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Item 7. Management’s Discussion and Analysis

2025-02-26 compared with 2024-02-27 · 297 added, 398 removed, 384 unchanged (64% of the section changed)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our Consolidated Financial Statements and the related notes filed as a part of this Annual Report.

The following discussion should be read in conjunction with our Consolidated Financial Statements and the related notes filed as a part of this Annual Report on Form 10-K (Annual Report).

This discussion contains forward-looking statements that involve risks, uncertainties, assumptions, and other factors, including those described in Part I, Item 1A .

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We are not obligated to update this information, whether as a result of new information, future events or otherwise, except as may be required by law.

This section of our Form 10-K discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.

Discussion of 2021 and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of The Howard Hughes Corporation’s Annual Report Form 10-K for the year ended December 31, 2022.

This section of our Annual Report discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.

Discussion of 2022 and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report can be found in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

All references to numbered Notes are to specific Notes to our Consolidated Financial Statements included in this Annual Report and which descriptions are incorporated into the applicable response by reference.

Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) have the same meanings as in such Notes.

Results of Operations

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Liquidity and Capital Resources

Critical Accounting Policies

Critical Accounting Policies and Estimates

Recently Issued Accounting Pronouncements and Developments

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Seaport Entertainment Spinoff On July 31, 2024, the spinoff of Seaport Entertainment Group Inc.

and its subsidiaries (Seaport Entertainment or SEG) was completed.

SEG included Howard Hughes Holdings, Inc.’s (HHH or the Company) entertainment-related assets in New York and Las Vegas, including the Seaport in Lower Manhattan, the Las Vegas Aviators Triple-A Minor League Baseball team and the Las Vegas Ballpark, as well as the Company’s ownership stake in Jean-Georges Restaurants and other partnerships, and an interest in and to 80% of the air rights above the Fashion Show Mall in Las Vegas.

Under the terms of the separation, each stockholder who held HHH common stock as of the close of business on July 29, 2024, the record date for the distribution, received one share of SEG common stock for every nine shares of HHH common stock held as of the close of business on such date.

SEG common stock began trading on the NYSE American stock exchange on August 1, 2024, under the symbol “SEG”.

As the spinoff of SEG represents a strategic shift in the Company’s operations, the results of SEG are presented as discontinued operations for all periods throughout this Annual Report.

See Note 2 - Discontinued Operations in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.

Pershing Square Proposals In August 2024, Pershing Square announced its intent to evaluate the possibility of various potential alternatives with respect to its investment in the Company, including a possible transaction in which it (either alone or together with one or more potential co-investors) might acquire all or substantially all of the shares of common stock in the Company not owned by Pershing Square and its affiliates, and in connection therewith take the Company private.

Following this announcement, our board of directors formed a committee (Special Committee), composed of independent directors to review any proposal by Pershing Square.

Following the August 2024 announcement, Pershing Square has engaged in additional communications with the Special Committee, including, as previously disclosed, submitting the January 13 Pershing Square Proposal, pursuant to which Pershing Square would acquire additional shares of the Company’s common stock in a merger transaction between the Company and a newly formed merger subsidiary of Pershing Square Holdco, L.P., upon the consummation of which Pershing Square would own a majority of the Company’s common stock.

On February 18, 2025, Pershing Square announced that it had withdrawn the January 13 Pershing Square Proposal and submitted the February 18 Pershing Square Proposal, under which it would purchase from the Company $900 million of the Company’s Common Stock for $90 per share.

Pershing Square currently beneficially owns approximately 37.4% of the Company's common stock.

Should the transaction contemplated by the February 18 Pershing Square Proposal be consummated, Pershing Square’s beneficial ownership would increase to 48.0%.

There can be no assurance that the Company will pursue this proposed transaction or any proposed modification thereof that Pershing Square submits, or any other strategic outcome, and HHH does not intend to comment further on this matter unless and until further disclosure is determined to be appropriate or necessary.

The Special Committee is currently evaluating these matters to determine the appropriate course of action and process.

General Overview Please refer to Item 1.

Business for a general discussion of our business strategy, competitive strengths, and a general description of the assets contained in our four business segments and Item 2.

Business for a general discussion of our business strategy, competitive strengths, and a general description of the assets contained in our three business segments and Item 2.

Properties for details regarding the asset type, size, location, and key metrics about our various properties.

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Therefore, certain changes may not recalculate based on the amounts rounded to the nearest million.

We are primarily focused on creating shareholder value by increasing our per-share net asset value.

We are primarily focused on creating stockholder value by increasing our per-share net asset value.

Often, the nature of our business results in short-term volatility in our net income due to the timing of Master Planned Communities (MPC) land sales, recognition of condominium revenue, and operating business pre-opening expenses.

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This strong performance is a testament to our premier communities and best-in-class assets, further highlighting the strength of our unique business model.

In our MPCs, a year-over-year increase of 45% in new homes sales in our communities, led to heightened demand and home builder interest for new land parcels as the year progressed.

MPC earnings before taxes (EBT) increased 21% year over year, driven by solid land sales and high residential prices per acre.

In Operating Assets, we delivered another full-year net operating income (NOI) record, outpacing 2022 results by 5%, excluding dispositions.

This growth was led by strong leasing velocity at our newest multi-family developments, as well as increased occupancy and absorption within our office portfolio.

In 2023, our leasing teams executed 581,000 square feet of new or expanded office leases, bringing our stabilized office assets to 88% leased at year-end and setting the stage for considerable NOI growth in the coming years.

Ward Village had another strong year, selling out all remaining condo inventory at ‘A‘ali‘i and Kō'ula and contracting to sell 78 units at our three condo towers in pre-sales, The Park Ward Village, Ulana Ward Village, and Kalae.

Together with Victoria Place, which is fully sold out and expected to be delivered in late 2024, these projects were 96% pre-sold at year-end and represent more than $2.6 billion of future contracted revenue that will be recognized as these projects are completed.

2024 Outlook Proceeding into 2024, we maintain a positive long-term outlook for our businesses.

Across our MPCs, we see incredibly strong demand for our unmatched landbank, world-class portfolio of operating assets, and premier condo developments.

The anticipated spin-off of Seaport Entertainment later in 2024 will allow Howard Hughes Holdings Inc.

(HHH or the Company) to better focus on long-term opportunities within our renowned portfolio of master planned communities and enable considerable growth and value creation in the years to come.

MPC EBT is projected to remain robust during 2024, aided by modest anticipated reductions in mortgage rates and tight supply of existing homes on the market.

New home sales in Summerlin, Bridgeland, and The Woodlands Hills are expected to be strong, leading to continued homebuilder demand for residential land.

The first land sales in Floreo, the first village in Teravalis, are also expected to contribute incremental EBT in 2024.

These year-over-year gains are expected to be more than offset by reduced EBT associated with exceptional commercial land sales and builder price participation during 2023, as well as reduced inventory of custom lots available to sell at Aria Isle in The Woodlands and the Summit in Summerlin.

As a result, 2024 MPC EBT is expected to modestly decline 10% to 15% year-over-year.

Operating Assets NOI is projected to benefit from increased occupancy at new multi-family developments in Downtown Columbia, Summerlin, and Bridgeland, as well as improved retail leasing and new tenants in Downtown Columbia, Ward Village, and The Woodlands.

The office portfolio is expected to benefit from strong leasing momentum experienced since mid-2022, but free rent periods on many of the new leases and the impact of some tenant vacancies and new office developments expected to be completed in 2024 will likely result in office NOI being relatively flat year-over-year.

Overall, 2024 Operating Assets NOI is expected to be in a range of up 1% to 4% year-over-year.

This includes projected NOI from The Las Vegas Aviators and the Las Vegas Ballpark, which are expected to be included in the spin-off of Seaport Entertainment.

Condo sales revenues are projected to range between $675 million and $725 million, with gross margins between 28% to 30%.

Projected condo sales revenues will be driven by the closing of units at Victoria Place, our 349-unit upscale development in Ward Village, which is 100% pre-sold and expected to be completed late in the fourth quarter of 2024.

This guidance contemplates a portion of condo sales revenues for Victoria Place occurring in the first quarter of 2025 due to the timing of condo closings.

In our MPCs, we experienced heightened demand and home builder interest for new land parcels.

As a result, MPC earnings before taxes (EBT) increased 2% year-over-year, driven by a new full-year record number of residential acres sold and record average price per acre.

HHH 2024 FORM 10-K | 37

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In Operating Assets, we delivered another full-year net operating income (NOI) record, outpacing 2023 results by 7%, excluding dispositions.

This growth was led by strong leasing velocity at our newest multifamily developments, as well as record NOI at our office properties due to strong lease-up activity and abatement expirations in The Woodlands and Summerlin.

In 2024, the Company executed 473,000 square feet of new or expanded office leases, including 323,000 square feet in The Woodlands, 91,000 square feet in Downtown Columbia, and 59,000 square feet in Summerlin.

In Strategic Developments, Ward Village had another strong year, closing all 349 units at Victoria Place and generating $778.6 million of condominium revenues.

Presales activity for our under construction condominiums progressed, with 111 condominium units contracted in Hawai’i and Texas in 2024, including 78 units at The Ritz-Carlton Residences, 18 units at Kalae, and 15 units at The Park Ward Village.

These projects were 96% pre-sold at year end and represent more than $2.2 billion of future contracted revenue that will be recognized as these projects are completed.

We also initiated presales for The Launiu, which contracted 283 units and was 58.4% pre-sold at year end.

Construction on The Launiu is expected to begin in 2025.

2025 Outlook Proceeding into 2025, we maintain a positive long-term outlook for our businesses.

Across our MPCs, we see strong demand for our unmatched landbank, world-class portfolio of operating assets, and premier condominium developments.

MPC EBT is projected to be strong in 2025 and aided by continued tight supply of existing homes on the market and low inventories of vacant developed lots in our MPCs.

As a result, we anticipate solid new home sales in Summerlin, Bridgeland, and The Woodlands Hills and continued strong homebuilder demand for residential land throughout 2025.

Residential land sales are expected to occur throughout the year, but the second and third quarters will likely see a higher concentration of superpad sales in Summerlin.

Overall, MPC EBT is expected to be up 5% to 10% year-over-year.

