Howard Hughes Holdings Inc. 10-K

Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements and Financial Statement Schedule Page Consolidated Financial Statements Management’s Report on Internal Control over Financial Reporting 58 Report of Independent Registered Public Accounting Firm (PCAOB ID : 185 ) 59 Consolidated Balance Sheets as of December 31, 2024, and 2023 61 Consolidated Statements of Operations for the years ended December 31, 2024 , 2023, and 2022 62 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024 , 2023, and 2022 63 Consolidated Statements of Equity for the years ended December 31, 2024 , 2023, and 2022 64 Consolidated Statements of Cash Flows for the years ended December 31, 2024 , 2023, and 2022 65 Notes to Consolidated Financial Statements 67 Note 1. Presentation of Financial Statements and Significant Accounting Policies 67 Note 2. Discontinued Operations 76 Note 3. Investments in Unconsolidated Ventures 78 Note 4. Acquisitions and Dispositions 80 Note 5. Impairment 81 Note 6. Other Assets and Liabilities 81 Note 7. Intangibles 82 Note 8. Mortgages, Notes, and Loans Payable, Net 83 Note 9. Fair Value 85 Note 10. Derivative Instruments and Hedging Activities 86 Note 11. Commitments and Contingencies 88 Note 12. Stock-Based Compensation Plans 90 Note 13. Income Taxes 92 Note 14. Accumulated Other Comprehensive Income (Loss) 94 Note 15. Earnings Per Share 95 Note 16. Revenues 96 Note 17. Leases 97 Note 18. Segments 99 Note 19. Quarterly Financial Information (Unaudited) 102 Schedule III – Real Estate and Accumulated Depreciation 103 HHH 2024 FORM 10-K | 57 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements Management’s Report on Internal Control over Financial Reporting Management of Howard Hughes Holdings Inc. (the Company) is responsible for establishing and maintaining a system of internal control over financial reporting designed to provide reasonable assurance that transactions are executed in accordance with management authorization and that such transactions are properly recorded and reported in the financial statements, and that records are maintained so as to permit preparation of the financial statements in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management has assessed the effectiveness of the Company’s internal control over financial reporting utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013 Framework). Management concluded, based on its assessment, that the Company’s internal control over financial reporting was effective as of December 31, 2024. KPMG LLP, an independent registered public accounting firm, has audited the Company’s internal control over financial reporting as of December 31, 2024, as stated in their report which is included in this Annual Report on Form 10-K (Annual Report). HHH 2024 FORM 10-K | 58 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Howard Hughes Holdings Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Howard Hughes Holdings Inc. (the Company) as of December 31, 2024 and 2023 , the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2024 , and the related notes and financial statement schedule III (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2024 , based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023 , and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024 , in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. HHH 2024 FORM 10-K | 59 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Master Planned Communities (MPC) cost of sales estimates As discussed in Note 1 to the consolidated financial statements, when developed residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs, based on relative sales value, that benefit the property sold. For purposes of allocating development costs, estimates of future revenues and future development costs are re-evaluated throughout the year, with adjustments being allocated prospectively to the remaining parcels available for sale. MPC cost of sales estimates are highly judgmental as they are sensitive to cost escalation and sales price escalation, which are subject to judgment and affected by expectations about future market or economic conditions. The Company recognized MPC cost of sales of $169.2 million for the year ended December 31, 2024. We identified the evaluation of estimated future development costs and revenues that drive the MPC cost of sales estimates as a critical audit matter. Subjective auditor judgment was required to evaluate the cost escalation and sales price escalation assumptions. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the process to estimate MPC cost of sales. This included controls related to management’s monitoring and review of the assumptions noted above. We tested the assumptions related to cost escalation and sales price escalation by: • agreeing the current year estimates for revenues and costs to actual results, where applicable • comparing the Company’s historical cost escalation and sales price escalation estimates to actual results to assess the Company’s ability to accurately estimate these amounts • performing site visits for certain MPC developments to compare the overall status of the developments to what is reflected within the MPC cost of sales estimates. • comparing expected price per acre for each property type available for sale to applicable market data • comparing the cost and sales price escalation rates throughout the duration of the development to available market data. /s/ KPMG LLP We have served as the Company’s auditor since 2022. Dallas, Texas February 26, 2025 HHH 2024 FORM 10-K | 60 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements HOWARD HUGHES HOLDINGS INC. CONSOLIDATED BALANCE SHEETS December 31, thousands except par values and share amounts 2024 2023 ASSETS Master Planned Communities assets $ 2,511,662 $ 2,445,673 Buildings and equipment 3,841,872 3,649,376 Less: accumulated depreciation ( 949,533 ) ( 829,018 ) Land 302,446 294,189 Developments 1,341,029 1,169,571 Net investment in real estate 7,047,476 6,729,791 Investments in unconsolidated ventures 169,566 182,799 Cash and cash equivalents 596,083 629,714 Restricted cash 402,420 379,498 Accounts receivable, net 105,185 101,373 Municipal Utility District (MUD) receivables, net 463,799 550,884 Deferred expenses, net 139,350 138,182 Operating lease right-of-use assets 5,806 5,463 Other assets, net 281,551 244,027 Assets of discontinued operations — 615,272 Total assets $ 9,211,236 $ 9,577,003 LIABILITIES Mortgages, notes, and loans payable, net $ 5,127,469 $ 5,146,992 Operating lease obligations 5,456 5,362 Deferred tax liabilities, net 142,100 84,293 Accounts payable and other liabilities 1,094,437 1,054,267 Liabilities of discontinued operations — 227,165 Total liabilities 6,369,462 6,518,079 Commitments and Contingencies (see Note 11) EQUITY Preferred stock: $ 0.01 par value; 50,000,000 shares authorized, none issued — — Common stock: $ 0.01 par value; 150,000,000 shares authorized, 56,610,009 issued, and 50,116,150 outstanding as of December 31, 2024, and 56,495,791 shares issued, and 50,038,014 outstanding as of December 31, 2023 566 565 Additional paid-in capital 3,576,274 3,988,496 Retained earnings (accumulated deficit) ( 185,993 ) ( 383,696 ) Accumulated other comprehensive income (loss) 1,968 1,272 Treasury stock, at cost, 6,493,859 shares as of December 31, 2024, and 6,457,777 shares as of December 31, 2023 ( 616,589 ) ( 613,766 ) Total stockholders' equity 2,776,226 2,992,871 Noncontrolling interests 65,548 66,053 Total equity 2,841,774 3,058,924 Total liabilities and equity $ 9,211,236 $ 9,577,003 See Notes to Consolidated Financial Statements. HHH 2024 FORM 10-K | 61 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements HOWARD HUGHES HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, thousands except per share amounts 2024 2023 2022 REVENUES Condominium rights and unit sales $ 778,616 $ 47,707 $ 677,078 Master Planned Communities land sales 453,195 370,185 316,065 Rental revenue 422,100 383,617 379,693 Other land, rental, and property revenues 44,755 46,255 44,893 Builder price participation 52,023 60,989 71,761 Total revenues 1,750,689 908,753 1,489,490 EXPENSES Condominium rights and unit cost of sales 582,574 55,417 483,983 Master Planned Communities cost of sales 169,191 140,050 119,466 Operating costs 208,578 205,453 191,856 Rental property real estate taxes 58,395 55,649 52,121 Provision for (recovery of) doubtful accounts 504 ( 2,762 ) 629 General and administrative 91,752 86,671 81,770 Depreciation and amortization 179,799 168,734 154,605 Other 15,002 13,302 11,920 Total expenses 1,305,795 722,514 1,096,350 OTHER Gain (loss) on sale or disposal of real estate and other assets, net 22,907 24,162 29,678 Other income (loss), net 92,120 5,823 1,421 Total other 115,027 29,985 31,099 Operating income (loss) 559,921 216,224 424,239 Interest income 25,349 25,500 3,818 Interest expense ( 164,926 ) ( 157,575 ) ( 112,498 ) Gain (loss) on extinguishment of debt ( 465 ) ( 97 ) ( 2,377 ) Gain (loss) on sale of MUD receivables ( 48,651 ) — — Equity in earnings (losses) from unconsolidated ventures ( 5,829 ) 25,776 21,723 Income (loss) from continuing operations before income taxes 365,399 109,828 334,905 Income tax expense (benefit) 80,184 26,418 82,196 Net income (loss) from continuing operations 285,215 83,410 252,709 Net income (loss) from discontinued operations, net of tax ( 88,223 ) ( 634,940 ) ( 68,073 ) Net income (loss) 196,992 ( 551,530 ) 184,636 Net (income) loss attributable to noncontrolling interests 711 ( 243 ) ( 103 ) Net income (loss) attributable to common stockholders $ 197,703 $ ( 551,773 ) $ 184,533 Basic income (loss) per share — continuing operations $ 5.75 $ 1.68 $ 5.00 Basic income (loss) per share — discontinued operations $ ( 1.78 ) $ ( 12.81 ) $ ( 1.35 ) Basic income (loss) per share attributable to common stockholders $ 3.98 $ ( 11.13 ) $ 3.65 Diluted income (loss) per share — continuing operations $ 5.73 $ 1.68 $ 5.00 Diluted income (loss) per share — discontinued operations $ ( 1.77 ) $ ( 12.80 ) $ ( 1.35 ) Diluted income (loss) per share attributable to common stockholders $ 3.96 $ ( 11.12 ) $ 3.65 See Notes to Consolidated Financial Statements. HHH 2024 FORM 10-K | 62 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements HOWARD HUGHES HOLDINGS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, thousands 2024 2023 2022 Net income (loss) $ 196,992 $ ( 551,530 ) $ 184,636 Other comprehensive income (loss) Interest rate caps and swaps (a) 321 ( 9,322 ) 31,698 Pension adjustment (b) 375 259 ( 183 ) Reclassification of the Company's share of previously deferred derivative gains to net income (c) — — ( 6,723 ) Other comprehensive income (loss) 696 ( 9,063 ) 24,792 Comprehensive income (loss) 197,688 ( 560,593 ) 209,428 Comprehensive (income) loss attributable to noncontrolling interests 711 ( 243 ) ( 103 ) Comprehensive income (loss) attributable to common stockholders $ 198,399 $ ( 560,836 ) $ 209,325 (a) Amounts are shown net of deferred tax expense of $ 0.1 million for the year ended December 31, 2024, deferred tax benefit of $ 2.7 million for the year ended December 31, 2023, and deferred tax expense of $ 9.5 million for the year ended December 31, 2022. (b) The deferred tax impact was not meaningful for the years ended December 31, 2024, 2023, and 2022. (c) In March 2022, the Company completed the sale of its ownership interest in 110 North Wacker and released a net of $ 6.7 million from Accumulated other comprehensive income (loss), representing the Company’s $ 8.6 million share of previously deferred gains associated with the Venture’s derivative instruments net of tax expense of $ 1.9 million. See Note 3 - Investments in Unconsolidated Ventures for additional information. See Notes to Consolidated Financial Statements. HHH 2024 FORM 10-K | 63 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements HOWARD HUGHES HOLDINGS INC. CONSOLIDATED STATEMENTS OF EQUITY Retained Accumulated Additional Earnings Other Total thousands except shares Common Stock Paid-In (Accumulated Comprehensive Treasury Stock Stockholders' Noncontrolling Total Shares Amount Capital Deficit) Income (Loss) Shares Amount Equity Interests Equity Balance, December 31, 2021 56,173,276 $ 563 $ 3,960,418 $ ( 16,456 ) $ ( 14,457 ) ( 2,107,615 ) $ ( 220,073 ) $ 3,709,995 $ 675 $ 3,710,670 Net income (loss) — — — 184,533 — — — 184,533 103 184,636 Interest rate swaps, net of tax expense (benefit) of $ 9,460 — — — — 31,698 — — 31,698 — 31,698 Pension adjustment, net of tax expense (benefit) of $( 71 ) — — — — ( 183 ) — — ( 183 ) — ( 183 ) Deconsolidation of Ward Village homeowners’ associations — — — — — — — — ( 211 ) ( 211 ) Teravalis noncontrolling interest — — — — — — — — 65,046 65,046 Reclassification of the Company’s share of previously deferred derivative gains, net of tax expense of $ 1,912 (a) — — — — ( 6,723 ) — — ( 6,723 ) — ( 6,723 ) Repurchase of common shares — — — — — ( 4,283,874 ) ( 388,372 ) ( 388,372 ) — ( 388,372 ) Stock plan activity 52,997 1 12,143 — — ( 32,787 ) ( 2,593 ) 9,551 — 9,551 Balance, December 31, 2022 56,226,273 $ 564 $ 3,972,561 $ 168,077 $ 10,335 ( 6,424,276 ) $ ( 611,038 ) $ 3,540,499 $ 65,613 $ 3,606,112 Net income (loss) — — — ( 551,773 ) — — — ( 551,773 ) 243 ( 551,530 ) Interest rate swaps, net of tax expense (benefit) of $( 2,729 ) — — — — ( 9,322 ) — — ( 9,322 ) — ( 9,322 ) Pension adjustment, net of tax expense (benefit) of $ 70 — — — — 259 — — 259 — 259 Teravalis noncontrolling interest — — — — — — — — 219 219 Stock plan activity 269,518 1 15,935 — — ( 33,501 ) ( 2,728 ) 13,208 — 13,208 Other — — — — — — — — ( 22 ) ( 22 ) Balance, December 31, 2023 56,495,791 $ 565 $ 3,988,496 $ ( 383,696 ) $ 1,272 ( 6,457,777 ) $ ( 613,766 ) $ 2,992,871 $ 66,053 $ 3,058,924 Net income (loss) — — — 197,703 — — — 197,703 ( 711 ) 196,992 Interest rate swaps, net of tax expense (benefit) of $ 60 — — — — 321 — — 321 — 321 Pension adjustment, net of tax expense (benefit) of $ 118 — — — — 375 — — 375 — 375 Teravalis noncontrolling interest — — — — — — — — 206 206 Distribution of Seaport Entertainment Group Inc. to stockolders — — ( 428,229 ) — — — — ( 428,229 ) — ( 428,229 ) Stock plan activity 114,218 1 16,007 — — ( 36,082 ) ( 2,823 ) 13,185 — 13,185 Balance, December 31, 2024 56,610,009 $ 566 $ 3,576,274 $ ( 185,993 ) $ 1,968 ( 6,493,859 ) $ ( 616,589 ) $ 2,776,226 $ 65,548 $ 2,841,774 (a) In March 2022, the Company completed the sale of its ownership interest in 110 North Wacker and released a net of $ 6.7 million from Accumulated other comprehensive income (loss), representing the Company’s $ 8.6 million share of previously deferred gains associated with the Venture’s derivative instruments net of tax expense of $ 1.9 million. See Note 3 - Investments in Unconsolidated Ventures for additional information. See Notes to Consolidated Financial Statements. HHH 2024 FORM 10-K | 64 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements HOWARD HUGHES HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, thousands 2024 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 196,992 $ ( 551,530 ) $ 184,636 Net income (loss) from discontinued operations, net of taxes ( 88,223 ) ( 634,940 ) ( 68,073 ) Net income (loss) from continuing operations 285,215 83,410 252,709 Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: Depreciation 160,638 151,881 137,817 Amortization 19,360 16,960 16,886 Amortization of deferred financing costs 12,396 11,840 10,254 Amortization of intangibles other than in-place leases 120 120 120 Straight-line rent amortization ( 7,012 ) ( 7,464 ) ( 7,597 ) Deferred income taxes 61,529 ( 9,897 ) 55,832 Restricted stock and stock option amortization 16,006 16,394 11,895 Net gain on sale of properties ( 22,907 ) ( 24,162 ) ( 29,687 ) Net gain on sale of unconsolidated ventures — — ( 5,016 ) Loss on sale of MUD receivables 48,651 — — Proceeds from sale of MUD receivables 176,680 — — (Gain) loss on extinguishment of debt 465 97 2,377 Equity in (earnings) losses from unconsolidated ventures, net of distributions and impairment charges 12,436 ( 15,539 ) ( 8,191 ) Provision for doubtful accounts ( 499 ) 8,274 34 Master Planned Community development expenditures ( 427,979 ) ( 403,633 ) ( 396,125 ) Master Planned Community cost of sales 151,177 126,167 111,723 Condominium development expenditures ( 681,998 ) ( 472,666 ) ( 340,793 ) Condominium rights and units cost of sales 565,419 53,156 465,711 Other — 1,319 — Net Changes: Accounts receivable, net 83,784 117,334 82,771 Other assets, net 15,681 30,687 ( 26,326 ) Condominium deposits, net ( 19,065 ) 88,595 21,273 Deferred expenses, net ( 31,123 ) ( 26,874 ) ( 28,112 ) Accounts payable and other liabilities 28,777 38,847 14,437 Cash provided by (used in) operating activities of continuing operations 447,751 ( 215,154 ) 341,992 Cash provided by (used in) operating activities of discontinued operations ( 51,160 ) ( 43,327 ) ( 16,739 ) Cash provided by (used in) operating activities 396,591 ( 258,481 ) 325,253 CASH FLOWS FROM INVESTING ACTIVITIES Property and equipment expenditures ( 2,143 ) ( 7,340 ) ( 2,004 ) Operating property improvements ( 47,949 ) ( 40,211 ) ( 43,193 ) Property development and redevelopment ( 252,953 ) ( 231,038 ) ( 268,413 ) Acquisition of assets ( 18,456 ) ( 5,898 ) — Proceeds from sales of properties, net 48,408 39,543 81,720 Reimbursements under tax increment financings and grants 8,721 1,469 127 Distributions from unconsolidated ventures 6,657 12,995 207,685 Investments in unconsolidated ventures, net ( 3,500 ) — ( 299 ) Net parent investment in discontinued operations ( 169,490 ) ( 115,185 ) ( 225,091 ) Cash provided by (used in) investing activities of continuing operations ( 430,705 ) ( 345,665 ) ( 249,468 ) Cash provided by (used in) investing activities of discontinued operations 129,911 9,522 28,773 Cash provided by (used in) investing activities ( 300,794 ) ( 336,143 ) ( 220,695 ) HHH 2024 FORM 10-K | 65 FINANCIAL STATEMENTS Table of Contents Index to Financial Statements Year Ended December 31, thousands 2024 2023 2022 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from mortgages, notes, and loans payable 761,429 677,441 1,235,897 Principal payments on mortgages, notes, and loans payable ( 807,548 ) ( 147,623 ) ( 1,063,439 ) Repurchases of common shares — — ( 403,863 ) Debt extinguishment costs — — ( 60 ) Special Improvement District bond funds released from (held in) escrow 16,850 11,037 23,148 Deferred financing costs and bond issuance costs, net ( 6,235 ) ( 569 ) ( 18,220 ) Taxes paid on stock options exercised and restricted stock vested ( 2,306 ) ( 2,696 ) ( 3,012 ) Stock options exercised — — 345 Issuance of Teravalis noncontrolling interest — — 31,234 Distribution to noncontrolling interest upon sale of 110 North Wacker — — ( 22,084 ) Sale of preferred stock in Seaport subsidiary 9,850 — — Contributions from Teravalis noncontrolling interest owner 206 219 — Cash provided by (used in) financing activities of continuing operations ( 27,754 ) 537,809 ( 220,054 ) Cash provided by (used in) financing activities of discontinued operations ( 122,597 ) 10,935 ( 2,204 ) Cash provided by (used in) financing activities ( 150,351 ) 548,744 ( 222,258 ) Net change in cash, cash equivalents, and restricted cash ( 54,554 ) ( 45,880 ) ( 117,700 ) Cash, cash equivalents, and restricted cash at beginning of period 1,053,057 1,098,937 1,216,637 Cash, cash equivalents, and restricted cash at end of period 998,503 1,053,057 1,098,937 Less: Cash, cash equivalents, and restricted cash of discontinued operations at end of period — 43,845 66,714 Cash, cash equivalents, and restricted cash of continuing operations at end of period $ 998,503 $ 1,009,212 $ 1,032,223 RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH Cash and cash equivalents $ 596,083 $ 629,714 $ 610,205 Restricted cash 402,420 379,498 422,018 Cash, cash equivalents, and restricted cash of continuing operations at end of period $ 998,503 $ 1,009,212 $ 1,032,223 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION — CONTINUING OPERATIONS Interest paid, net $ 298,364 $ 239,995 $ 205,758 Interest capitalized 151,632 109,510 89,687 Income taxes paid (refunded), net 3,943 10,608 24,974 NON-CASH TRANSACTIONS — CONTINUING OPERATIONS Accrued property improvements, developments, and redevelopments $ ( 13,441 ) $ 909 $ 12,539 Consideration from sale of properties — 5,250 — Special Improvement District bond transfers associated with land sales 18,014 13,883 7,774 Special Improvement District bonds held in third-party escrow 37,990 21,290 — Capitalized stock compensation 3,936 4,669 4,785 Initial recognition of operating lease right-of-use asset 766 — 1,488 Initial recognition of operating lease obligation 766 — 1,621 Issuance of Teravalis noncontrolling interest — — 33,810 MPC land contributed to unconsolidated venture — — 21,450 NON-CASH TRANSACTIONS — DISCONTINUED OPERATIONS Distribution of Seaport Entertainment Group Inc. to stockholders $ 361,210 $ — $ — See Notes to Consolidated Financial Statements. HHH 2024 FORM 10-K | 66 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements 1. Presentation of Financial Statements and Significant Accounting Policies General On August 11, 2023, Howard Hughes Holdings Inc. (HHH or the Company), a new holding company, replaced The Howard Hughes Corporation (HHC) as the public company trading on the New York Stock Exchange. Existing shares of common stock of HHC were automatically converted, on a one -for-one basis, into shares of common stock of HHH, with the same designations, rights, powers, and preferences, and the same qualifications, limitations, and restrictions, as the shares of HHC common stock immediately prior to the reorganization. HHH became the successor issuer to HHC pursuant to Rule 12g-3 (a) under the Exchange Act and replaced HHC as the public company trading on the New York Stock Exchange under the ticker symbol "HHH." References to HHH, the Company, we, us, and our refer to Howard Hughes Holdings Inc. and its consolidated subsidiaries, which includes The Howard Hughes Corporation, unless otherwise specifically stated. References to HHC refer to The Howard Hughes Corporation and its consolidated subsidiaries unless otherwise specifically stated. Together with its subsidiaries, HHH develops master planned communities (MPC), invests in other strategic real estate opportunities in the form of entitled and unentitled land and other development rights (Strategic Developments) and owns, manages, and operates real estate assets currently generating revenues (Operating Assets), which may be redeveloped or repositioned from time to time. 