DALLAS--(BUSINESS WIRE)--The Howard Hughes Corporation (NYSE: HHC) today announced its results for the fourth quarter and full year 2011. The fourth quarter 2011 results include the consolidated results for The Woodlands, and the full year 2011 results include the consolidated results for The Woodlands for the six months ended December 31, 2011.
The Howard Hughes Corporation’s results for 2011 include notable accomplishments within each of its business segments. The master planned communities generated land sale revenues of $150.3 million for the year ended December 31, 2011, a 20.9% increase over 2010. Net operating income from our income-producing operating assets increased by 10.8% to $55.6 million for 2011 compared to 2010. We also entered into a non-binding letter of intent with the City of New York which, subject to certain conditions, provides for future amendments to our lease with the City to permit us to redevelop Pier 17 at the South Street Seaport. In our strategic developments segment we entered into three joint ventures during 2011 to explore development of our condominium rights in Honolulu, Hawaii, to develop a 375 unit apartment building in Columbia, Maryland, and to develop a mall in Charlotte, North Carolina. Each of these achievements is more fully described below and in Notes 6 and 14 to the Company’s Form 10-K for the year ended December 31, 2011.
For the three months ended December 31, 2011, net income attributable to common stockholders was $31.4 million, compared with net loss of $(4.6) million for the three months ended December 31, 2010. Excluding the $0.8 million warrant gain, net income attributable to common stockholders for the three months ended December 31, 2011 was $30.6 million, or $0.80 per diluted common share. For the three months ended December 31, 2010 net income includes a $(140.9) million warrant loss, $(326.8) million after-tax impairment charges, $(14.2) million of after-tax restructuring charges and a $510.0 million tax benefit related to the spinoff. Excluding these items, net loss attributable to common stockholders for the three months ended December 31, 2010 was $(32.7) million, or $(0.87) per diluted common share.
For the year ended December 31, 2011, net income attributable to common stockholders was $147.2 million, compared with net loss of $(69.4) million for the year ended December 31, 2010. Full year 2011 net income includes a $101.6 million non-cash gain relating to the decrease in estimated value of outstanding warrants during the year, a $(11.3) million after-tax loss from refinancing mortgage debt carried on our books at a discount, and a non-cash $(3.9) million after-tax loss to adjust the basis of our equity investment in The Woodlands prior to its consolidation. For the year ended December 31, 2010, net loss attributable to common stockholders was $(69.4) million. Full year 2010 net loss includes a $(140.9) million non-cash loss relating to the increase in estimated value of outstanding warrants from their November 2010 issue date to December 31, 2010, $(327.2) million after-tax impairment charges, $(57.3) million after-tax restructuring charges and a $510.0 million tax benefit from the spinoff. Excluding these items, net income (loss) attributable to common stockholders for the years ended December 31, 2011 and 2010 was $60.8 million, or $1.56 per diluted common share, and $(54.0) million, or $(1.43) per diluted common share, respectively.
Diluted income (loss) per common share for the three months ended December 31, 2011 and 2010 was $0.80 and $(0.12), respectively. Diluted income (loss) per common share for the years ended December 31, 2011 and 2010 was $1.17 and $(1.84) per common share, respectively.
For a more complete description of impairments recorded in 2010, please refer to Item 7 beginning on page 36 and Footnotes 2 and 4 to The Howard Hughes Consolidated and Combined Financial Statements contained in the Company’s Form 10-K for the year ended December 31, 2011.
On July 1, 2011, we acquired our partner’s 47.5% economic interest (represented by a 57.5% legal interest) in The Woodlands master planned community for $117.5 million. For comparative purposes, MPC land sales and Operating Assets NOI relating to The Woodlands are presented in our Supplemental Information and discussion of results as if we owned 100% of The Woodlands during the periods being compared. We also include the commercial real estate assets of The Woodlands in the Operating Assets segment for all periods presented. These properties had been included in the MPC segment in periods prior to July 1, 2011. For a reconciliation of Operating Assets NOI to Operating Assets earnings before taxes (EBT), Operating Assets EBT to GAAP-basis loss from continuing operations, and segment-basis MPC land sales revenue to GAAP-basis land sales revenue, please refer to the Supplemental Information contained in this earnings release.
Land sales in our Master Planned Communities (MPC) segment, excluding deferred land sales and other revenue, were $36.8 million and $150.3 million for the three months and year ended December 31, 2011. These amounts represent a decrease of $11.4 million and an increase of $26.0 million, for the same periods in 2010. Bridgeland and The Woodlands residential revenues increased by 10.5% and 15.2%, respectively, for 2011 compared to 2010. These communities benefited from a strong Houston, TX economic environment driven primarily by the energy sector. ExxonMobil is constructing a campus facility on 400 acres just south of The Woodlands and its estimated three million square feet of commercial space is expected to increase demand for housing and office space for companies providing services to ExxonMobil. In October 2011, we announced the construction of a 192,000 square foot Class A office building in The Woodlands Town Center. Due to high demand and a shortage in class A office space, in January 2012 we increased the planned size of the building to 232,774 square feet.
