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Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2011	Feb. 24, 2012	Jun. 30, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	Howard Hughes Corp
Entity Central Index Key	0001498828
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
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	Large Accelerated Filer
Entity Public Float			$ 2.4
Entity Common Stock, Shares Outstanding		37,945,707

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Investment in real estate:
Master Planned Community assets	$ 1,600,074	$ 1,350,648
Land	236,363	180,976
Buildings and equipment	556,786	336,950
Less: accumulated depreciation	(92,494)	(78,931)
Developments in progress	195,034	293,403
Net property and equipment	2,495,763	2,083,046
Investment in Real Estate Affiliates	64,958	149,543
Net investment in real estate	2,560,721	2,232,589
Cash and cash equivalents	227,566	284,682
Accounts receivable, net	15,644	8,154
Municipal Utility District receivables	86,599	28,103
Notes receivable, net	35,354	38,954
Tax indemnity receivable, including interest	331,771	323,525
Deferred expenses, net	10,338	6,619
Prepaid expenses and other assets	127,156	100,081
Total assets	3,395,149	3,022,707
Liabilities:
Mortgages, notes and loans payable	606,477	318,660
Deferred tax liabilities	75,966	78,680
Warrant liabilities	127,764	227,348
Uncertain tax position liability	129,939	140,076
Accounts payable and accrued expenses	125,404	78,836
Total liabilities	1,065,550	843,600
Commitments and Contingencies (see Note 14 )
Equity:
Preferred stock: $.01 par value; 50,000,000 shares authorized, none issued
Common stock: $.01 par value; 150,000,000 shares authorized, 37,945,707 shares issued and outstanding as of December 31, 2011 and 37,904,506 shares issued and outstanding as of December 31, 2010	379	379
Additional paid-in capital	2,711,109	2,708,036
Accumulated deficit	(381,325)	(528,505)
Accumulated other comprehensive loss	(5,578)	(1,627)
Total stockholders' equity	2,324,585	2,178,283
Noncontrolling interests	5,014	824
Total equity	2,329,599	2,179,107
Total liabilities and equity	$ 3,395,149	$ 3,022,707

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2011	Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ .01	$ .01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued
Common stock, par value	$ .01	$ .01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	37,945,707	37,904,506
Common stock, shares outstanding	37,945,707	37,904,506

Consolidated and Combined Statements of Income (Loss) and Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenues:
Master Planned Community land sales	$ 113,502	$ 38,058	$ 34,563
Builder price participation	3,816	4,124	5,687
Minimum rents	71,178	66,926	65,653
Tenant recoveries	19,368	18,567	19,642
Condominium unit sales	22,067	1,139
Resort and conference center revenues	15,744
Other land revenues	14,141	5,384	5,747
Other rental and property revenues	15,875	8,521	5,056
Total revenues	275,691	142,719	136,348
Expenses:
Master Planned Community cost of sales	70,108	23,388	22,020
Master Planned Community operations	28,270	29,041	27,042
Rental property real estate taxes	11,571	14,530	13,813
Rental property maintenance costs	7,493	6,495	5,586
Condominium unit cost of sales	14,465	1,000
Resort and conference center operations	13,108
Other property operating costs	51,247	36,893	34,810
Provision for doubtful accounts		1,782	2,539
General and administrative	35,182	21,538	23,023
Provisions for impairment		503,356	680,349
Depreciation and amortization	16,782	16,563	19,841
Total expenses	248,226	654,586	829,023
Operating income (loss)	27,465	(511,867)	(692,675)
Interest income	9,876	369	1,689
Interest expense		(2,422)	(977)
Early extinguishment of debt	(11,305)
Warrant liability gain (loss)	101,584	(140,900)
Investment in real estate affiliate basis adjustment	(6,053)
Equity in earnings (loss) from Real Estate Affiliates	8,578	9,413	(28,209)
Income (loss) before taxes and reorganization items	130,145	(645,407)	(720,172)
Benefit from income taxes	18,325	633,459	23,969
Reorganization items		(57,282)	(6,674)
Net income (loss) from continuing operations	148,470	(69,230)	(702,877)
Discontinued operations - loss on dispositions			(939)
Net income (loss)	148,470	(69,230)	(703,816)
Net (income) loss attributable to noncontrolling interests	(1,290)	(201)	204
Net income (loss) attributable to common stockholders	$ 147,180	$ (69,431)	$ (703,612)
Basic Earnings (Loss) Per Share:
Continuing operations	$ 3.88	$ (1.84)	$ (18.64)
Discontinued operations			(0.02)
Total basic earnings (loss) per share	3.88	(1.84)	(18.66)
Diluted Earnings (Loss) Per Share:
Continuing operations	1.17	(1.84)	(18.64)
Discontinued operations			(0.02)
Total diluted earnings (loss) per share	$ 1.17	$ (1.84)	$ (18.66)
Comprehensive Income (Loss), Net of Tax:
Net income (loss)	$ 148,470	$ (69,230)	$ (703,816)
Other comprehensive income (loss):
Interest rate swap	(3,351)
Capitalized swap interest	(600)
Pension plan adjustment		117	1,182
Other comprehensive income (loss)	(3,951)	117	1,182
Comprehensive income (loss)	144,519	(69,113)	(702,634)
Comprehensive (income) loss attributable to noncontrolling interests	(1,290)	(201)	204
Comprehensive income (loss) attributable to common stockholders	$ 143,229	$ (69,314)	$ (702,430)

Consolidated and Combined Statements of Equity - 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, 2008	$ 1,985,815	$ 0	$ 0	$ 0	$ 1,986,938	$ (2,926)	$ 1,803
Beginning balance, shares at Dec. 31, 2008		0
Net income (loss)	(703,816)				(703,612)		(204)
Distributions to noncontrolling interests	(699)						(699)
Other comprehensive income	1,182					1,182
Contributions from GGP, net and prior to the Separation	221,038				221,038
Ending balance, shares at Dec. 31, 2009		0
Ending balance at Dec. 31, 2009	1,503,520	$ 0	0	0	1,504,364	(1,744)	900
Net income (loss)	(69,230)			(528,505)	459,074		201
Distributions to noncontrolling interests	(277)						(277)
Other comprehensive income	117					117
Issuance of common stock, shares		37,896,259,000
Issuance of common stock	182,663	$ 379	182,284
Issuance of restricted stock, net of expense, shares		8,247,000
Issuance of restricted stock, net of expense	85		85
Contributions from GGP, net and prior to the Separation	562,229				562,229
Transfer from GGP on Effective Date			2,525,667		(2,525,667)
Ending balance, shares at Dec. 31, 2010		37,904,506,000
Ending balance at Dec. 31, 2010	2,179,107	$ 379	2,708,036	(528,505)	0	(1,627)	824
Net income (loss)	148,470			147,180			1,290
Adjustment to noncontrolling interests	3,700						3,700
Other comprehensive income	(3,951)
Acquisitions	(777)						(777)
Preferred dividend payment on behalf of subsidiary	(23)						(23)
Interest rate swaps, net of tax $1,016	(3,351)					(3,351)
Capitalized swap interest, net of tax $358	(600)					(600)
Stock plan activity, shares		41,201,000
Stock plan activity	3,073		3,073
Ending balance, shares at Dec. 31, 2011		37,945,707,000
Ending balance at Dec. 31, 2011	$ 2,329,599	$ 379	$ 2,711,109	$ (381,325)	$ 0	$ (5,578)	$ 5,014

Consolidated and Combined Statements of Equity (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2011 USD ($)
Interest rate swaps, tax	$ 1,016
Capitalized swap interest, tax	358
Accumulated Other Comprehensive Income (Loss)
Interest rate swaps, tax	1,016
Capitalized swap interest, tax	$ 358

Consolidated and Combined Statements of Cash Flows - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2011

Dec. 31, 2010

Dec. 31, 2009

Cash Flows from Operating Activities:

Net income (loss)

$ 148,470

$ (69,230)

$ (703,816)

Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:

Equity in (earnings) loss from Real Estate Affiliates, net of distributions

(4,410)

(9,413)

29,615

Investment in Real Estate Affiliate basis adjustment

6,053

Provision for doubtful accounts

1,782

2,539

Depreciation

14,012

14,582

17,145

Amortization

2,770

1,981

2,696

Amortization of deferred financing costs and debt market rate adjustments

1,771

1,260

978

Amortization of intangibles other than in-place leases

297

174

220

Straight-line rent amortization

(1,060)

(151)

(49)

Deferred income taxes including tax restructuring benefit

(19,200)

(636,117)

(23,120)

Restricted stock and stock option amortization

3,073

Warrant liability gain (loss)

(101,584)

140,900

Loss on dispositions

939

Provisions for impairment

503,356

680,349

Real estate acquisition and development expenditures

(90,078)

(57,138)

(61,226)

Master Planned Community and condominium cost of sales

79,844

24,388

22,019

Reorganization items - finance costs related to emerged entities

1,311

2,158

Non-cash reorganization items

(2,724)

(11,835)

Net changes*:

Accounts and notes receivable

^[1]

27,500

534

(2,487)

Prepaid expenses and other assets

^[1]

2,036

18,686

24,867

Deferred expenses

^[1]

404

(2,110)

(1,850)

Accounts payable and accrued expenses

^[1]

19,502

112

1,941

Other, net

^[1]

(2,892)

(82)

1,047

Cash provided by (used in) operating activities

^[1]

86,508

(67,899)

(17,870)

Cash Flows from Investing Activities:

Cash acquired from The Woodlands acquisition, net of cash consideration

5,493

Real estate and property expenditures

(44,380)

(111,832)

(27,738)

Reimbursement for infrastructure improvements from municipality

5,560

Proceeds from dispositions

1,429

Proceeds from sales of investment properties

6,392

Investments in Real Estate Affiliates

(288)

Change in restricted cash

(7,782)

202

Cash used in investing activities

(39,680)

(111,829)

(21,432)

Cash Flows from Financing Activities:

Change in GGP investment, net

216,518

50,865

Proceeds from issuance of mortgages, notes and loans payable

304,911

Principal payments on mortgages, notes and loans payable

(407,027)

(22,109)

(10,465)

Finance costs related to emerged entities

(1,311)

(2,158)

Cash distributions paid to preferred stockholders of Victoria Ward, Ltd.

(12)

Deferred financing costs

(3,828)

Proceeds from issuance of common stock and warrants to Plan Sponsors

251,385

Proceeds from issuance of management warrants

2,000

17,000

Distributions to noncontrolling interests

(277)

(687)

Cash (used in) provided by financing activities

(103,944)

461,206

37,543

Net change in cash and cash equivalents

(57,116)

281,478

(1,759)

Cash and cash equivalents at beginning of year

284,682

3,204

4,963

Cash and cash equivalents at end of year

227,566

284,682

3,204

Supplemental Disclosure of Cash Flow Information:

Interest paid

22,158

21,225

48,100

Interest capitalized

24,062

19,139

46,976

Reorganization items paid

60,007

2,384

Non-Cash Investing and Financing Transactions:

Reduction in investments in Real Estate Affiliates due to The Woodlands acquisition

(128,764)

MPC land contributed to Real Estate Affiliate

2,990

Special Improvement District bond transfers associated with land sales

4,430

1,254

Change in accrued liability expenditures included in accounts payable and accrued expenses

(89,514)

(15,222)

Change in Contingent Stock Agreement liability

(15,000)

178,130

Contribution of tax indemnity receivable plus interest from GGP

323,525

Settlement/conversion to equity of intercompany payables to GGP

37,328

Contribution to note receivable from GGP

31,386

Other non-cash GGP equity transactions

(46,528)

2,612

Recognition of note payable in conjunction with land held for development and sale

6,520

Acquisition note related to The Woodlands (See Note 3)

96,500

Debt assumed from The Woodlands' acquisition (See Note 3)

296,695

Prepetition liabilities funded by GGP

$ 3,241

Mortgage debt market rate adjustment related to emerged entities

$ 2,749

$ 11,723

[1]	As a result of The Woodlands acquisition and consolidation, changes in certain accounts cannot be derived from the balance sheet because these changes are non-cash related. (See Note 3)

Organization

12 Months Ended

Dec. 31, 2011

Organization [Abstract]

ORGANIZATION

NOTE 1

ORGANIZATION

General

The Howard Hughes Corporation’s (“HHC” or the “Company”) mission is to be the preeminent developer and operator of Master Planned Communities and mixed-use properties. We create timeless places and memorable experiences that inspire people while driving sustainable, long-term growth and value for our shareholders. We specialize in the development of master planned communities, and ownership, management, and the development or repositioning of real estate assets currently generating revenues, also called operating assets, as well as other strategic real estate opportunities in the form of entitled and unentitled land and other development rights, also called strategic developments. We are 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”). 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 $250.0 million. Unless the context otherwise requires, references to “we,” “us” and “our” refer to HHC and its subsidiaries.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-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
-Name Statement of Position (SOP)
-Publisher AICPA
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-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
-Name FASB Interpretation (FIN)
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-Number 46R
-Paragraph 4, 14, 15
-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
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+ Details

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIGICANT ACCOUNTING POLICIES

NOTE 2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination and Basis of Presentation

The accompanying financial statements for the year ended December 31, 2011 and the balance sheet as of December 31, 2010 reflects the consolidation of the HHC Businesses with HHC, as of such date, with all intercompany balances and transactions between the HHC Businesses eliminated. The accompanying combined financial statements for the periods prior to the Separation have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) on a carve-out basis from the consolidated financial statements of GGP using the historical results of operations and basis 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. All intercompany balances and transactions between the HHC Businesses have been eliminated. Accordingly, the statements of income (loss) and comprehensive income (loss), equity and cash flows presented for the year ended December 31, 2010 reflect the aggregate of operations, changes in cash flows and equity on a carved-out basis for the period from January 1, 2010 through November 9, 2010 and on a consolidated basis for the period from November 10, 2010 through December 31, 2010.