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 HHH’s 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”. Principles of Consolidation and Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The consolidated financial statements include the accounts of Howard Hughes Holdings Inc. and its subsidiaries after elimination of intercompany balances and transactions. The Company also consolidates certain variable interest entities (VIEs) in accordance with Financial Accounting Standards Board’s Accounting Standards Codification (ASC) 810 Consolidation . The outside equity interests in certain entities controlled by the Company are reflected in the Consolidated Financial Statements as noncontrolling interests. As the spinoff of SEG represented a strategic shift in the Company’s operations, the results of SEG are presented as discontinued operations in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows and, as such, have been excluded from both continuing operations and segment results for all periods presented. Additionally, the related SEG assets and liabilities are classified as discontinued operations in the Consolidated Balance Sheets. The Consolidated Statements of Comprehensive Income (Loss), and Equity are presented on a consolidated basis for both continuing operations and discontinued operations. The disclosures presented in the notes to the Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted. See Note 2 - Discontinued Operations for additional information. Certain amounts in the Consolidated Statements of Cash Flows for the year ended December 31, 2022, have been reclassified to conform to the current balance sheet presentation. Specifically, the Company reclassified the Notes receivable, net from the Accounts receivable, net to Other assets, net within cash flows from operating activities. Management has evaluated for disclosure or recognition all material events occurring subsequent to the date of the Consolidated Financial Statements up to the date and time this Annual Report was filed. HHH 2024 FORM 10-K | 67 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Variable Interest Entities The Company has interests in various legal entities that represent a variable interest entity. A VIE is an entity: (a) that has total equity at risk that is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other entities; (b) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual return, or both (i.e., lack the characteristics of a controlling financial interest); or (c) where the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. The Company determines if a legal entity is a VIE by performing a qualitative analysis that requires certain subjective decisions, taking into consideration the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights of the parties and the purpose of the arrangement. Upon the occurrence of certain reconsideration events, the Company reassesses its initial determination as to whether the entity is a VIE. The Company also performs a qualitative assessment of each VIE to determine if it is the primary beneficiary. The Company is the primary beneficiary and would consolidate the VIE if it has a controlling financial interest where it has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. This assessment requires certain subjective decisions, taking into consideration the contractual agreements that define the ownership structure, the design of the entity, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties. Management’s assessment of whether the Company is the primary beneficiary of a VIE is continuously performed. Upon initial consolidation of a VIE, the Company records the assets, liabilities, and noncontrolling interests at fair value and recognizes a gain or loss for the difference between (i) the fair value of the consideration paid, the fair value of noncontrolling interests and the reported amount of any previously held interests and (ii) the net amount of the fair value of the assets and liabilities. If the Company determines it is no longer the primary beneficiary of a VIE, it will deconsolidate the entity and measure the initial cost basis for any retained interests that are recorded upon the deconsolidation at fair value. The Company will recognize a gain or loss for the difference between the fair value and the previous carrying amount of its investment in the VIE. Consolidated Variable Interest Entity At December 31, 2024, and December 31, 2023, the Company owned an 88.0 % interest in Teravalis, the Company’s newest large-scale master planned community in the West Valley of Phoenix, Arizona, and a third party owned the remaining 12.0 %. Teravalis was determined to be a VIE, and as the Company has the power to direct the activities that most significantly impact its economic performance, the Company is considered the primary beneficiary and consolidates Teravalis. Under the terms of the LLC agreement, cash distributions and the recognition of income-producing activities will be pro rata based on economic ownership interest. As of December 31, 2024, the Company’s Consolidated Balance Sheets included $ 542.1 million of Master Planned Community assets, $ 0.5 million of Accounts payable and other liabilities, and $ 65.1 million of Noncontrolling interest related to Teravalis. As of December 31, 2023, the Company’s Consolidated Balance Sheets included $ 541.6 million of Master Planned Community assets, $ 0.6 million of Accounts payable and other liabilities, and $ 65.0 million of Noncontrolling interest related to Teravalis. Investments in Unconsolidated Ventures The Company’s investments in unconsolidated ventures are accounted for under the equity method to the extent that, based on contractual rights associated with the investments, the Company can exert significant influence over a venture’s operations. Under the equity method, the Company’s investment in the venture is recorded at cost and is subsequently adjusted to recognize the Company’s allocable share of the earnings or losses of the venture. Dividends and distributions received by the Company are recognized as a reduction in the carrying amount of the investment. Generally, joint venture operating agreements provide that assets, liabilities, funding obligations, profits and losses, and cash flows are shared in accordance with ownership percentages. For certain equity method investments, various provisions in the joint venture operating agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses, and preferred returns may result in the Company’s economic interest differing from its stated ownership or if applicable, the Company’s final profit-sharing interest after receipt of any preferred returns based on the venture’s distribution priorities. For these investments, the Company recognizes income or loss based on the joint venture’s distribution priorities, which could fluctuate over time and may be different from its stated ownership or final profit-sharing percentage. HHH 2024 FORM 10-K | 68 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The Company periodically assesses the appropriateness of the carrying amount of its equity method investments, as events or changes in circumstance may indicate that a decrease in value has occurred which is other‑than‑temporary. In addition to the property‑specific impairment analysis performed on the underlying assets of the investment, the Company also considers the ownership, distribution preferences, limitations and rights to sell and repurchase its ownership interests. If a decrease in value of an investment is deemed to be other‑than‑temporary, the investment is reduced to its estimated fair value, and an impairment-related loss is recognized in the Consolidated Statements of Operations as a component of Equity in earnings (losses) from investments in unconsolidated ventures. For investments in ventures where the Company has virtually no influence over operations and the investments do not have a readily determinable fair value, the Company has elected the measurement alternative to carry the securities at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the issuer. Equity securities not accounted for under the equity method, or where the measurement alternative has not been elected, are required to be reported at fair value with unrealized gains and losses reported in the Consolidated Statements of Comprehensive Income (Loss) as Net unrealized gains (losses) on instruments measured at fair value through earnings. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The estimates and assumptions include, but are not limited to, capitalization of development costs, provision for income taxes, recoverable amounts of receivables and deferred tax assets, initial valuations of tangible and intangible assets acquired, and the related useful lives of assets upon which depreciation and amortization is based. Estimates and assumptions have also been made with respect to future revenues and costs, and the fair value of warrants, debt, and options granted. MPC cost of sales estimates are highly judgmental as they are sensitive to cost escalation, sales price escalation, and lot absorption, which are subject to judgment and affected by expectations about future market or economic conditions. Additionally, the future cash flow estimates and fair values used for impairment analysis are highly judgmental and reflect current and projected trends in rental, occupancy, pricing, development costs, sales pace, capitalization rates, selling costs, and estimated holding periods for the applicable assets. Both MPC cost of sale estimates and estimates used in impairment analysis are affected by expectations about future market or economic conditions. Actual results could differ from these and other estimates. Segments In 2024, the Company completed the spinoff of Seaport Entertainment Group Inc. which included all assets in the previously reported Seaport segment and the Las Vegas Aviators and Las Vegas Ballpark previously included in the Operating Assets segment. These assets are now disclosed as discontinued operations in the current and prior periods. See Note 2 - Discontinued Operations for additional information on the spinoff transaction. The Company operates in three business segments: (i) Operating Assets; (ii) MPC; and (iii) Strategic Developments. Segment information is prepared on the same basis that management reviews information for operational decision-making purposes. Management evaluates the performance of each of HHH’s real estate assets or investments individually and aggregates such properties into segments based on their economic characteristics and types of revenue streams. Net Investment in Real Estate Master Planned Community Assets, Buildings and Equipment, and Land Real estate assets are stated at cost less any provisions for impairments and depreciation as applicable. Expenditures for significant improvements to the Company’s assets are capitalized. Tenant improvements relating to the Company’s operating assets are capitalized and depreciated over the shorter of their economic lives or the lease term. Maintenance and repair costs are charged to expense when incurred. Depreciation The Company periodically reviews the estimated useful lives of properties. Depreciation or amortization expense is computed using the straight‑line method based upon the following estimated useful lives: Asset Type Years Balance Sheet Location Buildings and improvements 7 - 40 Buildings and Equipment Equipment and fixtures 5 - 20 Buildings and Equipment Computer hardware and vehicles 3 - 5 Buildings and Equipment Tenant improvements Related lease term Buildings and Equipment Leasing costs Related lease term Other assets, net HHH 2024 FORM 10-K | 69 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements From time to time, the Company may reassess the development strategies for certain buildings and improvements which results in changes to the Company’s estimate of their remaining useful lives. The Company did not recognize additional depreciation expense of significance for the years ended December 31, 2024, 2023, and 2022. Developments Development costs, which primarily include direct costs related to placing the asset in service associated with specific development properties, are capitalized as part of the property being developed. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized before they are placed into service. Such costs include planning, engineering, design, direct material, labor, and subcontract costs. Real estate taxes, utilities, direct legal and professional fees related to the sale of a specific unit, interest, insurance costs, and certain employee costs incurred during construction periods are also capitalized. Capitalization commences when the development activities begin and ceases when a project is completed, put on hold, or at the date that the Company decides not to move forward with a project. Capitalized costs related to a project where HHH has determined not to move forward are expensed if they are not deemed recoverable. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period. Demolition costs associated with redevelopments are expensed as incurred unless the demolition was included in the Company’s development plans and imminent as of the acquisition date of an asset. Once construction of operating properties is complete, the assets are placed into service, and capitalized costs are reclassed to Buildings and equipment and are depreciated in accordance with the Company’s policy. Once construction of condominiums is complete, the assets are reflected as condominium inventory in Other assets, net until the sale of each condominium unit is closed and the related cost is realized in Condominium rights and units cost of sales. In the event that management no longer has the ability or intent to complete a development, the costs previously capitalized are evaluated for impairment. Developments consist of the following categories as of December 31: thousands 2024 2023 Development costs $ 1,190,746 $ 982,368 Land and improvements 150,283 187,203 Total Developments $ 1,341,029 $ 1,169,571 Acquisitions of Properties The Company accounts for the acquisition of real estate properties in accordance with ASC 805 Business Combinations . This methodology requires that assets acquired and liabilities assumed be recorded at their fair values on the date of acquisition for business combinations and at relative fair values for asset acquisitions. Acquisition costs related to the acquisition of a business are expensed as incurred. Costs directly related to asset acquisitions are considered additions to the purchase price and increase the cost basis of such assets. The fair value of tangible assets of an acquired property (which includes land, buildings and improvements) is determined by valuing the property as if it were vacant, and the as-if-vacant value is then allocated to land, buildings and improvements based on management’s determination of the fair value of these assets. The as-if-vacant values are derived from several sources which incorporate significant unobservable inputs that are classified as Level 3 inputs in the fair value hierarchy and primarily include a discounted cash flow analysis using discount and capitalization rates based on recent comparable market transactions, where available. The fair value of acquired intangible assets consisting of in-place, above-market, and below-market leases is recorded based on a variety of considerations, some of which incorporate significant unobservable inputs that are classified as Level 3 inputs in the fair value hierarchy. In-place lease considerations include, but are not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases (i.e., the market cost to execute a lease, including leasing commissions and tenant improvements); (2) the value associated with lost revenue related to tenant reimbursable operating costs incurred during the assumed lease-up period (i.e., real estate taxes, insurance, and certain other operating expenses); and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Above-market and below-market leases are valued at the present value, using a discount rate that reflects the risks associated with the leases acquired, of the difference between (1) the contractual amounts to be paid pursuant to the in-place lease; and (2) management’s estimate of current market lease rates, measured over the remaining non-cancelable lease term, including any below-market renewal option periods. HHH 2024 FORM 10-K | 70 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Impairment HHH reviews its long-lived assets (including those held by its unconsolidated ventures) for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair value. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future economic conditions, such as occupancy, rental rates, capital requirements, and sales values that could differ materially from actual results in future periods. If impairment indicators exist and it is expected that undiscounted cash flows generated by the asset are less than its carrying amount, an impairment provision is recorded to write down the carrying amount of the asset to its fair value. Impairment indicators for HHH’s assets or projects within MPCs are assessed separately and include, but are not limited to, significant decreases in sales pace or average selling prices, significant increases in expected land development and construction costs or cancellation rates, and projected losses on expected future sales. MPC assets have extended life cycles that may last 20 to 40 years, or longer, and have few long‑term contractual cash flows. Further, MPC assets generally have minimal to no residual values because of their liquidating characteristics. MPC development periods often occur through several economic cycles. Subjective factors such as the expected timing of property development and sales, optimal development density, and sales strategy impact the timing and amount of expected future cash flows and fair value. Impairment indicators for Operating Assets are assessed for each property and include, but are not limited to, significant decreases in net operating income, significant decreases in occupancy, ongoing low occupancy, and significant net operating losses. Impairment indicators for assets in the Strategic Developments are assessed by project and include, but are not limited to, significant changes in projected completion dates, revenues or cash flows, development costs, market factors, significant decreases in comparable property sale prices, and feasibility. The cash flow estimates used for determining recoverability and estimating fair value are inherently judgmental and reflect current and projected trends in rental rates, occupancy, pricing, development costs, sales pace, capitalization rates, and estimated holding periods for the applicable assets. Although the estimated fair value of certain assets may be exceeded by the carrying amount, a real estate asset is only considered to be impaired when its carrying amount is not expected to be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is necessary, the excess of the carrying amount of the asset over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset or, for MPCs, is expensed as a cost of sales when land is sold. Assets that have been impaired will in the future have lower depreciation and cost of sale expenses. The impairment will have no impact on cash flows. Cash and Cash Equivalents Cash and cash equivalents consist of highly-liquid investments with maturities at date of purchase of three months or less and include registered money market mutual funds which are invested in United States Treasury bills that are valued at the net asset value of the underlying shares in the funds as of the close of business at the end of each period as well as deposits with major banks throughout the United States. Such deposits are in excess of FDIC limits and are placed with high-quality institutions in order to minimize concentration of counterparty credit risk. Restricted Cash Restricted cash reflects amounts segregated in escrow accounts in the name of the Company, primarily related to escrowed condominium deposits from buyers and other amounts related to taxes, insurance, and legally restricted security deposits and leasing costs. Accounts Receivable, net Accounts receivable, net includes straight-line rent receivables, tenant receivables, and other receivables. On a quarterly basis, management reviews the lease-related receivables, including straight-line rent receivables and tenant receivables, for collectability. This analysis includes a review of past due accounts and considers factors such as the credit quality of tenants, current economic conditions, and changes in customer payment trends. When full collection of a lease-related receivable or future lease payment is deemed to be not probable, a reserve for the receivable balance is charged against rental revenue and future rental revenue is recognized on a cash basis. The Company also records reserves for estimated losses if the estimated loss amount is probable and can be reasonably estimated. Other receivables are primarily related to short-term trade receivables. The Company is exposed to credit losses through the sale of goods and services to customers and assesses its exposure to credit loss related to these receivables on a quarterly basis based on historical collection experience and future expectations by portfolio. The Company records an allowance for credit losses if the estimated loss amount is probable. HHH 2024 FORM 10-K | 71 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The following table represents the components of Accounts Receivable, net of amounts considered uncollectible, in the accompanying Consolidated Balance Sheets as of December 31: thousands 2024 2023 Straight-line rent receivables $ 91,050 $ 84,316 Tenant receivables 1,638 5,493 Other receivables 12,497 11,564 Accounts receivable, net (a) $ 105,185 $ 101,373 (a) As of December 31, 2024, the total reserve balance for amounts considered uncollectible was $ 8.2 million, composed of $ 8.1 million attributable to lease-related receivables and $ 0.1 million attributable to the allowance for credit losses related to other accounts receivable. As of December 31, 2023, the total reserve balance was $ 13.6 million, all of which was attributable to lease-related receivables. The following table summarizes the impacts of the collectability reserves in the accompanying Consolidated Statements of Operations for the years ended December 31: thousands Statements of Operations Location 2024 2023 2022 Rental revenue $ ( 860 ) $ 10,984 $ ( 410 ) Provision for (recovery of) doubtful accounts 504 ( 2,762 ) 629 Total (income) expense impact $ ( 356 ) $ 8,222 $ 219 Municipal Utility District Receivables, net In Houston, Texas, certain development costs are reimbursable through the creation of a Municipal Utility District, also known as Water Control and Improvement Districts, which are separate political subdivisions authorized by Article 16, Section 59 of the Texas Constitution and governed by the Texas Commission on Environmental Quality (TCEQ). MUDs are formed to provide municipal water, wastewater, drainage services, recreational facilities, and roads to those areas where they are currently unavailable through the regular city services. Typically, the developer advances funds for the creation of the facilities, which must be designed, bid, and constructed in accordance with the City of Houston’s and TCEQ requirements. The MUD Board of Directors authorizes and approves all MUD development contracts, and MUD bond sale proceeds are used to reimburse the developer for its construction costs, including interest. At the date the expenditures occur, the Company determines the costs it believes will be eligible for reimbursement and recognizes that as MUD receivables. These expenditures are subject to review by the MUD engineers for eligibility in accordance with the development contracts as part of the process for reimbursement. MUD receivables are pledged as security to creditors under the debt facilities relating to Bridgeland. Sale of MUD Receivables In September 2024, the Company entered into a sales transaction of MUD receivables, in which it transferred the reimbursement rights to $ 186.0 million of existing MUD receivables and $ 9.3 million of related accrued interest, as well as $ 40.0 million of anticipated future MUD receivables, for total cash consideration of $ 176.7 million. Using the relative fair value method, $ 146.7 million of the cash consideration was allocated to the sale of the existing MUD receivables and $ 30.0 million was allocated to the sale of the anticipated future MUD receivables. As a result of the sale, the Company derecognized the existing MUD receivables and related accrued interest, resulting in a loss on sale of $ 48.7 million in the Consolidated Statements of Operations. The Company has recorded a liability related to the allocated amount of anticipated future MUD receivables, which is accounted for using the amortized cost method and is included in Accounts payable and other liabilities on the Consolidated Balance Sheets. The above amounts represent the final impact of the MUD receivable sale for the year ended December 31, 2024. Due to an adjustment to the allocation between projects, this differs slightly from what was initially reported in the third quarter of 2024. Other Assets, net The major components of Other assets, net include security, escrow, and other deposits; Special Improvement District (SID) receivables; in-place leases; intangibles; Tax increment financing (TIF) receivables; prepaid expenses related to the Company’s properties; condominium inventory; and various other assets. SID receivables are amounts due from SID bonds related to the Company’s Summerlin MPC. Proceeds from SID bonds are held in escrow by a third-party and are used to reimburse the Company for a portion of the development costs incurred in Summerlin. See Note 8 - Mortgages, Notes, and Loans Payable, Net for additional information on the SID bonds. HHH 2024 FORM 10-K | 72 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The Company’s intangibles include in-place lease assets and above-market lease assets where HHH is the lessor, as well as internally developed software and trademark and trade name intangibles related to MPCs. The Company amortizes finite-lived intangible assets less any residual value, if applicable, on a straight-line basis over the term of the related lease or the estimated useful life of the asset. TIF receivables are amounts which the Company has submitted for reimbursement from Howard County in Maryland or from the state of Maryland, in conjunction with development costs expended on key roads and infrastructure work within the Merriweather District of Downtown Columbia specified per the terms of the county’s TIF legislation, Special Obligation Bonds issued in October 2017, and Grant Disbursement Agreement executed in April 2023. Notes receivable, net includes non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, they are recorded at amortized cost less any provision for impairment as required under ASC 326 Financial Instruments - Credit Losses . Condominium inventory includes available for sale units at HHH’s completed condominium towers and is stated at the lower of cost or fair value less selling costs. Condominium inventory includes land acquisition and development costs, construction costs, and interest and real estate taxes that are capitalized during the development period. HHH evaluates condominium inventory for impairment when potential indicators exist. An impairment loss is recognized if the carrying amount of condominium inventory exceeds the fair value less selling costs, which is based on comparable sales in the normal course of business under existing and anticipated market conditions. Financial Instruments - Credit Losses The Company is exposed to credit losses through the sale of goods and services to the Company’s customers. Receivables held by the Company primarily relate to short-term trade receivables and financing receivables, which include MUD receivables, SID bonds, TIF receivables, net investments in lease receivables, and notes receivable. The Company assesses its exposure to credit loss based on historical collection experience and future expectations by portfolio segment. Historical collection experience is evaluated on a quarterly basis by the Company. The amortized cost basis of financing receivables, consisting primarily of MUD and SID receivables, totaled $ 569.1 million as of December 31, 2024, and $ 632.8 million as of December 31, 2023. The MUD receivable balance includes accrued interest of $ 44.0 million at December 31, 2024, and $ 35.8 million at December 31, 2023. The allowance for credit losses for financing receivables was not material as of December 31, 2024 and 2023, and there was no material activity related to the allowance for credit losses for the years ended December 31, 2024, 2023, and 2022. Financing receivables are considered to be past due once they are 30 days contractually past due under the terms of the agreement. The Company currently does not have significant financing receivables that are past due or on nonaccrual status. There have been no significant write-offs or recoveries of amounts previously written-off during the current period for financing receivables. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. The Company periodically assesses the realizability of its deferred tax assets. If the Company concludes that it is more likely than not that some of the deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including expectations of future taxable income, carryforward periods available to the Company for tax reporting purposes, various income tax strategies, and other relevant factors. In addition, interest and penalties related to uncertain tax positions, if necessary, are recognized in income tax expense. In the Company’s MPCs, gains with respect to land sales, whether for commercial use or for single-family residences, are reported for tax purposes either on the modified accrual method or on the percentage-of-completion method. Under the percentage-of-completion method, a gain is recognized for tax purposes as costs are incurred in satisfaction of contractual obligations. Deferred Expenses, net Deferred expenses consist principally of leasing costs. Deferred leasing costs are amortized to expense using the straight‑line method over the related lease term. Deferred expenses are shown net of accumulated amortization of $ 69.1 million as of December 31, 2024, and $ 59.6 million as of December 31, 2023. HHH 2024 FORM 10-K | 73 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Marketing and Advertising Each of the Company’s segments incur various marketing and advertising costs as part of their development, branding, leasing, or sales initiatives. These costs include special events, broadcasts, direct mail and online digital and social media programs, and they are expensed as incurred. Fair Value of Financial Instruments The carrying values of cash and cash equivalents, escrows, receivables, accounts payable, accrued expenses, and other assets and liabilities are reasonable estimates of their fair values because of the short maturities of these instruments. Derivative Instruments and Hedging Activities Derivative instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges. These judgments determine if the changes in fair value of the derivative instruments are reported as a component of Net Income in the Consolidated Statements of Operations or as a component of Comprehensive Income in the Equity on the Consolidated Balance Sheets. While management believes its judgments are reasonable, a change in a derivative’s effectiveness as a hedge could materially affect expenses, net income, and equity. The Company accounts for the changes in the fair value of an effective hedge in other comprehensive income (loss) and subsequently reclassifies the balance from other comprehensive income (loss) to earnings over the term that the hedged transaction affects earnings. The Company accounts for the changes in the fair value of an ineffective hedge directly in earnings. Stock-Based Compensation The Company maintains two equity incentive plans, with outstanding stock-based compensation awards (Awards) which include stock options and restricted stock awards (RSAs). In 2023, pursuant to the holding company reorganization discussed above, each outstanding share of HHC’s common stock was automatically converted into one share of HHH common stock. HHH assumed all obligations under the equity incentive plans. All stock options and restricted stock outstanding will be settled in HHH stock. In 2024, at the time of the spinoff of SEG, all of these Awards were modified to adjust the number of HHH shares by certain ratios and/or allocation factors. The stock options were modified into HHH stock options and SEG stock options based on the applicable ratios and/or allocation factors. In addition, the growth targets for the RSAs based on Net Asset Value and related performance conditions were revised to carve out the impact of the spinoff. Also, the market conditions related to Total Shareholder Return (TSR) targets were evaluated as of the spinoff date for the TSR-based RSAs and then modified to time-based, service conditions only. See Note 12 - Stock-Based Compensation Plans for additional information. The Company applies the provisions of ASC 718 Stock Compensation which requires all share‑based payments to be recognized in the Consolidated Statements of Operations based on their fair values. The fair value of stock option awards is determined using the Black-Scholes option-pricing model. Restricted stock awards are valued using the market price of the Company’s common stock on the grant date. For restricted stock awards with market conditions or performance conditions, the award is valued using a Monte Carlo simulation. The Company records compensation cost for stock-based compensation awards over the requisite service period. If the requisite service period is satisfied, compensation cost is not adjusted unless the award contains a performance condition. If an award contains a performance condition, expense is recognized only for those shares that ultimately vest using the per-share fair value measured at the grant date. The Company recognizes forfeitures as they occur. Revenue Recognition and Related Matters Condominium Rights and Unit Sales Revenue from the sale of an individual unit in a condominium project is recognized at a point in time (i.e., the closing) when HHH satisfies the single performance obligation to construct a condominium project and transfer control of a completed unit to a buyer. The transaction price, which is the amount of consideration the Company receives upon delivery of the completed condominium unit to the buyer, is allocated to this single obligation and is received at closing less any amounts previously paid on deposit. The Company receives cash payments in the form of escrowed condominium deposits from customers who have contracted to purchase a condominium unit based on billing schedules established in HHH’s condominium purchase agreement contracts. The amounts are recorded in Restricted cash until released from escrow in accordance with the escrow agreement and on approval of HHH’s lender to fund construction costs of a project. A corresponding condominium contract deposit liability is established at the date of receipt, representing a portion of HHH’s unsatisfied performance obligation at each reporting date. HHH 2024 FORM 10-K | 74 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements These deposits, along with the balance of the contract value, are recognized at closing upon satisfaction of HHH’s performance obligation and transfer of title to the buyer. Real estate project costs directly associated with a condominium project, which are HHH’s costs to fulfill contracts with condominium buyers, are capitalized while all other costs are expensed as incurred. Total estimated project costs include direct costs such as the carrying value of the land, site planning, architectural, construction, and financing costs, as well as indirect cost allocations. The allocations include costs which clearly relate to the specific project, including certain infrastructure and amenity costs which benefit the project as well as others, and are based upon the relative sales value of the units. Furthermore, incremental costs incurred to obtain a contract to sell condominium units are evaluated for capitalization in accordance with ASC 340-40 Components, Costs & Considerations , with incremental costs to fulfill a contract only being capitalized if the costs relate directly to a specifically identified contract, enhance resources to satisfy performance obligations in the future, and are expected to be recovered. Master Planned Communities Land Sales Revenues from land sales are recognized at a point in time when the land sale closing process is complete. The transaction price generally has both fixed and variable components, with the fixed price stipulated in the contract and representative of a single performance obligation. See Builder Price Participation (BPP) below for a discussion of the variable component. The fixed transaction price, which is the amount of consideration received in full upon transfer of the land title to the buyer, is allocated to this single obligation and is received at closing of the land sale less any amounts previously paid on deposit. The Company receives cash payments in the form of land purchase deposits from homebuilders or other commercial buyers who have contracted to purchase land within the Company’s MPCs, and HHH holds any escrowed deposits in Restricted cash or Cash and cash equivalents based on the terms of the contract. In situations where the Company has completed the closing of a developed land parcel or superpad and consideration is paid in full, but a portion of HHH’s performance obligation relating to the enhancement of the land is still unsatisfied, revenue related to HHH’s obligation is recognized over time. The Company recognizes only the portion of the improved land sale where the improvements are fully satisfied based on a cost input method. The aggregate amount of the transaction price allocated to the unsatisfied obligation is recorded as deferred land sales and is presented in Accounts payable and other liabilities. The Company measures HHH’s unsatisfied obligation based on the costs remaining relative to the total cost at the date of closing. When residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs benefiting the property sold. In accordance with ASC 970-360-30-1 Real Estate Project Costs , when land is sold, costs are allocated to each sold superpad or lot based upon the relative sales value. For purposes of allocating development costs, estimates of future revenues and development costs are re-evaluated throughout the year, with adjustments being allocated prospectively to the remaining parcels available for sale. For certain parcels of land, including acquired parcels that the Company does not intend to develop or for which development was complete at the date of acquisition, the specific identification method is used to determine the cost of sales. Builder Price Participation BPP is the variable component of the transaction price for certain Master Planned Communities land sales. BPP is earned when a developer that acquired land from HHH develops and sells a home to an end user at a price higher than a predetermined breakpoint. The excess over the breakpoint is shared between HHH and the developer at the time of closing on the sale of the home based on a previously agreed-upon percentage. Generally, BPP is constrained, and accordingly, the Company does not recognize an estimate of variable consideration. The Company’s conclusion is based on the following factors: – BPP is highly susceptible to factors outside HHH’s influence such as unemployment and interest rates – the time between the sale of land to a homebuilder and closing on a completed home can take up to three years – there is significant variability in home pricing from period to period The Company evaluates contracts with homebuilders with respect to BPP at each reporting period to determine whether a change in facts and circumstances has eliminated the constraint and will record an estimate of BPP revenue, if applicable. For Condominium rights