View Filing Data

Capitalized swap interest

$ (127,543)

$ 148,470

$ (69,230)

Other comprehensive income (loss):

Interest rate swaps

^[1]

(2,770)

(3,351)

^[2]

(1,227)

(600)

Pension plan adjustment

117

Other comprehensive income (loss)

(3,997)

(3,951)

117

Comprehensive income (loss)

(131,540)

144,519

(69,113)

Comprehensive income attributable to noncontrolling interests

(745)

(1,290)

(201)

Comprehensive income (loss) attributable to common stockholders

$ (132,285)

$ 143,229

$ (69,314)

[1]	Net of deferred taxes of $0.1 million and $1.0 million for the years ended December 31, 2012 and 2011, respectively.
[2]	Net of deferred taxes of $0.7 million and $0.4 million for the years ended December 31, 2012 and 2011, respectively.

CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Interest rate swaps, deferred tax expense	$ 0.1	$ 1.0
Capitalized swap interest, deferred tax expense	$ 0.7	$ 0.4

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

Balance at Dec. 31, 2009

$ 1,503,520

$ 1,504,364

$ (1,744)

$ 900

Increase (Decrease) in Stockholders' Equity

Distributions to noncontrolling interests

(69,230)

$ (528,505)

459,074

201

Pension plan adjustment

117

(277)

Issuance of common stock

182,663

$ 379

$ 182,284

Issuance of common stock (in shares)

37,896,259

Stock plan activity

Stock plan activity (in shares)

8,247

Contributions from GGP prior to the Separation

562,229

Transfer from GGP on Effective Date

2,525,667

$ (2,525,667)

Balance at Dec. 31, 2010

2,179,107

$ 379

2,708,036

(528,505)

(1,627)

824

Balance (in shares) at Dec. 31, 2010

37,904,506

Increase (Decrease) in Stockholders' Equity

Adjustment to noncontrolling interests

148,470

147,180

1,290

3,700

Acquisitions

(777)

Preferred dividend payment on behalf of subsidiary

(23)

Interest rate swaps, net of tax $55 and $1,016 for the year ended December 2012 and 2011, respectively

(3,351)

^[1]

(3,351)

Capitalized swap interest, net of tax $724 and $358 for the year ended December 2012 and 2011, respectively

(600)

^[2]

(600)

Stock plan activity

3,073

Stock plan activity (in shares)

41,201

Balance at Dec. 31, 2011

2,329,599

$ 379

2,711,109

(381,325)

(5,578)

5,014

Balance (in shares) at Dec. 31, 2011

37,945,707

Increase (Decrease) in Stockholders' Equity

Interest rate swaps, net of tax $55 and $1,016 for the year ended December 2012 and 2011, respectively

(127,543)

(128,288)

745

(2,770)

^[1]

(2,770)

Capitalized swap interest, net of tax $724 and $358 for the year ended December 2012 and 2011, respectively

(1,227)

^[2]

(1,227)

Warrants exercised

$ 108,660

$ 15

108,645

Warrants exercised (in shares)

1,525,272

Stock plan activity

$ 4,278

$ 1

4,277

Stock plan activity (in shares)

27,933

Balance at Dec. 31, 2012

$ 2,310,997

$ 395

$ 2,824,031

$ (509,613)

$ (9,575)

$ 5,759

Balance (in shares) at Dec. 31, 2012

39,498,912

[1]	Net of deferred taxes of $0.1 million and $1.0 million for the years ended December 31, 2012 and 2011, respectively.
[2]	Net of deferred taxes of $0.7 million and $0.4 million for the years ended December 31, 2012 and 2011, respectively.

CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY
Interest rate swaps, tax	$ 55	$ 1,016
Capitalized swap interest, tax	$ 724	$ 358

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

Cash Flows from Operating Activities:

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

$ (127,543)

$ 148,470

$ (69,230)

Depreciation

19,455

14,012

14,582

Amortization

4,974

2,770

1,981

Amortization of deferred financing costs and debt market rate adjustments, net

1,418

1,771

1,260

Amortization of intangibles other than in-place leases

297

174

Straight-line rent amortization

(757)

(1,060)

(151)

Deferred income taxes including tax restructuring benefit

4,448

(19,200)

(636,117)

Restricted stock and stock option amortization

4,277

3,073

Warrant liability gain (loss)

185,017

(101,584)

140,900

Reduction in tax indemnity receivable

20,260

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

(35)

(4,410)

(9,413)

Investment in Real Estate Affiliate basis adjustment

6,053

Provision for doubtful accounts

1,224

(235)

1,782

Provisions for impairment

503,356

Master Planned Community and development expenditures

(107,144)

(90,078)

(57,138)

Master Planned Community and condominium cost of sales

87,595

79,844

24,388

Reorganization items - finance costs related to emerged entities

1,311

Non-cash reorganization items

(2,724)

Net changes:

Accounts and notes receivable

^[1]

43,460

27,500

534

Prepaid expenses and other assets

^[1]

4,110

2,036

18,686

Deferred expenses

^[1]

(1,995)

404

(2,110)

Accounts payable and accrued expenses

^[1]

15,112

19,502

112

Other, net

^[1]

(908)

(2,657)

(82)

Cash provided by (used in) operating activities

^[1]

153,064

86,508

(67,899)

Cash Flows from Investing Activities:

Real estate and property expenditures

(74,367)

(44,380)

(111,832)

Cash acquired from The Woodlands acquisition, net of cash consideration

5,493

Reimbursement for infrastructure improvements from municipality

5,560

Proceeds from dispositions

1,429

Consideration paid to acquire Millennium Waterway Apartments, net of cash acquired

(2,721)

Distribution from Millennium Waterway Apartments

6,876

Proceeds from sales of investment in Real Estate Affiliates

8,579

Investment in Real Estate Affiliates, Net

(4,552)

Change in restricted cash

(15,164)

(7,782)

Cash used in investing activities

(81,349)

(39,680)

(111,829)

Cash Flows from Financing Activities:

Change in GGP investment, net

216,518

Proceeds from issuance of mortgages, notes and loans payable

68,410

304,911

Principal payments on mortgages, notes and loans payable

(55,832)

(407,027)

(22,109)

Finance costs related to emerged entities

(1,311)

Deferred financing costs

(2,114)

(3,828)

Proceeds from issuance of Management warrants

2,000

17,000

Purchase of Sponsors Warrants

(80,548)

Proceeds from issuance of common stock and warrants to Plan Sponsors

251,385

Distributions to noncontrolling interests

(277)

Cash (used in) provided by financing activities

(70,084)

(103,944)

461,206

Net change in cash and cash equivalents

1,631

(57,116)

281,478

Cash and cash equivalents at beginning of year

227,566

284,682

3,204

Cash and cash equivalents at end of year

229,197

227,566

284,682

Supplemental Disclosure of Cash Flow Information:

Interest paid

28,857

22,158

21,225

Interest capitalized

27,571

24,062

19,139

Income taxes paid

1,202

Reorganization items paid

60,007

Non-Cash Transactions:

Retirement of Sponsors Warrants and Issuance of 1,525,272 shares of common stock

(76,264)

Special Improvement District bond transfers associated with land sales

(3,033)

(4,430)

(1,254)

Real Estate and property expenditures

8,384

MPC Land contributed to Real Estate Affiliate

2,190

2,990

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

(89,514)

Change in Contingent Stock Agreement liability

(15,000)

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)

Acquisition note related to The Woodlands (See Note 4)

96,500

Debt assumed from The Woodlands' acquisition (See Note 4)

296,695

Prepetition liabilities funded by GGP

3,241

Purchase of land from GGP

(1,315)

Mortgage debt market rate adjustment related to emerged entities

$ 2,749

Millennium Waterway Apartments

Mortgages, notes and loans payable

Land

(15,917)

Building and equipment

(56,002)

Other Assets

(2,670)

55,584

Other liabilities

755

Reduction in investments in Real Estate Affiliates due to the acquisition

22,405

The Woodlands

Reduction in investments in Real Estate Affiliates due to the acquisition

$ (128,764)

70 Columbia Corporate Center

Mortgages, notes and loans payable

Land

(1,281)

Building and equipment

(13,089)

Other Assets

(2,957)

16,037

Other liabilities

$ 1,290

[1]	As a result of The Woodlands acquisition and consolidation in 2011, changes in certain accounts cannot be derived from the balance sheet because these changes are non-cash related. Please refer to Note 4 - Acquisitions and Dispositions.

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Parenthetical)	12 Months Ended
	Dec. 31, 2012 shares
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
Issuance of shares of common stock	1,525,272

ORGANIZATION	12 Months Ended
ORGANIZATION	Dec. 31, 2012
ORGANIZATION
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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination and Basis of Presentation

The accompanying financial statements for the years ended December 31, 2012 and 2011 reflect 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. Accordingly, the Statements of Operations, Comprehensive Income (Loss), Statement of Equity and Statement of Cash Flows presented for the year ended December 31, 2010 reflect the aggregate of operations, changes in equity and cash flows 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's 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 these services of approximately $8.4 million for 2010 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 financial statements is 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 that period 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.

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.

Use of Estimates

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

Investment in Real Estate

Master Planned Community Assets, Land, Buildings and Equipment

Real estate assets are stated at cost less any provisions for impairments. 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 repair costs are charged to expense when incurred. Expenditures for significant improvements are capitalized.

We periodically review the estimated useful lives of properties. Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:

Asset Type		Years

Buildings and improvements			10-45
Equipment, tenant improvements and fixtures			5-10
Computer hardware and software, and vehicles			3-5

Developments

Predevelopment costs, which 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 in this Note 2 below).

Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized. Real estate taxes and interest costs incurred during construction periods are also capitalized. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period.

Our Developments are made up of the following categories:

	December 31,

	2012		2011
	(In thousands)
Land & improvements	$	172,614	$	150,273
Pre-development costs		78,198		34,686
Condominium rights		22,801		22,801

Total Developments	$	273,613	$	207,760

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 acquisition date.

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 or losses of such Real Estate Affiliates from the date of investment 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. Any 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), including operating assets, land held for development and sale and developments for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Impairment indicators for our assets 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, 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 predevelopment costs in our Strategic Developments segment, 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.

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

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 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. In addition to the property-specific impairment analysis that we perform on the investment properties, land held for development and sale and developments 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.

Revenue Recognition and Related Matters

Land Sales Revenue

Revenues from land sales are recognized using the full accrual method at closing, when title has passed to the buyer, adequate consideration for the land has been received and we have no continuing involvement with the property. Revenue that is not recognized under the full accrual method is 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 the 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 within Master Planned Community and development expenditures in our Consolidated and Combined Statements of Cash Flows.

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, 2012, 2011 and 2010 was $3.8 million, $3.9 million and $3.9 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 $6.9 million as of December 31, 2012 and $7.6 million as of December 31, 2011, 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 $2.8 million, $3.0 million, and $3.4 million for 2012, 2011 and 2010, 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.

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.

Condominium Unit Sales

Nouvelle at Natick was 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. Income related to unit sales subsequent to the Effective Date was accounted for on a unit-by-unit full accrual method. As of December 31, 2012, all units were sold at Nouvelle at Natick.

Other Rental and Property Revenue

In the normal course of business, we may change our intent to hold a development asset and market it for sale. We recognize as revenue the proceeds related to these sales of development assets.

Allowance for Doubtful Accounts

We record allowances against our rent receivables from tenants and other receivables that we consider uncollectible. These allowances are reviewed periodically and are based on management's estimate of receivables that will not be realized in subsequent periods. We also maintain an allowance for receivables arising from the straight-lining of rents. This receivable arises from earnings recognized in excess of amounts currently due under the lease agreements. Management exercises judgment in establishing these allowances and considers payment history, current credit status and if they are currently occupying the space in developing these estimates. The allowance against our straight-line rent receivable is based on historical experience with early lease terminations, as well as specific review of significant tenants and tenants that are having known financial difficulties.

The following table summarizes the changes in allowance for doubtful accounts:

	2012			2011			2010

	(In thousands)
Balance as of January 1	$	8,496		$	10,966		$	11,455
Provision (Recovery) *		1,224			(235	)		1,782
Write-offs		(806	)		(2,235	)		(2,271	)

Balance as of December 31	$	8,914		$	8,496		$	10,966

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

Municipal Utility District receivables

In Houston, Texas, certain development costs are reimbursable through the creation of Municipal Utility District ("MUDs", also known as Water Control and Improvement Districts) receivables, which are separate political subdivisions authorized by Article 16, Section 59 of the Texas Constitution and governed by the Texas Commission on Environmental Quality ("TCEQ"). MUDs are formed to provide municipal water, waste water, drainage services, recreational facilities and roads to those areas where they are currently unavailable through the regular city services. Typically, the developer advances funds for the creation of the facilities, which must be designed, bid and constructed in accordance with the City of Houston's and TCEQ requirements. The developer initiates the MUD process by filing the applications for the formation of the MUD, and once the applications have been approved, a board of directors is elected for the MUD and given the authority to issue ad valorem tax bonds and the authority to tax residents. The MUD Board authorizes and approves all MUD development contracts and pay requests. The Company estimates the costs it believes will be eligible for reimbursement for MUD receivables and subject to TCEQ approval. MUD bond sale proceeds are used to reimburse the developer for its construction costs, including interest. MUD taxes are used to pay the debt service on the bonds and the operating expenses of the MUD. The Company estimates the costs it believes will be eligible for reimbursement as MUD receivables and has not incurred any debt relating to the MUDs. MUD receivables are shown net of an allowance of $5.3 million and $5.8 million as of December 31, 2012 and 2011, respectively.

Notes Receivable

Notes receivable includes amounts due from builders for previously sold lots, primarily at our Maryland Master Planned Community and a note from GGP received at the Effective Date in connection with the Plan. The GGP note, also known as the Arizona II lease, had a balance of $19.3 million and $25.2 million as of December 31, 2012 and 2011, respectively. The GGP note is fully amortizing, 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. Also included in Notes receivable are notes receivable from various tenants, net of an allowance for uncollectible notes receivable, of $0.8 million as of both December 31, 2012 and 2011.

We estimate the allowance for uncollectible notes receivable based on our assessment of expected receipts of future cash flows with consideration given to any collateral securing the respective note.

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 currently in effect. 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 two 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, the same two Master Planned Communities report gains with respect to sales of land for single family residences using 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.

Tax Indemnity Receivable

As further described in Note 9 "Income Taxes", GGP has indemnified us from and against a portion of taxes related to sales of certain assets in our Master Planned Communities segment as well as any interest or penalties assessed by the Internal Revenue Service that are attributable to those taxes. We recognize a tax indemnity receivable for an amount equal to the indemnified liability we have recorded, including interest and penalties, reduced for our cumulative utilization of certain of our tax assets that contractually limits the amount we can receive pursuant to the Tax Matters Agreement. Interest income related to the tax indemnity receivable is recognized as interest income in our Consolidated and Combined Statements of Operations. Reductions to the tax indemnity receivable attributable to a corresponding indemnified liability or recognition of contractual limitations incurred are recorded as Reduction in tax indemnity receivable in our Consolidated and Combined Statements of Operations.

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 $12.9 million and $10.3 million as of December 31, 2012 and 2011, respectively.

Stock Plans

We apply the provisions of 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 Company's stock at the date of grant.

Earnings Per Share

Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) 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 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,

	2012			2011			2010
	(In thousands, except per share amounts)
Basic EPS:
Numerator:
Net income (loss)	$	(127,543	)	$	148,470		$	(69,230	)
Net income attributable to noncontrolling interests		(745	)		(1,290	)		(201	)

Net income (loss) attributable to common stockholders	$	(128,288	)	$	147,180		$	(69,431	)

Denominator:
Weighted average number of common shares outstanding		38,127			37,908			37,726

Diluted EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	(128,288	)	$	147,180		$	(69,431	)
Less: warrant liability gain		—			(101,584	)		—

Adjusted net income (loss) available to common stockholders	$	(128,288	)	$	45,596		$	(69,431	)

Denominator:
Weighted average number of common shares outstanding		38,127			37,908			37,726
Warrants		—			1,074			—

Weighted average diluted common shares oustanding		38,127			38,982			37,726

Basic earnings (loss) per share	$	(3.36	)	$	3.88		$	(1.84	)
Diluted earnings (loss) per share	$	(3.36	)	$	1.17		$	(1.84	)

The diluted EPS computations as of December 31, 2012 exclude 861,940 stock options, 57,933 shares of restricted stock, 1,916,667 shares of common stock underlying the Sponsors Warrants and 2,862,687 shares of common stock underlying the Management Warrants because their inclusion would have been anti-dilutive.

Additionally, stock options of 715,137 and restricted stock of 42,553 as of December 31, 2011 and 10,683,726 Sponsors 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.

Recently Issued Accounting Pronouncements

In October 2012, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2012-04, "Technical Corrections and Improvements" in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income" in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.

In June 2011, FASB issued a new standard which changes the requirements for presenting comprehensive income in the financial statements. The new standard eliminates the option to present other comprehensive income ("OCI") in the statement of stockholders' equity and instead requires net income, components of OCI, and total comprehensive income to be presented in one continuous statement or two separate but consecutive statements. The standard was effective for us beginning with our first quarter 2012 reporting and was applied retrospectively. We elected to present OCI in two separate but consecutive statements in our previous filings and accordingly, the effective date of this standard did 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 the U.S. GAAP and IFRSs", and it is effective for fiscal years beginning after December 15, 2011. The adoption of this policy did not have an impact on our financial statements. No other new accounting pronouncements have been issued which impact or could impact the prior, current or subsequent years.

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 Operations. 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 have been allocated to us and have been reflected in our combined financial statements and in the tables 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 Operations in the amount of $13.5 million for the year ended December 31, 2010.

Reorganization items are as follows:

Reorganization Items	December 31, 2010

	(In thousands)
Gains on liabilities subject to compromise – vendors (a)	$	(791	)
Gains on liabilities subject to compromise, net – mortgage debt (b)		(2,749	)
Interest income (c)		(16	)
U.S. Trustee fees		571
Restructuring costs (d)		60,267

Total reorganization items	$	57,282

(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.

Prior Period Reclassifications

Certain amounts in 2011 and 2010 have been reclassified to conform to the 2012 presentation. The significant reclassifications for the year ended December 31, 2011 are as follows: (a) $2.2 million of Land, $11.4 million of Buildings and equipment, along with $0.9 million in Accumulated depreciation into Developments to align with our segment presentation; (b) $4.4 million representing certain credits from Accounts receivable to Accounts payable and accrued expenses to present certain items on a gross basis; (c) $2.4 million from Investment in Real Estate Affiliates to Master Planned Community assets as a reallocation of purchase accounting adjustments; (d) $3.8 million from Investment in Real Estate Affiliates to Prepaid and other assets and; (e) certain salaries and overhead costs relating to land development activities for The Woodlands from general and administrative expenses to Master Planned Community operations of $3.2 million. There were no significant reclassifications in 2010.

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

ACQUISITIONS AND DISPOSITIONS

SPONSORS AND MANAGEMENT WARRANTS	12 Months Ended
SPONSORS AND MANAGEMENT WARRANTS	Dec. 31, 2012
SPONSORS AND MANAGEMENT WARRANTS
SPONSORS AND MANAGEMENT WARRANTS	NOTE 3 SPONSORS AND MANAGEMENT WARRANTS On November 9, 2010 (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. 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 represent 2,862,687 underlying shares, which may be adjusted pursuant to a net settlement option; and 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's and Mr. Herlitz's warrants have exercise prices of $42.23 per share and Mr. Richardson's warrants have an exercise price of $54.50 per share. Generally, the Management Warrants become exercisable in November 2016 and expire by February 2018. On December 7, 2012, the affiliates of Blackstone Real Estate Partners and the Fairholme Funds, each sold their sponsor warrants totaling 333,333 and 1,916,667, respectively, to HHC for $30.00 cash per warrant. These transactions were accounted for as the settlement of a liability for cash consideration of $67.5 million. On November 9, 2012, Brookfield Asset Management, Inc. ("Brookfield"), one of our sponsors, exercised their warrants to purchase 1,525,272 shares of our common stock at an exercise price of $50.00 per warrant, or $76.3 million. In addition, Brookfield sold their remaining warrants to purchase 2,308,061 shares of our common stock to HHC for $89.3 million. The cash consideration paid to Brookfield net of the exercise price was $13.0 million. As a result of these transactions, $108.6 million of additional paid-in capital was recorded in our financial statements in the year ended December 31, 2012. The Sponsors Warrants expire on November 9, 2017. The estimated $58.5 million fair value for the Sponsors Warrants representing warrants to purchase 1,916,667 shares and estimated $65.1 million fair value for the Management Warrants outstanding as of December 31, 2012, have been recorded as liabilities because the holders of these warrants could require us to settle such warrants in cash upon a change of control. The estimated fair values for the outstanding Sponsors Warrants and Management Warrants were $102.6 million and $25.2 million, respectively, as of December 31, 2011. The fair values were estimated using an option pricing model and Level 3 inputs due to the unavailability of comparable market data. Decreases and increases in the fair value of the Sponsors Warrants and the Management Warrants are recognized as either warrant liability gains or losses, respectively, in the Consolidated and Combined Statements of Operations.

