Howard Hughes Holdings Inc

Master Planned Communities

Segment EBTThe following table presents segment EBT for MPC:

(a)MPC land sales include deferred revenue from land sales closed in a previous period that met criteria for recognition in the current period and excludes amounts deferred from current period land sales that do not yet meet the recognition criteria.

(b)Builder price participation revenue is earned when a developer that acquired land from us develops and sells a home to an end user at a price higher than a predetermined breakpoint. The excess over the breakpoint is shared between us and the developer at the time of closing on the sale of the home based on a previously agreed-upon percentage. This revenue fluctuates based upon the number and the prices of homes closed that qualify for builder price participation payments.

The following table presents MPC segment EBT by MPC:

(a)As of September 30, 2024, the Company owned an 88.0% interest in and consolidates Teravalis. For additional detail, refer to Note 1 -Presentation of Financial Statements and Significant Accounting Policiesin the Notes to Condensed Consolidated Financial Statements under Item 1 of this Form 10-Q.

(b)These amounts represent 100% of Floreo EBT. As of September 30, 2024, the Company owned a 50% interest in Floreo. Refer to Note 3 -Investments in Unconsolidated Venturesin the Notes to Condensed Consolidated Financial Statements under Item 1 of this Form 10-Q for a description of the joint venture and further discussion.

MPC segment EBT increased $60.0 million compared to the prior-year period primarily due to the following:

Summerlin EBT increased $58.6 million compared to the prior-year period.

–MPC sales, net of MPC cost of sales increased $79.3 million primarily due to the following activity:

–increase in superpad acres sold, with 129.2 acres sold at an average price of $1.3 million per acre in the third quarter of 2024, compared to 39.2 acres sold at an average price of $1.3 million per acre in the prior-year period

–increase due to $4.5 million more revenue recognized out of deferred revenue in the third quarter of 2024, compared to the prior-year period

–Equity earnings at The Summit decreased $15.4 million. Land and clubhouse unit sales decreased in the third quarter of 2024, compared to the prior-year period due to low remaining inventory.

–Builder price participation decreased $5.7 million as fewer homes were closed with sales prices over the predetermined breakpoint necessary for participation revenue in the current period.

The Woodlands Hills EBT increased $3.1 million compared to the prior-year period.

–MPC sales, net of MPC cost of sales increased $3.2 million primarily due to the following activity:

–increase in residential acres sold, with 15.3 acres sold at an average price of $466,000 per acre in the third quarter of 2024, compared to 5.2 acres sold at an average price of $440,000 per acre in the prior-year period

Teravalis EBT increased $1.5 million compared to the prior-year period.

–Equity earnings at Floreo increased $1.4 million primarily related to the closings of Floreo land sales in the third quarter of 2024.

Bridgeland EBT decreased $2.8 million compared to the prior-year period.

–MPC sales, net of MPC cost of sales decreased $2.0 million primarily due to the following activity:

–decrease in commercial acres sold with no acres sold in the third quarter of 2024, compared to 12.5 acres sold at an average price of $262,000 per acre in the prior-year period

The Woodlands EBT decreased $0.3 million compared to the prior-year period.

–MPC sales, net of MPC cost of sales decreased $1.9 million primarily due to the following activity:

–decrease in residential acres sold, with no acres sold in the third quarter of 2024, compared to 1.5 acres sold at Aria Isle, an exclusive gated community, at an average price of $2.6 million per acre in the prior-year period. The decrease in acres sold was expected as only one custom lot remains at Aria Isle.

–Other land, rental, and property revenues increased $1.3 million driven by a fee received due to change in use of previously sold commercial land.

MPC segment EBT increased $90.1 million compared to the prior-year period primarily due to the following:

Summerlin EBT increased $105.2 million compared to the prior-year period.