We were formed for the purpose of receiving, via a tax-free distribution, certain assets and assuming certain liabilities of our 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 periods prior to November 9, 2010 are derived from the books and records of GGP and were carved-out from GGP at a carrying value reflective of the historical cost in 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, which were approximately $8.4 million and $9.9 million for 2010 and 2009, 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 our 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 we been operating as a separate, stand-alone public company. In addition, the HHC Businesses were operated as subsidiaries of GGP, which operates as a real estate investment trust (“REIT”). We operate as a taxable corporation. The carved out combined financial information included in the 2010 and the 2009 financial statements are not indicative of the results of operations, financial position or cash flows that would have been obtained if we had been an independent, stand-alone entity during the periods shown or of our future performance as an independent, stand-alone entity.

On July 1, 2011, we acquired our partner’s economic interest 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”), located near Houston, Texas. As a result of the acquisition, we now consolidate The Woodlands’ operations in our consolidated financial statements. Prior to such acquisition, we accounted for The Woodlands using the equity method.

In 2011, certain amounts in the December 31, 2010 consolidated balance sheet were reclassified to conform to the current period presentation. We reclassified our Municpial Utility Districts receivables of $28.1 million to a separate line item from prepaid expenses and other assets. We also reclassed the cost of in-place leases of $6.1 million from buildings and equipment as well as the related in-place lease accumulated amortization of $4.5 million from accumulated depreciation to prepaid expenses and other assets.

Management has evaluated all material events occurring subsequent to the date of the consolidated financial statements up to the date and time this Annual Report is filed.

Investment in Real Estate

Real estate assets are stated at 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 development and construction periods are also capitalized. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period.

Pre-development costs, that generally include legal and professional fees and other directly-related third-party costs associated with specific development properties, 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).

Tenant improvements relating to our operating assets, 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

Acquisitions of Properties

We account for business combinations in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at their fair values on the date of a business combination. Our consolidated financial statements and results of operations reflect an acquired business from the completion date of an acquisition. On July 1, 2011, we completed the acquisition of The Woodlands (See Note 3).

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 are amortized over lives ranging from five to forty-five years. For cost method investments, we recognize earnings to the extent of distributions received from such investments.

Impairment

The 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 are less than its carrying amount, an impairment provision should be recorded to write down the carrying amount of such asset to its 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 (including those held by our Real Estate Affiliates) for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Impairment indicators for our assets, regions or projects within our Master Planned Communities segment are assessed separately and include, but are not limited to, significant decreases in sales pace or average selling prices, significant increases in expected land development and construction costs or cancellation rates, and projected losses on expected future sales. Master Planned Community assets have extended life cycles that may last 20 to 40 years and have few long-term contractual cash flows. Further for sale portions of master planned community assets generally have minimal to no residual values because of their liquidating characteristics. Master planned community development periods often occur through several economic cycles. Subjective factors such as the expected timing of property development and sales, optimal development density and sales strategy impact the timing and amount of expected future cash flows and fair value.

Impairment indicators for our Operating Assets segment are assessed separately for each property and include, but are not limited to, significant decreases in net operating income, significant decreases in occupancy or low occupancy and significant net operating losses.

Impairment indicators for our Strategic Developments segment are assessed separately for each property and include, but are not limited to, significant decreases in comparable property sale prices.

Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development, and developments in progress are assessed by project and include, but are not limited to, significant changes in projected completion dates, revenues or cash flows, development costs, market factors and sustainability of development projects.

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. 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 land 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.

With respect to our investment in the Real Estate Affiliates, a series of operating losses of an asset or other factors may indicate that a decrease in value has occurred which is other-than-temporary. The investment in each of the Real Estate Affiliates is evaluated periodically and as deemed necessary for recoverability and valuation declines that are other-than-temporary. If the decrease in value of our investment in a Real Estate Affiliate is deemed to be other-than-temporary, our investment in such Real Estate Affiliate is reduced to its estimated fair value. Accordingly, in addition to the property-specific impairment analysis that we perform on the investment properties, land held for development and sale and developments in progress owned by such joint ventures (as part of our investment property impairment process described above), we also considered the ownership and distribution preferences and limitations and rights to sell and repurchase our ownership interests.

Cash and Cash Equivalents

Highly-liquid investments with maturities at dates of purchase of three months or less are classified as cash equivalents.

Notes Receivable

Notes receivable includes amounts due from builders for previous sold lots, primarily at our Maryland master planned community and a note from GGP received at the Effective Date in connection with the Plan. This GGP note, also known as the Arizona II lease, has a balance of $25.2 million as of December 31, 2011. The GGP note carries an interest rate of 4.41%, and cash payments under the note are approximately $6.9 million per year through the end of 2015.

Deferred Expenses

Deferred expenses consist principally of financing fees and leasing costs and commissions. Deferred financing fees are amortized to interest expense using the effective interest method (or other methods which approximate the effective interest method) over the terms of the respective financing agreements. Deferred leasing costs and commissions are amortized using the straight-line method over periods that approximate the related lease terms. Deferred expenses in our consolidated balance sheets are shown at cost, net of accumulated amortization, of $5.7 million as of December 31, 2011 and $6.6 million as of December 31, 2010.

Sponsor and Management Warrants

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 initial exercise price for the warrants of $50.00 per share is 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 currently exercisable without restriction and approximately 1.9 million warrants are exercisable upon 90 days prior notice for the first 6.5 years after issuance and are subsequently exercisable without notice any time thereafter. The Sponsors Warrants expire on November 9, 2017.

In November 2010 and February 2011, we entered into certain warrant agreements (the “Management Warrants”) with David R. Weinreb, our Chief Executive Officer, Grant Herlitz, our President, and Andrew C. Richardson, our Chief Financial Officer, in each case prior to his appointment to such position. The Management Warrants representing 2,862,687 underlying shares were issued pursuant to such agreements at fair value in exchange for a combined total of approximately $19.0 million in cash from such executives at the commencement of their respective employment. 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 estimated $102.6 million fair value for the Sponsors Warrants and estimated $25.2 million fair value for the Management Warrants as of December 31, 2011, have been recorded as a liability because the holders of these warrants could require HHC to settle such warrants in cash upon a change of control. The fair values were estimated using an option pricing model and level 3 inputs due to the unavailability of comparable market data. Changes in the fair value of the Sponsors Warrants and the Management Warrants are recognized in earnings and, accordingly, warrant liability gains reflecting decreases in value of approximately $101.6 million were recognized for the year ended December 31, 2011.

Revenue Recognition and Related Matters

Rental Revenue

Operating property revenue consists of minimum rent, percentage rent in lieu of fixed minimum rent, overage rent and tenant recoveries.

Minimum rent revenues are recognized on a straight-line basis over the terms of the related leases and include base minimum rent and percentage rent in lieu of fixed minimum rent. Percentage rent in lieu of fixed minimum rent recognized from tenants for the years ended December 31, 2011, 2010 and 2009 was $3.9 million, $3.9 million and $3.0 million, respectively, and is included in minimum rents in our financial statements. Minimum rent revenues also include amortization related to above and below-market tenant leases on acquired properties.

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 $3.3 million as of December 31, 2011 and $2.0 million as of December 31, 2010, are included in Accounts receivable, net in our financial statements.

Overage rent is recognized on an accrual basis once tenant sales exceed contractual thresholds contained in the lease and is calculated by multiplying the tenant sales in excess of the minimum amount by a percentage defined in the lease. Overage rent of approximately $3.0 million, $3.4 million, and $2.7 million for 2011, 2010 and 2009, respectively is included in other rental and property revenues.

Recoveries from tenants are stipulated in the leases and are generally computed based upon a formula related to real estate taxes, insurance and other real estate operating expenses and are generally recognized as revenues in the period the related costs are incurred.

We provide an allowance for doubtful accounts against the portion of accounts receivable, including straight-line rents, which is estimated to be uncollectible. Such allowances are reviewed periodically based on our recovery experience. This analysis considers the long-term nature of our leases, as a certain portion of the straight-line rent currently recognizable will not be billed to the tenant until future periods. Our experience relative to unbilled deferred rent receivable is that a certain portion of the amounts recorded as straight-line rental revenue are never collected from (or billed to) tenants due to early lease terminations. For that portion of the otherwise recognizable deferred rent that is not deemed to be probable of collection, an allowance for doubtful accounts has been provided. Accounts receivable in our consolidated and combined balance sheets are shown net of an allowance for doubtful accounts of $14.4 million as of December 31, 2011 and $16.3 million as of December 31, 2010. The following table summarizes the changes in allowance for doubtful accounts:


	2011			2010			2009
				(In thousands)
Balance as of January 1	$	16,277		$	16,812		$	21,712

Provision*		—			1,782			2,539
Write-offs		(1,829	)		(2,317	)		(7,439	)


Balance as of December 31	$	14,448		$	16,277		$	16,812

*	Collection of significantly aged receivables previously reserved resulted in no provision in 2011.

Resort and Conference Center Revenue

Revenue for the resort and conference center is recognized as services are performed and primarily represents room rentals and food and beverage sales.

Land and Condominium Sales Revenue

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. Revenue related to builder participation rights is recognized when collected.

Cost of land sales is determined as a specified percentage of land sales revenues recognized for each community development project. These cost ratios 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 the cost of sales including acquired parcels that we do not intend to develop or for which development was complete at the date of acquisition. Expenditures in our MPC business to develop land for sale are classified as an operating activity under real estate acquisition and development expenditures in our consolidated and combined statements of cash flows.

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 December 31, 2011, two units were unsold at Nouvelle at Natick. Income related to unit sales subsequent to the Effective Date is accounted for on a unit-by-unit full accrual method.

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 basis 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. 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 deferred tax provision. There are events or circumstances that could occur in the future that could limit the benefit of deferred tax assets. 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, a 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, a 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 the Sponsors Warrants and Management Warrants is computed using the if-converted method. Gains associated with the Sponsors Warrants and Management Warrants are excluded from the numerator in computing diluted earnings per share because inclusion of such gains in the computation would be anti-dilutive.

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 used in the calculation of basic and diluted EPS for the year ended December 31, 2010 and 2009 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:


	Years Ended December 31,
	2011			2010			2009
(In thousands, except per share amounts)
Basic EPS:
Numerator:
Income (loss) from continuing operations	$	148,470		$	(69,230	)	$	(702,877	)
Net income attributable to noncontrolling interest		(1,290	)		(201	)		204

Income (loss) attributable to common stockholders		147,180			(69,431	)		(702,673	)
Discontinued operations - net of tax		—			—			(939	)

Net income (loss) attributable to common stockholders	$	147,180		$	(69,431	)	$	(703,612	)


Denominator:
Weighted average number of common shares outstanding - basic		37,908			37,726			37,716

Diluted EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	147,180		$	(69,431	)	$	(703,612	)
Less: warrant liability gain		101,584			—			—

Adjusted net income (loss) available to common stockholders	$	45,596		$	(69,431	)	$	(703,612	)


Denominator:
Weighted average number of common shares outstanding - basic		37,908			37,726			37,716
Restricted stock and stock options		—			—			—
Warrants		1,074			—			—

Weighted average number of common shares outstanding - diluted		38,982			37,726			37,716


Basic Earnings (Loss) Per Share
Income (loss) from continuing operations attributable to common stockholders	$	3.88		$	(1.84	)	$	(18.64	)
Discontinued operations attributable to common stockholders		—			—			(0.02	)

Net income (loss) attributable to common stockholders	$	3.88		$	(1.84	)	$	(18.66	)


Diluted Earnings (Loss) Per Share
Income (loss) from continuing operations attributable to common stockholders	$	1.17		$	(1.84	)	$	(18.64	)
Discontinued operations attributable to common stockholders		—			—			(0.02	)

Net income (loss) attributable to common stockholders	$	1.17		$	(1.84	)	$	(18.66	)

Stock options of 715,137 and restricted stock of 42,553 as of December 31, 2011 and 10,683,726 sponsor and management warrants outstanding as of December 31, 2010 were not included in the computation of diluted EPS above because to do so would have been anti-dilutive.

Stock Plans

We apply the provisions ASC 718 (“Stock Compensation”) in our accounting and reporting for stock-based compensation. ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. All unvested options outstanding under our option plans have grant prices equal to the market price of the Company’s stock on the dates of grant. Compensation cost for restricted stock is determined based on the fair market value of the our stock at the date of grant.

Fair Value Measurements

The following table presents, for each of the fair value hierarchy levels required under ASC 820, “Fair Value Measurement,” our assets and liabilities that are measured at fair value on a recurring basis.


			December 31, 2011 Fair Value Measurements Using								December 31, 2010 Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
			(In thousands)								(In thousands)

Assets:
Interest rate swap	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities
Warrants		127,764		—		—		127,764		227,348		—		—		227,348
Interest rate swaps		4,367		—		4,367		—		—		—		—		—

The valuation of warrants is based on an option pricing valuation model. The inputs to the model include the fair value of the stock related to the warrants, exercise price of the warrants, term, expected volatility, risk-free interest rate and dividend yield.

The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates derived from observable market interest rate curves.

