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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2011	Aug. 05, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	Howard Hughes Corp
Entity Central Index Key	0001498828
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		37,942,107

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2011	Dec. 31, 2010
Investment in real estate:
Master Planned Community assets	$ 1,348,138	$ 1,350,648
Land	180,976	180,976
Buildings and equipment	344,636	343,006
Less accumulated depreciation	(88,894)	(83,390)
Developments in progress	292,550	293,403
Net property and equipment	2,077,406	2,084,643
Investment in Real Estate Affiliates	153,133	149,543
Net investment in real estate	2,230,539	2,234,186
Cash and cash equivalents	275,956	284,682
Accounts receivable, net	7,039	8,154
Notes receivable	37,405	38,954
Tax indemnity receivable, including interest	327,444	323,525
Deferred expenses, net	5,903	6,619
Prepaid expenses and other assets	141,145	126,587
Total assets	3,025,431	3,022,707
Liabilities:
Mortgages, notes and loans payable	306,668	318,660
Deferred tax liabilities	79,267	78,680
Warrant liabilities	298,483	227,348
Uncertain tax position liability	144,255	140,076
Accounts payable and accrued expenses	65,839	78,836
Total liabilities	894,512	843,600
Commitments and Contingencies
Stockholders' Equity:
Common stock: $.01 par value; 100,000,000 shares authorized, 37,942,107 shares issued and outstanding as of June 30, 2011 and 37,904,506 shares issued and outstanding as of December 31, 2010	379	379
Additional paid-in capital	2,709,281	2,708,036
Accumulated deficit	(577,047)	(528,505)
Accumulated other comprehensive loss	(2,503)	(1,627)
Total stockholders' equity	2,130,110	2,178,283
Noncontrolling interests	809	824
Total equity	2,130,919	2,179,107
Total liabilities and equity	$ 3,025,431	$ 3,022,707

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2011	Dec. 31, 2010
Stockholders' Equity:
Common stock, par value	$ .01	$ .01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	37,942,107	37,904,506
Common stock, shares outstanding	37,942,107	37,904,506

Condensed Consolidated and Combined Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues:
Master Planned Community land sales	$ 18,148	$ 4,174	$ 41,540	$ 7,388
Builder price participation	597	1,451	1,118	2,195
Minimum rents	16,976	16,969	33,695	34,000
Tenant recoveries	4,615	4,433	9,139	9,252
Condominium unit sales	6,660		10,424
Other land sale revenues	2,248	1,412	3,496	2,524
Other rental and property revenues	1,579	2,190	4,512	4,060
Total revenues	50,823	30,629	103,924	59,419
Operating Expenses:
Master Planned Community cost of sales	9,438	1,924	24,874	3,250
Master Planned Community land sales operations	4,585	8,856	10,213	17,347
Rental property real estate taxes	2,952	4,051	6,426	7,029
Rental property maintenance costs	1,566	1,439	3,125	3,283
Condominium unit cost of sales	5,272		8,252
Property operating costs	9,473	9,729	19,065	18,201
Provision for doubtful accounts	304	256	315	357
General and administrative	8,359	4,861	13,591	8,996
Provisions for impairment		208		486
Depreciation and amortization	3,185	3,975	6,384	8,425
Total operating expenses	45,134	35,299	92,245	67,374
Operating income (loss)	5,689	(4,670)	11,679	(7,955)
Interest income	2,244		4,756	59
Interest expense		(541)		(1,207)
Warrant liability gain (loss)	56,910		(69,135)
Income (loss) before income taxes, income from Real Estate Affiliates, reorganization items and noncontrolling interests	64,843	(5,211)	(52,700)	(9,103)
Provision for income taxes	(958)	(16,467)	(3,415)	(17,953)
Income from Real Estate Affiliates	2,108	3,680	7,621	5,172
Reorganization items		(10,019)		(26,614)
Income (loss) from continuing operations	65,993	(28,017)	(48,494)	(48,498)
Net income attributable to noncontrolling interests	(20)	(25)	(48)	(73)
Net income (loss) attributable to common stockholders	$ 65,973	$ (28,042)	$ (48,542)	$ (48,571)
Basic Income (Loss) Per Share:	$ 1.74	$ (0.74)	$ (1.28)	$ (1.29)
Diluted Income (Loss) Per Share:	$ 0.22	$ (0.74)	$ (1.28)	$ (1.29)
Comprehensive Income (Loss), Net:
Net income (loss)	$ 65,993	$ (28,017)	$ (48,494)	$ (48,498)
Other comprehensive income (loss):
Interest rate swap	(748)		(748)
Pension adjustment	(63)	(311)	(128)	99
Other comprehensive income (loss)	(811)	(311)	(876)	99
Comprehensive income (loss)	65,182	(28,328)	(49,370)	(48,399)
Comprehensive loss attributable to noncontrolling interests	(20)	(25)	(48)	(73)
Comprehensive income (loss) attributable to common stockholders	$ 65,162	$ (28,353)	$ (49,418)	$ (48,472)

Condensed Consolidated and Combined Statements of Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	GGP Equity	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests in Consolidated Ventures
Beginning balance at Dec. 31, 2009	$ 1,503,520	$ 0	$ 0	$ 0	$ 1,504,364	$ (1,744)	$ 900
Net income (loss)	(48,498)				(48,571)		73
Distributions to noncontrolling interests	(138)						(138)
Other comprehensive income (loss)	99					99
Contributions from GGP, net	65,655				65,655
Ending balance at Jun. 30, 2010	1,520,638	0	0	0	1,521,448	(1,645)	835
Beginning balance at Dec. 31, 2010	2,179,107	379	2,708,036	(528,505)	0	(1,627)	824
Net income (loss)	(48,494)			(48,542)			48
Distributions to noncontrolling interests	(63)						(63)
Other comprehensive income (loss)	(876)					(876)
Restricted stock and stock option grants, (39,000 common shares)	1,245		1,245
Ending balance at Jun. 30, 2011	$ 2,130,919	$ 379	$ 2,709,281	$ (577,047)	$ 0	$ (2,503)	$ 809

- Definition

This element represents the amount of recognized equity-based compensation during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). Alternate captions include the words "stock-based compensation".

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- Definition

This element represents Other Comprehensive Income or Loss, Net of Tax, for the period. Includes deferred gains or losses on qualifying hedges, unrealized holding gains or losses on available-for-sale securities, minimum pension liability, and cumulative translation adjustment. While for technical reasons this element has no balance attribute, the default assumption is a credit balance consistent with its label.

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- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

- Definition

Total of Stockholders' Equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity including portions attributable to both the parent and noncontrolling interests (previously referred to as minority interest), if any. The entity including portions attributable to the parent and noncontrolling interests is sometimes referred to as the economic entity. This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Consolidated and Combined Statements of Equity (Unaudited) (Parenthetical) shares in Thousands	6 Months Ended
	Jun. 30, 2011 shares
Shares issued in respect of restricted stock and stock option grants	39,000
Additional Paid-In Capital
Shares issued in respect of restricted stock and stock option grants	39,000

Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash Flows from Operating Activities:
Net loss	$ (48,494)	$ (48,498)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Income from Real Estate Affiliates	(7,621)	(5,172)
Dividends received from Real Estate Affiliates	4,074
Provision for doubtful accounts	315	357
Depreciation	5,435	7,356
Amortization	949	1,069
Deferred financing costs	277	225
Amortization of intangibles other than in-place leases	45	101
Straight-line rent amortization	(758)	(615)
Warrant liability loss	69,135
Provisions for impairment		486
Land/residential development and acquisitions expenditures	(33,206)	(30,561)
Cost of sales	33,126	3,250
Special Improvement District bond transfers	(3,188)
Non-cash reorganization items		(570)
Net changes:
Accounts and notes receivable	2,512	6,465
Prepaid expenses and other assets	(3,803)	(7,191)
Deferred expenses	(492)	(926)
Accounts payable and accrued expenses and deferred tax liabilities	(234)	22,450
Other, net	(1,079)	612
Cash provided by (used in) operating activities	16,993	(51,162)
Cash Flows from Investing Activities:
Development of real estate and property additions/improvements	(18,565)	(37,110)
Increase in investments in Real Estate Affiliates	(42)	(8)
Cash used in investing activities	(18,607)	(37,118)
Cash Flows from Financing Activities:
Change in GGP investment, net		90,715
Proceeds from issuance of mortgages, notes and loans payable	29,000	0
Principal payments on mortgages, notes and loans payable	(38,049)	(2,519)
Proceeds from issuance of Management Warrant	2,000
Distributions to noncontrolling interests	(63)	(138)
Cash (used in) provided by financing activities	(7,112)	88,058
Net change in cash and cash equivalents	(8,726)	(222)
Cash and cash equivalents at beginning of period	284,682	3,204
Cash and cash equivalents at end of period	275,956	2,982
Supplemental Disclosure of Cash Flow Information:
Interest paid	7,410	21,022
Interest capitalized	8,707	20,412
Reorganization items paid		1,231
Non-Cash Transactions:
Prepetition liabilities funded by GGP	$ 2,714
Mortgage debt market rate adjustment related to emerged entities		876
Other non-cash GGP equity transactions		$ (25,024)

Organization

6 Months Ended

Jun. 30, 2011

Organization [Abstract]

ORGANIZATION

NOTE 1 ORGANIZATION

The accompanying condensed consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as issued by the SEC. Such condensed consolidated and combined financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. In addition, readers of this Quarterly Report on Form 10-Q (“Quarterly Report”) should refer to the Company’s (as defined below) audited Consolidated and Combined Financial Statements for the year ended December 31, 2010 which are included in the Company’s Annual Report on Form 10-K (the “Annual Report”) for the fiscal year ended December 31, 2010 (Commission File No. 001-34856). Capitalized terms used, but not defined in this Quarterly Report have the same meanings as in the Annual Report.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results for the interim periods ended June 30, 2011 and 2010 are not necessarily indicative of the results to be expected for the full fiscal year. In addition, certain amounts in the 2010 Combined Financial Statements have been reclassified to conform to the current period presentation. Finally, HHC management has evaluated all material events occurring subsequent to the date of the consolidated financial statements up to the date and time this Quarterly Report is filed.