ACQUISITIONS AND DISPOSITIONS

12 Months Ended

Dec. 31, 2012

ACQUISITIONS AND DISPOSITIONS

NOTE 4 ACQUISITIONS AND DISPOSITIONS

On August 15, 2012, we acquired 70 Columbia Corporate Center ("70 CCC"), a 169,590 square foot Class A office building located in the Columbia, Maryland Town Center by assuming a mortgage note from its lender, which encumbered the property and provided a participation right to the lender for 30% of the appreciation in the market value of the property after our preferred return. The note bears interest at 4.25% and matures on August 31, 2017. The building was approximately 23.7% leased at closing. Simultaneous with the closing of the transaction, we executed a lease for 76,308 square feet that will increase occupancy to approximately 68.7% when the tenant takes possession, which is estimated to occur in March 2013. As part of the transaction, we deposited approximately $5.0 million into an escrow account for capital expenditures, tenant improvements and leasing costs at the property. To the extent available, we are entitled to a 10% cumulative preferred return, after debt service, on our invested capital in the property. Cash flow is then split pro-rata based on our original contributed equity of $5.0 million plus any additional equity contributed and the loan amount. Excess proceeds from a capital event, after repayment of outstanding debt and the preferred return will be split 30% to the lender and 70% to us. The acquisition was recorded at fair value of $17.5 million and consists of land and a building that was valued as if it were vacant and the "as-if-vacant" value was allocated between the land and building. The "as-if-vacant" value was derived by estimating the value of the property assuming it was generating stabilized cash flows using market lease, capitalization and discount rates based on recent comparable market transactions, reduced by the estimated lease-up and carrying costs that we would incur to achieve stabilized cash flow if the property were vacant. The fair value of the liabilities assumed was determined using a discounted cash flow analysis. 70 CCC is included in our Operating Assets segment.

On July 6, 2012, we sold 11.5 acres including 104,705 square feet of mostly vacant retail space at Alameda Plaza in Pocatello, Idaho for $4.5 million. Our net earnings recognized on the sale was $2.0 million. As the sale of certain development assets is an integral part of our business strategy, we recognize the proceeds as revenue in the Consolidated and Combined Statements of Operations.

On May 31, 2012, we acquired our partner's interest in the 393-unit Millennium Waterway Apartments for $6.9 million, following the funding of a $55.6 million ten-year non-recourse mortgage bearing a 3.75% interest rate. Total assets of $78.6 million and liabilities of $56.4 million, including the recently funded loan, were consolidated into our financial statements at fair value as of the acquisition date, and no gain or loss was recognized. Prior to the acquisition, we accounted for our investment in Millennium Waterway Apartments under the equity method. We now own 100% of this stabilized Class A multi-family property located in The Woodlands Town Center. Included in the Consolidated and Combined Statements of Operations are revenues of $4.4 million and net loss of $1.3 million since the acquisition date, for the year ended December 31, 2012. Following this acquisition, we entered into a new joint venture with the same partner to construct a 314-unit Class A multi-family property. Please refer to Note 5 – Real Estate Affiliates for information about the new joint venture.

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 could 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 17 – Segments for a presentation of the results as if we consolidated 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, 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. None of the below market in-place leases at The Woodlands contained fixed rate renewal options, and as a result, the fair value calculation of the below market lease intangibles at acquisition was not impacted by options to renew;

•

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 Operations. For periods prior to July 1, 2011, our investment in The Woodlands was accounted for using the equity method.

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

	(In thousands)

Master Planned Community Assets	$	267,251
Land		44,597
Buildings and equipment		116,061
Investments in Real Estate Affiliates		36,764
Cash		25,492
Accounts receivable		7,548
Notes receivable		3,189
Municipal Utility District receivables		61,700
Other assets		24,956

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 and Combined Statement of Operations 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) 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.

REAL ESTATE AFFILIATES

12 Months Ended

Dec. 31, 2012

REAL ESTATE AFFILIATES

REAL ESTATE AFFILIATES

NOTE 5 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 $7.8 million and $3.2 million as of December 31, 2012 and 2011, respectively, and was classified as Investments in Real Estate Affiliates in the Consolidated Balance Sheets. Because these joint ventures are in the predevelopment stage, there were no earnings for the years ended December 31, 2012 and 2011. We did not participate in any VIEs in 2010. 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.

Our recent and more significant VIEs and the related accounting considerations are discussed below.

ONE 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.

On June 14, 2012, we formed another 50/50 joint venture, KR Holdings, LLC ("KR Holdings"), with the same partner. The initial capital contribution which, is due at closing for the construction loan, will include our interest in the condominium declaration and condominium rights for the condominium tower, owned by our wholly owned subsidiary and cash from our partner. We anticipate the construction loan to close in June 2013. We determined that KR Holdings is a VIE, and that we are not the primary beneficiary. Accordingly, we account for our investment in KR Holdings using the equity method. On September 17, 2012, KR Holdings closed on two $20.0 million non-recourse mezzanine loan commitments with List Island Properties, LLC and A & B Properties, Inc. These loans have a blended interest rate of 12%, must be drawn in full at the construction loan closing date and mature on April 30, 2018 with the option to extend for one year. In addition to the mezzanine loans, A & B Properties and List Island Properties, LLC, both have a profit interest in KR Holdings, LLC, which entitles them to receive a share of the profits after we get a return of our capital plus a 13% preferred return on our capital. LIST Co., Ltd., the parent of List Island Properties, LLC, is the exclusive representative for buyers in Japan for the residences. The venture may draw $3.0 million of the $40.0 million provided by the mezzanine lenders to fund the predevelopment costs of the venture. Per the terms of the mezzanine loans, the venture is not required to repay this $3.0 million if the construction loan fails to close or the project fails to go forward. Of the committed predevelopment costs, $2.6 million has been funded as of December 31, 2012, of which $2.0 million is non-interest bearing.

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.

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, located near Charlotte, NC to develop a shopping center on our combined properties. On October 30, 2012, we contributed $4.5 million in cash to the Bridges at Mint Hill joint venture in accordance with the joint venture's operating agreement. The cash was used to repay a mortgage secured by the land contributed by our partner. As a result of our additional contribution, our ownership percentage increased from 79.0% to 90.5%, and we now have the ability to direct the significant economic activities of the entity; therefore, we began consolidating this joint venture in the fourth quarter of 2012. Predevelopment costs incurred through December 31, 2012 total $0.8 million.

Millennium Woodlands Phase II, LLC

On May 14, 2012, we entered into a joint venture, Millennium Woodlands Phase II, LLC ("Millennium Phase II"), with the same partner from Millennium Waterway Apartments as discussed in Note 4 for the construction of a 314-unit Class A multi-family complex in The Woodlands Town Center. Our partner is the managing member of Millennium Phase II. As the managing member, our partner controls, directs, manages and administers the affairs of Millennium Phase II. Millennium Phase II is a variable interest entity, and although we have an 81.4% majority ownership interest in the joint venture, we determined that we are not the primary beneficiary because our partner has the power to direct activities that most significantly impact the economic performance of the joint venture and therefore we report our interest on the equity method. On July 5, 2012, Millennium Phase II was capitalized by our contribution of 4.8 acres of land valued at $15.5 million to the joint venture, our partner's contribution of $3.0 million in cash and by a construction loan in the amount of $37.7 million which is guaranteed by our partner. The development of Millennium Phase II further expands our multi-family portfolio in The Woodlands Town Center.

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 the Dallas/Fort Worth, Texas area is held through joint venture entities in which we own non-controlling interests and are unconsolidated and accounted for on the equity method. Woodlands Sarofim #1 Ltd. ("Woodlands Sarofim") industrial buildings and Stewart Title of Montgomery County, Inc. ("Stewart Title"), both are located in The Woodlands, are reflected in our financial statements as non-consolidated joint ventures and are accounted for on the equity method.

	Economic/Legal Ownership						Carrying Value				Share of Earnings/Dividends

	December 31,						December 31,				December 31,
	2012			2011			2012		2011		2012			2011			2010
	(In percentages)						(In thousands)				(In thousands)
Equity Method Investments
The Woodlands (a)							$	—	$	—	$	—		$	3,731		$	9,417
Bridges at Mint Hill, LLC (b)		90.50	%		79.00	%		—		180		—			—			—
Circle T		50.00	%		50.00	%		9,004		9,004		—			(1	)		(4	)
Forest View Apartments (c) (d)		—			50.00	%		—		5,358		2			5			—
HHMK Development, LLC		50.00	%		50.00	%		1,257		—		—			—			—
KR Holdings, LLC		50.00	%		—			—		—		—			—			—
Millennium Waterway Apartments (e)		100.00	%		83.55	%		—		21,998		407			682			—
Millennium Woodlands Phase II, LLC		81.43	%		—			2,190		—		—			—			—
Parcel D Development, LLC		50.00	%		50.00	%		4,330		2,990		—			—			—
Stewart Title (c)		50.00	%		50.00	%		3,871		3,643		902			204			—
Timbermill Apartments (c) (d)		—			50.00	%		—		3,988		2			—			—
Woodlands Sarofim #1 (c)		20.00	%		20.00	%		2,450		2,456		(6	)		64			—
Other Investments								300		—		—			—			—

								23,402		49,617		1,307			4,685			9,413
Cost basis investments (f)								8,777		9,173		2,376			3,893			—

Investment in Real Estate Affiliates							$	32,179	$	58,790	$	3,683		$	8,578		$	9,413

(a): As of July 1, 2011, The Woodlands is consolidated and no longer a Real Estate Affiliate (please refer to Note 4 – Acquisitions and Dispositions). Prior to July 1, 2011, we owned a 52.5% economic interest in The Woodlands.
(b): On October 30, 2012, we contributed $4.5 million to repay a mortgage secured by the land contributed by our partner. As a result, our ownership percentage increased from 79.0% to 90.5% and we now have the ability to direct the significant economic activities of the entity. We began consolidating this joint venture in the fourth quarter of 2012.
(c): Equity investment consolidated into our financial statements as part of the acquisition of our partner's economic interest in The Woodlands on July 1, 2011.
(d): On April 19, 2012, the joint ventures owning the Forest View and Timbermill Apartments completed their sale to a third party. Our share of the distributable cash, after repayment of debt and transaction expenses, was $8.6 million.
(e): On May 31, 2012, we acquired our partner's interest for $6.9 million and consolidated this property.
(f): Includes dividends received from Summerlin Hospital Medical Center.

As of December 31, 2012, approximately $9.9 million of indebtedness was secured by the properties owned by our Real Estate Affiliates of which our share was approximately $3.9 million based upon our economic ownership. All of this debt is without recourse to us.

IMPAIRMENT

12 Months Ended

Dec. 31, 2012

IMPAIRMENT

IMPAIRMENT

NOTE 6 IMPAIRMENT

General

There were no impairment charges for the years ended December 31, 2012 and 2011. Park West continues to suffer from a weak market, and its occupancy at December 31, 2012 and 2011 was 68.2% and 64.9%, respectively. During 2012, we leased approximately 18,500 square feet to a well-known restaurant/entertainment tenant who will take occupancy in 2013 and increase occupancy to 75.6%. We continue to focus on occupancy by attracting tenants who can drive increased traffic during the day and evening. 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 could reduce our expected cash flows and result in a significant impairment. Our expected cash flows could also be reduced if we changed our plans and determined that we should realize the assets' value through sale, and the period we intend to hold the asset is reduced.

Impairment charges totaled $503.4 million for the year ended December 31, 2010. These charges are included in the Provisions for impairment in our Consolidated and Combined Statements of Operations for the year ended December 31, 2010. 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 provisions for impairment were considered necessary for such projects and properties.

The following table presents a summary of all impairment provisions and the corresponding fair value measurements:

Impaired Asset		Method of Determining Fair Value	Total Fair Value Measurement Year Ended December 31, 2010		Total Loss Year Ended December 31, 2010

			(In thousands)
Master Planned Communities:
Maryland – Gateway (e)	Howard County, MD	Projected sales price analysis (a) (c)	$	1,649	$	2,613
Maryland – Columbia (e)	Columbia, MD	Projected sales price analysis (a) (c)		34,823		56,798
Summerlin – South (e)	Las Vegas, NV	Projected sales price analysis (a) (c)		203,325		345,920

				239,797		405,331

Operating Assets:
Landmark (e)	Alexandria, VA	Discounted cash flow analysis (a) (c)		23,750		24,434
Riverwalk Marketplace (g)	New Orleans, LA	Discounted cash flow analysis (c)		10,179		55,975
Various pre-development costs		(b)		—		514

				33,929		80,923

Strategic Developments:
Century Plaza Mall (f)	Birmingham, AL	Projected sales price analysis (a) (d)		4,500		12,899
Nouvelle at Natick (e)	Natick, MA	Discounted cash flow analysis (c)		13,413		4,135
Various pre-development costs		(b)		—		68

				17,913		17,102

Total			$	291,639	$	503,356

(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): The fair value was calculated on a discounted cash flow analysis using a discount rate of 20.0%.
(f): The fair value is based on estimated sales value.
(g): 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.

No provisions for impairment were recorded for the years ended December 31, 2012, 2011 and 2010 related to our investments in Real Estate Affiliates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2012

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 7 FAIR VALUE OF FINANCIAL INSTRUMENTS

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, 2012								December 31, 2011

			Fair Value Measurements Using								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)
Liabilities
Warrants	$	123,573		—		—	$	123,573	$	127,764		—		—	$	127,764
Interest rate swaps	$	7,183		—	$	7,183		—	$	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) which are our Sponsors and Management Warrants:

	December 31,

	2012			2011			2010
	(In thousands)
Beginning of year	$	127,764		$	227,348		$	—
Warrant liability loss (gain) (a)		185,017			(101,584	)		140,900
Settlements (b)		(189,208	)		—			—
Purchases		—			2,000			86,448

End of year	$	123,573		$	127,764		$	227,348

(a): The unrealized loss during 2012 related to the Sponsors and Management Warrants held as of December 31, 2012 was $73.8 million. The losses and gains for 2011 and 2010, respectively, were all unrealized.
(b): Settlements were for $80.5 million in cash and 1,525,272 shares of our common stock. Please refer to Note 3 – Sponsors and Management Warrants.

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 as a warrant liability gain or loss.

The significant unobservable input used in the fair value measurement of our warrants designated as Level 3 as of December 31, 2012 is as follows:

	Fair Value		Valuation Technique	Unobservable Input

	(In thousands)
Warrants	$	123,573	Option Pricing Valuation Model	Expected Volatility (a)	29	%

(a): Based on the asset volatility of comparable companies.

The expected volatility in the table above is a significant unobservable input used to estimate the fair value of our warrant liabilities. An increase in expected volatility would increase the fair value of the liability, while a decrease in expected volatility would decrease the fair value of the liability.

The following tables summarize our assets and liabilities that were measured at fair value on a non-recurring basis and include (1) Investment in Real Estate Affiliates related to the fair value based on purchases of our previously held equity investments; (2) impairment charges recorded in 2010 related to the fair value of owned properties and the fair value of debt related to properties that emerged from bankruptcy.

Investment in Real Estate Affiliates	Total Fair Value Measurement as of December 31,			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,

	(In thousands)
2012	$	22,405	(a)	$	22,405	$	—	$	—		$	—
2011	$	128,764	(b)	$	—	$	—	$	128,764	(b)	$	6,053	(c)

(a): We measured our equity interest in Millennium Waterway Apartments based on our purchase of our partner's 23.5% economic interest in Millennium Waterway Apartments. We used Level 1 inputs for the cash payment.
(b): 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 4 – Acquisitions and Dispositions. As of the acquisition date, The Woodlands financial condition and results of operations were consolidated.
(c): Represents the loss on remeasurement of our previously held equity investment in The Woodlands.

	Total Fair Value Measurement as of December 31, 2010		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)
Impairment Charges
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 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 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.

The estimated fair values of our financial instruments that are not measured at fair value on a recurring basis are as follows:

	December 31, 2012					December 31, 2011

	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(In thousands)
Assets:
Notes receivable, net	$	27,953	$	27,953		$	35,354	$	35,354
Tax indemnity receivable, including interest		319,622		(a	)		331,771		(a	)
Liabilities:
Fixed-rate debt	$	158,636	$	158,879		$	83,164	$	85,047
Variable-rate debt (b)		479,964		479,964			468,100		468,100
SID bonds		49,712		56,475			55,213		53,908

Total mortgages, notes and loans payable	$	688,312	$	695,318		$	606,477	$	607,055

(a): It is not practicable to estimate the fair value of the tax indemnity receivable, including interest, as the timing and ultimate amount received under contract is highly dependent on numerous future events that cannot be reliably predicted.
(b): As more fully described below, $172.0 million of variable-rate debt has been swapped to a fixed rate for the term of the related debt.

Notes receivable are carried at net realizable value which approximates fair value. The estimated fair values of these notes receivable are categorized as Level 3 due to certain factors, such as current interest rates, terms of the note and credit worthiness of the borrower.

The fair value of debt in the table above was estimated based on a discounted future cash payment model using Level 2 inputs, which includes risk premiums for loans of comparable quality and a risk free rate derived from the current London Interbank Offered Rate ("LIBOR") or U.S. Treasury obligation interest rates. 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 assuming that the debt is outstanding through maturity.

The carrying amounts of cash and cash equivalents and accounts receivable approximate fair value because of the short-term maturity of these instruments.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-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 133
-Paragraph 44A, 44B
-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 FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 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 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-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 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-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 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 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 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 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.

MORTGAGES, NOTES AND LOANS PAYABLE

MORTGAGES, NOTES AND LOANS PAYABLE

12 Months Ended

Dec. 31, 2012

MORTGAGES, NOTES AND LOANS PAYABLE.

NOTE 8 MORTGAGES, NOTES AND LOANS PAYABLE

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

								December 31,

			Interest Rate			Maximum Facility Amount		December 31,
	Maturity (a)		Interest Rate			Maximum Facility Amount		2012		2011
								(In thousands)
110 N. Wacker (b)		October 2019		5.21	%			$	29,000	$	29,000
70 Columbia Corporate Center		August 2017		4.25	%				16,037		—
Other Financing Arrangements		July 2015		—					612		—
Bridgeland
Land Loan (c)		June 2022		5.50	%				18,066		—
Development Loan (d)		June 2015		5.00	%	$	30,000		—		—
Various mortgage notes (e)		—		—					—		20,604

Bridgeland Total									18,066		20,604

Special Improvement District bonds
Summerlin South – S108		December 2016		5.95	%				1,067		1,302
Summerlin South – S124		December 2019		5.95	%				324		378
Summerlin South – S128		December 2020		7.30	%				787		862
Summerlin South – S128C		December 2030		6.05	%				5,739		5,956
Summerlin South – S132		December 2020		6.00	%				4,822		5,378
Summerlin South – S151		June 2025		6.00	%				10,501		12,293
Summerlin West – S808		April 2021		5.71	%				—		682
Summerlin West – S809		April 2023		6.65	%				—		1,000
Summerlin West – S810		April 2031		7.13	%				22,185		22,770
The Shops at Summerlin Centre – S128		December 2030		6.05	%				3,701		3,829
The Shops at Summerlin Centre – S108		December 2016		5.95	%				586		713
SID Payable to Nevada Cancer Institute		December 2019		5.95	%				—		50

Special Improvement District bonds Total									49,712		55,213

The Woodlands
Master Credit Facility (f)		March 2015		5.00	%	$	270,000		176,704		183,000
Resort and Conference Center (g)		October 2013		6.00	%				36,100		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		—		2.84	%				41		147
CVS		upon sale		3.25	%				—		101
4 Waterway Square		December 2023		4.88	%				40,140		41,000
9303 New Trails		December 2023		4.88	%				13,706		14,000
3 Waterway Square (h)		January 2017		2.86	%	$	43,295		9,150		—
Hughes Landing (h)		November 2017		2.86	%	$	38,000		10		—
20/25 Waterway		May 2022		4.79	%				14,450		—
Millennium Waterway Apartments (i)		June 2022		3.75	%				55,584		—

The Woodlands Total									345,885		281,660

Ward Centers (j)		September 2016		3.39	%	$	250,000		229,000		220,000

								$	688,312	$	606,477

(a): Maturity date includes any extension option periods which are within our control.
(b): 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.
(c): Loan is for ten year term. First five years interest is fixed at 5.50% and for second five years interest rate is floating based on three-month LIBOR +2.75%.
(d): Revolving development loan provides for a maximum of $30.0 million outstanding balance at any time with all draws not to exceed $140.0 million. The loan bears interest at three-month LIBOR + 3.25% and has a 5.00% minimum rate.
(e): The loan was refinanced during the second quarter of 2012.
(f): Loan bears interest at one-month LIBOR + 4.00% and has a 5.00% minimum rate.
(g): The loan was fully repaid on February 8, 2013 from the proceeds of a $95.0 million non-recourse construction financing to redevelop the property.
(h): Loan bears interest at one-month LIBOR + 2.65%.
(i): Loan payments are interest only until June 2017, then monthly principal and interest payment of $257,418 with unpaid balance due at maturity.
(j): Loan has a stated interest rate of one-month LIBOR + 2.50%. $143.0 million of the outstanding principal balance is swapped to a 3.80% fixed rate through maturity.

The weighted average interest rate on our mortgages, notes and loans payable excluding interest rate hedges was 4.49% and 4.68% as of December 31, 2012 and 2011, respectively.

Mortgages, notes and loans payable are summarized as follows:

	December 31,

	2012		2011
	(In thousands)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable	$	158,636	$	83,164
Special Improvement District bonds		49,712		55,213
Variable-rate debt:
Collateralized mortgages, notes and loans payable		479,964		468,100

Total mortgages, notes and loans payable	$	688,312	$	606,477

The following table summarizes the contractual obligations relating to our mortgages, notes and loans payable as of December 31, 2012:

	Mortgages, notes and loans payable principal payments

	(In thousands)
2013	$	28,722	(a)
2014		34,976
2015		129,170
2016		238,244
2017		35,054
Subsequent/Other		222,146

Total	$	688,312

(a): Reclassified $36.1 million of The Woodlands Resort and Conference Center debt due in 2013 that was refinanced on February 8, 2013 with a new maturity date of 2016.

