Segments |
In 2024, the Company completed the spinoff of Seaport Entertainment Group Inc. which included all assets in the previously reported Seaport segment and the Las Vegas Aviators and Las Vegas Ballpark previously included in the Operating Assets segment. These assets are now disclosed as discontinued operations in the current and prior periods. See Note 2 - Discontinued Operations for additional information on the spinoff transaction.
The Company has three business segments that offer different products and services. HHH’s three segments are managed separately because each requires different operating strategies or management expertise that are reflective of management’s operating philosophies and methods. Because the Company’s three segments, Operating Assets, MPC, and Strategic Developments, are managed separately, the Company uses different operating measures to assess operating results and allocate resources among them. The one common operating measure used to assess operating results for the Company’s business segments is earnings before tax (EBT). EBT, as it relates to each business segment, includes the revenues and expenses of each segment, as shown below. EBT excludes corporate expenses and other items that are not allocable to the segments. The Company presents EBT for each segment because the Company uses this measure, among others, internally to assess the core operating performance of the Company’s assets. 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. –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 Phoenix, Arizona. –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 | MPC Segment | Strategic Developments Segment | | Total | Three Months Ended September 30, 2024 | | | | | | Total revenues | $ | 114,019 | | $ | 212,607 | | $ | 505 | | | $ | 327,131 | | Total operating expenses | (48,987) | | (84,532) | | (16,411) | | | (149,930) | | Segment operating income (loss) | 65,032 | | 128,075 | | (15,906) | | | 177,201 | | Depreciation and amortization | (42,252) | | (109) | | (960) | | | (43,321) | | Interest income (expense), net | (36,661) | | 16,425 | | 4,353 | | | (15,883) | | Other income (loss), net | (54) | | — | | 90,089 | | | 90,035 | | Equity in earnings (losses) from unconsolidated ventures | (2,109) | | 361 | | 118 | | | (1,630) | | Gain (loss) on sale or disposal of real estate and other assets, net | 3,165 | | — | | — | | | 3,165 | | | | | | | | | | | | | | | | | | | | | | | | | | Segment EBT | $ | (12,879) | | $ | 144,752 | | $ | 77,694 | | | $ | 209,567 | | Corporate income, expenses, and other items | | | | | (113,039) | | Net income (loss) from continuing operations | | | | | 96,528 | | Net income (loss) from discontinued operations, net of taxes | | | | | (24,031) | | Net (income) loss attributable to noncontrolling interests | | | | | 273 | | Net income (loss) attributable to common stockholders | | | | | $ | 72,770 | | | | | | | | Three Months Ended September 30, 2023 | | | | | | Total revenues | $ | 106,178 | | $ | 95,799 | | $ | 26,481 | | | $ | 228,458 | | Total operating expenses | (47,960) | | (41,239) | | (29,620) | | | (118,819) | | Segment operating income (loss) | 58,218 | | 54,560 | | (3,139) | | | 109,639 | | Depreciation and amortization | (40,647) | | (103) | | (962) | | | (41,712) | | Interest income (expense), net | (31,337) | | 16,031 | | 4,412 | | | (10,894) | | Other income (loss), net | (186) | | — | | 81 | | | (105) | | Equity in earnings (losses) from unconsolidated ventures | 1,363 | | 14,310 | | 59 | | | 15,732 | | Gain (loss) on sale or disposal of real estate and other assets, net | 16,050 | | — | | 236 | | | 16,286 | | | | | | | | | | | | | | | | | | | | | | | | | | Segment EBT | $ | 3,461 | | $ | 84,798 | | $ | 687 | | | $ | 88,946 | | Corporate income, expenses, and other items | | | | | (56,882) | | Net income (loss) from continuing operations | | | | | 32,064 | | Net income (loss) from discontinued operations, net of taxes | | | | | (576,199) | | Net (income) loss attributable to noncontrolling interests | | | | | (46) | | Net income (loss) attributable to common stockholders | | | | | $ | (544,181) | | | | | | | |
| | | | | | | | | | | | | | | | | | thousands | Operating Assets Segment | MPC Segment | Strategic Developments Segment | | Total | Nine Months Ended September 30, 2024 | | | | | | Total revenues | $ | 331,779 | | $ | 433,663 | | $ | 1,607 | | | $ | 767,049 | | Total operating expenses | (142,751) | | (180,464) | | (29,271) | | | (352,486) | | Segment operating income (loss) | 189,028 | | 253,199 | | (27,664) | | | 414,563 | | Depreciation and amortization | (125,903) | | (327) | | (6,257) | | | (132,487) | | Interest income (expense), net | (103,768) | | 47,839 | | 12,971 | | | (42,958) | | Other income (loss), net | 896 | | — | | 90,075 | | | 90,971 | | Equity in earnings (losses) from unconsolidated ventures | 4,044 | | (8,467) | | 193 | | | (4,230) | | Gain (loss) on sale or disposal of real estate and other assets, net | 7,959 | | — | | — | | | 7,959 | | | | | | | | | | | | | | Gain (loss) on extinguishment of debt | (198) | | — | | — | | | (198) | | | | | | | | Segment EBT | $ | (27,942) | | $ | 292,244 | | $ | 69,318 | | | $ | 333,620 | | Corporate income, expenses, and other items | | | | | (210,725) | | Net income (loss) from continuing operations | | | | | 122,895 | | Net income (loss) from discontinued operations, net of taxes | | | | | (81,807) | | Net (income) loss attributable to noncontrolling interests | | | | | 297 | | Net income (loss) attributable to common stockholders | | | | | $ | 41,385 | | | | | | | | Nine Months Ended September 30, 2023 | | | | | | Total revenues | $ | 310,942 | | $ | 236,123 | | $ | 48,679 | | | $ | 595,744 | | Total operating expenses | (134,486) | | (103,668) | | (76,020) | | | (314,174) | | Segment operating income (loss) | 176,456 | | 132,455 | | (27,341) | | | 281,570 | | Depreciation and amortization | (116,454) | | (316) | | (2,848) | | | (119,618) | | Interest income (expense), net | (89,419) | | 49,004 | | 11,917 | | | (28,498) | | Other income (loss), net | 2,078 | | (103) | | 158 | | | 2,133 | | Equity in earnings (losses) from unconsolidated ventures | 5,311 | | 21,056 | | 94 | | | 26,461 | | Gain (loss) on sale or disposal of real estate and other assets, net | 20,764 | | — | | 236 | | | 21,000 | | | | | | | | | | | | | | | | | | | | | | | | | | Segment EBT | $ | (1,264) | | $ | 202,096 | | $ | (17,784) | | | $ | 183,048 | | Corporate income, expenses, and other items | | | | | (152,472) | | Net income (loss) from continuing operations | | | | | 30,576 | | Net income (loss) from discontinued operations, net of taxes | | | | | (616,479) | | Net (income) loss attributable to noncontrolling interests | | | | | (166) | | Net income (loss) attributable to common stockholders | | | | | $ | (586,069) | |
The assets by segment and the reconciliation of total segment assets to Total assets in the Condensed Consolidated Balance Sheets are summarized as follows: | | | | | | | | | | | | thousands | September 30, 2024 | | December 31, 2023 | Operating Assets | $ | 3,535,145 | | | $ | 3,448,319 | | Master Planned Communities | 3,286,291 | | | 3,358,821 | | Strategic Developments | 2,324,310 | | | 1,638,955 | | Total segment assets | 9,145,746 | | | 8,446,095 | | Corporate | 292,842 | | | 515,636 | | Discontinued operations | — | | | 615,272 | | Total assets | $ | 9,438,588 | | | $ | 9,577,003 | |
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