General

The Howard Hughes Corporation (“HHC” or the “Company”) is a Delaware corporation that was formed on July 1, 2010 to hold, after receipt via a tax-free distribution, certain assets of General Growth Properties, Inc. (“GGP”) and certain of its subsidiaries (collectively, the “Predecessors”) pursuant to their plans of reorganization (the “Plan”) under Chapter 11 of the United States Code (“Chapter 11”). We are a real estate company that specializes in the development and operation of master planned communities, operating rental properties and other strategic real estate opportunities across the United States. Pursuant to the Plan, certain of the assets and liabilities of the Predecessors (the “HHC Businesses”) were transferred to us and our common stock was distributed to the holders of GGP’s common stock and common units (the “Separation”) on a pro-rata basis (approximately 32.5 million shares of our common stock) on GGP’s date of emergence from bankruptcy, November 9, 2010 (the “Effective Date”). Also as part of the Plan, approximately 5.25 million shares of our common stock and 8.0 million warrants were purchased by certain of the investors sponsoring the Plan for $250 million. Unless the context otherwise requires, references to “we,” “us” and “our” refer to HHC and its subsidiaries.

The accompanying consolidated balance sheets at June 30, 2011 and December 31, 2010 reflect the consolidation of HHC and its subsidiaries, as of such date, with all intercompany balances and transactions eliminated. The accompanying combined financial statements for the periods prior to the Separation have been prepared in accordance with GAAP on a carve-out basis from the consolidated financial statements of GGP using the historical results of operations and the bases of the assets and liabilities of the transferred businesses and including allocations from GGP. This presentation incorporates the same principles used when preparing consolidated financial statements, including elimination of intercompany transactions. The presentation also includes the accounts of the HHC Businesses in which we have a controlling interest. The noncontrolling equity holders’ share of the assets, liabilities and operations are reflected in noncontrolling interests within permanent equity of the Company. The statement of equity and statement of cash flows for the six months ended June 30, 2010 and the statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2010 are presented on a carve out basis. The statement of equity and statements of cash flows for the six months ended June 30, 2011 and the statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2011 are presented on a consolidated basis.

As discussed above, we were formed for the purpose of receiving, via a tax-free distribution, certain assets and assuming certain liabilities of the Predecessors pursuant to the Plan. We conducted no business and had no separate material assets or liabilities until the Separation was consummated. No previous historical financial statements for the HHC Businesses have been prepared and, accordingly, our combined financial statements for the three and six months ended June 30, 2010 are derived from the books and records of GGP and were carved-out from GGP at carrying values reflective of such historical cost in such GGP records. Our historical financial results reflect allocations for certain corporate expenses which include, but are not limited to, costs related to property management, human resources, security, payroll and benefits, legal, corporate communications, information services and restructuring and reorganizations. Costs of the services (approximately $2.9 million and $5.7 million, for the three and six months ended June 30, 2010, respectively) that were allocated or charged to us were based on either actual costs incurred or a proportion of costs estimated to be applicable to us based on a number of factors, most significantly the Company’s percentage of GGP’s adjusted revenue and assets and the number of properties. We believe these allocations are reasonable; however, these results do not reflect what our expenses would have been had the Company been operating as a separate, stand-alone public company for such period. In addition, the HHC Businesses were operated as subsidiaries of GGP, which operated as a real estate investment trust during such period. We operate as a taxable corporation. The historical combined statement of equity and statement of cash flows presented for the six months ended June 30, 2010, and the statement of operations and comprehensive income (loss) presented for the three and six months ended June 30, 2010 therefore are not indicative of the results of operations, or cash flows that would have been obtained if we had been an independent, stand-alone entity during such period nor are they indicative of our future performance as an independent, stand-alone entity.

As of June 30, 2011, our assets consisted of the following:

•

four master planned communities (“MPC“s);

•

thirteen operating assets; and

•

seventeen strategic developments.

Our ownership interests in properties in which we own a majority or controlling interest are combined for the period from January 1, 2010 through June 30, 2010 and consolidated for the period from January 1, 2011 through June 30, 2011 under GAAP, with the non-controlling interests in such consolidated or combined ventures reflected as components of equity. Our interests in TWCPC Holdings, L.P., (“The Woodlands Commercial”), the Woodlands Operating Company, L.P. (“The Woodlands Operating”) and the Woodlands Land Development Company, L.P. (“The Woodlands MPC”, and together with The Woodlands Commercial and the Woodlands Operating, “The Woodlands Partnerships”), all located in Houston, Texas, and our interests in Westlake Retail Associates, Ltd (“Circle T Ranch”) and 170 Retail Associates Ltd (“Circle T Power Center”, and together with Circle T Ranch, “Circle T”), located in Dallas/Fort Worth, Texas, are held through joint venture entities in which we own non-controlling interests and are unconsolidated and accounted for on the equity method. (See Note 3 for a description of our acquisition of our venture partner’s share of The Woodlands Partnerships on July 1, 2011.) The Woodlands Partnerships, Circle T and certain cost method investments (for example, our interest in the Summerlin Hospital Medical Center) are collectively referred to in this report as our “Real Estate Affiliates.”

Investment in Real Estate

Real estate assets are stated at cost, including acquisition cost, less any provisions for impairments. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized. Real estate taxes and interest costs incurred during construction periods are also capitalized. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period. As of June 30, 2011, we have approximately 14,000 remaining saleable acres within our master planned communities including The Woodlands.

Pre-development costs associated with specifically identified development properties, which generally include legal and professional fees and other directly-related third-party costs, are capitalized as part of the property being developed. In the event that management no longer has the ability or intent to complete a development, the costs previously capitalized are expensed (see also our impairment policies below).

With respect to the operating retail properties, tenant improvements, either paid directly or in the form of construction allowances paid to tenants, are capitalized and depreciated over the shorter of their economic lives or the lease term. Maintenance and repairs are charged to expense when incurred. Expenditures for significant improvements are capitalized.

Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:


Asset Type	Years
Buildings and improvements		40-45
Equipment, tenant improvements and fixtures		5-10

Impairment

Generally accepted accounting principles related to accounting for the impairment or disposal of long-lived assets require that if impairment indicators exist and the undiscounted cash flows expected to be generated by an asset over its anticipated holding period are less than its carrying amount, the fair value of such assets should be estimated and an impairment provision should be recorded to write down the carrying amount of such asset to its estimated fair value. The impairment analysis does not consider the timing of future cash flows and whether the asset is expected to earn an above or below market rate of return. We review our real estate assets as well as our investments in Real Estate Affiliates for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

If an indicator of potential impairment exists, the asset is tested for recoverability by comparing its carrying amount to the estimated future undiscounted cash flow during our expected holding period. The cash flow estimates used both for determining recoverability and estimating fair value are inherently judgmental and reflect current and projected trends in rental, occupancy, pricing, development costs, sales pace and capitalization rates, and estimated holding periods for the applicable assets. Although the estimated fair value of certain assets may be exceeded by the carrying amount, a real estate asset is only considered to be impaired when its carrying amount is not expected to be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is necessary, the excess of the carrying amount of the asset over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset or, for Master Planned Communities, is expensed as a cost of sales when the asset is sold. Assets that have been impaired will in the future have lower depreciation and cost of sale expenses, but the impairment will have no impact on cash flow.

No impairment provisions were recorded in the three and six months ended June 30, 2011 and approximately $0.2 million and $0.5 million, respectively, of impairment provisions, on predevelopment costs at certain of our Strategic Developments properties, were recorded in the three and six months ended June 30, 2010. As of June 30, 2011, no additional impairments were taken because we believe that the carrying amounts are recoverable. Despite this conclusion, additional impairment charges in the future could result if our plans regarding our assets change and/or economic conditions deteriorate. We can provide no assurance that material impairment charges with respect to Master Planned Community assets, Operating Assets, Strategic Developments, Real Estate Affiliates or Developments in progress will not occur in future periods. Accordingly, we will continue to monitor circumstances and events in future periods to determine whether additional impairments are warranted.

Investments in Real Estate Affiliates

We account for investments in joint ventures where we own a non-controlling participating interest using the equity method and, investments in joint ventures where we have virtually no influence on the joint venture’s operating and financial policies, on the cost method. Under the equity method, the cost of our investment is adjusted for our share of the equity in earnings (losses) of such Real Estate Affiliates from the date of acquisition and reduced by distributions received. Generally, the operating agreements with respect to our Real Estate Affiliates provide that assets, liabilities and funding obligations are shared in accordance with our ownership percentages. We generally also share in the profit and losses, cash flows and other matters relating to our Real Estate Affiliates in accordance with our respective ownership percentages. Differences between the carrying amount of our investment in the Real Estate Affiliates and our share of the underlying equity of such Real Estate Affiliates, arising for example, from acquisition accounting or impairment provisions, are amortized over the related lives ranging from 5 to 45 years. For cost method investments, we recognize earnings when dividends are received from such investments, and along with equity method earnings, is included in Income from Real Estate Affiliates in our consolidated and combined statements of operations and comprehensive income (loss).

Warrants

As described above, on the Effective Date, we issued warrants to purchase 8.0 million shares of our common stock to certain of the sponsors of the Plan (the “Sponsors Warrants”) with an estimated initial value of approximately $69.5 million. The warrants have an initial exercise price of $50.00 per share and will be subject to adjustment for future stock dividends, splits or reverse splits of our common stock or certain other events. Approximately 6.1 million warrants are immediately exercisable and approximately 1.9 million warrants are exercisable upon 90 days prior notice for the first 6.5 years after issuance and exercisable without notice any time thereafter. Sponsors Warrants expire on November 9, 2017.