The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3):


	December 31
	2011			2010
	(In thousands)
Beginning of year	$	227,348		$	—
Warrant liability loss (gain)		(101,584	)		140,900
Purchases		2,000			86,448

End of year	$	127,764		$	227,348

The following tables summarize our assets and liabilities that were measured at fair value on a non-recurring basis as a result of the properties being impaired:


2011	Total Fair Value Measurement			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Loss Year Ended December 31, 2011
						(In thousands)

Investment in Real Estate Affiliates	$	128,764	(a)	$	—	$	—	$	128,764	(a)	$	6,053	(b)

(a)

Represents the fair value of our previously held equity investment in The Woodlands as of the acquisition date. The fair value was derived from the fair value of the assets and liabilities acquired in The Woodlands acquisition, which is further discussed in Note 3. As of the acquisition date, The Woodlands financial condition and results of operations were consolidated.

(b)	Represents the loss on remeasurement of our previously held equity investment in The Woodlands.


2010	Total Fair Value Measurement		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total (Loss) Gain - Year Ended December 31, 2010
					(In thousands)

Master Planned Communities:
Maryland - Columbia (a)	$	34,823	$	—	$	—	$	34,823	$	(56,798	)
Maryland - Gateway (a)		1,649		—		—		1,649		(2,613	)
Summerlin South (a)		203,325		—		—		203,325		(345,920	)

Operating Assets:
Landmark Mall (b)		23,750		—		—		23,750		(24,434	)
Riverwalk Marketplace (c)		10,179		—		—		10,179		(55,975	)

Strategic Developments:
Century Plaza Mall (b)		4,500		—		—		4,500		(12,899	)
Nouvelle at Natick (a)		13,413		—		—		13,413		(4,135	)

Total investments in real estate	$	291,639	$	—	$	—	$	291,639	$	(502,774	)


Debt
Fair value of emerged entity mortgage debt (d)	$	65,753	$	—	$	—	$	65,753	$	2,749

Total liabilities	$	65,753	$	—	$	—	$	65,753	$	2,749

(a)	The fair value was calculated based on a discounted cash flow analysis using a property specific discount rate of 20.0%.

(b)	The fair value is based on estimated sales value.

(c)	The fair value was calculated based on a discounted cash flow analysis using a property specific discount rate and a residual capitalization rate of 8.5% for both computations.

(d)	The fair value of debt relates to properties that emerged from bankruptcy in 2010.


2009	Total Fair Value Measurement		Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total (Loss) Gain - Year Ended December 31, 2009
					(In thousands)
Master Planned Communities:
Maryland - Fairwood	$	12,629	$	—	$	12,629	$	—	$	(52,767	)

Operating Assets:
Landmark Mall (a)		49,501		—		—		49,501		(27,323	)

Strategic Developments:
The Bridges at Mint Hill		14,100		—		14,100		—		(16,636	)
Elk Grove Promenade		21,900		—		21,900		—		(175,280	)
The Shops at Summerlin Center		46,300		—		46,300		—		(176,141	)
Kendall Town Center (b)		13,931		—		—		13,931		(35,089	)
AllenTowne		25,900		—		25,900		—		(29,063	)
Cottonwood Mall (a)		21,500		—		—		21,500		(50,768	)
Princeton Land East, LLC		8,802		—		8,802		—		(8,904	)
Princeton Land LLC		11,948		—		11,948		—		(13,356	)
Village at Redlands		7,545		—		—		7,545		(5,537	)
Redlands Promenade		6,727		—		—		6,727		(6,667	)
Nouvelle at Natick (b)		64,661		—		—		64,661		(55,923	)

Total investments in real estate	$	305,444	$	—	$	141,579	$	163,865	$	(653,454	)


Debt
Fair value of emerged entity mortgage debt (c)	$	134,089	$	—	$	—	$	134,089	$	11,723

Total liabilities	$	134,089	$	—	$	—	$	134,089	$	11,723

(a)	The fair value was calculated based on a discounted cash flow analysis using a property specific discount rate ranging from 9.25% to 12.00% and residual capitalization rates ranging from 8.50% to 11.50%.

(b)	The fair value is based on estimated sales value.

(c)	The fair value of debt relates to two properties that emerged from bankruptcy in 2009.

The estimated fair values of the Company’s financial instruments that are not measured at fair value on a recurring or non recurring basis are as follows:


	December 31, 2011				December 31, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
			(In thousands)
Fixed-rate debt	$	83,164	$	85,047	$	191,037	$	202,897
Variable-rate debt (a)		468,100		468,100		65,518		65,629
SID bonds (b)		55,213		55,213		62,105		62,105

Total	$	606,477	$	608,360	$	318,660	$	330,631

(a)	As more fully described in Note 7, $172.0 million of variable-rate debt entered into during 2011 has been swapped to a fixed rate for the term of the related debt.

(b)	Due to the uncertain repayment terms of special improvement district “SID” bonds, the carrying value approximates fair value.

The fair value of debt in the table above was estimated based on quoted market prices for publicly traded debt, recent financing transactions, 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 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.

The carrying amounts of cash and cash equivalents and accounts receivable approximate fair value because of the short-term maturity of these instruments. The carrying amounts of notes and Municipal Utility Districts receivables are carried at net realizable value which approximates fair value because of their short-term nature.

Municipal Utility Districts (“MUD”)

In Houston, Texas, certain development costs are reimbursable through the creation of MUDs (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 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. MUD bond sale proceeds are used to reimburse the developer for its construction costs, including interest, and MUD taxes are used to pay the debt service on the bonds and the operating expenses of the MUD. We estimate the costs we believe will be eligible for reimbursement (MUD receivable), and we have not incurred any debt relating to the MUDs.

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. 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.

Reorganization Items

Reorganization items are expense or income items that were incurred or realized by certain of our subsidiaries as a result of the Chapter 11 Cases and are presented separately in the Consolidated and Combined Statements of Income (Loss) and Comprehensive Income (Loss). 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 Chapter 11 Cases. Reorganization items specific to the HHC Businesses were allocated to us and reflected in our combined financial statements and in the table presented below.

The key employee incentive program (the “KEIP”) was intended to retain certain key employees of GGP during the pendency of the Chapter 11 Cases and provided for payment (in two installments) to these GGP employees upon successful emergence from bankruptcy. The first KEIP payment was made by GGP on November 12, 2010. As certain of these employees became our employees on the Effective Date, a portion of the KEIP was deemed to relate to us and therefore, we recognized our KEIP expense in the period from the date the KEIP was approved by the Bankruptcy Court (October 2009) to the Effective Date, in reorganization items on the Combined Statements of Income (Loss) and Comprehensive Income (Loss) in the amount of $13.5 million for the year ended December 31, 2010.

Reorganization items are as follows:


	December 31,
Reorganization Items	2010			2009
	(In thousands)

Gains on liabilities subject to compromise - vendors (a)	$	(791	)	$	(99	)
Gains on liabilities subject to compromise, net - mortgage debt (b)		(2,749	)		(11,723	)
Interest income (c)		(16	)		(4	)
U.S. Trustee fees		571			226
Restructuring costs (d)		60,267			18,274

Total reorganization items	$	57,282		$	6,674

(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)	Such net gains 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 KEIP payment, finance costs incurred by debtors upon emergence from bankruptcy and any associated write-off of unamortized deferred finance costs.

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. HHC had elected to present OCI in one continuous statement in its previous filings and accordingly, the effective date of this standard will not have an effect on our results of operations, 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.

Acquisition

12 Months Ended

Dec. 31, 2011

Acquisition [Abstract]

ACQUISITION

NOTE 3

ACQUISITION

On July 1, 2011, we acquired for $117.5 million our partner’s 47.5% economic interest (represented by a 57.5% legal interest) in The Woodlands. We made the acquisition so that we can control attractive residential and commercial assets and to internalize The Woodlands platform to benefit our MPC business. As a result of the acquisition, we now consolidate The Woodlands operations and our consolidated financial statements are therefore not comparable to prior periods. Please refer to Note 16 Segments, for a presentation of the results as if we owned 100% of The Woodlands, for all periods presented.

On the acquisition date, The Woodlands had approximately 1,324 acres of unsold residential land, representing approximately 4,395 lots, and approximately 962 acres of unsold land for commercial use. The Woodlands also had full or partial ownership interests in commercial properties totaling approximately 434,328 square feet of office space, 203,282 square feet of retail and service space, 865 rental apartment units, and also owns and operates a 440-room resort and conference center facility and a 36-hole golf and country club. We paid $20.0 million in cash at closing and the remaining $97.5 million of the purchase price was represented by a non-interest bearing promissory note which we repaid from available cash on hand on December 1, 2011. There was no contingent consideration related to this acquisition.

The assets and liabilities of The Woodlands were consolidated into our financial statements at fair value as of the acquisition date according to the following methodologies:

•

The fair value of the Master Planned Community assets which consists of residential and commercial land held for development and sale was determined using a discounted cash flow analysis;

•

The fair value of the commercial properties acquired, consisting of land and buildings, was determined by valuing the property as if it were vacant, and the “as-if-vacant” value was then allocated between land and buildings. The ”as-if-vacant” values were derived from several sources which primarily included a discounted cash flow analysis using discount and capitalization rates based on recent comparable market transactions, where available. The buildings are depreciated over the estimated useful life of 40 years using the straight-line method;

•

The value of above-market and below-market in-place leases for The Woodlands operating assets was based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) management’s estimate of current market lease rates, measured over the remaining non-cancelable lease term. We record the fair value of above-market and below-market leases as intangible assets or intangible liabilities, respectively, and amortize them as an adjustment to minimum rents over the lease term;

•

The estimated fair value for in-place leases included an estimate of carrying costs during the expected lease-up periods. In estimating the carrying costs that would have otherwise been incurred had the leases not been in place, we included such items as real estate taxes, insurance and other operating expenses as well as lost rental revenue during the expected lease-up period based on current market conditions;

•

The fair value for working capital items such as cash, Municipal Utility District receivables, prepaid expenses, accounts payable and accrued expenses was determined based on the carrying value due to the short term nature of these items; and

•

The debt assumed was primarily variable rate debt and fixed rate debt with short term maturities; therefore, the fair value was assumed to be the carrying value.

On the acquisition date, we consolidated $587.6 million of assets and $338.6 million of liabilities relating to The Woodlands. Consolidation of The Woodlands net assets resulted in a $3.9 million after-tax loss on the remeasurement of the carrying value of our existing 52.5% economic interest which had a $134.8 million net book value at June 30, 2011. The loss is recorded in the Investment in real estate affiliate basis adjustment line on our consolidated and combined statements of Income (Loss) and Comprehensive Income (Loss). For periods prior to July 1, 2011, our investment in The Woodlands was accounted for using the equity method. This business combination did not represent a significant acquisition of assets under the SEC rules.

The following table summarizes amounts recorded for the assets acquired and liabilities assumed at the acquisition date:


	(In thousands)
Master Planned Community Assets	$	264,889
Land		44,597
Buildings and Equipment		116,061
Investments in Real Estate Affiliates		42,932
Cash		25,492
Accounts receivable		7,548
Notes receivable		3,189
Municipal Utility District receivables		61,700
Other assets		21,150

Total assets		587,558

Mortgages, notes and loans payable		(296,695	)
Accounts payable and accrued expenses		(41,900	)
Noncontrolling interests		(3,700	)

Total liabilities and noncontrolling interests		(342,295	)


Total identifiable net assets	$	245,263

Included in the consolidated statements of income (loss) and comprehensive income (loss) since the acquisition date are revenues of $84.6 million and net income of $0.5 million for the six months ended December 31, 2011. The net income includes the impact of purchase accounting adjustments, including a $6.1 million increase in cost of sales to reflect the step-up in basis of finished lot inventory sold during the six months ended December 31, 2011.

Pro Forma Information

The following pro forma information for the years ended December 31, 2011 and 2010 was prepared as if The Woodlands acquisition had occurred as of the beginning of such period:


	Year Ended December 31,
	2011		2010
	(In thousands)
Total Revenues	$	357,472	$	294,310
Net income (loss)		157,520		(52,081	)

Pro forma adjustments were made for: (1) purchase accounting, including; (a) depreciation for the step-up in basis for property, plant and equipment; (b) amortization of in-place and above/below market leases; (c) Land Cost of sales increase for step-up in land basis for finished lots acquired and sold; and (d) elimination of amortization of deferred financing costs, prepaid commissions and deferred profits and; (2) adjustments for interest expense which is capitalizable in accordance with our interest capitalization policy. We applied a 36% effective tax to The Woodlands results in order to compute pro forma net income (loss).

The pro forma information is not necessarily indicative of the results that would have occurred had the acquisition occurred as of the beginning of the period presented, nor is it necessarily indicative of future results.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-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 141
-Paragraph 51, 52
-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 141R
-Appendix F
-Paragraph F4
-Subparagraph e

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-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 Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6927-128479

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1490-128463

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
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-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e7008-128479

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1392-128463

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 30
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e7000-128479

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1497-128463

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1486-128463

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1383-128463

+ Details

Impairment

12 Months Ended

Dec. 31, 2011

Impairment and Intangibles [Abstract]

IMPAIRMENT

NOTE 4

IMPAIRMENT

General

Although there were no impairment charges for the year ended December 31, 2011, Park West continues to suffer from a weak market and its occupancy was 64.9% at December 31, 2011. We are focused on attracting tenants who can drive increased traffic during the day and evening, such as entertainment concepts. If we are unsuccessful at increasing occupancy and traffic, many of our existing tenants may be unable to continue to occupy their leased spaces because their sales volume will likely be inadequate to support their operating costs, which would reduce our expected cash flows and result in a significant impairment. Impairment charges totaled $503.4 million and $680.3 million for the years ended December 31, 2010 and 2009, as presented in the table below. These impairment provisions resulted from an evaluation of impairment indicators for our properties, including considerations of revised strategies and operating philosophies and, with properties with such indicators, the undiscounted cash flows of the projects as compared to their carrying values. At December 31, 2010, although an additional four regions or projects within our master planned communities segment and four additional operating properties had carrying values in excess of estimated fair values based on current occupancy levels, cash flow and use of the property, no additional provisions for impairment were considered necessary for such projects and properties. These impairment charges are included in provisions for impairment in our consolidated and combined statement of income (loss) and comprehensive income (loss) for the years ended December 31, 2010 and 2009.