Summerlin generated $30.9 million of residential revenues for the year ended December 31, 2011 compared to $11.2 million in 2010. The Las Vegas, NV housing market remains challenging due to continued poor local economic conditions and housing prices that have experienced some of the nationally largest declines from their peak in 2007. During the last four months of 2011, builders defaulted on contracts to acquire approximately 268 lots at Summerlin due to slower than expected home sales; however, builder activity has recently begun to increase. Year to date through February 28, 2012, Summerlin has entered into residential lot sale contracts with four homebuilders for 153 lots and two superpad sites representing approximately $22.5 million of revenues if all of the sales are completed. Approximately $21.2 million of the sales are scheduled to occur in 2012, with the remaining $1.3 million scheduled for 2013.
Net operating income (NOI) from the combined retail, office and resort and conference center properties, including our share of the NOI of our non-consolidated ventures of this segment, was $15.4 million and $55.6 million for the three months and year ended December 31, 2011, respectively, compared with $12.4 million and $50.2 million for the same periods in 2010. These assets are collectively referred to as our “income-producing Operating Assets.” Our Operating Assets segment includes the commercial real estate properties of The Woodlands. Four properties at The Woodlands are expected to reach stabilized NOI in 2012. If these properties had been stabilized as of January 1, 2011, our income-producing Operating Assets NOI would have been approximately $62.5 million for the year ended December 31, 2011 based on our expected operations at stabilization. Other commercial properties, including two parking garages, ground leases and a private golf and country club located at The Woodlands, generated $(1.9) million and $(4.5) million of NOI losses for the fourth quarter and full year 2011, respectively, compared with NOI of $0.2 million and an NOI loss of $(1.2) million for the same periods in 2010.
The Howard Hughes Corporation entered into joint ventures with local partners to develop three properties owned by us. We entered into a joint venture equally owned with our partner to explore the development of a condominium tower above the Nordstrom parking garage at Ala Moana shopping center in Honolulu, HI. The venture values our condominium rights at $47.5 million, a 107.4% premium to our $22.9 million net book value as of December 31, 2011. We also entered into an equally owned joint venture with a developer to build an apartment building on approximately 4.2 acres we own in the Columbia Town Center. The venture values our land at approximately $20.1 million, a 570.0% premium to our $3.0 million net book value as of December 31, 2011. The partners will both be responsible for pre-development activities for these ventures. Development of both of these properties, and realization of the value of our contributed assets, is dependent on a number of factors, including obtaining construction financing and approvals needed to begin construction.
During 2011 we also formed a venture with the owner of land adjacent to the Bridges at Mint Hill property to jointly develop a mall on our combined sites. Both parties will contribute their respective properties into the venture by October 31, 2012, and we will be responsible for funding pre-development costs. Actual construction for each of the three projects described above is not expected to occur until 2013.
In December 2011, we entered into a non-binding letter of intent with the New York City Economic Development Corp., which will enable us to pursue redevelopment plans for the South Street Seaport. The City of New York is the lessor and the letter of intent describes the terms of future amendments to the lease, which must be finalized by June 30, 2012. The amendments will be effective upon achievement of certain development milestones, but generally will become effective after all approvals have been obtained to begin construction. Once they are finalized, the lease amendments will, among other things, eliminate any supplemental or participation rent the City would be entitled to under the existing lease and also will permit us, subject to obtaining necessary approvals from other constituencies, to renovate the Pier 17 building. Construction must begin prior to June 30, 2013.
During 2011 the Company completed $334.0 million of new committed financings replacing approximately $252.2 million of mortgage debt and creating approximately $73.6 million of additional cash and borrowing capacity. At December 31, 2011, The Howard Hughes Corporation had $227.6 million of cash and $34.2 million of undrawn borrowing availability under a revolving credit facility at The Woodlands.
David R. Weinreb, CEO of The Howard Hughes Corporation, stated, “2011 was a critical year where we laid the foundation for many of the opportunities that we anticipate executing on in this coming year and beyond. During this past year we filled out the Company’s senior leadership by assembling a deep bench of talented professionals including several key hires to our development team.”
Mr. Weinreb continued, “We made meaningful progress on the pre-development of a number of our assets. We also entered into joint ventures with several well-recognized partners to initiate design and development of our properties where we felt their involvement would significantly enhance value. Additionally, our investment in The Woodlands master planned community will prove to be an outstanding investment given its high quality platform and the fact that we are now able to leverage the experience of its talented management team at our Bridgeland master planned community. I look forward to sharing more specific details with regard to our progress as development plans are completed.”