Collateralized Mortgages, Notes and Loans Payable

As of December 31, 2012, we had $688.3 million of collateralized mortgages, notes and loans payable. Approximately $345.9 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. 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 2013. 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, 2012, the TWL Facility had an outstanding balance of $176.7 million. The TWL Facility bears interest at one-month LIBOR plus 4.00% with a 1.00% 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. We have not distributed and do not currently intend to distribute cash from The Woodlands; therefore, this distribution provision has had no impact on us. As of December 31, 2012, such leverage was approximately 28.3%. There was $7.3 million of undrawn and available borrowing capacity under the TWL Facility based on the collateral underlying the facility and covenants as of December 31, 2012. The TWL Facility also requires mandatory principal amortization payments during its initial term and during the extension period, if exercised. Repayments of $25.0 million and $30.0 million are required on March 29, 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, 2012. On February 8, 2013, we secured non-recourse construction financing of $95.0 million which refinanced the existing $36.1 million mortgage and provides funding for the redevelopment of The Woodlands Resort and Conference Center. The loan bears interest at LIBOR plus 3.50% and has an initial maturity of February 7, 2016, with three one-year extensions at our option. The loan is secured by a 440-room and 40-acre conference center and resort located within The Woodlands, and requires the maintenance of specified financial ratios.

On November 14, 2012, we secured $38.0 million in non-recourse financing for the construction of One Hughes Landing, the first office building to be constructed at Hughes Landing, a 66-acre, mixed-use development situated on 200-acre Lake Woodlands. The loan bears interest at LIBOR plus 2.65%, has a November 15, 2015 original maturity date and two, one-year extensions options.

On August 15, 2012, we assumed a $16.0 million loan as part of the acquisition of 70 CCC. The non-recourse, interest only promissory note matures on August 31, 2017, has a fixed rate of 4.25% and is secured by the property. Please refer to Note 4 – Acquisitions and Dispositions for a description of the acquisition.

On June 29, 2012, we refinanced $18.1 million of existing debt related to our Bridgeland master planned community with a ten-year term loan facility at a fixed interest rate of 5.50% for the first five years and three-month LIBOR plus 2.75% for the remaining term and maturing on June 29, 2022. Beginning on June 29, 2014, annual principal payments are required in the amount of 5.00% of the then outstanding principal balance. In addition, we simultaneously entered into a three-year revolving credit facility with aggregate borrowing capacity of $140.0 million and which has a $30.0 million maximum outstanding loan amount at any time. The revolving loan bears interest at the greater of 5.00% or LIBOR plus 3.25% and matures on June 29, 2015. This loan is intended to provide working capital at Bridgeland in order to accelerate development efforts to meet the demand of homebuilders for finished lots in the community. The Bridgeland loans are cross-collateralized and cross-defaulted and the Bridgeland Master Planned Community serves as collateral for the loans. The loans also require that Bridgeland maintain a minimum $3.0 million cash balance and a minimum net worth of $250.0 million. Additionally, we are restricted from making cash distributions from Bridgeland unless the revolver has no outstanding balance and one year of real estate taxes and debt service on the term loan have been escrowed with the lender.

On May 31, 2012, as part of the acquisition of our partner's interest in Millennium Waterway Apartments, we consolidated a $55.6 million non-recourse first mortgage loan. The proceeds from the mortgage were used to refinance the joint venture's existing debt and to fund our acquisition of the partner's interest in the property. The loan matures on June 1, 2022 and has a fixed interest rate of 3.75%. Payments are interest only until June 2017, then monthly principal and interest payments of $257,418 with the unpaid principal balance due at maturity.

On April 26, 2012, we closed on a 10-year, fixed rate loan with interest at 4.79% secured by 20/25 Waterway Avenue. The proceeds from the loan were $13.6 million.

On February 2, 2012, we secured non-recourse financing totaling $43.3 million for the construction of 3 Waterway Square, an eleven-story, approximate 232,000 square foot office building in The Woodlands. The loan matures on January 31, 2015 and has two, one-year extension options. The loan bears interest at LIBOR plus 2.65%.

On December 5, 2011, we secured a $41.0 million loan for 4 Waterway Square and a $14.0 million loan for 9303 New Trails. The non-recourse mortgages mature on December 11, 2023 and have fixed interest rates of 4.88%.

On September 30, 2011, we closed on a $250.0 million non-recourse first mortgage financing secured by 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 3.80% fixed rate for the term of the loan. The loan had a weighted-average interest rate of 3.39% as of December 31, 2012. 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 September 17, 2012, we drew an additional $9.0 million on the loan. As a result, the unused portion of this mortgage is $21.0 million as of December 31, 2012.

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. 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, 2012, $1.5 billion of land, buildings and equipment and developments (before accumulated depreciation) have been pledged as collateral for our mortgages, notes and loans payable of which $7.0 million is recourse.

Special Improvement Districts Bonds

The Summerlin Master Planned Community uses Special Improvement District bonds to finance certain common infrastructure improvements. These bonds are issued by the municipalities and, although unrated, are secured by the assessments on the land. The majority of proceeds from each bond issued is held in a construction escrow and disbursed to us as infrastructure projects are completed, inspected by the municipalities and approved for reimbursement. Accordingly, the Special Improvement District bonds have been classified as debt. The Summerlin Master Planned Community pays the debt service on the bonds semi-annually. However, our residential land sales contracts provide for the reimbursement of the principal amounts included in these debt service payments. In addition, as Summerlin sells land, the purchasers assume a proportionate share of the bond obligation.

As of December 31, 2012, we were in compliance with all of the financial covenants related to our debt agreements.

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.

INCOME TAXES

12 Months Ended

Dec. 31, 2012

INCOME TAXES

INCOME TAXES

NOTE 9 INCOME TAXES

The provision for (benefit from) income taxes for the years ended December 31, 2012, 2011 and 2010 was as follows:

	2012		2011			2010

	(In thousands)
Current	$	2,439	$	936		$	2,658
Deferred		4,448		(19,261	)		(636,117	)

Total	$	6,887	$	(18,325	)	$	(633,459	)

A component of the tax benefit recorded for the year ended December 31, 2011 relates to an adjustment to true-up the deferred tax assets and liabilities that were received by us upon the spin-off from GGP. 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.

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.

Income tax expense is computed by applying the Federal corporate tax rate for the years ended December 31, 2012, 2011 and 2010 and is reconciled to the provision for income taxes as follows:

	2012			2011			2010

	(In thousands)
Tax at statutory rate on earnings from continuing operations before income taxes	$	(42,490	)	$	45,099		$	(245,942	)
Increase (decrease) in valuation allowance, net		(32,172	)		(13,110	)		61,649
State income taxes, net of Federal income tax benefit		1,328			2,243			(7,969	)
Tax at statutory rate on REIT entity earnings not subject to Federal income taxes		(3,087	)		1,204			2,193
Tax expense (benefit) from change in rates, prior period adjustments and other permanent differences		13,908			(20,829	)		(8,811	)
Non-deductible warrant liability (gain) loss		65,311			(35,859	)		49,315
Non-taxable interest income		(2,863	)		(2,990	)		—
Non-deductible restructuring costs		—			—			17,352
Tax benefit from tax related restructuring		—			—			(509,970	)
Uncertain tax position expense, excluding interest		1,765			364			1,667
Uncertain tax position interest, net of Federal income tax benefit		5,187			5,553			7,057

Income tax expense (benefit)	$	6,887		$	(18,325	)	$	(633,459	)

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 the separate return limitation year rules (SRLY). It is possible that we could, in the future, experience a change in control pursuant to Section 382 that could put limits on the benefit of deferred tax assets. On February 27, 2012, we entered into a Section 382 Rights Agreement to protect us from such an event and protect our deferred tax assets. The section 382 Rights Agreement has a three-year term.

As of December 31, 2012, 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	$	59,107	2024-2032
Net operating loss carryforwards – State		273,406	2013-2032
Tax credit carryforwards – Federal AMT		2,323	n/a

As of December 31, 2012 and 2011, we had gross deferred tax assets totaling $410.5 million and $384.5 million, and gross deferred tax liabilities of $386.1 million and $403.2 million, respectively. We have established a valuation allowance in the amount of $101.5 million and $57.3 million as of December 31, 2012 and 2011, 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 in the amount of $76.4 million that we previously believed had only a remote possibility of realization have been recorded in 2012 due to tax planning that makes realization possible. Because significant uncertainty exists as to whether the tax planning will result in realization of the deferred tax assets we have established a 100% valuation allowance.

The tax effects of temporary differences and carry-forwards included in the net deferred tax liabilities at December 31, 2012 and 2011 are summarized as follows:

	2012			2011

	(In thousands)
Deferred tax assets:
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities	$	291,845		$	226,097
Interest deduction carryforwards		86,963			110,649
Operating loss and tax credit carryforwards		31,643			47,776

Total deferred tax assets		410,451			384,522
Valuation allowance		(101,518	)		(57,276	)

Total net deferred tax assets		308,933			327,246

Deferred tax liabilities:
Property associated with Master Planned Communities, primarily differences in the tax basis of land assets and treatment of interest and other costs		(172,914	)		(189,147	)
Deferred income		(213,166	)		(214,065	)

Total deferred tax liabilities		(386,080	)		(403,212	)

Net deferred tax liabilities	$	(77,147	)	$	(75,966	)

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.

One of our consolidated entities, Victoria Ward, Limited, elected to be taxed as a REIT. As of December 31, 2012, the bases of Victoria Ward included in our Consolidated and Combined Financial Statements exceeds the tax bases by $185.4 million.

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, 2008 through 2012 and are open to audit by state taxing authorities for years ending December 31, 2008 through 2012.

Several of our subsidiaries are involved in a dispute with the IRS relating to years in which those subsidiaries were owned by General Growth Properties ("GGP"), and in connection therewith, GGP has provided us with an indemnity against certain potential tax liabilities. Pursuant to the Tax Matters Agreement, GGP has indemnified us from and against 93.75% of any and all losses, claims, damages, liabilities and reasonable expenses to which we become subject (the "Tax Indemnity"), 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 ("MPC Taxes"), 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 ("Indemnity Cap") to the extent assessed by the IRS. As of the spinoff date, we recorded the Tax Indemnity receivable at the Indemnity Cap of $303.8 million, plus interest of $28.0 million, which is based upon the definition in the Investment Agreements of "MPC Taxes" which includes 93.75% of the deferred tax liability associated with the gains deferred for tax on closed land sales prior to March 31, 2010 that are accounted for tax purposes under the percentage of completion and the completed contract methods of accounting as of March 31, 2010. The tax liability amount for book includes more than just the amounts for which the timing of the recognition for tax is being challenged by the IRS. The total tax liability associated with the deferred gains on these land sales is reflected on the balance sheet in two lines; Deferred tax liabilities (primarily described as deferred income of $213.2 million and $214.1 million as of December 31, 2012 and December 31, 2011, respectively, in the temporary difference summary in this Note 9) and Uncertain tax position liability of $132.5 million and $129.9 million as of December 31, 2012 and December 31, 2011, respectively. The unrecognized tax benefits and related accrued interest through December 31, 2012 are primarily related to the taxes that are the subject of the Tax Indemnity. We have recorded interest income receivable on the Tax Indemnity receivable in the amounts of $36.4 million and $28.0 million as of December 31, 2012 and December 31, 2011, respectively.

The timing of the utilization of the tax assets attributable to indemnified and non-indemnified gains results in changes to the Tax Indemnity receivable and is dependent on numerous future events, such as the timing of recognition of indemnified and non-indemnified gains, the amount of each type of gain recognized in each year, the use of specific deductions and the ultimate amount of indemnified gains recognized. These non-cash changes could be material to our financial statements. Resolution of the Tax Court case noted below could also result in changes to the master planned community deferred gains and the timing of utilization of the tax assets, both of which could result in changes to the Tax Indemnity receivable. We record the Tax Indemnity receivable based on the amounts indemnified which are determined in accordance with the provisions set forth in ASC 740 (Income Taxes). The amounts indemnified are included in the deferred income component of deferred tax liability and in uncertain tax position liability.

During the twelve months ended December 31, 2012, the reduction in tax indemnity receivable of $20.3 million, $8.8 million of which related to 2011 and to a lesser extent 2010, related to our utilization of tax assets that contractually limit the amount we can receive pursuant to the Tax Matters Agreement and changes to our deferred tax liability for the MPC Taxes.

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 case was heard by The United States Tax Court in November of 2012. We expect the tax court to rule on the case within the next twelve months.

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 related to the unrecognized tax benefits of $8.2 million, $8.5 million and $10.9 million for the years ended December 31, 2012, 2011 and 2010, respectively. At December 31, 2012, we had total unrecognized tax benefits of $95.9 million, excluding interest of $36.6 million, of which none would impact our effective tax rate. At December 31, 2011 and 2010, we had total unrecognized tax benefits of $101.4 million and $120.8 million, respectively, excluding interest, of which none would impact our effective tax rate.

	2012			2011			2010

	(In thousands)
Unrecognized tax benefits, opening balance	$	101,408		$	120,816		$	56,508
Gross increases – tax positions in prior period		841			—			69,168
Gross decreases – tax positions in prior periods		(6,332	)		(19,408	)		(4,860	)

Unrecognized tax benefits, ending balance	$	95,917		$	101,408		$	120,816

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, 2012. A material change in unrecognized tax benefits could have a material effect on our statements of operations. As of December 31, 2012, there is approximately $95.9 million of unrecognized tax benefits, excluding accrued interest, which due to the reasons above, could significantly increase or decrease during the next twelve months.

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.

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COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2012

COMMITMENTS AND CONTINGENCIES.

NOTE 10 COMMITMENTS AND CONTINGENCIES

In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties. In management's opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material effect on our consolidated financial position, results of operations or liquidity.

We had outstanding letters of credit and surety bonds of $49.3 million and $41.6 million as of December 31, 2012 and 2011, respectively. These letters of credit and bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations.

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 $5.4 million, $5.2 million and $3.5 million for 2012, 2011 and 2010, respectively. The amortization of above and below-market ground leases and straight-line rents included in the contractual rent amount, was not significant.

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

	2013		2014		2015		2016		2017		Subsequent / Other		Total

	(In thousands)
Mortgages, notes and loans payable	$	28,722	$	34,976	$	129,170	$	238,244	$	35,054	$	222,146	$	688,312
Ground lease payments		5,836		5,649		5,538		5,240		4,613		178,586		205,462
Uncertainty in income taxes, including interest		—		—		—		—		—		132,492		132,492

Total	$	34,558	$	40,625	$	134,708	$	243,484	$	39,667	$	533,224	$	1,026,266

Please refer to Note 9 – Income Taxes for our obligations related to uncertain tax positions for disclosure of additional contingencies.

South Street Seaport

On June 29, 2012, we entered into an agreement to amend and restate the South Street Seaport ground lease with the City of New York according to the terms described in a non-binding letter of intent, dated December 12, 2011 between the New York City Economic Development Corporation and us. The agreement allows for the redevelopment of Pier 17 ("Renovation Project"). The restated ground lease will become effective when we meet certain milestones, the most important of which is the commencement of construction by June 30, 2013. Following commencement of construction of the Renovation Project, annual ground rent will be fixed at $1.2 million with an escalation of 3.0% annually and we will be entitled to a total $1.5 million rent credit, to be taken monthly over a 30-month period. We also must provide a completion guarantee to New York City for the Renovation Project. We agreed to pay approximately $1.1 million of esplanade maintenance costs over a five-year period. The initial esplanade payment of $210,000 per year escalates annually at CPI for the duration of the lease.

On October 29, 2012, South Street Seaport was heavily impacted by Superstorm Sandy. The storm caused massive flooding in the waterfront areas of Lower Manhattan, including the South Street Seaport and the surrounding properties. With the safety and security of our employees, tenants and customers as a top priority, we, together with New York City Economic Development Corporation, immediately began the recovery and repair process, which included a post event inspection of the Pier 17 structure and remediation and environmental testing of all the flooded spaces. The inspection of the pier found no significant damage to the structure so the Pier Building was re-opened on December 6, 2012. Once we receive the necessary environmental clearances for the other buildings, the rebuilding process will begin. We currently do not have a definitive timeline for reopening the damaged buildings. We are preparing an insurance claim that we anticipate will cover much of the cost of the property damage and loss of income due to the storm.

We have received $5.0 million in insurance advances related to property damage recoveries through December 31, 2012. The amount of the advance is included in Accounts payable and accrued expenses in our Consolidated Balance Sheets (please refer to Note 11 – Other Assets and Liabilities). Remediation costs incurred through December 31, 2012 were $0.8 million and the remaining balance in the insurance reserve is $4.2 million.

The entire disclosure for commitments and contingencies.

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-Name FASB Interpretation (FIN)
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
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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.

OTHER ASSETS AND LIABILITIES

OTHER ASSETS AND LIABILITIES

12 Months Ended

Dec. 31, 2012

OTHER ASSETS AND LIABILITIES

NOTE 11 OTHER ASSETS AND LIABILITIES

The following table summarizes the significant components of Prepaid expenses and other assets:

	December 31,

	2012		2011
	(In thousands)
Special Improvement District receivable	$	39,659	$	40,580
Other receivables		2,346		4,181
Federal income tax receivable		5,367		5,393
Prepaid expenses		4,757		6,507
Below-market ground leases (Note 12)		20,341		20,680
Condominium deposits		19,616		—
Security and escrow deposits		12,865		17,266
Above-market tenant leases (Note 12)		1,896		1,014
Uncertain tax position asset		12,801		11,935
In-place leases (Note 12)		11,516		11,865
Intangibles		3,714		3,074
Other		8,592		8,466

	$	143,470	$	130,961

The increase in condominium deposits as of December 31, 2012 compared to December 31, 2011 relates to condominium deposits received for the ONE Ala Moana condominium tower. We launched condominium pre-sales in December 2012 and have received $19.6 million of deposits at December 31, 2012. These deposits are being held in escrow and are non-refundable after 30 day cancellation period expires.

Security and escrow deposits decreased in 2012 over 2011 due to the $5.7 million repayment of the conference center cash collateral and $3.8 million utilization of tenant improvement escrow funds for 4 Waterway Square and 9303 New Trails loans, offset by an increase of $4.2 million for the operations escrow established in conjunction with the acquisition of 70 Columbia Corporate Center and an $0.8 million increase in escrow deposits on 20/25 Waterway Avenue and Millennium Waterway Apartment loans.

The following table summarizes the significant components of Accounts payable and accrued expenses:

	December 31,

	2012		2011
	(In thousands)
Construction payable	$	17,501	$	10,241
Accounts payable and accrued expenses		39,634		43,764
Condominium deposits		19,616		—
Membership deposits		20,248		16,033
Above-market ground leases (Note 12)		2,590		2,748
Deferred gains/income		7,767		5,739
Accrued interest		2,425		2,747
Accrued real estate taxes		6,622		3,439
Tenant and other deposits		8,096		5,966
Insurance reserve		9,037		6,939
Accrued payroll and other employee liabilities		11,514		9,658
Interest rate swap		7,183		4,367
Special Assessement		2,868		2,234
Other		15,420		15,973

	$	170,521	$	129,848

The construction payable increased as of December 31, 2012 compared to December 31, 2011 due to the increase in construction spending and activity at The Shops at Summerlin, 3 Waterway Square and Bridgeland. Membership deposits increased $4.2 million in 2012 due to increased membership at Carlton Woods. The interest rate swap liability increased $2.8 million in 2012 over 2011 due to falling interest rates. The increase in the condominium deposits as of December 31, 2012 compared to December 31, 2011 is described above under the Prepaid expenses and other assets table.

INTANGIBLES

12 Months Ended

Dec. 31, 2012

INTANGIBLES

INTANGIBLES

NOTE 12 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, 2012
Tenant leases:
In-place value	$	20,348		$	(8,832	)	$	11,516
Above-market		1,904			(8	)		1,896
Below-market		(319	)		(35	)		(354	)
Ground leases:
Above-market		(3,546	)		956			(2,590	)
Below-market		23,096			(2,755	)		20,341
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

The gross asset balances of the in-place value of tenant leases are included in Prepaid expenses and other assets in our Consolidated Balance Sheets and 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 11 and are amortized over the remaining non-cancelable terms of the respective leases.

Amortization/accretion of these intangible assets and liabilities decreased our income (excluding the impact of noncontrolling interest and the provision for income taxes) by $2.5 million in 2012, $2.0 million in 2011 and $0.8 million in 2010.

Future amortization is estimated to decrease income (excluding the impact of noncontrolling interest and the provision for income taxes) by $2.0 million in 2013, $1.9 million in 2014, $1.7 million in 2015, $1.6 million in 2016, $1.7 million in 2017, and $21.9 million thereafter.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2012

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

NOTE 13 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 derivatives. Our objective in using interest rate derivatives is to add stability to interest costs by reducing our exposure to interest rate movements. To accomplish this objective, we 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 the Company making 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. The outstanding derivatives at December 31, 2012 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, 2012 and 2011, the amount of ineffectiveness recorded in earnings was insignificant. We did not utilize any derivative instruments for hedging purpose 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 $2.3 million will be reclassified as an increase to interest expense.

As of December 31, 2012, we had gross notional amounts of $172.0 million for interest rate swaps and a $100.0 million interest rate cap that were designated as cash flow hedges of interest rate risk. The fair value of the interest rate cap derivative was insignificant.

If the interest rates swaps agreement is terminated prior to its maturity, the amount previously recorded in Accumulated other comprehensive income (loss), net is recognized into earnings over the period that the hedged transaction impacts earnings. If the hedging relationship is discontinued because it is probable that the forecasted transaction will not occur according to the original strategy, any related amounts previously recorded in Accumulated other comprehensive income (loss), net are recognized in earnings immediately.

The table below presents the fair value of our derivative financial instruments which are included in accounts payable and accrued liabilities in the Consolidated Balance Sheets:

	As of December 31,

	2012		2011
	(In thousands)
Interest rate swaps	$	7,183	$	4,367

Total derivatives designated as hedging instruments	$	7,183	$	4,367

The tables below present the effect of our derivative financial instruments on the Consolidated and Combined Statements of Operations for the years ended December 31, 2012 and 2011:

	Year Ended December 31,							Year Ended December 31,

	2012			2011				2012			2011
Cash Flow Hedges	Amount of (Loss) Recognized in OCI			Amount of (Loss) Recognized in OCI			Location of (Loss) Reclassified from AOCI into Earnings	Amount of (Loss) Reclassified from AOCI into Earnings			Amount of (Loss) Reclassified from AOCI into Earnings
	(In thousands)							(In thousands)
Interest rate swaps	$	(4,703	)	$	(4,047	)	Interest expense	$	(1,933	)	$	(696	)

	$	(4,703	)	$	(4,047	)		$	(1,933	)	$	(696	)

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.