Circle T also recorded impairment charges of $38.1 million for the year ended December 31, 2009 relating to the assets of our non-consolidated Real Estate Affiliates, of which our share was $19.0 million, and which was included in our Equity in income (loss) from Real Estate Affiliates. In addition to the impairment charges recorded by the Circle T venture, we recorded impairment charges related to our investment in Circle T of $10.6 million for the year ended December 31, 2009 to write these investments down to their estimated fair value, with such provisions reflected in our Equity in earnings (loss) from Real Estate Affiliates. No provisions for impairment were recorded for the years ended December 31, 2011 and 2010 related to our investments in Real Estate Affiliates.

Summary of all impairment provisions:


			Year Ended December 31,
Impaired Asset	Location	Method of Determining Fair Value	2010		2009
			(In thousands)
Master Planned Communities:
Maryland- Gateway	Howard County, MD	Projected sales price analysis (a) (c)	$	2,613	$	—
Maryland- Columbia	Columbia, MD	Projected sales price analysis (a) (c)		56,798		—
Maryland- Fairwood	Columbia, MD	Projected sales price analysis (a) (c)		—		52,767
Summerlin-South	Las Vegas, NV	Projected sales price analysis (a) (c)		345,920		—

				405,331		52,767

Operating Assets:
Landmark	Alexandria, VA	Discounted cash flow analysis (a) (c)		24,434		27,323
Riverwalk Marketplace	New Orleans, LA	Discounted cash flow analysis (c)		55,975		—
Various pre-development costs		(b)		514		23,641

				80,923		50,964

Strategic Developments:
Allen	Allen, TX	Projected sales price analysis (a) (c)		—		29,063
Cottonwood Mall	Holladay, UT	Comparable property market analysis		—		50,768
Kendall	Miami, FL	Projected sales price analysis (c)		—		35,089
West Windsor	Princeton, NJ	Projected sales price analysis (c)		—		22,260
Bridges at Mint Hill	Charlotte, NC	Projected sales price analysis (b)		—		16,636
Elk Grove Promenade	Elk Grove, CA	Projected sales price analysis (c)		—		175,280
The Shops at Summerlin Centre	Las Vegas, NV	Projected sales price analysis (c)		—		176,141
Century Plaza Mall	Birmingham, AL	Projected sales price analysis (a) (d)		12,899		—
Redlands Promenade	Redlands, CA	Projected sales price analysis (a) (c)		—		6,667
Village at Redlands	Redlands, CA	Projected sales price analysis (a) (b)		—		5,537
Nouvelle at Natick	Natick, MA	Discounted cash flow analysis (c)		4,135		55,923
Various pre-development costs		(b)		68		3,254

				17,102		576,618


Total provisions for impairment			$	503,356	$	680,349


Real Estate Affiliates (REA):
The Shops at Circle T Ranch	Dallas, TX	Projected sales price analysis (d)	$	—	$	17,062
Circle T Power Center	Dallas, TX	Projected sales price analysis (d)		—		21,020

Total provisions for impairment on property held by REA			$	—	$	38,082


The Shops at Circle T Ranch	Dallas, TX		$	—	$	8,531
Circle T Power Center	Dallas, TX			—		10,510

Total provisions for impairment on property held by REA at share			$	—	$	19,041


Impairment of Circle T investment (e)			$	—	$	10,600

(a)	Projected sales price analysis incorporates available market information and other management assumptions.

(b)	Related to the write down of various pre-development costs that were determined to be non-recoverable due to the related projects being terminated.

(c)	These impairments were primarily driven by the carrying value of the assets, including costs expected to be incurred, not being recoverable by the projected sales price of such assets.

(d)

These impairments were primarily driven by management’s changes in current plans with respect to the property and measured based on the value of the underlying land, which is based on comparable property market analysis or a projected sales price analysis that incorporates available market information and other management assumptions as these properties are either no longer operational or operating with no or nominal income.

(e)	Reflected in our equity in earnings (loss) of Real Estate Affiliates.

Intagibles

12 Months Ended

Dec. 31, 2011

Impairment and Intangibles [Abstract]

INTAGIBLES

NOTE 5

INTANGIBLES

Intangible Assets and Liabilities

The following table summarizes our intangible assets and liabilities:


	Gross Asset (Liability)			Accumulated (Amortization) / Accretion			Net Carrying Amount
	(In thousands)
As of December 31, 2011
Tenant leases:
In-place value	$	23,586		$	(11,721	)	$	11,865
Above-market		2,952			(1,938	)		1,014
Below-market		(347	)		28			(319	)
Ground leases:
Above-market		(3,545	)		797			(2,748	)
Below-market		23,096			(2,416	)		20,680

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 increase in tenant lease assets as of December 31, 2011 compared to December 31, 2010 relates to The Woodlands acquisition and consolidation. We acquired commercial properties with leases in place and a portion of the fair market values of the properties was assigned to the leases.

The balances of the in-place value of tenant leases are included in Prepaid expenses and other assets in our Consolidated Balance Sheets. Acquired in-place at-market tenant leases are amortized over periods that approximate the related lease terms. The above-market and below-market tenant and ground leases are included in Prepaid expenses and other assets and Accounts payable and accrued expenses as detailed in Note 13. Above and below-market lease values are amortized over the remaining non-cancelable terms of the respective leases.

Amortization/accretion of these intangible assets and liabilities decreased our income by $2.0 million in 2011, $0.8 million in 2010 and $0.3 million in 2009.

Future amortization is estimated to decrease income by $2.2 million in 2012, $2.1 million in 2013, $1.8 million in 2014, $1.5 million in 2015, $1.1 million in 2015 and $21.0 million thereafter.

Real Estate Affiliates

12 Months Ended

Dec. 31, 2011

Real Estate Affiliates [Abstract]

REAL ESTATE AFFILIATES

NOTE 6

REAL ESTATE AFFILIATES

In the ordinary course of business, we enter into partnerships or joint ventures primarily for the development and operations of real estate assets. These partnerships or joint ventures are typically characterized by a non-controlling ownership interest with decision making and distribution of expected gains and losses being proportionate to the ownership interest. We account for these partnerships and joint ventures in accordance with ASC 810.

In accordance with ASC 810, as amended, we assess our joint ventures at inception to determine if any meet the qualifications of a variable interest entity (“VIE”). We consider a partnership or joint venture a VIE if: (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity); or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, we reassess our initial determination of whether the partnership or joint venture is a VIE. We also perform a qualitative assessment of each VIE to determine if we are the primary beneficiary, as required by ASC 810, as amended.

We account for investments in joint ventures deemed to be variable interest entities for which we are not considered to be the primary beneficiary 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. 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.

The aggregate carrying value of the unconsolidated VIEs was $3.2 million as of December 31, 2011 and was classified as investments in real estate affiliates in the Consolidated Balance Sheet. We did not participate in any VIEs in 2010. Because these joint ventures are in the pre-development stage there were no earnings for the year ended December 31, 2011. Our maximum exposure to loss as a result of these investments is limited to the aggregate carrying value of the investment, as we have not provided any guarantees on behalf of these VIEs.

Below is a discussion of our VIEs and the related accounting considerations.

Columbia Parcel D Joint Venture

On October 27, 2011, we entered into a joint venture with a local developer to construct a Class A apartment building with ground floor retail space in downtown Columbia, MD. As we and our partner each own 50% of the venture, and unanimous consent of the partners is required for all major decisions, we account for our investment in this venture using the equity method.

Ala Moana Condominium Development Joint Venture

On October 11, 2011, we entered into a joint venture with two local developers and formed HHMK Development, LLC to explore the development of a luxury condominium tower at the Ala Moana Center, Honolulu, HI. As we and our partner each own 50% of the venture, and unanimous consent of the partners is required for all major decisions, we account for our investment in the venture using the equity method.

Bridges at Mint Hill Joint Venture

On September 8, 2011, we entered into a joint venture with the owner of land adjacent to our property to jointly develop a shopping center near Charlotte, NC. Our initial ownership in the venture is 79.0%, and our ownership percentage could increase to 90.5% if we are required to make a $4.5 million cash contribution related to the mortgage secured by our partner. Our partner has consent rights on all major decisions regarding the venture so long as its interest is at least 21.0%.

Other

Our interest in Westlake Retail Associates, Ltd (“Circle T Ranch”) and 170 Retail Associates (“Circle T Power Center”), and together with Circle T Ranch, (“Circle T”), located in Dallas/Fort Worth, Texas is held through joint venture entities in which we own non-controlling interest and are unconsolidated and accounted for on the equity method. Waterway Ave Partners, L.L.C. (“Millennium Waterway Apartments”), FV-93 Limited and Timbermill-94 Limited (“Forest View and Timbermill Apartments”), Woodlands Sarofim #1 Ltd. (“Woodlands Sarofim”) industrial buildings and Stewart Title of Montgomery County, Inc. (“Stewart Title”), all located in The Woodlands and collectively referred to as “The Woodlands Equity Investments”, are reflected in our financial statements as Real Estate Affiliates and are accounted for on the equity method.

As of July 1, 2011, The Woodlands is consolidated and no longer a Real Estate Affiliate and The Woodlands equity method investments are considered Real Estate Affiliates (refer to Note 1).


	Economic Ownership						Carrying Value				Share of Earnings
	December 31,						December 31,				December 31,
	2011			2010			2011		2010		2011			2010			2009
	(in percentages)						(in thousands)

The Woodlands					52.5	%	$	—	$	131,090	$	3,731		$	9,417		$	149
Circle T		50.00	%		50.0	%		9,004		9,004		(1	)		(4	)		(29,645	)
Millennium Waterway Apartments		83.55	%					21,998		—		682			—			—
Woodlands Sarofim #1		20.00	%					2,456		—		64			—			—
Stewart Title (title company)		50.00	%					3,643		—		204			—			—
Forest View/ Timbermill Apartments		50.00	%					11,709		—		5			—			—
Bridges at Mint Hill, LLC		79.00	%					180		—		—			—			—
Parcel D Development, LLC		50.00	%					2,990		—		—			—			—
HHMK Development, LLC		50.00	%					—		—		—			—			—

								51,980		140,094		4,685			9,413			(29,496	)

Cost basis investments (a)								12,978		9,449		3,893			—			1,287

Investment in Real Estate Affiliates							$	64,958	$	149,543	$	8,578		$	9,413		$	(28,209	)

(a)	Share of Earnings represents dividends received from Summerlin Hospital Medical Center.

- 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
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-Subsection I
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
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+ Details

Mortgages, Notes and Loans Payable

12 Months Ended

Dec. 31, 2011

Mortgages, Notes and Loans Payable [Abstract]

MORTGAGES, NOTES AND LOANS PAYABLE

NOTE 7

MORTGAGES, NOTES AND LOANS PAYABLE

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


Property	Maturity		Interest Rate			Maximum Facility Amount		Carrying Value
								December 31, 2011		2010
								December 31, 2011		2010
								(In thousands)
110 N. Wacker (a)		October 2019		5.21	%			$	29,000	$	28,276

Bridgeland
Note #1		May 2026		6.50	%				15,138		15,757
Note #2		December 2017		6.50	%				3,180		3,600
Note #3		June 2033		6.50	%				2,053		2,086
Note #4		December 2021		6.50	%				233		311
Bridgeland Acquisition									—		6,870

Bridgeland Total									20,604		28,624
Special Improvement District
Summerlin South - S108		December 2016		5.95	%				1,302		1,519
Summerlin South - S124		December 2019		5.95	%				378		414
Summerlin South - S128		December 2020		7.30	%				862		934
Summerlin South - S128C		December 2030		6.05	%				5,956		6,164
Summerlin South - S132		December 2020		7.88	%				5,378		5,366
Summerlin South - S151		June 2025		6.00	%				12,293		15,699
Summerlin West - S808		April 2021		7.75	%				682		1,580
Summerlin West - S809		April 2023		6.65	%				1,000		2,253
Summerlin West - S810		April 2031		7.13	%				22,770		23,316
The Shops at Summerlin Centre - S128		December 2030		6.05	%				3,829		4,066
The Shops at Summerlin Centre - S108		December 2016		5.95	%				713		793
SID Payable to Nevada Cancer Institute		December 2019		5.95	%				50		59

Total Special Improvement District bonds									55,213		62,163

The Woodlands (b)
Master credit facility (c)		March 2015		5.00	%	$	270,000		183,000		—
Resort and Conference Center (d)		October 2012		5.50	%				36,100		—
2201 Lake Woodlands Drive		November 2016		5.25	%				4,803		—
Weiner Tract		January 2013		6.25	%				1,479		—
Land in Montgomery Co.		December 2012		6.00	%				649		—
Land in Harris Co.		January 2013		6.00	%				381		—
Capital lease obligation		-		—					147		—
CVS		upon sale		3.25	%				101		—
4 Waterway		December 2023		4.88	%				41,000		—
9303 New Trails		December 2023		4.88	%				14,000		—

The Woodlands Total									281,660		—

Ward Centers
Victoria Ward									—		394
Ward Gateway Center									—		80,284
Ward Warehouse									—		65,518
Ward Entertainment Center									—		29,370
VWL-Ward Centers									—		24,031
Victoria Ward (e)		September 2016		3.45	%	$	250,000		220,000		—

Ward Centers Total									220,000		199,597


								$	606,477	$	318,660

(a)	Loan has a stated interest rate of one-month LIBOR + 2.25%. The $29.0 million outstanding principal balance is swapped to a 5.21% fixed rate through maturity.

