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4 deep values for opportunistic investingHoward Hughes NYSE: HHH used its second-quarter earnings call to outline its transition toward a diversified holding company following the June acquisition of Vantage Group Holdings, while reporting continued land-sale demand, condominium cash proceeds and growth in its master-planned communities business.

Executive Chair Bill Ackman said the company’s strategy is to direct increasing amounts of capital toward the insurance operation while monetizing certain real estate assets and considering joint ventures, recapitalizations and third-party capital arrangements. Pershing Square acquired $900 million of Howard Hughes stock at $100 per share in May 2025, raising its ownership to 47%, Ackman said.

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Howard Hughes acquired Vantage, a specialty insurance platform founded in late 2020, and contributed an additional $300 million of capital. Ackman said Pershing Square also will provide investment management to Vantage without fees. He described the acquisition as part of a longer-term plan to build a diversified holding company, with insurance expected to represent a growing share of the business over time.

Vantage reports premium growth amid catastrophe and reserve impacts Marc Grandisson, Vantage Executive Chair and a Howard Hughes director, said Vantage’s results included in Howard Hughes’ consolidated figures covered only the period from the June 4 acquisition closing through June 30. The Vantage supplemental disclosure, however, presented the insurer’s full second-quarter and first-half historical GAAP results excluding acquisition accounting.

For the second quarter, Vantage reported a combined ratio of 101.6%, compared with 94% a year earlier. Gross written premiums and net written premiums each increased 29% to $473 million and $325 million, respectively, while net earned premium rose 22% to $295 million.

Grandisson said the quarterly combined ratio reflected $18 million of catastrophe losses associated with the conflict in Iran and $19 million of adverse prior-period development, primarily in a discontinued transactional-liability line. Together, those items increased the combined ratio by 10.2 percentage points.

First-half combined ratio: 96.1% Trailing 12-month combined ratio: 94.7% Year-to-date net income: $86 million, up 94% Year-to-date underwriting income: $23 million, roughly double the prior-year level Second-quarter current accident-year combined ratio excluding catastrophes: 91.4%, versus 96.2% a year earlier Grandisson said Vantage is focused on underwriting profitability rather than premium volume, conservative reserving, data-driven loss assessments and disciplined risk selection. He said the company aims to generate return on equity at or above the mid-teens over the cycle, with the underwriting target excluding expected returns from the insurer’s equity investment portfolio.

Vantage ended the quarter with $1.8 billion of book value and about $1.2 billion of trailing-12-month net written premium, representing a premium-to-surplus ratio of 0.7. AM Best affirmed Vantage’s A- rating and raised its outlook to positive, Grandisson said. He added that S&P’s rating action reflected its group methodology, including Howard Hughes, while Vantage’s standalone anchor rating remained A-.

Investment portfolio shifts toward Treasuries and equities Chief Investment Officer Ryan Israel said Vantage had approximately $3.4 billion of invested assets at closing, largely allocated to fixed-income securities with a duration profile of three to four years. The company moved to restructure the portfolio into a “barbell” approach, pairing short-term U.S. Treasuries with common-stock investments.

As of June 30, more than 60% of the portfolio was invested in short-term Treasuries, while approximately $1.1 billion, or about one-third, was invested in equities. Israel said the equity allocation subsequently increased to about 40% of the portfolio.

Howard Hughes expects the Treasury portfolio to cover insurance reserves and provide a cushion for claims payments, with the remaining capital invested in liquid, large-cap public companies. Ackman said the company does not plan to invest Vantage assets in private companies.

Israel said the equity portfolio declined about 3% during the initial weeks after it was established amid broader market weakness, but had recovered and was up between 4% and 5% during the month following quarter-end. He said the company expects ultimately to allocate at least 50% of invested assets to common stocks, potentially more depending on the amount of insurance float generated.

Real estate operations generate land-sale and condominium proceeds Chief Executive Officer David O’Reilly said master-planned community earnings before taxes increased 32% year over year to $134.7 million, driven mainly by residential and commercial land sales. New-home sales increased 12%, including gains of 34% at The Woodlands Hills and 17% at Bridgeland, alongside continued growth at Summerlin.