and unit sales, Master planned communities land sales, and Builder price participation the Company elected the practical expedient to not adjust promised amount of consideration for the effects of a significant financing component when the expected period between transfer of the promised asset and payment is one year or less. Rental Revenues Revenue associated with the Company’s operating assets includes minimum rent, percentage rent in lieu of fixed minimum rent, tenant recoveries, and overage rent. Minimum rent revenues are recognized on a straight‑line basis over the terms of the related leases when collectability is reasonably assured and the tenant has taken possession of, or controls, the physical use of the leased asset. Percentage rent in lieu of fixed minimum rent is recognized as sales are reported from tenants. Minimum rent revenues also include amortization related to above-market and below‑market tenant leases on acquired properties. HHH 2024 FORM 10-K | 75 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Recoveries from tenants are stipulated in the leases, are generally computed based upon a formula related to real estate taxes, insurance, and other real estate operating expenses, and are generally recognized as revenues in the period the related costs are incurred. If the lease provides for tenant improvements, the Company determines whether the tenant improvements are owned by the tenant or by HHH. When HHH is the owner of the tenant improvements, rental revenue begins when the improvements are substantially complete. When the tenant is the owner of the tenant improvements, any tenant allowance funded by the Company is treated as a lease incentive and amortized as an adjustment to rental revenue over the lease term. Other Land, Rental, and Property Revenues Other land revenues recognized over time include ground maintenance revenue, and homeowner association management fee revenue. These revenues are recognized over time, as time elapses. The amount of consideration and the duration are fixed, as stipulated in the related agreements, and represent a single performance obligation. Other land revenues also include transfer and advertising fees on the secondary sales of homes in MPCs, forfeitures of earnest money deposits by buyers of HHH’s condominium units, lease termination fees, and other miscellaneous items. These items are recognized at a point in time when the real estate closing process is complete or HHH has a legal right to the respective fee or deposit. Other rental revenues also includes overage rent which is recognized on an accrual basis once tenant sales exceed contractual thresholds contained in the lease and is calculated by multiplying the tenant sales in excess of the minimum amount by a percentage defined in the lease. Noncontrolling Interests As of December 31, 2024, and December 31, 2023, noncontrolling interests related to the 12 % noncontrolling interest in Teravalis and the noncontrolling interest in the Ward Village Homeowners’ Associations (HOAs). All revenues and expenses related to the HOAs are attributable to noncontrolling interests and do not impact net income attributable to common stockholders. Recently Issued Accounting Standards The following is a summary of recently issued and other notable accounting pronouncements which relate to the Company’s business. Accounting Standards Update 2024-03, Disaggregation of Income Statement Expenses This update requires the disclosure of additional disaggregated information in the notes to financial statements for certain categories of costs and expenses that are included on the face of the statement of operations. The new disclosure requirements are effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its financial statement presentation and disclosures. 2. Discontinued Operations On July 31, 2024, the spinoff of SEG was completed. The separation of SEG refined the identity of HHH as a pure-play real estate company focused solely on its core businesses and development of its master planned communities. The spinoff included all assets previously included in the Company’s Seaport segment and the Las Vegas Aviators and the Las Vegas Ballpark, which were previously included in the Operating Assets segment. As the spinoff of SEG represents a strategic shift in the Company’s operations, the results of SEG are included as discontinued operations for all periods presented. HHH 2024 FORM 10-K | 76 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The following table presents key components of Net income (loss) from discontinued operations, net of income taxes, for the years ended December 31: thousands 2024 2023 2022 Total revenues $ 60,846 $ 115,349 $ 118,998 Total operating expenses 88,381 133,767 128,775 General and administrative (a) 32,535 4,522 — Depreciation and amortization 16,717 47,384 45,756 Other — 81 59 Provision for impairment — ( 672,492 ) — Other income (loss), net ( 67 ) ( 1,539 ) 488 Interest income (expense), net ( 7,414 ) 874 1,607 Gain (loss) on extinguishment of debt ( 1,563 ) ( 47 ) — Equity in earnings (losses) from unconsolidated ventures ( 18,960 ) ( 81,484 ) ( 36,272 ) Net income (loss) from discontinued operations before income taxes ( 104,791 ) ( 825,093 ) ( 89,769 ) Income tax expense (benefit) ( 16,568 ) ( 190,153 ) ( 21,696 ) Net income (loss) from discontinued operations, net of taxes $ ( 88,223 ) $ ( 634,940 ) $ ( 68,073 ) (a) General and administrative expenses relate to costs incurred to complete the spinoff of Seaport Entertainment. The following table summarizes the major classes of assets and liabilities that are classified as discontinued operations on the Consolidated Balance Sheets. thousands December 31, 2023 Net investment in real estate $ 437,463 Investments in unconsolidated ventures 37,459 Cash and cash equivalents 1,834 Restricted cash 42,011 Accounts receivable, net 13,672 Deferred expenses, net 4,379 Operating lease right-of-use assets 39,434 Other assets, net 39,020 Assets of discontinued operations $ 615,272 Mortgages, notes, and loans payable, net $ 155,628 Operating lease obligations 46,222 Deferred tax liabilities, net 3,542 Accounts payable and other liabilities 21,773 Liabilities of discontinued operations $ 227,165 Continuing Involvement with SEG In connection with the separation, HHH entered into several agreements with Seaport Entertainment that govern the execution of the transaction and the relationship of the parties following the spinoff including a Separation and Distribution Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement, Guaranty Agreement, and various other agreements. Seaport Entertainment Guaranty Following the execution of the spinoff, HHH continues to provide a full backstop guaranty for SEG’s outstanding mortgage related to its 250 Water Street property. See Note 11 - Commitments and Contingencies for additional information. HHH 2024 FORM 10-K | 77 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements 3. Investments in Unconsolidated Ventures In the normal course of business, the Company enters into partnerships and ventures with an emphasis on investments associated with the development and operation of real estate assets. As of December 31, 2024, the Company does not consolidate the investments below as it does not have a controlling financial interest in these ventures. As such, the Company primarily reports its interests in accordance with the equity method. As of December 31, 2024, these ventures had debt totaling $ 354.3 million, with the Company’s 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. See Note 11 - Commitments and Contingencies for additional information related to the Company’s collateral maintenance obligation. Investments in unconsolidated ventures consist of the following: Ownership Interest (a) Carrying Value Share of Earnings/Dividends December 31, December 31, December 31, December 31, Year Ended December 31, thousands except percentages 2024 2023 2024 2023 2024 2023 2022 Equity Method Investments Operating Assets 110 North Wacker — % — % $ — $ — $ — $ — $ 4,910 The Metropolitan (b) 50.0 % 50.0 % — — 667 33 4,556 Stewart Title of Montgomery County, TX 50.0 % 50.0 % 4,061 3,785 576 168 1,294 Woodlands Sarofim 20.0 % 20.0 % 2,975 2,990 ( 15 ) ( 40 ) ( 13 ) TEN.m.flats (c) 50.0 % 50.0 % — — 1,349 ( 225 ) 6,878 Master Planned Communities The Summit (d) 50.0 % 50.0 % 37,409 59,112 ( 16,807 ) 24,787 ( 30 ) Floreo (e) 50.0 % 50.0 % 60,788 55,880 4,908 ( 2,121 ) ( 1,377 ) Strategic Developments West End Alexandria (d) 58.3 % 58.3 % 60,513 56,757 256 139 70 Other 50.0 % 50.0 % 41 496 ( 5 ) 2 797 165,787 179,020 ( 9,071 ) 22,743 17,085 Other investments (f) 3,779 3,779 3,242 3,033 4,638 Investments in unconsolidated ventures $ 169,566 $ 182,799 $ ( 5,829 ) $ 25,776 $ 21,723 (a) Ownership interests presented reflect the Company’s stated ownership interest or if applicable, the Company’s final profit-sharing interest after receipt of any preferred returns based on the venture’s distribution priorities. (b) The Metropolitan was in a deficit position of $ 12.2 million at December 31, 2024, and $ 10.9 million at December 31, 2023, and presented in Accounts payable and other liabilities in the Consolidated Balance Sheets. (c) TEN.m.flats was in a deficit position of $ 5.8 million at December 31, 2024, and $ 4.7 million at December 31, 2023, and presented in Accounts payable and other liabilities in the Consolidated Balance Sheets. (d) For these equity method investments, various provisions in the venture operating agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses, and preferred returns may result in the Company’s economic interest differing from its stated interest or final profit-sharing interest. For these investments, the Company recognizes income or loss based on the venture’s distribution priorities, which could fluctuate over time and may be different from its stated ownership or final profit-sharing interest. (e) Classified as a VIE; however, the Company is not the primary beneficiary and accounts for its investment in accordance with the equity method. Refer to discussion below for additional information. (f) Other investments represent investments not accounted for under the equity method. The Company elected the measurement alternative as these investments do not have readily determinable fair values. There were no impairments, or upward or downward adjustments to the carrying amounts of these securities either during the current year, or cumulatively. 110 North Wacker The Company formed a partnership with a local developer (the Partnership) during the second quarter of 2017. During the second quarter of 2018, the Partnership executed an agreement with USAA to construct and operate the building at 110 North Wacker through a separate legal entity (the Venture). Construction was completed in the third quarter of 2020. In March 2022, the Partnership completed the sale of its ownership interest in the Venture for a gross sales price of $ 208.6 million. Upon sale, the Company recognized income of $ 5.0 million in Equity in earnings (losses) from unconsolidated ventures in the Consolidated Statements of Operations. Based upon the Partnership’s waterfall, $ 168.9 million of the net sales proceeds were allocated to the Company with the remaining $ 22.1 million allocated to the local developer. HHH 2024 FORM 10-K | 78 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The Summit In 2015, the Company formed DLV/HHPI Summerlin, LLC (The Summit) with Discovery Land Company (Discovery) to develop a custom home community in Summerlin. Phase I The Company contributed land with a carrying value of $ 13.4 million and transferred SID bonds related to such land with a carrying value of $ 1.3 million to The Summit at the agreed upon capital contribution value of $ 125.4 million, or $ 226,000 per acre, and has no further capital obligations. Discovery is required to fund up to a maximum of $ 30.0 million of cash as their capital contribution, of which $ 3.8 million has been contributed. The gains on the contributed land are recognized in Equity in earnings (losses) from unconsolidated ventures as The Summit sells lots. The Company has received its preferred return distributions and recognizes its share of income or loss for Phase I based on its final profit-sharing interest. Phase II In July 2022, the Company contributed an additional 54 acres to The Summit (Phase II land) with a fair value of $ 21.5 million. The Company recognized an incremental equity method investment at the fair value of $ 21.5 million and recognized a gain of $ 13.5 million recorded in Equity in earnings (losses) from unconsolidated ventures. This gain is the result of marking the cost basis of the land contributed to its estimated fair value at the time of contribution. The Phase II land is adjacent to the existing Summit development and includes approximately 28 custom home sites. The first lot sales closed in the first quarter of 2023. The Company will receive distributions and recognize its share of income or loss for Phase II based on the joint venture’s distribution priorities in the amended Summit LLC agreement, which could fluctuate over time. Upon receipt of preferred returns to HHH, distributions and recognition of income or loss will be allocated to the company based on its final profit-sharing interest. Floreo In the fourth quarter of 2021, simultaneous with the Teravalis land acquisition, the Company closed on the acquisition of a 50 % interest in Trillium Development Holding Company, LLC (Floreo), for $ 59.0 million and entered into a Limited Liability Company Agreement (LLC Agreement) with JDM Partners and El Dorado Holdings to develop the first village within the new Teravalis MPC on 3,029 acres of land in the greater Phoenix, Arizona area. The first land sales closed in the first quarter of 2024. In October 2022, Floreo closed on a $ 165.0 million financing, with outstanding borrowings of $ 158.6 million as of December 31, 2024. The Company provided a guaranty on this financing in the form of a collateral maintenance obligation and received a guaranty fee of $ 5.0 million. The financing and related guaranty provided by the Company triggered a reconsideration event, and as of December 31, 2022, Floreo was classified as a VIE. Due to rights held by other members, the Company does not have a controlling financial interest in Floreo and is not the primary beneficiary. As of December 31, 2024, the Company’s maximum exposure to loss as a result of this investment is limited to the $ 60.8 million aggregate carrying value as the Company has not made any other firm commitments to fund amounts on behalf of this VIE, and cash collateral that the Company may be obligated to post related to its collateral maintenance obligation. See Note 11 - Commitments and Contingencies for additional information related to the Company’s collateral maintenance obligation. West End Alexandria In the fourth quarter of 2021, the Company entered into an Asset Contribution Agreement with Landmark Land Holdings, LLC (West End Alexandria) to redevelop a 52 -acre site previously known as Landmark Mall. Other equity owners include Foulger-Pratt Development, LLC (Foulger-Pratt) and Seritage SRC Finance (Seritage). The Company conveyed its 33 -acre Landmark Mall property with an agreed upon fair value of $ 56.0 million and Seritage conveyed an additional 19 acres of land with an agreed upon fair value of $ 30.0 million to West End Alexandria in exchange for equity interest. Additionally, Foulger-Pratt agreed to contribute $ 10.0 million to West End Alexandria. Also in the fourth quarter of 2021, West End Alexandria executed a Purchase and Sale Agreement with the City of Alexandria to sell approximately 11 acres to the City of Alexandria. The city will lease this land to Inova Health Care Services for construction of a new hospital. Development plans for the remaining 41 -acre property include approximately four million square feet of residential, retail, commercial, and entertainment offerings integrated into a cohesive neighborhood with a central plaza and a network of parks and public transportation. Foulger-Pratt manages construction of the development. Demolition began in the second quarter of 2022 and was completed in 2023, with the completion of infrastructure work expected in 2025. The Company does not have the ability to control the activities that most impact the economic performance of the venture as Foulger-Pratt is the managing member and manages all development activities. As such, the Company accounts for its ownership interest in accordance with the equity method. HHH 2024 FORM 10-K | 79 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Summarized Financial Information The following tables provide combined summarized financial statement information for the Company’s unconsolidated ventures. Financial statement information is included for each investment for all periods in which the Company’s ownership interest was accounted for as an equity method investment. thousands December 31, 2024 December 31, 2023 Consolidated Balance Sheets Total Assets $ 879,908 $ 814,627 Total Liabilities 526,320 436,289 Total Equity 353,588 378,338 Year Ended December 31, thousands 2024 2023 2022 Consolidated Statements of Operations Revenues $ 219,766 $ 347,084 $ 150,746 Operating Income 35,545 75,099 31,752 Net income (loss) 20,987 55,006 31,058 4. Acquisitions and Dispositions Acquisitions Operating Assets In June 2024, the Company acquired the Waterway Plaza II office property and the adjacent parking garage for $ 19.2 million in an asset acquisition. The approximately 141,763 -square-foot office property is located in The Woodlands. Strategic Developments In May 2023, the Company acquired the Grogan’s Mill Village Center and related anchor site, a retail property in The Woodlands consisting of approximately 8.7 acres for $ 5.9 million in an asset acquisition. Dispositions Gains and losses on asset dispositions are recorded to Gain (loss) on sale or disposal of real estate and other assets, net in the Consolidated Statements of Operations, unless otherwise noted. Operating Assets During 2024, the Company completed the sale of four non-core ground leases in The Woodlands, for total proceeds of $ 9.6 million, resulting in a gain of $ 6.7 million. In December 2024, the Company completed the sale of Lakeland Village Center at Bridgeland, a 67,947 -square-foot retail property in Bridgeland, for $ 28.0 million, resulting in a gain of $ 11.4 million. In February 2024, the Company completed the sale of Creekside Park Medical Plaza, a 32,689 -square-foot medical office building in The Woodlands, for $ 14.0 million, resulting in a gain of $ 4.8 million. In December 2023, the Company completed the sale of Memorial Hermann Medical Office, a 20,000 -square-foot medical office building in The Woodlands, for $ 9.6 million, resulting in a gain of $ 3.2 million. In July 2023, the Company completed the sale of two self-storage facilities with a total of 1,370 storage units in The Woodlands, for $ 30.5 million, resulting in a gain of $ 16.1 million. In March 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, for total consideration of $ 6.3 million, resulting in a gain of $ 4.7 million. In December 2022, the Company completed the sale of Creekside Village Green, a 74,670 -square-foot retail property in The Woodlands, for $ 28.4 million, resulting in a gain of $ 13.4 million. In December 2022, the Company completed the sale of Lake Woodlands Crossing, a 60,261 -square-foot retail property in The Woodlands, for $ 22.5 million, resulting in a gain of $ 12.2 million. The Company retained the underlying land and simultaneously with the sale executed a 99-year ground lease with the buyer, which is classified as an operating lease. In June 2022, the Company completed the sale of the Outlet Collection at Riverwalk, a 264,080 -square-foot outlet center located in downtown New Orleans, for $ 34.0 million, resulting in a gain on sale of $ 4.0 million. HHH 2024 FORM 10-K | 80 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements In March 2022, the Company completed the sale of its ownership interest in 110 North Wacker for $ 208.6 million. See Note 3 - Investments in Unconsolidated Ventures for additional information. 