To the Shareholders of The Howard Hughes Corporation from the Chief Executive Officer: In our first full year as a company, The Howard Hughes Corporation made important strides in moving our assets closer to the point at which they can generate maximum potential value. We hired talented people, formed strategic joint ventures and made a substantial acquisition. These initiatives have positioned our company to create meaningful long-term value for our shareholders and our financial statements are beginning to reflect these efforts. We started 2011 with the foundation of a great team, and have since hired a few more key professionals in order to complete our executive roster. It was critical to find experienced talent who shared our core values. Our people are passionate, committed to excellence, and immersed in a culture that treats the company’s money as if it were their own. We found these values and more in our Chief Financial Officer, Andy Richardson, our General Counsel, Peter Riley, and in the development executives who joined our team this past year. These industry veterans bring decades of experience and a track record of success working for prominent real estate companies across the country. In 2011, we formed joint venture partnerships on three assets: Ala Moana Tower, Parcel D at Columbia Town Center and The Bridges at Mint Hill. In each case, we partnered with local developers who have strong reputations and a history of successful projects. Leveraging each group’s local knowledge and development expertise has already helped to accelerate our business plans for these assets. The highlight of 2011, which I will discuss in greater detail below, was completing our acquisition of Morgan Stanley’s 47.5% economic interest in The Woodlands Master Planned Community (“MPC”) located in Houston, TX. The Woodlands is one of the most successful large-scale MPC’s in the U.S., comprising over 28,000 acres, 97,000 residents and 1,700 employers. To learn more about this vibrant community visit www.thewoodlands.com. The Woodlands is now a wholly owned subsidiary of The Howard Hughes Corporation, and we are confident that this acquisition will create significant short and long-term value for our shareholders. Setting The Table Before telling you about our class of 2011 executive hires, I wanted to reiterate the outstanding job the entire Howard Hughes team has done to advance the company’s goals in 2011. I am personally grateful for all of their hard work and inspired by the way they have embraced the opportunity and challenges of being a new company.