Financial Data and Key Metrics Changes - For Q2 2025, adjusted operating cash flow was $91 million or $1.64 per diluted share, reflecting strong performance across business segments [6][7] - The company raised its full-year guidance for adjusted operating cash flow to a range of $385 million to $435 million, with a midpoint of approximately $410 million, an increase of $60 million at the midpoint compared to previous guidance [14][16] - The company reported a quarterly net operating income (NOI) of $69 million, representing a 5% year-over-year increase [9][10] Business Line Data and Key Metrics Changes - The master planned communities (MPC) segment delivered an earnings before tax (EBT) of $102 million, driven by land sales at a record average price per acre of $1.35 million, a 29% increase over the previous year [7][8] - The operating assets segment achieved a record quarterly NOI across office and multifamily properties, with a 5% year-over-year growth [7][10] - The multifamily portfolio delivered a record NOI of $17 million, a 19% increase year-over-year [10][11] Market Data and Key Metrics Changes - Home sales in the MPCs totaled 487 homes sold in Q2, a decline from the previous year due to reduced inventory and regulatory delays, but expected to rebound in the second half of the year [8][9] - The national housing market showed signs of softening, yet the company’s record price per acre indicates strong demand and desirability for its MPCs [8][9] Company Strategy and Development Direction - The company aims to transform from a pure play real estate company to a diversified holding company, with a focus on acquiring an insurance operation to enhance cash generation and investment returns [5][21] - The strategic direction includes maintaining a conservative leverage approach in the insurance business, similar to Berkshire Hathaway's model [21][26] - The company plans to leverage its real estate operations to support the growth of the insurance segment, aiming for a diversified holding company structure [22][79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of home sales within its communities despite broader market challenges, attributing this to the quality of its assets and amenities [39][41] - The company anticipates continued strength in land sales and homebuilder demand, projecting record residential land sales for the full year 2025 [9][43] - Management emphasized a cautious yet optimistic outlook for the insurance acquisition strategy, with expectations for it to become a significant part of the business in the near term [48][49] Other Important Information - The company has approximately $1.4 billion in cash and $515 million in undrawn lines of credit, providing strong liquidity for future investments [17][18] - The company successfully reduced near-term maturities and extended financing for key properties, enhancing its financial stability [18][19] Q&A Session Summary Question: Insights on MPC business amidst market challenges - Management noted strong home sales resilience due to the quality of assets and amenities, with a diverse range of price points attracting various buyers [36][39] Question: Thoughts on building versus acquiring an insurance entity - Management indicated a preference for acquiring an existing insurance operation to leverage established management and operations, rather than starting from scratch [44][46] Question: Expectations for earnings contribution from insurance versus stock portfolio - Management highlighted that the investment aspect of the insurance operation could significantly contribute to overall profitability, similar to Berkshire Hathaway's model [49][50] Question: Clarification on leverage and potential deal sizes for insurance acquisition - Management stated that they aim to maintain appropriate leverage and control over any acquired insurance operation, with potential deal sizes in the range of $1 billion to $3 billion [56][62] Question: Changes made within the organization post-acquisition - Management confirmed no significant changes to the real estate operations but emphasized G&A savings through centralization and efficiency improvements [65][70]

Strategic Transaction & Company Overview - Pershing Square invested $900 million in HHH, purchasing 9 million newly issued shares at $100 per share, representing a 48% premium[12] - Pershing Square's beneficial ownership increased to approximately 469%, with voting power capped at 40% and beneficial ownership limited to 47%[12] - Howard Hughes is transforming into a diversified holding company seeking controlling stakes in high-quality, durable growth companies while continuing to invest and grow the core real estate development business[12] - Howard Hughes has 34,000 acres of raw land[16] Financial Performance - The company's 2024 Master Planned Communities (MPC) Earnings Before Tax (EBT) was $349 million[18] - The company's 2024 Adjusted Condo Gross Profit was $211 million[20] - The company's 2024 Operating Assets Net Operating Income (NOI) was $257 million[23] - The company's Adjusted Operating Cash Flow for 2025 is projected to be $410 million[42] Operating Assets - Operating Assets In-Place NOI is $265 million with $353 million expected at stabilization[100]