(b)	The Woodlands was a non-consolidated equity investment as of December 31, 2010. Refer to Note 3- Acquisition.

(c)	Loan bears interest at one-month LIBOR + 4.00% and has a 1.00% LIBOR floor.

(d)	Loan bears interest at one-month LIBOR + 4.00% and has a 1.00% LIBOR floor. The rate increased by 0.5% on September 23, 2011 and increases by 0.5% every six months thereafter until maturity.

(e)	Loan has a stated interest rate of one-month LIBOR + 2.50%. $143.0 million of the outstanding principal balance is swapped to a 3.81% fixed rate through maturity.

The weighted average interest rate on our mortgages, notes and loans payable, inclusive of interest rate hedges but excluding the acquisition note and capital lease obligation, was 4.65% and 5.14% as of December 31, 2011 and December 31, 2010, respectively. The weighted average interest rate on our mortgages, notes and loans payable excluding interest rate hedges was 4.68% and 5.14% as of December 31, 2011 and 2010, respectively.

Mortgages, notes and loans payable are summarized as follows:


	December 31,
	2011		2010
	(In thousands)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable	$	83,164	$	191,037
Special Improvement District bonds		55,213		62,105
Variable-rate debt:
Collateralized mortgages, notes and loans payable		468,100		65,518

Total mortgages, notes and loans payable	$	606,477	$	318,660

The following table summarizes the contractual obligations relating to our long-term debt as of December 31, 2011:


	Long-term debt principal payments
	(In thousands)

2012	$	52,166
2013		31,896
2014		35,553
2015		126,670
2016		232,639
Subsequent/Other		127,553

Total	$	606,477

Collateralized Mortgages, Notes and Loans Payable

As of December 31, 2011, we had $606.5 million of collateralized mortgages, notes and loans payable. Approximately $281.7 million of the debt included in the table above is related to The Woodlands, which was consolidated on July 1, 2011. All of the debt is non-recourse and is secured by the individual properties as listed in the table above, except for The Woodlands Master Credit Facility and Resort and Conference Center Loan which is recourse to the partnerships that directly own The Woodlands operations, and a $7.0 million corporate recourse guarantee associated with the 110 N. Wacker mortgage, which is more fully discussed below. The Bridgeland MPC loan is secured by approximately 7,182 acres of land within the Bridgeland MPC and a security interest in its Municipal Utility District receivables. 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 impact our operations in 2012. 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.

The Woodlands Master Credit Facility is a $270.0 million facility consisting of a $170.0 million term loan and a $100.0 million revolving credit line (together, the “TWL Facility”). As of December 31, 2011, the TWL Facility had an outstanding balance of $183.0 million. The TWL Facility bears interest at one-month LIBOR plus 4.0% with a 1.0% LIBOR floor, has a March 29, 2014 initial maturity date and a one-year extension at borrower’s option. The TWL Facility also contains certain restrictions or covenants that, among other things, require the maintenance of specified financial ratios, restrict the incurrence of additional indebtedness at The Woodlands, and limit distributions from The Woodlands to us. Until The Woodlands leverage, as defined by the credit agreement, is less than a 40.0% loan to value ratio, we must amortize the debt on a dollar for dollar basis for any distributions that we make from The Woodlands. As of December 31, 2011, leverage was approximately 45.5%. There was $34.2 million of undrawn and available borrowing capacity under the TWL Facility based on the collateral underlying the facility and covenants as of December 31, 2011. The TWL Facility also requires mandatory principal amortization payments during its initial term and during the extension period, if exercised. Repayments of $10.0 million, $25.0 million and $30.0 million are required on March 29 of 2012, 2013 and, if extended, 2014, respectively. Furthermore, $10.0 million is due on each of June 29, September 29 and December 29, 2014 during the extension period.

The Woodlands Resort and Conference Center loan has a $36.1 million outstanding balance as of December 31, 2011, matures on October 30, 2012 and may be extended for one year at our option. The loan bears interest at one-month LIBOR plus 4.5% as of December 31, 2011 and has a 1.0% LIBOR floor. The interest rate increased by 0.5% on September 23, 2011 and increases by 0.5% every six months thereafter until maturity. The loan is secured by a 440 rooms and 40 acre conference center and resort located within The Woodlands, and requires the maintenance of specified financial ratios.

On December 5, 2011, we secured a $55.0 million loan for 4 Waterway Square and 9303 New Trails. Proceeds from the loan were partially used to refinance a $13.1 million mortgage secured by 9303 New Trails. The excess proceeds were used to partially repay the credit facility and to increase unrestricted cash. The loan matures in December 2023 and has a fixed interest rate of 4.88%.

On September 30, 2011, we closed on a $250.0 million non-recourse first mortgage financing secured by the Ward Centers in Honolulu, Hawaii, that bears interest at LIBOR plus 2.50%. The loan matures on September 29, 2016, and $143.0 million of the principal balance was swapped to a 3.81% fixed rate for the term of the loan. The initial loan proceeds of $212.5 million were used to repay approximately $208.7 million of mortgage debt and to fund closing costs. The loan may be drawn to a maximum $250.0 million to fund capital expenditures at the property, provided that the outstanding principal balance cannot exceed 65% of the property’s appraised value and the borrowers are required to have a minimum 10.0% debt yield in order to draw additional loan proceeds under the facility. The loan also permits partial repayment during its term in connection with property releases for development. The repayment of three mortgages previously secured by Ward Centers resulted in an $11.3 million pre-tax loss on early repayment of debt. The mortgages had been recorded at discounts to their outstanding principal balances because they were recorded at their fair values as part of the reorganization transactions in 2010. The loan had a $220.0 million outstanding balance as of December 31, 2011.

On May 10, 2011, we closed a $29.0 million first mortgage financing secured by our office building located at 110 N. Wacker Drive in Chicago, Illinois and bearing interest at LIBOR plus 2.25%. At closing, the interest rate on the loan was swapped to a 5.21% fixed rate for the term of the loan. 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 11). 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. We provided a $7.0 million repayment guarantee for the loan, which is reduced on a dollar for dollar basis during the amortization period.

As of December 31, 2011, $1.1 billion of land, buildings and equipment and developments in progress (before accumulated depreciation) have been pledged as collateral for our mortgages, notes and loans payable of which $7.0 million is recourse.

As of December 31, 2011, we were in compliance with all of the financial covenants related to our debt agreements.

Special Improvement Districts 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. They are tax exempt for federal income tax purposes. 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 and, accordingly, the Special Improvement District bonds have been classified as a receivable. The Summerlin master planned community pays the debt service on the bonds semi-annually, but receives reimbursement of all principal paid from most of the purchasers of its land; generally, resulting in no gain or loss relating to the Special Improvement District bonds. In addition, as Summerlin 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 $41.6 million as of December 31, 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

Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2011

Derivative Instruments and Hedging Activities [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

NOTE 8

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We are primarily exposed to interest rate risks related to our variable interest debt, and we seek to manage this risk by utilizing interest rate swap and cap instruments to minimize this exposure.

Our objectives in using interest rate derivatives are to add stability to interest costs by reducing our exposure to interest rate movements. To accomplish this objective and predictability, we primarily use interest rate swaps and caps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2011, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the years ended December 31, 2011, the amount of ineffectiveness was immaterial. We did not utilize any derivative instruments for hedging purposes in 2010.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. Over the next 12 months, we estimate that an additional $1.8 million will be reclassified as an increase to interest expense.

As of December 31, 2011, we had gross notional amounts of $172.0 million of interest rate swaps and a $100.0 million interest rate cap that were designated as cash flow hedges of interest risk. The fair value of the interest rate cap derivative was immaterial.

The table below presents the fair value of our derivative financial instruments as well as the classification on the Balance Sheet as of December 31, 2011 and 2010:


			As of December 31,
			2011			2010
	Balance Sheet Location		Fair Value			Fair Value
			(In thousands)
Interest Rate Swaps		Accounts payable and accrued expenses	$	(4,367	)	$	—

Total derivatives designated as hedging instruments			$	(4,367	)	$	—

The table below present the effect of our derivative financial instruments on the Statement of Income (Loss) for the years ended December 31, 2011 and 2010:


	Year Ended December 31,					Location of Loss Reclassified from Accumulated OCI into Earnings		Year Ended December 31,
	2011			2010				2011			2010
Cash Flow Hedges	Amount of (Loss) Recognized in OCI			Amount of Gain (Loss) Recognized in OCI				Amount of (Loss) Reclassified from Accumulated OCI into Earnings			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings
	(In thousands)							(In thousands)

Interest Rate Swaps	$	(4,047	)	$	—		Interest Expense	$	(696	)	$	—

	$	(4,047	)	$	—			$	(696	)	$	—

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
-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)
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+ Details

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

INCOME TAXES

NOTE 9

INCOME TAXES

We are taxed as a C corporation after November 9, 2010. 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 has satisfied such REIT distribution requirements for 2011 and 2010, and presently we intend to continue to operate Ward as a REIT. As a REIT, Ward is ordinarily not subject to income taxes; however, Ward is required to make annual distributions to its shareholders, and the shareholders are taxed on these distributions. As of December 31, 2011, the bases of Ward included in our Consolidated Financial Statements exceeds the tax bases in Ward by $173.3 million.

GGP received a private letter ruling from the Internal Revenue Service (the “IRS”) with respect to the tax effect of the transfer of assets from our predecessors to HHC and to the effect that the distribution of HHC stock to GGP’s shareholders in the separation would qualify as tax-free to GGP and its subsidiaries for U.S. federal income tax purposes. A private letter ruling from the IRS generally is binding on the IRS. The IRS did not rule that the distribution satisfies every requirement for a tax-free spin-off, and the parties have relied, and will rely, solely on the advice of counsel for comfort that such additional requirements are satisfied.

The provision for (benefit from) income taxes for the years ended December 31, 2011, 2010 and 2009 was as follows:


	2011			2010			2009
	(In thousands)
Current	$	936		$	2,658		$	(849	)
Deferred		(19,261	)		(636,117	)		(23,120	)

Total	$	(18,325	)	$	(633,459	)	$	(23,969	)

The 2010 income tax provision includes significant tax amounts recognized immediately prior to the Separation related to assets previously held in REIT entities for which no income tax provision was recorded. Upon transfer of the assets to a taxable entity a net tax benefit was recorded to reflect the excess of tax basis over the book basis of transferred assets. In addition, the 2010 income tax provision also reflects deferred tax benefits recognized after the Separation due to impairment losses.

Income tax expense is computed by applying the Federal corporate tax rate for the years ended December 31, 2011, 2010 and 2009 and is reconciled to the provision for income taxes as follows:


	2011			2010			2009
	(In thousands)
Tax at statutory rate on earnings from continuing operations before income taxes	$	45,099		$	(245,942	)	$	(254,653	)
Increase (decrease) in valuation allowance, net		(13,110	)		61,649			7,267
State income taxes, net of Federal income tax benefit		2,243			(7,969	)		(2,728	)
Tax at statutory rate on REIT entity earnings not subject to Federal income taxes		1,204			2,193			220,836
Tax expense (benefit) from change in rates, provision adjustments and other permanent differences		(20,829	)		(8,811	)		257
Non-deductible warrant liability (gain) loss		(35,859	)		49,315			—
Non-taxable interest income		(2,990	)		—			—
Non-deductible restructuring costs		—			17,352			—
Tax benefit from tax related restructuring		—			(509,970	)		—
Expiration of capital loss carryforwards		—			—			3,726
Uncertain tax position expense, excluding interest		364			1,667			—
Uncertain tax position interest, net of Federal income tax benefit		5,553			7,057			1,326

Income tax benefit	$	(18,325	)	$	(633,459	)	$	(23,969	)

Realization of a deferred tax benefit is dependent upon generating sufficient taxable income in future periods. Our net operating loss carry-forwards are currently scheduled to expire in subsequent years through 2032. Some of the net operating loss carry-forward amounts are subject to annual limitations under Section 382 of the Code. This annual limitation under Section 382 is subject to modification if a taxpayer recognizes what are called ‘‘built-in gain items.’’ It is possible that we could, in the future, experience a change in control pursuant to Section 382 that could put additional limits on the benefit of deferred tax assets.

As of December 31, 2011, the amounts and expiration dates of operating loss and tax credit carryforwards for tax purposes are as follows:


	Amount		Expiration Date
	(In thousands)
Net operating loss carryforwards - Federal	$	84,687	2024-2032
Net operating loss carryforwards - State		225,036	2011-2032
Tax credit carryforwards - Federal AMT		1,724	n/a

As of December 31, 2011 and 2010, we had gross deferred tax assets totaling $384.5 million and $367.9 million, and gross deferred tax liabilities of $403.2 million and $376.2 million, respectively. We have established a valuation allowance in the amount of $57.3 million and $70.4 million as of December 31, 2011 and 2010, respectively, against certain deferred tax assets for which it is more likely than not that such deferred tax assets will not be realized. Deferred tax assets that we believe have only a remote possibility of realization have not been recorded.

