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| Part I | | Financial Information | | |
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| Item 1. | | Financial Statements | | 5 |
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| | | Condensed Consolidated and Combined Balance Sheets as of September 30, 2024 and December 31, 2023 (Unaudited) | | 5 |
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| | | Condensed Consolidated Combined Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (Unaudited) | | 6 |
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| | | Condensed Consolidated and Combined Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (Unaudited) | | 7 |
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| | | Condensed Consolidated and Combined Statements of Shareholders’ Equity for the nine months ended September 30, 2024 and 2023 (Unaudited) | | 8 |
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| | | Notes to Condensed Consolidated and Combined Financial Statements (Unaudited) | | 9 |
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| Item 2. | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 35 |
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| Item 3. | | Quantitative and Qualitative Disclosures about Market Risk | | 53 |
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| Item 4. | | Controls and Procedures | | 54 |
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| Part II | | Other Information | | |
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| Item 1. | | Legal Proceedings | | 54 |
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| Item 1A. | | Risk Factors | | 54 |
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| Item 2. | | Unregistered Sales of Equity Securities and Use of Proceeds | | 54 |
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| Item 3. | | Defaults Upon Senior Securities | | 54 |
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| Item 4. | | Mine Safety Disclosures | | 55 |
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| Item 5. | | Other Information | | 55 |
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| Item 6. | | Exhibits | | 55 |
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| Signatures | | | | 58 |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q, including, without limitation, those related to our future operations constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Quarterly Report are forward-looking statements and may include words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “plan,” “project,” “realize,” “should,” “transform,” “would” and other statements of similar expression. These forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this Quarterly Report.
Forward-looking statements include statements related to:
| ● | forecasts of our future economic performance; |
| ● | our ability to operate as a stand-alone public company following our separation from Howard Hughes Holdings Inc. (“HHH”); |
| ● | our ability to achieve the intended benefits from our separation from HHH; |
| ● | expected capital required for our operations and development opportunities for our properties; |
| ● | impact of technology on our operations and business; |
| ● | expected performance of our business; |
| ● | expected commencement and completion for property developments; |
| ● | estimates of our future liquidity, development opportunities, development spending and management plans; and |
| ● | descriptions of assumptions underlying or relating to any of the foregoing. |
Some of the risks, uncertainties and other important factors that may affect future results or cause actual results to differ materially from those expressed or implied by forward-looking statements include:
| ● | risks related to our separation from, and relationship with, HHH; |
| ● | macroeconomic conditions, such as volatility in the capital markets, inflation, rising interest rates and a prolonged recession or downturn in the national economy; |
| ● | changes in discretionary consumer spending patterns or consumer tastes or preferences; |
| ● | risks associated with our investments in real estate assets and trends in the real estate industry; |
| ● | our ability to obtain operating and development capital on favorable terms, or at all, including our ability to obtain or refinance debt capital; |
| ● | the availability of debt and equity capital; |
| ● | our ability to renew our leases or re-lease available space; |
| ● | our ability to compete effectively; |
| ● | our ability to successfully identify, acquire, develop and manage properties on terms that are favorable to us; |
| ● | the impact of uncertainty around, and disruptions to, our supply chain, including labor shortages and shipping delays; |
| ● | risks related to the concentration of our properties in Manhattan and the Las Vegas area, including fluctuations in the regional and local economies and local real estate conditions; |
| ● | extreme weather conditions or climate change, including natural disasters, that may cause property damage or interrupt business; |
| ● | the impact of water and electricity shortages on our business; |
| ● | the contamination of our properties by hazardous or toxic substances; |
| ● | catastrophic events or geopolitical conditions, such as the COVID-19 pandemic and other public health crises, that may disrupt our business; |
| ● | actual or threatened terrorist activity and other acts of violence, or the perception of a heightened threat of such events; |
| ● | losses that are not insured or that exceed the applicable insurance limits; |
| ● | risks related to disruption or failure of information technology networks and related systems—both ours and those operated and managed by third parties—including data breaches and other cybersecurity attacks; |
| ● | our ability to attract and retain key personnel; |
| ● | our inability to control certain of our properties due to the joint ownership of such property and our inability to successfully attract desirable strategic partners, including joint venture partners; |
| ● | the significant influence Pershing Square has over us, including pursuant to its rights under the Investor Rights Agreement and our Certificate of Incorporation; and |
| ● | other risks and uncertainties described herein. |
Although we presently believe that the plans, expectations and anticipated results expressed in or suggested by the forward-looking statements contained in this Quarterly Report are reasonable, all forward-looking statements are inherently subjective, uncertain and subject to change, as they involve substantial risks and uncertainties, including those beyond our control. New factors emerge from time to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. The forward-looking statements in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update or revise any of our forward-looking statements for events or circumstances that arise after the statement is made, except as otherwise may be required by law.