O’Reilly said the company’s wholly owned land bank represents about $5.6 billion of projected margin-equivalent residual value, excluding future opportunities at Teravalis and Floreo. He emphasized that land-sale results can vary by quarter, but said the company continues to see healthy builder demand and pricing power across its communities.

The company also sold Creekside Park and Creekside Park The Grove, producing approximately $30 million of net proceeds after debt repayment and generating an approximately 30% project-level internal rate of return over the life of those investments, according to O’Reilly.

Howard Hughes plans to retain long-term oversight of its master-planned communities while evaluating whether mature assets should remain wholly owned or be placed into alternative structures. O’Reilly said potential options include asset sales, joint ventures, recapitalizations and other transactions intended to release capital for higher-return opportunities.

Its condominium platform generated about $227 million of net proceeds after repayment of the construction loan from the completion of The Park Ward Village. O’Reilly said the company has more than $4 billion of expected future condominium revenue, with about 78% already under contract.

Capital allocation priorities Ackman said the company views Vantage as the priority destination for incremental free cash flow, following the funding of insurance liabilities. He said Howard Hughes expects to generate $2.5 billion to $3 billion of excess free cash flow during the next five years and could supplement that capital through real estate monetizations and outside partnerships.

“The priority for every incremental dollar of free cash flow is to put it into Vantage,” Ackman said, while adding that the company intends to maintain discipline in determining whether capital can earn higher returns in insurance, public equities or real estate development opportunities.

About Howard Hughes (NYSE:HHH)Howard Hughes Holdings Inc, together with its subsidiaries, operates as a real estate development company in the United States. It operates in four segments: Operating Assets; Master Planned Communities (MPCs); Seaport; and Strategic Developments. The Operating Assets segment consists of developed or acquired retail, office, and multi-family properties along with other retail investments. Its MPCs segment develops, sells, and leases residential and commercial land designated for long-term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona.

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Howard Hughes® closes approximately $2.1 billion acquisition of Vantage, establishing specialty insurance and reinsurance as a second operating platform August 05, 2026 16:01 ET  | Source: Howard Hughes Holdings Inc.

THE WOODLANDS, Texas, Aug. 05, 2026 (GLOBE NEWSWIRE) -- Howard Hughes Holdings Inc. (NYSE: HHH) (the “Company,” “HHH,” “Howard Hughes,” or “we”) today reported second quarter 2026 results, highlighted by the June 4 closing of Vantage Group Holdings, Ltd. (Vantage), a specialty insurance and reinsurance company. The Vantage acquisition reshapes Howard Hughes into a diversified holding company powered by two principal operating platforms: Howard Hughes Communities™ and Vantage.

Second Quarter 2026 Highlights:

Net income attributable to common stockholders was $158.4 million for the quarter, compared to a net loss of $12.1 million in the prior-year period.Vantage acquisition closed June 4, 2026. Through its wholly owned subsidiary Howard Hughes Insurance Holdings, LLC, the Company completed the acquisition of 100% of Vantage Group Holdings, Ltd. for cash consideration of approximately $2.1 billion. Consolidated results include Vantage only for the stub period from June 4, 2026 through June 30, 2026. Accordingly, period-over-period and sequential comparisons, including total revenues, net income attributable to common stockholders, and earnings per share, are not comparable to prior periods and do not reflect run-rate performance.$1.0 billion of preferred stock issued to Pershing Square. On June 4, 2026, the Company issued and sold $1.0 billion of Series A Non-Voting Exchangeable Perpetual Preferred Stock to an affiliate of Pershing Square to partially fund the Vantage acquisition and to provide additional capital to Vantage. The preferred stock carries no current cash dividend and may be repurchased by the Company pursuant to its terms.Insurance platform's initial contribution. For the stub period, Vantage contributed $97.2 million of net earned insurance premiums, $4.7 million of underwriting income, $11.0 million of net insurance investment income, and $20.8 million of loss before income taxes, with a combined ratio of 95% (loss ratio 57%; expense ratio 38%). These partial-period ratios are not indicative of expected full-year performance.The real estate platform delivered Master Planned Communities (MPC) EBT of $134.7 million and Total Operating Assets Net Operating Income (NOI) of $70.5 million in the quarter. Segment detail and prior-year comparisons are presented in Financial Highlights below.Strong liquidity position of $2,648.0 million of cash and cash equivalents, including cash held at Vantage, $515.0 million of undrawn capacity on the Secured Bridgeland Notes, $1.0 billion of undrawn lender commitments available for property development, and limited near-term debt maturities, all as of June 30, 2026. Financial Highlights