The tax effects of temporary differences and carryforwards included in the net deferred tax liabilities at December 31, 2011 and 2010 are summarized as follows:


	2011			2010
	(In thousands)

Property Associated with Master Planned Communities, primarily differences in the tax basis of land assets and treatment of interest and other costs	$	(189,147	)	$	(171,351	)
Operating property, primarily differences in basis of assets and liabilities		226,097			210,587
Deferred income		(214,065	)		(204,828	)
Interest deduction carryforwards		110,649			122,330
Operating loss and tax credit carryforwards		47,776			34,968
Valuation allowance		(57,276	)		(70,386	)

Net deferred tax liabilities	$	(75,966	)	$	(78,680	)

The deferred tax liability associated with the master planned communities is largely attributable to the difference between the basis and value determined as of the date of the acquisition by our predecessors of The Rouse Company (“TRC”) in 2004 adjusted for sales that have occurred since that time. The cash cost related to this deferred tax liability is dependent upon the sales price of future land sales and the method of accounting used for income tax purposes. The deferred tax liability related to deferred income is the difference between the income tax method of accounting and the financial statement method of accounting for prior sales of land in our Master Planned Communities.

Although we believe our tax returns are correct, the final determination of tax examinations and any related litigation could be different than what was reported on the returns. In our opinion, we have made adequate tax provisions for years subject to examination. Generally, we are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December 31, 2007 through 2011 and are open to audit by state taxing authorities for years ending December 31, 2007 through 2011.

Two of our subsidiaries were subject to IRS audit for the years ended December 31, 2008 and 2007. On February 9, 2011, the two subsidiaries received statutory notices of deficiency (“90-day letters”) seeking $144.1 million in additional tax. It is our position that the tax law in question has been properly applied and reflected in the 2007 and 2008 returns for these two taxable REIT subsidiaries. We previously provided for the additional taxes sought by the IRS, through our uncertain tax position liability or deferred tax liabilities. Pursuant to the Investment Agreements, 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, 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. Under certain circumstances, GGP has also agreed to be responsible for interest or penalties attributable to such MPC Taxes in excess of the $303.8 million. We have recorded interest income receivable on the tax indemnity receivable in the amounts of $28.0 million and $19.7 million for the years ended December 31, 2011 and 2010, respectively. In addition, we are generally responsible for any liabilities, taxes or other charges that are imposed on GGP as a result of the Separation failing to qualify for nonrecognition treatment for U.S. federal (and state and local) income tax purposes, if we are the party responsible for such failure.

On May 6, 2011, GGP filed Tax Court petitions on behalf of the two former taxable REIT subsidiaries of GGP seeking a redetermination of federal income tax for the years 2007 and 2008. The petitions seek to overturn determinations by the IRS that the taxpayers were liable for combined deficiencies totaling $144.1 million. On October 20, 2011, GGP filed a motion in the United States Tax Court to consolidate the cases of the two former taxable REIT subsidiaries of GGP subject to litigation with the Internal Revenue Service due to the common nature of the cases’ facts and circumstances and the issues being litigated. The United States Tax Court granted the motion to consolidate. The litigation is currently in the discovery phase.

We adopted the generally accepted accounting principle related to accounting for uncertainty in income taxes, which prescribes a recognition threshold that a tax position is required to meet before recognition in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues.

We recognize and report interest and penalties, if applicable, within our provision for income tax expense from January 1, 2007 forward. We recognized potential interest expense (benefit) related to the unrecognized tax benefits of $8.5 million, $10.9 million and $2.0 million for the years ended December 31, 2011, 2010 and 2009, respectively. At December 31, 2011, we had total unrecognized tax benefits of $101.4 million, excluding interest of $28.5 million, of which none would impact our effective tax rate. At December 31, 2010 and 2009, we had total unrecognized tax benefits of $120.8 million and $56.5 million, respectively, excluding interest, of which $0.4 million would impact our effective tax rate.


	2011			2010			2009
	(In thousands)
Unrecognized tax benefits, opening balance	$	120,816		$	56,508		$	69,665
Gross increases - tax positions in prior period		—			69,168			41
Gross decreases - tax positions in prior periods		(19,408	)		(4,860	)		(13,198	)

Unrecognized tax benefits, ending balance	$	101,408		$	120,816		$	56,508

Based on our assessment of 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, it is reasonably possible that the related unrecognized tax benefits, excluding accrued interest, for tax positions taken regarding previously filed tax returns will materially change from those recorded at December 31, 2011. A material change in unrecognized tax benefits could have a material effect on our statements of income (loss) and comprehensive income (loss). As of December 31, 2011, there is approximately $101.4 million of unrecognized tax benefits, excluding accrued interest, which due to the reasons above, could significantly increase or decrease during the next twelve months.

Earnings and profits, which determine the taxability of dividends to stockholders, differ from net income reported for financial reporting purposes due to differences for Federal income tax reporting purposes in, among other things, estimated useful lives, depreciable basis of properties and permanent and temporary differences on the inclusion or deductibility of elements of income and deductibility of expense for such purposes.

- 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

Rentals Under Operating Leases

12 Months Ended

Dec. 31, 2011

Rentals Under Operating Leases [Abstract]

RENTALS UNDER OPERATING LEASES

NOTE 10

RENTALS UNDER OPERATING LEASES

We receive rental income from the leasing of retail and other space under operating leases. Such operating leases are with a variety of tenants, the majority of which are national and regional retail chains and local retailers, and our credit risk therefore is concentrated in the retail industry. The minimum future rentals based on operating leases of our consolidated properties held as of December 31, 2011 are as follows:


Year	Total Minimum Rent
	(In thousands)
2012	$	60,108
2013		54,587
2014		45,483
2015		40,086
2016		30,740
Subsequent		98,212

Minimum future rentals exclude amounts which are payable by certain tenants based upon a percentage of their gross sales or as reimbursement of operating expenses and amortization of above and below-market tenant leases.

- Definition

The entire disclosure for operating leases of a lessor. This may inlcude a general description of lessor's leasing arrangements for operating leases, including the basis on which contingent rental payments are determined, the existence and terms of renewal or purchase options and escalation clauses, restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions.

+ References + Details

Transactions With Ggp And Other Related Party Disclosures

12 Months Ended

Dec. 31, 2011

Transactions With Ggp And Other Related Party Disclosures [Abstract]

TRANSACTIONS WITH GGP AND OTHER RELATED PARTY DISCLOSURES

NOTE 11

TRANSACTIONS WITH GGP AND OTHER RELATED PARTY DISCLOSURES

The accompanying combined financial statements prior to the separation present the operations of the HHC Businesses as carved-out from the consolidated financial statements of GGP. Transactions between the HHC Businesses have been eliminated in the combined presentation. An allocation of certain centralized GGP costs incurred for activities such as employee benefit programs, property management and asset management functions, centralized treasury, payroll and administrative functions have been made to the property operating costs of HHC Businesses.

Prior to the Effective Date, we entered into a transition services agreement (the “TSA”) whereby GGP agreed to 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 agreed to provide GGP with certain income tax and accounting support services, also subject to earlier termination prior to its scheduled expiration of November 9, 2013. We incurred $0.4 million and $0.3 million of expenses related to the TSA in each of 2011 and 2010, respectively. For 2011 and 2010, we received negligible reimbursements under the RTSA.

In addition, GGP is a tenant at our 110 N. Wacker office property. Under the 110 N. Wacker lease agreement, we recognized approximately $6.1 million, $6.1 million and $5.0 million of rental income from GGP and its subsidiaries for the years ended December 31, 2011, 2010 and 2009, respectively.

In January 2011, we entered into 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. TPMC was reimbursed a total of $0.9 million in August 2011 for expenses related to Mr. Weinreb’s employment agreement with us. Such reimbursements are reflected in general and administrative expense for the year ended December 31, 2011.

We also 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. Annual rental expenses relating to the lease is approximately $111,965 per year and the lease expires in July 2016.

On January 31, 2011, we terminated a Management Services Agreement with Brookfield Advisors LP. Pursuant to the agreement which was executed on August 6, 2010. Brookfield Advisors LP provided us services that included strategic advice, project development oversight, financials planning, financing consultation, internal controls expertise and community and investor relations. This agreement provided for payments to Brookfield Advisors LP of $0.5 million per month.

- 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
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-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 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

Reference 7: 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.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

+ Details

Stock-Based Plans

12 Months Ended

Dec. 31, 2011

Stock-Based Plans [Abstract]

STOCK-BASED PLANS

NOTE 12

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 Chapter 11 cases, our 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 pertaining to such employees has been reflected in our financial statements for periods prior to the Effective Date.

All stock plans are administered by the Compensation Committee of the Board of Directors (“Committee”). Option grant amounts are awarded by the Committee. Options normally extend for ten years and generally become exercisable after five years. Recorded compensation cost for share-based payment arrangements totaled $3.0 million for 2011.

For 2010 and 2009, the GGP stock compensation expense for employees specifically attributed to the HHC Businesses, of approximately $0.6 million and $0.2 million, respectively, has been included in the accompanying financial statements for periods prior to the Effective Date.

As of December 31, 2011, there were a maximum of 2,934,610 shares available for future grant under our various stock plans.

Stock Options

Pursuant to the Plan, each outstanding option to acquire shares of GGP stock (“Old GGP Options”) was converted 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 Options”). The replacement options are fully vested as of the Effective Date and have the same terms and conditions as the outstanding GGP options.

The exercise price under the Old GGP Options was allocated to the New GGP Options and the HHC options based on the relative market values of the two underlying stocks. For purposes of such allocation, the volume-weighted price of shares of GGP after its emergence of bankruptcy and HHC during the last ten-day trading period (the “Trading Period”) ending on or before the 60th day after the Effective Date was used. As the date of emergence was November 9, 2010, the Trading Period was December 27, 2010 through January 7, 2011. The volume-weighted price of one GGP common share upon emergence from bankruptcy was $15.29 and one HHC common share was $54.13 (that was subsequently adjusted by .0983 to be on a comparable basis), during the Trading Period and, therefore, the exercise prices for the Old GGP Options replaced were allocated in a ratio of approximately 74.15% to GGP and 25.85% to HHC. In addition, we have agreed with GGP that all exercises of GGP replacement options would be settled by, except those of the former top two executive officers of GGP whose options were exercised at their termination in December 2010, the employer of the pre-emergence GGP employee at the time of exercise. As of December 31, 2011, the number of shares of common stock issuable upon exercise of the HHC options is insignificant.

The following tables summarize stock option activity:


	Shares			Weighted Average Exercise Price

Stock options outstanding at January 1, 2010	$	—		$	—
Granted		—			—
Exercised		—			—
Forfeited		—			—
Expired		—			—

Stock options outstanding at December 31, 2010		—			—

Granted		751,840			57.81
Exercised		—			—
Forfeited		(39,200	)		59.44
Expired		—			—

Stock options outstanding at December 31, 2011		712,640			57.72


Exercise Price		Shares		Weighted Average Remaining Contractual Term (in years)
$	57.77		595,500		9.2
	69.75		19,640		9.2
	64.41		5,000		9.3
	66.27		21,000		9.4
	55.81		34,500		9.6
	46.49		37,000		9.9

	57.72		712,640		9.2

The fair value on the grant date and the significant assumptions used in the Black-Scholes option-pricing model are as follows:


	2011
Weighted average grant date fair value	$	21.31
Weighted-average expected life of options (in years)		7.9
Weighted-average risk-free interest rate		2.9	%
Weighted-average expected volatility		26	%
Expected annual dividend per share	$	—

The computation of the expected volatility assumption used in the Black-Scholes calculations is based on the median asset volatility of comparable companies as of each of the grant dates.

The balance of unamortized stock option expense as of December 31, 2011 was $12.6 million, which is expected to be recognized over a weighted-average period of 4.2 years. Expense associated with stock options for the year ended December 31, 2011 which is included in general and administrative expense in the accompanying Consolidated Statement of Income (Loss), totaled $2.3 million.

As of December 31, 2011, there were no options exercisable under the plan.

Restricted Stock

In 2010, we granted 8,247 shares of restricted stock to certain non-employee directors as part of an annual retainer for their services on the board of directors and the restrictions on these shares lapsed in June 2011. In 2011, we granted 12,553 shares of restricted stock to certain non-employee directors, as part of an annual retainer for their services on the board of directors. The restrictions on these shares lapsed on June 1, 2012.

Restricted stock awards issued under the plan provide that shares awarded may not be sold or otherwise transferred until restrictions have lapsed as established by the Committee. Generally, upon termination of employment or directorship, restricted stock units and restricted shares which have not vested are forfeited. For the year 2011, recognized compensation expense of $0.7 million is included in general and administrative expense related to restricted stock awards. The fair value of restricted stock that vested during 2011 was $0.5 million. The balance of unamortized restricted stock expense as of December 31, 2011 was $2.2 million, which is expected to be recognized over a weighted-average period of 3.5 years.