Operating Assets NOI, including the contribution from unconsolidated ventures, is projected to benefit from continued growth in multifamily driven by increased occupancy at new multifamily developments.

Office is also expected to improve year-over-year due to strong leasing momentum and expiring rent abatements across the portfolio.

This improvement will likely be partially offset by lower occupancy at various properties in Downtown Columbia, some tenant turnover in The Woodlands, and initial operating losses from our newest office developments.

Retail is expected to see a modest reduction in NOI during 2025, primarily due to non-recurring collections of tenant reserves in Ward Village during 2024 and the impact of some tenant upgrades and turnover in Downtown Summerlin as this property reaches its 10-year anniversary.

Overall, Operating Assets NOI is expected to be flat to up 4% year-over-year.

Condominium sales revenues are projected to be approximately $375 million in 2025, and driven entirely by the closing of units at Ulana, which is 100% pre-sold and expected to be completed in the fourth quarter.

As Ulana is a workforce housing tower, the Company does not expect to recognize any gross profit from the project.

Our next condominium tower, The Park Ward Village, is already 96.7% pre-sold, and is expected to contribute meaningful revenues and gross profit in 2026.

2024 Highlights

– Net income attributable to common stockholders decreased to a net loss of $551.8 million in 2023, including an after-tax impairment of $548.5 million related to the Seaport.

This compares to net income of $184.5 million for the prior year.

Excluding the after-tax impairment, the year-over-year reduction was primarily attributed to the timing of condo sales as the prior year included the delivery of Kō'ula in Ward Village.

– We continue to maintain a strong liquidity position with $631.5 million of cash and cash equivalents, $1.0 billion of undrawn lender commitment available to be drawn for property development, and limited near-term debt maturities.

– During 2023, we completed the sale of two land parcels in Honolulu, Hawai‘i, including an 11,929-square-foot building at the Ward Village Retail property, two self-storage facilities in The Woodlands, and Memorial Hermann Medical Office in The Woodlands for total net proceeds after debt repayment of $43.3 million.

– Net income from continuing operations increased to $285.2 million in 2024, compared to net income of $83.4 million in the prior year.

The year-over-year increase was primarily attributed to condominium closings at Victoria Place, the receipt of insurance proceeds following the execution of a settlement agreement related to the construction defect claims at Waiea, and an increase in residential acres sold in Summerlin.

– We continue to maintain a strong liquidity position with $596.1 million of cash and cash equivalents, $317.0 million of undrawn capacity on our Secured Bridgeland Notes, and $1.2 billion of undrawn lender commitment available to be drawn for property development, and limited near-term debt maturities.

Operating Assets

– Operating Assets NOI totaled $233.6 million in 2023, a $7.9 million increase compared to $225.8 million in the prior year.

Excluding the impact of dispositions in 2022 and 2023, Operating Assets NOI increased $11.5 million compared to the prior-year period.

– Multi-family NOI increased $7.3 million primarily due to continued lease-up at our newer properties, Marlow in Downtown Columbia and Starling at Bridgeland, and rent growth across our portfolio.

– Office NOI increased $6.6 million, primarily due to continued lease-up activity and abatement expirations at various properties in The Woodlands, most notably at 9950 Woodloch Forest and Lakefront North, and one-time lease termination fees at 1725 Hughes Landing.

These increases are partially offset by decreases related to lower occupancy at One Hughes Landing, 1725 Hughes Landing, and various properties in Downtown Columbia, rent abatements at 3 Waterway Square, and initial operating losses from 1700 Pavilion in Summerlin.

– Retail NOI remained relatively flat in 2023 compared to the prior year.

– MPC EBT totaled $341.4 million in 2023, a $58.4 million increase compared to $283.0 million in the prior year.

– The increase in EBT was primarily due to increased residential land sales in Summerlin, a higher overall residential price per acre in our MPCs, and higher equity earnings at The Summit primarily related to Phase II land inventory.

– During 2023, the Company recorded an impairment charge related to the Seaport segment.

For additional information, refer to Note 4 - Impairment in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

– Seaport NOI totaled a loss of $15.5 million in 2023, a $5.7 million decrease compared to the prior year.

This change was primarily due to reduced restaurant performance as a result of poor weather conditions and elevated labor and overhead costs, and fewer private events in the current year, as well as COVID-related recoveries at the Fulton Market Building in the prior year.

These decreases were partially offset by an increase in rental revenue driven by the opening of the Tin Building in 2022.

– Seaport NOI excludes the impact of the Company’s equity ownership interest in the Tin Building by Jean-Georges managed business.

Tin Building by Jean-Georges NOI was a loss of $38.8 million in 2023, compared to a loss of $36.2 million in the prior year.

Strategic Developments

– Strategic Developments EBT totaled a loss of $17.3 million in 2023, a $207.5 million decrease compared to income of $190.2 million in the prior year.

– The decrease in EBT was primarily due to a $187.4 million decrease in profits from condominium sales.

We closed on 31 units at ‘A‘ali‘i and 16 units at Kō'ula during 2023, compared to 549 units at Kō'ula, 56 units at ‘A‘ali‘i, and 2 units at Waiea during the prior year.

The lower volume of condominium closings in 2023 was expected as our completed towers are now 100.0% sold and the next tower, Victoria Place, is not scheduled for completion until late 2024.

– During 2023, the final units at ‘A‘ali‘i and Kō'ula were sold, resulting in our six completed towers being 100.0% sold.

– As of December 31, 2023, 97.9% of the units at our three towers under construction, Victoria Place, The Park Ward Village, and Ulana Ward Village, are under contract, with Victoria Place and Ulana Ward Village being 100% sold.

Kalae, which is still in presales, was 87.2% presold as of December 31, 2023.

– Operating Assets EBT decreased $1.4 million, with a loss of $28.5 million in 2024, compared to a loss of $27.1 million in the prior year.

– Operating Assets NOI was $245.5 million in 2024, a $14.9 million increase compared to $230.6 million in the prior year.

– Office NOI increased $6.4 million, primarily due to strong leasing activity and abatement expirations at various properties in The Woodlands and Summerlin, most notably at 9950 Woodloch Forest and 1700 Pavilion, partially offset by decreases related to lower occupancy at 1725 Hughes Landing and certain properties in Downtown Columbia, as well as initial operating losses at Meridian in Summerlin.

HHH 2024 FORM 10-K | 38

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– In 2023, we placed Tanager Echo, a multi-family property in Summerlin, and the first phase of Wingspan, a single family build to rent property in Bridgeland, in service, representing a total of 368 multi-family units.

The second phase of Wingspan, representing an additional 92 units, was placed in service in January 2024.

The final phase of Wingspan, representing an additional 97 units, is expected to be placed in service in the second quarter of 2024.

– In 2023, we began construction on Ulana Ward Village, our ninth condominium project in Ward Village, 1 Riva Row, a multi-family property in The Woodlands, and a retail center in Downtown Summerlin, which will be anchored by a new Whole Foods Market.

These assets under construction represent 268 multi-family units, 696 condominium units, and 99,100 square feet of retail space.

– Net expenses related to Corporate income, expenses, and other items decreased $217.3 million compared to the prior-year period primarily due to a decrease in income tax expense.

– Retail NOI increased $4.2 million primarily due to the collection of previously reserved accounts receivable in Ward Village as well as improved occupancy in the ground floor retail at Juniper and Marlow in Downtown Columbia and Kō'ula in Ward Village.

– Multifamily NOI increased $6.0 million primarily due to continued lease-up at our newer properties, Marlow in Downtown Columbia, Starling at Bridgeland, and Tanager Echo in Summerlin, partially offset by winter-weather-related insurance recoveries in 2023.

– In 2024, the Company completed the sale of four non-core ground leases and a medical office building in The Woodlands, and a retail property in Bridgeland for total proceeds of $51.6 million, and a combined gain on sale of $22.9 million.

– MPC EBT totaled income of $349.1 million in 2024, a $7.7 million increase compared to income of $341.4 million in the prior year.

– The increase in EBT was primarily due to higher superpad land sales and price per acre in Summerlin, partially offset by lower equity earnings at The Summit, lower commercial land sales in Bridgeland, and lower residential and commercial land sales in The Woodlands.

Strategic Developments

– Strategic Developments EBT totaled income of $282.8 million in 2024, a $300.1 million increase compared to a loss of $17.3 million in the prior year.

– The increase in EBT was primarily due to a $203.8 million increase in profits from condominium sales and an $89.8 million increase in other income due to the receipt of insurance proceeds following the execution of a settlement agreement related to the construction defect claims at Waiea in the current year.

The increase in profits from condominium sales was the result of closing on all 349 units at Victoria Place during the current year, compared to closing on 31 units at ‘A‘ali‘i and 16 units at Kō'ula during the prior year.

– We began pre-sales at The Ritz-Carlton Residences, The Woodlands in March 2024.

As of December 31, 2024, we had pre-sold 78 units, representing 70.3% of available units.

Construction began on The Ritz-Carlton Residences in October 2024.

– As of December 31, 2024, 95.5% of the units at our four towers under construction, The Park Ward Village, Ulana Ward Village, Kalae, and The Ritz-Carlton Condominiums, are under contract.

– In 2024, we placed five properties in service, including the second and third phases of Wingspan, a single family build to rent property in Bridgeland;

10285 Lakefront Medical Office, an office property in Columbia;

Meridian, an office property in Summerlin;

Summerlin Grocery Anchored Center, a retail property in Summerlin;

and Village Green at Bridgeland Central, a retail property in Bridgeland.

These properties represent 189 multifamily units and approximately 328,000 square feet of retail and office space.

– In 2024, we began construction on four properties, including Kalae, a condominium property in Ward Village;

The Ritz-Carlton Condominiums, a condominium property in The Woodlands;

One Bridgeland Green, an office property in Bridgeland;

and Grogan’s Mill Retail, a retail property in The Woodlands.

These properties represent 440 condominium units and approximately 96,000 square feet of retail and office space.

– Net expenses related to Corporate income, expenses, and other items increased $104.6 million compared to the prior-year period primarily due to a $53.8 million increase in income tax expense and a $48.7 million loss on sale of Municipal Utility District (MUD) receivables.