Financial Performance - Net loss from continuing operations was $12.1 million, or $(0.22) per diluted share, compared to net income of $47.4 million, or $0.95 per diluted share in the prior-year period[12] - Total revenues for the three months ended June 30, 2025, were $260.88 million, a decrease of 7.9% compared to $283.47 million in the same period of 2024[29] - Net income attributable to common stockholders for the three months ended June 30, 2025, was a loss of $12.14 million, compared to a profit of $21.09 million in 2024[29] - Basic loss per share from continuing operations for the three months ended June 30, 2025, was $0.22, compared to earnings of $0.95 per share in 2024[29] - The net income from continuing operations attributable to common stockholders for the three months ended June 30, 2025, was $(12,144), compared to $(1,611) in the same period of 2024[48] Revenue and Sales - Master Planned Communities land sales generated $125.04 million in revenue for the three months ended June 30, 2025, down from $154.79 million in 2024, representing a decline of 19.3%[29] - Rental revenue increased to $111.09 million for the three months ended June 30, 2025, compared to $105.48 million in 2024, reflecting a growth of 5.4%[29] - The company reported condominium rights and unit sales of $193,000 in Q2 2025, compared to no sales in Q2 2024[21] - The total condominium rights and unit sales for the three months ended June 30, 2025, was $193, a decrease of $811 from the previous year[45] Operating Metrics - Adjusted Operating Cash Flow for the quarter was $91 million, or $1.64 per diluted share, with full-year 2025 guidance raised to $410 million, an increase of $60 million from previous estimates[6] - Total Operating Assets NOI for Q2 2025 was $68,860,000, representing a $3,429,000 increase or 5% from Q2 2024[21] - Total Operating Assets NOI for the first half of 2025 was $140,426,000, reflecting a $9,420,000 increase or 7% from the first half of 2024[21] - Total Same Store NOI for the three months ended June 30, 2025, was $68,628, an increase of $3,480 or 5.34% compared to $65,148 in the same period of 2024[41] - Non-Same Store NOI for the three months ended June 30, 2025, was $232, a decrease of $51 or 18.03% from $283 in the same period of 2024[41] Asset and Equity Position - Total assets as of June 30, 2025, increased to $10.30 billion from $9.21 billion as of December 31, 2024, marking a growth of 11.8%[31] - Cash and cash equivalents rose significantly to $1.44 billion as of June 30, 2025, compared to $596.08 million at the end of 2024, an increase of 141.5%[31] - Total liabilities increased to $6.59 billion as of June 30, 2025, from $6.37 billion at the end of 2024, reflecting a rise of 3.5%[31] - Total stockholders' equity grew to $3.64 billion as of June 30, 2025, compared to $2.78 billion at the end of 2024, an increase of 31.2%[31] Segment Performance - Master Planned Community (MPC) EBT was $102 million, driven by the sale of 111 residential acres at a record average price of $1.35 million per acre, with full-year EBT guidance raised to $430 million, an increase of $55 million[6] - MPC EBT for Q2 2025 was $102,412,000, a decrease of 17% from $123,241,000 in Q2 2024[21] - The Master Planned Communities Segment reported total revenues of $143,701,000 in Q2 2025, a decrease of 16.5% compared to $172,181,000 in Q2 2024[33] - The Master Planned Communities Segment's operating income decreased to $86,007,000 in Q2 2025, down 15.1% from $101,298,000 in Q2 2024[33] Market Position and Strategy - The company maintained a strong liquidity position with $1.4 billion in cash and cash equivalents, bolstered by a $900 million investment from Pershing Square[12] - The company is strategically positioned to meet market demand, focusing on innovative placemaking and development opportunities across its portfolio[23] Cost Management - Cash G&A is projected to range between $76 million and $86 million in 2025, with a mid-point of $81 million, excluding anticipated non-cash stock compensation[19] - Cash G&A for the three months ended June 30, 2025, was $28,385, compared to $34,552 in the same period of 2024, indicating a decrease of $6,167 or 17.88%[43]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Commission file number 001-41779 HOWARD HUGHES HOLDINGS INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) Delaware 93-1869991 ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2025 or ☐ Transition report pursuant to Section 13 or 15(d) o ...