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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
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Reference 22: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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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.

STOCK BASED PLANS

12 Months Ended

Dec. 31, 2012

STOCK BASED PLANS

STOCK BASED PLANS

NOTE 14 STOCK BASED PLANS

Incentive Stock Plans

On November 9, 2010 (the "Effective Date"), 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 were 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.

The Equity Plan is administered by the Compensation Committee of the Board of Directors ("Committee"). Option grant amounts are awarded by the Committee. Options granted vest ratably over five years, expire ten years after the grant date and generally become exercisable after five years. Recorded compensation cost for share-based payment arrangements totaled $4.3 million and $3.0 million for 2012 and 2011, respectively.

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

As of December 31, 2012, there were a maximum of 2,758,729 shares available for future grant under our various stock plans.

Stock Options

Pursuant to the Equity 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. As of December 31, 2012, the number of shares of common stock issuable upon exercise of the HHC options is insignificant.

The following tables summarize stock option activity:

			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value

					(In years)
Stock options outstanding at January 1, 2011	—		$	—
Granted	751,840			57.81
Exercised	—			—
Forfeited	(39,200	)		59.44
Expired	—			—

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

Granted	200,000			64.19
Exercised	—			—
Forfeited	(50,700	)		58.62
Expired	—			—

Stock options outstanding at December 31, 2012	861,940		$	59.17		8.5	$	11,941,409

Stock options exercisable at December 31, 2012	—			—		—		—

Remaining unvested options outstanding and expected to vest	828,536		$	59.16		8.5	$	11,481,453

Information related to stock options outstanding as of December 31, 2012 is summarized below:

Range of Exercise Prices		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

				(In years)
$46.49 – 55.82	66,500	$	51.19		8.7	—
$57.77 – 60.33	619,000		58.00		8.3	—
$61.64 – 69.75	176,440		66.26		9.2	—

	861,940	$	59.17		8.50	—

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

	2012

	Weighted Average		Range
Grant date fair value	$	19.33	$	18.77 – 20.51
Expected life of options (in years)		7.3		7.2 – 7.4
Risk-free interest rate		1.4		1.1% – 1.9	%
Expected volatility		25		23% – 27	%
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, 2012 is $12.8 million, which is expected to be recognized over a weighted-average period of 3.6 years. Expense associated with stock options for the year ended December 31, 2012, which is included in general and administrative expense in the accompanying Consolidated and Combined Statements of Operations, totaled $3.0 million.

Restricted Stock

Restricted stock awards issued under the Equity Plan provide that shares awarded may not be sold or otherwise transferred until restrictions have lapsed as established by the Committee. In addition to the granting of restricted stock to certain members of management, we award restricted stock to our non-employee directors as part of their annual retainer. The management awards vest over five years, and the restriction on the non-employee director shares lapse in June of each year. Generally, upon termination of employment or directorship, restricted stock units and restricted shares which have not vested are forfeited. For the year ended December 31, 2012, recognized compensation expense of $1.3 million is included in general and administrative expense related to restricted stock awards. The fair value of restricted stock that vested during 2012 was $0.8 million. The balance of unamortized restricted stock expense as of December 31, 2012 was $2.6 million, which is expected to be recognized over a weighted-average period of 3.2 years.

The following table summarizes restricted stock activity:

			Weighted Average Grant Date Fair Value

Restricted stock outstanding at January 1, 2011	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

Granted	27,933		$	63.86
Vested	(12,553	)		59.77
Cancelled	—			—

Restricted stock outstanding at December 31, 2012	57,933		$	65.72

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.

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RENTALS UNDER OPERATING LEASES

RENTALS UNDER OPERATING LEASES

12 Months Ended

Dec. 31, 2012

RENTALS UNDER OPERATING LEASES

NOTE 15 RENTALS UNDER OPERATING LEASES

We receive rental income from the leasing of retail, office 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. The minimum future rentals based on operating leases of our consolidated properties held as of December 31, 2012 are as follows:

Year	Total Minimum Rent

	(In thousands)
2013	$	55,643
2014		49,467
2015		44,569
2016		35,400
2017		28,261
Subsequent		84,754

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.

The entire disclosure for operating leases of a lessor. This may include 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.

TRANSACTIONS RELATED TO THE SPINOFF FROM GGP AND RELATED PARTIES	12 Months Ended
	Dec. 31, 2012
TRANSACTIONS RELATED TO THE SPINOFF FROM GGP AND RELATED PARTIES
TRANSACTIONS RELATED TO THE SPINOFF FROM GGP AND RELATED PARTIES	NOTE 16 TRANSACTIONS RELATED TO THE SPINOFF FROM GGP AND RELATED PARTIES The accompanying combined financial statements 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. No services have been provided under the TSA and RTSA during 2012, and we do not expect to provide or incur any services in the future. On November 9, 2010, we entered into a Tax Matters Agreement with GGP. For a discussion of the Tax Matters Agreement, please refer to Note 9 – Income Taxes. 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. The Transition Agreement provided for, among other things, certain mutual transactions and the services that facilitated the continuity of Company management, the net value of which were not material for the year ended December 31, 2011. Additionally, 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.

The entire disclosure for related party transactions. 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.

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SEGMENTS

12 Months Ended

Dec. 31, 2012

SEGMENTS

SEGMENTS

NOTE 17 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 management's operating philosophies and methods. In addition, our 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. Furthermore, 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 ("MPCs") – 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.

•

Operating Assets – includes retail and office properties, a multi-family property, The Woodlands Resort and Conference Center, The Club at Carlton Woods and other real estate investments. These assets are currently generating revenues, and we believe there is an opportunity to redevelop or reposition many of these assets to improve operating performance.

•

Strategic Developments – includes all properties held for development and redevelopment which are not currently operating (primarily retail and other interests in real estate at such locations), and our one residential condominium project located in Natick (Boston), Massachusetts, in which the remaining units were sold during the first six months of 2012.

As more fully discussed in Note 4, on July 1, 2011, we acquired our partner's interest in The Woodlands. 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.

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

REP EBT, as it relates to our business, is defined as net income (loss) excluding general and administrative expenses, corporate interest income, corporate interest and depreciation expense, provision (benefit) for income taxes, warrant liability gain (loss), the reduction in tax indemnity receivable, equity in earnings from Real Estate Affiliates, Investment in Real Estate Affiliate basis adjustment and reorganization items. We present REP 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) to calculate REP EBT is appropriate to provide additional information to investors.

Segment operating results are as follows:

	Year Ended December 31,

	2012			2011									2010
	Segment Basis			Consolidated Properties			Real Estate Affiliates			Segment Basis			Consolidated Properties			Real Estate Affiliates			Segment Basis
	(In thousands)
Master Planned Communities
Land sales	$	182,643		$	114,610		$	46,773		$	161,383		$	38,058		$	90,986		$	129,044
Builder price participation		5,747			3,816			1,108			4,924			4,124			2,777			6,901
Minimum rents		576			659			14			673			—			27			27
Other land revenues		18,073			13,133			3,924			17,057			6,332			8,827			15,159

Total revenues		207,039			132,218			51,819			184,037			48,514			102,617			151,131

Cost of sales – land		89,298			70,108			23,932			94,040			23,388			49,745			73,133
Land sales operations		32,817			24,533			7,432			31,965			17,153			20,829			37,982
Land sales real estate and business taxes		7,558			7,713			1,906			9,619			12,699			—			12,699
Other property operating costs		—			—			—			—			(1	)		—			(1	)
Provisions for impairment		—			—			—			—			405,331			—			405,331
Depreciation and amortization		72			2			46			48			17			111			128
Interest income		(45	)		(144	)		(364	)		(508	)		—			(824	)		(824	)
Interest expense (*)		(14,598	)		(11,920	)		2,132			(9,788	)		(14,127	)		7,857			(6,270	)

Total expenses		115,102			90,292			35,084			125,376			444,460			77,718			522,178

Venture partner share of The Woodlands EBT		—			—			(7,949	)		(7,949	)		—			(11,827	)		(11,827	)

MPC EBT		91,937			41,926			8,786			50,712			(395,946	)		13,072			(382,874	)

Operating Assets
Minimum rents		81,140			69,602			2,803			72,405			65,911			4,026			69,937
Tenant recoveries		23,210			19,193			1,061			20,254			18,220			1,484			19,704
Resort and conference center revenues		39,782			15,744			19,106			34,850			—			28,850			28,850
Other rental and property revenues		20,959			14,072			6,992			21,064			7,390			14,613			22,003

Total revenues		165,091			118,611			29,962			148,573			91,521			48,973			140,494

Rental property real estate taxes		11,292			9,666			972			10,638			9,962			2,185			12,147
Rental property maintenance costs		8,073			6,405			517			6,922			5,811			1,063			6,874
Resort and conference center operations		29,112			13,220			13,904			27,124			—			24,471			24,471
Other property operating costs		60,072			46,522			9,223			55,745			30,717			17,316			48,033
Provision for (recovery of) doubtful accounts		1,335			(98	)		(9	)		(107	)		1,607			154			1,761
Provisions for impairment		—			—			—			—			80,924			—			80,924
Depreciation and amortization		23,318			16,341			3,968			20,309			16,313			7,148			23,461
Interest income		(185	)		(125	)		(2	)		(127	)		(170	)		2			(168	)
Interest expense		16,289			10,586			2,316			12,902			16,515			836			17,351
Early extinguishment of debt		—			11,305			—			11,305			—			—			—
Equity in Earnings from Real Estate Affiliates		(3,683	)		—			(3,926	)		(3,926	)		—			338			338

Total expenses		145,623			113,822			26,963			140,785			161,679			53,513			215,192

Venture partner share of The Woodlands EBT		—			—			425			425			—			2,157			2,157

Operating Assets EBT		19,468			4,789			3,424			8,213			(70,158	)		(2,383	)		(72,541	)

Strategic Developments
Minimum rents		905			917			—			917			1,015			—			1,015
Tenant recoveries		141			130			—			130			347			—			347
Condominium unit sales		267			22,067			—			22,067			1,139			—			1,139
Other rental and property revenues		3,443			1,746			—			1,746			182			—			182

Total revenues		4,756			24,860			—			24,860			2,683			—			2,683

Condominium unit cost of sales		96			14,465			—			14,465			1,000			—			1,000
Condominium sales operations		131			1,401			—			1,401			252			—			252
Real estate taxes		2,351			604			—			604			3,756			—			3,756
Rental property maintenance costs		582			671			—			671			684			—			684
Other property operating costs		2,963			4,027			—			4,027			5,925			—			5,925
Provision for (recovery of) doubtful accounts		(111	)		(137	)		—			(137	)		175			—			175
Provisions for impairment		—			—			—			—			17,101			—			17,101
Depreciation and amortization		225			234			—			234			212			—			212
Interest expense		219			323			—			323			34			—			34

Total expenses		6,456			21,588			—			21,588			29,139			—			29,139

Strategic Developments EBT		(1,700	)		3,272			—			3,272			(26,456	)		—			(26,456	)

EBT	$	109,705		$	49,987		$	12,210		$	62,197		$	(492,560	)	$	10,689		$	(481,871	)

(*): Negative interest expense amounts relate to interest capitalized on debt assigned to our Operating Assets Segment for the years ended December 31, 2011 and 2011.

The following reconciles REP EBT to GAAP-basis income (loss):

Reconciliation of REP EBT to GAAP-net income (loss)	Year Ended December 31,

	2012			2011			2010
	(In thousands)
Real Estate Property EBT:
Segment basis	$	109,705		$	62,197		$	(481,871	)
Real Estate Affiliates		(3,683	)		(12,210	)		(10,689	)

Segment EBT		106,022			49,987			(492,560	)
General and administrative		(34,423	)		(32,342	)		(21,538	)
Corporate interest income, net		10,153			8,595			199
Warrant liability gain (loss)		(185,017	)		101,584			(140,900	)
Benefit (provision) for income taxes		(6,887	)		18,325			633,459
Reduction in tax indemnity receivable		(20,260	)		—			—
Equity in earnings from Real Estate Affiliates		3,683			8,578			9,413
Investment in Real Estate Affiliate basis adjustment		—			(6,053	)		—
Reorganization items		—			—			(57,282	)
Corporate depreciation		(814	)		(204	)		(21	)

Net income (loss)	$	(127,543	)	$	148,470		$	(69,230	)

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

Reconciliation of Segment Basis Revenues to GAAP Revenues	Year Ended December 31,

	2012		2011			2010
	(In thousands)
Master Planned Communities – Total Segment	$	207,039	$	184,037		$	151,131
Operating Assets – Total Segment		165,091		148,573			140,494
Strategic Developments – Total Segment		4,756		24,860			2,683

Total Segment revenues		376,886		357,470			294,308
Less: The Woodlands Partnerships revenues		—		(81,781	)		(151,590	)

Total revenues – GAAP basis	$	376,886	$	275,689		$	142,718

The assets by segment and the reconciliation of total segment assets to the total assets in the combined financial statements at December 31, 2012 and 2011 are summarized as follows:

	Year Ended December 31,

	2012		2011		2010
	(In thousands)
Master Planned Communities	$	1,756,625	$	1,780,596	$	1,765,487
Operating Assets		944,562		871,549		812,646
Strategic Developments		288,287		189,807		206,037

Total segment assets		2,989,474		2,841,952		2,784,170
Corporate and other		513,568		557,641		730,741
Real Estate Affiliates		—		—		(492,204	)

Total assets	$	3,503,042	$	3,399,593	$	3,022,707

The increase in the 2012 Strategic Development segment's asset balance of $98.5 million as compared to 2011, is primarily due to approximately $60.0 million of costs incurred related to our Woodlands development projects (approximately $18.0 million of these costs are due to a reclassification of land from our Master Planned Communities Segment) and the collection of approximately $19.6 million of pre-sale condominium deposits from our ONE Ala Moana project. The balance of the increase is due to costs incurred related to our other development projects.

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.

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QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2012

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

NOTE 18 QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

	2012

	First Quarter			Second Quarter		Third Quarter			Fourth Quarter
	(In thousands, except for per share amounts)
Total revenues	$	79,765		$	93,939	$	94,815		$	108,367
Operating income		9,104			19,057		17,362			26,942
Net income (loss)		(111,522	)		24,992		(50,192	)		9,179
Net income (loss) attributable to common stockholders		(112,258	)		34,310		(49,411	)		(929	)
Earnings (loss) per share:
Basic		(2.96	)		0.91		(1.30	)		(0.01	)
Diluted		(2.96	)		0.27		(1.30	)		(0.01	)
Weighted average basic and diluted shares outstanding		37,903			37,907		37,916			38,778

	2011

	First Quarter			Second Quarter		Third Quarter			Fourth Quarter
	(In thousands, except for per share amounts)
Total revenues (b)	$	53,101		$	50,821	$	86,673		$	85,094
Operating income		5,990			5,689		2,218			13,568
Net income (loss)		(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			37,897		37,912			38,114

(a): Revenues in the fourth quarter of 2012 were higher than the same period in 2011 by $23.3 million primarily due to the lot bid program that was implemented at The Woodlands in the third quarter of 2012.
(b): Revenue increases in the third and fourth quarters are due to the acquisition of The Woodlands

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.

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

12 Months Ended

Dec. 31, 2012

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

THE HOWARD HUGHES CORPORATION, INC.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2012

($ in thousands)				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 (f)		Land			Buildings and Improve- ments (f)			Land		Buildings and Improve- ments (f)		Total		Accumulated Depreciation (e)		Date of Construction		Date Acquired/ Completed
Summerlin	Las Vegas, NV	$	45,425	$	990,179	$	—	$	(92,788	)	$	794		$	897,391	$	794	$	898,185	$	253				2004
Bridgeland	Houston, TX		18,066		257,222		—		134,785			1,627			392,007		1,627		393,634		868				2004
Maryland	Howard County, MD		—		457,552		—		(390,028	)		143			67,524		143		67,667		42				2004
The Woodlands	Houston, TX		176,704		264,141		—		(58,941	)		18,074			206,200		18,074		224,274		9				2011
Ward Centers	Honolulu, HI		229,000		164,007		89,321		(9,491	)		155,662			154,516		244,983		399,499		39,841				2002
South Street Seaport	New York, NY		—		—		7,884		—			4,029			—		11,913		11,913		465				2004
Landmark Mall	Alexandria, VA		—		28,396		67,235		(19,408	)		(50,417	)		8,988		16,818		25,806		863				2003
Park West	Peoria, AZ		—		16,526		77,548		1,201			(2,297	)		17,727		75,251		92,978		14,299		2008		2006
Rio West Mall	Gallup, NM		—		—		19,500		—			8,456			—		27,956		27,956		17,347				1986
Riverwalk Marketplace	New Orleans, LA		—		—		94,513		—			(78,141	)		—		16,372		16,372		688				2004
Cottonwood Square	Salt Lake City, UT		—		1,558		4,339		—			636			1,558		4,975		6,533		1,224				2002
20/25 Waterway Avenue	Houston, TX		14,450		2,346		8,871		—			1,144			2,346		10,015		12,361		543				2011
Waterway Garage Retail	Houston, TX		—		1,342		4,255		(1	)		698			1,341		4,953		6,294		151				2011
1400 Woodloch Forest	Houston, TX		—		—		—		1,570			13,023			1,570		13,023		14,593		5,887				1981
2201 Lake Woodlands Drive	Houston, TX		—		3,755		—		—			—			3,755		—		3,755		—				2011
4 Waterway Square	Houston, TX		40,140		1,430		51,553		—			6,576			1,430		58,129		59,559		2,831				2011
9303 New Trails	Houston, TX		13,706		1,929		11,915		—			1,619			1,929		13,534		15,463		533				2011
The Club at Carlton Woods	Houston, TX		—		13,796		457		393			589			14,189		1,046		15,235		65				2011
Woodlands Parking Garages	Houston, TX		—		5,857		—		—			138			5,857		138		5,995		51				2011
Woodlands Resort and Conference Center	Houston, TX		36,100		13,258		37,983		—			4,010			13,258		41,993		55,251		1,249				2011
Millennium Waterway Apartments	Houston, TX		55,584		15,917		56,002		—			—			15,917		56,002		71,919		1,338				2012
110 N. Wacker	Chicago, IL		29,000		—		29,035		—			5,315			—		34,350		34,350		11,616				1997
Columbia Offices	Howard County, MD		—		1,575		28,447		1,571			8,394			3,146		36,841		39,987		11,121				2004
70 Columbia Corporate Center	Columbia, MD		16,037		1,281		14,523		—			—			1,281		14,523		15,804		139				2012

($ in thousands)				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 (f)		Land			Buildings and Improve- ments (f)			Land		Buildings and Improve- ments (f)		Total		Accumulated Depreciation (e)		Date of Construction		Date Acquired/ Completed
Bridges at Mint Hill	Charlotte, NC	$	—	$	—	$	—	$	—		$	16,619		$	—	$	16,619	$	16,619	$	—				2007
Elk Grove Promenade	Elk Grove, CA		—		—		—		—			5,666			—		5,666		5,666		4				2003
3 Waterway Square	Houston, TX		9,150		748		—		(748	)		23,581			—		23,581		23,581		—				2012
One Hughes Landing	Houston, TX		10		—		—		—			5,304			—		5,304		5,304		—				2012
The Shops at Summerlin	Las Vegas, NV		4,287		—		—		—			44,781			—		44,781		44,781		—				2004
Ala Moana Condo Project	Honolulu, HI		—		—		—		—			24,377			—		24,377		24,377		—				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	)		(25,996	)		2,900		16,991		19,891		—				2002
Kendall Town Center	Miami, FL		—		—		—		—			17,666			—		17,666		17,666		—				2004
West Windsor	Princeton, NJ		—		—		—		—			21,835			—		21,835		21,835		—				2004
Alameda Plaza	Pocatello, ID		—		740		2,060		(740	)		(999	)		—		1,061		1,061		30				2002
Century Plaza Mall	Birmingham, AL		—		3,164		28,514		(3,164	)		(23,163	)		—		5,351		5,351		—				1997
Village at Redlands	Redlands, CA		—		—		—		—			6,600			—		6,600		6,600		—		2008		2004
Redlands Promenade	Redlands, CA		—		—		—		—			2,907			—		2,907		2,907		—				2004
Lakemoor (Volo) Land	Volo, IL		—		320		—		(320	)		321			—		321		321		—				1995
Corporate general and administrative			653		885		1,027		—			7,926			885		8,953		9,838		1,034

Total HHC		$	688,312	$	2,281,112	$	677,969	$	(465,397	)	$	252,913		$	1,815,715	$	930,882	$	2,746,597	$	112,491

(a): See description of mortgages, notes and other debt payable in Note 8 of the Consolidated and Combined 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 write-downs. For Master Planned Communities, costs capitalized subsequent to acquisitions are net of land sales.
(d): The aggregate cost of land, building and improvements for federal income tax purposes is approximately $2.6 billion.
(e): Depreciation is computed based upon the following estimated lives.
(f): Includes all amounts related to Developments:

		Years

Building and improvements		10-45
Equipment, tenant improvements and fixtures		5-10
Computer hardware and software, and vehicles		3-5


Reconciliation of Real Estate
	2012			2011			2010
		(In thousands)
Balance at beginning of year	$	2,589,730		$	2,161,977		$	2,680,647
Change in Land		66,889			69,110			13,240
Additions		179,372			452,461			116,482
Impairments		—			—			(503,356	)
Dispositions and write-offs and land costs of sales		(89,395	)		(93,818	)		(145,036	)

Balance at end of year	$	2,746,596		$	2,589,730		$	2,161,977


Reconciliation of Accumulated Depreciation
	2012		2011			2010
		(In thousands)
Balance at beginning of year	$	91,605	$	78,931		$	81,180
Depreciation Expense		19,457		14,012			14,582
Dispositions and write-offs		1,429		(1,338	)		(16,831	)

Balance at end of year	$	112,491	$	91,605		$	78,931

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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2012

Principles of Combination and Basis of Presentation

Principles of Combination and Basis of Presentation

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.

