on sale or disposal of real estate	—			—			(6		)	—
Segment EBT	(14,270		)	(856		)	(30,122		)	593
Strategic Developments Segment EBT
Total revenues	236,347			24,932			440,358			39,588
Total operating expenses	(224,711		)	(35,312		)	(371,014		)	(47,339		)
Segment operating income	11,636			(10,380		)	69,344			(7,751		)
Depreciation and amortization	(1,260		)	(1,113		)	(2,316		)	(2,178		)



Interest income, net	3,235			3,139			6,497			6,946
Other (loss) income, net	(385		)	164			310			373
Equity in earnings from real estate and other affiliates	261			3,440			298			4,112
Loss on sale or disposal of real estate	(144		)	—			(144		)	—
Segment EBT	13,343			(4,750		)	73,989			1,502

Consolidated Segment EBT
Total revenues	431,316			181,005			785,206			342,684
Total operating expenses	(331,802		)	(119,744		)	(563,964		)	(213,685		)
Segment operating income	99,514			61,261			221,242			128,999
Depreciation and amortization	(37,037		)	(27,350		)	(71,554		)	(54,100		)
Interest expense, net	(10,465		)	(4,083		)	(20,183		)	(6,854		)
Other income, net	714			235			1,353			537
Equity in earnings from real estate and other affiliates	6,354			16,300			16,305			30,683
Loss on sale or disposal of real estate	(144		)	—			(150		)	—
Consolidated segment EBT	58,936			46,363			147,013			99,265

Corporate expenses and other items	45,608			52,242			101,760			103,310
Net income (loss)	13,328			(5,879		)	45,253			(4,045		)
Net loss attributable to noncontrolling interests	149			791			45			431
Net income (loss) attributable to common stockholders	$	13,477		$	(5,088	)	$	45,298		$	(3,614	)

The assets by segment and the reconciliation of total segment assets to the Total assets in the Condensed Consolidated Balance Sheets are summarized as follows:



	June 30,		December 31,
(In thousands)	2019		2018
Operating Assets	$	2,713,098	$	2,562,257
Master Planned Communities	2,192,267		2,076,678
Seaport District	919,329		839,522
Strategic Developments	1,416,669		1,538,917
Total segment assets	7,241,363		7,017,374
Corporate and other	467,815		338,425
Total assets	$	7,709,178	$	7,355,799