Core Insights - The article discusses potential investment opportunities in HHH, indicating a possible long position in the stock within the next 72 hours [1]. Group 1 - The analyst expresses a personal opinion on the stock without any current holdings but may initiate a beneficial position soon [1]. - There is no compensation received for the article, emphasizing the independence of the analysis [1]. - The article does not provide specific investment recommendations or advice tailored to individual investors [2].

Core Insights - Summerlin and Bridgeland, communities under Howard Hughes Holdings, are ranked among the top-selling master planned communities in the U.S. for mid-year 2025, with Summerlin at 7 (515 new homes sold) and Bridgeland at 14 (438 new homes sold) [1][2] Summerlin - Summerlin has been a leading community for 35 years, covering 22,500 acres and located near Red Rock Canyon and the Las Vegas Strip, offering a blend of natural beauty and modern amenities [2][9] - The community features extensive amenities including schools, shopping centers, parks, and a vibrant urban core, Downtown Summerlin, which hosts over 125 retail brands and restaurants [4][9] - Summerlin offers over 100 actively selling floor plans across 20 neighborhoods, catering to diverse family needs with various home styles [5][9] Bridgeland - Bridgeland spans 11,500 acres and is transforming the Northwest Houston region, with over 3,000 acres of open space and a projected 23,000 homes for over 70,000 residents at full buildout [6][10] - Bridgeland Central, a 925-acre urban district, is developing commercial spaces including the first H-E-B grocery store and a mass timber office development, indicating strong commercial growth [7][10] - The community emphasizes a high-quality lifestyle with top-rated schools, job opportunities, and extensive outdoor amenities, supporting a healthy and active lifestyle [10][11] Company Overview - Howard Hughes Holdings manages a diverse portfolio of master planned communities and mixed-use real estate across the U.S., recognized for innovative placemaking and design excellence [11] - The company is strategically positioned to meet market demand, contributing to its strong real estate platform [11]

Core Points - Howard Hughes Holdings Inc. will release its second quarter earnings for 2025 on August 6, 2025, after market close, and will hold a conference call on August 7, 2025, at 10:00 AM ET [1] - The earnings call will be accessible via a live webcast, and participants can register for a Q&A session through the company's registration webpage [2] - Howard Hughes Holdings Inc. operates a diverse portfolio of commercial, residential, and mixed-use real estate across the U.S., with notable developments in Texas, Nevada, Arizona, Hawaii, and Maryland [3]

Core Viewpoint - Investors in Howard Hughes Holdings (HHH) should closely monitor the stock due to significant movements in the options market, particularly the high implied volatility of the Jul 18, 2025 $120.00 Call option [1] Company Analysis - Howard Hughes Holdings is currently rated as a Zacks Rank 1 (Strong Buy) in the Real Estate - Development Industry, which is in the top 13% of the Zacks Industry Rank [3] - Over the past 60 days, one analyst has raised the earnings estimate for the current quarter, resulting in a consensus estimate increase from 99 cents per share to $1.01 [3] Options Market Insights - The high implied volatility suggests that options traders are anticipating a significant price movement for Howard Hughes Holdings shares, potentially indicating an upcoming event that could lead to a major rally or sell-off [2][4] - Seasoned options traders often seek to sell premium on options with high implied volatility, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected [4]