On February 27, 2012, the Company adopted a shareholder rights plan designed to protect shareholder value by preserving the value of certain of the Company’s deferred tax assets generated by net operating losses and other tax attributes. The rights plan was adopted to reduce the likelihood of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. Generally, an “ownership change” would occur if the percentage of the Company’s stock owned by one or more “five percent stockholders” increased by more than fifty percentage points at any time during the prior three-year period. An ownership change could substantially limit the Company’s ability to use its net operating losses and other deferred tax assets. The rights plan is intended to act as a deterrent to any person acquiring 4.99% or more of the Company’s outstanding shares without the approval of the Company’s Board of Directors. The rights plan is intended to work in tandem with the restrictions related to the acquisition of 4.99% or more of the Company’s common stock, which are currently set forth in the Company’s Amended and Restated Certificate of Incorporation. Similar rights plans have been adopted in the past several years by a number of companies holding significant deferred tax assets.
ABOUT THE HOWARD HUGHES CORPORATION
The Howard Hughes Corporation owns, manages and develops commercial, residential and mixed-use real estate throughout the country. Created from a selected subset of 34 assets previously held by General Growth Properties, the company’s properties include master planned communities, operating properties, development opportunities and other unique assets spanning 18 states from New York to Hawaii. The Howard Hughes Corporation is traded on the New York Stock Exchange as HHC, and is headquartered in Dallas, Texas. For more information about HHC, visit www.howardhughes.com.
Safe Harbor Statement
Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “expect,” “enables,” “realize” or similar words, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s expectations, estimates, assumptions, and projections as of the date of this release and are not guarantees of future performance. Actual results may differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially are set forth as risk factors in The Howard Hughes Corporation’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Reports on Form 10-Q. The Howard Hughes Corporation cautions you not to place undue reliance on the forward-looking statements contained in this release. The Howard Hughes Corporation does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.
| THE HOWARD HUGHES CORPORATION | ||||||||||||||||||
| CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||
| Revenues: | ||||||||||||||||||
| Master Planned Community land sales | $ | 38,716 | $ | 23,372 | $ | 113,502 | $ | 38,058 | ||||||||||
| Builder price participation | 553 | 781 | 3,816 | 4,124 | ||||||||||||||
| Minimum rents | 18,080 | 16,577 | 71,178 | 66,926 | ||||||||||||||
| Tenant recoveries | 4,830 | 4,676 | 19,368 | 18,567 | ||||||||||||||
| Condominium unit sales | 2,572 | 1,139 | 22,067 | 1,139 | ||||||||||||||
| Resort and conference center revenues | 8,544 | - | 15,744 | - | ||||||||||||||
| Other land revenues | 6,759 | 1,271 | 14,141 | 5,384 | ||||||||||||||
| Other rental and property revenues | 4,823 | 3,024 | 15,875 | 8,521 | ||||||||||||||
| Total revenues | 84,877 | 50,840 | 275,691 | 142,719 | ||||||||||||||
| Operating Expenses: | ||||||||||||||||||
| Master Planned Community cost of sales | 18,199 | 16,387 | 70,108 | 23,388 | ||||||||||||||
| Master Planned Community operations | 10,659 | 5,388 | 28,270 | 29,041 | ||||||||||||||
| Rental property real estate taxes | 3,506 | 3,369 | 11,571 | 14,530 | ||||||||||||||
| Rental property maintenance costs | 2,027 | 1,729 | 7,493 | 6,495 | ||||||||||||||
| Condominium unit cost of sales | 743 | 1,000 | 14,465 | 1,000 | ||||||||||||||
| Resort and conference center operations | 6,756 | - | 13,108 | - | ||||||||||||||
| Other property operating costs | 15,218 | 9,698 | 51,247 | 36,893 | ||||||||||||||