In addition, in 2010 and 2011, the Company entered into certain warrant agreements with David R. Weinreb, our Chief Executive Officer, Grant Herlitz, our President, and Andrew C. Richardson, our Chief Financial Officer (the “Management Warrants”), in each case prior to his appointment to such position. Warrants for an aggregate of 2,862,687 shares were issued pursuant to such agreements in exchange for approximately $19.0 million from such executives at the commencement of their respective employment, which was deemed to be the fair value of such warrants. Mr. Weinreb and Mr. Herlitz’s warrants have exercise prices of $42.23 per share and Mr. Richardson’s warrant has an exercise price of $54.50 per share. Generally, the Management Warrants become exercisable in November 2016 and expire by February 2018.

The aggregate estimated $298.5 million and $227.3 million fair values of the Sponsors Warrants and Management Warrants as of June 30, 2011 and December 31, 2010, respectively, have been recorded as a liability because the holders of the warrants could require HHC to settle such warrants in cash upon a change of control. Such fair values were estimated using an option pricing model and level 3 inputs due to the unavailability of comparable market data. Changes in fair value of the Sponsors Warrants and the Management Warrants have been and will continue to be recognized in earnings and, accordingly, the warrant liability gains reflecting a decrease in value of approximately $56.9 million and the warrant liability losses reflecting an increase in value of $69.1 million, were recognized for the three and six months ended June 30, 2011, respectively.

Contingent Stock Agreement

In conjunction with GGP’s acquisition of The Rouse Company (“TRC”) in November 2004, GGP assumed TRC’s obligations under the Contingent Stock Agreement, (the “CSA”). TRC entered into the CSA in 1996 when it acquired The Hughes Corporation (“Hughes”). This acquisition included various assets, including Summerlin (the “CSA Assets”), a development in our Master Planned Communities segment. The CSA provided that the beneficiaries receive a share of the cash flow and income from the development or sale of the CSA assets and a final payment representing their share of the valuation of the CSA Assets as of December 31, 2009. The Plan provided that the final payment and settlement of all other claims under the CSA was an obligation of GGP and was $230 million (down from the $245 million estimate at December 31, 2009), and such amount was distributed by GGP after the Effective Date. Accordingly, during September 2010, we reduced our carrying value of the CSA assets, and the related GGP equity, by $15 million for this revised estimate.

Fair Value Measurements

The accounting principles for fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

•

Level 1 — defined as observable inputs such as quoted prices for identical assets or liabilities in active markets;

•

Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

•

Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The asset or liability fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Any fair values utilized or disclosed in our financial statements were developed for the purpose of complying with the accounting principles established for fair value measurements.

The Company is required to estimate the fair value of its long-lived assets, such as its real estate investments, that it determines are impaired. For the three and six months ended June 30, 2011, no real estate assets were considered impaired and therefore no real estate assets were measured at fair value in such period. Those assets which were impaired in 2010 were recorded at their estimated fair value in the period in which the impairment occurred.

The only liabilities presented at fair value and measured on a recurring basis at June 30, 2011 are the Sponsors Warrants and Management Warrants for which we recognized approximately $56.9 million of income and $69.1 million, of expense, respectively, in the three and six months ended June 30, 2011 for the changes in the recorded valuation of such warrants and a swap entered into in May 2011 with a recorded fair value of $0.7 million (Note 4). As of December 31, 2010, we did not have any derivative financial instruments and our investments in marketable securities were immaterial.

For the three and six months ended June 30, 2010, non-recurring fair value measurements included approximately $0.2 million and $0.5 million, respectively, of impairment provisions, representing the full write-off of various pre-development costs that were determined to be non-recoverable due to the related projects being terminated. In addition, no debt was measured at fair value during the three and six months ended June 30, 2010 as no HHC Debtors emerged from bankruptcy during this time period.

Fair Value of Financial Instruments

The fair values of our financial instruments approximate their carrying amount in our financial statements except for debt. Management’s required estimates of fair value are presented below for our debt at June 30, 2011 and December 31, 2010. This fair value was estimated solely for financial statement reporting purposes and should not be used for any other purposes, including estimating the value of any of the Company’s securities. We estimated the fair value of this debt based on quoted market prices for publicly-traded debt, recent financing transactions (which may not be comparable), estimates of the fair value of the property that serves as collateral for such debt, historical risk premiums for loans of comparable quality, the current London Interbank Offered Rate (“LIBOR”), a widely quoted market interest rate which is frequently the index used to determine the rate at which we borrow funds, U.S. treasury obligation interest rates and on the discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect our judgment as to what the approximate current lending rates for loans or groups of loans with similar maturities and credit quality would be if credit markets were operating efficiently and assume that the debt is outstanding through maturity. We have utilized available market information or present value techniques to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist in specific loans, it is unlikely that the estimated fair value of any of such debt could be realized by immediate settlement of the obligation.


	June 30, 2011				December 31, 2010
	Carrying		Estimated		Carrying		Estimated
(In thousands)	Amount		Fair Value		Amount		Fair Value
Fixed-rate debt	$	154,949	$	168,447	$	191,037	$	202,897
Variable-rate debt		93,902		94,378		65,518		65,629
SID bonds (*)		57,817		57,817		62,105		62,105

Total	$	306,668	$	320,642	$	318,660	$	330,631


(*)		Due to the uncertain repayment terms of special improvement district (SID) bonds, the carrying value has been used as an approximation of fair value.

Revenue Recognition and Related Matters

Revenues from land sales are recognized using the full accrual method if various criteria provided by GAAP relating to the terms of the transactions and our subsequent involvement with the land sold are met. Revenues relating to transactions that do not meet the established criteria are deferred and recognized when the criteria are met or using the installment or cost recovery methods, as appropriate in the circumstances. In addition, we recognize revenue related to our right to participate in the ultimate home sale proceeds of the builders we sell our lots to as such amounts are collected.

Cost of land sales is determined as a specified percentage of land sales revenues recognized for each community development project. These cost ratios used are based on actual costs incurred and estimates of future development costs and sales revenues to completion of each project. The ratios are reviewed regularly and revised for changes in sales and cost estimates or development plans. Significant changes in these estimates or development plans, whether due to changes in market conditions or other factors, could result in changes to the cost ratio used for a specific project. For certain parcels of land, however, the specific identification method is used to determine cost of sales including acquired parcels we do not intend to develop or for which development was complete at the date of acquisition.

Nouvelle at Natick is a 215 unit residential condominium project, located in Natick, Massachusetts. Pursuant to the Plan, only the unsold units at Nouvelle at Natick on the Effective Date were distributed to us and no deferred revenue or sales proceeds from unit closings prior to the Effective Date were allocated to us. As of June 30, 2011, 33 units were unsold at Nouvelle at Natick, of which eight were under contract for sale. Income related to unit sales subsequent to the Effective Date is accounted for on a unit-by-unit full accrual method.

Minimum rent revenues are recognized on a straight-line basis over the terms of the related leases. Minimum rent revenues also include amounts collected from tenants to allow the termination of their leases prior to their scheduled termination dates and accretion related to above and below-market tenant leases on acquired properties. Certain of our leases include both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The portion of the tenant rent from these leases attributable to real estate tax and operating expense recoveries are recorded as tenant recoveries.

Straight-line rent receivables, which represent the current net cumulative rents recognized prior to when billed and collectible as provided by the terms of the leases, of $2.7 million and $2.0 million as of June 30, 2011 and December 31, 2010, respectively, are included in Accounts receivable, net in our consolidated balance sheets.

Income Taxes

Deferred income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. There are events or circumstances that could occur in the future that could limit the benefit of deferred tax assets, such as an inability to generate taxable income in the future or a change in ownership. An increase or decrease in the valuation allowance that results from a change in circumstances, and which causes a change in our judgment about the realizability of the related deferred tax asset, is included in the current year deferred tax provision. In addition, we recognize and report interest and penalties, if necessary, related to uncertain tax positions within our provision for income tax expense.

In many of our Master Planned Communities, gains with respect to sales of land for commercial use are reported for tax purposes on the percentage of completion method. Under the percentage of completion method, gain is recognized for tax purposes as costs are incurred in satisfaction of contractual obligations. The method used for determining the percentage complete for income tax purposes is different than that used for financial statement purposes. In addition, gains with respect to sales of land for single family residences are reported for tax purposes under the completed contract method. Under the completed contract method, gain is recognized for tax purposes when 95% of the costs of our contractual obligations are incurred or the contractual obligation is transferred.

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed after adjusting the numerator and denominator of the basic EPS computation for the effects of all potentially dilutive common shares. The dilutive effect of options and nonvested stock issued under stock-based compensation plans is computed using the “treasury stock” method. The dilutive effect of Sponsor Warrants and Management Warrants is computed using the if-converted method.

As defined and described in Note 6, certain HHC Replacement Options outstanding are required to be settled by GGP and therefore do not represent dilutive securities at any date presented. Of the HHC Replacement Options outstanding that are required to be settled by HHC, diluted EPS excludes options where the exercise price was higher than the average market price of our common stock and options for which vesting requirements were not satisfied. Such options totaled 2,522 shares as of June 30, 2011.

As discussed above, in connection with the Separation on November 9, 2010, GGP distributed to its stockholders 32.5 million shares of our common stock and approximately 5.25 million shares were purchased by certain investors sponsoring the Plan. This share amount is being used in the calculation of basic and diluted EPS for the three and six months ended June 30, 2010 as our common stock was not traded prior to November 9, 2010 and there were no dilutive securities in the prior periods.