The following table summarizes restricted stock activity:


	Shares			Weighted Average Grant Date Fair Value
Restricted stock outstanding at January 1, 2010		—		$	—
Granted		8,247			41.42
Vested		—			—
Cancelled		—			—

Restricted stock outstanding at December 31, 2010		8,247			41.42

Granted		42,553		$	65.18
Vested		(6,895	)		41.42
Cancelled		(1,352	)		41.42

Restricted stock outstanding at December 31, 2011		42,553		$	65.18

- 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
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-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

12 Months Ended

Dec. 31, 2011

Other Assets and Liabilities [Abstract]

OTHER ASSETS AND LIABILITIES

NOTE 13

OTHER ASSETS AND LIABILITIES

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


	December 31,
	2011		2010
	(In thousands)
Special Improvement District receivable	$	40,580	$	46,250
Other receivables		4,181		5,352
Federal income tax receivable		5,393		—
Prepaid expenses		6,507		2,859
Below-market ground leases (Note 5)		20,680		21,018
Security and escrow deposits		17,266		6,814
Above-market tenant leases (Note 5)		1,014		119
Uncertain tax position asset		11,935		8,945
In-place leases (Note 5)		11,865		1,603
Intangibles		3,074		1,307
Other		4,661		5,814

	$	127,156	$	100,081

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


	December 31,
	2011		2010
	(In thousands)
Construction payable	$	8,923	$	15,531
Accounts payable and accrued expenses		45,078		29,745
Membership deposits		16,033		—
Above-market ground leases (Note 5)		2,748		2,907
Deferred gains/income		5,739		5,631
Accrued interest		2,747		1,633
Accrued real estate taxes		3,439		3,953
Tenant and other deposits		5,966		3,555
Insurance reserve		4,728		4,229
Accrued payroll and other employee liabilities		9,658		3,930
Interest rate swap		4,367		—
Other		15,978		7,722

	$	125,404	$	78,836

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 14

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 our 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. 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 $3.9 million, $3.5 million and $3.5 million for 2011, 2010 and 2009, respectively. The amortization of above and below-market ground leases and straight-line rents included in the contractual rent amount, was not significant.

On December 12, 2011, we entered into a Letter of Intent (“LOI”) with the New York City Economic Development Corporation (“EDC”) which will enable us to pursue redevelopment plans for the South Street Seaport. The EDC is the ground lessor and the LOI describes the business terms of future amendments to the ground lease, the first of which must be finalized by June 30, 2012. During the earlier of the construction period and 30 months, we will be entitled to a total $1.5 million rent reduction. We also must provide a completion guarantee to New York City for the project. We agreed to pay approximately $1.1 million of esplanade maintenance costs over a five-year period as consideration for entering into the LOI. This obligation will continue to exist regardless of whether the ground lease is amended.

In conjunction with GGP’s acquisition of TRC in November 2004, GGP assumed TRC’s obligations under a 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 $230.0 million (down from the $245.0 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 $15.0 million for this revised estimate.

See Note 9 for our obligations related to uncertain tax positions for disclosure of additional contingencies.

The following table summarizes the contractual obligations relating to our long-term commitments.


	2012		2013		2014		2015		2016		Subsequent / Other		Total
(In thousands)
Long-term debt-principal	$	52,166	$	31,896	$	35,553	$	126,670	$	232,639	$	127,553	$	606,477
Ground lease payments		5,197		5,187		5,205		5,241		4,965		179,235		205,030
Uncertainty in income taxes, including interest		—		—		—		—		—		129,939		129,939

Total	$	57,363	$	37,083	$	40,758	$	131,911	$	237,604	$	436,727	$	941,446

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-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.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Segments

12 Months Ended

Dec. 31, 2011

Segments [Abstract]

SEGMENTS

NOTE 15

SEGMENTS

We have three business segments which offer different products and services. Our three segments are managed separately because each requires different operating strategies or management expertise and are reflective of our current management’s operating philosophies and methods. In addition, our current segments or assets within such segments could change in the future as development of certain properties commences or other operational or management changes occur. We do not distinguish or group our combined operations on a geographic basis which is consistent with how we manage the business. 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. In prior years this segment included certain commercial properties and other ownership interests owned by The Woodlands. For the years ending December 31, 2011, 2010 and 2009 we have reclassified the operations of The Woodlands commercial properties and other ownership interests to the Operating Assets segment. Furthermore, for segment reporting, we disclosed The Woodlands historical financial information at 100% so that operating performance between periods is comparable.

•

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.

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 as it relates to our business is defined as net income (loss) from continuing operations excluding general and administrative expenses, corporate interest income and depreciation expense, investment in real estate basis adjustment, benefit from income taxes, warrant liability gain (loss), reorganization items and the effects of the previously mentioned items within our equity in earnings (loss) from Real Estate Affiliates. 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.

As more fully discussed in this report, on July 1, 2011, we acquired our partner’s interest in The Woodlands Master planned community, we now own 100% of The Woodlands and consolidate its operations. As such, The Woodlands operating results for historical periods when this investment was a Real Estate Affiliate are now analyzed internally on a non-GAAP consolidation basis by management in order to provide management comparability between periods for analyzing operating results. Segment information presented herein has also been restated for all periods presented to reflect The Woodlands on a consolidation basis and provide comparability for all periods. Prior to July 1, 2011, we presented the operations of our equity method Real Estate Affiliates using the non-GAAP proportionate share method for segment reporting purposes. Under this method we presented our share of the revenues and expenses of these Real Estate Affiliates aggregated with the revenues and expenses of consolidated or combined properties. We previously reported the proportionate method because our 52.5% economic interest in The Woodlands represented a significant portion of our Master Planned Community segment. We now own 100% of The Woodlands and consolidate its operations. Now our segment operating results for the year ended December 31, 2011 includes results of The Woodlands from July 1, 2011 to December 31, 2011 under Consolidated Properties and results of The Woodlands from January 1, 2011 to June 30, 2011 and for the years ended December 31, 2010 and 2009 under Real Estate Affiliates on a consolidation basis. The remaining Real Estate Affiliates, including equity investments owned by the Woodlands, primarily represent entities that own single assets rather than a large business such as The Woodlands; therefore, we no longer use the proportionate share method for any Real Estate Affiliates. Rather, we will include the results of our Real Estate Affiliates other than The Woodlands using the equity or cost method, as appropriate.

The total cash expenditures for additions to long-lived assets for the Master Planned Communities and condominiums was $90.1 million, $57.1 million and $61.2 million for the years ended December 31, 2011, 2010 and 2009, respectively. Similarly, total cash expenditures for long-lived assets for the Operating Assets and Strategic Developments segments were $44.4 million, $111.8 million and $27.7 million for the years ended December 31, 2011 2010 and 2009, respectively.

Segment operating results are as follows:


	Year Ended December 31, 2011
	Consolidated Properties			Real Estate Affiliates			Segment Basis
	(In thousands)
Master Planned Communities
Land sales	$	113,502		$	47,880		$	161,382
Builder price participation		3,816			1,108			4,924
Minimum rents		659			14			673
Other land revenues		14,140			2,817			16,957
Other rental and property revenues		102			—			102

Total revenues		132,219			51,819			184,038

Cost of sales - land		70,108			23,932			94,040
Land sales operations		17,776			2,992			20,768
Land sales real estate and business taxes		7,713			1,906			9,619
Rental property real estate taxes		1			—			1
Rental property maintenance costs		412			329			741
Other property operating costs		3,308			2,068			5,376
Provisions for impairment		—			—			—
Depreciation and amortization		2			46			48
Interest income		(144	)		(364	)		(508	)
Interest expense (*)		(10,908	)		7,854			(3,054	)

Total expenses		88,268			38,763			127,031

Venture partner share of The Woodlands EBT		—			(6,202	)		(6,202	)

MPC EBT		43,951			6,854			50,805


Operating Assets
Minimum rents		69,602			2,803			72,405
Tenant recoveries		19,193			1,061			20,254
Resort and conference center revenues		15,744			19,106			34,850
Other rental and property revenues		14,072			6,992			21,064

Total revenues		118,611			29,962			148,573

Rental property real estate taxes		10,952			972			11,924
Rental property maintenance costs		6,315			443			6,758
Resort and conference center operations		13,108			13,904			27,012
Other property operating costs		45,576			9,172			54,748
Depreciation and amortization		16,341			3,968			20,309
Interest income		(125	)		(2	)		(127	)
Interest expense		10,586			391			10,977
Early extinguishment of debt		11,305			—			11,305
Equity in Earnings from Real Estate Affiliates		—			(3,926	)		(3,926	)

Total expenses		114,058			24,922			138,980

Venture partner share of The Woodlands EBT		—			(91	)		(91	)

Operating Assets EBT		4,553			4,949			9,502


Strategic Developments
Minimum rents		917			—			917
Tenant recoveries		130			—			130
Condominium unit sales		22,067			—			22,067
Other rental and property revenues		1,747			—			1,747

Total revenues		24,861			—			24,861


Condominium unit cost of sales		14,465			—			14,465
Real estate taxes		604			—			604
Rental property maintenance costs		671			—			671
Other property operating costs		5,253			—			5,253
Depreciation and amortization		234			—			234
Interest expense		323			—			323

Total expenses		21,550			—			21,550

Strategic Developments EBT		3,311			—			3,311

EBT	$	51,815		$	11,803		$	63,618

(*)	Negative interest expense amounts relate to interest capitalized on debt assigned to our Operating Assets Segment.


	Year Ended December 31, 2010
	Consolidated Properties			Real Estate Affiliates			Segment Basis
	(In thousands)
Master Planned Communities
Land sales	$	38,058		$	90,986		$	129,044
Builder price participation		4,124			2,777			6,901
Minimum rents		—			27			27
Other land revenues		5,384			8,827			14,211
Other rental and property revenues		948			—			948

Total revenues		48,514			102,617			151,131

Cost of sales - land		23,388			49,745			73,133
CSA participation expense		—			—			—
Land sales operations		17,153			5,801			22,954
Land sales real estate and business taxes		11,887			4,882			16,769
Rental property real estate taxes		812			—			812
Rental property maintenance costs		—			623			623
Other property operating costs		(1	)		4,035			4,034
Provisions for impairment		405,331			—			405,331
Depreciation and amortization		17			111			128
Interest income		—			(824	)		(824	)
Interest expense (*)		(14,127	)		7,857			(6,270	)

Total expenses		444,460			72,230			516,690

Venture partner share of The Woodlands EBT		—			(14,434	)		(14,434	)

MPC EBT		(395,946	)		15,953			(379,993	)


Operating Assets
Minimum rents		65,911			4,026			69,937
Tenant recoveries		18,220			1,484			19,704
Resort and conference center revenues		—			28,850			28,850
Other rental and property revenues		7,557			14,613			22,170

Total revenues		91,688			48,973			140,661

Rental property real estate taxes		9,963			2,185			12,148
Rental property maintenance costs		5,812			1,413			7,225
Resort and conference center operations		—			24,471			24,471
Other property operating costs		30,970			16,521			47,491
Provision for doubtful accounts		1,606			154			1,760
Provisions for impairment		80,923			—			80,923
Depreciation and amortization		16,313			7,148			23,461
Interest income		(170	)		2			(168	)
Interest expense		16,515			836			17,351
Equity in Earnings from Real Estate Affiliates		—			338			338

Total expenses		161,932			53,068			215,000

Venture partner share of The Woodlands EBT		—			1,945			1,945

Operating Assets EBT		(70,244	)		(2,150	)		(72,394	)


Strategic Developments
Minimum rents		1,015			—			1,015
Tenant recoveries		347			—			347

Condominium unit sales		1,139			—			1,139
Other rental and property revenues		16			—			16

Total revenues		2,517			—			2,517

Condominium unit cost of sales		1,000			—			1,000
Real estate taxes		3,756			—			3,756
Rental property maintenance costs		684			—			684
Other property operating costs		5,925			—			5,925
Provision for doubtful accounts		175			—			175
Provisions for impairment		17,101			—			17,101
Depreciation and amortization		212			—			212
Interest expense		34			—			34

Total expenses		28,887			—			28,887

Strategic Developments EBT		(26,370	)		—			(26,370	)

EBT	$	(492,560	)	$	13,803		$	(478,757	)

(*)	Negative interest expense amounts relate to interest capitalized on debt assigned to our Operating Assets Segment.


	Year Ended December 31, 2009
	Consolidated Properties			Real Estate Affiliates			Segment Basis
	(In thousands)
Master Planned Communities
Land sales	$	34,564		$	62,723		$	97,287
Builder price participation		5,687			3,289			8,976
Minimum rents		—			28			28
Other land revenues		5,747			8,920			14,667
Other rental and property revenues		825			—			825

Total revenues		46,823			74,960			121,783

Cost of sales - land		22,019			34,560			56,579
CSA participation expense		(5,344	)		—			(5,344	)
Land sales operations		15,643			4,504			20,147
Land sales real estate and business taxes		16,743			5,706			22,449
Rental property real estate taxes		811			—			811
Rental property maintenance costs		—			643			643
Other property operating costs		(1	)		3,411			3,410
Provisions for impairment		52,766			—			52,766
Depreciation and amortization		33			113			146
Interest income		(9	)		(1,072	)		(1,081	)
Interest expense (*)		(11,932	)		8,491			(3,441	)

Total expenses		90,729			56,356			147,085

Venture partner share of The Woodlands EBT		—			(8,837	)		(8,837	)

MPC EBT		(43,906	)		9,767			(34,139	)


Operating Assets
Minimum rents		63,735			6,532			70,267
Tenant recoveries		18,741			1,054			19,795
Resort and conference center revenues		—			29,314			29,314
Other rental and property revenues		7,409			12,077			19,486

Total revenues		89,885			48,977			138,862

Rental property real estate taxes		10,001			1,266			11,267
Rental property maintenance costs		4,653			1,174			5,827
Resort and conference center operations		—			23,842			23,842
Other property operating costs		30,697			20,516			51,213
Provision for doubtful accounts		2,189			107			2,296
Provisions for impairment		50,964			—			50,964
Depreciation and amortization		17,687			8,795			26,482
Interest income		(1,680	)		—			(1,680	)
Interest expense		15,634			192			15,826
Equity in Earnings from Real Estate Affiliates		—			(2,172	)		(2,172	)

Total expenses		130,145			53,720			183,865

Venture partner share of The Woodlands EBT		—			2,864			2,864

Operating Assets EBT		(40,260	)		(1,879	)		(42,139	)


Strategic Developments
Minimum rents		1,902			—			1,902
Tenant recoveries		900			—			900
Other rental and property revenues		(3,162	)		—			(3,162	)

Total revenues		(360	)		—			(360	)


Condominium unit cost of sales		—			—			—
Real estate taxes		2,973			—			2,973
Rental property maintenance costs		722			—			722
Other property operating costs		4,355			—			4,355
Provision for doubtful accounts		350			—			350
Provisions for impairment		576,618			—			576,618
Depreciation and amortization		2,104			—			2,104
Interest expense		(2,725	)		—			(2,725	)
Equity in Earnings from Real Estate Affiliates		—			19,046			19,046

Total expenses		584,397			19,046			603,443

Strategic Developments EBT		(584,757	)		(19,046	)		(603,803	)

EBT	$	(668,923	)	$	(11,158	)	$	(680,081	)

(*)	Negative interest expense amounts relate to interest capitalized on debt assigned to our Operating Assets Segment.