Use of Estimates

Use of Estimates

Investment in Real Estate

Investment in Real Estate

Master Planned Community Assets, Land, Buildings and Equipment

We periodically review the estimated useful lives of properties. Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:

Asset Type		Years

Buildings and improvements			10-45
Equipment, tenant improvements and fixtures			5-10
Computer hardware and software, and vehicles			3-5

Developments

Our Developments are made up of the following categories:

	December 31,

	2012		2011
	(In thousands)
Land & improvements	$	172,614	$	150,273
Pre-development costs		78,198		34,686
Condominium rights		22,801		22,801

Total Developments	$	273,613	$	207,760

Acquisitions of Properties

Acquisitions of Properties

Investments in Real Estate Affiliates

Investments in Real Estate Affiliates

Impairment

Impairment

Cash and Cash Equivalents

Cash and Cash Equivalents

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

Revenue Recognition and Related Matters

Revenue Recognition and Related Matters

Land Sales Revenue

Rental Revenue

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

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.

Condominium Unit Sales

Other Rental and Property Revenue

In the normal course of business, we may change our intent to hold a development asset and market it for sale. We recognize as revenue the proceeds related to these sales of development assets.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

The following table summarizes the changes in allowance for doubtful accounts:

	2012			2011			2010

	(In thousands)
Balance as of January 1	$	8,496		$	10,966		$	11,455
Provision (Recovery) *		1,224			(235	)		1,782
Write-offs		(806	)		(2,235	)		(2,271	)

Balance as of December 31	$	8,914		$	8,496		$	10,966

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

Municipal Utility Districts

Municipal Utility District receivables

Notes Receivable

Notes Receivable

We estimate the allowance for uncollectible notes receivable based on our assessment of expected receipts of future cash flows with consideration given to any collateral securing the respective note.

Income Taxes

Income Taxes

Tax Indemnity Receivable

Tax Indemnity Receivable

Deferred Expenses

Deferred Expenses

Stock Plans

Stock Plans

Earnings Per Share

Earnings Per Share

Information related to our EPS calculations is summarized as follows:

	Years Ended December 31,

	2012			2011			2010
	(In thousands, except per share amounts)
Basic EPS:
Numerator:
Net income (loss)	$	(127,543	)	$	148,470		$	(69,230	)
Net income attributable to noncontrolling interests		(745	)		(1,290	)		(201	)

Net income (loss) attributable to common stockholders	$	(128,288	)	$	147,180		$	(69,431	)

Denominator:
Weighted average number of common shares outstanding		38,127			37,908			37,726

Diluted EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	(128,288	)	$	147,180		$	(69,431	)
Less: warrant liability gain		—			(101,584	)		—

Adjusted net income (loss) available to common stockholders	$	(128,288	)	$	45,596		$	(69,431	)

Denominator:
Weighted average number of common shares outstanding		38,127			37,908			37,726
Warrants		—			1,074			—

Weighted average diluted common shares oustanding		38,127			38,982			37,726

Basic earnings (loss) per share	$	(3.36	)	$	3.88		$	(1.84	)
Diluted earnings (loss) per share	$	(3.36	)	$	1.17		$	(1.84	)

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Reorganization Items

Reorganization Items

Reorganization items are as follows:

Reorganization Items	December 31, 2010

	(In thousands)
Gains on liabilities subject to compromise – vendors (a)	$	(791	)
Gains on liabilities subject to compromise, net – mortgage debt (b)		(2,749	)
Interest income (c)		(16	)
U.S. Trustee fees		571
Restructuring costs (d)		60,267

Total reorganization items	$	57,282

(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.

Prior Period Reclassifications

Prior Period Reclassifications

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of estimated useful lives

Asset Type		Years

Buildings and improvements			10-45
Equipment, tenant improvements and fixtures			5-10
Computer hardware and software, and vehicles			3-5

Schedule of categories of developments

	December 31,

	2012		2011
	(In thousands)
Land & improvements	$	172,614	$	150,273
Pre-development costs		78,198		34,686
Condominium rights		22,801		22,801

Total Developments	$	273,613	$	207,760

Summary of changes in allowance for doubtful accounts

	2012			2011			2010

	(In thousands)
Balance as of January 1	$	8,496		$	10,966		$	11,455
Provision (Recovery) *		1,224			(235	)		1,782
Write-offs		(806	)		(2,235	)		(2,271	)

Balance as of December 31	$	8,914		$	8,496		$	10,966

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

Summary of information related to the entity's EPS calculations

	Years Ended December 31,

	2012			2011			2010
	(In thousands, except per share amounts)
Basic EPS:
Numerator:
Net income (loss)	$	(127,543	)	$	148,470		$	(69,230	)
Net income attributable to noncontrolling interests		(745	)		(1,290	)		(201	)

Net income (loss) attributable to common stockholders	$	(128,288	)	$	147,180		$	(69,431	)

Denominator:
Weighted average number of common shares outstanding		38,127			37,908			37,726

Diluted EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	(128,288	)	$	147,180		$	(69,431	)
Less: warrant liability gain		—			(101,584	)		—

Adjusted net income (loss) available to common stockholders	$	(128,288	)	$	45,596		$	(69,431	)

Denominator:
Weighted average number of common shares outstanding		38,127			37,908			37,726
Warrants		—			1,074			—

Weighted average diluted common shares oustanding		38,127			38,982			37,726

Basic earnings (loss) per share	$	(3.36	)	$	3.88		$	(1.84	)
Diluted earnings (loss) per share	$	(3.36	)	$	1.17		$	(1.84	)

Schedule of reorganization items

Reorganization Items	December 31, 2010

	(In thousands)
Gains on liabilities subject to compromise – vendors (a)	$	(791	)
Gains on liabilities subject to compromise, net – mortgage debt (b)		(2,749	)
Interest income (c)		(16	)
U.S. Trustee fees		571
Restructuring costs (d)		60,267

Total reorganization items	$	57,282

(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.

ACQUISITIONS AND DISPOSITIONS (Tables)

12 Months Ended

Dec. 31, 2012

ACQUISITIONS AND DISPOSITIONS

Summary of amounts recorded for the assets acquired and liabilities assumed at the acquisition date

	(In thousands)

Master Planned Community Assets	$	267,251
Land		44,597
Buildings and equipment		116,061
Investments in Real Estate Affiliates		36,764
Cash		25,492
Accounts receivable		7,548
Notes receivable		3,189
Municipal Utility District receivables		61,700
Other assets		24,956

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

Schedule of pro forma information

	Year Ended December 31,

	2011		2010
	(In thousands)
Total revenues	$	357,472	$	294,310
Net income (loss)		157,520		(52,081	)

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

Schedule of information related to investments in real estate affiliates

REAL ESTATE AFFILIATES (Tables)

12 Months Ended

Dec. 31, 2012

REAL ESTATE AFFILIATES

	Economic/Legal Ownership						Carrying Value				Share of Earnings/Dividends

	December 31,						December 31,				December 31,
	2012			2011			2012		2011		2012			2011			2010
	(In percentages)						(In thousands)				(In thousands)
Equity Method Investments
The Woodlands (a)							$	—	$	—	$	—		$	3,731		$	9,417
Bridges at Mint Hill, LLC (b)		90.50	%		79.00	%		—		180		—			—			—
Circle T		50.00	%		50.00	%		9,004		9,004		—			(1	)		(4	)
Forest View Apartments (c) (d)		—			50.00	%		—		5,358		2			5			—
HHMK Development, LLC		50.00	%		50.00	%		1,257		—		—			—			—
KR Holdings, LLC		50.00	%		—			—		—		—			—			—
Millennium Waterway Apartments (e)		100.00	%		83.55	%		—		21,998		407			682			—
Millennium Woodlands Phase II, LLC		81.43	%		—			2,190		—		—			—			—
Parcel D Development, LLC		50.00	%		50.00	%		4,330		2,990		—			—			—
Stewart Title (c)		50.00	%		50.00	%		3,871		3,643		902			204			—
Timbermill Apartments (c) (d)		—			50.00	%		—		3,988		2			—			—
Woodlands Sarofim #1 (c)		20.00	%		20.00	%		2,450		2,456		(6	)		64			—
Other Investments								300		—		—			—			—

								23,402		49,617		1,307			4,685			9,413
Cost basis investments (f)								8,777		9,173		2,376			3,893			—

Investment in Real Estate Affiliates							$	32,179	$	58,790	$	3,683		$	8,578		$	9,413

(a): As of July 1, 2011, The Woodlands is consolidated and no longer a Real Estate Affiliate (please refer to Note 4 – Acquisitions and Dispositions). Prior to July 1, 2011, we owned a 52.5% economic interest in The Woodlands.
(b): On October 30, 2012, we contributed $4.5 million to repay a mortgage secured by the land contributed by our partner. As a result, our ownership percentage increased from 79.0% to 90.5% and we now have the ability to direct the significant economic activities of the entity. We began consolidating this joint venture in the fourth quarter of 2012.
(c): Equity investment consolidated into our financial statements as part of the acquisition of our partner's economic interest in The Woodlands on July 1, 2011.
(d): On April 19, 2012, the joint ventures owning the Forest View and Timbermill Apartments completed their sale to a third party. Our share of the distributable cash, after repayment of debt and transaction expenses, was $8.6 million.
(e): On May 31, 2012, we acquired our partner's interest for $6.9 million and consolidated this property.
(f): Includes dividends received from Summerlin Hospital Medical Center.

IMPAIRMENT (Tables)

12 Months Ended

Dec. 31, 2012

IMPAIRMENT

Schedule of Impairment Provisions and Fair Value Measurements

Impaired Asset		Method of Determining Fair Value	Total Fair Value Measurement Year Ended December 31, 2010		Total Loss Year Ended December 31, 2010

			(In thousands)
Master Planned Communities:
Maryland – Gateway (e)	Howard County, MD	Projected sales price analysis (a) (c)	$	1,649	$	2,613
Maryland – Columbia (e)	Columbia, MD	Projected sales price analysis (a) (c)		34,823		56,798
Summerlin – South (e)	Las Vegas, NV	Projected sales price analysis (a) (c)		203,325		345,920

				239,797		405,331

Operating Assets:
Landmark (e)	Alexandria, VA	Discounted cash flow analysis (a) (c)		23,750		24,434
Riverwalk Marketplace (g)	New Orleans, LA	Discounted cash flow analysis (c)		10,179		55,975
Various pre-development costs		(b)		—		514

				33,929		80,923

Strategic Developments:
Century Plaza Mall (f)	Birmingham, AL	Projected sales price analysis (a) (d)		4,500		12,899
Nouvelle at Natick (e)	Natick, MA	Discounted cash flow analysis (c)		13,413		4,135
Various pre-development costs		(b)		—		68

				17,913		17,102

Total			$	291,639	$	503,356

(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): The fair value was calculated on a discounted cash flow analysis using a discount rate of 20.0%.
(f): The fair value is based on estimated sales value.
(g): 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.

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2012

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of assets and liabilities that are measured at fair value on a recurring basis

	December 31, 2012								December 31, 2011

			Fair Value Measurements Using								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)
Liabilities
Warrants	$	123,573		—		—	$	123,573	$	127,764		—		—	$	127,764
Interest rate swaps	$	7,183		—	$	7,183		—	$	4,367		—	$	4,367		—

Schedule of reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3)

	December 31,

	2012			2011			2010
	(In thousands)
Beginning of year	$	127,764		$	227,348		$	—
Warrant liability loss (gain) (a)		185,017			(101,584	)		140,900
Settlements (b)		(189,208	)		—			—
Purchases		—			2,000			86,448

End of year	$	123,573		$	127,764		$	227,348

(a): The unrealized loss during 2012 related to the Sponsors and Management Warrants held as of December 31, 2012 was $73.8 million. The losses and gains for 2011 and 2010, respectively, were all unrealized.
(b): Settlements were for $80.5 million in cash and 1,525,272 shares of our common stock. Please refer to Note 3 – Sponsors and Management Warrants.

Schedule of significant unobservable input used in the fair value measurement of warrants designated as Level 3

	Fair Value		Valuation Technique	Unobservable Input

	(In thousands)
Warrants	$	123,573	Option Pricing Valuation Model	Expected Volatility (a)	29	%

(a): Based on the asset volatility of comparable companies.

Summary of assets and liabilities that were measured at fair value on a non-recurring basis

Investment in Real Estate Affiliates	Total Fair Value Measurement as of December 31,			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,

	(In thousands)
2012	$	22,405	(a)	$	22,405	$	—	$	—		$	—
2011	$	128,764	(b)	$	—	$	—	$	128,764	(b)	$	6,053	(c)

(a): We measured our equity interest in Millennium Waterway Apartments based on our purchase of our partner's 23.5% economic interest in Millennium Waterway Apartments. We used Level 1 inputs for the cash payment.
(b): 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 4 – Acquisitions and Dispositions. As of the acquisition date, The Woodlands financial condition and results of operations were consolidated.
(c): Represents the loss on remeasurement of our previously held equity investment in The Woodlands.

	Total Fair Value Measurement as of December 31, 2010		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)
Impairment Charges
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 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 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.

Schedule of estimated fair values of the Company's financial instruments that are not measured at fair value on a recurring basis

	December 31, 2012					December 31, 2011

	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(In thousands)
Assets:
Notes receivable, net	$	27,953	$	27,953		$	35,354	$	35,354
Tax indemnity receivable, including interest		319,622		(a	)		331,771		(a	)
Liabilities:
Fixed-rate debt	$	158,636	$	158,879		$	83,164	$	85,047
Variable-rate debt (b)		479,964		479,964			468,100		468,100
SID bonds		49,712		56,475			55,213		53,908

Total mortgages, notes and loans payable	$	688,312	$	695,318		$	606,477	$	607,055

(a): It is not practicable to estimate the fair value of the tax indemnity receivable, including interest, as the timing and ultimate amount received under contract is highly dependent on numerous future events that cannot be reliably predicted.
(b): As more fully described below, $172.0 million of variable-rate debt has been swapped to a fixed rate for the term of the related debt.

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

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-Name Accounting Standards Codification
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-Paragraph 2
-Subparagraph (a)
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 19
-Subparagraph a, b, c(1), d(1)
-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
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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 9: http://www.xbrl.org/2003/role/presentationRef
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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 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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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 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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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 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
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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.

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

Schedule of mortgages, notes and loans payable by property

MORTGAGES, NOTES AND LOANS PAYABLE (Tables)

12 Months Ended

Dec. 31, 2012

MORTGAGES, NOTES AND LOANS PAYABLE.

								December 31,

			Interest Rate			Maximum Facility Amount		December 31,
	Maturity (a)		Interest Rate			Maximum Facility Amount		2012		2011
								(In thousands)
110 N. Wacker (b)		October 2019		5.21	%			$	29,000	$	29,000
70 Columbia Corporate Center		August 2017		4.25	%				16,037		—
Other Financing Arrangements		July 2015		—					612		—
Bridgeland
Land Loan (c)		June 2022		5.50	%				18,066		—
Development Loan (d)		June 2015		5.00	%	$	30,000		—		—
Various mortgage notes (e)		—		—					—		20,604

Bridgeland Total									18,066		20,604

Special Improvement District bonds
Summerlin South – S108		December 2016		5.95	%				1,067		1,302
Summerlin South – S124		December 2019		5.95	%				324		378
Summerlin South – S128		December 2020		7.30	%				787		862
Summerlin South – S128C		December 2030		6.05	%				5,739		5,956
Summerlin South – S132		December 2020		6.00	%				4,822		5,378
Summerlin South – S151		June 2025		6.00	%				10,501		12,293
Summerlin West – S808		April 2021		5.71	%				—		682
Summerlin West – S809		April 2023		6.65	%				—		1,000
Summerlin West – S810		April 2031		7.13	%				22,185		22,770
The Shops at Summerlin Centre – S128		December 2030		6.05	%				3,701		3,829
The Shops at Summerlin Centre – S108		December 2016		5.95	%				586		713
SID Payable to Nevada Cancer Institute		December 2019		5.95	%				—		50

Special Improvement District bonds Total									49,712		55,213

The Woodlands
Master Credit Facility (f)		March 2015		5.00	%	$	270,000		176,704		183,000
Resort and Conference Center (g)		October 2013		6.00	%				36,100		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		—		2.84	%				41		147
CVS		upon sale		3.25	%				—		101
4 Waterway Square		December 2023		4.88	%				40,140		41,000
9303 New Trails		December 2023		4.88	%				13,706		14,000
3 Waterway Square (h)		January 2017		2.86	%	$	43,295		9,150		—
Hughes Landing (h)		November 2017		2.86	%	$	38,000		10		—
20/25 Waterway		May 2022		4.79	%				14,450		—
Millennium Waterway Apartments (i)		June 2022		3.75	%				55,584		—

The Woodlands Total									345,885		281,660

Ward Centers (j)		September 2016		3.39	%	$	250,000		229,000		220,000

								$	688,312	$	606,477

(a): Maturity date includes any extension option periods which are within our control.
(b): 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.
(c): Loan is for ten year term. First five years interest is fixed at 5.50% and for second five years interest rate is floating based on three-month LIBOR +2.75%.
(d): Revolving development loan provides for a maximum of $30.0 million outstanding balance at any time with all draws not to exceed $140.0 million. The loan bears interest at three-month LIBOR + 3.25% and has a 5.00% minimum rate.
(e): The loan was refinanced during the second quarter of 2012.
(f): Loan bears interest at one-month LIBOR + 4.00% and has a 5.00% minimum rate.
(g): The loan was fully repaid on February 8, 2013 from the proceeds of a $95.0 million non-recourse construction financing to redevelop the property.
(h): Loan bears interest at one-month LIBOR + 2.65%.
(i): Loan payments are interest only until June 2017, then monthly principal and interest payment of $257,418 with unpaid balance due at maturity.
(j): Loan has a stated interest rate of one-month LIBOR + 2.50%. $143.0 million of the outstanding principal balance is swapped to a 3.80% fixed rate through maturity.

Summary of mortgages, notes and loans payable

	December 31,

	2012		2011
	(In thousands)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable	$	158,636	$	83,164
Special Improvement District bonds		49,712		55,213
Variable-rate debt:
Collateralized mortgages, notes and loans payable		479,964		468,100

Total mortgages, notes and loans payable	$	688,312	$	606,477

Summary of contractual obligations relating to the entity's long-term debt

	Mortgages, notes and loans payable principal payments

	(In thousands)
2013	$	28,722	(a)
2014		34,976
2015		129,170
2016		238,244
2017		35,054
Subsequent/Other		222,146

Total	$	688,312

(a): Reclassified $36.1 million of The Woodlands Resort and Conference Center debt due in 2013 that was refinanced on February 8, 2013 with a new maturity date of 2016.

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
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-Subparagraph (SX 210.5-02.22)
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
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-Article 5

Schedule of provision for (benefit from) income taxes

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

INCOME TAXES

	2012		2011			2010

	(In thousands)
Current	$	2,439	$	936		$	2,658
Deferred		4,448		(19,261	)		(636,117	)

Total	$	6,887	$	(18,325	)	$	(633,459	)

Schedule of reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes

	2012			2011			2010

	(In thousands)
Tax at statutory rate on earnings from continuing operations before income taxes	$	(42,490	)	$	45,099		$	(245,942	)
Increase (decrease) in valuation allowance, net		(32,172	)		(13,110	)		61,649
State income taxes, net of Federal income tax benefit		1,328			2,243			(7,969	)
Tax at statutory rate on REIT entity earnings not subject to Federal income taxes		(3,087	)		1,204			2,193
Tax expense (benefit) from change in rates, prior period adjustments and other permanent differences		13,908			(20,829	)		(8,811	)
Non-deductible warrant liability (gain) loss		65,311			(35,859	)		49,315
Non-taxable interest income		(2,863	)		(2,990	)		—
Non-deductible restructuring costs		—			—			17,352
Tax benefit from tax related restructuring		—			—			(509,970	)
Uncertain tax position expense, excluding interest		1,765			364			1,667
Uncertain tax position interest, net of Federal income tax benefit		5,187			5,553			7,057

Income tax expense (benefit)	$	6,887		$	(18,325	)	$	(633,459	)

Schedule of amounts and expiration dates of operating loss and tax credit carryforwards

As of December 31, 2012, 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	$	59,107	2024-2032
Net operating loss carryforwards – State		273,406	2013-2032
Tax credit carryforwards – Federal AMT		2,323	n/a

Summary of tax effects of temporary differences and carry-forwards included in net deferred tax liabilities

	2012			2011

	(In thousands)
Deferred tax assets:
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities	$	291,845		$	226,097
Interest deduction carryforwards		86,963			110,649
Operating loss and tax credit carryforwards		31,643			47,776

Total deferred tax assets		410,451			384,522
Valuation allowance		(101,518	)		(57,276	)

Total net deferred tax assets		308,933			327,246

Deferred tax liabilities:
Property associated with Master Planned Communities, primarily differences in the tax basis of land assets and treatment of interest and other costs		(172,914	)		(189,147	)
Deferred income		(213,166	)		(214,065	)

Total deferred tax liabilities		(386,080	)		(403,212	)

Net deferred tax liabilities	$	(77,147	)	$	(75,966	)

Schedule of reconciliation of Unrecognized Tax Benefits

	2012			2011			2010

	(In thousands)
Unrecognized tax benefits, opening balance	$	101,408		$	120,816		$	56,508
Gross increases – tax positions in prior period		841			—			69,168
Gross decreases – tax positions in prior periods		(6,332	)		(19,408	)		(4,860	)

Unrecognized tax benefits, ending balance	$	95,917		$	101,408		$	120,816

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

Summary of contractual obligations relating to the entity's long-term commitments

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2012

COMMITMENTS AND CONTINGENCIES.

