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The Howard Hughes Corporation Reports Fourth Quarter And Full Year 2012 Results

Master Planned Communities Summary

Land sales in our MPC segment, excluding deferred land sales and other revenue, increased $24.9 million, or 66.6%, to $62.3 million for the three months ended December 31, 2012, as compared to the three months ended December 31, 2011. The increase in revenues was primarily caused by a $23.6 million increase in residential land sales at The Woodlands. Approximately 78% of The Woodlands lot sales in the fourth quarter 2012 were a result of the auctions we held in August 2012. The auction resulted in a $50.4 million aggregate sales price for the 375 lots offered representing a $16.7 million, or 49%, increase in price compared to sales prices prior to the auction. The auction also resulted in an acceleration of homebuilder closings on the lots. Higher sales of non-core commercial land at The Woodlands increased commercial revenues by $3.6 million.

For the year ended December 31, 2012, land sales, excluding deferred land sales and other revenue, increased $30.1 million to $180.4 million compared to the year ended December 31, 2011, primarily due to the residential lot auction at The Woodlands, $5.2 million of increased sales at Bridgeland and a $5.1 million increase in commercial land sales, respectively.

The Houston, TX, economy remains strong. The expected influx in 2014 and 2015 of 10,000 employees to ExxonMobil’s three million square foot corporate campus which is under construction just south of The Woodlands is driving demand for residential housing and commercial space at The Woodlands and Bridgeland. The latest phase of construction on the greater Houston area’s perimeter loop, the Grand Parkway, will bisect the Bridgeland community and will connect the ExxonMobil campus, the airport and the Energy Corridor, which we believe will serve as another catalyst for growth.

At Summerlin, existing inventory levels for both new and resale homes continue to decline resulting in improved pricing. In the Las Vegas market, 44,902 homes were sold in 2012, the third-best year on record, and the median single family home price increased 24.2%, according to the Greater Las Vegas Association of Realtors. In addition, the number of single-family homes available for sale on the Multiple Listing Service at December 31, 2012, declined 24.1% from the prior year, representing an approximate five-week supply of inventory. Summerlin sold 38 and 109 residential lots during the three months ended December 31, 2012 and 2011, respectively, and sold 400 and 421 residential lots during the years ended December 31, 2012 and 2011, respectively. Summerlin’s pipeline remains robust, with 110 residential lots under contract representing approximately $9.3 million of sales revenue as of December 31, 2012, if all sales are completed. In addition, Summerlin has an outparcel in escrow representing $2.6 million of sales revenue.

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