Capital and Financing Activities

– In 2023, our financing activity included draws on existing mortgages of $384.4 million, an additional draw of $200.0 million on the Secured Bridgeland Notes, refinancings of $161.0 million, and repayments of $48.4 million.

For additional information, refer to Note 7 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

– In 2024, our financing activity included draws on existing mortgages of $417.0 million, new borrowings of $176.5 million (excluding undrawn amounts on new construction loans), refinancings of $168.0 million, and repayments of $454.8 million.

In addition, we repaid $192.0 million on the Secured Bridgeland Notes using the proceeds from the sale of MUD receivables.

In the fourth quarter of 2024, we expanded the borrowing capacity of these notes from $475.0 million to $600.0 million and extended the maturity to 2029.

For additional information, refer to Note 8 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.

HHH 2024 FORM 10-K | 39

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Operating Assets segment EBT decreased $1.4 million compared to the prior-year period primarily due to the following:

– Interest expense increased $37.4 million primarily due to new financings secured by our operating assets and higher interest rates on variable-rate debt.

– Equity earnings decreased $19.3 million primarily as a result of a $11.8 million decrease related to the change in value of certain derivative instruments and a $4.9 million decrease related to the sale of 110 North Wacker in the first quarter of 2022.

This decrease is due to the release of our share of accumulated other comprehensive income related to 110 North Wacker’s derivative instruments upon the sale in 2022.

– Depreciation and amortization increased $16.1 million primarily related to new assets placed in service in the second half of 2022.

– Gain on sale of real estate decreased $5.7 million as the combined gain on the sales of two self-storage properties and Memorial Hermann Medical Office in The Woodlands and certain properties in Ward Village in 2023 was lower than the combined gain on the sales of Creekside Village Green, Lake Woodlands Crossing, and Outlet Collection at Riverwalk in 2022.

– Total revenues, net of operating costs decreased $5.5 million primarily due to COVID-related tenant recoveries at Ward Village in the prior year, and the sales of Creekside Village Green and Lake Woodlands Crossing in 2022, as well as increased insurance costs across our portfolio and increased labor and event costs for the Las Vegas Aviators in 2023.

These decreases are partially offset by increased leasing activity and abatement expirations across our portfolio as well as one-time lease termination fees.

– Interest expense increased $13.0 million primarily due to increased borrowings on construction loans secured by our operating assets as well as an increase related to the change in fair value of certain derivative instruments.

– Depreciation and amortization increased $7.9 million primarily related to new assets placed in service.

– Rental property real estate taxes increased $3.4 million primarily due to new assets placed in service.

– Gain on sale of real estate decreased $1.0 million as the gain on the sale of Lakeland Village Center at Bridgeland and Creekside Park Medical Plaza, and four non-core ground leases in The Woodlands in 2024 was lower than the combined gain on the sales of two self-storage properties and Memorial Hermann Medical Office in The Woodlands and certain properties in Ward Village in 2023.

– Other land, rental, and property revenues decreased $4.4 million primarily due to higher office lease termination fees in the 2023 than in 2024.

These decreases to EBT were partially offset by the following:

– Rental revenues, net of Operating costs and provision for doubtful accounts increased $27.1 million primarily due to increased leasing activity across our portfolio.

– Equity earnings increased $2.9 million primarily due to the change in value of certain derivative instruments.

Net Operating Income In addition to the required presentations using accounting principles generally accepted in the United States (GAAP), we use certain non-GAAP performance measures, as we believe these measures improve the understanding of our operational results and make comparisons of operating results among peer companies more meaningful.

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We believe that NOI is a useful supplemental measure of the performance of our Operating Assets and Seaport segments because it provides a performance measure that reflects the revenues and expenses directly associated with owning and operating real estate properties.

We believe that NOI is a useful supplemental measure of the performance of our Operating Assets segment because it provides a performance measure that reflects the revenues and expenses directly associated with owning and operating real estate properties.

We use NOI to evaluate our operating performance on a property-by-property basis because NOI allows us to evaluate the impact that property-specific factors such as rental and occupancy rates, tenant mix, and operating costs have on our operating results, gross margins, and investment returns.

A reconciliation of Operating Assets segment EBT to Operating Assets NOI is presented in the table below.

Refer to the Seaport section for a reconciliation of Seaport segment EBT to Seaport NOI.

Operating Assets NOI

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Retail 54,163 49,981 4,182

Multi-family 52,831 45,564 7,267

Multifamily 58,827 52,831 5,996

Other 6,153 7,411 (1,258)

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Operating Assets NOI increased $14.9 million compared to the prior-year period primarily due to the following:

– Multi-family NOI increased $7.3 million primarily driven by continued lease-up at our newer properties, Marlow in Downtown Columbia and Starling at Bridgeland, rent growth across our portfolio, and winter weather-related insurance recoveries.

– Office NOI increased $6.6 million primarily due to continued lease-up activity and abatement expirations at various properties in The Woodlands, most notably at 9950 Woodloch Forest and Lakefront North, and one-time lease termination fees at 1725 Hughes Landing.

– These increases were partially offset by a $3.7 million decrease related to the retail asset dispositions of Creekside Village Green, Lake Woodlands Crossing, and Outlet Collection at Riverwalk in 2022 and two self-storage properties in The Woodlands in 2023.

– Other NOI decreased $2.2 million primarily due to higher labor and event costs related to the Las Vegas Aviators.

– Office NOI increased $6.4 million primarily due to strong leasing activity and abatement expirations at various properties in The Woodlands and Summerlin, most notably at 9950 Woodloch Forest and 1700 Pavilion, partially offset by decreases related to lower occupancy at 1725 Hughes Landing and certain properties in Downtown Columbia, as well as initial operating losses at Meridian in Summerlin.

HHH 2024 FORM 10-K | 41

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Bridgeland $ 77,611 $ 101,835 $ (24,224)

Columbia (a) — (2,297) 2,297

Summerlin 260,924 227,409 33,515

Teravalis (b) (3,777) (1,975) (1,802)

Teravalis (a) 3,596 (3,777) 7,373

The Woodlands (8,863) 4,036 (12,899)

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Segment EBT $ 349,134 $ 341,419 $ 7,715

Floreo (c) $ (4,150) $ (2,848) $ (1,302)

(a) Columbia MPC land development is complete and the sale of remaining land or development of additional commercial assets will occur as the market dictates.

As such, the remaining Columbia land was transferred to the Strategic Developments segment in the first quarter of 2023.

(b) As of December 31, 2023, the Company owns an 88.0% interest and consolidates Teravalis.

For additional detail, refer to Note 3 - Acquisitions and Dispositions in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

The Company owns a 50% interest in Floreo.

Refer to Note 2 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for a description of the joint venture and further discussion.

Floreo (b) $ 9,816 $ (4,150) $ 13,966

(a) As of December 31, 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 Policies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.

(b) These amounts represent 100% of Floreo EBT.

As of December 31, 2024, the Company owned a 50% interest in Floreo.

Refer to Note 3 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for a description of the joint venture and further discussion.

HHH 2024 FORM 10-K | 42

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Index to Financial Statements

MPC Segment EBT increased $58.4 million compared to the prior-year period primarily due to higher superpad land sales and price per acre in Summerlin, higher equity earnings of $24.1 million, primarily related to The Summit, and higher capitalized interest, partially offset by lower builder price participation of $10.8 million in all MPCs.

Summerlin EBT increased $48.3 million compared to the prior period.

MPC segment EBT increased $7.7 million compared to the prior-year period primarily due to higher superpad land sales and price per acre in Summerlin, partially offset by lower equity earnings, primarily related to The Summit, lower commercial land sales at Bridgeland, and no residential or commercial land sales in The Woodlands.

Summerlin EBT increased $33.5 million compared to the prior year.

– MPC sales, net of MPC cost of sales increased $81.7 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 2024, compared to 169.2 acres sold at an average price of $1.3 million per acre in 2023

– decrease in commercial acres sold, with no acres sold in 2023, compared to 16.6 acres sold at an average price of $1.6 million in 2022

– decrease in custom lots sold, with one lot sold at a price of $2.0 million in 2023, compared to four lots sold with an average price of $2.2 million in 2022

– Equity earnings at The Summit increased $24.8 million primarily related to higher sales in 2023 as a result of additional available Phase II inventory and the close-out of clubhouse condominium units.

– Builder price participation decreased $8.1 million as fewer homes were closed with sales prices over the predetermined breakpoint necessary for participation revenue in the current period.

This reflects price moderation from all-time highs in 2022.

The Woodlands EBT increased $8.4 million compared to the prior period.

– MPC sales, net of MPC cost of sales increased $6.2 million primarily due to the following activity.

– increase in commercial acres sold, with 8.4 acres sold at an average price of $646,000 in 2023, compared to no acres sold in 2022

– increase in residential acres sold, with 9.8 acres sold in Aria Isle, an exclusive gated community, at an average price of $2.5 million per acre in 2023, compared to 7.4 acres sold at an average price of $3.0 million per acre in 2022

– Operating costs decreased $4.7 million due to higher legal fees in the prior year, primarily related to the flood litigation.

– Builder price participation decreased $1.6 million as fewer homes were closed with sales prices over the predetermined breakpoint necessary for participation revenue in the current period.

This reflects price moderation from all-time highs in 2022.

Bridgeland EBT increased $6.9 million compared to the prior period.

– increase in custom lots sold, with six lots totaling 3.8 acres sold at an average price of $6.0 million per acre in 2024, compared to one lot totaling 0.7 acres sold at a price of $2.9 million per acre in 2023

– increase due to $14.7 million more revenue recognized out of deferred revenue in 2024, compared to 2023

– increase due to $4.1 million in Special Improvement District (SID) bond assumptions resulting from an increase in superpad sales in 2024, compared to 2023

– Increase of $4.1 million primarily due to higher capitalized interest inclusive of derivatives.

For additional detail, refer to Note 9 - Derivative Instruments and Hedging Activities in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

For additional detail, refer to Note 10 - Derivative Instruments and Hedging Activities in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.

– Equity earnings at The Summit decreased $41.6 million.

Land and clubhouse unit sales decreased in 2024, compared to 2023, due to low remaining inventory.

– Builder price participation decreased $9.1 million as fewer homes were closed with sales prices over the predetermined breakpoint necessary for participation revenue in 2024.