Real Estate

MPC

MPC EBT of $134.7 million in the second quarter, up 32% from $102.4 million in the prior-year period. Pricing also remained strong during the first six months of 2026, with Howard Hughes Communities selling 206.7 residential acres at an average price of $1.2 million per acre and 9.8 commercial acres at an average price of $0.9 million per acre. Operating Assets

Total Operating Assets NOI, including contributions from unconsolidated ventures, continued to grow, increasing by $1.7 million, or 2% to a total of $70.5 million in the quarter compared to $68.9 million in the prior-year period.In June 2026, Howard Hughes Communities sold Creekside Park and Creekside Park The Grove in The Woodlands for $127.3 million, generating $30.2 million of net proceeds after loan payoffs and closing costs. Over the life of the investments, the asset generated approximately $45 million of cumulative cash flow and an outsized project-level IRR. Strategic Developments

Howard Hughes Communities completed construction of The Park Ward Village and closed sales of 97% of its units during the quarter, generating $226.6 million of net proceeds after repayment of debt. Insurance and Reinsurance

Insurance and Reinsurance figures reflect the stub period from the acquisition date of June 4, 2026 through June 30, 2026, and include the impact of Purchase Accounting. As a result, they are not indicative of run-rate performance. 

Net earned insurance premiums were $97.2 million for the stub period from June 4, 2026 through June 30, 2026.Underwriting income was $4.7 million, with a combined ratio of 95%, comprising a loss ratio of 57% and an expense ratio of 38%. These partial-period ratios are not indicative of expected full-year performance.Net insurance investment income was $11.0 million.Net loss before income taxes was $20.8 million. Conference Call & Webcast Information

Howard Hughes Holdings Inc. will host its second quarter 2026 earnings conference call on Thursday, August 6, 2026, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). A live webcast will be available in the Events & Webcast section of the Company’s investor relations website. Participants who wish to ask questions by telephone should preregister using HHH’s earnings call registration webpage. All registrants will receive dial-in information and a PIN allowing them to access the live call. An on-demand replay of the earnings call will be available on the Company’s website immediately after the call for a period of one year.

About Howard Hughes Holdings Inc.