	2013		2014		2015		2016		2017		Subsequent / Other		Total

	(In thousands)
Mortgages, notes and loans payable	$	28,722	$	34,976	$	129,170	$	238,244	$	35,054	$	222,146	$	688,312
Ground lease payments		5,836		5,649		5,538		5,240		4,613		178,586		205,462
Uncertainty in income taxes, including interest		—		—		—		—		—		132,492		132,492

Total	$	34,558	$	40,625	$	134,708	$	243,484	$	39,667	$	533,224	$	1,026,266

OTHER ASSETS AND LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2012

OTHER ASSETS AND LIABILITIES

Summary of the significant components of Prepaid expenses and other assets:

	December 31,

	2012		2011
	(In thousands)
Special Improvement District receivable	$	39,659	$	40,580
Other receivables		2,346		4,181
Federal income tax receivable		5,367		5,393
Prepaid expenses		4,757		6,507
Below-market ground leases (Note 12)		20,341		20,680
Condominium deposits		19,616		—
Security and escrow deposits		12,865		17,266
Above-market tenant leases (Note 12)		1,896		1,014
Uncertain tax position asset		12,801		11,935
In-place leases (Note 12)		11,516		11,865
Intangibles		3,714		3,074
Other		8,592		8,466

	$	143,470	$	130,961

Summary of the significant components of Accounts payable and accrued expenses:

	December 31,

	2012		2011
	(In thousands)
Construction payable	$	17,501	$	10,241
Accounts payable and accrued expenses		39,634		43,764
Condominium deposits		19,616		—
Membership deposits		20,248		16,033
Above-market ground leases (Note 12)		2,590		2,748
Deferred gains/income		7,767		5,739
Accrued interest		2,425		2,747
Accrued real estate taxes		6,622		3,439
Tenant and other deposits		8,096		5,966
Insurance reserve		9,037		6,939
Accrued payroll and other employee liabilities		11,514		9,658
Interest rate swap		7,183		4,367
Special Assessement		2,868		2,234
Other		15,420		15,973

	$	170,521	$	129,848

INTANGIBLES (Tables)

12 Months Ended

Dec. 31, 2012

INTANGIBLES

Summary of intangible assets and liabilities

	Gross Asset (Liability)			Accumulated (Amortization) / Accretion			Net Carrying Amount

	(In thousands)
As of December 31, 2012
Tenant leases:
In-place value	$	20,348		$	(8,832	)	$	11,516
Above-market		1,904			(8	)		1,896
Below-market		(319	)		(35	)		(354	)
Ground leases:
Above-market		(3,546	)		956			(2,590	)
Below-market		23,096			(2,755	)		20,341
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

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2012

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Summary of fair value of the Company's derivative financial instruments which are included in accounts payable and accrued liabilities in the Consolidated Balance Sheet

	As of December 31,

	2012		2011
	(In thousands)
Interest rate swaps	$	7,183	$	4,367

Total derivatives designated as hedging instruments	$	7,183	$	4,367

Summary of effect of the Company's derivative financial instruments on the Consolidated and Combined Statements of Operations

	Year Ended December 31,							Year Ended December 31,

	2012			2011				2012			2011
Cash Flow Hedges	Amount of (Loss) Recognized in OCI			Amount of (Loss) Recognized in OCI			Location of (Loss) Reclassified from AOCI into Earnings	Amount of (Loss) Reclassified from AOCI into Earnings			Amount of (Loss) Reclassified from AOCI into Earnings
	(In thousands)							(In thousands)
Interest rate swaps	$	(4,703	)	$	(4,047	)	Interest expense	$	(1,933	)	$	(696	)

	$	(4,703	)	$	(4,047	)		$	(1,933	)	$	(696	)

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

Summary of stock option activity

STOCK BASED PLANS (Tables)

12 Months Ended

Dec. 31, 2012

STOCK BASED PLANS

			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value

					(In years)
Stock options outstanding at January 1, 2011	—		$	—
Granted	751,840			57.81
Exercised	—			—
Forfeited	(39,200	)		59.44
Expired	—			—

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

Granted	200,000			64.19
Exercised	—			—
Forfeited	(50,700	)		58.62
Expired	—			—

Stock options outstanding at December 31, 2012	861,940		$	59.17		8.5	$	11,941,409

Stock options exercisable at December 31, 2012	—			—		—		—

Remaining unvested options outstanding and expected to vest	828,536		$	59.16		8.5	$	11,481,453

Schedule of information related to stock options outstanding

Information related to stock options outstanding as of December 31, 2012 is summarized below:

Range of Exercise Prices		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

				(In years)
$46.49 – 55.82	66,500	$	51.19		8.7	—
$57.77 – 60.33	619,000		58.00		8.3	—
$61.64 – 69.75	176,440		66.26		9.2	—

	861,940	$	59.17		8.50	—

Schedule of fair value on grant date and the significant assumptions used in Black-Scholes option-pricing model

	2012

	Weighted Average		Range
Grant date fair value	$	19.33	$	18.77 – 20.51
Expected life of options (in years)		7.3		7.2 – 7.4
Risk-free interest rate		1.4		1.1% – 1.9	%
Expected volatility		25		23% – 27	%
Expected annual dividend per share		—		—

Summary of restricted stock activity

			Weighted Average Grant Date Fair Value

Restricted stock outstanding at January 1, 2011	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

Granted	27,933		$	63.86
Vested	(12,553	)		59.77
Cancelled	—			—

Restricted stock outstanding at December 31, 2012	57,933		$	65.72

RENTALS UNDER OPERATING LEASES (Tables)

12 Months Ended

Dec. 31, 2012

RENTALS UNDER OPERATING LEASES

Schedule of minimum future rentals under operating leases

The minimum future rentals based on operating leases of our consolidated properties held as of December 31, 2012 are as follows:

Year	Total Minimum Rent

	(In thousands)
2013	$	55,643
2014		49,467
2015		44,569
2016		35,400
2017		28,261
Subsequent		84,754

SEGMENTS (Tables)

12 Months Ended

Dec. 31, 2012

SEGMENTS

Schedule of segment operating results

	Year Ended December 31,

	2012			2011									2010
	Segment Basis			Consolidated Properties			Real Estate Affiliates			Segment Basis			Consolidated Properties			Real Estate Affiliates			Segment Basis
	(In thousands)
Master Planned Communities
Land sales	$	182,643		$	114,610		$	46,773		$	161,383		$	38,058		$	90,986		$	129,044
Builder price participation		5,747			3,816			1,108			4,924			4,124			2,777			6,901
Minimum rents		576			659			14			673			—			27			27
Other land revenues		18,073			13,133			3,924			17,057			6,332			8,827			15,159

Total revenues		207,039			132,218			51,819			184,037			48,514			102,617			151,131

Cost of sales – land		89,298			70,108			23,932			94,040			23,388			49,745			73,133
Land sales operations		32,817			24,533			7,432			31,965			17,153			20,829			37,982
Land sales real estate and business taxes		7,558			7,713			1,906			9,619			12,699			—			12,699
Other property operating costs		—			—			—			—			(1	)		—			(1	)
Provisions for impairment		—			—			—			—			405,331			—			405,331
Depreciation and amortization		72			2			46			48			17			111			128
Interest income		(45	)		(144	)		(364	)		(508	)		—			(824	)		(824	)
Interest expense (*)		(14,598	)		(11,920	)		2,132			(9,788	)		(14,127	)		7,857			(6,270	)

Total expenses		115,102			90,292			35,084			125,376			444,460			77,718			522,178

Venture partner share of The Woodlands EBT		—			—			(7,949	)		(7,949	)		—			(11,827	)		(11,827	)

MPC EBT		91,937			41,926			8,786			50,712			(395,946	)		13,072			(382,874	)

Operating Assets
Minimum rents		81,140			69,602			2,803			72,405			65,911			4,026			69,937
Tenant recoveries		23,210			19,193			1,061			20,254			18,220			1,484			19,704
Resort and conference center revenues		39,782			15,744			19,106			34,850			—			28,850			28,850
Other rental and property revenues		20,959			14,072			6,992			21,064			7,390			14,613			22,003

Total revenues		165,091			118,611			29,962			148,573			91,521			48,973			140,494

Rental property real estate taxes		11,292			9,666			972			10,638			9,962			2,185			12,147
Rental property maintenance costs		8,073			6,405			517			6,922			5,811			1,063			6,874
Resort and conference center operations		29,112			13,220			13,904			27,124			—			24,471			24,471
Other property operating costs		60,072			46,522			9,223			55,745			30,717			17,316			48,033
Provision for (recovery of) doubtful accounts		1,335			(98	)		(9	)		(107	)		1,607			154			1,761
Provisions for impairment		—			—			—			—			80,924			—			80,924
Depreciation and amortization		23,318			16,341			3,968			20,309			16,313			7,148			23,461
Interest income		(185	)		(125	)		(2	)		(127	)		(170	)		2			(168	)
Interest expense		16,289			10,586			2,316			12,902			16,515			836			17,351
Early extinguishment of debt		—			11,305			—			11,305			—			—			—
Equity in Earnings from Real Estate Affiliates		(3,683	)		—			(3,926	)		(3,926	)		—			338			338

Total expenses		145,623			113,822			26,963			140,785			161,679			53,513			215,192

Venture partner share of The Woodlands EBT		—			—			425			425			—			2,157			2,157

Operating Assets EBT		19,468			4,789			3,424			8,213			(70,158	)		(2,383	)		(72,541	)

Strategic Developments
Minimum rents		905			917			—			917			1,015			—			1,015
Tenant recoveries		141			130			—			130			347			—			347
Condominium unit sales		267			22,067			—			22,067			1,139			—			1,139
Other rental and property revenues		3,443			1,746			—			1,746			182			—			182

Total revenues		4,756			24,860			—			24,860			2,683			—			2,683

Condominium unit cost of sales		96			14,465			—			14,465			1,000			—			1,000
Condominium sales operations		131			1,401			—			1,401			252			—			252
Real estate taxes		2,351			604			—			604			3,756			—			3,756
Rental property maintenance costs		582			671			—			671			684			—			684
Other property operating costs		2,963			4,027			—			4,027			5,925			—			5,925
Provision for (recovery of) doubtful accounts		(111	)		(137	)		—			(137	)		175			—			175
Provisions for impairment		—			—			—			—			17,101			—			17,101
Depreciation and amortization		225			234			—			234			212			—			212
Interest expense		219			323			—			323			34			—			34

Total expenses		6,456			21,588			—			21,588			29,139			—			29,139

Strategic Developments EBT		(1,700	)		3,272			—			3,272			(26,456	)		—			(26,456	)

EBT	$	109,705		$	49,987		$	12,210		$	62,197		$	(492,560	)	$	10,689		$	(481,871	)

(*): Negative interest expense amounts relate to interest capitalized on debt assigned to our Operating Assets Segment for the years ended December 31, 2011 and 2011.

Schedule of reconciliation of REP EBT to GAAP-basis income (loss)

Reconciliation of REP EBT to GAAP-net income (loss)	Year Ended December 31,

	2012			2011			2010
	(In thousands)
Real Estate Property EBT:
Segment basis	$	109,705		$	62,197		$	(481,871	)
Real Estate Affiliates		(3,683	)		(12,210	)		(10,689	)

Segment EBT		106,022			49,987			(492,560	)
General and administrative		(34,423	)		(32,342	)		(21,538	)
Corporate interest income, net		10,153			8,595			199
Warrant liability gain (loss)		(185,017	)		101,584			(140,900	)
Benefit (provision) for income taxes		(6,887	)		18,325			633,459
Reduction in tax indemnity receivable		(20,260	)		—			—
Equity in earnings from Real Estate Affiliates		3,683			8,578			9,413
Investment in Real Estate Affiliate basis adjustment		—			(6,053	)		—
Reorganization items		—			—			(57,282	)
Corporate depreciation		(814	)		(204	)		(21	)

Net income (loss)	$	(127,543	)	$	148,470		$	(69,230	)

Schedule of reconciliation of segment revenue to GAAP-basis consolidated and combined revenues

Reconciliation of Segment Basis Revenues to GAAP Revenues	Year Ended December 31,

	2012		2011			2010
	(In thousands)
Master Planned Communities – Total Segment	$	207,039	$	184,037		$	151,131
Operating Assets – Total Segment		165,091		148,573			140,494
Strategic Developments – Total Segment		4,756		24,860			2,683

Total Segment revenues		376,886		357,470			294,308
Less: The Woodlands Partnerships revenues		—		(81,781	)		(151,590	)

Total revenues – GAAP basis	$	376,886	$	275,689		$	142,718

Summary of assets by segment and the reconciliation of total segment assets to the total assets in the consolidated balance sheet

	Year Ended December 31,

	2012		2011		2010
	(In thousands)
Master Planned Communities	$	1,756,625	$	1,780,596	$	1,765,487
Operating Assets		944,562		871,549		812,646
Strategic Developments		288,287		189,807		206,037

Total segment assets		2,989,474		2,841,952		2,784,170
Corporate and other		513,568		557,641		730,741
Real Estate Affiliates		—		—		(492,204	)

Total assets	$	3,503,042	$	3,399,593	$	3,022,707

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of quarterly financial information

	2012
	First Quarter			Second Quarter		Third Quarter			Fourth Quarter
	(In thousands, except for per share amounts)
Total revenues	$	79,765		$	93,939	$	94,815		$	108,367
Operating income		9,104			19,057		17,362			26,942
Net income (loss)		(111,522	)		24,992		(50,192	)		9,179
Net income (loss) attributable to common stockholders		(112,258	)		34,310		(49,411	)		(929	)
Earnings (loss) per share:
Basic		(2.96	)		0.91		(1.30	)		(0.01	)
Diluted		(2.96	)		0.27		(1.30	)		(0.01	)
Weighted average basic and diluted shares outstanding		37,903			37,907		37,916			38,778

	2011

	First Quarter			Second Quarter		Third Quarter			Fourth Quarter
	(In thousands, except for per share amounts)
Total revenues (b)	$	53,101		$	50,821	$	86,673		$	85,094
Operating income		5,990			5,689		2,218			13,568
Net income (loss)		(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			37,897		37,912			38,114

(a): Revenues in the fourth quarter of 2012 were higher than the same period in 2011 by $23.3 million primarily due to the lot bid program that was implemented at The Woodlands in the third quarter of 2012.
(b): Revenue increases in the third and fourth quarters are due to the acquisition of The Woodlands.

ORGANIZATION (Details) shares in Thousands, $ in Millions	Nov. 09, 2010 USD ($) shares
Spinoff Transaction
Shares issued to investors in connection with spin-off	5,250
Warrants issued to investors in connection with spin-off	8,000
Consideration received for shares and warrants issued to investors in connection with spin-off \| $	$ 250.0
GGP
Spinoff Transaction
Shares issued to predecessor as consideration for spin-off	32,500

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions	12 Months Ended
	Dec. 31, 2010 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cost of services	$ 8.4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) $ in Thousands	12 Months Ended
	Dec. 31, 2012 USD ($) item	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)
Developments
Land & improvements	$ 172,614	$ 150,273
Pre-development costs	78,198	34,686
Condominium rights	22,801	22,801
Total Developments	$ 273,613	207,760
Investments in Real Estate Affiliates
Minimum period over which differences between carrying amount of equity method investment and share of underlying equity are amortized	5 years
Maximum period over which differences between carrying amount of equity method investment and share of underlying equity are amortized	45 years
Rental Revenue
Number of residential condominium projects located in Natick (Boston), Massachusetts \| item	215
Percentage rent in lieu of fixed minimum rent	$ 3,800	3,900	$ 3,900
Straight-line rent receivables	6,900	7,600
Overage rent	$ 2,800	$ 3,000	$ 3,400
Minimum \| Master Planned Communities
Useful lives of assets
Estimated useful lives	20 years
Maximum \| Master Planned Communities
Useful lives of assets
Estimated useful lives	40 years
Buildings and improvements \| Minimum
Useful lives of assets
Estimated useful lives	10 years
Buildings and improvements \| Maximum
Useful lives of assets
Estimated useful lives	45 years
Equipment, tenant improvements and fixtures \| Minimum
Useful lives of assets
Estimated useful lives	5 years
Equipment, tenant improvements and fixtures \| Maximum
Useful lives of assets
Estimated useful lives	10 years
Computer hardware and software, and vehicles \| Minimum
Useful lives of assets
Estimated useful lives	3 years
Computer hardware and software, and vehicles \| Maximum
Useful lives of assets
Estimated useful lives	5 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) $ in Thousands	12 Months Ended
	Dec. 31, 2012 USD ($) item	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)
Allowance for doubtful accounts and notes receivable
Balance of note receivable from GGP	$ 27,953	$ 35,354
Notes receivable from various tenants, net of an allowance for uncollectible notes receivable included in Notes receivable	800	800
Municipal Utility District receivables
Receivables net of allowances	$ 5,300	5,800
Income Taxes
Number of Master Planned Communities \| item	2
Threshold percentage of costs of contractual obligations incurred for recognition of gain for tax purposes	95.00%
Deferred Expenses
Deferred expenses, net of accumulated amortization	$ 12,900	10,300
GGP
Allowance for doubtful accounts and notes receivable
Balance of note receivable from GGP	$ 19,300	25,200
Note receivable from GGP, interest rate (as a percent)	4.41%
Cash payments under the note receivable	$ 6,900
Allowance for Doubtful Accounts
Changes in allowance for doubtful accounts and notes receivable accounts
Balance at the beginning of the period	8,496	10,966	$ 11,455
Provision (Recovery)	1,224	(235)	1,782
Write-offs	(806)	(2,235)	(2,271)
Balance at the end of the period	$ 8,914	$ 8,496	$ 10,966

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) $ / shares in Units, $ in Thousands		3 Months Ended								12 Months Ended
	Nov. 09, 2010 shares	Dec. 31, 2012 USD ($) $ / shares	Sep. 30, 2012 USD ($) $ / shares	Jun. 30, 2012 USD ($) $ / shares	Mar. 31, 2012 USD ($) $ / shares	Dec. 31, 2011 USD ($) $ / shares shares	Sep. 30, 2011 USD ($) $ / shares	Jun. 30, 2011 USD ($) $ / shares	Mar. 31, 2011 USD ($) $ / shares	Dec. 31, 2012 USD ($) item $ / shares shares	Dec. 31, 2011 USD ($) $ / shares shares	Dec. 31, 2010 USD ($) $ / shares shares
Earnings per share
Shares issued to investors in connection with spin-off \| shares	5,250,000
Numerator:
Net income (loss)										$ (127,543)	$ 148,470	$ (69,230)
Net income (loss) attributable to noncontrolling interests										(745)	(1,290)	(201)
Net income (loss) attributable to common stockholders		$ (929)	$ (49,411)	$ 34,310	$ (112,258)	$ 31,427	$ 164,295	$ 65,973	$ (114,515)	$ (128,288)	$ 147,180	$ (69,431)
Denominator:
Weighted average basic common shares outstanding \| shares										38,127,000	37,908,000	37,726,000
Numerator:
Net income (loss) attributable to common stockholders		$ (929)	$ (49,411)	$ 34,310	$ (112,258)	$ 31,427	$ 164,295	$ 65,973	$ (114,515)	$ (128,288)	$ 147,180	$ (69,431)
Less: Warrant liability gain										185,017	(101,584)	140,900
Adjusted net income (loss) available to common stockholders										$ (128,288)	$ 45,596	$ (69,431)
Denominator:
Weighted average basic common shares outstanding \| shares										38,127,000	37,908,000	37,726,000
Warrants (in shares) \| shares						1,074,000					1,074,000
Weighted average diluted common shares outstanding \| shares										38,127,000	38,982,000	37,726,000
Basic Earnings (Loss) Per Share (in dollars per share) \| $ / shares		$ (0.01)	$ (1.30)	$ 0.91	$ (2.96)	$ 0.83	$ 4.33	$ 1.74	$ (3.02)	$ (3.36)	$ 3.88	$ (1.84)
Diluted Earnings (Loss) Per Share (in dollars per share) \| $ / shares		$ (0.01)	$ (1.30)	$ 0.27	$ (2.96)	$ 0.80	$ (0.14)	$ 0.22	$ (3.02)	$ (3.36)	$ 1.17	$ (1.84)
Reorganization Items
Number of installments in which payment to GGP employees was made \| item										2
KEIP expenses												$ 13,500
Gains on liabilities subject to compromise - vendors												(791)
Gains on liabilities subject to compromise, net - mortgage debt												(2,749)
Interest income												(16)
U.S. Trustee fees												571
Restructuring costs												60,267
Total reorganization items												$ 57,282
Stock options
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares) \| shares										861,940	715,137
Restricted stock
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares) \| shares										57,933	42,553
Sponsor and management warrants
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares) \| shares												10,683,726
Sponsors Warrants
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares) \| shares										1,916,667
Management Warrants
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares) \| shares										2,862,687
GGP
Earnings per share
Shares issued to predecessor as consideration for spin-off \| shares	32,500,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Prior period reclassification
Land	$ 252,593	$ 234,190
Buildings and equipment	657,268	545,343
Accumulated depreciation	112,491	91,605
Accounts receivable, net	13,905	20,089
Investment in Real Estate Affiliates	32,179	58,790
General and administrative	$ 34,423	32,342	$ 21,538
Reclassification Adjustment \| Master Planned Community operations
Prior period reclassification
General and administrative		3,200
Reclassification Adjustment \| Developments
Prior period reclassification
Land		2,200
Buildings and equipment		11,400
Accumulated depreciation		900
Reclassification Adjustment \| Accounts Payable
Prior period reclassification
Accounts receivable, net		4,400
Reclassification Adjustment \| Master Planned Community assets
Prior period reclassification
Investment in Real Estate Affiliates		2,400
Reclassification Adjustment \| Prepaid expenses and other assets
Prior period reclassification
Investment in Real Estate Affiliates		$ 3,800