This decrease was expected as several neighborhoods were completed in the first half of the year, and new neighborhoods were not launched until later in the year, resulting in lower available home inventory.

Teravalis EBT increased $7.4 million compared to the prior year.

– Equity earnings at Floreo increased $7.0 million primarily related to the closings of Floreo land sales in 2024 compared to no land sales in 2023.

Our Floreo joint venture sold a total of 115.4 residential acres at an average price of $777,000 per acre in 2024.

The Woodlands Hills EBT increased $4.0 million compared to the prior year.

– MPC sales, net of MPC cost of sales increased $3.4 million primarily due to the following activity:

– increase due to more revenue recognized out of deferred revenue in 2023, compared to 2022

– decrease in commercial price per acre, with 121.3 acres sold at an average price of $249,000 per acre in 2023, compared to 110.7 acres sold at an average price of $433,000 in 2022

– decrease in residential acres sold, with 151.0 acres sold at an average price of $564,000 per acre in 2023, compared to 156.8 acres sold at an average price of $544,000 per acre in 2022

– Operating costs increased $3.0 million primarily due to higher real estate taxes.

The Woodlands Hills EBT decreased $5.8 million compared to the prior period.

– increase in residential acres sold, with 47.0 acres sold at an average price of $458,000 per acre in 2024, compared to 44.7 acres sold at an average price of $427,000 per acre in 2023

Bridgeland EBT decreased $24.2 million compared to the prior year.

– MPC sales, net of MPC cost of sales decreased $15.9 million primarily due to the following activity:

– decrease in residential acres sold, with 44.7 acres sold at an average price of $427,000 per acre in 2023, compared to 61.9 acres sold at an average price of $382,000 per acre in 2022

– decrease in commercial acres sold, with no acres sold in 2023, compared to 8.0 acres sold at an average price of $175,000 in 2022

– Builder price participation decreased $1.2 million as fewer homes were closed with sales prices over the predetermined breakpoint necessary for participation revenue in the current period.

This reflects price moderation from all-time highs in 2022.

– decrease in commercial acres sold partially offset by an increase in price per acre, with 13.5 acres sold at an average price of $369,000 per acre in 2024, compared to 123.5 acres sold at an average price of $247,000 per acre in 2023

– decrease due to $2.7 million less recognition of deferred revenue net of associated deferred costs in 2024, compared to 2023

– increase in residential acres sold, with 178.1 acres sold at an average price of $591,000 per acre in 2024, compared to 151.0 acres sold at an average price of $564,000 per acre in 2023

– Decrease of $9.4 million primarily due increased interest expense as a result of a higher debt balance, higher variable interest rates as a result of a derivative termination in the third quarter of 2023, and amortization of the liability related to the 2024 sale of future MUD receivables, partially offset by an increase in capitalized interest.

The Woodlands EBT decreased $12.9 million compared to the prior year.

– MPC sales, net of MPC cost of sales decreased $15.4 million primarily due to the following activity.

– decrease in residential acres sold, with no acres sold in 2024, compared to 9.8 acres sold in Aria Isle, an exclusive gated community, at an average price of $2.5 million per acre in 2023.

The decrease in acres sold was expected as there are no remaining lots to be sold at Aria Isle.

– decrease in commercial acres sold, with no acres sold in 2024, compared to 8.4 acres sold at an average price of $646,000 per acre in 2023

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

HHH 2024 FORM 10-K | 43

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MPC Equity Investments

The Summit, our joint venture with Discovery, offers a mix of custom lots, single-family homes, and clubhouse suites in our Summerlin MPC.

The original 555-acre community (Phase I) is nearing completion and consists of approximately 270 homes including 32 condominiums.

The Summit, our joint venture with Discovery Land Company, offers a mix of custom lots, single-family homes, and clubhouse suites in our Summerlin MPC.

The original 555-acre community (Phase I) is nearing completion and expected to consist of approximately 245 homes and 32 condominiums.

In 2022, the Company contributed an additional 54 acres (Phase II) to The Summit adjacent to the existing Summit community to develop approximately 28 custom home sites.

We recognized equity earnings of $24.8 million and received cash distributions of $15.1 million in 2023, compared to equity losses of $30.0 thousand and no cash distributions in 2022.

We recognized equity losses of $16.8 million and received cash distributions of $4.9 million in 2024, compared to equity earnings of $24.8 million and cash distributions of $15.1 million in 2023.

Land development is currently underway at Floreo, our joint venture with Trillium Development Holding Company, LLC.

The first Floreo land sales were contracted as of December 31, 2023, and are expected to close in the first quarter of 2024.

For additional detail, refer to Note 2 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

Residential and Commercial Land Sales The following tables detail our residential and commercial land sales for the years ended December 31:

The first land sales closed in the first quarter of 2024, with the joint venture selling a total of 115.4 residential acres at an average price of $777,000 per acre in 2024.

For additional detail, refer to Note 3 - Investments in Unconsolidated Ventures in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.

Master Planned Communities Land Sales The following table presents the detail of MPC land sales recognized for the years ended December 31, 2024 and 2023.

Total net recognized (deferred) revenue includes revenues recognized in the current period which are related to sales closed in prior periods, offset by revenues deferred on sales closed in the current period.

thousands 2024 2023

Total residential land sales closed $ 441,044 $ 354,263

Total commercial land sales closed 4,984 35,960

Net recognized (deferred) revenue:

Bridgeland 6,491 10,467

The Woodlands 517 (782)

The Woodlands Hills 30 22

Summerlin (18,140) (44,174)

Total net recognized (deferred) revenue (11,102) (34,467)

Special Improvement District revenue 18,269 14,429

Master Planned Community land sales $ 453,195 $ 370,185

HHH 2024 FORM 10-K | 44

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

Residential and Commercial Land Sales Closed The following tables detail our residential and commercial land sales closed for the years ended December 31:

Summary of MPC Land Sales Closed

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Commercial Land Sales Closed

Commercial $ 30,536 $ 47,971 123.5 110.7 $ 247 $ 433

Commercial — 26,016 — 16.6 — 1,567

The Woodlands

Commercial 5,424 — 8.4 — 646 —

The Woodlands Hills

Commercial — 1,396 — 8.0 — 175

Total commercial land sales closed (a) $ 35,960 $ 75,383 131.9 135.3 $ 273 $ 557

(a) Excludes revenues related to sales closed in a previous period and deferred for recognition that met criteria for recognition in the current period.

Please see the Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue table below which reconciles Total residential and commercial land sales closed to Land sales revenue for the years ended December 31, 2023 and 2022.

HHH 2023 FORM 10-K | 46

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

Reconciliation of MPC Land Sales Closed to GAAP Land Sales Revenue The following table reconciles residential and commercial land sales closed in the years ended December 31, 2023 and 2022, to Master Planned Community land sales for the respective periods.

thousands 2023 2022

Total residential land sales closed $ 354,263 $ 247,949

Total commercial land sales closed 35,960 75,383

Net recognized (deferred) revenue:

Bridgeland $ 4,984 $ 30,536 13.5 123.5 $ 369 $ 247

The Woodlands — 5,424 — 8.4 — 646

The Woodlands Hills 22 (172)

Summerlin (44,174) 3,248

Total net recognized (deferred) revenue (34,467) (15,312)

Special Improvement District revenue 14,429 8,045

Master Planned Community land sales $ 370,185 $ 316,065

Total commercial land sales closed (a) $ 4,984 $ 35,960 13.5 131.9 $ 369 $ 273

(a) Excludes revenues recognized in the current period which are related to sales closed in prior periods and includes revenues deferred on sales closed in the current period.

Please see the summary of MPC land sales table above which reconciles total residential and commercial land sales closed to MPC land sales revenue recognized for the years ended December 31, 2024 and 2023.

Although our business does not involve the sale or resale of homes, we believe that net new home sales are an important indicator of future demand for our superpad sites and finished lots.

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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 Special Improvement District (SID) bonds and Municipal Utility District (MUD) receivables, reduced by MPC development expenditures, land acquisitions, and Equity in earnings from unconsolidated ventures, net of distributions.

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 MPC’s 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.

HHH 2024 FORM 10-K | 45

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

Below is a reconciliation of segment EBT to MPC Net Contribution for the years ended December 31:

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MUD and SID bonds collections, net (a) 107,031 136,409 (29,378)

Proceeds from sale of MUD receivables 176,680 — 176,680

Distributions from unconsolidated ventures 4,896 15,050 (10,154)

3 unchanged sentences

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

HHH 2023 FORM 10-K | 47

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

MPC Net contribution increased $67.8 million for the year ended December 31, 2023, primarily due to higher MPC land sales and an increase in distributions from unconsolidated ventures.

MPC Net Contribution increased $184.2 million for the year ended December 31, 2024, primarily due to proceeds from the sale of MUD receivables and higher MPC land sales, partially offset by higher SID transfers to buyers, an increase in MPC development expenditures, and a decrease in distributions from unconsolidated ventures.

MPC Land Inventory The following table summarizes MPC land inventory activity:

5 unchanged sentences

MUD reimbursable costs (c) (172,120) — — — (1,200) (25,688) (199,008)

Transfer to Strategic Developments and Operating Assets Segments (777) — (12,424) — (4,433) — (17,634)

Transfer to Strategic Development and Operating Assets Segments (4,530) (16,625) (4,073) — (3,226) — (28,454)

Other (10,978) — 2,516 53 497 5,938 (1,974)

14 unchanged sentences

Index to Financial Statements

Seaport Entertainment On October 5, 2023, HHH announced the intent to form a new division, Seaport Entertainment, that is expected to include all of the assets in the Seaport segment, as well as the Las Vegas Aviators Triple-A Minor League Baseball team, the Las Vegas Ballpark, and our 80% interest in the air rights above the Fashion Show Mall in Las Vegas.

HHH is establishing Seaport Entertainment with the intention of completing its spinoff as an independent, publicly traded company in 2024, but there can be no assurance regarding the ultimate timing of the spinoff or that the spinoff will ultimately occur.

General The Seaport is part non-stabilized operating asset, part development project, and part operating business.

As such, the Seaport has a greater range of possible outcomes than our other projects.