Howard Hughes Holdings Inc. (NYSE: HHH) is a diversified holding company focused on growing long-term shareholder value. Its principal subsidiaries are Vantage Group Holdings, a leading specialty insurance, reinsurance, and partnership capital platform, and Howard Hughes Communities™, one of the nation’s leading real estate platforms. HHH brings together long-duration capital, high-quality operating businesses, and disciplined capital allocation to build long-term value. For additional information visit www.howardhughes.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (Exchange Act). We intend these statements to be covered by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations relating to our financial condition, results of operations, plans, objectives, future performance, or business, and are not guarantees of performance. These statements may include words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “plan,” “project,” “realize,” “should,” “transform,” “will,” “would,” and other statements of similar expression. Forward-looking statements should not be relied upon, and actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict, some of which include: (i) our ability to realize the anticipated benefits of the transactions with Pershing Square and our strategy of becoming a diversified holding company; (ii) our ability to identify and consummate transactions as part of our strategy of becoming a diversified holding company; (iii) risks inherent in acquiring or making investments in operating companies, especially companies in industries unrelated to our existing real estate business; (iv) our ability to integrate Vantage’s insurance and reinsurance business into our operations, and realize the financial and strategic benefits currently anticipated from such acquisition; (v) our ability to realize the anticipated benefits of recent transactions, including the May 2025 transactions with Pershing Square and the spinoff of Seaport Entertainment Group Inc. in 2024; (vi) macroeconomic conditions such as volatility in capital markets, unstable economic and political conditions within the U.S. and foreign jurisdictions, geopolitical conflicts, and a prolonged recession in the national economy impacting the real estate and insurance and reinsurance businesses, including but not limited to inflation and changes in interest rates; (vii) changes in trade policies, including tariffs, and related impacts on market conditions and business activity; (viii) our inability to obtain operating and development capital for our properties, including our inability to obtain or refinance debt capital from lenders and the capital markets; (ix) our ability to compete effectively, including the potential impact of heightened competition for tenants and potential decreases in occupancy at our properties; (x) extreme weather conditions, climate change, natural disasters, pandemics or other catastrophes, that may cause property damage or interrupt our real estate or insurance or reinsurance business; (xi) losses that are not insured or exceed the applicable insurance limits as well as insufficient reserves for losses; (xii) increased construction costs exceeding our original estimates, delays or overruns, claims for construction defects, or other factors affecting our ability to develop, redevelop or construct our properties; (xiii) regulation of the portions of our business that are dedicated to the formation and sale of condominiums or insurance and reinsurance, as applicable, including obtaining government permits necessary for the development of our properties; (xiv) fluctuations in regional and local economies, the impact of changes in interest rates on residential housing and condominium markets, local real estate conditions, tenant rental rates, and competition from competing retail properties and the internet; (xv) insufficient reserves for insurance claims and claim expenses due to the impact of social inflation or other factors; (xvi) greater-than-expected loss ratios on business written by Vantage; (xvii) Vantage’s ability to accurately assess underwriting risk and establish adequate premium rates; (xviii) decreases in pricing for property and casualty reinsurance and insurance; (xix) Vantage’s ability to purchase adequate reinsurance; (xx) Vantage’s ability to maintain financial strength ratings; (xxi) material variation of analytical models used in decision making from actual results; (xxii) Vantage’s ability to comply with insurance and tax laws and regulations and other regulatory challenges, including to obtain licenses or admittance in additional jurisdictions to develop its business; (xxiii) inherent risks related to disruption of information technology networks and related systems, including cyber security attacks on us or our vendors; (xxiv) our indebtedness, including our $650,000,000 4.125% senior unsecured notes due 2029, $650,000,000 4.375% senior unsecured notes due 2031, $500,000,000 5.875% senior unsecured notes due 2032, and $500,000,000 6.125% senior unsecured notes due 2034, contain restrictions that may limit our ability to operate our business; (xxv) our directors’ involvement or interests in other businesses, including real estate activities and investments; (xxvi) our dependence on the operations and funds of our subsidiaries, including The Howard Hughes Corporation and Vantage; and (xxvii) other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the SEC, including the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2026. Copies of each filing may be obtained from the Company or the Securities and Exchange Commission. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements unless otherwise required by law.

Non-GAAP Financial Measures

As discussed throughout this release, we use certain non-GAAP performance measures, in addition to the required GAAP presentations, as we believe these measures improve the understanding of our operational results and make comparisons of operating results among peer companies more meaningful. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change. Non-GAAP financial measures should not be considered independently, or as a substitute, for financial information presented in accordance with GAAP. A non-GAAP financial measure used throughout this release is net operating income (NOI). We provide a more detailed discussion about this non-GAAP measure and a reconciliation to the most directly comparable GAAP measure in the appendix to this earnings release. The financial statements, exhibits, and Supplemental Information referenced in this release are available in the attached Appendix and through the Investors section of our website.