Information related to our EPS calculations is summarized as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
(In thousands, except per share amounts)
Basic EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	65,973		$	(28,042	)	$	(48,542	)	$	(48,571	)

Denominator:
Weighted average number of common shares outstanding — basic		37,897			37,716			37,897			37,716
Diluted EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	65,973		$	(28,042	)	$	(48,542	)	$	(48,571	)
Warrant liability gain		(56,910	)		—			—			—

Adjusted net income available to common stockholders	$	9,063		$	(28,042	)	$	(48,542	)	$	(48,571	)

Denominator:
Weighted average number of common shares outstanding — basic		37,897			37,716			37,897			37,716
Diluted effect:
Restricted stock		3			—			—			—
Warrants		2,970			—			—			—

Weighted average number of common shares outstanding — diluted		40,870			37,716			37,897			37,716


Anti-dilutive securities not included above		669						9,335

Basic Earnings (Loss) Per Share	$	1.74		$	(0.74	)	$	(1.28	)	$	(1.29	)
Diluted Earnings (Loss) Per Share	$	0.22		$	(0.74	)	$	(1.28	)	$	(1.29	)

Municipal Utility Districts

In Houston, Texas, certain development costs are reimbursable through the creation of Municipal Utility Districts (“MUD“s) and Water Control and Improvement Districts, which are separate political subdivisions authorized by Article 16, Section 59 of the Texas Constitution and governed by the Texas Commission on Environmental Quality (“TCEQ”). MUDs are formed to provide municipal water, waste water, drainage services, recreational facilities and roads to those areas where they are currently unavailable through the regular city services. Typically, the developer advances funds for the creation of the facilities, which must be designed, bid and constructed in accordance with the City of Houston’s and TCEQ requirements. The developer initiates the MUD process by filing the applications for the formation of the MUD, and once the applications have been approved, a board of directors is elected for the MUD and given the authority to issue ad valorem tax bonds and the authority to tax residents. The MUD board authorizes and approves all MUD development contracts and pay estimates. The Company estimates the costs it believes will be eligible for reimbursement and classifies them as MUD receivables. MUD bond sale proceeds are used to reimburse the developer for its construction costs, including interest. MUD taxes are used to pay the debt service on the bonds and the operating expenses of the MUD. The Company has not incurred any debt relating to the MUDs.

Reorganization and Other 2010 Bankruptcy-Related Items

As certain of the HHC Businesses had filed for bankruptcy protection in April 2009 (the “HHC Debtors”), these entities are required by GAAP to separately present as Reorganization items elements of expense or income that were incurred or realized as a result of the bankruptcy filings. These items include professional fees and similar types of expenses and gains and interest earned on cash accumulated by certain of our subsidiaries, all as a result of the bankruptcy. Reorganization items specific to the HHC Debtors have been allocated to us and have been reflected in our combined statement of operations and comprehensive income (loss) for the three and six months ended June 30, 2010 and in the table presented below.

Reorganization items are as follows:


	Three Months Ended			Six Months Ended
Reorganization Items	June 30, 2010			June 30, 2010
(In thousands)
Gains on liabilities subject to compromise — vendors (a)	$	(36	)	$	(282	)
Losses on liabilities subject to compromise, net — mortgage debt (b)		365			365
Interest income (c)		(1	)		(1	)
U.S. Trustee fees		131			270
Restructuring costs (d)		9,560			26,262

Total reorganization items	$	10,019		$	26,614


(a)		This amount includes gains from repudiation, rejection or termination of contracts or guarantee of obligations. Such gains reflect agreements reached with certain critical vendors, which were authorized by the Bankruptcy Court, and for which payments on an installment basis began in July 2009.

(b)		Net losses include the Fair Value adjustments of mortgage debt relating to entities that emerged from bankruptcy.

(c)		Interest income primarily reflects amounts earned on cash accumulated as a result of our Chapter 11 cases.

(d)		Restructuring costs primarily include professional fees incurred related to the bankruptcy filings, our allocated share of the Key Employee Incentive Plan (KEIP) payment, finance costs incurred by debtors upon emergence from bankruptcy and any associated write-off of unamortized deferred finance costs related to emerged debtors.

Gains on liabilities subject to compromise — vendors represent the income effects of the settlement of certain liabilities of the HHC Debtors that were incurred prior to their bankruptcy filings in 2009. All liabilities incurred by the HHC Debtors prior to such bankruptcy filings were subject to compromise in 2010 as the amounts to be paid were subject to settlement, adjustment, or reinstatement as provided by Chapter 11. The amounts of the various categories of liabilities that were subject to compromise are set forth below and represented the then estimates of known or potential liabilities likely to be resolved in connection with the then planned 2010 emergence from bankruptcy of the HHC Debtors. As the plans of reorganization for the HHC Debtors ultimately approved subsequent to June 30, 2010 provided for, in general, full payment of allowed claims, substantially all recorded liabilities of the HHC Debtors that were subject to compromise at June 30, 2010 were settled, reinstated or retained by the Effective Date. In addition, GGP agreed that it would reimburse HHC up to $5.0 million for liability claims related to periods prior to the HHC Debtors’ bankruptcy filings, the majority of which has been paid as of June 30, 2011.

The amounts subject to compromise at June 30, 2010 consisted of the following items:


(In thousands)
Mortgages and secured notes	$	132,849
Accounts payable and accrued liabilities		100,774

Total liabilities subject to compromise	$	233,623

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. For example, estimates and assumptions have been made with respect to useful lives of assets, capitalization of development and leasing costs, provision for income taxes, recoverable amounts of receivables and deferred taxes, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to acquisitions, impairment of long-lived assets and goodwill, fair value of warrants and debt and cost ratios and completion percentages used for land sales. Actual results could differ from these and other estimates.

Recently Issued Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued a new standard which changes the requirements for presenting comprehensive income in the financial statements. The new standard eliminates the option to present other comprehensive income (OCI) in the statement of stockholders’ equity and instead requires net income, components of OCI, and total comprehensive income to be presented in one continuous statement or two separate but consecutive statements. The standard will be effective for us beginning with our first quarter 2012 reporting and will be applied retrospectively. HHC had elected to present OCI in one continuous statement in all its previous filings and accordingly, the effective date of this standard will not have an effect on our results of operating, financial position, or cash flows in our consolidated financial statements.

In May 2011, the FASB issued “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The standard revises guidance for fair value measurement and expands the disclosure requirements. It is effective for fiscal years beginning after December 15, 2011. We are currently evaluating the impact that the adoption of this standard will have on our Consolidated Financial Statements.

- Definition

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References + Details

Intangible Assets and Liabilities

6 Months Ended

Jun. 30, 2011

Intangible Assets and Liabilities [Abstract]

INTANGIBLE ASSETS AND LIABILITIES

NOTE 2 INTANGIBLE ASSETS AND LIABILITIES

The following table summarizes our intangible assets and liabilities:


				Accumulated			Net
	Gross Asset			(Amortization)			Carrying
(In thousands)	(Liability)			/ Accretion			Amount
As of June 30, 2011
Tenant leases:
In-place value	$	11,738		$	(10,385	)	$	1,353
Above-market		1,820			(1,814	)		6
Below-market		—			—			—
Ground leases:
Above-market		(3,545	)		874			(2,671	)
Below-market		23,096			(2,247	)		20,849

As of December 31, 2010
Tenant leases:
In-place value	$	11,824		$	(10,221	)	$	1,603
Above-market		1,820			(1,701	)		119
Below-market		(77	)		77			—
Ground leases:
Above-market		(3,545	)		638			(2,907	)
Below-market		23,096			(2,078	)		21,018

The gross asset balances of the in-place value of tenant leases are included in Buildings and equipment in our consolidated balance sheets. The above-market and below-market tenant and ground leases are included in Prepaid expenses and other assets and Accounts payable and accrued expenses in our consolidated balance sheets.

Amortization/accretion of these intangible assets and liabilities decreased our income (excluding the impact of noncontrolling interests and the provision for income taxes) by $0.1 million and $0.3 million, respectively, for the three and six months ended June 30, 2011 and by $0.2 million and $0.4 million, respectively, for the three and six months ended June 30, 2010

Future amortization of these intangible assets and liabilities is estimated to decrease net income (excluding the impact of noncontrolling interests and the provision for income taxes) by approximately $0.2 million for the remainder of 2011 and $0.3 million in 2012, $0.2 million in 2013, $0.1 million in 2014 and $18.7 million thereafter.

Real Estate Affiliates

6 Months Ended

Jun. 30, 2011

Real Estate Affiliates [Abstract]

REAL ESTATE AFFILIATES

NOTE 3 REAL ESTATE AFFILIATES

As of June 30, 2011, we own noncontrolling investments in The Woodlands Partnerships and Circle T whereby, generally, we share in the profits and losses, cash flows and other matters relating to our investments in Real Estate Affiliates in accordance with our respective ownership percentages. As we have joint interest and joint control of these ventures with our venture partners, we account for these joint ventures using the equity method. For cost method investments (Note 1), we recognize earnings to the extent of dividends received from such investments, which are included, along with equity method earnings, in Income from Real Estate Affiliates in our consolidated and combined statements of operations and comprehensive income (loss). In March 2011, we received approximately $3.9 million in dividends from our Summerlin Hospital investment which is reported on the cost method.

As of June 30, 2011, approximately $296.5 million of indebtedness was secured by the properties owned by our Real Estate Affiliates, our share of which was approximately $126.0 million.

On July 1, 2011, HHC completed the acquisition of its venture partner’s 57.5% legal interest, which equates to a 47.5% economic interest based on the joint venture agreement, in The Woodlands Partnerships for $117.5 million. The purchase consideration consisted of $20.0 million in cash paid at closing and a $97.5 million non-interest bearing promissory note due December 1, 2011. Upon completion of the acquisition, The Woodlands Partnerships became a wholly-owned subsidiary of HHC. This business combination did not represent a significant acquisition of assets under the SEC rules. However, the acquisition will require that we apply in our future reports the acquisition method of accounting and record, on a consolidated basis, the assets and liabilities of The Woodlands Partnerships at fair value on the date of acquisition.