SPONSORS AND MANAGEMENT WARRANTS (Details) $ in Thousands			1 Months Ended	12 Months Ended
SPONSORS AND MANAGEMENT WARRANTS (Details) $ in Thousands	Dec. 07, 2012 $ / shares shares	Nov. 09, 2012 USD ($) $ / shares shares	Feb. 28, 2011 USD ($) $ / shares shares	Dec. 31, 2012 USD ($) shares	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Nov. 09, 2010 USD ($) $ / shares shares
Sponsors and Management Warrants
Issuance of warrants to purchase common stock (in shares) \| shares				1,525,272
Payments for repurchase of warrants				$ 80,548
Warrant liability gain (loss)				(185,017)	$ 101,584	$ (140,900)
Proceeds from issuance of management warrants					2,000	$ 17,000
Warrant liabilities				123,573	127,764
Brookfield
Sponsors and Management Warrants
Additional paid-in capital				$ 108,600
Blackstone Real Estate Partners
Sponsors and Management Warrants
Exercise price (in dollars per share) \| $ / shares	30.00
Number of shares of common stock under warrants repurchased \| shares	333,333
Fairholme Funds
Sponsors and Management Warrants
Exercise price (in dollars per share) \| $ / shares	30.00
Number of shares of common stock under warrants repurchased \| shares	1,916,667
Sponsors Warrants
Sponsors and Management Warrants
Issuance of warrants to purchase common stock (in shares) \| shares				1,916,667			8,000,000
Estimated initial value							$ 69,500
Exercise price (in dollars per share) \| $ / shares							50.00
Warrant liabilities				$ 58,500	102,600
Sponsors Warrants \| Brookfield
Sponsors and Management Warrants
Issuance of warrants to purchase common stock (in shares) \| shares		1,525,272
Exercise price (in dollars per share) \| $ / shares		50.00
Proceeds from exercise of warrants		$ 76,300
Number of shares of common stock under warrants repurchased \| shares		2,308,061
Payments for repurchase of warrants		$ 89,300
Cash consideration paid net of exercise price		13,000
Settlement of warrant liability for cash consideration		$ 67,500
Warrant liabilities				67,500
Management Warrants
Sponsors and Management Warrants
Issuance of warrants to purchase common stock (in shares) \| shares			2,862,687
Proceeds from issuance of management warrants			$ 19,000
Warrant liabilities				$ 65,100	$ 25,200
Management Warrants \| David R. Weinreb
Sponsors and Management Warrants
Exercise price (in dollars per share) \| $ / shares			42.23
Management Warrants \| Grant Herlitz
Sponsors and Management Warrants
Exercise price (in dollars per share) \| $ / shares			42.23
Management Warrants \| Andrew C. Richardson
Sponsors and Management Warrants
Exercise price (in dollars per share) \| $ / shares			54.50

ACQUISITIONS AND DISPOSITIONS (Details) $ in Thousands		1 Months Ended			3 Months Ended	6 Months Ended	12 Months Ended
ACQUISITIONS AND DISPOSITIONS (Details) $ in Thousands	Jul. 02, 2011 USD ($) a ft² item	Aug. 31, 2012 USD ($) ft²	May 31, 2012 USD ($) item	Jul. 31, 2011	Jun. 30, 2011 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Aug. 15, 2012 USD ($) ft²
Acquisitions
Percentage distribution of excess proceeds after repayment of outstanding debt and preferred return		70.00%
Millennium Woodlands Phase II, LLC.
Acquisitions
Number of units in Class A multi-family unit in The Woodlands Town Center to be constructed \| item			314
70 Columbia Corporate Center
Acquisitions
Area of real estate property acquired (in square foot) \| ft²										169,590
Purchase price										$ 17,500
Interest rate (as a percent)							4.25%
Percentage of appreciation in the market value of building		30.00%
Percentage of building leased at closing										23.70%
Area of building leased \| ft²		76,308
Percentage of occupancy after lease is executed										68.70%
Amount deposited in escrow account		$ 5,000
Percentage of cumulative preferred return after debt service on amount invested in property		10.00%
Original contributed equity										$ 5,000
Percentage distribution of excess proceeds after repayment of outstanding debt and preferred return		30.00%
The Woodlands
Acquisitions
Purchase price	$ 117,500
Total assets consolidated into financial statements at fair value as of the acquisition date	587,558
Total liabilities consolidated into financial statements at fair value as of the acquisition date	338,600
Portion of refinanced mortgage proceeds used to acquire partner's interest	$ 20,000
Percentage of economic interest acquired	47.50%
Percentage of legal interest acquired	57.50%
Existing economic interest (as a percent)					52.50%
Net book value of existing economic interest					$ 134,800
Area of unsold residential land acquired (in acres) \| a	1,324
Lots of unsold residential land acquired \| item	4,395
Area of unsold commercial land acquired (in acres) \| a	962
Number of Units Acquired in Real Estate Property \| item	865
Number of room resorts and conference centre \| item	440
Number of holes on the golf and country club aquired \| item	36
Area of office space acquired (in square feet) \| ft²	434,328
Area of retail and service space acquired (in square feet) \| ft²	203,282
Acquisition price represented by a non-interest bearing promissory note	$ 97,500
Estimated useful life				40 years
Assets acquired consolidated	587,558
Liabilities acquired consolidated	338,600
After-tax loss on the remeasurement relating to existing economic interest					$ 3,900
Amounts recorded for the assets acquired and liabilities assumed at the acquisition date
Master Planned Community Assets	267,251
Land	44,597
Buildings and Equipment	116,061
Investments in Real Estate Affiliates	36,764
Cash	25,492
Accounts receivable	7,548
Notes receivable	3,189
Municipal Utility District receivables	61,700
Other assets	24,956
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
Revenues and net losses included in the condensed consolidated statement of operations since the acquisition date
Revenues						$ 84,600
Net income (loss)						$ 500
Impact of increase in cost of sales on net loss								$ 6,100
Pro Forma Information
Total revenues								357,472	$ 294,310
Net income (loss) attributable to common shareholders								$ 157,520	$ (52,081)
Effective tax rate (as a percent)							36.00%
Millennium Waterway Apartments
Acquisitions
Interest rate (as a percent)			3.75%
Total assets consolidated into financial statements at fair value as of the acquisition date			$ 78,600
Total liabilities consolidated into financial statements at fair value as of the acquisition date			56,400
Portion of refinanced mortgage proceeds used to acquire partner's interest			6,900
Non-recourse mortgage assumed			$ 55,600
Term of debt instrument			10 years
Ownership interest (as a percent)			100.00%
Number of Units Acquired in Real Estate Property \| item			393
Assets acquired consolidated			$ 78,600
Liabilities acquired consolidated			56,400
Amounts recorded for the assets acquired and liabilities assumed at the acquisition date
Total assets			$ 78,600
Revenues and net losses included in the condensed consolidated statement of operations since the acquisition date
Revenues							$ 4,400
Net income (loss)							$ (1,300)

ACQUISITIONS AND DISPOSITIONS (Details 2) - Site in Pocatello, Idaho (Alameda Plaza) $ in Millions	1 Months Ended
	Jul. 31, 2012 USD ($) a ft²
Income Statement Balance Sheet and Additional Disclosures by Disposal Groups Including Discontinued Operations
Area of site sold (in acres) \| a	11.5
Area of vacant retail space sold (in square feet) \| ft²	104,705
Proceeds from sale of vacant retail space	$ 4.5
Net earnings recognized on the sale	$ 2.0

REAL ESTATE AFFILIATES (Details) $ in Thousands							1 Months Ended	12 Months Ended
REAL ESTATE AFFILIATES (Details) $ in Thousands	Oct. 30, 2012 USD ($)	Sep. 30, 2012	Sep. 17, 2012 USD ($) item	Jul. 05, 2012 USD ($) a	Jun. 14, 2012	Apr. 19, 2012 USD ($)	Oct. 31, 2011 item	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	May 31, 2012 USD ($)	May 14, 2012	Oct. 27, 2011	Oct. 11, 2011	Jun. 30, 2011
Investment in Real Estate Affiliates
Carrying Value								$ 32,179	$ 58,790
Share of Earnings								3,683	8,578	$ 9,413
Aggregate carrying value of unconsolidated VIEs								7,800	3,200
Amount funded in cash to joint venture								0
Share of distributable cash									1,429
Equity method investments
Investment in Real Estate Affiliates
Carrying Value								23,402	49,617
Share of Earnings								1,307	4,685	9,413
Other Investments
Investment in Real Estate Affiliates
Carrying Value								300
Cost basis investments
Investment in Real Estate Affiliates
Carrying Value								8,777	9,173
Share of Earnings								2,376	3,893
The Woodlands \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)															52.50%
Share of Earnings									$ 3,731	9,417
Bridges at Mint Hill, LLC
Investment in Real Estate Affiliates
Amount funded in cash to joint venture	$ 4,500
Economic interest (as a percent)	90.50%
Ownership percentage before acquiring additional interest	79.00%
Predevelopment costs								$ 800
Bridges at Mint Hill, LLC \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								90.50%	79.00%
Carrying Value									$ 180
Circle T
Investment in Real Estate Affiliates
Share of Earnings										(4)
Circle T \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								50.00%	50.00%
Carrying Value								$ 9,004	$ 9,004
Share of Earnings									$ (1)	$ (4)
Forest View Apartments \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								0.00%	50.00%
Carrying Value									$ 5,358
Share of Earnings								$ 2	$ 5
HHMK Development, LLC
Real Estate Affiliates
Number of local developers with whom the entity entered into a joint venture \| item							2
HHMK Development, LLC \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								50.00%	50.00%
Carrying Value								$ 1,257
Millennium Waterway Apartments
Investment in Real Estate Affiliates
Consideration for acquisition of partner's interest											$ 6,900
Millennium Waterway Apartments \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								100.00%	83.55%
Carrying Value									$ 21,998
Share of Earnings								$ 407	$ 682
Millennium Woodlands Phase II, LLC.
Investment in Real Estate Affiliates
Economic interest (as a percent)												81.40%
Area of land contributed to the joint venture (in acres) \| a				4.8
Value of the land contributed to joint venture				$ 15,500
Cash contributed by joint venture partner				3,000
Construction loan secured				$ 37,700
Millennium Woodlands Phase II, LLC. \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								81.43%
Carrying Value								$ 2,190
Parcel D Development, LLC \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								50.00%	50.00%
Carrying Value								$ 4,330	$ 2,990
Stewart Title \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								50.00%	50.00%
Carrying Value								$ 3,871	$ 3,643
Share of Earnings								$ 902	$ 204
Timbermill Apartments \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								0.00%	50.00%
Carrying Value									$ 3,988
Share of Earnings								$ 2
Woodlands Sarofim # 1 \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								20.00%	20.00%
Carrying Value								$ 2,450	$ 2,456
Share of Earnings								(6)	64
Forest View/Timbermill Apartments
Investment in Real Estate Affiliates
Share of distributable cash						$ 8,600
AlaMoana Condominium Development Joint Venture
Investment in Real Estate Affiliates
Economic interest (as a percent)														50.00%
Columbia Parcel D Joint Venture
Investment in Real Estate Affiliates
Economic interest (as a percent)													50.00%
Properties owned by real estate affiliates
Investment in Real Estate Affiliates
Secured debt								9,900
Share of the entity in secured debt								$ 3,900
The Woodlands
Investment in Real Estate Affiliates
Share of Earnings									$ 3,731
KR Holdings, LLC
Investment in Real Estate Affiliates
Ownership ratio in a joint venture					50.00%
Preferred return on capital (as a percent)		13.00%
Committed pre-development costs			$ 40,000
KR Holdings, LLC \| Equity method investments
Investment in Real Estate Affiliates
Economic ownership (as a percent)								50.00%
KR Holdings, LLC \| Mezzanine loan agreements
Investment in Real Estate Affiliates
Number of debt instruments \| item			2
Amount of borrowings			$ 20,000
Blended interest rate (as a percent)			12.00%
Option to extend, term		1 year
Committed pre-development costs			$ 3,000
Funded pre-development costs								$ 2,600
Non-interest bearing predevelopment costs								$ 2,000

IMPAIRMENT (Details) $ in Thousands	12 Months Ended
IMPAIRMENT (Details) $ in Thousands	Dec. 31, 2012 ft²	Dec. 31, 2011	Dec. 31, 2010 USD ($) item
IMPAIRMENT
Occupancy percentage of Park West property	68.20%	64.90%
Area of lease (in squarefeet) \| ft²	18,500
Increased occupancy percentage	75.60%
Impairment
Number of additional regions or projects for which additional provisions for impairment were not considered necessary \| item			4
Number of additional operating properties for which additional provisions for impairment were not considered necessary \| item			4
Impaired Asset, Total Loss			$ 503,356
Share of the entity in impairment charges recorded by real estate affiliates			$ 0
Discount rate			20.00%
Total Fair Value Measurement
Impairment
Impaired Asset			$ 291,639
Master Planned Communities
Impairment
Impairment charges on investment in real estate			405,331
Master Planned Communities \| Total Fair Value Measurement
Impairment
Impaired Asset			239,797
Master Planned Communities \| Maryland - Gateway
Impairment
Impairment charges on investment in real estate			2,613
Master Planned Communities \| Maryland - Gateway \| Total Fair Value Measurement
Impairment
Impaired Asset			1,649
Master Planned Communities \| Maryland - Columbia
Impairment
Impairment charges on investment in real estate			56,798
Master Planned Communities \| Maryland - Columbia \| Total Fair Value Measurement
Impairment
Impaired Asset			34,823
Master Planned Communities \| Summerlin South
Impairment
Impairment charges on investment in real estate			345,920
Master Planned Communities \| Summerlin South \| Total Fair Value Measurement
Impairment
Impaired Asset			203,325
Operating Assets
Impairment
Impairment charges on investment in real estate			80,923
Impairment charges for pre-development costs			514
Operating Assets \| Total Fair Value Measurement
Impairment
Impaired Asset			33,929
Operating Assets \| Landmark Mall
Impairment
Impairment charges on investment in real estate			24,434
Operating Assets \| Landmark Mall \| Total Fair Value Measurement
Impairment
Impaired Asset			23,750
Operating Assets \| Riverwalk Marketplace
Impairment
Impairment charges on investment in real estate			55,975
Operating Assets \| Riverwalk Marketplace \| Total Fair Value Measurement
Impairment
Impaired Asset			$ 10,179
Residual capitalization rate (as a percent)			8.50%
Strategic Developments
Impairment
Impairment charges on investment in real estate			$ 17,102
Impairment charges for pre-development costs			68
Strategic Developments \| Total Fair Value Measurement
Impairment
Impaired Asset			17,913
Strategic Developments \| Century Plaza Mall
Impairment
Impairment charges on investment in real estate			12,899
Strategic Developments \| Century Plaza Mall \| Total Fair Value Measurement
Impairment
Impaired Asset			4,500
Strategic Developments \| Nouvelle at Natick
Impairment
Impairment charges on investment in real estate			4,135
Strategic Developments \| Nouvelle at Natick \| Total Fair Value Measurement
Impairment
Impaired Asset			$ 13,413

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2012	Dec. 31, 2011
Liabilities
Warrants	$ 123,573	$ 127,764
Interest rate swaps	7,183	4,367
Recurring basis \| Total Fair Value Measurement
Liabilities
Warrants	123,573	127,764
Interest rate swaps	7,183	4,367
Recurring basis \| Significant Other Observable Inputs (Level 2)
Liabilities
Interest rate swaps	7,183	4,367
Recurring basis \| Significant Unobservable Inputs (Level 3)
Liabilities
Warrants	$ 123,573	$ 127,764

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3)
Settlements made in cash	$ 80,500
Issuance of warrants to purchase common stock (in shares)	1,525,272
Warrant Liability
Reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3)
Balance at the beginning of the period	$ 127,764	$ 227,348
Warrant liability loss (gain)	185,017	(101,584)	$ 140,900
Settlements	(189,208)
Purchases		2,000	86,448
Balance at the end of the period	$ 123,573	$ 127,764	$ 227,348
Warrant Liability \| Significant Unobservable Inputs (Level 3)
Reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3)
Expected Volatility (as a percent)	29.00%

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Debt
Fair value of emerged entity mortgage debt			$ 2,749
Total liabilities			$ 2,749
Discount rate			20.00%
Master Planned Communities
Assets:
Impairment Charges			$ 405,331
Master Planned Communities \| Maryland - Columbia
Assets:
Impairment Charges			56,798
Master Planned Communities \| Maryland - Gateway
Assets:
Impairment Charges			2,613
Master Planned Communities \| Summerlin South
Assets:
Impairment Charges			345,920
Operating Assets
Assets:
Impairment Charges			80,923
Operating Assets \| Landmark Mall
Assets:
Impairment Charges			24,434
Operating Assets \| Riverwalk Marketplace
Assets:
Impairment Charges			55,975
Strategic Developments
Assets:
Impairment Charges			17,102
Strategic Developments \| Century Plaza Mall
Assets:
Impairment Charges			12,899
Strategic Developments \| Nouvelle at Natick
Assets:
Impairment Charges			4,135
Total Fair Value Measurement
Assets:
Impaired Asset			291,639
Total Fair Value Measurement \| Master Planned Communities
Assets:
Impaired Asset			239,797
Total Fair Value Measurement \| Master Planned Communities \| Maryland - Columbia
Assets:
Impaired Asset			34,823
Total Fair Value Measurement \| Master Planned Communities \| Maryland - Gateway
Assets:
Impaired Asset			1,649
Total Fair Value Measurement \| Master Planned Communities \| Summerlin South
Assets:
Impaired Asset			203,325
Total Fair Value Measurement \| Operating Assets
Assets:
Impaired Asset			33,929
Total Fair Value Measurement \| Operating Assets \| Landmark Mall
Assets:
Impaired Asset			23,750
Total Fair Value Measurement \| Operating Assets \| Riverwalk Marketplace
Assets:
Impaired Asset			$ 10,179
Debt
Residual capitalization rate (as a percent)			8.50%
Total Fair Value Measurement \| Strategic Developments
Assets:
Impaired Asset			$ 17,913
Total Fair Value Measurement \| Strategic Developments \| Century Plaza Mall
Assets:
Impaired Asset			4,500
Total Fair Value Measurement \| Strategic Developments \| Nouvelle at Natick
Assets:
Impaired Asset			13,413
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Millennium Waterway Apartments
Debt
Percentage of economic interest acquired	23.50%
Non-recurring basis
Assets:
Investment in Real Estate Affiliates, Total Loss		$ 6,053
Impairment Charges			502,774
Non-recurring basis \| Master Planned Communities \| Maryland - Columbia
Assets:
Impairment Charges			56,798
Non-recurring basis \| Master Planned Communities \| Maryland - Gateway
Assets:
Impairment Charges			2,613
Non-recurring basis \| Master Planned Communities \| Summerlin South
Assets:
Impairment Charges			345,920
Non-recurring basis \| Operating Assets \| Landmark Mall
Assets:
Impairment Charges			24,434
Non-recurring basis \| Operating Assets \| Riverwalk Marketplace
Assets:
Impairment Charges			55,975
Non-recurring basis \| Strategic Developments \| Century Plaza Mall
Assets:
Impairment Charges			12,899
Non-recurring basis \| Strategic Developments \| Nouvelle at Natick
Assets:
Impairment Charges			4,135
Non-recurring basis \| Total Fair Value Measurement
Assets:
Investment in Real Estate Affiliates	$ 22,405	128,764
Impaired Asset			291,639
Debt
Fair value of emerged entity mortgage debt			65,753
Total liabilities			65,753
Non-recurring basis \| Total Fair Value Measurement \| Master Planned Communities \| Maryland - Columbia
Assets:
Impaired Asset			34,823
Non-recurring basis \| Total Fair Value Measurement \| Master Planned Communities \| Maryland - Gateway
Assets:
Impaired Asset			1,649
Non-recurring basis \| Total Fair Value Measurement \| Master Planned Communities \| Summerlin South
Assets:
Impaired Asset			203,325
Non-recurring basis \| Total Fair Value Measurement \| Operating Assets \| Landmark Mall
Assets:
Impaired Asset			23,750
Non-recurring basis \| Total Fair Value Measurement \| Operating Assets \| Riverwalk Marketplace
Assets:
Impaired Asset			10,179
Non-recurring basis \| Total Fair Value Measurement \| Strategic Developments \| Century Plaza Mall
Assets:
Impaired Asset			4,500
Non-recurring basis \| Total Fair Value Measurement \| Strategic Developments \| Nouvelle at Natick
Assets:
Impaired Asset			13,413
Non-recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Investment in Real Estate Affiliates	$ 22,405
Impaired Asset			291,639
Non-recurring basis \| Significant Unobservable Inputs (Level 3)
Assets:
Investment in Real Estate Affiliates		$ 128,764
Impaired Asset			291,639
Debt
Fair value of emerged entity mortgage debt			65,753
Total liabilities			65,753
Non-recurring basis \| Significant Unobservable Inputs (Level 3) \| Master Planned Communities \| Maryland - Columbia
Assets:
Impaired Asset			34,823
Non-recurring basis \| Significant Unobservable Inputs (Level 3) \| Master Planned Communities \| Maryland - Gateway
Assets:
Impaired Asset			1,649
Non-recurring basis \| Significant Unobservable Inputs (Level 3) \| Master Planned Communities \| Summerlin South
Assets:
Impaired Asset			203,325
Non-recurring basis \| Significant Unobservable Inputs (Level 3) \| Operating Assets \| Landmark Mall
Assets:
Impaired Asset			23,750
Non-recurring basis \| Significant Unobservable Inputs (Level 3) \| Operating Assets \| Riverwalk Marketplace
Assets:
Impaired Asset			10,179
Non-recurring basis \| Significant Unobservable Inputs (Level 3) \| Strategic Developments \| Century Plaza Mall
Assets:
Impaired Asset			4,500
Non-recurring basis \| Significant Unobservable Inputs (Level 3) \| Strategic Developments \| Nouvelle at Natick
Assets:
Impaired Asset			$ 13,413