–MPC sales, net of MPC cost of sales increased $148.7 million primarily due to the following activity:

–increase in superpad acres sold, with 216.5 acres sold at an average price of $1.3 million per acre in the nine months ended September 30, 2024, compared to 39.2 acres sold at an average price of $1.3 million in the prior-year period

–increase due to $6.9 million in SID bond assumptions resulting from an increase in superpad sales in the nine months ended September 30, 2024, compared to the prior-year period

–decrease due to $11.4 million less revenue recognized out of deferred revenue in the nine months ended September 30, 2024, compared to the prior-year period

–decrease in custom lots sold, with no lots sold in the nine months ended September 30, 2024, compared to one lot sold at a price of $2.0 million in the prior-year period. The lot sold in the prior-year period was the last custom lot currently available.

–Equity earnings at The Summit decreased $33.7 million. Land and clubhouse unit sales decreased in the nine months ended September 30, 2024, compared to the prior-year period due to low remaining inventory.

–Builder price participation decreased $10.8 million as fewer homes were closed with sales prices over the predetermined breakpoint necessary for participation revenue in the current period.

The Woodlands Hills EBT increased $5.4 million compared to the prior-year period.

–MPC sales, net of MPC cost of sales increased $4.8 million primarily due to the following activity:

–increase in residential acres sold, with 32.7 acres sold at an average price of $460,000 per acre in the nine months ended September 30, 2024, compared to 20.6 acres sold at an average price of $422,000 per acre in the prior-year period

Teravalis EBT increased $4.6 million compared to the prior-year period.

–Equity earnings at Floreo increased $4.2 million primarily related to the closings of Floreo land sales in the nine months ended September 30, 2024, compared to no land sales in the prior-year period.

Bridgeland EBT decreased $14.4 million compared to the prior-year period.

–MPC sales, net of MPC cost of sales decreased $9.5 million primarily due to the following activity:

–decrease in commercial acres sold partially offset by an increase in price per acre, with 3.5 acres sold at an average price of $801,000 per acre in the nine months ended September 30, 2024, compared to 121.3 acres sold at an average price of $249,000 per acre in the prior-year period

–increase in residential acres sold, with 136.3 acres sold at an average price of $589,000 per acre in the nine months ended September 30, 2024, compared to 99.7 acres sold at an average price of $555,000 per acre in the prior-year period

–Interest expense increased $5.9 million primarily due to a higher debt balance and higher variable interest rates as a result of a derivative termination in the third quarter of 2023, partially offset by an increase in capitalized interest.

The Woodlands EBT decreased $10.6 million compared to the prior-year period.

–MPC sales, net of MPC cost of sales decreased $12.8 million primarily due to the following activity:

–decrease in residential acres sold, with no acres sold in the nine months ended September 30, 2024, compared to 8.7 acres sold in Aria Isle, an exclusive gated community, at an average price of $2.6 million per acre in the prior-year period. The decrease in acres sold was expected as only one custom lot remains at Aria Isle.

–Other land, rental, and property revenues increased $1.3 million driven by a fee received due to change in use of previously sold commercial land.

MPC Net Contribution MPC Net Contribution is a non-GAAP financial measure derived from EBT, adjusted for certain items as discussed below. Management uses this measure because it captures current period performance through the velocity of sales, as well as current period development expenditures based upon demand at our MPCs, which varies depending upon the stage of the MPCs development lifecycle, and the overall economic environment. MPC Net Contribution is defined as MPC segment EBT, plus MPC cost of sales, Depreciation and amortization, and net collections from MUD and SID bonds receivables, reduced by MPC development expenditures, land acquisitions, and Equity in earnings from unconsolidated ventures, net of distributions. MPC Net Contribution is not a GAAP-based operational metric and should not be used to measure operating performance of the MPC assets as a substitute for GAAP measures of such performance nor should it be used as a comparison metric with other comparable businesses.

Below is a reconciliation of segment EBT to MPC Net Contribution:

(a)SID collections are shown net of SID transfers to buyers in the respective periods.

MPC Net Contribution increased $284.6 million in the three months ended September 30, 2024, and increased $342.8 million in the nine months ended September 30, 2024, compared to the same periods in 2023, primarily due to proceeds from the sale of MUD receivables and higher MPC land sales.

MPC Land Inventory The following table summarizes MPC land inventory activity for the nine months ended September 30, 2024:

(a)Development expenditures are inclusive of capitalized interest and property taxes.

(b)MUD reimbursable costs represent land development expenditures transferred to MUD Receivables.