Condensed Combined Financial Information of Certain Real Estate Affiliates

The Woodlands Partnerships and Circle T are accounted for on the equity method. The three and six months ended June 30, 2010 revenues and expenses and net income attributable to joint ventures in the table below have been restated to correct the prior presentation to reflect certain eliminations not previously reported. The restatement has no effect on our previously reported Income from Real Estate Affiliates. The following summarized financial information as of June 30, 2011 and December 31, 2010 and for the three and six months ended June 30, 2011 and 2010, is presented below:


	June 30,			December 31,
Condensed Combined Balance Sheets - Certain Real Estate Affiliates	2011			2010
	(In thousands)
Assets:
Land	$	31,077		$	31,077
Building and equipment		242,430			241,436
Less accumulated depreciation		(85,081	)		(81,218	)
Developments in progress		28,725			25,431

Net property and equipment		217,151			216,726
Land held for development and sale		226,777			237,117

Net investment in real estate		443,928			453,843
Cash and cash equivalents		25,493			99,769
Accounts and notes receivable, net		44,782			45,863
Deferred expenses, net		5,094			895
Prepaid expenses and other assets		39,377			41,663

Total assets	$	558,674		$	642,033


Liabilities and Owners’ Equity:
Mortgages, notes and loans payable	$	296,515		$	372,222
Accounts payable, accrued expenses and other liabilities		109,403			122,877
Owners’ equity		152,756			146,934

Total liabilities and owners’ equity	$	558,674		$	642,033


Investment in Real Estate Affiliates, Net
Owners’ equity	$	152,756		$	146,934
Less joint venture partners’ equity		(73,009	)		(70,243	)
Basis differences, loans and cost basis investments		73,386			72,852

Investment in Real Estate Affiliates	$	153,133		$	149,543

The Woodlands Partnerships had total assets, total debt and owner’s equity of $540.7 million, $296.5 million and $107.3 million, respectively, as of June 30, 2011. On December 31, 2010, such amounts were $616.9 million, $372.2 million and $101.1 million, respectively.


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
	(In thousands)						(In thousands)
Revenue:
Land sales	$	25,907		$	26,085		$	47,880		$	49,471
Tenant rents		4,207			3,620			6,048			4,541
Other		13,799			10,651			26,569			21,987

Total revenues		43,913			40,356			80,497			75,999


Expenses:
Cost of sales — land		12,442			14,057			23,932			26,206
Land sales operations		8,887			5,282			14,206			11,438
Real estate taxes		485			496			984			986
Property maintenance costs		568			383			1,037			468
Property operating costs		9,810			9,896			20,969			20,354
Depreciation and amortization		1,899			1,711			3,829			3,676

Total operating expenses		34,091			31,825			64,957			63,128

Operating income		9,822			8,531			15,540			12,871

Other income		639			570			1,084			1,339
Interest expense		(4,918	)		(5,219	)		(8,927	)		(8,121	)
Provision for income taxes		(970	)		(827	)		(1,467	)		(1,137	)

Net income attributable to joint ventures	$	4,573		$	3,055		$	6,230		$	4,952


Income from Real Estate Affiliates:
Net income attributable to joint ventures	$	4,573		$	3,055		$	6,230		$	4,952
Joint venture partners’ share of income		(2,172	)		(1,451	)		(2,959	)		(2,352	)
Amortization of capital or basis differences, and distributions from cost method investments		(293	)		2,076			4,350			2,572

Income from Real Estate Affiliates	$	2,108		$	3,680		$	7,621		$	5,172


Income from Real Estate Affiliates — By Affiliate:
The Woodlands	$	2,108		$	3,680		$	3,727		$	5,172
Circle T		—			—			—			—
Summerlin Hospital Medical Center		—			—			3,894			—

	$	2,108		$	3,680		$	7,621		$	5,172

- Definition

The entire disclosure for real estate owned (as defined). Generally, the largest component of real estate owned by lenders is assets taken in settlement of troubled loans through surrender or foreclosure. Real estate investments, real estate loans that qualify as investments in real estate, and premises that are no longer used in operations may also be included in real estate owned.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph c
-Subparagraph Schedule III
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 28
-Article 12

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher OTS
-Name Federal Regulation (FR)
-Number Title 12
-Chapter V
-Section 563c.102
-Paragraph 11
-Subsection I
-LegacyDoc This is a non-GAAP reference that was included in the 2009 taxonomy. It will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph f
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 15
-Paragraph 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Audit and Accounting Guide (AAG)
-Number AAG-DEP
-Chapter 11
-Paragraph 2, 6, 9-11, 18, 20
-IssueDate 2006-05-01
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 7, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 34
-Paragraph 9, 11, 12, 13, 14, 15, 21
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher OTS
-Name Federal Regulation (FR)
-Number Title 12
-Chapter V
-Section 563c.102
-Paragraph 10
-Subparagraph a, b
-Subsection I
-LegacyDoc This is a non-GAAP reference that was included in the 2009 taxonomy. It will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 10
-Subparagraph 4
-Article 9

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 11
-Article 9

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6375948&loc=d3e4437-111522

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 35
-Paragraph 43
-URI http://asc.fasb.org/extlink&oid=6390298&loc=d3e1739-110224

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03.10(4))
-URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 40
-Section 40
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6905009&loc=d3e18551-111553

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 40
-Section 40
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6905009&loc=d3e18511-111553

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 35
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=6390298&loc=d3e1424-110224

+ Details

Mortgages, Notes and Loans Payable

6 Months Ended

Jun. 30, 2011

Mortgages, Notes and Loans Payable [Abstract]

MORTGAGES, NOTES AND LOANS PAYABLE

NOTE 4 MORTGAGES, NOTES AND LOANS PAYABLE

Mortgages, notes and loans payable are summarized as follows:


	June 30,		December 31,
(In thousands)	2011		2010
Fixed-rate debt:
Collateralized mortgages, notes and loans payable	$	154,949	$	191,037
Special Improvement District bonds		57,817		62,105
Variable-rate debt:
Collateralized mortgages, notes and loans payable		93,902		65,518

Total mortgages, notes and loans payable	$	306,668	$	318,660

The following table presents our mortgages, notes, and loans payable by property:


	As of June 30, 2011
						Carrying		Interest
Property (In thousands)	Principal		Discount			Value		Rate			Maturity
Mortgages, notes and loans payable Ward Centers
Ward Gateway — Industrial — Village	$	86,823	$	(6,612	)	$	80,211		5.61	%	October 2016
Ward Entertainment Center — Ward Centre		55,584		(2,411	)		53,173		4.33	%	January 2014
Ward Village Shops		377		—			377		5.35	%	June 2025
Ward Warehouse — Ward Plaza		67,302		(2,400	)		64,902		2.69	% (a)	October 2016

111 N. Wacker		29,000		—			29,000		5.21	% (b)	November 2019

Bridgeland
Note #1		2,249		(180	)		2,069		6.50	%	June 2033
Note #2		3,394		—			3,394		6.50	%	December 2017
Note #3		15,452		—			15,452		6.50	%	May 2026
Note #4		273		—			273		6.50	%	December 2021

Total Mortgages, notes and loans payable		260,454		(11,603	)		248,851

Special Improvement District bonds
Summerlin West — S808		1,053		—			1,053		7.75	%	April 2021
Summerlin West — S809		1,518		—			1,518		6.65	%	April 2023
Summerlin West — S810		23,048		—			23,048		7.13	%	April 2031
Summerlin South — S108		1,426		—			1,426		5.95	%	December 2016
Summerlin South — S124		438		—			438		5.95	%	December 2019
Summerlin South — S128		898		—			898		7.30	%	December 2020
Summerlin South — S128C		6,060		—			6,060		6.05	%	December 2030
Summerlin South — S132		4,124		—			4,124		7.88	%	December 2020
Summerlin South — S151		14,243		—			14,243		6.00	%	June 2025
The Shops @ Summerlin Centre — S108		943		—			943		5.95	%	December 2016
The Shops @ Summerlin Centre — S128		4,066		—			4,066		6.05	%	December 2030

Total Special Improvement District bonds		57,817		—			57,817

	$	318,271	$	(11,603	)	$	306,668


(a)		Based on LIBOR of 0.1872% at June 30, 2011 plus the specified spread in the loan.

(b)		Based on the May 10, 2011 cash flow hedge described below.

The weighted average interest rate on our mortgages, notes and loans payable, inclusive of interest rate hedges, was 4.99% and 5.14% as of June 30, 2011 and December 31, 2010, respectively.

Collateralized Mortgages, Notes and Loans Payable

As of June 30, 2011, we had $248.9 million of collateralized mortgages, notes and loans payable. All of the debt is non-recourse and is secured by the individual properties as listed in the table above, except for a $7.0 million recourse guarantee associated with the 110 N. Wacker mortgage, which is more fully discussed below. The Bridgeland MPC loan is secured by approximately 7,615 acres of land within the Bridgelands MPC. In addition, certain of our loans contain provisions which grant the lender a security interest in the operating cash flow of the property that represents the collateral for the loan. Such provisions are not expected to materially impact our operations in 2011. Certain mortgage notes may be prepaid, but may be subject to a prepayment penalty equal to a yield-maintenance premium, defeasance or a percentage of the loan balance.

On May 10, 2011, the Company closed a $29.0 million first mortgage financing secured by its office building located at 110 N. Wacker Drive in Chicago, Illinois and bearing interest at LIBOR plus 2.25%. The loan matures on October 31, 2019 and its term is coterminous with the expiration of the first term of the existing tenant’s lease (Note 9). The loan has an interest-only period through April 2015 and, thereafter, amortizes ratably to $12.0 million through maturity. The proceeds from the financing were used to repay the existing $28.2 million mortgage and to pay closing costs and other expenses. The Company provided a $7.0 million repayment guarantee for the loan, which is reduced on a dollar for dollar basis during the amortization period.

