Howard Hughes Holdings Inc.

OVERVIEW

Description of Business

Overview Howard Hughes Holdings Inc. (HHH or the Company) is a holding company that owns subsidiaries engaged in various diverse business activities. These include a real estate development subsidiary that operates a large-scale, mixed-use real estate platform focused on the development of master planned communities (MPCs), the investment in strategic real estate development opportunities, and the ownership and operation of income-producing properties, and a specialty insurance and reinsurance subsidiary, which provides property, casualty, and specialty insurance and reinsurance.

Vantage Acquisition On June 4, 2026, Howard Hughes Insurance Holdings, LLC, a wholly owned subsidiary of the Company, completed the acquisition of 100% of the outstanding shares of capital stock of Vantage Group Holdings, Ltd., a privately held specialty insurance and reinsurance company, for cash consideration of approximately $2.1 billion (Vantage Acquisition). References to "Vantage" herein refer to Howard Hughes Insurance Holdings, LLC and its consolidated insurance and reinsurance subsidiaries acquired in the Vantage Acquisition, unless the context otherwise requires. Also on June 4, 2026, to support the funding of the Vantage Acquisition, the Company issued $1.0 billion of its Series A Preferred Stock to Pershing Square Holdings, Ltd. See Note 2 -Vantage Acquisition and Note 3 -Pershing Square in the Notes to Condensed Consolidated Financial Statements under Item 1 of this Quarterly Report for additional information. The accompanying Condensed Consolidated Financial Statements reflect the assets acquired, liabilities assumed, and results of operations of Vantage beginning on the acquisition date. Accordingly, the Company's results for the three and six months ended June 30, 2026 include Vantage's results only for the period subsequent to the acquisition date.

Vantage operates in the United States (U.S.) and Bermuda. Vantage writes insurance business in the U.S. on both an admitted and excess and surplus basis, and writes specialty insurance and reinsurance business in Bermuda on a worldwide basis. Insurance product lines offered by its U.S. insurance subsidiaries include casualty, property, professional liability, financial lines, healthcare, construction, and political risk and credit. Insurance products offered by its Bermuda subsidiary include financial and professional lines and healthcare and excess casualty. Vantage’s reinsurance operations include specialty, property and casualty, financial lines, and property catastrophe. Vantage also earns net investment income and net fee income. The acquisition diversifies our portfolio and is expected to provide recurring premium and fee-based revenues and investment income over time.

Segments Due to the recent timing of the Vantage Acquisition, the Company is continuing to evaluate the acquired operations, including the manner in which the chief operating decision maker reviews financial information and allocates resources. Accordingly, the results of the acquired business have not yet been separately reflected within the Company’s segment reporting disclosures as of June 30, 2026. The Company expects to finalize its segment reporting assessment as integration activities progress. We have separately disclosed the impact of Vantage on consolidated results below to enable investors to understand the contribution of the acquisition to the period.

We continue to operate through three business segments: Operating Assets, MPCs, and Strategic Developments. In our MPC segment, we plan, develop, and manage small cities and large-scale, mixed-use communities, in markets with strong long-term growth fundamentals. This business focuses on the horizontal development of residential land. The improved acreage is then sold to homebuilders who build and sell homes to new residents. New homeowners create demand for commercial developments, such as retail, office, and hospitality offerings. We build these commercial properties through Strategic Developments at the appropriate times, which helps mitigate development risk, using the cash flow harvested from the sale of land to homebuilders. Once the commercial developments are completed, the assets transition to Operating Assets, which increases recurring Net Operating Income (NOI). New office, retail, and other commercial amenities make our MPC residential land more appealing to buyers and increase the velocity of land sales at premiums that typically exceed the broader market and generate more cash flow from MPCs. Our Strategic Developments segment also develops and sells residential condominiums in Hawai‘i.

Non-GAAP Measures In addition to the required presentations using GAAP, we use certain non-GAAP performance measures, such as NOI and Net Debt. See the Operating Assets and Short- and Long-Term Liquidity sections below for the reconciliations of these non-GAAP to GAAP financial measures and statements indicating why management believes these non-GAAP financial measures provide useful information for investors.

Second Quarter 2026 Highlights

Comparison of the three months ended June 30, 2026, to the three months ended June 30, 2025

Total Company

–Net income attributable to common stockholders increased to income of $158.4 million in the current quarter, compared to a loss of $12.1 million in the prior-year period. This increase was primarily driven by condominium sales at The Park Ward Village, gains on the sale of two multifamily properties in the current period, and an increase in MPC EBT attributable to changes in deferred revenue and an increase in residential land sales closed in Summerlin. These increases were partially offset by a net loss attributable to Vantage following the completion of the Vantage Acquisition in the current period.

–We continue to maintain a strong liquidity position with $2.6 billion of cash and cash equivalents, including cash held at Vantage, $515.0 million of undrawn capacity on our Secured Bridgeland Notes, $970.3 million of undrawn lender commitments available to be drawn for property development, subject to certain restrictions, and limited near-term debt maturities, all as of June 30, 2026.

Operating Assets

–Operating Assets NOI totaled $68.5 million in the current quarter, a $1.6 million increase compared to $66.9 million in the prior-year period.

–Operating Assets results reflect modest increases across all property types driven by strong leasing activity and expiration of rent abatements.

–In the second quarter of 2026, the Company completed the sale of two multifamily properties in The Woodlands, resulting in a gain of $51.8 million.

MPC

–MPC EBT totaled $134.7 million in the current quarter, a $32.3 million increase compared to $102.4 million in the prior-year period.

–The increase in EBT was primarily due to changes in deferred revenue, net of associated deferred costs, an increase in SID bond assumptions, and residential MPC land sales closed in Summerlin.

Strategic Developments

–Strategic Developments EBT totaled $126.6 million in the current quarter, a $125.6 million increase compared to $1.0 million in the prior-year period.

–The increase in EBT was primarily due to the closing of 527 units at The Park Ward Village in the current quarter.

Corporate Income, Expenses, and Other Items

–Corporate income, expenses, and other items, excluding the Vantage pre-tax net loss discussed below, included an increase in net expenses of $8.8 million primarily due to an increase in income tax expense and a net increase in general and administrative expenses, primarily related to Vantage Acquisition transaction costs, partially offset by a decrease in compensation and benefit costs related to the strategic reduction in force in 2025. These increases in expenses were partially offset by a reduction in loss on sale of MUD receivables.

–Net income includes a pre-tax net loss of $20.8 million related to the post-acquisition activity of Vantage. This includes a net investment loss of $38.3 million, primarily attributable to unrealized losses on equity securities and realized losses on the sale of fixed maturity securities. Without the impact of the net investment loss, Vantage generated pre-tax net income of $17.5 million in the post-acquisition period. Refer to the Vantage Post-Acquisition Results section below for further discussion of this activity.