Spin-off and Capital Contribution - The Company completed its spin-off from Howard Hughes Holdings Inc. on July 31, 2024, distributing all outstanding shares of common stock to HHH's stockholders [166]. - Prior to the Separation, the Company received a capital contribution of $23.4 million from HHH to support its operating, investing, and financing activities [167]. Business Segments and Operations - The Company operates through three segments: Hospitality, Entertainment, and Landlord Operations, focusing on asset management, partnerships, acquisitions, and development projects [160]. - The Tin Building by Jean-Georges, completed in Q3 2022, is fully leased and has shown improved operating results in 2024 compared to the previous year [179]. - The Las Vegas Aviators, a Triple-A Minor League Baseball team, plays at the Las Vegas Ballpark, which has a capacity of 10,000, contributing to the Company's entertainment segment [164]. - The Company aims to fill vacancies in its Landlord Operations portfolio, which is under a long-term ground lease from the City of New York [165]. - The Company's operations are highly seasonal, with increased revenue typically occurring from May through October due to outdoor events and favorable weather conditions [180]. Financial Performance - Total revenue for the three months ended September 30, 2025, increased by 14% to $45.05 million, driven by an 85% increase in hospitality revenue to $16.60 million [192]. - Hospitality costs surged by 115% to $19.92 million for the same period, contributing to an operating loss of $33.90 million, which is a 69% increase compared to the prior year [192]. - Net loss attributable to common stockholders for the three months ended September 30, 2025, increased by 2% to $33.20 million, primarily due to a $7.20 million decrease in other income [193]. - For the nine months ended September 30, 2025, total revenue rose by 15% to $100.92 million, with hospitality revenue increasing by 79% to $39.52 million [200]. - General and administrative expenses decreased by 33% to $36.01 million for the nine months ended September 30, 2025, largely due to a reduction in prior separation costs [200]. - The company incurred leadership transition costs of $11.5 million for the three months ended September 30, 2025, with no such costs recorded in the prior-year period [191]. - Rental revenue decreased by 32% to $13.64 million for the nine months ended September 30, 2025, reflecting challenges in the rental segment [200]. Adjusted EBITDA and Losses - Hospitality Adjusted EBITDA losses decreased by $2.3 million for the nine months ended September 30, 2025, compared to the prior-year period [212]. - Landlord Operations Adjusted EBITDA loss increased by $4.3 million compared to the prior-year period, primarily due to a $4.0 million loss recognized on assets held for sale [224]. - The company recorded a loss on assets held for sale of $3.99 million for both the three and nine months ended September 30, 2025, indicating asset management challenges [192]. Cash Flow and Liquidity - Cash used in operating activities decreased by $21.4 million to $26.6 million in the nine months ended September 30, 2025, compared to $48.0 million in the prior-year period [242]. - Cash used in investing activities decreased by $61.1 million to $21.1 million in the nine months ended September 30, 2025, compared to $82.2 million in the prior-year period [243]. - Cash provided by financing activities decreased by $117.5 million to cash used in financing activities of $3.4 million in the nine months ended September 30, 2025, compared to cash provided of $114.1 million in the prior-year period [244]. - As of September 30, 2025, cash and cash equivalents were $106.2 million, down from $165.7 million as of December 31, 2024 [234]. - Management believes existing cash balances and access to capital markets provide adequate liquidity to meet current and long-term obligations [239]. Interest Expense and Debt - Interest expense decreased by 96% to $0.13 million for the three months ended September 30, 2025, compared to $3.13 million in the prior-year period [198]. - As of September 30, 2025, the company had third-party mortgages payable of $101.4 million related to the 250 Water Street development [235]. - As of September 30, 2025, the weighted average interest rate on the $40.1 million of fixed-rate indebtedness outstanding was 4.92% per annum [264]. - If short-term interest rates had been 1% higher, interest expense would have increased by approximately $0.2 million and $0.5 million for the three and nine months ended September 30, 2025, respectively [264].
Seaport Entertainment Group Inc.(SEG) - 2025 Q3 - Quarterly Report