| Provision for doubtful accounts | (590 | ) | 681 | - | 1,782 | |||||||||||||
| General and administrative | 11,601 | 9,076 | 35,182 | 21,538 | ||||||||||||||
| Provisions for impairment | - | 502,778 | - | 503,356 | ||||||||||||||
| Depreciation and amortization | 3,190 | 4,028 | 16,782 | 16,563 | ||||||||||||||
| Total expenses | 71,309 | 554,134 | 248,226 | 654,586 | ||||||||||||||
| Operating income (loss) | 13,568 | (503,294 | ) | 27,465 | (511,867 | ) | ||||||||||||
| Interest income | 2,779 | 251 | 9,876 | 369 | ||||||||||||||
| Interest expense | - | (534 | ) | - | (2,422 | ) | ||||||||||||
| Early extinguishment of debt | - | - | (11,305 | ) | - | |||||||||||||
| Warrant liability gain (loss) | 822 | (140,900 | ) | 101,584 | (140,900 | ) | ||||||||||||
| Investment in real estate affiliate basis adjustment | - | - | (6,053 | ) | - | |||||||||||||
| Equity in earnings (loss) from Real Estate Affiliates | 791 | 3,019 | 8,578 | 9,413 | ||||||||||||||
| Income (loss) before taxes and reorganization items | 17,960 | (641,458 | ) | 130,145 | (645,407 | ) | ||||||||||||
| Benefit from income taxes | 13,980 | 651,062 | 18,325 | 633,459 | ||||||||||||||
| Reorganization items | - | (14,153 | ) | - | (57,282 | ) | ||||||||||||
| Net income (loss) from continuing operations | 31,940 | (4,549 | ) | 148,470 | (69,230 | ) | ||||||||||||
| Discontinued operations - loss on dispositions | - | - | - | - | ||||||||||||||
| Net income (loss) | 31,940 | (4,549 | ) | 148,470 | (69,230 | ) | ||||||||||||
| Net (income) loss attributable to noncontrolling interests | (513 | ) | (81 | ) | (1,290 | ) | (201 | ) | ||||||||||
| Net income (loss) attributable to common stockholders | $ | 31,427 | $ | (4,630 | ) | $ | 147,180 | $ | (69,431 | ) | ||||||||
| Basic Income (Loss) Per Share: | $ | 0.83 | $ | (0.12 | ) | $ | 3.88 | $ | (1.84 | ) | ||||||||
| Diluted Income (Loss) Per Share: | $ | 0.80 | $ | (0.12 | ) | $ | 1.17 | $ | (1.84 | ) | ||||||||
| Comprehensive Income (Loss), Net of Tax: | ||||||||||||||||||
| Net income (loss) | $ | 31,940 | $ | (4,369 | ) | $ | 148,470 | $ | (69,230 | ) | ||||||||
| Other comprehensive income (loss): | ||||||||||||||||||
| Interest rate swap | (579 | ) | - | (3,351 | ) | - | ||||||||||||
| Capitalized swap interest | (472 | ) | - | (600 | ) | - | ||||||||||||
| Pension plan adjustment | - | 117 | - | 117 | ||||||||||||||
| Other comprehensive income (loss) | (1,051 | ) | 117 | (3,951 | ) | 117 | ||||||||||||
| Comprehensive income (loss) | 30,889 | (4,252 | ) | 144,519 | (69,113 | ) | ||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interests | (513 | ) | (81 | ) | (1,290 | ) | (201 | ) | ||||||||||
| Comprehensive income (loss) attributable to common stockholders | $ | 30,376 | $ | (4,333 | ) | $ | 143,229 | $ | (69,314 | ) | ||||||||
| THE HOWARD HUGHES CORPORATION | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| December 31, | December 31, | |||||||||
| 2011 | 2010 | |||||||||
| Assets: | (In thousands, except share amounts) | |||||||||
| Investment in real estate: | ||||||||||
| Master Planned Community assets | $ | 1,600,074 | $ | 1,350,648 | ||||||
| Land | 236,363 | 180,976 | ||||||||
| Buildings and equipment | 556,786 | 336,950 | ||||||||
| Less: accumulated depreciation | (92,494 | ) | (78,931 | ) | ||||||
| Developments in progress | 195,034 | 293,403 | ||||||||
| Net property and equipment | 2,495,763 | 2,083,046 | ||||||||
| Investment in Real Estate Affiliates | 64,958 | 149,543 | ||||||||
| Net investment in real estate | 2,560,721 | 2,232,589 | ||||||||
| Cash and cash equivalents | 227,566 | 284,682 | ||||||||
| Accounts receivable, net | 15,644 | 8,154 | ||||||||
| Municipal Utility District receivables | 86,599 | 28,103 | ||||||||
| Notes receivable, net | 35,354 | 38,954 | ||||||||
| Tax indemnity receivable, including interest | 331,771 | 323,525 | ||||||||
| Deferred expenses, net | 10,338 | 6,619 | ||||||||
| Prepaid expenses and other assets | 127,156 | 100,081 | ||||||||
| Total assets | $ | 3,395,149 | $ | 3,022,707 | ||||||
| Liabilities: | ||||||||||
| Mortgages, notes and loans payable | $ | 606,477 | $ | 318,660 | ||||||
| Deferred tax liabilities | 75,966 | 78,680 | ||||||||