Investor Relations:

[email protected]
281-929-7700

Media Relations:

[email protected]
281-929-7700

    HOWARD HUGHES HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED     Three Months Ended June 30, Six Months Ended June 30,thousands except per share amounts 2026   2025   2026   2025 REVENUES       Condominium rights and unit sales$        706,311  $        193  $        709,445  $        535 Master Planned Communities land sales         170,936           125,041           270,509           196,683 Rental revenue         114,198           111,092           227,747           219,505 Net earned insurance premiums         97,247           —           97,247           — Net insurance investment income         10,988           —           10,988           — Builder price participation         6,868           14,138           15,550           23,425 Other revenues         15,779           10,416           26,758           20,060 Total revenues         1,122,327           260,880           1,358,244           460,208         EXPENSES       Condominium rights and unit cost of sales         575,389           811           578,523           1,053 Master Planned Communities cost of sales         59,057           45,178           93,799           70,392 Operating costs         54,723           50,518           107,756           101,307 Rental property real estate taxes         14,798           15,365           31,026           30,664 Insurance claims and claim expenses         55,210           —           55,210           — Insurance underwriting expenses         37,381           —           37,381           — Provision for (recovery of) doubtful accounts         123           542           64           386 General and administrative         36,136           34,552           61,894           56,988 Depreciation and amortization         56,609           44,325           105,249           89,464 Other expenses         6,173           4,273           10,065           9,070 Total expenses         895,599           195,564           1,080,967           359,324         OTHER       Gain (loss) on sale or disposal of real estate and other assets, net         51,800           1,656           51,800           15,385 Investment gain (loss), net         (38,278)          —           (38,278)          — Other income (loss), net         (660)          885           (533)          (482)Total other         12,862           2,541           12,989           14,903         Operating income (loss)         239,590           67,857           290,266           115,787         Interest income         13,803           10,331           28,466           16,449 Interest expense         (45,812)          (43,694)          (87,602)          (84,788)Gain (loss) on extinguishment of debt         (413)          (307)          (10,639)          (307)Gain (loss) on sale of MUD receivables         (555)          (48,197)          (555)          (48,197)Equity in earnings (losses) from unconsolidated ventures         301           (1,887)          (2,339)          (567)Income (loss) before income taxes         206,914           (15,897)          217,597           (1,623)Income tax expense (benefit)         49,957           (3,821)          52,575           (385)Net income (loss)         156,957           (12,076)          165,022           (1,238)Net (income) loss attributable to noncontrolling interests         1,408           (68)          1,569           (373)Net income (loss) attributable to common stockholders$        158,365  $        (12,144) $        166,591  $        (1,611)        Basic income (loss) per share$        2.68  $        (0.22) $        2.82  $        (0.03)Diluted income (loss) per share$        2.68  $        (0.22) $        2.82  $        (0.03)     HOWARD HUGHES HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
UNAUDITED    thousands except par values and share amounts June 30, 2026 December 31, 2025ASSETS   Master Planned Communities assets$        2,646,774  $        2,635,077 Buildings and equipment         4,031,804           4,028,862 Less: accumulated depreciation         (1,117,166)          (1,082,124)Land         335,872           307,625 Developments         1,072,034           1,477,615 Net investment in real estate         6,969,318           7,367,055 Investments in fixed maturity securities         246,583           — Investments in equity securities         1,077,535           — Short-term investments         27,822           — Investments in unconsolidated ventures         186,153           170,122 Cash and cash equivalents         2,647,959           1,468,507 Restricted cash         717,395           628,651 Accounts receivable, net         940,400           134,122 Municipal Utility District (MUD) receivables, net         579,160           459,729 Reinsurance recoverable on paid and unpaid losses         601,602           — Deferred expenses, net         175,243           160,966 Intangibles, net         586,439           34,658 Goodwill         282,218           2,336 Other assets, net         872,216           213,315 Total assets$        15,910,043  $        10,639,461     LIABILITIES   Mortgages, notes, and loans payable, net$        5,456,403  $        5,109,828 Reserves for claims and claim expenses         2,115,416           — Unearned premiums         1,406,691           — Deferred tax liabilities, net         223,113           164,472 Other liabilities, net         1,678,683           1,522,915 Total liabilities         10,880,306           6,797,215     MEZZANINE EQUITY   Series A non-voting exchangeable perpetual preferred stock: $0.01 par value; 140,000 issued and outstanding as of June 30, 2026, and none issued or outstanding as of December 31, 2025         995,764           —     EQUITY   Preferred stock: $0.01 par value; 50,000,000 shares authorized; 140,000 shares designated as Series A Preferred Stock; no other shares issued or outstanding         —           — Common stock: $0.01 par value; 150,000,000 shares authorized, 66,253,546 issued, and 59,657,062 outstanding as of June 30, 2026, 65,910,640 shares issued, and 59,370,353 outstanding as of December 31, 2025         663           659 Additional paid-in capital         4,478,286           4,458,838 Retained earnings (accumulated deficit)         104,495           (62,096)Accumulated other comprehensive income (loss)         1,544           (1,827)Treasury stock, at cost, 6,596,484 shares as of June 30, 2026, and 6,540,287 shares as of December 31, 2025 (624,592)  (620,118)Total stockholders' equity 3,960,396   3,775,456 Noncontrolling interests         73,577   66,790 Total equity 4,033,973   3,842,246 Total liabilities, mezzanine equity, and equity$        15,910,043  $        10,639,461 
Segment Earnings Before Taxes (EBT)