The greater uncertainty is largely the result of:

(i) seasonality;

(ii) potential sponsorship revenue;

(iii) potential event revenue;

and (iv) business operating risks from various start-up businesses.

We operate and own, either directly, through license agreements, or in joint ventures, many of the tenants in the Seaport.

As a result, the revenues and expenses of these businesses, as well as the underlying market conditions affecting these types of businesses, will directly impact the NOI of the Seaport.

This is in contrast to our other retail properties where we primarily receive lease payments and are not as directly impacted by the operating performance of the underlying businesses.

This causes the financial results and eventual stabilized yield of the Seaport to be less predictable than our other operating real estate assets with traditional lease structures.

Further, as we open new operating businesses, either owned entirely or in partnership with third parties, we expect to incur pre-opening expenses and operating losses until those businesses stabilize, which likely will not happen until the Seaport reaches its critical mass of offerings.

Given the factors and uncertainties listed above, we do not currently provide guidance on our expected NOI yield or stabilization date for the Seaport.

We primarily categorize the businesses in the Seaport segment into the following groups:

Landlord Operations, Managed Businesses, the Tin Building, and Events and Sponsorships.

Landlord Operations Landlord Operations represent physical real estate in the Historic District and Pier 17 that we have developed and own, and is inclusive of our office, retail, and multi-family properties.

Managed Businesses Managed Businesses represent retail and food and beverage businesses in the Historic District and Pier 17 that the Company owns, either wholly or through partnerships with third parties, and operates, including license and management agreements.

These businesses include, among others, The Fulton, Mister Dips, Carne Mare, and Malibu Farm.

The Fulton and Malibu Farm are managed by Creative Culinary Management Company, LLC (CCMC), a Jean-Georges company, and Mister Dips and Carne Mare are managed by Seaport F&B LLC, an Andrew Carmellini company.

These management companies are responsible for employment and supervision of all employees providing services for the food and beverage operations and restaurant as well as day-to-day operations and accounting for food and beverage operations.

The Company owns a 25% interest in Jean-Georges Restaurants, which currently operates over 40 restaurant and hospitality offerings around the world.

This ownership interest is reported in accordance with the equity method.

In the fourth quarter of 2023, we expanded our Managed Businesses portfolio with the launch of The Lawn Club, a new joint venture concept that transformed over 20,000 square feet of the Fulton Market Building into an immersive indoor and outdoor experience that includes an extensive indoor grass area, a stylish clubhouse bar, and a wide variety of lawn games.

Tin Building The Tin Building includes both landlord operations and managed business.

The Company owns 100% of the Tin Building, which was completed and placed in service during the third quarter of 2022.

The Company leased 100% of the space to the Tin Building by Jean-Georges joint venture, a managed business in which the Company has an equity ownership interest and reports its ownership interest in accordance with the equity method.

Based on capital contribution and distribution provisions for the Tin Building by Jean-Georges, the Company currently recognizes all of the economic interest in the venture.

The Company recognizes lease payments from the Tin Building by Jean-Georges in Rental revenue and recognizes its share of the offsetting rent expense in Equity earnings.

As the Company currently recognizes 100% of operating income or losses from the Tin Building by Jean-Georges, the Tin Building lease has no net impact to Seaport EBT.

However, Seaport NOI includes only rental revenue related to the Tin Building lease payments, and does not include the offsetting rent expense in Equity earnings.

The Tin Building by Jean-Georges opened in late September 2022, with an expanded focus on experiences including in-person dining, retail shopping, and delivery and is managed by CCMC, a Jean-Georges company.

HHH 2023 FORM 10-K | 49

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

Events and Sponsorships Our events and sponsorships businesses include our concert series, event catering, private events, and sponsorships.

Food and beverage operations associated with concert concessions and catering are operated under management agreements with CCMC.

The 2023 summer concert series, which began in May and ran through the end of October, included 63 shows with over 204,000 tickets sold, representing over 93% of available ticket inventory.

This represents a modest increase from the 2022 summer concert series, which included 60 shows with over 188,200 tickets sold, representing over 90% of available ticket inventory.

250 Water Street In 2021, the Company received the necessary approvals for its 250 Water Street development project, which includes a mixed-use development with affordable and market-rate apartments, community-oriented spaces, and office space.

In May 2021, the Company received approval from the New York City Landmarks Preservation Commission (LPC) on its proposed design for the 250 Water Street site.

The Company received final approvals in December 2021 through the New York City Uniform Land Use Review Procedure known as ULURP, which allowed the necessary transfer of development rights to the parking lot site.

Also in December 2021, an amendment to the Seaport ground lease was executed giving the Company extension options, at the discretion of the Company, for an additional 48 years from its current expiration in 2072 until 2120.

We received a building foundation permit from the New York City Department of Buildings and began initial foundation work and remediation in the second quarter of 2022.

Remediation of the site as a volunteer of the New York State Brownfield Cleanup program was completed in December 2023.

Various lawsuits have been filed challenging the governmental approval of our development project.

For additional information regarding these lawsuits, see Note 10 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

Segment EBT The following table presents segment EBT for the Seaport for the years ended December 31:

Seaport Segment EBT

thousands 2023 2022 $ Change

Rental revenue (a) $ 21,746 $ 19,410 $ 2,336

Other land, rental, and property revenues 60,225 69,058 (8,833)

Total revenues 81,971 88,468 (6,497)

Operating costs (102,725) (102,271) (454)

Rental property real estate taxes (686) (885) 199

(Provision for) recovery of doubtful accounts (55) (1,237) 1,182

Total operating expenses (103,466) (104,393) 927

Segment operating income (loss) (21,495) (15,925) (5,570)

Depreciation and amortization (37,791) (36,338) (1,453)

Interest income (expense), net 3,065 3,902 (837)

Other income (loss), net (1,290) 245 (1,535)

Equity in earnings (losses) from unconsolidated ventures (81,485) (36,273) (45,212)

Gain (loss) on extinguishment of debt (48) — (48)

Provision for impairment (672,492) — (672,492)

Segment EBT $ (811,536) $ (84,389) $ (727,147)

(a) Lease payments for the Tin Building included in Rental revenue and offset in Equity losses were $11.6 million for the year ended December 31, 2023, and $4.6 million for the year ended December 31, 2022.

No rental payments were made during the first or second quarter of 2022 as the lease had not yet commenced.

Refer to the Tin Building discussion above for additional detail.

Seaport segment EBT decreased $727.1 million compared to the prior-year period primarily due to the following:

– Provision for impairment includes $672.5 million and Equity losses includes $37.0 million related to the Seaport impairment.

For additional information, refer to Note 4 - Impairment in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

– Equity losses increased $8.2 million, excluding the impact of the $37.0 million impairment charge above, primarily due to operating losses for the Tin Building by Jean-Georges, which opened in the third quarter of 2022.

– Total revenues, net of Operating costs decreased $7.0 million primarily due to reduced restaurant performance as a result of poor weather conditions and elevated labor and overhead costs, and fewer private events in the current year, as well as COVID-related recoveries at the Fulton Market Building in the prior year.

These decreases were partially offset by an increase in rental revenue driven by the opening of the Tin Building.

HHH 2023 FORM 10-K | 50

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

– Depreciation expense increased $1.5 million primarily due to the Tin Building being completed and placed in service in the third quarter of 2022, partially offset by a decrease as a result of the Seaport impairment.

Net Operating Income A reconciliation of Seaport segment EBT to Seaport NOI is presented below:

thousands 2023 2022 $ Change

Total Seaport segment EBT $ (811,536) $ (84,389) $ (727,147)

Depreciation and amortization 37,791 36,338 1,453

Interest (income) expense, net (3,065) (3,902) 837

Equity in (earnings) losses from unconsolidated ventures 81,485 36,273 45,212

(Gain) loss on extinguishment of debt 48 — 48

Impact of straight-line rent 1,927 456 1,471

Other (income) loss, net 5,341 5,456 (115)

Provision for impairment 672,492 — 672,492

Seaport NOI $ (15,517) $ (9,768) $ (5,749)

The Seaport, including Managed Businesses, Events and Sponsorships, and the Tin Building, is approximately 69% leased.

We may continue to incur operating expenses in excess of rental revenues while the remaining available space is in lease-up, as the Seaport continues to move toward its critical mass of offerings.

The below table presents Seaport NOI by category:

Seaport NOI by Category

thousands 2023 2022 $ Change

Landlord Operations $ (21,506) $ (15,702) $ (5,804)

Landlord Operations - Multi-family 133 110 23

Managed Businesses (3,516) (85) (3,431)

Tin Building 9,486 4,015 5,471

Events and Sponsorships (114) 1,894 (2,008)

Seaport NOI $ (15,517) $ (9,768) $ (5,749)

Seaport NOI decreased $5.7 million compared to the prior-year period.

The decreases in Landlord Operations NOI are primarily due to increased labor and overhead costs, insurance expense, and franchise tax expense in the current year as well as COVID-related recoveries at the Fulton Market Building in the prior year.

The decreases in Managed Businesses and Events and Sponsorships NOI are due to reduced restaurant performance as a result of poor weather conditions and elevated labor and overhead costs, fewer private events, and increased marketing and production costs related to the concert series in the current year.

These decreases were partially offset by an increase in Tin Building NOI resulting from the opening of the Tin Building in the third quarter of 2022.

Tin Building in the table above represents NOI from our landlord business and, as defined, excludes the impact of the Company’s equity ownership interest in the Tin Building by Jean-Georges managed business which opened in the third quarter of 2022.

The table below presents the above NOI related to the Tin Building, which primarily represents lease payments from the Tin Building by Jean-Georges, as well as the Company’s share of NOI related to its investment in the Tin Building by Jean-Georges, which primarily represents the operations of the Tin Building marketplace and includes rent expense paid to the Company.

thousands 2023 2022 2023-2022

Tin Building $ 9,486 $ 4,015 $ 5,471

Tin Building by Jean-Georges (38,798) (36,183) (2,615)

Total $ (29,312) $ (32,168) $ 2,856

Tin Building by Jean-Georges NOI losses during 2022 relate to costs incurred prior to the marketplace opening in the third quarter of 2022 and elevated operating losses during the early months of operation.

In 2023, the Tin Building by Jean-Georges was open seven days per week, with strong foot traffic and sales.