| Warrant liabilities | 127,764 | 227,348 | ||||||||
| Uncertain tax position liability | 129,939 | 140,076 | ||||||||
| Accounts payable and accrued expenses | 125,404 | 78,836 | ||||||||
| Total liabilities | 1,065,550 | 843,600 | ||||||||
| Commitments and Contingencies (see Note 14 ) | ||||||||||
| Stockholders' Equity: | ||||||||||
| Preferred stock: $.01 par value; 50,000,000 shares authorized, none issued | - | - | ||||||||
| Common stock: $.01 par value; 150,000,000 shares authorized, | ||||||||||
| 37,945,707 shares issued and outstanding as of December 31, 2011 and | ||||||||||
| 37,904,506 shares issued and outstanding as of December 31, 2010 | 379 | 379 | ||||||||
| Additional paid-in capital | 2,711,109 | 2,708,036 | ||||||||
| Accumulated deficit | (381,325 | ) | (528,505 | ) | ||||||
| Accumulated other comprehensive loss | (5,578 | ) | (1,627 | ) | ||||||
| Total stockholders' equity | 2,324,585 | 2,178,283 | ||||||||
| Noncontrolling interests | 5,014 | 824 | ||||||||
| Total equity | 2,329,599 | 2,179,107 | ||||||||
| Total liabilities and equity | $ | 3,395,149 | $ | 3,022,707 | ||||||
Supplemental Information
December 31, 2011
As our three segments, Master Planned Communities, Operating Assets and Strategic Developments, are managed separately, different operating measures are utilized to assess operating results and allocate resources. The one common operating measure used to assess operating results for our business segments is real estate property earnings before taxes (“EBT”) which represents the operating revenues of the properties less property operating expenses. We have defined EBT as net income (loss) from continuing operations excluding general and administrative expenses, corporate interest income and depreciation expense, investment in real estate basis adjustment, benefit from income taxes, warrant liability gain (loss), reorganization items and the effect of the previously mentioned items within our equity in earnings (loss) from Real Estate Affiliates. Management believes that EBT provides useful information about the operating performance of all our assets, projects and property. However, EBT should not be considered as an alternative to GAAP net income (loss) attributable to common stockholders or GAAP net income (loss) from continuing operations.
|
Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||||
| (In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Reconciliation of EBT to GAAP-basis | ||||||||||||||||||
| income (loss) from continuing operations | ||||||||||||||||||
| Real estate property EBT: | ||||||||||||||||||
| Master Planned Communities | $ | 20,663 | $ | (394,637 | ) | $ | 50,805 | $ | (379,993 | ) | ||||||||
| Operating Assets | 6,369 | (77,693 | ) | 9,502 | (72,394 | ) | ||||||||||||
| Strategic Developments | 472 | (18,901 | ) | 3,311 | (26,370 | ) | ||||||||||||
| Segment EBT | $ | 27,504 | $ | (491,231 | ) | $ | 63,618 | $ | (478,757 | ) | ||||||||
| Real Estate Affiliates | - | (3,252 | ) | (11,803 | ) | (13,803 | ) | |||||||||||
| 27,504 | (494,483 | ) | 51,815 | (492,560 | ) | |||||||||||||
| General and administrative | (11,601 | ) | (9,076 | ) | (35,182 | ) | (21,538 | ) | ||||||||||
| Interest income | 465 | - | 9,607 | 199 | ||||||||||||||
| Warrant liability gain (loss) | 822 | (140,900 | ) | 101,584 | (140,900 | ) | ||||||||||||
| Benefit from income taxes | 13,980 | 651,062 | 18,325 | 633,459 | ||||||||||||||
| Equity in earnings (loss) from Real Estate Affiliates | 782 | 3,019 | 8,578 | 9,413 | ||||||||||||||
| Investment in real estate affiliate basis adjustment | - |
- |
(6,053 | ) |
- |
|||||||||||||
| Reorganization items | - | (14,153 | ) | - | (57,282 | ) | ||||||||||||
| Corporate depreciation | (12 | ) | (18 | ) | (204 | ) | (21 | ) | ||||||||||
| Net income (loss) from continuing operations | $ | 31,940 | $ | (4,549 | ) | $ | 148,470 | $ | (69,230 | ) | ||||||||
|
MPC Sales Summary |
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| MPC Sales Summary for the Three Months Ended December 31, | ||||||||||||||||||||||||||||||||