In order to limit the Company’s exposure to interest rate fluctuations related to the variable rate debt disclosed above, the Company entered into an interest rate swap. This interest rate swap was designated as a cash flow hedge and fixed the interest rate at 5.21% per annum. The effective portion of the swap’s gains or losses due to changes in fair value are initially recorded in accumulated other comprehensive loss and are subsequently reclassified into earnings when the interest payments are remitted. The gross notional amount of the swap is $29.0 million and matures on October 31, 2019. The fixed pay rate is 2.96% and the variable receive rate is based on the monthly LIBOR rate. The fair value of the swap was estimated using Level 2 measurements based on the hedged variable cash flows and forward yield curves relating to the variable interest rates on which the cash flows are based. At June 30, 2011, the swap liability was $0.7 million and is recorded in accounts payable and accrued expenses. The swap was determined to be highly effective and as a result the impact to earnings for the three and six months ended June 30, 2011 due to ineffectiveness was immaterial.

Special Improvement District Bonds

The Summerlin master planned community uses Special Improvement District bonds to finance certain common infrastructure. These bonds are issued by the municipalities and, although unrated, are secured by the assessments on the land and approximately 1,971 acres of land within the Summerlin MPC. The majority of proceeds from each bond issued is held in a construction escrow and dispersed to us as infrastructure projects are completed, inspected by the municipalities and approved for reimbursement. Accordingly, the cash raised but not yet spent related to the Special Improvement District bonds has been classified as a receivable within Prepaid and other assets. We pay the debt service on the bonds semi-annually, but typically receive reimbursement of all principal amortization paid by us from certain purchasers of our land; therefore, the Special Improvement District receivable (included in Prepaid expenses and other assets) and Special Improvement District bonds (included in Mortgages, notes and loans payable) largely offset (Note 7). In addition, as the Summerlin master planned community sells land, the purchasers assume a proportionate share of the bond obligation.

Letters of Credit and Surety Bonds

We had outstanding letters of credit and surety bonds of $33.5 million as of June 30, 2011 and $38.7 million as of December 31, 2010. These letters of credit and bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2011
Income Taxes [Abstract]
INCOME TAXES	NOTE 5 INCOME TAXES We are taxed as a C Corporation. One of our consolidated entities, Victoria Ward, Limited. (“Ward”, substantially all of which is owned by us) elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the taxable year beginning January 1, 2002. To qualify as a REIT, Ward must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of its ordinary taxable income and to distribute to stockholders or pay tax on 100% of capital gains and to meet certain asset and income tests. Ward was in compliance with the REIT requirements for 2010 and we intend to operate Ward as a REIT in all periods subsequent to the Effective Date. Warrant liability gain or loss as calculated for GAAP purposes reflects the change in the estimated Warrant Liability based on an option pricing model and is not deductible for tax purposes. Changes in the Company’s stock price can materially change the estimated liability from quarter to quarter. For financial reporting purposes, the tax effect of the warrant liability gain or loss will be treated as a discrete item within the provision for income taxes due to the volatility of the change in estimated liability from quarter to quarter. Unrecognized tax benefits recorded pursuant to uncertain tax positions were $120.1 million as of June 30, 2011 and December 31, 2010, excluding interest, of which none would impact our effective tax rate. Accrued interest related to these unrecognized tax benefits amounted to $24.2 million as of June 30, 2011 and $20.0 million as of December 31, 2010. We recognized an increase of interest expense related to the unrecognized tax benefits of $2.0 million and $4.2 million, respectively, for the three and six months ended June 30, 2011. Based on the expected outcome of existing examinations or examinations that may commence, or as a result of the expiration of the statute of limitations for specific jurisdictions, management does not believe that the unrecognized tax benefits, excluding accrued interest, for tax positions taken regarding previously filed tax returns will materially increase or decrease during the next twelve months. As described in the Annual Report, pursuant to the Tax Matters Agreement, GGP has indemnified us from and against 93.75% of any and all losses, claims, damages, liabilities and reasonable expenses to which we become subject (the “Tax Indemnity Cap”), in each case solely to the extent directly attributable to certain taxes related to sales of certain assets in our Master Planned Communities segment prior to March 31, 2010, in an amount up to $303.8 million, plus interest and penalties related to these amounts so long as GGP controls the action in the Tax Court related to the dispute with the IRS. The unrecognized tax benefits and related accrued interest recorded through June 30, 2011 are primarily related to the taxes that are the subject of the Tax Indemnity Cap.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Stock-Based Plans

6 Months Ended

Jun. 30, 2011

Stock-Based Plans [Abstract]

STOCK-BASED PLANS

NOTE 6 STOCK-BASED PLANS

Incentive Stock Plans

On November 9, 2010, HHC adopted The Howard Hughes Corporation 2010 Equity Incentive Plan (the ''Equity Plan’’). Pursuant to the Equity Plan, 3,698,050 shares of HHC common stock are reserved for issuance. The Equity Plan provides for grants of options, stock appreciation rights, restricted stock, other stock-based awards and performance-based compensation (collectively, ''the Awards’’). Directors, employees and consultants of HHC and its subsidiaries and affiliates are eligible for Awards.

Prior to the Separation, the Predecessors granted qualified and non-qualified stock options and restricted stock to certain GGP officers and key employees whose compensation costs related specifically to our assets. Accordingly, an allocation of stock-based compensation costs of approximately $0.2 million and $0.3 million, respectively, pertaining to such employees has been reflected in our combined statement of operations and comprehensive income (loss) for the three and six months ended June 30, 2010.

Stock Options

There were no grants of stock options under the Equity Plan in 2010. In the six months ended June 30, 2011, 679,340 options to purchase shares of our common stock were granted to certain of our employees. Such options had a weighted average exercise price of approximately $58.53, vest at the rate of 20% per year on each of the first five anniversaries of the grant date, may not be exercised prior to December 31, 2016 and, unless earlier terminated under certain circumstances, expire ten years from the grant date. Compensation expense related to stock options was approximately $0.9 million for the six months ended June 30, 2011.

Pursuant to the Plan, each outstanding option to acquire shares of GGP stock (“Old GGP Options”) was converted on the Effective Date into (i) an option to acquire the same number of shares of common stock of reorganized GGP (“New GGP Options”) and (ii) a separate option to acquire 0.0983 shares of our common stock for each existing option for one share of GGP common stock (“HHC Replacement Options”). The HHC Replacement Options were fully vested as of the Effective Date and have the same terms and conditions as the Old GGP Options except that we have agreed with GGP that all exercises of New GGP Options and HHC Replacement Options in 2011 and beyond would be settled by the respective employer at the time of exercise. As of June 30, 2011 and January 1, 2011, there were 53,393 and 164,138, respectively, HHC Replacement Options outstanding. Of such amounts, only 2,522 of such options represent potentially dilutive shares at such dates as all remaining amounts were held by GGP employees. In addition, 25,994 New GGP Options (with a weighted average exercise price of $45.99 as compared to a June 30, 2010 GGP closing stock price of $16.69 and a weighted average remaining contracted term of 0.7 years) were held by our employees at June 30, 2011 and therefore our potential net share settlement obligation for such New GGP Options is expected to be nominal.

The following tables summarize HHC Replacement Option activity as of and for the six months ended June 30, 2011:


	2011
				Weighted
				Average
				Exercise
	Shares			Price
HHC Replacement Options outstanding at January 1		164,138		$	133.28
Exercised (a)		(19,265	)		40.71
Expired		(91,480	)		139.01

HHC Replacement Options outstanding at June 30		53,393		$	156.88	(b)


(a)		All net share settled by GGP.

(b)		Weighted average remaining contractual term of 0.7 years.

Restricted Stock

Pursuant to the Equity Plan, the Company granted 8,247 and 8,953 shares of restricted common stock in November 2010 and June 2011, respectively, to certain non-employee directors as part of their annual retainer for their services on the board of directors. Our chairman has waived all compensation, including any restricted stock grants, for services rendered as a director. Subsequently, receipt of 1,352 of the shares of restricted stock issued in November 2010 was waived by one of the directors as he also elected to not receive compensation for his service as a director. The restrictions on all shares of restricted common stock issued in 2010 lapsed on June 1, 2011, and restrictions on all shares of restricted common stock issued in 2011 lapse on the earlier of the Company’s annual stockholders meeting or June 1, 2012. The Company granted 20,000 shares of restricted common stock to our CFO in March 2011 and 10,000 shares to our general counsel in May 2011 in connection with their employment agreements and pursuant to the Equity Plan. The restricted shares granted to our CFO generally do not vest until March 28, 2016, and the restricted shares granted to our general counsel generally do not vest unit May 2, 2016.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
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-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Other Assets and Liabilities

6 Months Ended

Jun. 30, 2011

Other Assets and Liabilities [Abstract]

OTHER ASSETS AND LIABILITIES

NOTE 7 OTHER ASSETS AND LIABILITIES

The following table summarizes the significant components of prepaid expenses and other assets.


	June 30,		December 31,
(in thousands)	2011		2010
Special Improvement District receivable	$	45,089	$	46,250
MUD and other receivables		46,194		33,455
Prepaid expenses		5,135		2,859
Below-market ground leases (Note 2)		20,849		21,018
Security and escrow deposits		8,049		6,814
Above-market tenant leases (Note 2)		6		119
Uncertain tax position asset		10,407		8,945
Other		5,416		7,127

	$	141,145	$	126,587

The following table summarizes the significant components of accounts payable and accrued expenses.