5. Impairment The Company reviews its long-lived assets for potential impairment indicators when events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment or disposal of long‑lived assets in accordance with ASC 360 Property, Plant, and Equipment , requires that if impairment indicators exist and expected undiscounted cash flows generated by the asset over an anticipated holding period are less than its carrying amount, an impairment provision should be recorded to write down the carrying amount of the asset to its fair value. The impairment analysis does not consider the timing of future cash flows and whether the asset is expected to earn an above- or below-market rate of return. No impairment charges were recorded in continuing operations during the three years ended December 31, 2024. The Company periodically evaluates strategic alternatives with respect to each property and may revise the strategy from time to time, including the intent to hold the asset on a long-term basis or the timing of potential asset dispositions. For example, the Company may decide to sell property that is held for use, and the sale price may be less than the carrying amount. As a result, changes in strategy could result in impairment charges in future periods. The Company evaluates each investment in an unconsolidated venture discussed in Note 3 - Investments in Unconsolidated Ventures periodically for recoverability and valuation declines that are other-than-temporary. If the decrease in value of an investment is deemed to be other-than-temporary, the investment is reduced to its estimated fair value. No impairment charges were recorded in continuing operations during the three years ended December 31, 2024. In 2023, the Company recorded a $ 709.5 million impairment charge related to the Seaport segment, which is now reported in discontinued operations following the spinoff of SEG. 6. Other Assets and Liabilities Other Assets, Net The following table summarizes the significant components of Other assets, net as of December 31: thousands 2024 2023 Special Improvement District receivable, net $ 97,432 $ 74,899 Security, escrow, and other deposits 66,348 67,701 In-place leases, net 32,995 35,490 Other 28,433 16,531 Prepaid expenses 22,791 15,551 Tenant incentives and other receivables, net 12,567 10,840 Interest rate derivative assets 9,082 10,318 TIF receivable, net 4,340 6,371 Intangibles, net 3,359 1,360 Net investment in lease receivable 2,809 2,883 Notes receivable, net 870 1,412 Condominium inventory 525 671 Other assets, net $ 281,551 $ 244,027 HHH 2024 FORM 10-K | 81 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Accounts Payable and Other Liabilities The following table summarizes the significant components of Accounts payable and other liabilities as of December 31: thousands 2024 2023 Condominium deposit liabilities $ 459,683 $ 478,870 Construction payables 252,619 244,749 Deferred income 125,784 114,402 Accrued interest 51,828 53,301 Accounts payable and accrued expenses 48,317 47,602 Other 47,656 23,555 Tenant and other deposits 47,112 29,422 Accrued payroll and other employee liabilities 32,154 32,270 Accrued real estate taxes 29,284 30,096 Accounts payable and other liabilities $ 1,094,437 $ 1,054,267 7. Intangibles The following table summarizes the Company’s intangible assets and liabilities: As of December 31, 2024 As of December 31, 2023 Gross Asset (Liability) Accumulated (Amortization)/ Accretion Net Carrying Amount Gross Asset (Liability) Accumulated (Amortization)/ Accretion Net Carrying Amount thousands Intangible Assets: Other intangibles $ 4,526 $ ( 1,324 ) $ 3,202 $ 2,407 $ ( 1,204 ) $ 1,203 Indefinite lived intangibles 157 — 157 157 — 157 Tenant leases: In-place value 56,019 ( 23,024 ) 32,995 54,180 ( 18,690 ) 35,490 Above-market 1,281 ( 395 ) 886 292 ( 261 ) 31 Below-market ( 627 ) 627 — ( 576 ) 536 ( 40 ) Total indefinite lived intangibles $ 157 $ 157 Total amortizing intangibles $ 37,083 $ 36,684 Other intangibles includes trademark and trade name intangibles related to MPCs as well as internally developed software. These intangibles are included in Other assets, net and are amortized on a straight-line basis over the estimated useful life of the asset. The tenant in-place, above-market, and below-market lease intangible assets resulted from real estate acquisitions. The in‑place value and above-market value of tenant leases are included in Other assets, net and are amortized over periods that approximate the related lease terms. The below‑market tenant leases are included in Accounts payable and other liabilities and are amortized over the remaining non-cancelable terms of the respective leases. See Note 6 - Other Assets and Liabilities for additional information regarding Other assets, net and Accounts payable and other liabilities. Net amortization and accretion expense for these intangible assets and liabilities was $ 6.2 million in 2024, $ 4.3 million in 2023, and $ 4.7 million in 2022. Future net amortization and accretion expense is estimated for each of the five succeeding years as shown below: thousands 2025 2026 2027 2028 2029 Net amortization and accretion expense $ 5,304 $ 5,073 $ 4,454 $ 4,344 $ 4,278 HHH 2024 FORM 10-K | 82 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements 8. Mortgages, Notes, and Loans Payable, Net Mortgages, Notes, and Loans Payable All mortgages, notes, and loans payable of HHH are held by HHC and its subsidiaries. December 31, thousands 2024 2023 Fixed-rate debt Senior unsecured notes $ 2,050,000 $ 2,050,000 Secured mortgages payable 1,635,750 1,442,505 Special Improvement District bonds 83,779 65,627 Variable-rate debt (a) Secured Bridgeland Notes 283,000 475,000 Secured mortgages payable 1,115,908 1,161,488 Unamortized deferred financing costs (b) ( 40,968 ) ( 47,628 ) Mortgages, notes, and loans payable, net $ 5,127,469 $ 5,146,992 (a) The Company has entered into derivative instruments to manage the variable interest rate exposure. The Company had an interest rate swap and two interest rate caps that expired in the third quarter of 2023. See Note 10 - Derivative Instruments and Hedging Activities for additional information. (b) Deferred financing costs are amortized to interest expense over the initial contractual term of the respective financing agreements using the effective interest method (or other methods which approximate the effective interest method). As of December 31, 2024, land, buildings and equipment, developments, and other collateral with a net book value of $ 4.7 billion have been pledged as collateral for the Company’s debt obligations. Senior notes totaling $ 2.1 billion and $ 89.0 million of Secured mortgages payable are recourse to the Company. Senior Unsecured Notes During 2020 and 2021, the Company issued $ 2.1 billion of aggregate principal of senior unsecured notes. These notes have fixed rates of interest that are payable semi-annually and are interest only until maturity. These debt obligations are redeemable prior to the maturity date subject to a “make-whole” premium which decreases annually until 2026 at which time the redemption make-whole premium is no longer applicable. The following table summarizes the Company’s senior unsecured notes by issuance date: $ in thousands Principal Maturity Date Interest Rate August 2020 $ 750,000 August 2028 5.375 % February 2021 650,000 February 2029 4.125 % February 2021 650,000 February 2031 4.375 % Senior unsecured notes $ 2,050,000 Secured Mortgages Payable The Company’s outstanding mortgages are collateralized by certain of the Company’s real estate assets. Certain of the Company’s loans contain provisions that grant the lender a security interest in the operating cash flow of the property that represents the collateral for the loan. Certain mortgage notes may be prepaid subject to a prepayment penalty equal to a yield maintenance premium, defeasance, or a percentage of the loan balance. Construction loans related to the Company’s development properties are generally variable-rate, interest-only, and have maturities of five years or less. Debt obligations related to the Company’s operating properties generally require monthly installments of principal and interest. The following table summarizes the Company’s Secured mortgages payable: December 31, 2024 December 31, 2023 $ in thousands Principal Range of Interest Rates Weighted-average Interest Rate Weighted-average Years to Maturity Principal Range of Interest Rates Weighted-average Interest Rate Weighted-average Years to Maturity Fixed rate (a) $ 1,635,750 3.13 % - 8.67 % 4.74 % 5.8 $ 1,442,505 3.13 % - 8.67 % 4.45 % 7.0 Variable rate (b) 1,115,908 6.43 % - 9.42 % 7.67 % 1.7 1,161,488 7.08 % - 10.48 % 8.69 % 2.1 Secured mortgages payable $ 2,751,658 3.13 % - 9.42 % 5.93 % 4.1 $ 2,603,993 3.13 % - 10.48 % 6.34 % 4.8 (a) Interest rates presented are based upon the coupon rates of the Company’s fixed-rate debt obligations. HHH 2024 FORM 10-K | 83 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements (b) Interest rates presented are based on the applicable reference interest rates as of December 31, 2024 and 2023, excluding the effects of interest rate derivatives. The Company has entered into derivative instruments to manage its variable interest rate exposure. The weighted-average interest rate of the Company’s variable-rate mortgages payable, inclusive of interest rate derivatives, was 7.02 % as of December 31, 2024, and 7.86 % as of December 31, 2023. See Note 10 - Derivative Instruments and Hedging Activities for additional information. The Company’s secured mortgages mature over various terms through September 2052. On certain of its debt obligations, the Company has the option to exercise extension options, subject to certain terms, which may include minimum debt service coverage, minimum occupancy levels or condominium sales levels, as applicable, and other performance criteria. In certain cases, due to property performance not meeting identified covenants, the Company may be required to pay down a portion of the loan to exercise the extension option. During 2024, the Company’s mortgage activity included draws on existing mortgages of $ 417.0 million, new borrowings of $ 95.1 million (excluding undrawn amounts on new construction loans), refinancings of $ 168.0 million, and repayments of $ 373.3 million. As of December 31, 2024, the Company’s secured mortgage loans had $ 1.2 billion of undrawn lender commitment available to be drawn for property development, subject to certain restrictions. Special Improvement District Bonds The Summerlin MPC uses SID bonds to finance certain common infrastructure improvements. These bonds are issued by the municipalities and are secured by the assessments on the land. The majority of proceeds from each bond issued is held in a construction escrow and disbursed to the Company as infrastructure projects are completed, inspected by the municipalities, and approved for reimbursement. Accordingly, the SID bonds have been classified as debt, and the Summerlin MPC pays the debt service on the bonds semi‑annually. As Summerlin sells land, the buyers assume a proportionate share of the bond obligation at closing, and the residential sales contracts provide for the reimbursement of the principal amounts that the Company previously paid with respect to such proportionate share of the bond. These bonds bear interest at fixed rates ranging from 4.13 % to 6.05 % with maturities ranging from 2025 to 2054 as of December 31, 2024, and fixed rates ranging from 4.13 % to 7.00 % with maturities ranging from 2025 to 2053 as of December 31, 2023. For the year ended December 31, 2024, $ 38.0 million in SID bonds were issued and obligations of $ 18.0 million were assumed by buyers. Secured Bridgeland Notes In the fourth quarter of 2024, the borrowing capacity of the Company’s secured notes was expanded from $ 475.0 million to $ 600.0 million, and the maturity was extended from 2026 to 2029. This financing is secured by MUD receivables and land in Bridgeland. The loan required a 10 % fully refundable deposit on the outstanding balance and has an interest rate of 6.81 %. As of December 2023, outstanding borrowings were $ 475.0 million. In the third quarter of 2024, $ 192.0 million was repaid using the proceeds from the sale of MUD receivables, bringing outstanding borrowings to $ 283.0 million as of December 31, 2024. 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. As a result, the excess net cash flow after debt service from the underlying properties became restricted. 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. Scheduled Maturities The following table summarizes the contractual obligations relating to the Company’s mortgages, notes, and loans payable as of December 31, 2024: thousands Mortgages, notes, and loans payable principal payments 2025 $ 421,202 2026 509,097 2027 415,717 2028 838,680 2029 1,270,240 Thereafter 1,713,501 Total principal payments 5,168,437 Unamortized deferred financing costs ( 40,968 ) Mortgages, notes, and loans payable $ 5,127,469 HHH 2024 FORM 10-K | 84 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements 9. Fair Value ASC 820, Fair Value Measurement (ASC 820), emphasizes that fair value is a market-based measurement that should be determined using assumptions market participants would use in pricing an asset or liability. The standard establishes a hierarchical disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets or liabilities at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the asset or liability. Assets or liabilities with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The following table presents the fair value measurement hierarchy levels required under ASC 820 for the Company’s assets that are measured at fair value on a recurring basis. The Company does not have any liabilities that are measured at a fair value on a recurring basis for the periods presented. December 31, 2024 December 31, 2023 Fair Value Measurements Using Fair Value Measurements Using thousands Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate derivative assets $ 9,082 $ — $ 9,082 $ — $ 10,318 $ — $ 10,318 $ — The fair values of interest rate derivatives are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates derived from observable market interest rate curves. The estimated fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis are as follows: December 31, 2024 December 31, 2023 thousands Fair Value Hierarchy Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Cash and restricted cash Level 1 $ 998,503 $ 998,503 $ 1,009,212 $ 1,009,212 Accounts receivable, net (a) Level 3 105,185 105,185 101,373 101,373 Notes receivable, net (b) Level 3 870 870 1,412 1,412 Liabilities: Fixed-rate debt (c) Level 2 3,769,529 3,495,298 3,558,132 3,255,525 Variable-rate debt (c) Level 2 1,398,908 1,398,908 1,636,488 1,636,488 (a) Accounts receivable, net is shown net of an allowance of $ 8.2 million at December 31, 2024, and $ 13.6 million at December 31, 2023. Refer to Note 1 - Presentation of Financial Statements and Significant Accounting Policies for additional information on the allowance. (b) Notes receivable, net is shown net of an immaterial allowance at December 31, 2024, and December 31, 2023. (c) Excludes related unamortized financing costs. The carrying amounts of Cash and restricted cash, Accounts receivable, net, and Notes receivable, net approximate fair value because of the short‑term maturity of these instruments. The fair value of the Company’s Senior Notes, included in fixed-rate debt in the table above, is based upon the trade price closest to the end of the period presented. The fair value of other fixed-rate debt in the table above was estimated based on a discounted future cash payment model, which includes risk premiums and risk-free rates derived from the Secured Overnight Financing Rate (SOFR) or U.S. Treasury obligation interest rates as of December 31, 2024. Refer to Note 8 - Mortgages, Notes, and Loans Payable, Net for additional information. The discount rates reflect the Company’s judgment as to what the approximate current lending rates for loans or groups of loans with similar maturities and credit quality would be if credit markets were operating efficiently and assuming that the debt is outstanding through maturity. HHH 2024 FORM 10-K | 85 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The carrying amounts for the Company’s variable-rate debt approximate fair value given that the interest rates are variable and adjust with current market rates for instruments with similar risks and maturities. 10. Derivative Instruments and Hedging Activities The Company is exposed to interest rate risk related to its variable interest rate debt, and it manages this risk by utilizing interest rate derivatives. The Company uses interest rate swaps, collars, and caps to add stability to interest costs by reducing the Company’s exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company’s fixed‑rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above an established ceiling rate and payment of variable amounts to a counterparty if interest rates fall below an established floor rate, in exchange for an upfront premium. No payments or receipts are exchanged on interest rate collar contracts unless interest rates rise above or fall below the established ceiling and floor rates. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an upfront premium. Certain of the Company’s interest rate caps are not currently designated as hedges, and therefore, any gains or losses are recognized in current-period earnings within Interest expense on the Consolidated Statements of Operations. These derivatives are recorded on a gross basis at fair value on the balance sheet. Assessments of hedge effectiveness are performed quarterly using regression analysis. The change in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in Accumulated other comprehensive income (loss) (AOCI) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings within the same income statement line item being hedged. Derivatives accounted for as cash flow hedges are classified in the same category in the Consolidated Statements of Cash Flows as the items being hedged. Gains and losses from derivative financial instruments are reported in Cash provided by (used in) operating activities within the Consolidated Statements of Cash Flows. The Company is exposed to credit risk in the event of non-performance by its derivative counterparties. To mitigate its credit risk, the Company reviews the creditworthiness of counterparties and enters into agreements with those that are considered credit-worthy, such as large financial institutions with favorable credit ratings. There were no derivative counterparty defaults as of December 31, 2024 or 2023. If the derivative contracts are terminated prior to their maturity, the amounts previously recorded in AOCI are recognized in earnings over the period that the hedged transaction impacts earnings. During the year ended December 31, 2024, the Company recorded an immaterial reduction in Interest expense related to the amortization of terminated swaps. Amounts reported in AOCI related to derivatives will be reclassified to Interest expense as interest payments are made on the Company’s variable‑rate debt. Over the next 12 months, HHH estimates that $ 3.0 million of net gain will be reclassified to Interest expense including amounts related to the amortization of terminated swaps. HHH 2024 FORM 10-K | 86 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The following table summarizes certain terms of the Company’s derivative contracts. The Company reports derivative assets in Other assets, net and derivative liabilities in Accounts payable and other liabilities. Fair Value Asset (Liability) Notional Fixed Interest Effective Maturity December 31, December 31, thousands Amount Rate (a) Date Date 2024 2023 Derivative instruments not designated as hedging instruments: (b) Interest rate collar 173,477 2.00 % - 4.50 % 6/1/2023 6/1/2025 $ 35 $ 417 Interest rate collar 205,613 2.00 % - 4.50 % 6/1/2023 6/1/2025 34 440 Interest rate cap 75,000 2.50 % 10/12/2021 9/29/2025 919 2,274 Interest rate cap 59,500 2.50 % 10/12/2021 9/29/2025 729 1,804 Interest rate cap 59,619 6.00 % 6/20/2024 7/15/2026 30 — Interest rate cap 6,924 6.00 % 6/20/2024 7/15/2026 4 — Interest rate cap 46,875 5.25 % 12/2/2024 12/15/2026 297 — Derivative instruments designated as hedging instruments: Interest rate cap 127,000 5.50 % 11/10/2022 11/7/2024 — 28 Interest rate cap 127,000 3.50 % 11/7/2024 11/7/2025 725 — Interest rate cap 73,241 5.00 % 12/22/2022 12/21/2025 15 223 Interest rate swap (c) 175,000 3.69 % 1/3/2023 1/1/2027 1,062 117 Interest rate swap 40,800 1.68 % 3/1/2022 2/18/2027 1,979 2,496 Interest rate swap 34,392 4.89 % 11/1/2019 1/1/2032 3,253 2,519 Total fair value derivative assets $ 9,082 $ 10,318 (a) These rates represent the swap rate and cap strike rate on HHH’s interest rate swaps, caps, and collars. (b) Interest income related to these contracts was $ 1.4 million in 2024 and $ 0.5 million in 2023. (c) In the first quarter of 2024, the Company terminated a portion of this swap, reducing the notional amount from $ 200.0 million to $ 175.0 million. The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations for the years ended December 31: Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives thousands 2024 2023 2022 Interest rate derivatives $ 4,818 $ 3,809 $ 25,657 Location of Gain (Loss) Reclassified from AOCI into Statements of Operations Amount of Gain (Loss) Reclassified from AOCI into Statements of Operations thousands 2024 2023 2022 Interest expense $ 4,497 $ 13,131 $ ( 6,041 ) Credit-risk-related Contingent Features The Company has agreements at the property level with certain derivative counterparties that contain a provision where if the Company defaults on the related property-level indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its related derivative obligations. No ne of the Company’s derivatives which contain credit-risk-related features were in a net liability position as of December 31, 2024. HHH 2024 FORM 10-K | 87 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements 11. Commitments and Contingencies Litigation In the normal course of business, from time to time, the Company is involved in legal proceedings relating to the ownership and operations of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from normal course of business legal actions are not expected to have a material effect on the Company’s consolidated financial position, results of operations, or liquidity. Columbia The Company is currently developing certain property it owns in the Lakefront neighborhood of Downtown Columbia, which is subject to certain recorded documents, covenants, and restrictions (Covenants). Under the Covenants, HHH is the master developer of the Lakefront neighborhood. In 2017, IMH Columbia, LLC (IMH) purchased the site of a former Sheraton Hotel (Hotel Lot) subject to the Covenants. IMH has made demands that HHH accede to IMH’s development plans for the Hotel Lot and HHH has exercised its right under the Covenants to object to IMH’s plans for the Hotel Lot. IMH filed a complaint seeking (1) a declaration that (A) HHH gave its consent, under the Covenants, to IMH’s proposed changes in use and onsite parking, or (B) that the limitations under the Covenants are obsolete and unenforceable, (2) damages reimbursing the costs and expenses IMH claims to have incurred in reliance on HHH's alleged consent to IMH’s proposed development, (3) damages related to the expectation of lost profits, which IMH alleges were caused by HHH breaching the Covenants by prohibiting IMH from proceeding with their proposed development, and (4) declarations finding that HHH had breached the shared parking related Covenants relating to HHH’s own property. The jury trial concluded in April 2024, and the jury found partially in favor of IMH and awarded damages of $ 17.0 million, which will accrue post-judgment interest of 10 % annually from the date of the final judgment. The Company has filed a notice of appeal and will continue to defend the matter as it believes that these claims are without merit and that it has substantial legal and factual defenses to the claims and allegations contained in the complaint. Timarron Park In June 2018, the Company was served with a petition involving approximately 500 individuals or entities who claim that their properties, located in the Timarron Park neighborhood of The Woodlands, were damaged by flood waters that resulted from the unprecedented rainfall that occurred throughout Harris County and surrounding areas during Hurricane Harvey in August 2017. The complaint was filed in State Court in Harris County of the State of Texas. In general, the plaintiffs allege negligence in the development of Timarron Park and violations of Texas’ Deceptive Trade Practices Act and name as defendants The Howard Hughes Corporation, The Woodlands Land Development Company, and two unaffiliated parties involved in the planning and engineering of Timarron Park. The plaintiffs are seeking restitution for damages to their properties and diminution of their property values. In August 2022, the Court granted the Company’s summary judgment motions and dismissed the plaintiffs’ claims. The Plaintiffs appealed the Company’s summary judgment win on Plaintiffs’ claims for negligence and negligent undertaking. Plaintiffs did not appeal the Company’s summary judgment win on the rest of the Plaintiffs’ causes of action. A Court of Appeals three-judge panel affirmed the trial court’s decision, and the Plaintiffs filed a motion for rehearing, which is currently pending. The Company will continue to defend the matter as it believes that these claims are without merit and that it has substantial legal and factual defenses to the claims and allegations contained in the complaint. Based upon the present status of this matter, the Company does not believe it is probable that a loss will be incurred. Accordingly, the Company has not recorded a charge as a result of this action. Waiea The Company entered into a settlement agreement with the Waiea homeowners association related to certain construction defects at the condominium tower. Pursuant to the settlement agreement, the Company agreed to pay for the repair of the defects. However, as the Company believed the general contractor was ultimately responsible for the defects, the Company sought to recover the repair costs from the general contractor, other responsible parties, and insurance proceeds. Total estimated cost related to the remediation was $ 158.4 million, inclusive of $ 3.0 million of additional costs recognized in the first quarter of 2024. The sixth and final amendment of resolution of disputes and release agreement was executed during the first quarter of 2024, thereby releasing the Company from any further claims or demands from the Waiea homeowners association arising from or relating to the construction or repair of the condominium project. As of December 31, 2024, $ 0.4 million remains in Construction payables for the estimated repair costs related to this matter, which is included in Accounts payable and other liabilities in the accompanying Consolidated Balance Sheets. In July 2024, the Company executed a settlement agreement with the general contractor, the Waiea homeowners association, and various insurance carriers. As part of this settlement, the Company received $ 90.0 million of insurance proceeds from various insurance carriers during the third quarter of 2024, which was recognized in Other income (loss), net in the accompanying Consolidated Statements of Operations. The amount received represents the full payout of the related insurance policy and per the executed agreement the Company agreed to release the general contractor and the insurance carriers from any further claims related to the construction defects at the condominium tower. HHH 2024 FORM 10-K | 88 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Also, as part of this settlement agreement, the Company agreed to pay the general contractor $ 22.0 million, representing the final payment of project costs previously incurred by the general contractor. This amount was paid in September 2024, and as the Company had $ 9.9 million accrued at December 31, 2023, related to these costs, the difference of $ 12.1 million was recognized in Condominium rights and units cost of sales in the accompanying Consolidated Statements of Operations. Kō'ula On January 25, 2025, the Association of Unit Owners of Kō'ula (AOUO) provided notice of a claim filed against the Howard Hughes Corporation, and alleged affiliated entities, in the Circuit Court of First Circuit, State of Hawaii. This claim is a building-wide construction matter alleging unspecified construction defects. As the Company is awaiting information from the AOUO identifying its claims with specificity, the Company has not accrued any amount related to this claim as no estimate can be made at this time. The Company does have an insurance policy to cover legal fees and defect repairs, if necessary. Letters of Credit and Surety Bonds As of December 31, 2024, the Company had outstanding letters of credit totaling $ 3.9 million and surety bonds totaling $ 353.8 million. As of December 31, 2023, the Company had outstanding letters of credit totaling $ 3.9 million and surety bonds totaling $ 470.4 million. These letters of credit and surety bonds were issued primarily in connection with insurance requirements, special real estate assessments, and construction obligations. Operating Leases The Company leases land or buildings at certain properties from third parties, which are recorded in Operating lease right-of-use assets and Operating lease obligations on the Consolidated Balance Sheets. See Note 17 - Leases for further discussion. Guaranty Agreements The Company evaluates the likelihood of future performance under the below guarantees and, as of December 31, 2024 and 2023, there were no events requiring financial performance under the following guarantees. Seaport Entertainment Guaranty Immediately prior to the spinoff, 250 Seaport District, LLC (SEG Borrower), then a subsidiary of HHH, refinanced the existing mortgage loan related to the 250 Water Street property. This included the repayment of the existing mortgage loan payable with a carrying value of $ 113.4 million and the incurrence of $ 61.3 million in new mortgage indebtedness (SEG Term Loan). As part of the refinancing, SEG Borrower also entered into a total return swap with a third-party lender to provide credit support for the SEG Term Loan, which was supported by a guaranty provided by a separate subsidiary of HHH (HHH Guarantor). The SEG Term Loan and related total return swap were included in the liabilities transferred to Seaport Entertainment upon completion of the spinoff. As a result, following the spinoff, HHH Guarantor now provides a full backstop guaranty for the SEG Term Loan. The SEG Term Loan agreement is scheduled to mature on July 1, 2029. Collateral for the loan includes the 250 Water Street property which was transferred to SEG upon completion of the spinoff. Under the terms of SEG’s loan agreement, the Loan-to-Value (LTV) ratio must not exceed certain thresholds. In the event the LTV ratio exceeds the applicable threshold, SEG must pay down the loan to an amount that would result in an LTV ratio under the applicable threshold. In the event SEG fails to make any necessary payments when due, HHH Guarantor is required to make all payments in full. In consideration of HHH Guarantor providing such guaranty, SEG will pay the Company an annualized guaranty fee equal to 2.0 % of the total outstanding principal, paid monthly. The Company’s maximum exposure under this guaranty is equal to the outstanding principal and interest balance at the end of each period. Given the value of the 250 Water Street property collateral, the Company does not expect to have to perform under this guaranty. As of December 31, 2024, the SEG Term Loan LTV ratio is under the applicable threshold. HHH 2024 FORM 10-K | 89 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Floreo In October 2022, Floreo, the Company’s 50 %-owned joint venture in Teravalis, closed on a $ 165 million bond financing. Outstanding borrowings as of December 31, 2024, were $ 158.6 million. A wholly owned subsidiary of the Company (HHC Member) provides a guaranty for the bond in the form of a collateral maintenance commitment under which it will post refundable cash collateral if the Loan-to-Value ratio exceeds 50 %. A separate wholly owned subsidiary of the Company also provides a backstop guaranty of up to $ 50 million of the cash collateral commitment in the event HHC Member fails to make necessary payments when due. The cash collateral becomes nonrefundable if Floreo defaults on the bond obligation. The Company received a fee of $ 5.0 million in exchange for providing this guaranty, which was recognized in Accounts payable and other liabilities on the Consolidated Balance Sheets as of December 31, 2024. This liability amount will be recognized in Other income (loss), net in a manner that corresponds to the bond repayment by Floreo. The Company’s maximum exposure under this guaranty is equal to the cash collateral that the Company may be obligated to post. As of December 31, 2024, the Company has not posted any cash collateral. Given the existence of other collateral including the undeveloped land owned by Floreo, the entity’s extensive and discretionary development plan, and its eligibility for reimbursement of a significant part of the development costs from the Community Facility District in Arizona, the Company does not expect to have to post collateral. Downtown Columbia The Company’s wholly owned subsidiaries agreed to complete defined public improvements and to indemnify Howard County, Maryland, for certain matters as part of the Downtown Columbia Redevelopment District TIF bonds. To the extent that increases in taxes do not cover debt service payments on the TIF bonds, the Company’s wholly owned subsidiary is obligated to pay special taxes. Management has concluded that, as of December 31, 2024, any obligations to pay special taxes are not probable. Ward Village As part of the Company’s development permits with the Hawai‘i Community Development Authority for the condominium towers at Ward Village, the Company entered into a guaranty whereby it is required to reserve 20 % of the residential units for local residents who meet certain maximum income and net worth requirements. This guaranty, which is triggered once the necessary permits are granted and construction commences, was satisfied for Waiea, Anaha, and Ae`o, with the opening of Ke Kilohana, which is a workforce tower fully earmarked to fulfill this obligation for the first four towers. The reserved units for ‘A‘ali‘i tower are included in the ‘A‘ali‘i tower. Units for Kō‘ula, Victoria Place, The Park Ward Village, and Kalae will be satisfied with the construction of Ulana Ward Village, which is a second workforce tower fully earmarked to fulfill the remaining reserved housing guaranty in the community. Ulana Ward Village began construction in early 2023. 12. Stock-Based Compensation Plans In May 2020, the Company’s stockholders approved The Howard Hughes Corporation 2020 Equity Incentive Plan (the 2020 Equity Plan). Pursuant to the 2020 Equity Plan, 1,350,000 shares of the Company’s common stock were reserved for issuance. The 2020 Equity Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. Employees, directors, and consultants of the Company are eligible for Awards. The 2020 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors (Compensation Committee). Prior to the adoption of the 2020 Equity Plan, equity awards were issued under The Howard Hughes Corporation Amended and Restated 2010 Equity Incentive Plan (the 2010 Equity Plan). The adoption of the 2020 Equity Plan did not impact the administration of Awards issued under the 2010 Equity Plan but following adoption of the 2020 Equity Plan, equity awards will no longer be granted under the 2010 Equity Plan. As of December 31, 2024, there were a maximum of 598,842 HHH shares available for future grants under the 2020 Equity Plan. Prior to the spinoff of SEG, the Company had outstanding stock-based compensation awards in the form of stock options and RSAs, which were settleable in shares of common stock of HHH. At the time of the spinoff, all of these Awards were modified to adjust the number of HHH shares by certain ratios and/or allocation factors. The stock options were modified into HHH stock options and SEG stock options based on the applicable ratios and/or allocation factors. In addition, the growth targets for the RSAs based on Net Asset Value and related performance conditions were revised to carve out the impact of the spinoff. Also, the market conditions related to TSR targets were evaluated as of the spinoff date for the TSR-based RSAs and then modified to time-based, service conditions only. The number of grantees affected by the modification was 193 and the total incremental stock-based compensation cost resulting from the modification is $ 1.6 million. HHH 2024 FORM 10-K | 90 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The following summarizes stock-based compensation expense, net of amounts capitalized to development projects, for the years ended December 31: thousands 2024 2023 2022 Stock Options (a) $ 195 $ 336 $ 250 Restricted Stock (b) 11,875 11,389 6,860 Pre-tax stock-based compensation expense $ 12,070 $ 11,725 $ 7,110 Income tax benefit $ 1,077 $ 1,001 $ 636 (a) Amounts shown are net of immaterial amounts capitalized to development projects. (b) Amounts shown are net of $ 3.9 million capitalized to development projects in 2024, $ 4.6 million capitalized to development projects in 2023, and $ 4.8 million capitalized to development projects in 2022. Stock Options As a result of the modification, 102,337 HHH stock options were cancelled representing all outstanding HHH stock options as of the modification date and replaced with 110,255 new HHH stock options granted on the modification date. The weighted-average exercise price for stock options granted is based on the post-spinoff exercise price for these awards. There were no other stock options granted during 2024 and no exercises in 2024. There were no grants no r exercises of stock options in 2023. The following table summarizes stock option activity: Stock Options Weighted-average Exercise Price Weighted-average Remaining Contractual Term (years) Aggregate Intrinsic Value Stock options outstanding at December 31, 2023 134,337 $ 108.76 Granted 110,255 94.86 Forfeited ( 113,414 ) 103.17 Expired ( 39,776 ) 124.89 Stock options outstanding at December 31, 2024 91,402 $ 91.90 3.9 $ 491,624 Stock options vested and expected to vest at December 31, 2024 91,402 $ 91.90 3.9 $ 491,624 Stock options exercisable at December 31, 2024 46,861 $ 114.98 1.9 $ — There were no stock options exercised during 2023. The total intrinsic value of stock options exercised was $ 0.1 million during 2022, based on the difference between the market price at the exercise date and the exercise price. Cash received from stock option exercises was $ 0.3 million in 2022. The tax benefit from these exercises was immaterial. The fair value of stock option awards is determined using the Black-Scholes option-pricing model with the following assumptions: – Expected life —Based on the average of the time to vesting and full term of an option – Risk-free interest rates —Based on the U.S. Treasury rate over the expected life of an option – Expected volatility —Based on the average of implied and historical volatilities as of each of the grant dates The fair value on the grant date and the significant assumptions used in the Black‑Scholes option‑pricing model are as follows: 2024 2023 2022 Weighted-average grant date fair value $ 11.16 N/A $ 37.70 Assumptions Expected life of options (in years) (a) 3.3 N/A 7.5 Risk-free interest rate 4.3 % N/A 3.4 % Expected volatility 30.6 % N/A 50.3 % Expected annual dividend per share — N/A — (a) The expected life of options granted in 2024 is the expected time to exercise from the modification date as determined by the Black-Scholes option-pricing model. Generally, options granted vest over requisite service periods, expire ten years after the grant date and generally do not become exercisable until their restrictions on exercise lapse after the five-year anniversary of the grant date. The balance of unamortized stock option expense as of December 31, 2024, was $ 0.3 million, which is expected to be recognized over a weighted‑average period of 1.4 years. HHH 2024 FORM 10-K | 91 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Restricted Stock Restricted stock awards issued under the 2020 Equity Plan provide that shares awarded may not be sold or otherwise transferred until restrictions have lapsed as established by the Compensation Committee. In addition to the granting of restricted stock to certain members of management, the Company awards restricted stock to non‑employee directors as part of their annual retainer. The management awards generally vest over a range of three to five years , and non‑employee director awards generally vest in approximately one year . As a result of the modification, 528,710 restricted stock awards were cancelled representing all unvested restricted stock awards as of the modification date and replaced with 438,266 new restricted stock awards granted on the modification date. The weighted-average grant date fair value for restricted stock granted due to modification is based on the fair value at date of modification. The following table summarizes restricted stock activity: Restricted Stock Weighted-average Grant Date Fair Value Restricted stock outstanding at December 31, 2023 393,698 $ 79.94 Granted 740,907 66.16 Vested ( 135,961 ) 75.84 Forfeited ( 626,689 ) 78.49 Restricted stock outstanding at December 31, 2024 371,955 $ 56.43 The grant date fair value of restricted stock is based on the closing price of common stock at grant date. For restricted stock awards that vest based on stockholder returns, the grant date fair value is calculated using a Monte-Carlo approach which simulates the Company’s stock price on the corresponding vesting dates and is reflected at the target level of performance. For restricted stock awards that vest based on net asset value per share, the grant date fair value is calculated using a Monte-Carlo approach which simulates the Company’s net asset value on the vesting date and is reflected at the target level of performance. The weighted-average grant-date fair value per share of restricted stock granted was $ 83.85 during 2023 and $ 88.19 during 2022. The fair value of restricted stock that vested was $ 10.3 million during 2024, $ 9.6 million during 2023, and $ 8.0 million during 2022, based on the HHH market price at the vesting date. The balance of unamortized restricted stock expense as of December 31, 2024, was $ 17.5 million, which is expected to be recognized over a weighted‑average period of 1.7 years. 