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) - USD ($) $ in Thousands	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Liabilities
SID bonds	$ 2,868	$ 2,234
Total			$ 2,749
Variable-rate debt that has been swapped to a fixed rate	172,000
Carrying Amount
Assets:
Notes receivable, net	27,953	35,354
Tax indemnity receivable, including interest	319,622	331,771
Liabilities
Fixed-rate debt	158,636	83,164
Variable-rate debt	479,964	468,100
SID bonds	49,712	55,213
Total	688,312	606,477
Estimated Fair Value
Assets:
Notes receivable, net	27,953	35,354
Liabilities
Fixed-rate debt	158,879	85,047
Variable-rate debt	479,964	468,100
SID bonds	56,475	53,908
Total	$ 695,318	$ 607,055

MORTGAGES, NOTES AND LOANS PAYABLE (Details) - USD ($) $ in Thousands	Dec. 31, 2012	Dec. 31, 2011
Mortgages, notes and loans payable
Total mortgages, notes and loans payable	$ 688,312	$ 606,477
Long-term debt-principal payments
2013	28,722
2014	34,976
2015	129,170
2016	238,244
2017	35,054
Subsequent/Other	222,146
Total	688,312
Collateralized mortgages, notes and loans payable
Mortgages, notes and loans payable
Fixed-rate debt:	158,636	83,164
Variable-rate debt:	479,964	468,100
Special Improvement District bonds
Mortgages, notes and loans payable
Fixed-rate debt:	49,712	55,213
Total mortgages, notes and loans payable	$ 49,712	$ 55,213

MORTGAGES, NOTES AND LOANS PAYABLE (Details 2)								9 Months Ended	12 Months Ended
MORTGAGES, NOTES AND LOANS PAYABLE (Details 2)	Feb. 08, 2013 USD ($)	Sep. 17, 2012 USD ($)	Aug. 15, 2012 USD ($)	May 31, 2012 USD ($)	Apr. 30, 2012 USD ($)	Feb. 29, 2012 USD ($)	Dec. 31, 2011 USD ($)	Sep. 30, 2011 USD ($) item	Dec. 31, 2012 USD ($) a item	Dec. 31, 2011 USD ($)	Nov. 14, 2012 a	Feb. 02, 2012 ft² item
Mortgages, notes and loans payable
Total mortgages, notes and loans payable							$ 606,477,000		$ 688,312,000	$ 606,477,000
Outstanding principal balance of debt that is swapped to fixed rate through maturity									172,000,000
Repayments of mortgage debt from loan proceeds									$ 36,100,000
Pre-tax loss on early repayment of debt										$ (11,305,000)
Weighted average interest rate (as a percent)							4.68%		4.49%	4.68%
Corporate recourse guarantee amount									$ 7,000,000
Land, buildings and equipment and developments in progress pledged as collateral									1,500,000,000
Development Loan
Mortgages, notes and loans payable
Maximum Facility Amount									140,000,000
Special Improvement District bonds
Mortgages, notes and loans payable
Total mortgages, notes and loans payable							$ 55,213,000		$ 49,712,000	$ 55,213,000
SID Payable to Nevada Cancer Institute
Mortgages, notes and loans payable
Total mortgages, notes and loans payable							$ 50,000			$ 50,000
Weighted average interest rate (as a percent)							5.95%		5.95%	5.95%
110 N. Wacker
Mortgages, notes and loans payable
Interest rate (as a percent)							5.21%		5.21%	5.21%
Total mortgages, notes and loans payable							$ 29,000,000		$ 29,000,000	$ 29,000,000
Variable rate basis									one-month LIBOR
Interest rate margin (as a percent)									2.25%
Outstanding principal balance of debt that is swapped to fixed rate through maturity									$ 29,000,000
Fixed interest rate per swap (as a percent)									5.21%
Amount of borrowings				$ 29,000,000
Repayments of mortgage debt from loan proceeds									$ 28,200,000
Corporate recourse guarantee amount									7,000,000
Amount to which debt will amortize ratably through maturity following an interest-only period									$ 12,000,000
70 Columbia Corporate Center
Mortgages, notes and loans payable
Interest rate (as a percent)									4.25%
Total mortgages, notes and loans payable									$ 16,037,000
Amount of borrowings			$ 16,000,000
Hughes Landing
Mortgages, notes and loans payable
Interest rate (as a percent)									2.86%
Maximum Facility Amount									$ 38,000,000
Total mortgages, notes and loans payable									$ 10,000
Variable rate basis									LIBOR
Interest rate margin (as a percent)											2.65%
Area of site (in acres) \| a											200
Other Financing Arrangements
Mortgages, notes and loans payable
Total mortgages, notes and loans payable									$ 612,000
Bridgeland
Mortgages, notes and loans payable
Total mortgages, notes and loans payable							20,604,000		$ 18,066,000	20,604,000
Area of site (in acres) \| a									7,182
Bridgeland \| Minimum
Mortgages, notes and loans payable
Cash balance required to be maintained									$ 3,000,000
Net worth required to be maintained									$ 250,000,000
Bridgeland \| Land Loan
Mortgages, notes and loans payable
Interest rate (as a percent)									5.50%
Total mortgages, notes and loans payable									$ 18,066,000
Variable rate basis									three-month LIBOR
Interest rate margin (as a percent)									2.75%
Term of debt instrument									10 years
Period for which interest rate is fixed									5 years
Period for which interest rate is floating									5 years
Fixed interest rate (as a percent)									5.50%
Annual principal payments as a percentage of outstanding principal balance									5.00%
Period of real estate taxes and debt service required to be escrowed with the lender									1 year
Bridgeland \| Development Loan
Mortgages, notes and loans payable
Interest rate (as a percent)									5.00%
Maximum Facility Amount									$ 30,000,000
Variable rate basis									LIBOR
Interest rate margin (as a percent)									3.25%
Term of debt instrument									3 years
Interest rate (as a percent)									5.00%
Bridgeland \| Note # 1 - # 4
Mortgages, notes and loans payable
Total mortgages, notes and loans payable							$ 20,604,000			$ 20,604,000
Summerlin South \| S108
Mortgages, notes and loans payable
Interest rate (as a percent)							5.95%		5.95%	5.95%
Total mortgages, notes and loans payable							$ 1,302,000		$ 1,067,000	$ 1,302,000
Summerlin South \| S124
Mortgages, notes and loans payable
Interest rate (as a percent)							5.95%		5.95%	5.95%
Total mortgages, notes and loans payable							$ 378,000		$ 324,000	$ 378,000
Summerlin South \| S128
Mortgages, notes and loans payable
Interest rate (as a percent)							7.30%		7.30%	7.30%
Total mortgages, notes and loans payable							$ 862,000		$ 787,000	$ 862,000
Summerlin South \| S128C
Mortgages, notes and loans payable
Interest rate (as a percent)							6.05%		6.05%	6.05%
Total mortgages, notes and loans payable							$ 5,956,000		$ 5,739,000	$ 5,956,000
Summerlin South \| S132
Mortgages, notes and loans payable
Interest rate (as a percent)							6.00%		6.00%	6.00%
Total mortgages, notes and loans payable							$ 5,378,000		$ 4,822,000	$ 5,378,000
Summerlin South \| S151
Mortgages, notes and loans payable
Interest rate (as a percent)							6.00%		6.00%	6.00%
Total mortgages, notes and loans payable							$ 12,293,000		$ 10,501,000	$ 12,293,000
Summerlin South \| S808
Mortgages, notes and loans payable
Interest rate (as a percent)							5.71%		5.71%	5.71%
Total mortgages, notes and loans payable							$ 682,000			$ 682,000
Summerlin South \| S809
Mortgages, notes and loans payable
Interest rate (as a percent)							6.65%		6.65%	6.65%
Total mortgages, notes and loans payable							$ 1,000,000			$ 1,000,000
Summerlin South \| S810
Mortgages, notes and loans payable
Interest rate (as a percent)							7.13%		7.13%	7.13%
Total mortgages, notes and loans payable							$ 22,770,000		$ 22,185,000	$ 22,770,000
The Shops at Summerlin Centre \| S108
Mortgages, notes and loans payable
Interest rate (as a percent)							5.95%		5.95%	5.95%
Total mortgages, notes and loans payable							$ 713,000		$ 586,000	$ 713,000
The Shops at Summerlin Centre \| S128
Mortgages, notes and loans payable
Interest rate (as a percent)							6.05%		6.05%	6.05%
Total mortgages, notes and loans payable							$ 3,829,000		$ 3,701,000	$ 3,829,000
The Woodlands
Mortgages, notes and loans payable
Total mortgages, notes and loans payable							$ 281,660,000		$ 345,885,000	$ 281,660,000
The Woodlands \| TWL Facility
Mortgages, notes and loans payable
Interest rate (as a percent)							5.00%		5.00%	5.00%
Maximum Facility Amount									$ 270,000,000
Total mortgages, notes and loans payable							$ 183,000,000		$ 176,704,000	$ 183,000,000
Interest rate margin (as a percent)									4.00%
Extension period at borrower's option									1 year
Leverage expressed as loan to value ratio (as a percent)									28.30%
Undrawn and available borrowing capacity									$ 7,200,000
The Woodlands \| TWL Facility \| Maximum
Mortgages, notes and loans payable
Percentage of loan to value ratio at which debt will not be amortized on dollar for dollar basis for distributions made from The Woodlands									40.00%
The Woodlands \| TWL Facility \| March 29, 2013
Mortgages, notes and loans payable
Amount of future required repayments									$ 25,000,000
The Woodlands \| TWL Facility \| March 29, 2014
Mortgages, notes and loans payable
Amount of future required repayments									30,000,000
The Woodlands \| TWL Facility \| June 29, 2014
Mortgages, notes and loans payable
Amount of future required repayments									10,000,000
The Woodlands \| TWL Facility \| September 29, 2014
Mortgages, notes and loans payable
Amount of future required repayments									10,000,000
The Woodlands \| TWL Facility \| December 29, 2014
Mortgages, notes and loans payable
Amount of future required repayments									10,000,000
The Woodlands \| Term loan
Mortgages, notes and loans payable
Maximum Facility Amount									170,000,000
The Woodlands \| Revolving credit line
Mortgages, notes and loans payable
Maximum Facility Amount									$ 100,000,000
The Woodlands \| Capital lease obligation
Mortgages, notes and loans payable
Interest rate (as a percent)							2.84%		2.84%	2.84%
Total mortgages, notes and loans payable							$ 147,000		$ 41,000	$ 147,000
Resort and Conference Center
Mortgages, notes and loans payable
Interest rate (as a percent)							6.00%		6.00%	6.00%
Proceeds from non-recourse construction financing to redevelop the property									$ 95,000,000
Total mortgages, notes and loans payable	$ 95,000,000						$ 36,100,000		$ 36,100,000	$ 36,100,000
Number of extension options \| item									3
Area of land securing debt (in acres) \| a									40
Extension period at borrower's option									1 year
Number of rooms in property securing debt (in rooms) \| item									440
Option to extend, term									1 year
Amount of loan repaid from proceeds of a non-recourse construction financing to redevelop the property	$ 95,000,000
2201 Lake Woodlands Drive
Mortgages, notes and loans payable
Interest rate (as a percent)							5.25%		5.25%	5.25%
Total mortgages, notes and loans payable							$ 4,803,000			$ 4,803,000
Weiner Tract
Mortgages, notes and loans payable
Interest rate (as a percent)							6.25%		6.25%	6.25%
Total mortgages, notes and loans payable							$ 1,479,000			$ 1,479,000
Land in Montgomery Co.
Mortgages, notes and loans payable
Interest rate (as a percent)							6.00%		6.00%	6.00%
Total mortgages, notes and loans payable							$ 649,000			$ 649,000
Land in Harris Co.
Mortgages, notes and loans payable
Interest rate (as a percent)							6.00%		6.00%	6.00%
Total mortgages, notes and loans payable							$ 381,000			$ 381,000
CVS
Mortgages, notes and loans payable
Interest rate (as a percent)							3.25%		3.25%	3.25%
Total mortgages, notes and loans payable							$ 101,000			$ 101,000
4 Waterway
Mortgages, notes and loans payable
Interest rate (as a percent)							4.88%		4.88%	4.88%
Total mortgages, notes and loans payable							$ 41,000,000		$ 40,140,000	$ 41,000,000
Amount of borrowings							$ 41,000,000
9303 New Trails
Mortgages, notes and loans payable
Interest rate (as a percent)							4.88%		4.88%	4.88%
Total mortgages, notes and loans payable							$ 14,000,000		$ 13,706,000	$ 14,000,000
Amount of borrowings							$ 14,000,000
3 Waterway Square
Mortgages, notes and loans payable
Interest rate (as a percent)									2.86%
Maximum Facility Amount									$ 43,295,000
Total mortgages, notes and loans payable									$ 9,150,000
Variable rate basis						LIBOR			one-month LIBOR
Interest rate margin (as a percent)						2.65%			2.65%
Amount of borrowings						$ 43,300,000
Number of stories of building to be constructed with loan proceeds \| item												11
Area of office building to be constructed using proceeds from loan \| ft²												232,000
Number of extension options \| item									2
Extension period at borrower's option									1 year
20/25 Waterway
Mortgages, notes and loans payable
Interest rate (as a percent)							4.79%		4.79%	4.79%
Total mortgages, notes and loans payable									$ 14,450,000
Term of debt instrument					10 years
Fixed interest rate (as a percent)					4.79%				4.79%
Proceeds from the loan					$ 13,600,000
Millennium Waterway Apartments
Mortgages, notes and loans payable
Interest rate (as a percent)									3.75%
Total mortgages, notes and loans payable				$ 55,600,000					$ 55,584,000
Fixed interest rate (as a percent)									3.75%
Monthly principal and interest payment required									$ 257,418
Ward Centers
Mortgages, notes and loans payable
Interest rate (as a percent)									3.39%
Maximum Facility Amount								$ 250,000,000	$ 250,000,000
Total mortgages, notes and loans payable							$ 220,000,000		$ 229,000,000	$ 220,000,000
Variable rate basis								one-month LIBOR
Interest rate margin (as a percent)								2.50%
Outstanding principal balance of debt that is swapped to fixed rate through maturity								$ 143,000,000
Fixed interest rate per swap (as a percent)								3.80%
Amount of borrowings		$ 9,000,000
Proceeds from the loan								$ 212,500,000
Repayments of mortgage debt from loan proceeds								$ 208,700,000
Number of secured mortgages repaid \| item								3
Pre-tax loss on early repayment of debt								$ 11,300,000
Weighted average interest rate (as a percent)									3.39%
Unused portion of the debt instrument									$ 21,000,000
Ward Centers \| Minimum
Mortgages, notes and loans payable
Percentage of debt yield to draw additional loan proceeds									10.00%
Ward Centers \| Maximum
Mortgages, notes and loans payable
Loan to value ratio to draw additional loan proceeds (as a percent)									65.00%

INCOME TAXES (Details) $ in Thousands	12 Months Ended
INCOME TAXES (Details) $ in Thousands	Dec. 31, 2012 USD ($) item	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Oct. 20, 2011 item	May 06, 2011 USD ($) item
Provision for (benefit from) income taxes
Current	$ 2,439	$ 936	$ 2,658
Deferred taxes	4,448	(19,261)	(636,117)
Provision for (benefit from) income taxes	6,887	(18,325)	(633,459)
Reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes
Tax at statutory rate on earnings from continuing operations before income taxes	(42,490)	45,099	(245,942)
Increase (decrease) in valuation allowance, net	(32,172)	(13,110)	61,649
State income taxes, net of Federal income tax benefit	1,328	2,243	(7,969)
Tax at statutory rate on REIT entity earnings not subject to Federal income taxes	(3,087)	1,204	2,193
Tax expense (benefit) from change in rates, prior period adjustments and other permanent differences	13,908	(20,829)	(8,811)
Non-deductible warrant liability (gain) loss	65,311	(35,859)	49,315
Non-taxable interest income	(2,863)	(2,990)
Non-deductible restructuring costs			17,352
Tax benefit from tax related restructuring			(509,970)
Uncertain tax position expense, excluding interest	1,765	364	1,667
Uncertain tax position interest, net of Federal income tax benefit	5,187	5,553	7,057
Provision for (benefit from) income taxes	6,887	(18,325)	(633,459)
Net operating loss carryforwards				$ 31,643	$ 47,776
Additional Disclosures
Gross deferred tax assets				410,451	384,522
Gross deferred tax liabilities				386,080	403,212
Valuation allowance				101,518	57,276
Deferred tax assets previously believed to have had only a remote possibility of realization recorded in the current period				76,400
Tax effects of temporary differences and carry-forwards included in the net deferred tax liabilities
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities				291,845	226,097
Interest deduction carryforwards				86,963	110,649
Total deferred tax assets				410,451	384,522
Valuation allowance				(101,518)	(57,276)
Total net deferred tax assets				308,933	327,246
Property Associated with Master Planned Communities, primarily differences in the tax basis of land assets and treatment of interest and other costs				(172,914)	(189,147)
Deferred income				(213,166)	(214,065)
Total deferred tax liabilities				(386,080)	(403,212)
Net deferred tax liabilities				(77,147)	(75,966)
Reduction in tax indemnity receivable	$ 20,260
Reduction in tax indemnity receivable from prior periods				8,800
Number of consolidated entities elected to be taxed as a REIT \| item	1
Amount by which bases of Victoria Ward exceeds the tax bases				185,400
Unrecognized tax benefits, excluding interest	$ 95,917	101,408	120,816	95,917	101,408
Accrued interest related to unrecognized tax benefits				36,600
Increase in interest expense related to unrecognized tax benefits	8,200	8,500	10,900
Unrecognized tax benefits
Unrecognized tax benefits, opening balance	101,408	120,816	56,508
Gross increases - tax positions in prior period	841		69,168
Gross decreases - tax positions in prior periods	(6,332)	(19,408)	(4,860)
Unrecognized tax benefits, ending balance	$ 95,917	$ 101,408	$ 120,816
Unrecognized tax benefits, excluding accrued interest, which could significantly increase or decrease during the next twelve months				95,900
Federal
Reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes
Net operating loss carryforwards				59,107
Tax credit carryforwards - Federal AMT				2,323
State
Reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes
Net operating loss carryforwards				273,406
GGP
Tax effects of temporary differences and carry-forwards included in the net deferred tax liabilities
Deferred income				(213,200)	(214,100)
Uncertain tax position liability				132,500	129,900
Percentage of certain taxes indemnified by related party	93.75%
Amount of combined deficiencies determined by the IRS sought to be overturned by the petition filed							$ 144,100
Number of former taxable REIT subsidiaries subject to litigation for which motion is filed to consolidate cases \| item						2	2
Unrecognized tax benefits
Amount of interest income receivable on the Tax Indemnity receivable				$ 36,400	$ 28,000
GGP \| Maximum
Tax effects of temporary differences and carry-forwards included in the net deferred tax liabilities
Amount of certain taxes indemnified by related party	$ 303,800

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
COMMITMENTS AND CONTINGENCIES.
Amount of outstanding letters of credit and surety bonds	$ 49,300	$ 41,600
Contractual rental expense, including participation rent	5,400	$ 5,200	$ 3,500
Mortgages, notes and loans payable
2013	28,722
2014	34,976
2015	129,170
2016	238,244
2017	35,054
Subsequent/Other	222,146
Total	688,312
Ground lease payments
2013	5,836
2014	5,649
2015	5,538
2016	5,240
2017	4,613
Subsequent/Other	178,586
Total	205,462
Uncertainty in income taxes, including interest
Subsequent/Other	132,492
Total	132,492
Total
2013	34,558
2014	40,625
2015	134,708
2016	243,484
2017	39,667
Subsequent/Other	533,224
Total	$ 1,026,266

COMMITMENTS AND CONTINGENCIES (Details 2) - USD ($)	Jun. 29, 2012	Dec. 31, 2012
Commitments
Esplanade maintenance costs agreed to be paid		$ 1,026,266,000
Non binding letter of intent with New York City Economic Authority
Commitments
Annual ground rent	$ 1,200,000
Annual escalation rate (as a percent)	3.00%
Rent credit to be received	$ 1,500,000
Maximum period for rent credit	30 months
Esplanade maintenance costs agreed to be paid	$ 1,100,000
Period during which esplanade maintenance costs are agreed to be paid	5 years
Initial esplanade payments	$ 210,000

The increases or decreases in lease payments that result from changes occurring after the inception of the lease in the factors (other than the passage of time) on which lease payments are based, except that any escalation of minimum lease payments relating to increases in construction or acquisition cost of the leased property or for increases in some measure of cost or value during the construction or preconstruction period, are excluded from contingent rentals. Contingent rentals also may include amounts for which the triggering events have not yet occurred or the specified targets for which have not yet been achieved (such as sales based percentage rent), but which events are considered probable of occurring or which specified targets are considered probable of being achieved.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6453985&loc=d3e41499-112717

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-SubTopic 10
-Section 55
-Paragraph 40
-Subparagraph (Note 3)
-URI http://asc.fasb.org/extlink&oid=6584154&loc=d3e38371-112697

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Contingent Rentals
-URI http://asc.fasb.org/extlink&oid=6508509

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-SubTopic 10
-Section 25
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=7579899&loc=d3e35050-112683

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-SubTopic 10
-Section 40
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6452616&loc=d3e36728-112689

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6452660&loc=d3e36991-112694

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 98-9
-Paragraph 17
-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 13
-Paragraph 16
-Subparagraph c
-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 FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 13
-Paragraph 106, 122
-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.

This element represents the payments that the lessee is obligated to make or can be required to make in connection with a property under the terms of an agreement classified as an operating lease, excluding contingent rentals and a guarantee by the lessee of the lessor's debt and the lessee's obligation to pay (apart from the rental payments) executory costs such as insurance, maintenance, and taxes.