However, operating losses remained elevated in 2023, as the Company continues to refine the operating model during the marketplace’s first year in operations, and the Seaport experienced poor weather conditions throughout the year.

HHH 2023 FORM 10-K | 51

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

Strategic Developments

1 unchanged sentence

Other than our condominium properties, most of the properties and projects in this segment do not generate revenues.

Our expenses relating to these assets are primarily related to costs associated with constructing the assets, selling condominiums, marketing costs associated with our Strategic Developments, carrying costs including, but not limited to, property taxes and insurance and other ongoing costs relating to maintaining the assets in their current condition.

Our expenses relating to these assets are primarily related to costs associated with constructing the assets, selling condominiums, carrying costs including, but not limited to, property taxes and insurance and other ongoing costs relating to maintaining the assets in their current condition.

If we decide to redevelop or develop a Strategic Developments asset, we expect that with the exception of the residential portion of our condominium projects, upon completion of development, the asset would likely be reclassified to Operating Assets when the asset is placed in service and NOI would become a meaningful measure of its operating performance.

18 unchanged sentences

Segment EBT $ 282,805 $ (17,306) $ 300,111

Strategic Developments segment EBT decreased $207.5 million compared to the prior-year period primarily due to the following:

– Condominium sales, net of cost of sales decreased $187.4 million, excluding the change in remediation costs of $13.4 million discussed below, due to the timing of condominium closings, including the completion of Kō'ula in the third quarter of 2022, and pricing reductions in 2023 at ‘A‘ali‘i and Kō'ula to facilitate the close-out of remaining units.

We closed on 31 units at ‘A‘ali‘i and 16 units at Kō'ula during 2023, compared to 549 units at Kō'ula, 56 units at ‘A‘ali‘i, and 2 units at Waiea during the prior year.

The lower volume of condominium closings in 2023 was expected as our completed towers are now 100.0% sold and the next tower, Victoria Place, is not scheduled for completion until late 2024.

– Condominium cost of sales also includes an increase of $13.4 million due to charges related to the defect remediation accrual at Waiea.

We charged $16.1 million in 2023, related to additional anticipated costs, compared to $2.7 million charged in 2022.

Strategic Developments segment EBT increased $300.1 million compared to the prior-year period primarily due to the following:

– Condominium sales, net of cost of sales increased $203.8 million, primarily due to the timing of condominium closings.

We closed on all 349 units at Victoria Place during 2024, compared to 31 units at ‘A‘ali‘i and 16 units at Kō'ula during 2023.

– Other income includes an increase of $89.8 million due to the receipt of insurance proceeds following the execution of a settlement agreement related to the construction defect claims at Waiea in the current period.

Refer to Note 11 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.

HHH 2024 FORM 10-K | 47

2 unchanged sentences

Index to Financial Statements

Strategic Developments Projects The following describes the status of our major construction projects and announced Strategic Developments projects as of December 31, 2023.

10285 Lakefront Medical Office 10285 Lakefront Medical Office (formerly South Lake Medical Office) will be an 86,000 square foot medical office property.

Total development costs are expected to be approximately $49.9 million, which will be partially financed with a $28.2 million construction loan.

We began construction in the third quarter of 2022 and anticipate project completion in the second quarter of 2024.

We expect to reach projected annual stabilized NOI of $3.2 million by 2027.

Meridian Meridian (formerly Summerlin South Office) will be a 147,000 square foot office property.

Total development costs are expected to be approximately $55.5 million, which will be partially financed with a $27.8 million construction loan.

We began construction in the fourth quarter of 2022 and anticipate project completion in the first quarter of 2024.

We expect to reach projected annual stabilized NOI of $4.3 million by 2027.

Summerlin Grocery Anchored Center This 67,000 square foot retail property in Downtown Summerlin will be anchored by a new Whole Foods Market.

Total development costs are expected to be approximately $46.4 million, which will be partially financed with an $18.0 million construction loan.

We began construction in the third quarter of 2023 and anticipate project completion in the third quarter of 2024.

We expect to reach projected annual stabilized NOI of $1.8 million by 2027.

Strategic Developments Projects The following describes the status of our major construction projects as of December 31, 2024.

These properties will be transferred to the Operating Assets segment upon completion of construction, unless otherwise noted below.

One Bridgeland Green This will be a 49,501-square-foot office property.

Total development costs are expected to be approximately $35.4 million.

We began construction in the second quarter of 2024, and anticipate project completion in the second quarter of 2025.

We expect this property to reach projected annual stabilized NOI of $1.8 million by 2028.

The Woodlands

1 Riva Row 1 Riva Row will be a 268-unit multi-family property and will consist of studio, one-, two-, and three-bedroom units.

Grogan’s Mill Retail This will be a 38,378-square-foot retail property.

Total development costs are expected to be approximately $8.6 million.

We began construction in the third quarter of 2024, and anticipate project completion in the second quarter of 2025.

We expect this property to reach projected annual stabilized NOI of $0.9 million by 2028.

Grogan’s Mill Library and Community Center This will be a 53,863-square-foot property, and is being developed in connection with a land swap agreement entered into with Montgomery County, Texas.

Upon completion of construction, the Company will transfer the Grogan's Mill Library and Community Center to Montgomery County in exchange for land parcels elsewhere in The Woodlands.

As such, projected annual stabilized NOI is not applicable for this project.

We began construction in the third quarter of 2024, and anticipate project completion in the second quarter of 2025.

1 Riva Row This will be a 268-unit multifamily property and will consist of studio, one-, two-, and three-bedroom units.

Total development costs are expected to be approximately $156.0 million, which will be partially financed by a $93.3 million construction loan.

We began construction in the third quarter of 2023 and anticipate project completion in 2025.

We expect to reach projected annual stabilized NOI of $9.9 million by 2028.

We continue to transform Ward Village into a vibrant neighborhood offering unique retail experiences, dining, and entertainment, along with exceptional residences and workforce housing set among open public spaces and pedestrian-friendly streets.

We believe we have found the optimal mix of price point and product in the Honolulu market for condominium development as evidenced by the demand for our condominium projects discussed below.

The ongoing and completed construction at our mixed-use condominium projects includes 232,020 square feet of retail to serve our new residents and the community at large.

As we progress the buildout of the master plan, which ultimately contemplates a total of approximately 1,000,000 million square feet of commercial space at completion, we will periodically redevelop, reposition, or replace the existing retail spaces as part of new mixed-use projects.

Condominium revenue is recognized when construction of the condominium tower is complete and unit sales close, leading to potentially significant variability in revenue recognized between periods.

Sales contracts for condominium units are subject to a 30-day rescission period, and the buyers are typically required to make an initial deposit at signing and an additional deposit 30 days later at which point their total deposit becomes non-refundable.

Buyers are typically then required to make a final deposit within approximately 90 days of our receipt of their second deposit.

Certain buyers are required to deposit the remainder of the sales price on a predetermined pre-closing date, which is specified in the sales contracts for each condominium project.

We began construction in the third quarter of 2023, and anticipate project completion in the fourth quarter of 2025.

We expect this property to reach projected annual stabilized NOI of $9.9 million by 2028.

Condominiums Condominium revenue is recognized when construction of the condominium tower is complete and unit sales close, leading to potentially significant variability in revenue recognized between periods.

For all Ward Village condominium units, sales contracts are subject to a 30-day rescission period.

The buyers are required to make an initial deposit at signing and an additional deposit 30 days later at which point their total deposit becomes non-refundable.

Buyers are then required to make a final deposit within approximately 90 days of our receipt of their second deposit.

Buyers are required to deposit the remainder of the sales price on a predetermined pre-closing date.

Contracted units disclosed below represent sales that are past the 30-day rescission period.

During 2023, we achieved 100% presold status at Ulana Ward Village, achieved 100% sold status at ‘A‘ali‘i and Kō‘ula, and began construction at Ulana Ward Village.

Completed Condominiums As of December 31, 2023, our six completed condominiums, Ae‘o, Ke Kilohana, Anaha, Waiea, ‘A‘ali‘i, and Kō‘ula, are completely sold.

Condominiums Under Construction As of December 31, 2023, 97.9% of the units at our three towers under construction, Victoria Place, The Park Ward Village, and Ulana Ward Village, are under contract.

We broke ground on our seventh condominium project, Victoria Place in February 2021, and expect to complete construction in the fourth quarter of 2024.

Victoria Place, which is 100.0% presold, will consist of 349 one-, two-, and three-bedroom units.

HHH 2023 FORM 10-K | 53

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

We broke ground on our eighth condominium project, The Park Ward Village, in October 2022, expect to complete construction in 2026.

For The Woodlands condominium units, sales contracts are subject to a 6-day rescission period.

The buyers are required to make an initial deposit at signing and a final deposit 60 days later at which point their total deposit becomes non-refundable.

Buyers are required to deposit the remainder of the sales price on a predetermined pre-closing date.

Contracted units disclosed below represent sales that are past the 6-day rescission period.

Completed Condominiums

Ward Village As of December 31, 2024, our seven completed condominiums, Ae`o, Ke Kilohana, Anaha, Waiea, ‘A‘ali‘i, Kō‘ula, and Victoria Place, are completely sold.

Condominiums Under Construction

Ward Village As of December 31, 2024, 97.3% of the units at our three towers under construction, The Park Ward Village, Ulana Ward Village, and Kalae, are under contract.

We broke ground on The Park Ward Village in October 2022 and expect to complete construction in 2026.

The Park Ward Village will consist of 545 studio, one-, two-, and three-bedroom residences.

As of December 31, 2024, we have entered into contracts for 527 units, representing 96.7% of total units.

We broke ground on our ninth condominium project, Ulana Ward Village, in January 2023 and expect to complete construction in 2025.

We broke ground on Ulana Ward Village in January 2023 and expect to complete construction in 2025.

Ulana Ward Village, which is 100% presold, will consist of 696 studio, one-, two-, and three-bedroom units.

All units are designated as workforce housing units and are being offered to local residents who meet certain maximum income and net worth requirements.

Predevelopment Condominiums We launched public presales of our tenth condominium project, Kalae, in September 2022.

HHH 2024 FORM 10-K | 48

MANAGEMENT’S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Index to Financial Statements

We broke ground on Kalae in June 2024 and expect to complete construction in 2027.