13. Income Taxes Deferred income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities using enacted tax rates currently in effect. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. The following summarizes income tax expense (benefit) for the years ended December 31: thousands 2024 2023 2022 Current $ 18,655 $ 36,315 $ 26,364 Deferred 61,529 ( 9,897 ) 55,832 Total $ 80,184 $ 26,418 $ 82,196 HHH 2024 FORM 10-K | 92 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Reconciliation of the Income tax expense (benefit) if computed at the U.S. federal statutory income tax rate to the Company’s reported Income tax expense (benefit) for the years ended December 31 is as follows: thousands except percentages 2024 2023 2022 Income (loss) from continuing operations before income taxes $ 365,399 $ 109,828 $ 334,905 U.S. federal statutory tax rate 21.0 % 21.0 % 21.0 % Tax computed at the U.S. federal statutory rate $ 76,734 $ 23,064 $ 70,330 Increase (decrease) in valuation allowance, net ( 20,736 ) 4,003 ( 1,209 ) State income tax expense (benefit), net of federal income tax 18,719 ( 4,432 ) 11,232 Tax expense (benefit) from other change in rates, prior period adjustments, and other permanent differences 3,398 1,701 314 Tax expense on compensation disallowance 1,920 2,133 1,551 Net (income) loss attributable to noncontrolling interests 149 ( 51 ) ( 22 ) Income tax expense (benefit) $ 80,184 $ 26,418 $ 82,196 Effective tax rate 21.9 % 24.1 % 24.5 % As of December 31, 2024, the amounts and expiration dates of operating loss carryforwards for tax purposes are as follows: thousands Amount Net operating loss carryforwards - Federal (a) $ 802,747 Net operating loss carryforwards - State (b) 1,237,887 (a) Federal net operating loss carryforwards have an indefinite carryforward period. (b) State net operating loss carryforwards of $ 979.7 million have an indefinite carryforward period. The remaining $ 258.1 million of carryforwards have varying carryforward periods through 2044. The following summarizes tax effects of temporary differences and carryforwards included in the net deferred tax liabilities as of December 31: thousands 2024 2023 Deferred tax assets: Operating and development properties and fixed assets $ — $ 204,532 Investments in unconsolidated ventures — 11,577 Accrued expenses 6,350 6,893 Prepaid expenses 45 2,015 Other 930 1,804 Operating loss and tax carryforwards 205,892 52,301 Total deferred tax assets 213,217 279,122 Valuation allowance ( 16,314 ) ( 62,789 ) Total net deferred tax assets $ 196,903 $ 216,333 Deferred tax liabilities: Master Planned Communities properties $ ( 209,067 ) $ ( 205,611 ) Operating and development properties and fixed assets ( 26,828 ) — Deferred income ( 81,073 ) ( 76,329 ) Accounts receivable ( 19,202 ) ( 18,686 ) Investments in unconsolidated ventures ( 2,833 ) — Total deferred tax liabilities ( 339,003 ) ( 300,626 ) Total net deferred tax liabilities $ ( 142,100 ) $ ( 84,293 ) HHH 2024 FORM 10-K | 93 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The deferred tax liability associated with the Company’s MPCs is largely attributable to the difference between the basis and value determined as of the date of the acquisition by its predecessors adjusted for sales that have occurred since that time. The recognition of these deferred tax liabilities is dependent upon the timing and sales price of future land sales and the method of accounting used for income tax purposes. The deferred tax liability related to deferred income represents the difference between the income tax method of accounting and the financial statement method of accounting for prior sales of land in the Company’s MPCs. Generally, the Company is currently open to audit under the statute of limitations by the Internal Revenue Service as well as state taxing authorities for the years ended December 31, 2020 through 2023. In the Company’s opinion, it has made adequate tax provisions for years subject to examination. However, the final determination of tax examinations and any related litigation could be different from what was reported on the returns. The Company applies the generally accepted accounting principle related to accounting for uncertainty in income taxes, which prescribes a recognition threshold that a tax position is required to meet before recognition in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition issues. The Company recognizes and reports interest and penalties related to unrecognized tax benefits, if applicable, within the provision for income tax expense. The Company had no unrecognized tax benefits for the years ended December 31, 2024, 2023, or 2022, and therefore did no t recognize any interest expense or penalties on unrecognized tax benefits. 14. Accumulated Other Comprehensive Income (Loss) The following tables summarize changes in AOCI, all of which are presented net of tax: thousands Balance at December 31, 2021 $ ( 14,457 ) Derivative instruments: Other comprehensive income (loss) before reclassifications 25,657 (Gain) loss reclassified to net income 6,041 Reclassification of the Company's share of previously deferred derivative gains to net income (a) ( 6,723 ) Pension adjustment ( 183 ) Net current-period other comprehensive income (loss) 24,792 Balance at December 31, 2022 $ 10,335 Derivative instruments: Other comprehensive income (loss) before reclassifications 3,809 (Gain) loss reclassified to net income ( 13,131 ) Pension adjustment 259 Net current-period other comprehensive income (loss) ( 9,063 ) Balance at December 31, 2023 $ 1,272 Derivative instruments: Other comprehensive income (loss) before reclassifications 4,818 (Gain) loss reclassified to net income ( 4,497 ) Pension adjustment 375 Net current-period other comprehensive income (loss) 696 Balance at December 31, 2024 $ 1,968 (a) In March 2022, the Compa ny completed the sale of its ownership interest in 110 North Wacker and released a net of $ 6.7 million from Accumulated other comprehensive income (loss), representing the Company’s $ 8.6 million share of previously deferred gains associated with the Venture’s derivative instruments net of tax expense of $ 1.9 million. Refer to Note 3 - Investments in Unconsolidated Ventures for additional information. HHH 2024 FORM 10-K | 94 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The following table summarizes the amounts reclassified out of AOCI for the years ended December 31: Accumulated Other Comprehensive Income (Loss) Components thousands Affected line items in the Statements of Operations 2024 2023 (Gains) losses on cash flow hedges $ ( 5,821 ) $ ( 16,970 ) Interest expense Income taxes on (gains) losses on cash flow hedges 1,324 3,839 Income tax expense (benefit) Total reclassifications of (income) loss for the period $ ( 4,497 ) $ ( 13,131 ) 15. Earnings Per Share Basic earnings (loss) per share (EPS) is computed by dividing net income (loss) available to common stockholders by the weighted‑average number of common shares outstanding. Diluted EPS is computed after adjusting the numerator and denominator of the basic EPS computation for the effects of all potentially dilutive common shares. The dilutive effect of options and non-vested stock issued under stock‑based compensation plans is computed using the treasury stock method. The dilutive effect of the warrants, which expired without being exercised in 2023, was computed using the if-converted method. Information related to the Company’s EPS calculations is summarized for the years ended December 31 as follows: thousands except per share amounts 2024 2023 2022 Net income (loss) Net income (loss) from continuing operations $ 285,215 $ 83,410 $ 252,709 Net (income) loss attributable to noncontrolling interests 711 ( 243 ) ( 103 ) Net income (loss) from continuing operations attributable to common stockholders 285,926 83,167 252,606 Net income (loss) from discontinued operations ( 88,223 ) ( 634,940 ) ( 68,073 ) Net income (loss) attributable to common stockholders $ 197,703 $ ( 551,773 ) $ 184,533 Shares Weighted-average common shares outstanding — basic 49,686 49,568 50,513 Restricted stock and stock options 226 48 45 Weighted-average common shares outstanding — diluted 49,912 49,616 50,558 Net income (loss) per common share Basic income (loss) per share — continuing operations $ 5.75 $ 1.68 $ 5.00 Basic income (loss) per share — discontinued operations $ ( 1.78 ) $ ( 12.81 ) $ ( 1.35 ) Basic income (loss) per share — attributable to common stockholders $ 3.98 $ ( 11.13 ) $ 3.65 Diluted income (loss) per share — continuing operations $ 5.73 $ 1.68 $ 5.00 Diluted income (loss) per share — discontinued operations $ ( 1.77 ) $ ( 12.80 ) $ ( 1.35 ) Diluted income (loss) per share — attributable to common stockholders $ 3.96 $ ( 11.12 ) $ 3.65 Anti-dilutive shares excluded from diluted EPS Restricted stock and stock options 66 250 531 Warrants — — 2,053 Common Stock Repurchases In October 2021, the Company’s board of directors (Board) authorized a share repurchase program, pursuant to which the Company was authorized to purchase up to $ 250.0 million of its common stock through open-market transactions. During the fourth quarter of 2021, the Company repurchased 1,023,284 shares of its common stock, par value $ 0.01 per share, for $ 96.6 million, or approximately $ 94.42 per share. During the first quarter of 2022, the Company repurchased an additional 1,579,646 shares of its common stock, for $ 153.4 million, or approximately $ 97.10 per share, thereby completing all authorized purchases under the October 2021 plan. HHH 2024 FORM 10-K | 95 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements In March 2022, the Board authorized an additional share repurchase program, pursuant to which the Company may, from time to time, purchase up to $ 250.0 million of its common stock through open-market transactions. The date and time of such repurchases will depend upon market conditions, and the program may be suspended or discontinued at any time. During 2022, the Company repurchased 2,704,228 shares of its common stock under this program for approximately $ 235.0 million at an average price of $ 86.90 per share. All purchases were funded with cash on hand. 16. Revenues Revenues from contracts with customers (excluding lease-related revenues) are recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Revenue and cost of sales for condominium units sold are not recognized until the construction is complete, the sale closes, and the title to the property has transferred to the buyer (point in time). Additionally, certain real estate selling costs, such as the costs related to the Company’s condominium model units, are either expensed immediately or capitalized as property and equipment and depreciated over their estimated useful life. The following presents the Company’s revenues disaggregated by revenue source for the years ended December 31: thousands 2024 2023 2022 Revenues from contracts with customers Recognized at a point in time: Condominium rights and unit sales $ 778,616 $ 47,707 $ 677,078 Master Planned Communities land sales 453,195 370,185 316,065 Builder price participation 52,023 60,989 71,761 Total 1,283,834 478,881 1,064,904 Recognized at a point in time or over time: Other land, rental, and property revenues 44,755 46,255 44,893 Rental and lease-related revenues Rental revenue 422,100 383,617 379,693 Total revenues $ 1,750,689 $ 908,753 $ 1,489,490 Revenues by segment Operating Assets revenues $ 444,300 $ 410,254 $ 401,304 Master Planned Communities revenues 522,925 448,452 408,365 Strategic Developments revenues 783,396 49,987 679,763 Corporate revenues 68 60 58 Total revenues $ 1,750,689 $ 908,753 $ 1,489,490 Contract Assets and Liabilities Contract assets are the Company’s right to consideration in exchange for goods or services that have been transferred to a customer, excluding any amounts presented as a receivable. Contract liabilities are the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration. There were no contract assets for the periods presented. The contract liabilities primarily relate to escrowed condominium deposits, MPC land sales deposits, and deferred MPC land sales related to unsatisfied land improvements. The beginning and ending balances of contract liabilities and significant activity during the periods presented are as follows: thousands Contract Liabilities Balance at December 31, 2022 $ 453,091 Consideration earned during the period ( 109,030 ) Consideration received during the period 231,560 Balance at December 31, 2023 $ 575,621 Consideration earned during the period ( 865,949 ) Consideration received during the period 874,864 Balance at December 31, 2024 $ 584,536 HHH 2024 FORM 10-K | 96 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Remaining Unsatisfied Performance Obligations The Company’s remaining unsatisfied performance obligations represent a measure of the total dollar value of work to be performed on contracts executed and in progress. These performance obligations primarily relate to the completion of condominium construction and transfer of control to a buyer, as well as the completion of contracted MPC land sales and related land improvements. These obligations are associated with contracts that generally are non-cancelable by the customer after 30 days for all Ward Village condominiums and after 6 days for The Ritz-Carlton Residences; however, purchasers of condominium units have the right to cancel the contract should the Company elect not to construct the condominium unit within a certain period of time or materially change the design of the condominium unit. The aggregate amount of the transaction price allocated to the Company’s remaining unsatisfied performance obligations as of December 31, 2024, was $ 3.1 billion. The Company expects to recognize this amount as revenue over the following periods: thousands Less than 1 year 1-2 years 3 years and thereafter Total remaining unsatisfied performance obligations $ 717,723 $ 721,738 $ 1,623,159 The Company’s remaining performance obligations are adjusted to reflect any known project cancellations, revisions to project scope and cost, and deferrals, as appropriate. These amounts exclude estimated amounts of variable consideration which are constrained, such as builder price participation. 17. Leases The Company has lease agreements with lease and non-lease components and has elected to aggregate these components into a single component for all classes of underlying assets. Certain of the Company’s lease agreements include non-lease components such as fixed common area maintenance charges. Lessee Arrangements The Company determines whether an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets and Operating lease obligations on the Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an estimate of the incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. The Operating lease right-of-use asset also includes any lease payments made, less any lease incentives and initial direct costs incurred. The Company does not have any finance leases. The Company’s lessee agreements consist of operating leases primarily for ground leases and other real estate. The Company’s leases have remaining lease terms of approximately 2 years to approximately 25 years, excluding extension options. The Company considers its strategic plan and the life of associated agreements in determining when options to extend or terminate lease terms are reasonably certain of being exercised. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Certain of the Company’s lease agreements include variable lease payments based on a percentage of income generated through subleases, changes in price indices and market rates, and other costs arising from operating, maintenance, and taxes. The Company’s lease agreements do not contain residual value guarantees or restrictive covenants. The Company leases certain buildings and office space constructed on its ground leases to third parties. The Company’s leased assets and liabilities are as follows: thousands 2024 2023 Operating lease right-of-use assets $ 5,806 $ 5,463 Operating lease obligations $ 5,456 $ 5,362 HHH 2024 FORM 10-K | 97 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Future minimum lease payments as of December 31, 2024, are as follows: thousands Operating Leases 2025 $ 692 2026 956 2027 898 2028 616 2029 622 Thereafter 5,981 Total lease payments 9,765 Less: imputed interest ( 4,309 ) Present value of lease liabilities $ 5,456 Other information related to the Company’s lessee agreements is as follows: Supplemental Consolidated Statements of Cash Flows Information Year ended December 31, thousands 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows on operating leases $ 759 $ 368 Other Information 2024 2023 Weighted-average remaining lease term (years) Operating leases 16.4 18.6 Weighted-average discount rate Operating leases 7.1 % 7.4 % Lessor Arrangements The Company receives rental income from the leasing of retail, office, multifamily, and other space under operating leases, as well as certain variable tenant recoveries. Operating leases for retail, office, and other properties are with a variety of tenants and have a remaining average term of approximately five years . Lease terms generally vary among tenants and may include early termination options, extension options, and fixed rental rate increases or rental rate increases based on an index. Multifamily leases generally have a term of 12 months or less. Minimum rent revenues related to operating leases are as follows: Year ended December 31, thousands 2024 2023 Total minimum rent payments $ 235,652 $ 219,025 Total future minimum rents associated with operating leases are as follows: thousands Total Minimum Rent 2025 $ 237,680 2026 233,774 2027 224,137 2028 202,047 2029 182,760 Thereafter 672,278 Total $ 1,752,676 Minimum rent revenues are recognized on a straight‑line basis over the terms of the related leases when collectability is reasonably assured and the tenant has taken possession of, or controls, the physical use of the leased asset. Percentage rent in lieu of fixed minimum rent is recognized as sales are reported from tenants. Minimum rent revenues reported on the Consolidated Statements of Operations also include amortization related to above-market and below‑market tenant leases on acquired properties. HHH 2024 FORM 10-K | 98 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements 18. Segments In 2024, the Company completed the spinoff of Seaport Entertainment Group Inc. which included all assets in the previously reported Seaport segment and the Las Vegas Aviators and Las Vegas Ballpark previously included in the Operating Assets segment. These assets are now disclosed as discontinued operations in the current and prior periods. See Note 2 - Discontinued Operations for additional information on the spinoff transaction. The Company has three business segments, Operating Assets, MPC, and Strategic Developments, which are organized based on the different products and services that each segment offers, and are separately managed as each requires different operating strategies or management expertise reflective of management’s operating philosophies and methods. The Company’s segments or assets within such segments could change in the future as development of certain properties commences or other operational or management changes occur. All operations are within the United States. Activity within each of the Company’s reportable segments is as follows: – Operating Assets – consists of developed or acquired retail, office, and multifamily properties along with other real estate investments. These properties are currently generating rental revenues and may be redeveloped, repositioned, or sold to improve segment performance or to recycle capital. – MPC – consists of the development and sale of land in large‑scale, long‑term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona. Revenues are primarily generated through the sale of residential and commercial land to homebuilders and developers. – Strategic Developments – consists of residential condominium and commercial property projects currently under development and all other properties held for development which have no substantial operations. Revenues are primarily generated from the sale of condominium units. The Chief Operating Decision Maker (CODM), which is the Company’s Chief Executive Officer, may use different operating measures to assess operating results and allocate resources among the three segments, however the measure that is most consistent with the amounts included in the consolidated financial statements is earnings before taxes (EBT). EBT, as it relates to each business segment, includes the revenues and expenses of each segment, as shown below. EBT excludes corporate expenses and other items that are not allocable to the segments. The CODM utilizes EBT