Howard Hughes Communities has three real estate business segments, Operating Assets, MPC, and Strategic Developments. 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.

 Three Months Ended June 30, Six Months Ended June 30,thousands except percentages 2026   2025  $ Change  2026   2025  $ ChangeOperating Assets Segment EBT           Total revenues$        119,960  $        116,446  $        3,514  $        239,162  $        230,448  $        8,714 Total operating expenses         (50,520)          (49,467)          (1,053)          (101,445)          (98,284)          (3,161)Segment operating income (loss)         69,440           66,979           2,461           137,717           132,164           5,553 Depreciation and amortization         (52,028)          (42,305)          (9,723)          (97,606)          (85,428)          (12,178)Interest income (expense), net         (37,873)          (34,173)          (3,700)          (71,380)          (68,391)          (2,989)Other income (loss), net         (527)          634           (1,161)          (508)          438           (946)Equity in earnings (losses) from unconsolidated ventures         794           (325)          1,119           6,671           4,318           2,353 Gain (loss) on sale or disposal of real estate and other assets, net         51,800           (1)          51,801           51,800           9,978           41,822 Gain (loss) on extinguishment of debt         (413)          (307)          (106)          (413)          (307)          (106)Operating Assets segment EBT$        31,193  $        (9,498) $        40,691  $        26,281  $        (7,228) $        33,509             Master Planned Communities Segment EBT           Total revenues$        181,740  $        143,701  $        38,039  $        294,021  $        228,155  $        65,866 Total operating expenses         (70,390)          (57,694)          (12,696)          (118,267)          (95,899)          (22,368)Segment operating income (loss)         111,350           86,007           25,343           175,754           132,256           43,498 Depreciation and amortization         (110)          (88)          (22)          (175)          (199)          24 Interest income (expense), net         24,012           18,107           5,905           45,724           34,893           10,831 Other income (loss), net         —           35           (35)          1,860           35           1,825 Equity in earnings (losses) from unconsolidated ventures         (569)          (1,649)          1,080           (4,104)          (5,059)          955 Gain (loss) on sale or disposal of real estate and other assets, net         —           —           —           —           3,750           (3,750)MPC segment EBT$        134,683  $        102,412  $        32,271  $        219,059  $        165,676  $        53,383             Strategic Developments Segment EBT           Total revenues$        707,432  $        714  $        706,718  $        711,839  $        1,568  $        710,271 Total operating expenses         (582,986)          (5,186)          (577,800)          (591,075)          (9,552)          (581,523)Segment operating income (loss)         124,446           (4,472)          128,918           120,764           (7,984)          128,748 Depreciation and amortization         (2,068)          (1,076)          (992)          (4,125)          (2,234)          (1,891)Interest income (expense), net         4,097           4,633           (536)          9,071           9,279           (208)Other income (loss), net         —           132           (132)          (889)          (1,130)          241 Equity in earnings (losses) from unconsolidated ventures         76           87           (11)          (4,906)          174           (5,080)Gain (loss) on sale or disposal of real estate and other assets, net         —           1,657           (1,657)          —           1,657           (1,657)Strategic Developments segment EBT$        126,551  $        961  $        125,590  $        119,915  $        (238) $        120,153                                                 Appendix – Reconciliation of Non-GAAP Measures
Below are GAAP to non-GAAP reconciliations of certain financial measures, as required under Regulation G promulgated by the Securities and Exchange Commission. Non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. The non-GAAP financial information presented may be determined or calculated differently by other companies and may not be comparable to similarly titled measures.

