Segments

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segments

16. Segments

The Company has four business segments that 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 developed or acquired retail, office and multi-family properties along with other real estate investments. These properties are currently generating revenues and may be redeveloped, repositioned, or sold to improve segment performance or to recycle capital. This segment also included hospitality properties prior to the sale of The Woodlands Resort, The Westin at The Woodlands and Embassy Suites at Hughes Landing in the third quarter of 2021. Refer to Note 3 - Acquisitions and Dispositions for additional information.

–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; Phoenix, Arizona; and Columbia, Maryland.

–Seaport – consists of approximately 472,000 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 as well as the 250 Water Street development, and equity interest in Jean-Georges Restaurants.

–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.

Segment operating results are as follows:

thousands	Operating Assets Segment (a)		MPC Segment		Seaport Segment		Strategic Developments Segment		Total
Three Months Ended September 30, 2022
Total revenues	$	109,493	$	78,188	$	32,501	$	419,353	$	639,535
Total operating expenses	(48,994)		(31,055)		(31,404)		(300,515)		(411,968)
Segment operating income (loss)	60,499		47,133		1,097		118,838		227,567
Depreciation and amortization	(37,714)		(104)		(9,651)		(1,406)		(48,875)
Interest income (expense), net	(23,340)		13,492		1,731		5,817		(2,300)
Other income (loss), net	421		—		(18)		900		1,303
Equity in earnings (losses) from real estate and other affiliates	4,132		14,862		(11,273)		(13)		7,708
Segment EBT	$	3,998	$	75,383	$	(18,114)	$	124,136	$	185,403
Corporate income, expenses and other items									(77,734)
Net income (loss)									107,669
Net (income) loss attributable to noncontrolling interests									427
Net income (loss) attributable to common stockholders									$	108,096
Three Months Ended September 30, 2021
Total revenues	$	125,072	$	72,061	$	21,143	$	809	$	219,085
Total operating expenses	(61,091)		(35,474)		(25,219)		(6,708)		(128,492)
Segment operating income (loss)	63,981		36,587		(4,076)		(5,899)		90,593
Depreciation and amortization	(44,224)		(102)		(9,087)		(1,741)		(55,154)
Interest income (expense), net	(18,027)		10,362		377		850		(6,438)
Other income (loss), net	(285)		—		(1,134)		5		(1,414)
Equity in earnings (losses) from real estate and other affiliates	(15,108)		8,277		(1,009)		(8)		(7,848)
Gain (loss) on sale or disposal of real estate and other assets, net	39,141		—		—		—		39,141
Gain (loss) on extinguishment of debt	(573)		(1,004)		—		—		(1,577)
Segment EBT	$	24,905	$	54,120	$	(14,929)	$	(6,793)	$	57,303
Corporate income, expenses and other items									(55,186)
Net income (loss)									2,117
Net (income) loss attributable to noncontrolling interests									1,936
Net income (loss) attributable to common stockholders									$	4,053

(a)Total revenues includes hospitality revenues of $14.0 million for the three months ended September 30, 2021. Total operating expenses includes hospitality operating costs of $11.7 million for the three months ended September 30, 2021. In September 2021, the Company completed the sale of its three hospitality properties.

thousands	Operating Assets Segment (a)		MPC Segment		Seaport Segment		Strategic Developments Segment		Total
Nine Months Ended September 30, 2022
Total revenues	$	327,742	$	266,990	$	70,053	$	461,655	$	1,126,440
Total operating expenses	(146,958)		(113,087)		(79,329)		(344,271)		(683,645)
Segment operating income (loss)	180,784		153,903		(9,276)		117,384		442,795
Depreciation and amortization	(115,143)		(286)		(25,194)		(4,083)		(144,706)
Interest income (expense), net	(64,776)		35,697		3,003		12,334		(13,742)
Other income (loss), net	(57)		23		289		1,361		1,616
Equity in earnings (losses) from real estate and other affiliates	21,898		16,990		(20,223)		863		19,528
Gain (loss) on sale or disposal of real estate and other assets, net	4,018		—		—		(9)		4,009
Gain (loss) on extinguishment of debt	(645)		—		—		—		(645)
Segment EBT	$	26,079	$	206,327	$	(51,401)	$	127,850	$	308,855
Corporate income, expenses and other items									(177,583)
Net income (loss)									131,272
Net (income) loss attributable to noncontrolling interests									510
Net income (loss) attributable to common stockholders									$	131,782
Nine Months Ended September 30, 2021
Total revenues	$	334,933	$	194,926	$	39,494	$	52,575	$	621,928
Total operating expenses	(161,516)		(92,646)		(53,721)		(84,971)		(392,854)
Segment operating income (loss)	173,417		102,280		(14,227)		(32,396)		229,074
Depreciation and amortization	(123,850)		(272)		(22,926)		(4,936)		(151,984)
Interest income (expense), net	(55,179)		31,734		666		2,610		(20,169)
Other income (loss), net	(10,539)		—		(2,088)		19		(12,608)
Equity in earnings (losses) from real estate and other affiliates	(36,931)		54,568		(1,697)		(125)		15,815
Gain (loss) on sale or disposal of real estate and other assets, net	39,141		—		—		21,333		60,474
Gain (loss) on extinguishment of debt	(1,455)		(1,004)		—		—		(2,459)
Provision for impairment	—		—		—		(13,068)		(13,068)
Segment EBT	$	(15,396)	$	187,306	$	(40,272)	$	(26,563)	$	105,075
Corporate income, expenses and other items									(167,500)
Net income (loss)									(62,425)
Net (income) loss attributable to noncontrolling interests									4,725
Net income (loss) attributable to common stockholders									$	(57,700)

(a)Total revenues includes hospitality revenues of $35.6 million for the nine months ended September 30, 2021. Total operating expenses includes hospitality operating costs of $30.5 million for the nine months ended September 30, 2021. In September 2021, the Company completed the sale of its three hospitality properties.

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:

thousands	September 30, 2022		December 31, 2021
Operating Assets	$	3,320,476	$	3,607,718
Master Planned Communities	3,141,488		3,056,240
Seaport	1,166,083		1,046,992
Strategic Developments	1,586,119		1,193,549
Total segment assets	9,214,166		8,904,499
Corporate	294,515		677,195
Total assets	$	9,508,681	$	9,581,694