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


Reconciliation of EBT to GAAP-basis income (loss) from continuing operations	Year Ended December 31,
	2011			2010			2009
	(In thousands)

Real estate property EBT:
Segment EBT	$	63,618		$	(478,757	)	$	(680,081	)
Real Estate Affiliates		(11,803	)		(13,803	)		11,158

		51,815			(492,560	)		(668,923	)
General and administrative		(35,182	)		(21,538	)		(23,023	)
Interest income		9,607			199			—
Warrant liability gain (loss)		101,584			(140,900	)		—
Benefit from income taxes		18,325			633,459			23,969
Equity in Earnings from Real Estate Affiliates		8,578			9,413			(28,209	)
Investment in real estate affiliates basis adjustment		(6,053	)		—			—
Reorganization items		—			(57,282	)		(6,674	)
Corporate depreciation		(204	)		(21	)		(17	)

Net income (loss) from continuing operations	$	148,470		$	(69,230	)	$	(702,877	)

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


Reconciliation of Segment Basis Revenues to GAAP Revenues	Year Ended December 31,
	2011			2010			2009
	(In thousands)

Master Planned Communities - Total Segment	$	184,038		$	151,131		$	121,783
Operating Assets - Total Segment		148,573			140,661			138,862
Strategic Developments - Total Segment		24,861			2,517			(360	)

Total Segment revenues		357,472			294,309			260,285
Less: The Woodlands Partnerships revenues, at our ownership share		(81,781	)		(151,590	)		(123,937	)

Total revenues - GAAP basis	$	275,691		$	142,719		$	136,348

The assets by segment and the reconciliation of total segment assets to the total assets in the combined financial statements at December 31, 2011, 2010 and 2009 are summarized as follows:


	Year Ended December 31,
	2011		2010			2009
	(In thousands)
Master Planned Communities	$	1,755,797	$	1,765,487		$	2,196,971
Operating Assets		871,549		812,646			879,736
Strategic Developments		189,807		206,037			248,183

Total segment assets		2,817,153		2,784,170			3,324,890
Corporate and other		577,996		730,741			47,529
Real Estate Affiliates		—		(492,204	)		(467,192	)

Total assets	$	3,395,149	$	3,022,707		$	2,905,227

- 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
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Information (Unaudited) [Abstract]

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

NOTE 16

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

		00000000			00000000		00000000			00000000
	2011
	First Quarter			Second Quarter		Third Quarter			Fourth Quarter
	(In thousands, except for per share amounts)
Total revenues (b)	$	53,101		$	50,823	$	86,890		$	84,877
Operating income		5,990			5,689		2,218			13,568
Net income (loss) from continuing operations		(114,487	)		65,993		165,024			31,940
Net income (loss) attributable to common stockholders		(114,515	)		65,973		164,295			31,427
Earnings (loss) per share:
Basic		(3.02	)		1.74		4.33			0.83
Diluted		(3.02	)		0.22		(0.14	)		0.80
Weighted average basic and diluted shares outstanding		37,905			40,870		38,755			38,114

		00000000			00000000			00000000			00000000
	2010
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
	(In thousands, except for per share amounts)
Total revenues	$	28,790		$	30,629		$	32,460		$	50,840
Operating loss (a)		(3,285	)		(4,670	)		(618	)		(503,294	)
Net loss from continuing operations (a)		(20,481	)		(28,017	)		(16,183	)		(4,549	)
Net loss attributable to common stockholders		(20,529	)		(28,042	)		(16,230	)		(4,630	)
Earnings (loss) per share:
Basic		(0.54	)		(0.74	)		(0.43	)		(0.12	)
Diluted		(0.54	)		(0.74	)		(0.43	)		(0.12	)
Weighted average basic and diluted shares outstanding		37,716			37,716			37,716			37,753

(a)	Operating loss and loss from continuing operations in the fourth quarter 2010 were significantly impacted by impairment provisions (Note 4) and warrant liability expense (Note 2).

(b)	Revenue increases due to the acquisition of The Woodlands.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details

Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2011

REAL ESTATE AND ACCUMULATED DEPRECIATION[abstract="Real Estate and Accumulated Depreciation"'] [Abstract]

REAL ESTATE AND ACCUMULATED DEPRECIATION[abstract="Real Estate and Accumulated Depreciation"']

SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2011


				Initial Cost (b)				Costs Capitalized Subsequent to Acquisition (c)						Gross Amounts at Which Carried at Close of Period (d)
Name of Center	Location	Encum- brances (a)		Land		Buildings and Improve- ments		Land			Buildings and Improve- ments			Land			Buildings and Improve- ments		Total		Accumulated Depreciation (e)		Date of Construction	Date Acquired/ Completed
				(In thousands)				(In thousands)						(In thousands)
Master Planned Communities
Summerlin	Las Vegas, NV	$	50,672	$	990,179	$	—	$	(94,165	)	$	676		$	896,014		$	676	$	896,690	$	147		2004
Bridgeland	Houston, TX		20,604		257,222		—		134,562			1,556			391,784			1,556		393,340		735		2004
Maryland	Howard County, MD		—		457,552		—		(390,893	)		123			66,659			123		66,782		20		2004
The Woodlands	Houston, TX		185,757		264,889		—		(19,272	)		—			245,617			—		245,617		—		2011

Total Master Planned Communities			257,033		1,969,842		—		(369,768	)		2,355			1,600,074			2,355		1,602,429		902


Operating Properties
Ward Centers	Honolulu, HI		220,000		164,007		89,321		(9,491	)		139,650			154,516			228,971		383,487		34,593		2002
South Street Seaport	New York, NY		—		—		7,884		—			(2,454	)		—			5,430		5,430		380		2004
Landmark Mall	Alexandria, VA		—		28,396		67,235		(19,408	)		(52,109	)		8,988			15,126		24,114		276		2003
Park West	Peoria, AZ		—		16,526		77,548		1			(3,227	)		16,527			74,321		90,848		11,264	2008	2006
Rio West	Gallup, NM		—		—		19,500		—			8,163			—			27,663		27,663		16,627		1986
Riverwalk Marketplace	New Orleans, LA		—		—		94,513		—			(82,160	)		—			12,353		12,353		340		2004
Cottonwood Square	Salt Lake City, UT		—		1,558		4,339		—			315			1,558			4,654		6,212		1,097		2002
20/25 Waterway Avenue	Houston, TX		—		2,346		8,871		—			536			2,346			9,407		11,753		167		2011
Waterway Garage Retail	Houston, TX		—		1,342		4,255		—			629			1,342			4,884		6,226		41		2011
1400 Woodloch Forest	Houston, TX		—		—		—		1,570			12,237			1,570			12,237		13,807		3,856		1981
2201 Lake Woodlands Drive	Houston, TX		4,803		3,755		—		—			—			3,755			—		3,755		—		2011
4 Waterway Square	Houston, TX		41,000		1,430		51,553		396			3,615			1,826			55,168		56,994		878		2011
9303 New Trails	Houston, TX		14,000		1,929		11,915		—			639			1,929			12,554		14,483		145		2011
The Club at Carlton Woods	Houston, TX		—		13,796		457		—			307			13,796			764		14,560		5		2011
Woodlands Parking Garages	Houston, TX		—		5,857		—		—			—			5,857			—		5,857		55		2011
Woodlands Resort and Conference Center	Houston, TX		36,100		13,258		37,983		—			870			13,258			38,853		52,111		323		2011
110 N. Wacker	Chicago, IL		29,000		—		29,035		—			5,315			—			34,350		34,350		10,740		1997
Columbia Offices	Howard County, MD		—		1,575		28,447		1,571			7,234			3,146			35,681		38,827		9,686		2004

Total Operating Properties			344,903		255,775		532,856		(25,361	)		39,560			230,414			572,416		802,830		90,473


Strategic Developments
Bridges at Mint Hill	Charlotte, NC		—		—		—		—			12,450			—			12,450		12,450		—		2007
Fashion Show Air Rights	Las Vegas, NV		—		—		—		—			—			—			—		—		—		2004
Elk Grove Promenade	Elk Grove, CA		—		—		—		—			5,455			—			5,455		5,455		4		2003
Maui Ranch Land	Maui, HI		—		—		—		—			—			—			—		—		—		2002
3 Waterway Square Office	Houston, TX		—		—		—		—			—			—			—		—		—		2012
The Shops at Summerlin Centre	Las Vegas, NV		4,541		—		—		—			35,767			—			35,767		35,767		—		2004
Ala Moana Condo Project	Honolulu, HI		—		—		—		—			22,856			—			22,856		22,856		—		2002
AllenTowne	Dallas, TX		—		25,575		—		(25,575	)		25,416			—			25,416		25,416		—		2006
Cottonwood Mall	Salt Lake City, UT		—		7,613		42,987		(4,713	)		(26,301	)		2,900			16,686		19,586		—		2002
Kendall Town Center	Miami, FL		—		—		—		—			17,487			—			17,487		17,487		—		2004
West Windsor	Princeton, NJ		—		—		—		—			20,888			—			20,888		20,888		13		2004
Alameda Plaza	Pocatello, ID		—		740		2,060		—			26			740			2,086		2,826		491		2002
Century Plaza	Birmingham, AL		—		3,164		28,514		(2,350	)		(24,840	)		814			3,674		4,488		17		1997
Village at Redlands	Redlands, CA		—		—		—		616			6,511			616			6,511		7,127		368	2008	2004
Redlands Promenade	Redlands, CA		—		—		—		—			2,809			—			2,809		2,809		—		2004
Lakemoor (Volo) Land	Volo, IL		—		320		—		(326	)		327			(6	)		327		321		—		1995
Nouvelle at Natick	Natick, MA		—		—		—		—			82			—			82		82		—		2007

Total Strategic Development			4,541		37,412		73,561		(32,348	)		98,933			5,064			172,494		177,558		893


Corporate general and administrative			—		885		1,027		—			3,528			885			4,555		5,440		226


Total HHC		$	606,477	$	2,263,914	$	607,444	$	(427,477	)	$	144,376		$	1,836,437		$	751,820	$	2,588,257	$	92,494

(a)	See description of mortgages, notes and other debt payable in Note 7 of Notes to Consolidated Financial Statements.

(b)	Initial cost for constructed malls is cost at end of first complete calendar year subsequent to opening.

(c)	For retail and other properties, costs capitalized subsequent to acquisitions is net of cost of disposals or other property

(d)	The aggregate cost of land, building and improvements for federal income tax purposes is approximately $2.3 billion.

(e)	Depreciation is computed based upon the following estimated lives:


		Years
Building, improvements and carrying costs		40-45
Equipment, tenant improvements and fixtures		5-10


Reconciliation of Real Estate
	2011			2010			2009
(In thousands)
Balance at beginning of year	$	2,161,977		$	2,680,647		$	3,194,141
Change in land		69,110			13,240			179,765
Additions		450,988			116,482			238,020
Impairments		—			(503,356	)		(680,349	)
Dispositions and write-offs		(93,818	)		(145,036	)		(250,930	)

Balance at end of year	$	2,588,257		$	2,161,977		$	2,680,647


Reconciliation of Accumulated Depreciation
	2011			2010			2009
(In thousands)
Balance at beginning of year	$	78,931		$	81,180		$	94,004
Depreciation Expense		14,012			14,582			17,145
Dispositions and write-offs		(449	)		(16,831	)		(29,969	)

Balance at end of year	$	92,494		$	78,931		$	81,180

- Definition

The entire disclosure for real estate and accumulated depreciation. This may include a schedule that describes the property and lists the initial cost of land, buildings and improvements, improvements and carrying costs capitalized after acquisition, and the total carrying cost for land, buildings and improvements for each property and in aggregate. The schedule also lists the accumulated depreciation for each property and in aggregate, the date each property was constructed and acquired, the useful life used to calculate depreciation and any encumbrances on the properties. The entity provides a reconciliation of the carrying amount of real estate from the beginning of the period to the end of the period. Any real estate investments that have been written down or reserved against are described, including the basis of the write-down. A material amount of intercompany profit in the total carrying amount of real estate is disclosed. The aggregate cost of all real estate investments for federal income tax purposes is also disclosed.

+ References + Details