Net Operating Income (NOI)

We define NOI as operating revenues (rental income, tenant recoveries, and other revenue) less operating expenses (real estate taxes, repairs and maintenance, marketing, and other property expenses). NOI excludes straight-line rents and amortization of tenant incentives, net; interest expense, net; ground rent amortization; demolition costs; other income (loss); depreciation and amortization; development-related marketing costs; gain on sale or disposal of real estate and other assets, net; loss on extinguishment of debt; provision for impairment; and equity in earnings from unconsolidated ventures. This amount is presented as Operating Assets NOI throughout this document. Total Operating Assets NOI represents NOI as defined above with the addition of our share of NOI from unconsolidated ventures.

We believe that NOI is a useful supplemental measure of the performance of our Operating Assets segment because it provides a performance measure that reflects the revenues and expenses directly associated with owning and operating real estate properties. We use NOI to evaluate our operating performance on a property-by-property basis because NOI allows us to evaluate the impact that property-specific factors such as rental and occupancy rates, tenant mix, and operating costs have on our operating results, gross margins, and investment returns.

A reconciliation of segment EBT to NOI for Operating Assets is presented in the table below:

 Three Months Ended June 30, Six Months Ended June 30,thousands 2026   2025  $ Change  2026   2025  $ ChangeOperating Assets Segment           Total revenues$        119,960  $        116,446  $        3,514  $        239,162  $        230,448  $        8,714 Total operating expenses         (50,520)          (49,467)          (1,053)          (101,445)          (98,284)          (3,161)Segment operating income (loss)         69,440           66,979           2,461           137,717           132,164           5,553 Depreciation and amortization         (52,028)          (42,305)          (9,723)          (97,606)          (85,428)          (12,178)Interest income (expense), net         (37,873)          (34,173)          (3,700)          (71,380)          (68,391)          (2,989)Other income (loss), net         (527)          634           (1,161)          (508)          438           (946)Equity in earnings (losses) from unconsolidated ventures         794           (325)          1,119           6,671           4,318           2,353 Gain (loss) on sale or disposal of real estate and other assets, net         51,800           (1)          51,801           51,800           9,978           41,822 Gain (loss) on extinguishment of debt         (413)          (307)          (106)          (413)          (307)          (106)Operating Assets segment EBT         31,193           (9,498)          40,691           26,281           (7,228)          33,509 Add back:           Depreciation and amortization         52,028           42,305           9,723           97,606           85,428           12,178 Interest (income) expense, net         37,873           34,173           3,700           71,380           68,391           2,989 Equity in (earnings) losses from unconsolidated ventures         (794)          325           (1,119)          (6,671)          (4,318)          (2,353)(Gain) loss on sale or disposal of real estate and other assets, net         (51,800)          1           (51,801)          (51,800)          (9,978)          (41,822)(Gain) loss on extinguishment of debt         413   307   106           413           307           106 Impact of straight-line rent         (1,015)          (373)          (642)          (3,637)          (1,533)          (2,104)Other         600           (384)          984           585           (195)          780 Operating Assets NOI         68,498           66,856           1,642           134,157           130,874           3,283             Company's share of NOI from equity investments         2,045           2,004           41           4,217           3,947           270 Distributions from Summerlin Hospital investment         —           —           —           5,318           5,605           (287)Company's share of NOI from unconsolidated ventures         2,045           2,004           41           9,535           9,552           (17)Total Operating Assets NOI$        70,543  $        68,860  $        1,683  $        143,692  $        140,426  $        3,266