to evaluate the current financial performance and project the future financial performance of each segment to determine the allocation of capital resources. This measure is also used to evaluate the need for operational adjustments, such as adjustments to prices, cost structures, and product mix necessary to achieve profitability targets. HHH 2024 FORM 10-K | 99 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements Segment EBT is as follows for the years ended December 31: thousands Operating Assets Segment MPC Segment Strategic Developments Segment Year Ended December 31, 2024 Total revenues $ 444,300 $ 522,925 $ 783,396 Condominium rights and unit cost of sales — — ( 582,574 ) Master Planned Communities cost of sales — ( 169,191 ) — Operating costs ( 138,172 ) ( 52,736 ) ( 17,670 ) Rental property real estate taxes ( 55,915 ) — ( 2,480 ) (Provision for) recovery of doubtful accounts ( 504 ) — — Segment operating income (loss) 249,709 300,998 180,672 Depreciation and amortization ( 169,040 ) ( 438 ) ( 7,255 ) Interest income (expense), net ( 138,207 ) 60,473 18,603 Other income (loss), net 822 — 90,534 Equity in earnings (losses) from unconsolidated ventures 5,819 ( 11,899 ) 251 Gain (loss) on sale or disposal of real estate and other assets, net 22,907 — — Gain (loss) on extinguishment of debt ( 465 ) — — Segment EBT $ ( 28,455 ) $ 349,134 $ 282,805 Year Ended December 31, 2023 Total revenues $ 410,254 $ 448,452 $ 49,987 Condominium rights and unit cost of sales — — ( 55,417 ) Master Planned Communities cost of sales — ( 140,050 ) — Operating costs ( 130,125 ) ( 53,420 ) ( 21,908 ) Rental property real estate taxes ( 52,502 ) — ( 3,147 ) (Provision for) recovery of doubtful accounts 2,762 — — Segment operating income (loss) 230,389 254,982 ( 30,485 ) Depreciation and amortization ( 161,138 ) ( 418 ) ( 3,963 ) Interest income (expense), net ( 125,197 ) 64,291 16,074 Other income (loss), net 2,092 ( 102 ) 690 Equity in earnings (losses) from unconsolidated ventures 2,968 22,666 142 Gain (loss) on sale or disposal of real estate and other assets, net 23,926 — 236 Gain (loss) on extinguishment of debt ( 97 ) — — Segment EBT $ ( 27,057 ) $ 341,419 $ ( 17,306 ) Year Ended December 31, 2022 Total revenues $ 401,304 $ 408,365 $ 679,763 Condominium rights and unit cost of sales — — ( 483,983 ) Master Planned Communities cost of sales — ( 119,466 ) — Operating costs ( 118,416 ) ( 54,439 ) ( 19,001 ) Rental property real estate taxes ( 51,069 ) — ( 1,052 ) (Provision for) recovery of doubtful accounts ( 629 ) — — Segment operating income (loss) 231,190 234,460 175,727 Depreciation and amortization ( 145,208 ) ( 394 ) ( 5,319 ) Interest income (expense), net ( 87,664 ) 50,305 17,073 Other income (loss), net ( 1,383 ) 23 1,799 Equity in earnings (losses) from unconsolidated ventures 22,262 ( 1,407 ) 868 Gain (loss) on sale or disposal of real estate and other assets, net 29,588 — 90 Gain (loss) on extinguishment of debt ( 2,230 ) — — Segment EBT $ 46,555 $ 282,987 $ 190,238 HHH 2024 FORM 10-K | 100 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements The following represents the reconciliation of segment EBT to Net income (loss) from continuing operations before income taxes in the Consolidated Statements of Operations for the years ended December 31: thousands 2024 2023 2022 Operating Assets EBT $ ( 28,455 ) $ ( 27,057 ) $ 46,555 MPC EBT 349,134 341,419 282,987 Strategic Developments EBT 282,805 ( 17,306 ) 190,238 General and administrative ( 91,752 ) ( 86,671 ) ( 81,770 ) Gain (loss) on sale of MUD receivables ( 48,651 ) — — Corporate interest expense, net ( 80,446 ) ( 87,243 ) ( 88,394 ) Corporate income, expenses, and other items ( 17,236 ) ( 13,314 ) ( 14,711 ) Net income (loss) from continuing operations before income taxes $ 365,399 $ 109,828 $ 334,905 The following represents the reconciliation of segment revenue to Total revenues in the Consolidated Statements of Operations for the years ended December 31: thousands 2024 2023 2022 Operating Assets revenue $ 444,300 $ 410,254 $ 401,304 MPC revenue 522,925 448,452 408,365 Strategic Developments revenue 783,396 49,987 679,763 Corporate income 68 60 58 Total revenues $ 1,750,689 $ 908,753 $ 1,489,490 The following represents asset information by segment and the reconciliation of total segment assets to Total assets in the Consolidated Balance Sheets as of December 31: thousands 2024 2023 Operating Assets $ 3,548,162 $ 3,448,319 Master Planned Communities 3,373,827 3,358,821 Strategic Developments 1,836,791 1,638,955 Corporate 452,456 515,636 Discontinued operations — 615,272 Total assets $ 9,211,236 $ 9,577,003 The following represents capital expenditures by segment for the years ended December 31: thousands 2024 2023 Operating Assets $ 63,781 $ 44,342 Master Planned Communities 232 351 Strategic Developments 239,472 233,674 Corporate 740 7,028 HHH 2024 FORM 10-K | 101 FINANCIAL STATEMENTS FOOTNOTES Table of Contents Index to Financial Statements 19. Quarterly Financial Information (Unaudited) The Company completed the spinoff of SEG in the third quarter of 2024. As the spinoff represented a strategic shift in the Company’s operations, the results of SEG are presented as discontinued operations, which resulted in retrospective changes to the Company’s Consolidated Statements of Operations. See Note 2 - Discontinued Operations for additional information. The following table provides summarized quarterly financial data for 2024 and 2023. All per share amounts presented below are calculated based on whole dollars and number of shares, and therefore the sum of continuing and discontinued operations per share amounts may not recalculate to the total per share amounts. thousands except per share amounts First Quarter Second Quarter Third Quarter Fourth Quarter 2024 Total revenues $ 156,484 $ 283,468 $ 327,147 $ 983,590 Operating income (loss) 12,608 88,464 198,339 260,510 Net income (loss) from continuing operations ( 21,000 ) 47,367 96,528 162,320 Net income (loss) from discontinued operations, net of tax ( 31,467 ) ( 26,309 ) ( 24,031 ) ( 6,416 ) Net income (loss) ( 52,467 ) 21,058 72,497 155,904 Net (income) loss attributable to noncontrolling interests ( 10 ) 34 273 414 Net income (loss) attributable to common stockholders ( 52,477 ) 21,092 72,770 156,318 Basic income (loss) per share — continuing operations $ ( 0.42 ) $ 0.95 $ 1.95 $ 3.27 Basic income (loss) per share — discontinued operations $ ( 0.63 ) $ ( 0.53 ) $ ( 0.48 ) $ ( 0.13 ) Basic income (loss) per share — attributable to common stockholders $ ( 1.06 ) $ 0.42 $ 1.46 $ 3.15 Diluted income (loss) per share — continuing operations $ ( 0.42 ) $ 0.95 $ 1.95 $ 3.25 Diluted income (loss) per share — discontinued operations $ ( 0.63 ) $ ( 0.53 ) $ ( 0.48 ) $ ( 0.13 ) Diluted income (loss) per share — attributable to common stockholders $ ( 1.06 ) $ 0.42 $ 1.46 $ 3.12 2023 Total revenues $ 181,541 $ 185,775 $ 228,473 $ 312,964 Operating income (loss) 37,790 13,941 59,376 105,117 Net income (loss) from continuing operations 6,493 ( 7,981 ) 32,064 52,834 Net income (loss) from discontinued operations, net of tax ( 29,120 ) ( 11,160 ) ( 576,199 ) ( 18,461 ) Net income (loss) ( 22,627 ) ( 19,141 ) ( 544,135 ) 34,373 Net (income) loss attributable to noncontrolling interests ( 118 ) ( 2 ) ( 46 ) ( 77 ) Net income (loss) attributable to common stockholders ( 22,745 ) ( 19,143 ) ( 544,181 ) 34,296 Basic income (loss) per share — continuing operations $ 0.13 $ ( 0.16 ) $ 0.65 $ 1.06 Basic income (loss) per share — discontinued operations $ ( 0.59 ) $ ( 0.23 ) $ ( 11.61 ) $ ( 0.37 ) Basic income (loss) per share — attributable to common stockholders $ ( 0.46 ) $ ( 0.39 ) $ ( 10.97 ) $ 0.69 Diluted income (loss) per share — continuing operations $ 0.13 $ ( 0.16 ) $ 0.64 $ 1.06 Diluted income (loss) per share — discontinued operations $ ( 0.59 ) $ ( 0.23 ) $ ( 11.60 ) $ ( 0.37 ) Diluted income (loss) per share — attributable to common stockholders $ ( 0.46 ) $ ( 0.39 ) $ ( 10.96 ) $ 0.69 HHH 2024 FORM 10-K | 102 FINANCIAL STATEMENT SCHEDULE Table of Contents Index to Financial Statements SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2024 Initial Cost (b) Costs Capitalized Subsequent to Acquisition (c) Gross Amounts at Which Carried at Close of Period (d) Name of Center thousands Location Center Type Encumbrances (a) Land Buildings and Improvements Land (e) Buildings and Improvements (e) Land Buildings and Improvements Total Accumulated Depreciation (f) Date of Construction Date Acquired / Completed Bridgeland Bridgeland Cypress, TX MPC $ 283,000 $ 260,223 $ — $ 249,010 $ 1,708 $ 509,233 $ 1,708 $ 510,941 $ ( 886 ) 2004 Bridgeland Predevelopment Cypress, TX Development — — 2,455 — — — 2,455 2,455 — Houston Ground Leases - Bridgeland Cypress, TX Other — 3,935 — — — 3,935 — 3,935 — Various Lakeside Row Cypress, TX Multifamily 35,500 812 42,875 — 543 812 43,418 44,230 ( 9,093 ) 2018 2019 One Bridgeland Green Cypress, TX Development — — 16,791 — — — 16,791 16,791 — 2024 Starling at Bridgeland Cypress, TX Multifamily 37,976 1,511 57,505 — 490 1,511 57,995 59,506 ( 4,781 ) 2021 2022 Village Green at Bridgeland Central Cypress, TX Retail 9,154 1,774 14,726 — — 1,774 14,726 16,500 ( 41 ) 2024 2024 Wingspan Cypress, TX Multifamily 49,138 1,214 72,042 — — 1,214 72,042 73,256 ( 3,263 ) 2022 2023 Columbia Color Burst Park Retail Columbia, MD Retail — 337 6,945 10 2,160 347 9,105 9,452 ( 1,217 ) 2019 2020 Columbia Ground Leases Columbia, MD Other — — 1,312 — — — 1,312 1,312 ( 18 ) 2024 Columbia Office Properties Columbia, MD Office — 1,175 14,394 — ( 1,179 ) 1,175 13,215 14,390 ( 7,184 ) 2004 / 2007 Columbia Parking Garages Columbia, MD Other — — 42,940 — ( 157 ) — 42,783 42,783 ( 6,866 ) Various Various Columbia Predevelopment Columbia, MD Development — — 34,530 — — — 34,530 34,530 — Juniper Columbia, MD Multifamily 117,000 3,923 112,435 — 9,098 3,923 121,533 125,456 ( 21,219 ) 2018 2020 10285 Lakefront Medical Office Columbia, MD Office 14,034 — 45,288 — — — 45,288 45,288 ( 739 ) 2022 2024 Lakefront District Columbia, MD Development — 400 80,053 ( 400 ) ( 44,992 ) — 35,061 35,061 — Various One Mall North Columbia, MD Office 6,774 7,822 10,818 — 2,533 7,822 13,351 21,173 ( 9,385 ) 2016 Marlow Columbia, MD Multifamily 75,815 4,088 130,083 — 3,495 4,088 133,578 137,666 ( 10,250 ) 2021 2022 6100 Merriweather Columbia, MD Office 76,000 2,550 86,867 — 9,261 2,550 96,128 98,678 ( 16,415 ) 2018 2019 One Merriweather Columbia, MD Office 49,800 1,433 56,125 — 1,738 1,433 57,863 59,296 ( 16,962 ) 2015 2017 Two Merriweather Columbia, MD Office 25,600 1,019 33,016 — 6,268 1,019 39,284 40,303 ( 9,625 ) 2016 2017 Merriweather District Columbia, MD Development — — 76,808 — 10,987 — 87,795 87,795 — 2015 Merriweather Row Columbia, MD Office 66,467 24,685 94,824 — 59,149 24,685 153,973 178,658 ( 44,418 ) 2012/2014 Rouse Building Columbia, MD Retail 22,362 — 28,865 — 3,063 — 31,928 31,928 ( 10,273 ) 2013 2014 Summerlin Aristocrat Las Vegas, NV Office 32,873 5,004 34,588 — 152 5,004 34,740 39,744 ( 8,113 ) 2017 2018 Constellation Las Vegas, NV Multifamily 24,200 3,069 39,759 — 2,494 3,069 42,253 45,322 ( 10,940 ) 2017 Downtown Summerlin (g)(h) Las Vegas, NV Retail/Office 1,519 30,855 364,100 — 31,318 30,855 395,418 426,273 ( 141,906 ) 2013 2014 / 2015 Hockey Ground Lease (g) Las Vegas, NV Other 141 6,705 2,198 — — 6,705 2,198 8,903 ( 403 ) 2017 Meridian Las Vegas, NV Office 8,807 4,509 38,905 — — 4,509 38,905 43,414 ( 837 ) 2022 2024 1700 Pavilion (g) Las Vegas, NV Office 70,574 1,700 101,760 — 9,178 1,700 110,938 112,638 ( 7,214 ) 2021 2022 Two Summerlin (g) Las Vegas, NV Office 40,857 3,037 47,104 — 2,151 3,037 49,255 52,292 ( 12,979 ) 2017 2018 Summerlin (g) Las Vegas, NV MPC 81,793 990,179 — 163,556 1,180 1,153,735 1,180 1,154,915 ( 752 ) 2004 Summerlin Grocery Anchored Center (g) Las Vegas, NV Retail 3,715 4,073 35,357 — — 4,073 35,357 39,430 ( 167 ) 2023 2024 Summerlin Predevelopment Las Vegas, NV Development — — 21,177 — — — 21,177 21,177 — Tanager (g) Las Vegas, NV Multifamily 58,616 7,331 53,978 — 661 7,331 54,639 61,970 ( 11,632 ) 2017 2019 Tanager Echo (g) Las Vegas, NV Multifamily 59,529 2,302 86,013 — — 2,302 86,013 88,315 ( 5,284 ) 2021 2023 HHH 2024 FORM 10-K | 103 FINANCIAL STATEMENT SCHEDULE Table of Contents Index to Financial Statements Initial Cost (b) Costs Capitalized Subsequent to Acquisition (c) Gross Amounts at Which Carried at Close of Period (d) Name of Center thousands Location Center Type Encumbrances (a) Land Buildings and Improvements Land (e) Buildings and Improvements (e) Land Buildings and Improvements Total Accumulated Depreciation (f) Date of Construction Date Acquired / Completed Teravalis Teravalis Phoenix, AZ MPC — 544,546 312 834 20 545,380 332 545,712 ( 99 ) 2021 The Woodlands Creekside Park The Woodlands, TX Multifamily 36,912 729 40,116 — 620 729 40,736 41,465 ( 9,678 ) 2017 2018 Creekside Park The Grove The Woodlands, TX Multifamily 57,000 1,876 52,382 — 294 1,876 52,676 54,552 ( 7,648 ) 2019 2021 Creekside Park West The Woodlands, TX Retail 15,669 1,228 17,922 — 1,325 1,228 19,247 20,475 ( 3,317 ) 2018 2019 Grogan’s Mill Library and Community Center The Woodlands, TX Development — — 13,786 — — — 13,786 13,786 ( 375 ) 2024 Grogan's Mill Retail The Woodlands, TX Development — — 2,042 — — — 2,042 2,042 — 2024 Houston Ground Leases - The Woodlands The Woodlands, TX Other — 13,324 2,582 — — 13,324 2,582 15,906 ( 459 ) Various One Hughes Landing The Woodlands, TX Office 45,531 1,678 34,761 — ( 2,365 ) 1,678 32,396 34,074 ( 11,669 ) 2012 2013 Two Hughes Landing The Woodlands, TX Office 44,519 1,269 34,950 — ( 2,601 ) 1,269 32,349 33,618 ( 12,669 ) 2013 2014 Three Hughes Landing The Woodlands, TX Office 70,000 2,626 46,372 — 33,131 2,626 79,503 82,129 ( 24,487 ) 2014 2016 1725 Hughes Landing Boulevard The Woodlands, TX Office 61,221 1,351 36,764 — 28,164 1,351 64,928 66,279 ( 19,104 ) 2013 2015 1735 Hughes Landing Boulevard The Woodlands, TX Office 63,247 3,709 97,651 — ( 280 ) 3,709 97,371 101,080 ( 39,030 ) 2013 2015 Hughes Landing Daycare The Woodlands, TX Other — 138 — — — 138 — 138 — 2018 2019 Hughes Landing Retail The Woodlands, TX Retail 31,394 5,184 32,562 — 1,003 5,184 33,565 38,749 ( 11,748 ) 2013 2015 1701 Lake Robbins The Woodlands, TX Retail — 1,663 3,725 — 856 1,663 4,581 6,244 ( 1,327 ) 2014 2201 Lake Woodlands Drive The Woodlands, TX Office — 3,755 — — 1,210 3,755 1,210 4,965 ( 941 ) 2011 Lakefront North The Woodlands, TX Office 50,000 10,260 39,357 — 17,675 10,260 57,032 67,292 ( 13,735 ) 2018 One Lakes Edge The Woodlands, TX Multifamily 65,159 1,057 81,768 — 1,104 1,057 82,872 83,929 ( 26,022 ) 2013 2015 Two Lakes Edge The Woodlands, TX Multifamily 105,000 1,870 96,349 — 1,048 1,870 97,397 99,267 ( 18,534 ) 2018 2020 Millennium Six Pines The Woodlands, TX Multifamily 41,418 4,000 54,624 7,225 1,119 11,225 55,743 66,968 ( 17,438 ) 2016 Millennium Waterway The Woodlands, TX Multifamily 51,000 15,917 56,002 — 1,844 15,917 57,846 73,763 ( 26,643 ) 2012 8770 New Trails The Woodlands, TX Office 34,392 2,204 35,033 — 80 2,204 35,113 37,317 ( 7,986 ) 2019 2020 9303 New Trails The Woodlands, TX Office 7,195 1,929 11,915 — 2,295 1,929 14,210 16,139 ( 4,858 ) 2011 1 Riva Row The Woodlands, TX Development 35,996 — 88,897 — — — 88,897 88,897 — 2023 3831 Technology Forest Drive The Woodlands, TX Office 18,649 514 14,194 — 1,816 514 16,010 16,524 ( 8,024 ) 2014 2014 The Lane at Waterway The Woodlands, TX Multifamily 37,500 2,029 40,033 — 474 2,029 40,507 42,536 ( 6,892 ) 2019 2020 The Ritz-Carlton Residences The Woodlands, TX Development 40,402 — 47,655 — — — 47,655 47,655 ( 1,235 ) 2024 The Woodlands The Woodlands, TX MPC — 269,411 9,814 ( 79,918 ) ( 9,744 ) 189,493 70 189,563 ( 70 ) 2011 The Woodlands Parking Garages The Woodlands, TX Other — 6,885 3,600 2,497 15,103 9,382 18,703 28,085 ( 4,324 ) Various The Woodlands Predevelopment The Woodlands, TX Development — — 19,196 — — — 19,196 19,196 ( 1,675 ) The Woodlands Towers at the Waterway (i) The Woodlands, TX Office 379,549 11,044 437,561 — 48,835 11,044 486,396 497,440 ( 80,277 ) 2019 The Woodlands Warehouse The Woodlands, TX Other 13,700 4,480 4,389 — 103 4,480 4,492 8,972 ( 902 ) 2019 20/25 Waterway Avenue The Woodlands, TX Retail 14,500 2,346 8,871 — 1,053 2,346 9,924 12,270 ( 3,375 ) 2011 Waterway Plaza II The Woodlands, TX Office 9,663 841 10,279 — 399 841 10,678 11,519 ( 701 ) 2024 3 Waterway Square The Woodlands, TX Office 39,947 748 42,214 — 1,574 748 43,788 44,536 ( 17,802 ) 2012 2013 4 Waterway Square The Woodlands, TX Office 21,071 1,430 51,553 — 9,853 1,430 61,406 62,836 ( 24,354 ) 2011 Waterway Square Retail The Woodlands, TX Retail — 1,341 4,255 — 1,314 1,341 5,569 6,910 ( 2,006 ) 2011 1400 Woodloch Forest The Woodlands, TX Office — 1,570 13,023 — 5,864 1,570 18,887 20,457 ( 8,103 ) 2011 The Woodlands Hills The Woodlands Hills Conroe, TX MPC — 99,284 — 14,536 12 113,820 12 113,832 ( 7 ) 2014 HHH 2024 FORM 10-K | 104 FINANCIAL STATEMENT SCHEDULE Table of Contents Index to Financial Statements Initial Cost (b) Costs Capitalized Subsequent to Acquisition (c) Gross Amounts at Which Carried at Close of Period (d) Name of Center thousands Location Center Type Encumbrances (a) Land Buildings and Improvements Land (e) Buildings and Improvements (e) Land Buildings and Improvements Total Accumulated Depreciation (f) Date of Construction Date Acquired / Completed Ward Village ‘A‘ali‘i Honolulu, HI Condominium — — 714 — 132 — 846 846 ( 69 ) 2018 2021 Ae`o Honolulu, HI Condominium — — 1,162 — — — 1,162 1,162 ( 175 ) 2016 2018 Anaha Honolulu, HI Condominium — — 1,097 — — — 1,097 1,097 ( 194 ) 2014 2017 Kalae Honolulu, HI Development 64,573 — 137,008 — — — 137,008 137,008 — 2024 Ke Kilohana Honolulu, HI Condominium — — 656 — — — 656 656 ( 93 ) 2016 2019 Kewalo Basin Harbor Honolulu, HI Other 10,736 — 24,116 — ( 786 ) — 23,330 23,330 ( 7,126 ) 2017 2019 Kō‘ula Honolulu, HI Condominium — — 1,184 — 190 — 1,374 1,374 ( 76 ) 2019 2022 The Park Ward Village Honolulu, HI Development 41,242 — 333,235 — — — 333,235 333,235 — 2022 Ulana Ward Village Honolulu, HI Development 181,581 — 307,839 — — — 307,839 307,839 — 2023 Victoria Place Honolulu, HI Condominium — — 1,388 — — — 1,388 1,388 ( 273 ) 2021 2024 Waiea Honolulu, HI Condominium — — 1,206 — 414 — 1,620 1,620 ( 294 ) 2014 2016 Ward Predevelopment Honolulu, HI Development 3,427 — 182,304 — — — 182,304 182,304 ( 2,044 ) Ward Village Parking Garages Honolulu, HI Other — 4,448 — 257 140,353 4,705 140,353 145,058 ( 39,168 ) 2011 / 2016 2013 / 2018 Ward Village Retail Honolulu, HI Retail 175,000 159,559 89,321 ( 105,407 ) 203,086 54,152 292,407 346,559 ( 105,983 ) Various Various Total excluding Corporate and Deferred financing costs 3,118,437 2,561,908 4,554,375 252,200 617,886 2,814,108 5,172,261 7,986,369 ( 945,871 ) Corporate Various 2,050,000 885 1,027 ( 885 ) 9,613 — 10,640 10,640 ( 3,662 ) Deferred financing costs N/A ( 40,968 ) Total $ 5,127,469 $ 2,562,793 $ 4,555,402 $ 251,315 $ 627,499 $ 2,814,108 $ 5,182,901 $ 7,997,009 $ ( 949,533 ) (a) Refer to Note 8 - Mortgages, Notes, and Loans Payable, Net for additional information. (b) The initial cost for developed projects includes costs incurred through the end of the first complete calendar year after the asset is placed in service; for projects undergoing development or redevelopment, it includes all costs incurred up to the end of the reporting period; for acquired properties, it represents the acquisition cost. (c) For retail and other properties, costs capitalized subsequent to acquisitions is net of cost of disposals or other property write‑downs. For MPCs, costs capitalized subsequent to acquisitions are net of the cost of land sales. (d) The aggregate cost of land, buildings, and improvements for federal income tax purposes is approximately $ 6.3 billion. (e) Reductions in Land reflect transfers to Buildings and Improvements for projects which the Company is internally developing. (f) Depreciation is based upon the useful lives in Note 1 - Presentation of Financial Statements and Significant Accounting Policies . (g) Encumbrances balance either represents or is inclusive of SIDs. (h) Downtown Summerlin includes the One Summerlin office property, which was placed in service in 2015. (i) The Woodlands Towers at the Waterway includes 1201 Lake Robbins and 9950 Woodloch Forest. Reconciliation of Real Estate thousands 2024 2023 2022 Balance at January 1 $ 7,558,809 $ 6,854,826 $ 6,615,870 Additions 1,431,478 1,160,786 1,050,528 Dispositions, write-offs, and land and condominium costs of sales ( 993,278 ) ( 456,803 ) ( 811,572 ) Balance at December 31 $ 7,997,009 $ 7,558,809 $ 6,854,826 HHH 2024 FORM 10-K | 105 FINANCIAL STATEMENT SCHEDULE Table of Contents Index to Financial Statements Reconciliation of Accumulated Depreciation thousands 2024 2023 2022 Balance at January 1 $ 829,018 $ 717,270 $ 632,415 Depreciation Expense 160,638 151,881 137,817 Dispositions and write-offs ( 40,123 ) ( 40,133 ) ( 52,962 ) Balance at December 31 $ 949,533 $ 829,018 $ 717,270 HHH 2024 FORM 10-K | 106 Table of Contents Index to Financial Statements Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.