| Land Sales | Acres Sold | Number of Lots/Units | Price per acre | Price per lot | ||||||||||||||||||||||||||||
| Three Months Ended December 31 | ||||||||||||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||
|
Residential Land Sales |
||||||||||||||||||||||||||||||||
| Columbia | Single family - detached | $ | - | $ | 2,400 | 0.0 | 1.9 | 0 | 12 | - | 1,275 | - | 200 | |||||||||||||||||||
| Townhomes | 2,227 | 3,031 | 0.7 | 1.7 | 15 | 29 | N/A | N/A | 148 | 105 | ||||||||||||||||||||||
| Bridgeland | Single family - detached | 2,861 | 4,730 | 10.7 | 17.3 | 58 | 80 | 269 | 274 | 49 | 59 | |||||||||||||||||||||
| Summerlin | Single family - detached | 4,744 | 8,909 | 21.1 | 17.0 | 107 | 95 | 225 | 524 | 44 | 94 | |||||||||||||||||||||
| Custom lots | 679 | 890 | 1.0 | 0.9 | 2 | 2 | 693 | 1,000 | 340 | 445 | ||||||||||||||||||||||
| The Woodlands | Single family - detached | 20,290 | 17,854 | 60.6 | 40.8 | 216 | 172 | 335 | 437 | 94 | 104 | |||||||||||||||||||||
| Single family - attached | 348 | 75 | 0.8 | 0.0 | 12 | 0 | 463 | - | 29 | - | ||||||||||||||||||||||
| Subtotal | 31,149 | 37,890 | 94.8 | 79.5 | 410 | 390 | ||||||||||||||||||||||||||
|
Commercial Land Sales |
||||||||||||||||||||||||||||||||
| Bridgeland | Worship Sites | - | 1,600 | - | 20.0 | - | - | - | 80 | - | - | |||||||||||||||||||||
| The Woodlands | Office and other | 4,412 | 0 | 10.7 | - | - | - | 414 | - | - | - | |||||||||||||||||||||
| Apartments and assisted living | 0 | 4,879 | - | 12.5 | - | - | - | 392 | - | - | ||||||||||||||||||||||
| Retail | 1,250 | 1,500 | 1.2 | 5.5 | - | - | 1,068 | 275 | - | - | ||||||||||||||||||||||
| Hotel | 0 | 2,331 | - | 3.2 | - | - | - | 719 | - | - | ||||||||||||||||||||||
| Subtotal | 5,662 | 10,310 | 11.8 | 41.2 | ||||||||||||||||||||||||||||
| Total acreage sales revenue | 36,811 | 48,200 | ||||||||||||||||||||||||||||||
| Deferred revenue | 264 | 1,089 | ||||||||||||||||||||||||||||||
| Deferred revenue - Woodlands | 249 | (55 | ) | |||||||||||||||||||||||||||||
| Special Improvement District Revenue | 1,392 | 722 | ||||||||||||||||||||||||||||||
| Total segment Land sale revenues | 38,716 | 49,956 | ||||||||||||||||||||||||||||||
| Less: Real Estate Affiliates land sales revenue | 0 | (26,584 | ) | |||||||||||||||||||||||||||||
| Total land sales revenue - GAAP basis | 38,716 | 23,372 | ||||||||||||||||||||||||||||||
| MPC Sales Summary for the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
| Land Sales | Acres Sold | Number of Lots/Units | Price per acre | Price per lot | |||||||||||||||||||||||||||||||||
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||||||||||||||
|
Residential Land Sales |
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| Columbia | Single family - detached | $ | 1,480 | $ | 2,400 | 1.4 | 1.9 | 7 | 12 | $ | 1,040 | $ | 1,275 | $ | 211 | $ | 200 | ||||||||||||||||||||
| Townhomes | 5,538 | 3,031 | 1.8 | 1.7 | 39 | 29 | - | - | 142 | 105 | |||||||||||||||||||||||||||
| Bridgeland | Single family - detached | 16,707 | 15,123 | 63.2 | 58.2 | 318 | 289 | 265 | 259 | 53 | 52 | ||||||||||||||||||||||||||
| Summerlin | Single family - detached | 30,247 | 8,909 | 83.5 | 17.0 | 419 | 95 | 362 | 519 | 72 | 94 | ||||||||||||||||||||||||||
| Custom lots | 679 | 2,253 | 1.0 | 1.9 | 2 | 4 | 694 | 1,204 | 340 | 563 | |||||||||||||||||||||||||||
| The Woodlands | Single family - detached | 76,362 | 66,272 | 210.4 | 181.3 | 826 | 737 | 363 | 366 | 92 | 90 | ||||||||||||||||||||||||||
| Single family - attached | 1,235 | 1,063 | 3.0 | 3.5 | 46 | 52 | 409 | 304 | 27 | 20 | |||||||||||||||||||||||||||
| Subtotal | 132,248 | 99,051 | 364.3 | 265.5 | 1,657 | 1,218 | |||||||||||||||||||||||||||||||
|
Commercial Land Sales |
|||||||||||||||||||||||||||||||||||||
| Summerlin | Not-for-profit | 3,616 | - | 16.1 | - | - | - | 225 | - | - | - | ||||||||||||||||||||||||||
| Bridgeland | Not-for-profit | - | 1,600 | - | 20.0 | - | - | - | 80 | - | - | ||||||||||||||||||||||||||
| The Woodlands | Office and other | 6,213 | 10,597 | 14.0 | 21.3 | - | - | 449 | 497 | - | - | ||||||||||||||||||||||||||
| Apartments and assisted living | 1,839 | 4,879 | 5.0 | 12.5 | - | - | 348 | 392 | - | - | |||||||||||||||||||||||||||