Core Insights - Bill Ackman maintains a concentrated portfolio with only 10 high-conviction companies, which allows for potential market-beating returns [1][2] Group 1: Top Holdings - Uber constitutes 19.7% of Pershing Square's portfolio, with Ackman acquiring 30.3 million shares at the start of 2025, and the stock has risen approximately 55% since then [4][8] - Uber has a strong user base of 170 million monthly active users and is experiencing growth in gross bookings by 14% last quarter, with EBITDA increasing by 35% and free cash flow growing by 66% [5][7] - Brookfield represents 18.4% of the portfolio, with a diversified business model across real estate, renewable power, and infrastructure, achieving an average growth rate of 19% in distributable earnings per share over the past five years [9][11] - Howard Hughes Holdings accounts for 13.3% of the portfolio, with Ackman acquiring a 46.9% economic stake and aiming to transform it into a diversified holding company, while the company's net asset value is estimated at $5.8 billion per share, compared to a market cap of $4 billion [13][15][18] Group 2: Financial Performance - Uber's enterprise value is less than 23 times forward EBITDA estimates, with management expecting EBITDA growth above 30% in the coming years, indicating an attractive valuation [8] - Brookfield's stock trades at 19 times trailing earnings per share, suggesting it is undervalued compared to peers despite strong growth expectations [12] - Howard Hughes generates strong operating cash flow from real estate sales and rental income, allowing for reinvestment into new projects while maintaining strong returns on capital [16]

Core Viewpoint - Bill Ackman's Pershing Square fund is transforming Howard Hughes Holdings into a diversified holding company, similar to Berkshire Hathaway, presenting an investment opportunity for those looking to leverage Ackman's expertise [2][16]. Group 1: Investment Portfolio Overview - Pershing Square's equity portfolio is valued at $13.6 billion, with over half invested in three key stocks: Uber Technologies, Brookfield, and Howard Hughes Holdings [3]. Group 2: Uber Technologies - Uber represents 19% of Pershing Square's equity portfolio, with an investment of approximately $2.3 billion, now valued at around $2.6 billion [5]. - Ackman believes concerns regarding autonomous vehicles negatively impacting Uber's value are unfounded, as Uber's extensive network of over 170 million users is valuable for self-driving car companies [6]. - Uber's EBITDA increased by 35% last quarter, supported by a 14% rise in gross bookings, with expectations for similar growth in the upcoming quarter [7]. - The company generated $2.3 billion in free cash flow last quarter, a 66% year-over-year increase, with a goal to convert over 90% of EBITDA into free cash flow in the next three years [8]. - Uber's stock trades at an enterprise value-to-EBITDA ratio of about 25, which is considered attractive given its 30% annual EBITDA growth [9]. Group 3: Brookfield - Brookfield accounts for 17% of the portfolio, with a total investment value of about $2.4 billion after acquiring an additional 6.1 million shares [10]. - The company has a unique corporate structure with several publicly traded subsidiaries, including Brookfield Asset Management, which owns 73% of its shares [11]. - Distributable earnings rose by 27% year-over-year in the first quarter, with management projecting a cash flow growth rate exceeding 20% annually through 2029 [12]. - Brookfield's shares trade at 13.8 times trailing distributable earnings, with Ackman suggesting a valuation multiple of at least 16 [13]. Group 4: Howard Hughes Holdings - Howard Hughes Holdings makes up 14% of the portfolio, with Ackman acquiring a 47% stake worth about $1.9 billion [14]. - The company's assets are valued at $5.9 billion, indicating the stock is trading at a discount [15]. - Management anticipates net operating income growth of up to 4% in 2025, with long-term projections indicating a 37% increase from 2024 levels [15]. - Ackman plans to diversify Howard Hughes by adding an insurance business, which would provide capital for further investments [16]. - The new structure incurs a quarterly fee of $3.75 million to Pershing Square, along with a 0.375% incentive fee, but may offer investors a direct way to invest in Ackman's strategies [17].