	June 30,		December 31,
(in thousands)	2011		2010
Construction payable	$	6,559	$	15,531
Accounts payable and accrued expenses		20,962		29,745
Above-market ground leases (Note 2)		2,671		2,907
Deferred gains/income		8,377		5,631
Accrued interest		1,496		1,633
Accrued real estate taxes		3,535		3,953
Tenant and other deposits		3,467		3,555
Insurance reserve		4,212		4,229
Accrued payroll and other employee liabilities		5,078		3,930
Other		9,482		7,722

Total accounts payable and accrued expenses	$	65,839	$	78,836

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2011
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 8 COMMITMENTS AND CONTINGENCIES In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material effect on our consolidated financial position, results of operations or liquidity. We lease land or buildings at certain properties from third parties. The leases generally provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. Rental payments are expensed as incurred and have, to the extent applicable, been straight-lined over the term of the lease. Contractual rental expense, including participation rent, was $1.0 million and $1.6 million for the three and six months ended June 30, 2011, respectively. Contractual rental expense, including participation rent, was $0.7 million and $1.3 million for the three and six months ended June 30, 2010, respectively. The amortization of above and below-market ground leases and straight-line rents included in the contractual rent amount is not significant. See Note 5 for our obligations related to uncertain tax positions for disclosure of additional contingencies.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Name Accounting Standards Codification
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+ Details

Transactions With GGP and With Related Parties	6 Months Ended
Transactions With GGP and With Related Parties	Jun. 30, 2011
Transactions With GGP and With Related Parties [Abstract]
TRANSACTIONS WITH GGP AND WITH RELATED PARTIES	NOTE 9 TRANSACTIONS WITH GGP AND WITH RELATED PARTIES Prior to the Effective Date, we entered into a transition services agreement (the “TSA”) whereby GGP will provide to us, on a transitional basis, certain specified services on an interim basis for various terms not exceeding 24 months following the Separation, subject to our right of earlier termination. Concurrently, we entered into a reverse transition services agreement (“RTSA”) whereby we will provide GGP with certain income tax and accounting support services, also subject to earlier termination prior to its scheduled expiration of November 9, 2013. For the six months ended June 30, 2011, we incurred approximately $0.4 million of expenses related to the TSA and earned a negligible amount of reimbursements under RTSA. In addition, for the three and six months ended June 30, 2011 and 2010, approximately $1.5 million and $3.0 million, respectively, of rental income was recognized from GGP and its subsidiaries. During January 2011, the Audit Committee of our Board of Directors approved a Transition Agreement with TPMC Realty Services Group, Inc. (“TPMC”). David Weinreb, a director and our CEO, is the sole equity owner of TPMC and the chief executive officer of TPMC and Grant Herlitz, our president, is the president of TPMC. The Transition Agreement provided for, among other things, certain mutual transactions and services that facilitated the continuity of Company management, the net value of which was approximately $65,000 for the six months ended June 30, 2011. In addition, the reimbursement to TPMC of approximately $0.9 million of expenses as contemplated by Mr. Weinreb’s employment agreement with us was approved. Such reimbursements are reflected as an administrative expense for the six months ended June 30, 2011. With the approval of our Board of Directors, we entered into a lease agreement for 3,253 square feet of office space in Los Angeles, California with an affiliate of TPMC, which commenced on May 1, 2011. Rental expense to be recognized for such lease will be approximately $111,965 per year and the lease is scheduled to terminate in July 2016.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Number 210
-Article 3A
-Section 04
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-Name Statement of Financial Accounting Standard (FAS)
-Number 57
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-Topic 850
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+ Details

Segments

6 Months Ended

Jun. 30, 2011

Segments [Abstract]

SEGMENTS

NOTE 10 SEGMENTS

We have three business segments which offer different products and services. In 2010, we reported in two segments predominantly as the assets within our current Operating Assets segment and our current Strategic Developments segment were managed jointly as a group. Our current three segments are managed separately because each requires different operating strategies or management expertise. These segments are different than those of the Predecessors with respect to the HHC Businesses and are reflective of our current management’s operating philosophies and methods. All resulting changes from the Predecessors’ previous presentation of our segments have been applied to all periods presented. In addition, our current segments or assets within such segments could change in the future as development of certain properties commence or other operational or management changes occur. We do not distinguish or group our combined operations on a geographic basis. Further, all operations are within the United States and no customer or tenant comprises more than 10% of revenues. Our reportable segments are as follows:

•

Master Planned Communities — includes the development and sale of land, in large-scale, long-term community development projects in and around Las Vegas, Nevada; Houston, Texas and Columbia, Maryland. This segment also includes certain office properties and other ownership interests owned by The Woodlands Partnerships as such assets are managed jointly with The Woodlands Master Planned Community.

•

Operating Assets — includes commercial, mixed use and retail properties currently generating revenues, many of which we believe there is an opportunity to redevelop or reposition the asset to increase operating performance.

•

Strategic Developments — includes all properties held for development and redevelopment, including the current rental property operations (primarily retail and other interests in real estate at such locations) as well as our one residential condominium project located in Natick (Boston), Massachusetts.

The assets included in each segment are contained in the following chart:

As our segments are managed separately, different operating measures are utilized to assess operating results and allocate resources. The one common operating measure used to assess operating results for the business segments is Real Estate Property Earnings Before Taxes (“EBT”) which represents the operating revenues of the properties less property operating expenses, as further described below. Management believes that EBT provides useful information about the operating performance of all of our assets, projects and property.

EBT is defined as net income (loss) from continuing operations as adjusted for: (1) reorganization items; (2) income tax provision (benefit); (3) warrant liability gain (loss); and (4) general and administrative costs. The net income (loss) from our Real Estate Affiliates, at our proportionate share, is similarly adjusted for items (1) through (4) immediately above. We present EBT because we use this measure, among others, internally to assess the core operating performance of our assets. We also present this measure because we believe certain investors use it as a measure of a company’s historical operating performance and its ability to service and incur debt. We believe that the inclusion of certain adjustments to net income (loss) from continuing operations to calculate EBT is appropriate to provide additional information to investors because EBT excludes certain non-recurring and non-cash items, including reorganization items related to the bankruptcy, which we believe are not indicative of our core operating performance. EBT should not be considered as an alternative to GAAP net income (loss) attributable to common stockholders or GAAP net income (loss) from continuing operations, it has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP.

We report the operations of our equity method Real Estate Affiliates using the proportionate share method, whereby our share of the revenues and expenses of these Real Estate Affiliates are aggregated with the revenues and expenses of consolidated or combined properties. Our investment in the Summerlin Hospital Medical Center is accounted for on the cost method. Approximately $3.9 million was received in the first quarter of 2011 as dividends related to this investment and has been reflected as other rental and property revenues for the six months ended June 30, 2011 within the Operating Assets segment.

The total cash expenditures for additions to long-lived assets for the Master Planned Communities segment was $27.0 million for the six months ended June 30, 2011 and $30.6 million for the six months ended June 30, 2010. Similarly, cash expenditures for long-lived assets for the Operating Assets and Strategic Developments segments was $16.5 million and $2.1 million, respectively, for the six months ended June 30, 2011 and $36.5 million and $0.6 million, respectively, for the six months ended June 30, 2010. Such amounts for the Master Planned Communities segment and certain amounts in the Strategic Developments segment are included in the amounts listed in our consolidated and combined statements of cash flow as Land/residential development and acquisitions expenditures. With respect to the long-lived assets within the Operating Assets segment and certain other investing amounts in the Strategic Developments segment, such amounts are included in the amounts listed as Development of real estate and property additions/improvements primarily previously accrued, respectively, in our consolidated and combined statements of cash flows.

As more fully discussed in this report, on July 1, 2011 we acquired our partner’s interest in The Woodlands master planned community for $117.5 million. We now own 100% of The Woodlands and will consolidate its operations beginning the third quarter 2011.

Segment operating results are as follows:


	Three Months Ended June 30, 2011
	Consolidated			Real Estate			Segment
	Properties			Affiliates			Basis
				(In thousands)
Master Planned Communities
Land sales	$	18,148		$	12,982		$	31,130
Builder price participation		597			619			1,216
Minimum rents		383			2,302			2,685
Other land sale revenues		2,248			592			2,840
Other rental and property revenues		1			11,257			11,258

Total revenues		21,377			27,752			49,129
Cost of sales — land		9,438			6,532			15,970
CSA participation expense		—			—			—
Land sales operations		3,044			3,949			6,993
Land sales real estate and business taxes		1,541			471			2,012
Rental property real estate taxes		54			268			322
Rental property maintenance costs		59			299			358
Property operating costs		207			11,162			11,369
Provisions for impairment		—			—			—
Depreciation and amortization		66			1,006			1,072
Interest income (a)		1,165			(335	)		830
Interest expense (b)		(2,602	)		1,584			(1,018	)

Total expenses		12,972			24,936			37,908

MPC EBT		8,405			2,816			11,221


Operating Assets
Minimum rents		16,357			—			16,357
Tenant recoveries		4,522			—			4,522
Other rental and property revenues		1,551			—			1,551

Total revenues		22,430			—			22,430
Rental property real estate taxes		2,439			—			2,439
Rental property maintenance costs		1,378			—			1,378
Property operating costs		7,977			—			7,977
Provision for doubtful accounts		291			—			291
Provisions for impairment		—			—			—
Depreciation and amortization		3,060			—			3,060
Interest income		(3,409	)		—			(3,409	)
Interest expense		2,602			—			2,602

Total expenses		14,338			—			14,338

Operating Assets EBT		8,092			—			8,092


Strategic Developments
Minimum rents		236			—			236
Tenant recoveries		93			—			93
Condominium unit sales		6,660			—			6,660
Other rental and property revenues		27			—			27

Total revenues		7,016			—			7,016
Condominium unit cost of sales		5,272			—			5,272
Real estate taxes		459			—			459
Rental property maintenance costs		129			—			129
Property operating costs		1,289			—			1,289
Provision for doubtful accounts		13			—			13
Provisions for impairment		—			—			—
Depreciation and amortization		59			—			59

Total expenses		7,221			—			7,221

Strategic Developments EBT		(205	)		—			(205	)


EBT	$	16,292		$	2,816		$	19,108


(a)		Reflects a reclassification of amounts recongnized in this segment in the three months ended March 31, 2011.

(b)		Negative interest expense relates to interest costs of debt at our Operating Assets segment which are allocated to the MPC segment assets eligible for interest capitalization.