| Retail | 6,365 | 5,843 | 12.0 | 20.2 | - | - | 547 | 290 | - | - | |||||||||||||||||||||||||||
| Hotel | - | 2,331 | - | 3.2 | - | - | - | 719 | - | - | |||||||||||||||||||||||||||
| Subtotal | 18,033 | 25,250 | 47.1 | 77.2 | |||||||||||||||||||||||||||||||||
| Total acreage sales revenue | 150,281 | 124,301 | |||||||||||||||||||||||||||||||||||
| Deferred revenue | (481 | ) | 3,994 | ||||||||||||||||||||||||||||||||||
| Deferred revenue - Woodlands | 6,161 | - | |||||||||||||||||||||||||||||||||||
| Special Improvement District revenue | 5,420 | 749 | |||||||||||||||||||||||||||||||||||
| Total segment Land sale revenues | 161,381 | 129,044 | |||||||||||||||||||||||||||||||||||
| Less: Real Estate Affiliates land sales revenue | (47,879 | ) | (90,986 | ) | |||||||||||||||||||||||||||||||||
| Total land sales revenue - GAAP basis | $ | 113,502 | $ | 38,058 | |||||||||||||||||||||||||||||||||
Operating Assets Net Operating Income (“NOI”)
The Company believes that NOI is a useful supplemental measure of the performance of its Operating Assets. We define NOI as property specific revenues (rental income, tenant recoveries and other income) less expenses (real estate taxes, repairs and maintenance, marketing and other property expenses) and excluding the operations of properties held for disposition. NOI also excludes straight line rents, market lease amortization, impairments, depreciation and other amortization expense. Other real estate companies may use different methodologies for calculating NOI, and accordingly, the NOI of our Operating Assets may not be comparable to other real estate companies.
The Company also believes that NOI 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 occupancy rates, rental rates, and operating costs. This measure thereby provides an operating perspective not immediately apparent from GAAP continuing operations or net income attributable to common stockholders. The Company uses NOI to evaluate its operating performance on a property-by-property basis because NOI allows the Company to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on the Company’s operating results, gross margins and investment returns. NOI should only by used as an alternative measure of the financial performance of such assets and not as an alternative to GAAP income (loss) from continuing operations, operating income (loss) or net income (loss) available to common stockholders.
| Net Operating Income (NOI) Three | Net Operating Income (NOI) | ||||||||||||||||||
| Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| (In thousands) | |||||||||||||||||||
| Operating Assets | |||||||||||||||||||
| Retail | |||||||||||||||||||
| Ward Centers | $ | 5,032 | $ | 5,761 | $ | 21,481 | $ | 22,980 | |||||||||||
| South Street Seaport (a) | 2,244 | 1,029 | (b) | 5,650 | 4,238 | ||||||||||||||
| Rio West Mall (a) | 356 | 417 | 1,319 | 1,897 | |||||||||||||||
| Landmark Mall (a) | 110 | 396 | 737 | 1,619 | |||||||||||||||
| Riverwalk Marketplace (a) | 80 | 254 | 418 | 579 | |||||||||||||||
| Cottonwood Square | 81 | 111 | 380 | 484 | |||||||||||||||
| Park West | 86 | 111 | 576 | 366 | |||||||||||||||
| 20/25 Waterway Avenue | 406 | 216 | 1,310 | 674 | |||||||||||||||
| Waterway Garage Retail | - | - | 7 | - | |||||||||||||||
| Total Retail | 8,395 | 8,295 | 31,878 | 32,837 | |||||||||||||||
| Office | |||||||||||||||||||
| 110 N. Wacker | 1,529 | 2,039 | 6,115 | 6,628 | |||||||||||||||
| Columbia Office Properties (c) | 918 | 602 | 2,649 | 2,657 | |||||||||||||||
| 4 Waterway Square | 538 | 175 | 1,639 | 15 | |||||||||||||||
| 9303 New Trails (d) | 249 | 108 | 742 | 706 | |||||||||||||||
| 1400 Woodloch Forest | - | 274 | 649 | 1,036 | |||||||||||||||
| 2201 Lake Woodlands Drive | 83 | 83 | 332 | 322 | |||||||||||||||
| Total Office | 3,317 | 3,281 | 12,126 | 11,364 | |||||||||||||||
| The Woodlands Resort and Conference Center | 1,675 | 465 | 7,726 | 4,379 | |||||||||||||||
| Total Retail, Office, Resort and Conference Center | 13,387 | 12,041 | 51,730 | 48,580 | |||||||||||||||
| The Club at Carlton Woods | (1,193 | ) | 276 | (5,126 | ) | (3,885 | ) | ||||||||||||