Kalae will consist of 329 one-, two-, and three-bedroom residences.

As of December 31, 2024, we have entered into contracts for 305 units, representing 92.7% of total units.

The following provides further details for Ward Village as of December 31, 2023:

Units Closed Units Under Contract Total Units Total % of Units Closed or Under Contract Completion Date

Waiea (a) 177 — 177 100.0 % Q4 2016

Anaha (a) 317 — 317 100.0 % Q4 2017

Ae‘o (a) 465 — 465 100.0 % Q4 2018

Ke Kilohana (a) 423 — 423 100.0 % Q2 2019

‘A‘ali‘i (a) 750 — 750 100.0 % Q4 2021

(b) 565 — 565 100.0 % Q3 2022

The Woodlands We launched public presales of our first condominium project in The Woodlands in March 2024.

The Ritz-Carlton Residences, The Woodlands will consist of 111 one-, two-, three-, and four-bedroom residences.

The development sits on the last available large-scale residential site on Lake Woodlands, spanning roughly eight acres across approximately 1,200 feet of premier lakefront shoreline.

As of December 31, 2024, we have entered into contracts for 78 units, representing 70.3% of total units.

We broke ground on The Ritz-Carlton Residences in October 2024.

Predevelopment Condominiums

Ward Village We launched public presales for The Launiu in February 2024.

The Launiu will consist of 485 studio, one-, two-, and three-bedroom residences.

As of December 31, 2024, we have entered into contracts for 283 units, representing 58.4% of total units.

The following provides further detail for all condominium projects as of December 31, 2024:

Location Units Closed Units Under Contract Total Units Total % of Units Closed or Under Contract Completion Date

Waiea (a) Honolulu, HI 177 — 177 100.0 % Q4 2016

Anaha (a) Honolulu, HI 317 — 317 100.0 % Q4 2017

Ae`o (a) Honolulu, HI 465 — 465 100.0 % Q4 2018

Ke Kilohana (a) Honolulu, HI 423 — 423 100.0 % Q2 2019

‘A‘ali‘i (a) Honolulu, HI 750 — 750 100.0 % Q4 2021

Kō'ula (b) Honolulu, HI 565 — 565 100.0 % Q3 2022

Victoria Place Honolulu, HI 349 — 349 100.0 % Q4 2024

Under construction

Victoria Place — 349 349 100.0 % Q4 2024

The Park Ward Village (c) — 512 545 93.9 % 2026

Ulana Ward Village (d) — 696 696 100.0 % 2025

Ulana Ward Village (c) Honolulu, HI — 696 696 100.0 % 2025

The Park Ward Village (d) Honolulu, HI — 527 545 96.7 % 2026

Kalae (e) Honolulu, HI — 305 329 92.7 % 2027

The Ritz-Carlton Residences (f) The Woodlands, TX — 78 111 70.3 % 2027

Predevelopment

Kalae (e) — 287 329 87.2 % 2027

The Launiu (g) Honolulu, HI — 283 485 58.4 % 2028

(a) The retail portions of these projects are 100% leased and have been placed in service.

(b) The retail portion of this project has been placed in service and is 56% leased.

(d) There will be approximately 32,100 square feet of retail space as part of this project.

(e) There will be approximately 2,000 square feet of retail space as part of this project.

(d) The Park Ward Village will include approximately 26,800 square feet of retail space.

(e) Kalae will include approximately 2,000 square feet of retail space.

(f) The Ritz-Carlton Residences will include approximately 5,800 square feet of retail space.

(g) The Launiu will include approximately 10,000 square feet of retail space.

HHH 2024 FORM 10-K | 49

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General and administrative (91,752) (86,671) (5,081)

Gain (loss) on sale of MUD receivables (48,651) — (48,651)

Corporate interest expense, net (80,446) (87,243) 6,797

Gain (loss) on extinguishment of debt — (147) 147

Corporate other income (loss), net 764 3,143 (2,379)

3 unchanged sentences

Total Corporate income, expenses, and other items $ (318,269) $ (213,646) $ (104,623)

Corporate income, expenses, and other items was unfavorably impacted compared to the prior year by the following:

– Income tax expense increased $53.8 million primarily due to an increase in Income before income taxes as well as a net increase in expense related to the revaluation of deferred tax assets and liabilities as a result of the spinoff of Seaport Entertainment Group Inc.

These increases were offset by a partial release of valuation allowances on the Company’s deferred tax assets including a state net operating loss carryover as a result of the spinoff.

Refer to Note 13 - Income Taxes in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.

– Loss on sale of MUD receivables of $48.7 million was recognized in 2024.

Refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.

Corporate income, expenses, and other items was favorably impacted compared to the prior-year period by the following:

– Income tax expense decreased $224.2 million primarily due to a decrease in income before income taxes.

– Corporate other income increased $2.2 million primarily related to the receipt of insurance proceeds.

Corporate income, expenses, and other items was unfavorably impacted compared to the prior-year period by the following:

– General and administrative expenses increased $9.4 million primarily attributable to an increase in compensation costs and increased legal and consulting fees related to the holding company reorganization and planned spinoff of Seaport Entertainment.

– Corporate interest expense, net decreased $6.8 million primarily due to the termination of a derivative instrument in the third quarter of 2023.

Refer to Note 10 - Derivative Instruments and Hedging Activities in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information.

thousands except percentages 2024 2023

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Effective tax rate 21.9 % 24.1 %

The Company’s effective tax rate for the year ended December 31, 2023, was 22.9% compared to 24.7% for the year ended December 31, 2022.

The Company’s effective tax rate is typically impacted by non-deductible executive compensation and other permanent differences as well as state income taxes, which cause the Company’s effective tax rate to deviate from the federal statutory rate.

For additional information on income taxes, see Note 12 - Income Taxes in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

The Company’s effective tax rate for the year ended December 31, 2024, was 21.9% compared to 24.1% for the year ended December 31, 2023.

The decrease was primarily due a partial release of valuation allowances on the Company’s deferred tax assets including a state net operating loss carryover as a result of the spinoff of Seaport Entertainment Group Inc.

as well as a decrease in non-deductible executive compensation, partially offset by a net increase in expense related to the revaluation of deferred tax assets and liabilities as a result of the spinoff.

For additional information on income taxes, see Note 13 - Income Taxes in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report.

HHH 2024 FORM 10-K | 50

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We continue to maintain a strong balance sheet and ensure we maintain the financial flexibility and liquidity necessary to fund future growth.

In 2023, our financing activity included draws on existing mortgages of $384.4 million, an additional draw of $200.0 million on the Secured Bridgeland Notes, refinancings of $161.0 million, and repayments of $48.4 million.

As of December 31, 2023, we have $1.0 billion of undrawn lender commitment available to be drawn for property development, subject to certain restrictions.

In 2022, the Company sold its ownership interest in 110 North Wacker for net proceeds to the Company of $168.9 million and sold the Outlet Collection at Riverwalk for net proceeds of $8.2 million.

Additionally, during the fourth quarter of 2022, the Company completed the sale of two retail properties in The Woodlands, Lake Woodlands Crossing and Creekside Village Green, for combined net proceeds after debt repayment of $38.8 million.

In 2023, the Company completed the sale of two land parcels in Honolulu, Hawai‘i, including an 11,929-square-foot building at the Ward Village Retail property, two self-storage facilities in The Woodlands, and Memorial Hermann Medical Office in The Woodlands for total net proceeds after debt repayment of $43.3 million.

As of December 31, 2024, we had $596.1 million of cash and cash equivalents, $317.0 million of undrawn capacity on our Secured Bridgeland Notes, and $1.2 billion of undrawn lender commitments available to be drawn for property development, subject to certain restrictions.

In 2024, we drew $417.0 million on existing mortgage loans, entered into new borrowings of $176.5 million (excluding undrawn amounts on new construction loans), refinanced $168.0 million of existing indebtedness, and made repayments of $454.8 million.

In addition, we repaid $192.0 million on the Secured Bridgeland Notes using the proceeds from the sale of MUD receivables.

In the fourth quarter of 2024, we expanded the borrowing capacity of these notes from $475.0 million to $600.0 million and extended the maturity to 2029.

Year Ended December 31,

thousands 2024 2023

Cash provided by (used in) operating activities $ (258,482) $ 325,254

Cash provided by (used in) investing activities (336,143) (220,695)

Cash provided by (used in) financing activities 548,745 (222,259)

Cash provided by (used in) operating activities of continuing operations $ 447,751 $ (215,154)

Cash provided by (used in) investing activities of continuing operations (430,705) (345,665)

Cash provided by (used in) financing activities of continuing operations (27,754) 537,809

Net cash provided by (used in) discontinued operations (43,846) (22,870)

Operating Activities Each segment’s relative contribution to our cash flows from operating activities will likely vary significantly from year to year given the changing nature of our development focus.

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MPC land sales are a substantial portion of our cash flows from operating activities and are partially offset by development costs associated with the land sales business and acquisitions of land that is intended to ultimately be developed and sold.

Net cash used in operating activities was $258.5 million in 2023 and net cash provided by operating activities was $325.3 million in 2022.

The change in operating activities of $583.7 million was primarily due to a $693.9 million increase in net cash used associated with our condominiums due to timing, as we continued development activity on our three under construction projects and did not complete a condominium project in 2023.

This change was also impacted by a $35.1 million increase in interest payments, partially offset by a $20.2 million increase in MUD receivable collections and a $14.4 million decrease in income tax payments.

Investing Activities Net cash used in investing activities was $336.1 million in 2023 and net cash used in investing activities was $220.7 million in 2022.

The $115.4 million increase in cash used in investing activities was primarily due to a $194.7 million decrease in distributions from unconsolidated ventures and a $42.2 million decrease in proceeds from sales of properties.

The decrease in distributions primarily related to distributions received from the sale of the Company’s interest in 110 North Wacker in the first quarter of 2022, which resulted in a net increase to the Company’s liquidity of $168.9 million after the payment of transaction costs and distributions to our partner.

The impact of these changes was partially offset by a decrease in cash used related to investments in unconsolidated ventures of $54.9 million, primarily attributable to the Company’s investment in Jean-Georges Restaurants in the first quarter of 2022, and a $78.0 million decrease in cash used for property development and redevelopment expenditures.

