The Howard Hughes Corporation (NYSE:HHC) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 10:00 am ET

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The Howard Hughes Corporation (NYSE:HHC) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the Howard Hughes Corporation Third Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to David Striph, Executive Vice President of Investor Relations. Please go ahead.

Executive
David Striph

Good morning and welcome to the Howard Hughes Corporation's third quarter 2019 earnings call. With me today are Paul Layne, Chief Executive Officer; David O'Reilly, Chief Financial Officer; and Peter Riley, General Counsel. Before we begin, I would like to direct you to our website at www.howardhughes.com, where you can download both our third quarter earnings press release and our supplemental package. The earnings release and supplemental package include reconciliations of non-GAAP financial measures and will be discussed today in relation to their most directly comparable GAAP financial measures.

Certain statements made today that are not in the present tense or that discuss the Company's expectations are forward-looking statements within the meaning of the federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved. Please see the forward-looking statement disclaimer in our third quarter earnings press release and the risk factors in our SEC filings for factors that could cause material differences between forward-looking statements and actual results. We are not under any duty to update forward-looking statements unless required by law.

I will now turn the call over to our CEO, Paul Layne.

Executive
Paul H. Layne

Thank you, Dave, and thank you all for joining us today. Welcome to our third quarter 2019 earnings call and my first as CEO. As we disclosed on October 21, we've concluded our previously-announced review of strategic alternatives and embarked on a transformation plan for the Company. The plan rests on three pillars; a $45 million to $50 million reduction in annual overhead expenses; the sale of approximately $2 billion of non-core assets, which we currently anticipate will net approximately $600 million; and an intensified focus on growth in our core MPC assets.

We expect to rapidly transform the Company to create a more focused, lean and decentralized organization with significantly reduced corporate overhead built around our core MPCs. We firmly believe this will bring added value to our shareholders and create a Company that cannot not only survive but prosper in all phases of the economic cycle. Both David O'Reilly and I are truly excited and energized to lead this new effort and we have made significant progress.

We have announced the relocation of our corporate headquarters from Dallas to The Woodlands. We expect to realize significant efficiencies and cost savings from this move. We have executed on approximately $86 million in non-core asset sales already. These sales include $46 million for the Cottonwood Mall outside of Salt Lake City and subsequent to the quarter-end $40 million for the sale