	Three Months Ended June 30, 2010
	Combined			Real Estate			Segment
	Properties			Affiliates			Basis
				(In thousands)
Master Planned Communities
Land sales	$	4,174		$	12,282		$	16,456
Builder price participation		1,451			496			1,947
Minimum rents		494			1,341			1,835
Other land sale revenues		1,412			559			1,971
Other rental and property revenues		208			8,585			8,793

Total revenues		7,739			23,263			31,002
Cost of sales — land		1,924			7,379			9,303
CSA participation expense		(4,689	)		—			(4,689	)
Land sales operations		9,170			744			9,914
Land sales real estate and business taxes		4,375			635			5,010
Rental property real estate taxes		254			260			514
Rental property maintenance costs		74			291			365
Property operating costs		155			7,886			8,041
Provisions for impairment		—			—			—
Depreciation and amortization		103			970			1,073
Interest income		—			(299	)		(299	)
Interest expense (*)		(4,053	)		1,280			(2,773	)

Total expenses		7,313			19,146			26,459

MPC EBT		426			4,117			4,543


Operating Assets
Minimum rents		16,209			—			16,209
Tenant recoveries		4,340			—			4,340
Other rental and property revenues		1,956			—			1,956

Total revenues		22,505			—			22,505
Rental property real estate taxes		2,489			—			2,489
Rental property maintenance costs		1,184			—			1,184
Property operating costs		7,374			—			7,374
Provision for doubtful accounts		226			—			226
Provisions for impairment		178			—			178
Depreciation and amortization		3,812			—			3,812
Interest income		—			—			—
Interest expense		4,587			—			4,587

Total expenses		19,850			—			19,850

Operating Assets EBT		2,655			—			2,655


Strategic Developments
Minimum rents		266			—			266
Tenant recoveries		93			—			93
Condominium unit sales		—			—			—
Other rental and property revenues		26			—			26

Total revenues		385			—			385
Condominium unit cost of sales		—			—			—
Real estate taxes		1,308			—			1,308
Rental property maintenance costs		181			—			181
Property operating costs		2,200			—			2,200
Provision for doubtful accounts		30			—			30
Provisions for impairment		30			—			30
Depreciation and amortization		60			—			60
Interest expense		7			—			7

Total expenses		3,816			—			3,816

Strategic Developments EBT		(3,431	)		—			(3,431	)


EBT	$	(350	)	$	4,117		$	3,767


*		Negative interest expense relates to interest costs of debt at our Operating Assets segment which are allocated to the MPC segment assets eligible for interest capitalization.


	Six Months Ended June 30, 2011
	Consolidated			Real Estate			Segment
	Properties			Affiliates			Basis
				(In thousands)
Master Planned Communities
Land sales	$	41,540		$	23,844		$	65,384
Builder price participation		1,118			1,293			2,411
Minimum rents		776			3,269			4,045
Other land sale revenues		3,496			1,053			4,549
Other rental and property revenues		106			17,500			17,606

Total revenues		47,036			46,959			93,995
Cost of sales – land		24,874			12,564			37,438
CSA participation expense		—			—			—
Land sales operations		7,161			6,235			13,396
Land sales real estate and business taxes		3,052			999			4,051
Rental property real estate taxes		107			530			637
Rental property maintenance costs		99			545			644
Property operating costs		371			17,021			17,392
Provisions for impairment		—			—			—
Depreciation and amortization		143			2,082			2,225
Interest income		—			(569	)		(569	)
Interest expense (a)		(5,128	)		2,855			(2,273	)

Total expenses		30,679			42,262			72,941

MPC EBT		16,357			4,697			21,054


Operating Assets
Minimum rents		32,470			—			32,470
Tenant recoveries		9,004			—			9,004
Other rental and property revenues (b)		3,396			3,894			7,290

Total revenues		44,870			3,894			48,764
Rental property real estate taxes		4,874			—			4,874
Rental property maintenance costs		2,694			—			2,694
Property operating costs		16,094			—			16,094
Provision for doubtful accounts		12			—			12
Provisions for impairment		—			—			—
Depreciation and amortization		6,124			—			6,124
Interest income		(4,756	)		—			(4,756	)
Interest expense		5,128			—			5,128

Total expenses		30,170			—			30,170

Operating Assets EBT		14,700			3,894			18,594


Strategic Developments
Minimum rents		449			—			449
Tenant recoveries		135			—			135
Condominium unit sales		10,424			—			10,424
Other rental and property revenues		1,010			—			1,010

Total revenues		12,018			—			12,018
Condominium unit cost of sales		8,252			—			8,252
Real estate taxes		1,445			1			1,446
Rental property maintenance costs		332			—			332
Property operating costs		2,600			—			2,600
Provision for doubtful accounts		303			—			303
Provisions for impairment		—			—			—
Depreciation and amortization		117			—			117

Total expenses		13,049			1			13,050

Strategic Developments EBT		(1,031	)		(1	)		(1,032	)


EBT	$	30,026		$	8,590		$	38,616


(a)		Negative interest expense relates to interest costs of debt at our Operating Assets segment which are allocated to the MPC segment assets eligible for interest capitalization.

(b)		Reflects the $3.9 million cash dividend from Summerlin Hospital Medical Center which is a Real Estate Affiliate accounted for using the cost method as described above.


	Six Months Ended June 30, 2010
	Combined			Real Estate			Segment
	Properties			Affiliates			Basis
				(In thousands)
Master Planned Communities
Land sales	$	7,388		$	24,154		$	31,542
Builder price participation		2,195			901			3,096
Minimum rents		988			2,384			3,372
Other land sale revenues		2,524			917			3,441
Other rental and property revenues		438			15,844			16,282

Total revenues		13,533			44,200			57,733
Cost of sales — land		3,250			13,758			17,008
CSA participation expense		(4,689	)		—			(4,689	)
Land sales operations		13,367			3,711			17,078
Land sales real estate and business taxes		8,669			1,271			9,940
Rental property real estate taxes		508			517			1,025
Rental property maintenance costs		122			246			368
Property operating costs		290			14,985			15,275
Provisions for impairment		—			—			—
Depreciation and amortization		176			1,997			2,173
Interest income		—			(703	)		(703	)
Interest expense (*)		(7,880	)		2,646			(5,234	)

Total expenses		13,813			38,428			52,241

MPC EBT		(280	)		5,772			5,492


Operating Assets
Minimum rents		32,474			—			32,474
Tenant recoveries		9,061			—			9,061
Other rental and property revenues		3,602			—			3,602

Total revenues		45,137			—			45,137
Rental property real estate taxes		5,029			—			5,029
Rental property maintenance costs		2,804			—			2,804
Property operating costs		14,672			—			14,672
Provision for doubtful accounts		388			—			388
Provisions for impairment		430			—			430
Depreciation and amortization		8,162			—			8,162
Interest income		(59	)		—			(59	)
Interest expense		9,073			—			9,073

Total expenses		40,499			—			40,499

Operating Assets EBT		4,638			—			4,638


Strategic Developments
Minimum rents		538			—			538
Tenant recoveries		191			—			191
Condominium unit sales		—			—			—
Other rental and property revenues		20			—			20

Total revenues		749			—			749
Condominium unit cost of sales		—			—			—
Real estate taxes		1,492			—			1,492
Rental property maintenance costs		357			—			357
Property operating costs		3,239			—			3,239
Provision for doubtful accounts		(31	)		—			(31	)
Provisions for impairment		56			—			56
Depreciation and amortization		87			—			87
Interest expense		14			—			14

Total expenses		5,214			—			5,214

Strategic Developments EBT		(4,465	)		—			(4,465	)


EBT	$	(107	)	$	5,772		$	5,665


*		Negative interest expense relates to interest costs of debt at our Operating Assets segment which are allocated to the MPC segment assets eligible for interest capitalization.

The following reconciles EBT to GAAP-basis income (loss) from continuing operations:


	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2011			2010			2011			2010
Reconciliation of EBT to GAAP-basis income (loss) from continuing operations
Real estate property EBT:
Segment basis	$	19,108		$	3,767		$	38,616		$	5,665
Real Estate Affiliates		(2,816	)		(4,117	)		(8,590	)		(5,772	)

Consolidated properties		16,292			(350	)		30,026			(107	)
General and administrative		(8,359	)		(4,861	)		(13,591	)		(8,996	)
Warrant liability gain (loss)		56,910			—			(69,135	)		—
Provision for income taxes		(958	)		(16,467	)		(3,415	)		(17,953	)
Income from Real Estate Affiliates		2,108			3,680			7,621			5,172
Reorganization costs		—			(10,019	)		—			(26,614	)

Income (loss) from continuing operations	$	65,993		$	(28,017	)	$	(48,494	)	$	(48,498	)

The following reconciles segment revenue to GAAP-basis consolidated and combined revenues:


	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2011			2010			2011			2010
Reconciliation of segment basis revenues to GAAP revenues

Master Planned Communities — Total segment	$	49,129		$	31,002		$	93,995		$	57,733
Operating Assets — Total segment		22,430			22,505			48,764			45,137
Strategic Developments — Total segment		7,016			385			12,018			749

Total segment revenues		78,575			53,892			154,777			103,619
Less: The Woodlands Partnerships revenues, at our ownership share		(27,752	)		(23,263	)		(46,959	)		(44,200	)
Operating Assets Real Estate Affiliates revenues		—			—			(3,894	)		—

Total revenues — GAAP basis	$	50,823		$	30,629		$	103,924		$	59,419

The assets by segment and the reconciliation of total segment assets to the total assets in the consolidated balance sheets at June 30, 2011 and December 31, 2010 are summarized as follows:


	June 30,			December 31,
	2011			2010
	(In thousands)
Assets by segment

Master Planned Communities	$	1,936,334		$	1,823,399
Operating Assets		585,123			718,330
Strategic Developments		207,333			215,037

Total segment assets		2,728,790			2,756,766
Corporate and other		597,027			601,902
Less Real Estate Affiliates		(300,386	)		(335,961	)

Total assets	$	3,025,431		$	3,022,707

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details