| The Woodlands Parking Garages | (296 | ) | (519 | ) | (1,204 | ) | (1,049 | ) | |||||||||||
| The Woodlands Ground leases | 93 | 74 | 403 | 337 | |||||||||||||||
| Other Properties | (499 | ) | 320 | 1,410 | 3,396 | ||||||||||||||
| Total Other | (1,895 | ) | 151 | (4,517 | ) | (1,201 | ) | ||||||||||||
| Total Operating Assets NOI | 11,492 | 12,192 | 47,213 | 47,379 | |||||||||||||||
| Straight-line and lease amortization | (166 | ) | (325 | ) | 918 | 183 | |||||||||||||
| Provisions for impairment | - | (80,401 | ) | - | (80,923 | ) | |||||||||||||
| Early extinguishment of debt | - | - | (11,305 | ) | - | ||||||||||||||
| Depreciation and amortization | (3,141 | ) | (5,931 | ) | (20,309 | ) | (23,461 | ) | |||||||||||
| Equity in earnings from Real Estate Affiliates | 384 | (324 | ) | 3,926 | (338 | ) | |||||||||||||
| Interest, net | (2,200 | ) | (3,529 | ) | (10,850 | ) | (17,179 | ) | |||||||||||
| Less: Partners' share of Operating Assets EBT | - | 625 | (91 | ) | 1,945 | ||||||||||||||
| Operating assets EBT (100% Owned) | $ | 6,369 | $ | (77,693 | ) | $ | 9,502 | $ | (72,394 | ) | |||||||||
| Net Operating Income (NOI) | Net Operating Income (NOI) | |||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||
| Operating Assets NOI | ||||||||||||||||||
| - Equity and Cost Method Investments | ||||||||||||||||||
| Millennium Waterway Apartments | $ | 1,830 | $ | (133 | ) | $ | 2,571 | $ | (157 | ) | ||||||||
| Woodlands Sarofim # 1 | 351 | 395 | 1,489 | 1,572 | ||||||||||||||
| Stewart Title (title company) | 402 | 438 | 1,069 | 1,222 | ||||||||||||||
| Forest View/Timbermill Apartments | 509 | 412 | 1,826 | 1,610 | ||||||||||||||
|
Total NOI - equity investees of |
3,092 | 1,112 | 6,955 | 4,247 | ||||||||||||||
| Adjustments to NOI (e) | (114 | ) | 203 | (3,862 | ) | (1,937 | ) | |||||||||||
| Equity Method Investments EBT | 2,978 | 1,315 | 3,093 | 2,310 | ||||||||||||||
| Less: Joint Venture Partner's Share of EBT | (2,156 | ) | (1,626 | ) | (3,061 | ) | (2,648 | ) | ||||||||||
|
Equity in earnings from Real Estate |
822 | (311 | ) | 32 | (338 | ) | ||||||||||||
|
Distributions from Summerlin Hospital |
- | - | 3,894 | - | ||||||||||||||
|
Equity in earnings from Real Estate |
$ | 822 | $ | (311 | ) | $ | 3,926 | $ | (338 | ) | ||||||||
| Company Share of Equity Method Investments NOI | ||||||||||||||||||
| Millennium Waterway Apartments | $ | 1,529 | $ | (111 | ) | $ | 2,148 | $ | (131 | ) | ||||||||
| Woodlands Sarofim # 1 | 70 | 79 | 298 | 314 | ||||||||||||||
| Stewart Title (title company) | 201 | 219 | 535 | 611 | ||||||||||||||
| Forest View/Timbermill Apartments | 255 | 206 | 913 | 805 | ||||||||||||||
|
Total NOI - equity investees of |
$ | 2,055 | $ | 393 | $ | 3,894 | $ | 1,599 | ||||||||||
| Economic | December 31, 2011 | |||||||||||||||||
| Ownership | Debt | Cash | ||||||||||||||||
| (In thousands) | ||||||||||||||||||
| Millennium Waterway Apartments | 83.55 | % | $ | 47,175 | $ | 2,733 | ||||||||||||
|
Woodlands Sarofim # 1 |
20.00 | % | 7,087 | 811 | ||||||||||||||
|
Stewart Title (title company) |
50.00 | % | - | 426 | ||||||||||||||
| Forest View/Timbermill Apartments | 50.00 | % | 5,708 | 1,258 | ||||||||||||||
| (a) | Straight-line non-cash ground rent amortization was excluded from 2010 and 2009 amounts to conform to the 2011 presentation and to be consistent with the exclusion of straight-line revenues. | |
| (b) | Includes a provision for bad debt of $1.2 million related to a single tenant. | |
| (c) |
Amounts relating to an operating lease in which we are the lessee and the related sublease income totaling $0.1 million and less than $0.1 million for 2010 and 2009, respectively, and which were included in Columbia Operating Properties for 2011, 2010 and 2009, were reclassified to general and administrative expenses to conform to 2011 presentation. |
|
| (d) | Since November 2009, a portion of The Woodlands' staff has occupied from approximately 5,900 square feet to almost 10,000 square feet of this building. | |
| (e) | Adjustments to NOI include straight-line and market lease amortization, depreciation and amortization and non-real estate taxes. |