Net cash provided by operating activities of continuing operations was $447.8 million in 2024 and net cash used in operating activities of continuing operations was $215.2 million in 2023.

The change in operating activities of $662.9 million was primarily due to an increase of $414.1 million in cash provided by condominium towers, primarily due to the closing of condominium units at Victoria Place in 2024;

an increase of $176.7 million related to proceeds from the sale of MUD receivables in 2024;

an increase of $90.0 million related to insurance proceeds received in 2024 for settlement of the construction defect claims at Waiea;

an increase of approximately $66.0 million in cash provided by MPC operations, primarily related to increased MPC land sales;

and an increase of $39.2 million in net cash provided related to the return of lender holdback deposits in the current year, compared to the payment of lender holdback deposits in the prior year.

These changes were partially offset by a $58.4 million increase in interest payments;

a $31.6 million decrease in MUD receivable collections;

and a $24.3 million increase in MPC development expenditures.

Investing Activities Net cash used in investing activities of continuing operations was $430.7 million in 2024 and net cash used in investing activities was $345.7 million in 2023.

The $85.0 million increase in cash used in investing activities was primarily due to a $54.3 million increase in net parent investment in discontinued operations;

a $21.9 million increase in cash used for property development and redevelopment expenditures;

and a $12.6 million increase in cash used for acquisitions, primarily related to the acquisition of Waterway Plaza II in 2024, compared to the acquisition of Grogan’s Mill Village Center in 2023.

These changes were partially offset by an $8.9 million increase in proceeds from asset sales, primarily related to the sale of a retail property in Bridgeland as well as a medical office building and four ground leases in The Woodlands in 2024, compared the sale of two self-storage properties and a medical office building in The Woodlands and certain properties in Ward Village in 2023.

HHH 2024 FORM 10-K | 51

2 unchanged sentences

Index to Financial Statements

Financing Activities Net cash provided by financing activities was $548.7 million in 2023 and net cash used in financing activities was $222.3 million in 2022.

The change in financing activities of $771.0 million was primarily due to a decrease in cash used related to principal payments on mortgages, notes, and loans payable of $815.9 million and repurchases of common shares of $403.9 million in 2022, with no similar activity in 2023.

These decreases in cash used were partially offset by a decrease in proceeds from mortgages, notes, and loans payable of $443.5 million.

Financing Activities Net cash used in financing activities of continuing operations was $27.8 million in 2024 and net cash provided by financing activities was $537.8 million in 2023.

The change in financing activities of $565.6 million was primarily due to a $659.9 million increase in cash used related to principal payments on mortgages, notes, and loans payable, primarily related to the payoff of the Victoria Place construction loan upon completion of the tower and pay down of the Secured Bridgeland Notes.

This activity was partially offset by an $84.0 million increase in proceeds from mortgages, notes, and loans payable.

Short- and Long-Term Liquidity

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Projects that are substantially complete and have been placed into service in the Operating Assets segment and completed condominium projects in the Strategic Developments segment are included in the following table if the project has more than $1.0 million of estimated costs remaining to be incurred.

As of December 31, 2023, $23.4 million primarily relates to warranty repairs at Waiea in Ward Village.

However, we anticipate recovering a substantial amount of these costs in the future, which is not reflected in the table below.

The remaining cost related to substantially completed projects primarily represent costs associated with the completion of common areas at our completed condominium towers and budgeted tenant allowances necessary to bring our completed operating assets to stabilized occupancy.

HHH 2023 FORM 10-K | 57

MANAGEMENT’S DISCUSSION AND ANALYSIS

LIQUIDITY AND CAPITAL RESOURCES

Index to Financial Statements

We expect to be able to meet our cash funding requirements with a combination of existing and anticipated construction loans, condominium buyer deposits, free cash flow from our Operating Assets and MPC segments, net proceeds from condominium sales, and our existing cash balances.

We expect to be able to meet our cash funding requirements with a combination of existing and anticipated construction loans, condominium buyer deposits, cash flow from our Operating Assets and MPC segments, net proceeds from condominium sales, and our existing cash balances.

thousands Estimated Remaining to be Spent Remaining Buyer Deposits/Holdback to be Drawn Debt to be Drawn (a) Costs Remaining to be Paid, Net of Debt

3 unchanged sentences

The Woodlands 7,369 — 7,746 (377)

Bridgeland 31,790 — 30,961 829

Summerlin 41,130 — 37,780 3,350

1 unchanged sentence

Strategic Developments

Columbia 27,045 — 23,758 3,287

The Woodlands 425,678 — 276,902 148,776

Summerlin 70,041 — 45,762 24,279

Ward Village (b) 1,010,730 147,201 736,731 126,798

Bridgeland 21,223 — — 21,223

Ward Village 998,089 151,261 787,679 59,149

Total Strategic Developments 1,444,990 151,261 1,064,581 229,148

Total $ 1,519,455 $ 151,261 $ 1,130,986 $ 237,208

(a) Refer to Note 7 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional information on debt.

(b) Estimated remaining to be spent includes amounts for Waiea warranty repairs.

However, we anticipate recovering a substantial amount of these costs in the future, which is not reflected in this schedule.

HHH 2024 FORM 10-K | 52

MANAGEMENT’S DISCUSSION AND ANALYSIS

LIQUIDITY AND CAPITAL RESOURCES

Index to Financial Statements

(a) Refer to Note 8 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information on debt.

(b) Negative balance relates to costs paid by HHH, but not yet reimbursed by our lenders.

We expect to receive funds from our lenders for these costs in the future.

Contractual Cash Obligations and Commitments The following table aggregates our contractual cash obligations and commitments as of December 31, 2024:

2 unchanged sentences

Interest payments (a) 272,263 229,822 198,285 164,000 99,822 223,887 1,188,079

Ground lease commitments (b) 2,883 2,937 2,992 3,049 3,108 240,242 255,211

Ground lease commitments 300 300 300 300 300 5,900 7,400

Total $ 693,765 $ 739,219 $ 614,302 $ 1,002,980 $ 1,370,362 $ 1,943,288 $ 6,363,916

(a) Interest is based on the borrowings that are presently outstanding and current floating interest rates.

(b) Ground lease commitments totaling $247.5 million relate to the Seaport ground lease, which has an initial expiration date of December 31, 2072, and is subject to extension options through December 31, 2120.

Future cash payments are not inclusive of extension options.

The remaining $7.7 million in ground lease commitments relates to Kewalo Basin Harbor.

Debt As of December 31, 2024, the Company had $5.1 billion of outstanding debt and $1.2 billion of undrawn lender commitment available to be drawn for property development, subject to certain restrictions.

Refer to Note 7 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional detail.

Refer to Note 8 - Mortgages, Notes, and Loans Payable, Net in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional detail.

Our proportionate share of the debt of our unconsolidated ventures totaled $175.6 million as of December 31, 2024.

All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo.

See Note 10 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional information related to the Company’s collateral maintenance obligation.

See Note 11 - Commitments and Contingencies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information related to the Company’s collateral maintenance obligation.

Debt Compliance As of December 31, 2024, the Company was in compliance with all property-level debt covenants with the exception of five property-level debt instruments.

1 unchanged sentence

While the restricted cash could not be used for general corporate purposes, it could be used to fund operations of the underlying assets and did not have a material impact on the Company’s liquidity or its ability to operate these assets.

Additionally, one property-level debt instrument that was not in compliance as of September 30, 2023, is in compliance as of December 31, 2023, but requires two consecutive quarters of compliance to remove the cash flow restriction.

HHH 2023 FORM 10-K | 58

MANAGEMENT’S DISCUSSION AND ANALYSIS

LIQUIDITY AND CAPITAL RESOURCES

Index to Financial Statements

Net Debt The following table summarizes our net debt on a segment basis as of December 31, 2024.

Net debt is defined as Mortgages, notes, and loans payable, net, including our ownership share of debt of our unconsolidated ventures, reduced by liquidity sources to satisfy such obligations such as our ownership share of Cash and cash equivalents and SID, MUD, and TIF receivables.

Although net debt is a non-GAAP financial measure, we believe that such information is useful to our investors and other users of our financial statements as net debt and its components are important indicators of our overall liquidity, capital structure, and financial position.

2 unchanged sentences

Assets Master

Communities Seaport Strategic

Communities Strategic

Developments Segment

8 unchanged sentences

Net Debt $ 2,436,574 $ (238,673) $ 342,371 $ 2,540,272 $ 1,583,317 $ 4,123,589

Unconsolidated Ventures We have interests in certain unconsolidated ventures which, as of December 31, 2023, have mortgage financing totaling $273.1 million, with our proportionate share of this debt totaling $134.9 million.

HHH 2024 FORM 10-K | 53

MANAGEMENT’S DISCUSSION AND ANALYSIS

LIQUIDITY AND CAPITAL RESOURCES

Index to Financial Statements

Unconsolidated Ventures We have interests in certain unconsolidated ventures which, as of December 31, 2024, had mortgage financing totaling $354.3 million, with our proportionate share of this debt totaling $175.6 million.

All of this indebtedness is without recourse to the Company, with the exception of the collateral maintenance obligation for Floreo.

The following table summarizes our share of affiliate debt and cash as of December 31, 2024:

8 unchanged sentences

Floreo 77,360 5,399

The Lawn Club — 40

Tin Building by Jean-Georges — 5,191

Jean-George Restaurants 76 4,062

Ssäm Bar — 15

Strategic Developments

HHMK Development — 10

KR Holdings — 487

West End Alexandria — 4,967

2 unchanged sentences

MANAGEMENT’S DISCUSSION AND ANALYSIS

CRITICAL ACCOUNTING POLICIES

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Index to Financial Statements

CRITICAL ACCOUNTING POLICIES

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with GAAP requires management to make informed judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses.

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Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.

Below is a discussion of the accounting policies that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain.

A discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

Below is a discussion of the accounting policies and estimates that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain.

Methodology We review our long-lived assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AND DEVELOPMENTS

Please refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K for additional information about new accounting pronouncements.

Please refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies in the Notes to Consolidated Financial Statements under Item 8 of this Annual Report for additional information about new accounting pronouncements.

HHH 2024 FORM 10-K | 55

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis