View Filing Data

Capitalized swap interest

$ (73,695)

$ (127,543)

$ 148,470

Other comprehensive income (loss):

Interest rate swaps

^[1]

2,542

(2,770)

(3,351)

^[2]

(1,189)

(1,227)

(600)

Other comprehensive income (loss)

1,353

(3,997)

(3,951)

Comprehensive income (loss)

(72,342)

(131,540)

144,519

Comprehensive income attributable to noncontrolling interests

(95)

(745)

(1,290)

Comprehensive income (loss) attributable to common stockholders

$ (72,437)

$ (132,285)

$ 143,229

[1]	Net of deferred tax expense of $0.5 million, and deferred tax benefit of $0.1 million, and $0.1 million for the years ended December 31, 2013, 2012 and 2011, respectively.
[2]	Net of deferred tax benefit of $0.6 million, $0.7 million, and $0.4 million for the years ended December 31, 2013, 2012 and 2011, respectively.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Interest rate swaps, deferred tax expense (benefit)	$ 0.5	$ (0.1)	$ (0.1)
Capitalized swap interest, deferred tax benefit	$ 0.6	$ 0.7	$ 0.4

CONSOLIDATED STATEMENTS OF EQUITY - USD ($)
$ in Thousands

Total

Common Stock

Additional Paid-In Capital

Accumulated Deficit

Accumulated Other Comprehensive Income (Loss)

Noncontrolling Interests

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 $(486), $55 and $1,016 for the year ended December 2013, 2012 and 2011, respectively

(3,351)

^[1]

(3,351)

Capitalized swap interest, net of tax $635, $724 and $358 for the year ended December 2013, 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 $(486), $55 and $1,016 for the year ended December 2013, 2012 and 2011, respectively

(127,543)

(128,288)

745

(2,770)

^[1]

(2,770)

Capitalized swap interest, net of tax $635, $724 and $358 for the year ended December 2013, 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

Increase (Decrease) in Stockholders' Equity

Adjustment to noncontrolling interests

(73,695)

(73,790)

720

Preferred dividend payment on behalf of subsidiary

(12)

Interest rate swaps, net of tax $(486), $55 and $1,016 for the year ended December 2013, 2012 and 2011, respectively

2,542

^[1]

2,542

Capitalized swap interest, net of tax $635, $724 and $358 for the year ended December 2013, 2012 and 2011, respectively

(1,189)

^[2]

(1,189)

Stock plan activity

5,783

$ 1

5,782

Stock plan activity (in shares)

77,432

Balance at Dec. 31, 2013

$ 2,245,146

$ 396

$ 2,829,813

$ (583,403)

$ (8,222)

$ 6,562

Balance (in shares) at Dec. 31, 2013

39,576,344

[1]	Net of deferred tax expense of $0.5 million, and deferred tax benefit of $0.1 million, and $0.1 million for the years ended December 31, 2013, 2012 and 2011, respectively.
[2]	Net of deferred tax benefit of $0.6 million, $0.7 million, and $0.4 million for the years ended December 31, 2013, 2012 and 2011, respectively.

CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF EQUITY
Interest rate swaps, tax	$ (486)	$ 55	$ 1,016
Capitalized swap interest, tax	$ 635	$ 724	$ 358

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

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Cash Flows from Operating Activities:

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

$ (73,695)

$ (127,543)

$ 148,470

Depreciation

29,637

19,455

14,012

Amortization

4,208

4,974

2,770

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

2,952

1,418

1,771

Amortization of intangibles other than in-place leases

213

297

Straight-line rent amortization

(3,652)

(757)

(1,060)

Deferred income taxes

8,352

4,448

(19,200)

Gain on disposal of investment in Real Estate Affiliate

(8,483)

Restricted stock and stock option amortization

5,782

4,277

3,073

Warrant liability gain (loss)

181,987

185,017

(101,584)

Reduction in tax indemnity receivable

1,206

20,260

Equity in earnings from Real Estate Affiliates, net of distributions

(7,121)

(35)

(4,410)

Investment in Real Estate Affiliate basis adjustment

6,053

Provision for doubtful accounts

836

1,224

(235)

Master Planned Community land acquisitions

(5,667)

Master Planned Community development expenditures

(133,590)

(107,144)

(90,078)

Master Planned Community cost of sales

112,695

87,499

65,379

Condominium development expenditures

(21,213)

Condominium and other cost of sales

16,572

14,465

Deferred revenue from sale of condominium rights

14,531

Net changes*:

Accounts and notes receivable

^[1]

3,857

43,460

27,500

Prepaid expenses and other assets

^[1]

(1,591)

4,110

2,036

Deferred expenses

^[1]

(19,364)

(1,995)

404

Accounts payable and accrued expenses

^[1]

20,333

15,112

19,502

Other

^[1]

547

(908)

(2,657)

Cash provided by operating activities

^[1]

129,332

153,064

86,508

Property and equipment expenditures

(31,768)

(1,226)

(690)

Operating property improvements, net

(17,231)

(14,201)

(8,498)

Operating property redevelopments

(221,071)

(58,940)

(35,192)

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

13,270

8,579

Proceeds from sales of operating assets

10,814

Change in restricted cash

(17,204)

(15,164)

(7,782)

Cash used in investing activities

(294,325)

(81,349)

(39,680)

Cash Flows from Financing Activities:

Proceeds from issuance of mortgages, notes and loans payable

1,120,102

68,410

304,911

Principal payments on mortgages, notes and loans payable

(279,721)

(55,832)

(407,027)

Deferred financing costs

(6,594)

(2,114)

(3,828)

Preferred dividend payment on behalf of REIT subsidiary

(12)

Distributions to noncontrolling interests

(3,031)

Proceeds from issuance of Management warrants

2,000

Purchase of Sponsors Warrants

(80,548)

Cash provided by (used in) financing activities

830,744

(70,084)

(103,944)

Net change in cash and cash equivalents

665,751

1,631

(57,116)

Cash and cash equivalents at beginning of year

229,197

227,566

284,682

Cash and cash equivalents at end of year

894,948

229,197

227,566

Supplemental Disclosure of Cash Flow Information:

Interest paid

30,600

28,857

22,158

Interest capitalized

37,470

27,571

24,062

Income taxes paid

2,268

1,202

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

14,376

(3,033)

(4,430)

Real Estate and property expenditures

85,609

8,384

MPC Land contributed to Real Estate Affiliate

2,190

2,990

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

Non-cash increase in property due to consolidation of real estate affiliate

3,750

Transfer of condominium buyer deposits to real estate affiliate

34,220

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

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

The Woodlands

Reduction in investments in Real Estate Affiliates due to the acquisition

$ (128,764)

Other real estate affiliates, net

Investment in Real Estate Affiliates, net

(4,035)

$ (4,552)

KR Holdings, LLC

Investment in Real Estate Affiliates, net

(16,750)

Summerlin Las Vegas Baseball Club

Investment in Real Estate Affiliates, net

$ (10,350)

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

ORGANIZATION	12 Months Ended
ORGANIZATION	Dec. 31, 2013
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 specialize in the development of master planned communities and the ownership, management and 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. 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.

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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements for the years ended December 31, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), with all intercompany balances eliminated. Certain amounts in 2012 have been reclassified to conform to 2013 presentation. The presentation includes the accounts of the Company, and those entities in which we have a controlling financial interest. The noncontrolling equity holders' share of the assets, liabilities and operations are reflected in noncontrolling interests within permanent equity. The company consolidates certain variable interest entities ("VIEs") in accordance with Accounting Standards Codification ("ASC") 810 ("ASC 810") Consolidations (see "Real Estate Affiliates" below).

We account for investments in joint ventures where we own a non-controlling 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. For cost method investments, we recognize earnings to the extent of distributions received from such investments.

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.

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. 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.

On August 22, 2013, in conjunction with the Hawaii Community Development Authority's unanimous approval for two mixed-use towers at Ward Village, we reevaluated the useful lives of the existing buildings and improvements located on the sites where this future development will take place. As a result, we recognized an additional $1.2 million in depreciation due to the change in useful life of these buildings and improvements.

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, 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

Development 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.

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. Demolition costs associated with these redevelopments are expensed as incurred.

Our Developments are made up of the following categories:

	December 31,

	2013		2012
	(In thousands)
Land & improvements	$	194,282	$	172,614
Development costs		293,874		78,198
Condominium rights		—		22,801


Total Developments	$	488,156	$	273,613

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 which are referred to as "Real Estate Affiliates". 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 generally proportionate to the ownership interest. We evaluate these partnerships and joint ventures for consolidation in accordance with ASC 810 Consolidations.

In accordance with ASC 810, 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. Under ASC 810, a company concludes that it is the primary beneficiary and consolidates the VIE if the company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining if the company is the primary beneficiary. As required by ASC 810, management's assessment of whether the company is the primary beneficiary of a VIE is continuously performed.

We account for VIEs for which we are not considered to be the primary beneficiary, but have significant influence, using the equity method and investments in VIEs where we do not have significant influence on the joint venture's operating and financial policies using the cost method.

Acquisitions of Properties

We account for business combinations in accordance with ASC 805 ("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.

Impairment

GAAP 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), 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 development 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, significant decreases in comparable property sale prices and feasibility.

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 Real Estate Affiliate 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 underlying assets of the Real Estate Affiliates' land held for development and sale and developments owned by such Real Estate Affiliates, 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 development expenditures in our Consolidated Statements of Cash Flows.

Rental Revenue

Revenue associated with our operating assets includes minimum rent, percentage rent in lieu of fixed minimum rent, tenant recoveries and overage rent.

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 is included in minimum rents in our consolidated financial statements. Minimum rent revenues also include amortization related to above and below-market tenant leases on acquired properties.

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.

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.

Condominium Rights and Unit Sales

Revenue recognition for individual units in a condominium project are accounted for under the percentage of completion method when the following criteria are met: a) construction is beyond a preliminary stage; b) buyer is unable to require a refund of its deposit, except for non-delivery of the unit; c) sufficient units are sold to assure that it will not revert to a rental property; d) sales prices are collectible; and e) aggregate sales proceeds and costs can be reasonably estimated. Those units that don't meet the criteria use the full accrual method or deposit method.

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.

Other Income

Other income for the year ended December 31, 2013 includes $12.2 million from the gain on insurance recoveries related to casualty losses at South Street Seaport from Superstorm Sandy, $4.5 million from a legal settlement at Riverwalk, a gain of $8.5 million from our sale of Head Acquisition, LP, and $0.6 million from our sale of Rio West.

Accounts Receivable

Accounts receivable includes tenant and other receivables, and straight-line rent receivables.

Straight-line rent receivables represent rental revenues recognized in excess of amounts currently due under lease agreements. Such amounts totaling $10.2 million as of December 31, 2013 and $6.9 million as of December 31, 2012, are included in Accounts receivable, net in our Consolidated Balance Sheets.

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. Management exercises judgment in establishing these allowances and considers payment history, current credit status and if the tenant is 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 against our accounts receivables:

	2013			2012			2011

	(In thousands)
Balance as of January 1	$	8,914		$	8,496		$	10,966
Change in provision *		2,008			1,224			(235	)
Write-offs		(3,532	)		(806	)		(2,235	)


Balance as of December 31	$	7,390		$	8,914		$	8,496

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. 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. MUD receivables are pledged as security to creditors under the Bridgeland and TWL facilities. MUD receivables are shown net of an allowance of $5.3 million as of both December 31, 2013 and 2012, in the accompanying Consolidated Balance Sheets.

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 $13.2 million and $19.3 million as of December 31, 2013 and 2012, 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 $0.4 million as of December 31, 2013 and $0.8 million as of December 31, 2012.

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 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 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 $36.6 million and $12.9 million as of December 31, 2013 and 2012, respectively.

Warrants

The valuation of our Sponsors and Management warrants require significant judgment and complex valuation. The fair values were estimated using an option pricing model and Level 3 inputs due to the unavailability of comparable market data, as further discussed in Note 7 – Fair Value of Financial Instruments. 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 Statements of Operations.

Stock Plans

We apply the provisions of ASC 718 ("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.

Information related to our EPS calculations is summarized as follows:

	Years Ended December 31,

	2013			2012			2011
	(In thousands, except per share amounts)
Basic EPS:
Numerator:
Net income (loss)	$	(73,695	)	$	(127,543	)	$	148,470
Net income attributable to noncontrolling interests		(95	)		(745	)		(1,290	)


Net income (loss) attributable to common stockholders	$	(73,790	)	$	(128,288	)	$	147,180




Denominator:
Weighted average number of common shares outstanding		39,449			38,127			37,908




Diluted EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	(73,790	)	$	(128,288	)	$	147,180
Less: Warrant liability gain		—			—			(101,584	)


Adjusted net income (loss) available to common stockholders	$	(73,790	)	$	(128,288	)	$	45,596




Denominator:
Weighted average number of common shares outstanding		39,449			38,127			37,908
Warrants		—			—			1,074


Weighted average diluted common shares oustanding		39,449			38,127			38,982




Basic earnings (loss) per share	$	(1.87	)	$	(3.36	)	$	3.88
Diluted earnings (loss) per share	$	(1.87	)	$	(3.36	)	$	1.17

The diluted EPS computations as of December 31, 2013 exclude 965,440 stock options, 122,334 shares of restricted stock, 1,916,667 shares of common stock underlying the Sponsor 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 861,940, restricted stock of 57,933, 1,916,667 shares of common stock underlying the Sponsor Warrants, and 2,862,687 shares of common stock underlying the Management Warrants were not included in the computation of diluted EPS above as of December 31, 2012 because their inclusion would have been anti-dilutive.

Additionally, stock options of 715,137 and restricted stock of 42,553 were not included in the computation of diluted EPS above as of December 31, 2011 because their inclusion would have been anti-dilutive.

Recently Issued Accounting Pronouncements

We have implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

SPONSORS AND MANAGEMENT WARRANTS	12 Months Ended
SPONSORS AND MANAGEMENT WARRANTS	Dec. 31, 2013
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 our sponsors (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 and the number of shares of common stock underlying each warrant are subject to adjustment for future stock dividends, splits or reverse splits of our common stock or certain other events. On December 7, 2012, the affiliates of Blackstone Real Estate Partners and the Fairholme Fund and the Fairholme Focused Income Fund, each sold their portion of the Sponsors 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, affiliates of 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. In November 2010 and February 2011, we entered into certain 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, to purchase shares of our common stock. The Management Warrants representing 2,862,687 underlying shares, which may be adjusted pursuant to a net settlement option, were issued pursuant to such agreements at fair value in exchange for a combined total of approximately $19.0 million in cash from such executives at the commencement of their respective employment. Mr. Weinreb and Mr. Herlitz's warrants have exercise prices of $42.23 per share and Mr. Richardson's warrant has an exercise price of $54.50 per share. Generally, the Management Warrants become exercisable in November 2016 and expire in February 2018. The estimated $141.8 million fair value for the Sponsors Warrants representing warrants to purchase 1,916,667 shares and estimated $163.8 million fair value for the Management Warrants representing warrants to purchase 2,862,687 shares outstanding as of December 31, 2013, 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 $58.5 million and $65.1 million, respectively, as of December 31, 2012. The fair values were estimated using an option pricing model and Level 3 inputs due to the unavailability of comparable market data, as further discussed in Note 7 – Fair Value of Financial Instruments. 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 Statements of Operations.

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

ACQUISITIONS AND DISPOSITIONS

ACQUISITIONS AND DISPOSITIONS

12 Months Ended

Dec. 31, 2013

ACQUISITIONS AND DISPOSITIONS

NOTE 4 ACQUISITIONS AND DISPOSITIONS

On September 30, 2013, we sold the Rio West Mall, a 521,194 square foot shopping center on 50 acres of land, located in Gallup, New Mexico for $12.0 million. The sale includes our ground lease interest, all buildings, structures and improvements, machinery, equipment and furnishings, and all leases and security deposits. The pre-tax gain recognized on the sale was $0.6 million.

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%. 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 Columbia Office Properties 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 profit 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 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 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 18 – 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 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 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 year ended December 31, 2011 was prepared as if The Woodlands acquisition had occurred as of the beginning of such period:

	Year Ended December 31, 2011

	(In thousands)
Total revenues	$	357,472
Net income (loss)		157,520

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, 2013

REAL ESTATE AFFILIATES

REAL ESTATE AFFILIATES

NOTE 5 REAL ESTATE AFFILIATES

Our investment in real estate affiliates which are reported on the equity and cost methods are as follows:

	Economic/ Legal Ownership						Carrying Value				Share of Earnings/Dividends

	December 31,						December 31,				December 31,
	2013			2012			2013		2012		2013			2012			2011
	(In percentages)						(In thousands)				(In thousands)
Equity Method Investments:
Circle T Ranch and Power Center		50.00	%		50.00	%	$	9,004	$	9,004	$	—		$	—		$	(1	)
Forest View /Timbermill Apartments (a)		—			—			—		—		—			4			5
HHMK Development, LLC (d)		50.00	%		50.00	%		13		1,257		732			—			—
KR Holdings, LLC (d)		50.00	%		50.00	%		19,764		—		9,877			—			—
Millennium Waterway Apartments (c)		100.00	%		100.00	%		—		—		—			407			682
Millennium Woodlands Phase II, LLC (d)		81.43	%		81.43	%		2,174		2,190		(74	)		—			—
Parcel C (d)		50.00	%		—			5,801		—		—			—			—
Stewart Title		50.00	%		50.00	%		3,843		3,871		1,223			902			204
Summerlin Las Vegas Baseball Club (d)		50.00	%		—			10,636		300		(13	)		—			—
The Metropolitan Downtown Columbia Project (b)		50.00	%		50.00	%		3,461		4,330		—			—			—
The Woodlands (e)		100.00	%		100.00	%		—		—		—			—			3,731
Woodlands Sarofim #1		20.00	%		20.00	%		2,579		2,450		180			(6	)		64


								57,275		23,402		11,925			1,307			4,685
Cost basis investments (g)								3,746		8,777		2,503	(f)		2,376	(f)		3,893	(f)


Investment in Real Estate Affiliates							$	61,021	$	32,179	$	14,428		$	3,683		$	8,578

(a): 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.
(b): These entities were previously considered VIEs, whose reassessment in 2013 caused them to no longer be considered VIEs. Please refer to discussion in section following the table.
(c): On May 31, 2012, we acquired our partner's interest for $6.9 million and consolidated this property.
(d): Equity method VIEs.
(e): 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.
(f): Includes distribution received from Summerlin Hospital Medical Center.
(g): The lower carrying value as of December 31, 2013 is attributable to the sale of our interest in Head Acquisition, LP (Hexalon) on October 30, 2013 that resulted in a gain of approximately $8.5 million.

Millennium Woodlands Phase II, LLC, Parcel C, KR Holdings, HHMK Development, LLC, and Summerlin Las Vegas Baseball Club entities included in the table above are VIEs. We are not the primary beneficiary of any of these VIEs because we do not have the power to direct activities that most significantly impact the economic performance of such joint ventures and therefore we report our interests on the equity method. 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 or otherwise made firm commitments to fund amounts on behalf of these VIEs. The aggregate carrying value of the unconsolidated VIEs were $38.4 million and $7.8 million as of December 31, 2013 and 2012, respectively, and was classified as Investments in Real Estate Affiliates in the Consolidated Balance Sheets. As of December 31, 2013, approximately $69.2 million of indebtedness was secured by the properties owned by our Real Estate Affiliates of which our share was approximately $39.0 million based upon our economic ownership. All of this debt is without recourse to us.

As of December 31, 2013, the Company determined that it was the primary beneficiary of two VIEs. The creditors of the consolidated VIEs do not have recourse to the Company's general credit. As of December 31, 2013, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $31.7 million and $0.8 million, respectively. As of December 31, 2012, the carrying values of the assets and liabilities associated with operations of the consolidated VIEs were $28.3 million and $1.0 million, respectively. The assets of the VIEs are restricted for use only by the particular VIEs and are not available for our general operations.

Our recent and more significant investments in Real Estate Affiliates and the related accounting considerations are described below.

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 attained the ability to direct the significant economic activities of the entity; therefore, we began consolidating this joint venture in the fourth quarter of 2012.

Parcel C

On October 4, 2013, we entered into a joint venture agreement with Kettler, Inc., to construct a 437 unit, Class A apartment building with 31,000 square feet of ground floor retail on Parcel C in downtown Columbia, MD. We contributed approximately five acres of land having an approximate book value of $4.0 million to the joint venture. The transaction values our land at $23.4 million or $53,500 per constructed unit. When the venture closes on the construction loan and upon completion of certain other conditions, including obtaining completed site development and construction plans and an approved project budget, our partner will be required to contribute cash to the venture.

ONE Ala Moana Condominium Project

On October 11, 2011, we and an entity jointly owned by two local development partners formed a joint venture called HHMK Development, LLC ("HHMK Development") to explore the development of a luxury condominium tower at the Ala Moana Center in Honolulu, Hawaii. On June 14, 2012, we formed another 50/50 joint venture, KR Holdings, with the same partner. We own 50% of each venture and our partners jointly own the remaining 50%.

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%, were drawn in full on May 15, 2013 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 both have profit interests in KR Holdings, which entitles them to receive a share of the profits, up to a maximum of $3.0 million, after a return of, and a 13.0% preferred return on, our capital.

KR Holdings closed the first mortgage construction loan on May 15, 2013. Upon closing and under the terms of the venture agreement, we sold to KR Holdings our interest in the condominium rights for net cash proceeds of $30.8 million and a 50% equity interest in KR Holdings. Our partner contributed $16.8 million of cash for their 50% equity interest.

The construction loan will be drawn over the course of construction with the total proceeds not to exceed $132.0 million. The loan is secured by the condominium rights and buyers' deposits, has no recourse to us, matures on May 15, 2016, and bears interest at one-month LIBOR plus 3.00%. KR Holdings summarized financial information as of December 31, 2013 includes total assets of $189.0 million, total liabilities of $135.7 million, revenues of $131.2 million and net income of $19.7 million. The venture uses the percentage of completion method to recognize earnings and we recorded $9.9 million in equity in earnings from Real Estate Affiliates related to KR Holdings in the Consolidated Statement of Operations for the year ended December 31, 2013. Our investment balance includes deferred profit of $6.9 million related to the partial sale of land to the joint venture which is being recognized on the same percentage of completion basis as KR Holdings.

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 Dinerstein Companies, the same joint venture partner in the Millennium Waterway Apartments I project, for the construction of a new 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. 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 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.

Summerlin Las Vegas Baseball Club

On August 6, 2012, we entered into a joint venture for the purpose of acquiring 100% of the operating assets of the Las Vegas 51s, a Triple-A baseball team which is a member of the Pacific Coast League. We own 50% of the venture and our partners jointly own the remaining 50%. Unanimous consent of the partners is required for all major decisions. In August 2012, we contributed $0.3 million to the joint venture pending final approval of the acquisition by Major League Baseball. In May 2013, after approval was received, we funded our remaining capital obligation of $10.2 million and the joint venture completed the acquisition of the baseball team. Our strategy in acquiring an ownership interest is to pursue a potential relocation of the team to a to-be-built stadium in our Summerlin master planned community. There can be no assurance that such a stadium will ultimately be built.

The Metropolitan Downtown Columbia Project

On October 27, 2011, we entered into a joint venture, Parcel D Development, LLC ("Parcel D"), with a local developer, Kettler, Inc., to construct a Class A apartment building with ground floor retail space in downtown Columbia, Maryland. We and our partner each own 50% of the venture, and unanimous consent of the partners is required for all major decisions. On July 11, 2013, the joint venture closed a $64.1 million construction loan which is non-recourse to us. The loan bears interest at one-month LIBOR plus 2.4% and matures in July 2020. At loan closing, our land contribution was valued at $53,500 per unit, or $20.3 million, and Kettler contributed $13.3 million in cash, of which $7.0 million was distributed to us. Both we and Kettler are required to each make future contributions of $3.1 million to the joint venture in accordance with the loan agreement, thus increasing our total capital account to $16.4 million. This transaction was accounted for as a partial sale of the land for which we recognized a net profit of $0.7 million. As of December 31, 2013, we have contributed the $3.1 million to the joint venture.

Upon formation of the joint venture, we determined that Parcel D was a VIE, and that we were not the primary beneficiary. Accordingly, we accounted for our investment in Parcel D using the equity method. Upon closing of the first mortgage construction loan, the entity was recapitalized resulting in a reconsideration of the initial determination of VIE status. As of a result of the reconsideration, we determined that Parcel D was no longer considered a VIE. We still account for our investment in Parcel D using the equity method.

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

IMPAIRMENT	12 Months Ended
IMPAIRMENT	Dec. 31, 2013
IMPAIRMENT
IMPAIRMENT	NOTE 6 IMPAIRMENT There were no impairment charges for the years ended December 31, 2013, 2012 and 2011. We continually evaluate our strategic alternatives with respect to each of our properties and may revise our strategy from time to time, including our intent to hold the asset on a long-term basis or the timing of potential asset dispositions. For example, we may decide to sell property that is held for use and the sale price may be less than the carrying amount. As a result, changes in strategy could result in impairment charges in future periods. No provisions for impairment were recorded for the years ended December 31, 2013, 2012 and 2011 related to our investments in Real Estate Affiliates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2013

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 ("ASC 820") Fair Value Measurement, our assets and liabilities that are measured at fair value on a recurring basis.

	December 31, 2013								December 31, 2012

			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	$	305,560	$	—	$	—	$	305,560	$	123,573	$	—	$	—	$	123,573
Interest rate swaps	$	4,164	$	—	$	4,164	$	—	$	7,183	$	—	$	7,183	$	—

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,

	2013		2012			2011
	(In thousands)
Beginning of year	$	123,573	$	127,764		$	227,348
Warrant liability loss (gain) (a)		181,987		185,017			(101,584	)
Settlements (b)		—		(189,208	)		—
Purchases		—		—			2,000


End of year	$	305,560	$	123,573		$	127,764

(a): The unrealized losses during 2013 and 2012 related to the Sponsors and Management warrants held as of December 31, 2013 and 2012, of $182.0 million and $73.8 million, respectively. The gain for 2011 was also 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, 2013 is as follows:

	Fair Value		Valuation Technique	Unobservable Input

	(In thousands)
Warrants	$	305,560	Option Pricing Valuation Model	Expected Volatility (a)	32.9	%

(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 Investment in Real Estate Affiliates related to the fair value based on purchases of our previously held equity investments.

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	$	—	$	—	$	—

(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.

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

	December 31, 2013					December 31, 2012

	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(In thousands)
Assets:
Notes receivable, net	$	20,554	$	20,554		$	27,953	$	27,953
Tax indemnity receivable, including interest		320,494		(a	)		319,622		(a	)
Liabilities:
Fixed-rate debt	$	971,786	$	1,012,461		$	158,636	$	158,879
Variable-rate debt (b)		509,737		509,737			479,964		479,964
SID bonds		33,100		32,837			49,712		56,475


Total mortgages, notes and loans payable	$	1,514,623	$	1,555,035		$	688,312	$	695,318

(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, not including our Senior Notes, 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 fair value of our Senior Notes in the table above was estimated based on quoted market prices for similar issues.

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.

MORTGAGES, NOTES AND LOANS PAYABLE

MORTGAGES, NOTES AND LOANS PAYABLE

12 Months Ended

Dec. 31, 2013

MORTGAGES, NOTES AND LOANS PAYABLE

NOTE 8 MORTGAGES, NOTES AND LOANS PAYABLE

Mortgages, notes and loans payable are summarized as follows:

	December 31,

	2013		2012
	(In thousands)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable	$	971,786	$	158,636
Special Improvement District bonds		33,100		49,712
Variable-rate debt:
Collateralized mortgages, notes and loans payable (a)		509,737		479,964


Total mortgages, notes and loans payable	$	1,514,623	$	688,312

(a): 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.

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

							Carrying Value

							December 31,			December 31,
		Interest Rate			Maximum Facility Amount		December 31,			December 31,
$ In thousands	Maturity (a)	Interest Rate			Maximum Facility Amount		2013			2012
							(In thousands)
Master Planned Communities
Bridgeland Land Loan (b)	June 2022		5.50	%			$	18,066		$	18,066
Bridgeland Development Loan (c)	June 2015		5.00	%	$	30,000		—			—
Summerlin West SID Bonds – S808/S810	April 2031		7.13	%				11,168			22,185
Summerlin South SID Bonds – S151	June 2025		6.00	%				6,623			10,501
Summerlin South SID Bonds – S128C	December 2030		6.05	%				5,511			5,739
Summerlin South SID Bonds – S132	December 2020		6.00	%				3,962			4,822
Summerlin South SID Bonds – S108	December 2016		5.95	%				823			1,067
Summerlin South SID Bonds – S128	December 2020		7.30	%				707			787
Summerlin South SID Bonds – S124	December 2019		5.95	%				285			324
The Woodlands Master Credit Facility (d)	August 2018		2.92	%		250,000		176,663			176,704


Master Planned Communities Total								223,808			240,195


Operating Assets
110 N. Wacker (e)	October 2019		5.21	%				29,000			29,000
20/25 Waterway Avenue	May 2022		4.79	%				14,450			14,450
3 Waterway Square (f)	August 2028		3.94	%				52,000			9,150
4 Waterway Square	December 2023		4.88	%				39,237			40,140
70 Columbia Corporate Center	August 2017		4.25	%				16,287			16,037
9303 New Trails	December 2023		4.88	%				13,398			13,706
Columbia Regional Building (g)	March 2018		2.17	%		23,008		9,207			—
Millennium Waterway Apartments	June 2022		3.75	%				55,584			55,584
One Hughes Landing (h)	November 2017		2.82	%		38,000		19,128			10
Riverwalk Marketplace (i)	October 2018		2.92	%		64,400		—			—
The Woodlands Resort & Conference Center (j)	February 2019		3.67	%		95,000		36,100			36,100
Victoria Ward (k)	September 2016		3.35	%		250,000		238,716			229,000
Capital lease obligation	various		3.60	%				205			41


Operating Assets Total								523,312			443,218


Strategic Developments
Hughes Landing Retail (m)	December 2018		2.12	%		36,575		913			—
One Lake's Edge (l)	November 2018		2.67	%		73,525		—			—
The Shops at Summerlin SID Bonds – S128	December 2030		6.05	%				3,569			3,701
The Shops at Summerlin SID Bonds – S108	December 2016		5.95	%				452			586
Two Hughes Landing (h)	September 2018		2.82	%		41,230		10			—


Strategic Developments Total								4,944			4,287


Other Corporate Financing Arrangements (n)	Various		3.00	%		22,700		21,309			612
Senior Notes (o)	October 2021		6.88	%				750,000			—
Unamortized underwriting fees	n/a		n/a					(8,750	)		—


Total mortgages, notes, and loans payable							$	1,514,623		$	688,312

(a): Maturity date includes any extension periods which can be exercised at our option.
(b): Loan is fixed at 5.50% through June 2017 and is floating based on three-month LIBOR +2.75% thereafter.
(c): Revolving development loan provides for a maximum of $30.0 million outstanding balance at any one time with all draws not exceeding $140.0 million. The loan bears interest at the greater of 5.00% or LIBOR + 3.25%.
(d): On August 8, 2013, the loan was modified and extended to a August 2018 final maturity date. The interest rate was reduced from one-month LIBOR + 4.00%, with a 5.00% minimum rate to a LIBOR + 2.75% with no floor. The maximum available balance was reduced to $250.0 million from $270.0 million.
(e): 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.
(f): On August 2, 2013, the loan was refinanced with a $52.0 million loan bearing interest at 3.94% and maturity in August 2028.
(g): Loan bears interest at prime rate for draws less than $0.5 million. For draws over $0.5 million, we elect to use one-month LIBOR + 2.00% or the prime rate.
(h): Loan bears interest at one-month LIBOR + 2.65%.
(i): On October 24, 2013, we closed on a $64.4 million partial-recourse construction loan bearing interest at one-month LIBOR plus 2.75% with an initial maturity date of October 24, 2016, with two, one-year extension options.
(j): Loan was refinanced in February 2013 and bears interest at one-month LIBOR + 3.50%.
(k): 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.
(l): On November 25, 2013, we closed on a $73.5 million non-recourse loan bearing interest at one-month LIBOR plus 2.50% with an initial maturity date of November 25, 2016, with two, one-year extension options.
(m): On December 20, 2013, we closed on a $36.6 million non-recourse loan bearing interest at one-month LIBOR plus 1.95% with an initial maturity date of December 20, 2016, with two, one-year extension options.
(n): Includes the partial funding of a $22.7 million loan used to acquire a company airplane, of which $21.3 million is drawn as of December 31, 2013. The loan bears interest at 3.00% and requires approximately $1.0 million annual amortization through maturity in July 2018.
(o): On October 2, 2013, we issued $750.0 million in aggregate principal amount of 6.875% Senior Notes due 2021 (the "Senior Notes"). Interest is payable semiannually, on April 1 and October 1 of each year starting in April 2014. At any time prior to October 1, 2016, we may redeem up to 35% of the Notes using the proceeds from equity offerings or we may redeem some or all of the Notes at a price equal to 106.875% of the principal amount. We may redeem all or part of the Notes at any time on or after October 1, 2016 with a declining call premium thereafter to maturity.

The weighted average interest rate on our mortgages, notes and loans payable excluding interest rate hedges was 5.25% and 4.49% as of December 31, 2013 and 2012, respectively.

The following table summarizes the contractual obligations relating to our mortgages, notes and loans payable as of December 31, 2013 based on initial maturity dates:

	Mortgages, notes and loans payable principal payments

	(In thousands)
2014	$	5,462
2015		26,958
2016		470,784
2017		25,885
2018		26,683
Thereafter		958,851


Total	$	1,514,623

All of our mortgage debt is secured by the individual properties as listed in the table above and is non-recourse to us, except for a $7.0 million parent guarantee associated with the 110 N. Wacker mortgage. The $750.0 million of Senior Notes and $21.3 million of Other Corporate Financing arrangements are also recourse to us. In addition, we have $32.2 million of recourse guarantees associated with undrawn construction financing commitments as of December 31, 2013. The Woodlands Master Credit Facility and Resort & Conference Center loans are recourse to the entities that directly own The Woodlands operations. 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 2014. 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. As of December 31, 2013, land, buildings and equipment and developments in progress with a cost basis of $1.6 billion have been pledged as collateral for our mortgages, notes and loans payable. On July 26, 2013, we closed on a $22.7 million loan to acquire an airplane, which is recourse to us as noted above. The loan bears interest at 3.00%, requires approximately $1.0 million annual amortization and matures in July 2018.

As of December 31, 2013, we were in compliance with all of the financial covenants related to our debt agreements.

Master Planned Communities

On August 8, 2013, The Woodlands refinanced its existing Master Credit Facility with a $250.0 million credit facility consisting of a $125.0 million term loan and a $125.0 million revolver (together, the "TWL Facility"). The TWL Facility bears interest at one-month LIBOR plus 2.75% and has an initial three-year term with two one-year extension options. The extension options require a reduction of the total commitment to $220.0 million for the first extension and $185.0 million for the second extension. The TWL Facility also contains certain covenants that, among other things, require the maintenance of specified financial ratios, limit the incurrence of additional recourse indebtedness at The Woodlands, and limit distributions from The Woodlands to us based on a loan-to-value test. There was $73.3 million of undrawn and available borrowing capacity under the TWL Facility based on the collateral underlying the facility and covenants as of December 31, 2013.

During the second quarter of 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 of which $39.2 million has been utilized and which has a $30.0 million maximum outstanding loan amount at any time. New residential lot development was delayed while we pursued a permit from the U.S. Army Corps of Engineers to develop an additional 806 acres of land in Bridgeland. Due to the delayed lot development and low level of lot inventory, we can no longer draw upon the revolving credit facility until we develop new finished lots. The revolving loan bears interest at the greater of 5.00% or one-month LIBOR plus 3.25% and matures on June 29, 2015. This loan is intended to provide working capital at Bridgeland 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 revolving credit facility has no outstanding balance and one year of real estate taxes and debt service on the term loan have been escrowed with the lender.

The Summerlin Master Planned Community uses Special Improvement District ("SID") 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, and the Summerlin Master Planned Community pays the debt service on the bonds semi-annually. As Summerlin sells land, the buyers assume a proportionate share of the bond obligation at closing, and the residential sales contracts provide for the reimbursement of the principal amounts that we previously paid with respect to such proportionate share of the bond.

Operating Assets

On October 24, 2013, we closed on a $64.4 million partial recourse construction loan for Riverwalk Marketplace. The loan bears interest at one-month LIBOR plus 2.75%, with an initial maturity date of October 24, 2016 with two, one-year extension options.

On March 15, 2013, we closed on a non-recourse financing totaling $23.0 million for the redevelopment of The Columbia Regional Building (also known as The Rouse Building), an office building located in Columbia, Maryland. The loan bears interest at one-month LIBOR plus 2.00% and is interest only through the initial maturity date of March 15, 2016. The loan has two, one-year extension options.

On February 8, 2013, we closed on a $95.0 million non-recourse construction loan which repaid the existing $36.1 million mortgage and provides funding for the redevelopment of The Woodlands Resort and Conference Center. The loan bears interest at one-month LIBOR plus 3.50% and has an initial maturity of February 8, 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 after completion of construction.

On November 14, 2012, we closed on a non-recourse financing totaling $38.0 million for the construction of One Hughes Landing, an eight-story, 197,000 square foot office building in The Woodlands. The loan matures on November 14, 2015 and has two, one-year extension options. The loan bears interest at one-month LIBOR plus 2.65%.

On August 15, 2012, we assumed a $16.0 million loan as part of the acquisition of 70 Columbia Corporate Center ("70 CCC"), located in Columbia, MD. 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. The loan includes a participation right to the lender for 30% of the appreciation in the market value of the property after our 10% cumulative preferred return and repayment of the outstanding debt and our contributed equity. The fair value of the participation obligation is remeasured each quarter and the resulting change in the fair value of the participation right is recorded through interest expense. For the year ended December 31, 2013, $1.4 million relating to the estimated increase in value of the participation right is due to increased leasing of the property and was recorded in interest expense.

On May 31, 2012, as part of the acquisition of our former partner's interest in Millennium Waterway Apartments, located within The Woodlands, 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 September 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 $14.5 million non-recourse financing secured by 20/25 Waterway Avenue, located within The Woodlands. The loan bears interest at 4.79% and matures on May 1, 2022.

On February 2, 2012, we closed on a non-recourse financing totaling $43.3 million for the construction of 3 Waterway Square, an 11-story, 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 one-month LIBOR plus 2.65%. On August 2, 2013, we refinanced the loan with a $52.0 million non-recourse first mortgage financing bearing interest at 3.94% and maturing on August 11, 2028.

On December 5, 2011, we obtained a $41.0 million loan for 4 Waterway Square and a $14.0 million loan for 9303 New Trails, both located within The Woodlands. These 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 one-month LIBOR plus 2.50%. 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 to draw additional loan proceeds under the facility. The loan permits partial repayment during its term in connection with property releases for development. In the third quarter of 2013, certain properties securing the loan were approved for condominium development. As a result, the properties were removed from the collateral pool and a minor principal paydown of the loan was required. 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 3.35% as of December 31, 2013. The unused portion of this mortgage was $11.3 million as of December 31, 2013.

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, IL. The loan 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. We provided a $7.0 million repayment guarantee for the loan, which is reduced on a dollar for dollar basis during the amortization period.

Strategic Developments

On December 20, 2013, we closed on a $36.6 million non-recourse loan for the construction of Hughes Landing Retail, a 123,000 square foot retail component of Hughes Landing. The loan bears interest at one-month LIBOR plus 1.95% with an initial maturity date of December 20, 2016, with two, one-year extension options.

On November 25, 2013, we closed on a $73.5 million non-recourse loan for the construction of an eight-story, Class A, multi-family project within Hughes Landing called One Lake's Edge. One Lake's Edge will be comprised of 390 multi-family units (averaging 984 square feet per unit), 22,289 square feet of retail and an approximately 750 space parking garage, all situated on 2.92 acres of land. The loan bears interest at one-month LIBOR plus 2.50% with an initial maturity date of November 25, 2016, with two, one-year extension options.

On September 11, 2013, we closed on a non-recourse financing totaling $41.2 million for the construction of Two Hughes Landing, the second Class A office building in the 66-acre mixed-use development of Hughes Landing on Lake Woodlands, located in The Woodlands. Two Hughes Landing will be a 197,000 square foot, eight-story office building with an adjacent parking garage containing approximately 630 spaces and is the second of up to 11 office buildings planned for Hughes Landing. The loan matures on September 11, 2016 and has two, one-year extension options. The loan bears interest at one-month LIBOR plus 2.65% due monthly.

Corporate

On October 2, 2013, we issued $750.0 million in aggregate principal amount of 6.875% Senior Notes due 2021 (the "Senior Notes") and received net cash proceeds of $739.6 million. We intend to use the net proceeds for development, acquisitions and other general corporate purposes. Interest is payable semiannually, on April 1 and October 1 of each year starting in April 2014. At any time prior to October 1, 2016, we may redeem up to 35% of the Notes at a price equal to 106.875% using the proceeds from equity offerings. We may redeem all or part of the Notes at any time on or after October 1, 2016 with a declining call premium thereafter to maturity. The Notes contain customary terms and covenants for non-investment grade senior notes and have no maintenance covenants.

INCOME TAXES

12 Months Ended

Dec. 31, 2013

INCOME TAXES

INCOME TAXES

NOTE 9 INCOME TAXES

The provision for (benefit from) income taxes for the years ended December 31, 2013, 2012 and 2011 was as follows:

	2013		2012		2011

	(In thousands)
Current	$	1,218	$	2,439	$	936
Deferred		8,352		4,448		(19,261	)(*)


Total	$	9,570	$	6,887	$	(18,325	)

(*): 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.

Income tax expense is computed by applying the Federal corporate tax rate for the years ended December 31, 2013, 2012 and 2011 and is reconciled to the provision for income taxes as follows:

	2013			2012			2011

	(In thousands)
Tax at statutory rate on earnings from continuing operations before income taxes	$	(22,477	)	$	(42,490	)	$	45,099
Increase (decrease) in valuation allowance, net		(88,826	)		(32,172	)		(13,110	)
State income taxes, net of Federal income tax benefit		1,562			1,328			2,243
Tax at statutory rate on REIT entity earnings not subject to Federal income taxes		(2,648	)		(3,087	)		1,204
Tax expense (benefit) from change in rates, prior period adjustments and other permanent differences		4,339			13,908			(20,829	)
Record deferred tax liability on captive REIT and REIT land distribution		53,973			—			—
Non-deductible warrant liability (gain) loss		63,695			65,311			(35,859	)
Non-taxable interest income		(363	)		(2,863	)		(2,990	)
Uncertain tax position expense, excluding interest		(1,034	)		1,765			364
Uncertain tax position interest, net of Federal income tax benefit		1,349			5,187			5,553


Income tax expense (benefit)	$	9,570		$	6,887		$	(18,325	)

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 2033. 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, 2013, 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	$	94,715	2024-2033
Net operating loss carryforwards – State		254,533	2014-2033
Capital loss carryforward		16,397	2018
Tax credit carryforwards – Federal AMT		2,045	n/a

As of December 31, 2013 and 2012, we had gross deferred tax assets totaling $336.6 million and $410.5 million, and gross deferred tax liabilities of $413.4 million and $386.1 million, respectively. We have established a valuation allowance in the amount of $12.6 million and $101.5 million as of December 31, 2013 and 2012, 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 related to our investment in Head Acquisition, LP in the amount of $76.4 million that we previously believed had only a remote possibility of realization were recorded in 2012 due to tax planning that made realization possible. Due to the uncertainty that the tax planning would result in the realization of the deferred tax asset we established a 100% valuation allowance. During the fourth quarter 2013, the tax planning was successfully implemented and over 90% of the deferred tax asset was realized and the remaining amount will likely be realized in 2014; therefore, we determined that it was appropriate to release the entire valuation allowance in 2013.

The tax effects of temporary differences and carry-forwards included in the net deferred tax liabilities at December 31, 2013 and 2012 are summarized as follows:

	2013			2012

	(In thousands)
Deferred tax assets:
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities	$	201,993		$	291,845
Interest deduction carryforwards		85,671			86,963
Operating loss and tax credit carryforwards		48,971			31,643


Total deferred tax assets		336,635			410,451
Valuation allowance		(12,624	)		(101,518	)


Total net deferred tax assets		324,011			308,933


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	$	(137,930	)		(172,914	)
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities		(48,007	)		—
Deferred income		(227,439	)		(213,166	)


Total deferred tax liabilities		(413,376	)		(386,080	)


Net deferred tax liabilities	$	(89,365	)	$	(77,147	)

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 and intended to continue to operate so as to qualify as a REIT going forward. Consequently, deferred taxes were not recorded on book and tax basis differences of Victoria Ward, Limited as it was believed these differences would ultimately be realized at a zero percent tax rate. In connection with the planned condominium development of Victoria Ward that was approved by the Hawaii Real Estate Commission during the fourth quarter of 2013, the Company now intends to revoke its REIT election within the next few years, before future phases of condominium development commences. The Company now believes that the book and tax basis differences in the land and buildings of Victoria Ward, Limited will be realized after such time REIT status is revoked and will be taxed at the applicable corporate tax rates. As a result of these fourth quarter events, deferred tax liabilities of $48.0 million have been recorded due to the excess book over tax basis relating to land and buildings as of December 31, 2013.

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 ended December 31, 2009 through 2013 and are open to audit by state taxing authorities for years ending December 31, 2009 through 2013.

Two 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 with GGP, 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, plus interest and penalties related to these amounts (the "Indemnity Cap") so long as GGP controls the action in the United States Tax Court (the "Tax Court") related to the dispute with the IRS as described below. We recorded the Tax Indemnity receivable at the Indemnity Cap amount as of the spinoff date. The unrecognized tax benefits and related accrued interest recorded through December 31, 2013 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 $38.6 million and $36.4 million as of December 31, 2013 and 2012, 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 material changes to the Master Planned Community deferred gains and the timing of utilization of the tax assets, both of which could result in material 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 ("ASC 740") Income Taxes. The amounts indemnified are included in the deferred income component of deferred tax liability and in Uncertain tax position liability in our Consolidated Balance Sheets.

During the year ended December 31, 2013, the reduction in the Tax Indemnity receivable of $1.2 million related to interest income that was offset by 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.

During the year ended December 31, 2012, the reduction in the 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 Tax Court to consolidate the cases of the two former taxable REIT subsidiaries of GGP subject to litigation with the IRS due to the common nature of the cases' facts and circumstances and the issues being litigated. The Tax Court granted the motion to consolidate. The case was heard by the Tax Court in November 2012. We expect the Tax Court to rule on the case within the next 12 months.

We apply 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 $2.1 million, $8.2 million and $8.5 million for the years ended December 31, 2013, 2012 and 2011, respectively. At December 31, 2013, we had total unrecognized tax benefits of $90.5 million, excluding interest of $38.7 million, of which none would impact our effective tax rate. At December 31, 2012 and 2011, we had total unrecognized tax benefits of $95.9 million and $101.4 million, respectively, excluding interest, of which none would impact our effective tax rate.

	2013			2012			2011

	(In thousands)
Unrecognized tax benefits, opening balance	$	95,917		$	101,408		$	120,816
Gross increases – tax positions in prior period		9,162			841			—
Gross decreases – tax positions in prior periods		(14,547	)		(6,332	)		(19,408	)


Unrecognized tax benefits, ending balance	$	90,532		$	95,917		$	101,408

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, 2013. A material change in unrecognized tax benefits could have a material effect on our statements of operations. As of December 31, 2013, there is approximately $90.5 million of unrecognized tax benefits, excluding accrued interest, which due to the reasons above, could significantly increase or decrease during the next twelve months.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2013

COMMITMENTS AND CONTINGENCIES

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 totaling $58.7 million and $49.3 million as of December 31, 2013 and 2012, 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 $6.3 million, $5.4 million and $5.2 million for 2013, 2012 and 2011, 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:

	2014		2015		2016		2017		2018		Subsequent / Other		Total

	(In thousands)
Mortgages, notes and loans payable (a)	$	5,462	$	26,958	$	470,784	$	25,885	$	26,683	$	958,851	$	1,514,623
Ground lease and other leasing commitments (b)		5,152		7,152		8,787		7,883		6,744		332,867		368,585
Uncertainty in income taxes, including interest (c)		—		—		—		—		—		129,183		129,183


Total	$	10,614	$	34,110	$	479,571	$	33,768	$	33,427	$	1,420,901	$	2,012,391

(a): Refinanced The Woodlands Credit Facility $250.0 million, new financing for 3 Waterway $52.0 million, One Hughes Landing $38.0 million, Columbia Regional Building $23.0 million and Other Corporate financing $21.3 million.
(b): Executed new lease at South Street Seaport.
(c): 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 27, 2013, the City of New York executed the amended and restated ground lease for South Street Seaport. The restated lease terms provide for annual fixed rent of $1.2 million starting July 1, 2013 with an expiration of December 30, 2072, including our options to extend. The rent escalates at 3.0% compounded annually. On July 1, 2048 the base rent will be adjusted to the higher of the fair market value or the then base rent. In addition to the annual base rent of $1.2 million, we are required to make annual payments of $210,000 as additional rent through the term of the lease. The additional rent escalates annually at CPI. Simultaneously with the execution of the lease, we executed a completion guaranty for the redevelopment of Pier 17. The completion guaranty requires us to perform certain obligations under the lease, including the commencement of construction with a scheduled completion date in 2016.

In the fourth quarter of 2012, as a result of Superstorm Sandy, the historic area of South Street Seaport (area west of the FDR Drive) suffered damage due to flooding, but the Pier 17 structure was not significantly damaged. Reconstruction efforts are ongoing and the property is only partially operating. We have received $20.5 million in insurance proceeds through December 31, 2013 at South Street Seaport related to our claim of which we recognized a $12.2 million in Other income during the year ended December 31, 2013. We believe that our insurance will reimburse substantially all of the costs of repairing the property and will also compensate us for substantially all lost income resulting from the storm.

OTHER ASSETS AND LIABILITIES

12 Months Ended

Dec. 31, 2013

OTHER ASSETS AND LIABILITIES

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,

	2013		2012
	(In thousands)
Special Improvement District receivable	$	39,688	$	39,659
Equipment, net of accumulated depreciation of $0.7 million		21,978		—
Tenant incentives and other receivables		6,757		2,346
Federal income tax receivable		6,053		5,367
Prepaid expenses		4,744		4,757
Below-market ground leases (Note 12)		20,002		20,341
Condominium deposits		12,405		19,616
Security and escrow deposits		28,082		12,865
Above-market tenant leases (Note 12)		1,095		1,896
Uncertain tax position asset		13,528		12,801
In-place leases (Note 12)		9,306		11,516
Intangibles		3,714		3,714
Other		6,588		8,592


	$	173,940	$	143,470

The $30.5 million increase as of December 31, 2013 compared to 2012 primarily relates to a $22.0 million increase in equipment related to an airplane purchase, a $4.4 million increase in tenant and other receivables primarily related to lease incentives at Ward Centers, and a $15.2 million increase in security and escrow deposits related primarily to approximately $14.7 million in escrow deposits for the South Street Seaport project. These increases are offset by a decrease of $7.2 million in condominium deposits due to the sale of our condominium rights for ONE Ala Moana.

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

	December 31,

	2013		2012
	(In thousands)
Construction payables	$	106,741	$	17,501
Accounts payable and accrued expenses		46,998		39,634
Condominium deposits		12,405		19,616
Membership deposits		24,830		20,248
Above-market ground leases (Note 12)		2,431		2,590
Deferred income		18,963		7,767
Accrued interest		17,463		2,425
Accrued real estate taxes		8,581		6,622
Tenant and other deposits		9,490		8,096
Insurance reserve		1,417		9,037
Accrued payroll and other employee liabilities		15,666		11,514
Interest rate swaps		4,164		7,183
Special Assessement		2,603		2,868
Other		12,239		15,420


	$	283,991	$	170,521

The $113.5 million increase as of December 31, 2013 compared to 2012 is primarily due to the increase of $89.2 million in construction payables, which relates to construction and renovation activities primarily for The Shops at Summerlin, Ward Village and Riverwalk properties that are under development, an increase of $11.2 million in deferred income primarily due to increased land sales and the deferral of a portion of the income for post-sale land development obligations at our Summerlin MPC, and a $15.0 million increase in accrued interest mainly from the Senior Notes. These increases were partially offset by the decrease of $7.2 million in condominium deposits as of December 31, 2013 compared to 2012 due to the sale of our ONE Ala Moana condominium rights.

INTANGIBLES

12 Months Ended

Dec. 31, 2013

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, 2013
Tenant leases:
In-place value	$	14,633		$	(5,327	)	$	9,306
Above-market		1,596			(501	)		1,095
Below-market		(482	)		150			(332	)
Ground leases:
Above-market		(3,546	)		1,115			(2,431	)
Below-market		23,096			(3,094	)		20,002
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

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 – Other Assets and Liabilities 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 $3.0 million in 2013, $2.5 million in 2012 and $2.0 million in 2011.

Future amortization/accretion is estimated to decrease income (excluding the impact of noncontrolling interest and the provision for income taxes) by $2.3 million in 2014, $2.1 million in 2015, $1.8 million in 2016, $1.6 million in 2017, $1.1 million in 2018, and $18.6 million thereafter.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2013

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 manage this risk by utilizing interest rate derivatives. Our objectives in using interest rate derivatives are to add stability to interest costs by reducing our exposure to interest rate movements. To accomplish this objective, 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's 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 ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the years ended December 31, 2013, 2012 and 2011, the ineffective portion recorded in earnings was insignificant.

As of December 31, 2013 and 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 was insignificant.

If the interest rate swap agreements are terminated prior to their maturity, the amounts previously recorded in AOCI would be 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 AOCI would be recognized in earnings immediately.

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.

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,

	2013		2012
	(In thousands)
Interest rate swaps	$	4,164	$	7,183


Total derivatives designated as hedging instruments	$	4,164	$	7,183

The tables below present the effect of our derivative financial instruments on the Consolidated Statements of Operations for the years ended December 31, 2013 and 2012:

	Year Ended December 31,						Year Ended December 31,

	2013		2012				2013			2012
Cash Flow Hedges	Amount of Income 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	$	1,306	$	(4,703	)	Interest expense	$	(1,236	)	$	(1,933	)


	$	1,306	$	(4,703	)		$	(1,236	)	$	(1,933	)

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 2
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

12 Months Ended

Dec. 31, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

NOTE 14 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes AOCI for the year ended December 31, 2013:

Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)

Gains and (Losses) on Cash Flow Hedges
(In Thousands)

	For the Year Ended December 31, 2013

Balance as of January 1, 2013	$	(9,575	)


Other comprehensive income (loss) before reclassifications		117
Amounts reclassified from accumulated other comprehensive income (loss)		1,236


Net current-period other comprehensive income		1,353


Balance as of December 31, 2013	$	(8,222	)

(a): All amounts are net of tax.

The following table summarizes the amounts reclassified out of AOCI for the period indicated:

Reclassifications out of Accumulated Other Comprehensive Income (Loss)
(In Thousands)

	Amounts reclassified from Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income Components	For the Year Ended December 31, 2013			Affected line item in the Statement of Operations
Gains and losses on cash flow hedges
Interest rate swap contracts	$	(967	)	Interest (expense)
		(269	)	Provision for income taxes


Total reclassifications for the period	$	(1,236	)	Net of tax

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

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RENTALS UNDER OPERATING LEASES

STOCK BASED PLANS

12 Months Ended

Dec. 31, 2013

STOCK BASED PLANS

STOCK BASED PLANS

NOTE 15 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. Generally, options granted vest over requisite service periods, expire ten years after the grant date and generally do not become exercisable until their restrictions on exercise lapses after the five-year anniversary of the grant date. In May 2013, certain key employees were granted restricted stock and stock options whereby half vest after four years of service and the remaining half vest on a graduated scale based on total shareholder return in 2017. Compensation cost for share-based payment arrangements totaled $5.7 million and $4.3 million for 2013 and 2012, respectively.

As of December 31, 2013, there were a maximum of 2,577,795 shares available for future grant under our various stock plans.

Stock Options

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, 2012	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




Granted	132,100			99.38
Exercised	—			—
Forfeited	(28,600	)		62.40
Expired	—			—


Stock options outstanding at December 31, 2013	965,440		$	64.57		7.8	$	53,607,886




Stock options exercisable at December 31, 2013	400			57.77		3.5		24,932




Remaining unvested options outstanding and expected to vest	936,680		$	64.48		7.8	$	52,101,542

Information related to stock options outstanding as of December 31, 2013 is summarized below:

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

				(In years)
$46.49 – 55.82	64,500	$	51.19		7.8	—
$57.77 – 60.33	597,400		57.98		7.3	—
$61.64 – 69.75	175,440		66.26		8.2	—
$81.80 – 110.50	128,100		99.77		9.5	—


	965,440	$	64.57		7.8	—

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

	2013

	Weighted Average			Range
Grant date fair value	$	28.04		$	18.12 – $36.55
Expected life of options (in years)		7.34			7.0 – 7.5
Risk-free interest rate		1.8	%		1.26% – 2.30	%
Expected volatility		22	%		18% – 26	%
Expected annual dividend per share		—			—

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

The balance of unamortized stock option expense as of December 31, 2013 is $12.4 million, which is expected to be recognized over a weighted-average period of 3.1 years. Expense associated with stock options for the year ended December 31, 2013, which is included in general and administrative expense in the accompanying Consolidated Statements of Operations, totaled $3.5 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, 2013, recognized compensation expense of $2.2 million is included in general and administrative expense related to restricted stock awards. The fair value of restricted stock that vested during 2013 was $1.4 million. The balance of unamortized restricted stock expense as of December 31, 2013 was $6.5 million, which is expected to be recognized over a weighted-average period of 3.48 years.

The following table summarizes restricted stock activity:

			Weighted Average Grant Date Fair Value

Restricted stock outstanding at January 1, 2012	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




Granted	77,434		$	79.77
Vested	(13,033	)		60.15
Cancelled	—			—


Restricted stock outstanding at December 31, 2013	122,334		$	75.21

RENTALS UNDER OPERATING LEASES

12 Months Ended

Dec. 31, 2013

RENTALS UNDER OPERATING LEASES

NOTE 16 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, 2013 are as follows:

Year	Total Minimum Rent

	(In thousands)
2014	$	60,158
2015		57,543
2016		50,478
2017		45,111
2018		39,322
Subsequent		140,910

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.

Percentage rent in lieu of fixed minimum rent recognized from tenants for the years ended December 31, 2013, 2012 and 2011 was $2.2 million, $3.8 million and $3.9 million, respectively. These rents are declining primarily due to the non-renewal and cancellation of leases at the Outlet Collection at Riverwalk and South Street Seaport for their redevelopments.

Overage rent of approximately $2.6 million, $2.8 million, and $3.0 million for 2013, 2012 and 2011, respectively, is included in Other rental and property revenues in our Consolidated Statements of Operations.

RELATED PARTY TRANSACTIONS	12 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2013
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 17 RELATED PARTY TRANSACTIONS 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.

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.

SEGMENTS

12 Months Ended

Dec. 31, 2013

SEGMENTS

SEGMENTS

NOTE 18 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 & 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 or redevelopment which have no substantial operations.

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. We believe that REP EBT provides useful information about the operating performance of all of our properties.

REP EBT, as it relates to our business, is defined as net income (loss) excluding general and administrative expenses, other income, 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, and Investment in Real Estate Affiliate basis adjustment. 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,

	2013			2012			2011
	Segment Basis			Segment Basis			Consolidated Properties			Real Estate Affiliates			Segment Basis
	(In thousands)
Master Planned Communities
Land sales	$	251,217		$	182,643		$	114,610		$	46,773		$	161,383
Builder price participation		9,356			5,747			3,816			1,108			4,924
Minimum rents		781			576			659			14			673
Other land revenues		13,416			18,073			13,133			3,924			17,057


Total revenues		274,770			207,039			132,218			51,819			184,037


Cost of sales – land		124,040			89,298			70,108			23,932			94,040
Land sales operations		30,826			32,817			24,533			7,432			31,965
Land sales real estate and business taxes		7,588			7,558			7,713			1,906			9,619
Depreciation and amortization		32			72			2			46			48
Interest income		(16	)		(45	)		(144	)		(364	)		(508	)
Interest expense (*)		(18,678	)		(14,598	)		(11,920	)		2,132			(9,788	)


Total expenses		143,792			115,102			90,292			35,084			125,376


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


MPC EBT		130,978			91,937			41,926			8,786			50,712


Operating Assets
Minimum rents		80,124			81,140			69,602			2,803			72,405
Tenant recoveries		20,901			23,210			19,193			1,061			20,254
Resort and conference center revenues		39,201			39,782			15,744			19,106			34,850
Other rental and property revenues		20,360			20,959			14,072			6,992			21,064


Total revenues		160,586			165,091			118,611			29,962			148,573


Other property operating costs		64,608			60,072			46,522			9,223			55,745
Rental property real estate taxes		12,065			11,292			9,666			972			10,638
Rental property maintenance costs		7,552			8,073			6,405			517			6,922
Resort and conference center operations		29,454			29,112			13,220			13,904			27,124
Provision for (recovery of) doubtful accounts		835			1,335			(98	)		(9	)		(107	)
Demolition costs		2,078			—			—			—			—
Depreciation and amortization		31,427			23,318			16,341			3,968			20,309
Interest income		(135	)		(185	)		(125	)		(2	)		(127	)
Interest expense		19,146			16,289			10,586			2,316			12,902
Early extinguishment of debt		—			—			11,305			—			11,305
Equity in Earnings from Real Estate Affiliates		(3,893	)		(3,683	)		—			(3,926	)		(3,926	)


Total expenses		163,137			145,623			113,822			26,963			140,785


Venture partner share of The Woodlands EBT		—			—			—			425			425


Operating Assets EBT		(2,551	)		19,468			4,789			3,424			8,213


Strategic Developments
Minimum rents		763			905			917			—			917
Tenant recoveries		167			141			130			—			130
Condominium rights and unit sales		32,969			267			22,067			—			22,067
Other land revenues		3,899			—			—			—			—
Other rental and property revenues		1,456			3,443			1,746			—			1,746


Total revenues		39,254			4,756			24,860			—			24,860


Condominium rights and unit cost of sales		16,572			96			14,465			—			14,465
Other property operating costs		8,578			3,094			5,428			—			5,428
Real estate taxes		2,226			2,351			604			—			604
Rental property maintenance costs		531			582			671			—			671
Provision for (recovery of) doubtful accounts		1			(111	)		(137	)		—			(137	)
Depreciation and amortization		189			225			234			—			234
Interest expense (*)		(4,318	)		219			323			—			323
Equity in Earnings from Real Estate Affiliates		(10,535	)		—			—			—			—


Total expenses		13,244			6,456			21,588			—			21,588


Strategic Developments EBT		26,010			(1,700	)		3,272			—			3,272


REP EBT	$	154,437		$	109,705		$	49,987		$	12,210		$	62,197

(*): Negative interest expense amounts relate to interest capitalized on debt assigned to our Operating Assets Segment and Corporate for the years ended December 31, 2013, 2012 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,

	2013			2012			2011
	(In thousands)
Real Estate Property EBT:
Segment basis	$	154,437		$	109,705		$	62,197
Real Estate Affiliates		(14,428	)		(3,683	)		(12,210	)


REP EBT		140,009			106,022			49,987
General and administrative		(48,466	)		(36,548	)		(32,342	)
Corporate interest income, net		(10,575	)		10,153			8,595
Warrant liability gain (loss)		(181,987	)		(185,017	)		101,584
Benefit (provision) for income taxes		(9,570	)		(6,887	)		18,325
Reduction in tax indemnity receivable		(1,206	)		(20,260	)		—
Equity in earnings from Real Estate Affiliates		14,428			3,683			8,578
Investment in Real Estate Affiliate basis adjustment		—			—			(6,053	)
Other income		25,869			2,125			—
Corporate depreciation		(2,197	)		(814	)		(204	)


Net income (loss)	$	(73,695	)	$	(127,543	)	$	148,470

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

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

	2013		2012		2011
	(In thousands)
Master Planned Communities	$	274,770	$	207,039	$	184,037
Operating Assets		160,586		165,091		148,573
Strategic Developments		39,254		4,756		24,860


Total revenues		474,610		376,886		357,470
Less: The Woodlands Partnerships revenues		—		—		(81,781	)


Total revenues – GAAP basis	$	474,610	$	376,886	$	275,689

The assets by segment and the reconciliation of total segment assets to the total assets in the Consolidated Balance Sheets are summarized as follows:

	Year Ended December 31,

	2013		2012		2011
	(In thousands)
Master Planned Communities	$	1,760,639	$	1,756,625	$	1,780,596
Operating Assets (a)		1,344,005		944,562		871,549
Strategic Developments		462,525		288,287		189,807


Total segment assets		3,567,169		2,989,474		2,841,952
Corporate and other (b)		1,000,699		513,568		557,641


Total assets	$	4,567,868	$	3,503,042	$	3,399,593

(a): Certain assets included in our Operating Asset segment are in various stages of redevelopment and are included in Developments on our Consolidated Balance Sheets.
(b): Assets included in Corporate and other consist primarily of the Tax Indemnity receivable, including interest, and Cash and cash equivalents.

Capital expenditures in 2013 for the strategic developments, operating assets and corporate were $221.1 million, $22.2 million and $26.8 million, respectively. Capital expenditures in 2012 for the strategic developments, operating assets and corporate were $58.9 million, $14.2 million and $1.3 million, respectively. Capital expenditures in 2011 for the strategic developments, operating assets and corporate were $35.2 million, $8.5 million and $0.7 million, respectively.

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.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2013

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

NOTE 19 QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

	2013

	First Quarter			Second Quarter			Third Quarter		Fourth Quarter
	(In thousands, except for per share amounts)
Total revenues	$	90,091		$	147,052		$	103,514	$	133,953
Operating income		9,294			47,790			10,700		43,430
Net income (loss)		(23,170	)		(76,496	)		7,433		18,538
Net income (loss) attributable to common stockholders		(23,124	)		(76,554	)		7,335		18,553
Earnings (loss) per share:
Basic		(0.59	)		(1.94	)		0.19		0.47
Diluted		(0.59	)		(1.94	)		0.17		0.44
Weighted average shares outstanding:
Basic		39,441			39,445			39,454		39,454
Diluted		39,441			39,445			42,439		42,529

	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	(a)
Operating income		9,104			19,057		17,362			26,942
Net income (loss)		(111,522	)		34,992		(50,192	)		(821	)
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 shares outstanding:
Basic		37,903			37,907		37,916			39,778
Diluted		37,903			40,251		37,916			39,778

(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.

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

12 Months Ended

Dec. 31, 2013

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

THE HOWARD HUGHES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2013

($ 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 (e)		Total		Accumulated Depreciation (f)		Date of Construction		Date Acquired/ Completed
Bridgeland	The Woodlands, TX	$	18,066	$	257,222	$	—	$	144,678		$	1,770		$	401,900	$	1,770	$	403,670	$	994				2004
Maryland Communities	Howard County, MD		—		457,552		—		(398,295	)		197			59,257		197		59,454		75				2004
Summerlin	Las Vegas, NV		29,079		990,179		—		(111,179	)		919			879,000		919		879,919		342				2004
The Woodlands	The Woodlands, TX		176,663		264,141		—		(65,707	)		14,977			198,434		14,977		213,411		11				2011
20/25 Waterway Avenue	The Woodlands, TX	$	14,450	$	2,346	$	8,871	$	—		$	481		$	2,346	$	9,352	$	11,698	$	770				2011
Cottonwood Square	Salt Lake City, UT		—		1,558		4,339		—			862			1,558		5,201		6,759		1,370				2002
Landmark Mall	Alexandria, VA		—		28,396		67,235		(19,408	)		(39,354	)		8,988		27,881		36,869		3,036				2003
Park West	Peoria, AZ		—		16,526		77,548		1,201			1,252			17,727		78,800		96,527		17,576		2008
Outlet Collection at Riverwalk	New Orleans, LA		—		—		94,513		—			(53,903	)		—		40,610		40,610		915				2004
South Street Seaport	New York, NY		—		—		7,884		—			29,013			—		36,897		36,897		283				2004
Ward Centers	Honolulu, HI		238,716		164,007		89,321		(21,158	)		215,154			142,849		304,475		447,324		38,916				2002
Waterway Garage Retail	The Woodlands, TX		—		1,342		4,255		(1	)		994			1,341		5,249		6,590		266				2011
110 N. Wacker	Chicago, IL		29,000		—		29,035		—			5,315			—		34,350		34,350		12,491				1997
1400 Woodloch Forest	The Woodlands, TX		—		—		—		1,570			13,423			1,570		13,423		14,993		6,225				1981
2201 Lake Woodlands Drive	The Woodlands, TX		—		3,755		—		—			—			3,755		—		3,755		—				2011
3 Waterway Square	The Woodlands, TX		52,000		748		—		—			42,044			748		42,044		42,792		1,020				2012
4 Waterway Square	The Woodlands, TX		39,237		1,430		51,553		—			6,712			1,430		58,265		59,695		4,904				2011
9303 New Trails	The Woodlands, TX		13,398		1,929		11,915		—			1,934			1,929		13,849		15,778		997				2011
Columbia Office Properties	Howard County, MD		9,207		1,575		28,447		1,571			24,796			3,146		53,243		56,389		12,021				2004
70 Columbia Corporate Center	Howard County, MD		16,287		1,281		14,523		—			5,286			1,281		19,809		21,090		749
Millennium Waterway Apartments	The Woodlands, TX		55,584		15,917		56,002		—			—			15,917		56,002		71,919		3,632				2012
One Hughes Landing	The Woodlands, TX		19,128		—		—		2,366			33,184			2,366		33,184		35,550		19				2012
The Club at Carlton Woods	The Woodlands, TX		—		13,796		457		393			1,412			14,189		1,869		16,058		199				2011
The Woodlands Resort and Conference Center	The Woodlands, TX		36,100		13,258		37,983		—			26,217			13,258		64,200		77,458		2,391				2011
Woodlands Parking Garages	The Woodlands, TX		—		5,857		—		—			—			5,857		—		5,857		—				2011

($ 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 (e)		Total		Accumulated Depreciation (f)		Date of Construction		Date Acquired/ Completed
ExxonMobil Build-to-Suit	The Woodlands, TX	$	—	$	—	$	—	$	—		$	6,595		$	—	$	6,595	$	6,595	$	—				—
Creekside Park Village Center	The Woodlands, TX		—		—		—		—			2,941			—		2,941		2,941		—				—
Hughes Landing Retail	The Woodlands, TX		913		—		—		—			5,995			—		5,995		5,995		—				—
ONE Ala Moana	Honolulu, HI		—		—		—		—			86			—		86		86		—				2002
One Lake's Edge	The Woodlands, TX		—		—		—		—			6,099			—		6,099		6,099		—				—
The Metropolitan Downtown Columbia Project	Columbia, MD		—		—		—		—			1,500			—		1,500		1,500		—				—
The Shops at Summerlin	Las Vegas, NV		4,021		—		—		—			141,383			—		141,383		141,383		—				2004
Two Hughes Landing	The Woodlands, TX		10		—		—		—			22,380			—		22,380		22,380		—				—
Alameda Plaza	Pocatello, ID		—		740		2,060		(740	)		(1,368	)		—		692		692		—				2002
AllenTowne	Dallas, TX		—		25,575		—		(25,575	)		25,464			—		25,464		25,464		—				2006
Bridges at Mint Hill	Charlotte, NC		—		—		—		—			20,619			—		20,619		20,619		—				2007
Century Plaza Mall	Birmingham, AL		—		3,164		28,514		(3,164	)		(24,059	)		—		4,455		4,455		—				1997
Circle T Ranch and Power Center	Dallas/Fort Worth, TX		—		—		—		—			60			—		60		60		—				2005
Cottonwood Mall	Salt Lake City, UT		—		7,613		42,987		(4,713	)		(25,562	)		2,900		17,425		20,325		—				2002
Elk Grove Promenade	Elk Grove, CA		—		—		—		—			6,254			—		6,254		6,254		4				2003
Kendall Town Center	Miami, FL		—		—		—		—			18,135			—		18,135		18,135		—				2004
Lakemoor (Volo) Land	Volo, IL		—		320		—		(320	)		321			—		321		321		—				1995
Redlands Promenade	Redlands, CA		—		—		—		—			2,951			—		2,951		2,951		—				2004
Redlands Mall	Redlands, CA		—		—		—		—			6,453			—		6,453		6,453		—		2008		2004
West Windsor	Princeton, NJ		—		—		—		53			22,985			53		22,985		23,038						2004


Corporate general and administrative			762,764		885		1,027		(885	)		12,648			—		13,675		13,675		2,522


Total HHC		$	1,514,623	$	2,281,112	$	658,469	$	(499,313	)	$	584,565		$	1,781,799	$	1,243,034	$	3,024,833	$	111,728

(a): See description of mortgages, notes and other debt payable in Note 8 of the Consolidated Financial Statements.
(b): Initial cost for constructed malls is cost at end of first complete calendar year subsequent to opening.
(c): For retail and other properties, costs capitalized subsequent to acquisitions is net of cost of disposals or other property 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 $3.0 billion.
(e): Includes all amounts related to Developments.
(f): Depreciation is computed based upon the following estimated lives:

		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
	2013			2012			2011
		(In thousands)
Balance at beginning of year	$	2,746,596		$	2,589,730		$	2,161,977
Change in Land		90,124			66,889			69,110
Additions		352,141			179,372			452,161
Impairments		—			—			—
Dispositions and write-offs and land costs of sales		(164,028	)		(89,395	)		(93,818	)


Balance at end of year	$	3,024,833		$	2,746,596		$	2,589,430


Reconciliation of Accumulated Depreciation
	2013			2012		2011
		(In thousands)
Balance at beginning of year	$	112,491		$	91,605	$	78,931
Depreciation Expense		29,637			19,457		14,012
Dispositions and write-offs		(30,400	)		1,429		(1,338	)


Balance at end of year	$	111,728		$	112,491	$	91,605

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

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,

	2013		2012
	(In thousands)
Land & improvements	$	194,282	$	172,614
Development costs		293,874		78,198
Condominium rights		—		22,801


Total Developments	$	488,156	$	273,613

Real Estate Affiliates

Real Estate Affiliates

Acquisitions of Properties

Acquisitions of Properties

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

Revenue associated with our operating assets includes minimum rent, percentage rent in lieu of fixed minimum rent, tenant recoveries and overage rent.

Condominium Rights and Unit Sales

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.

Other Income

Accounts Receivable

Accounts Receivable

Accounts receivable includes tenant and other receivables, and straight-line rent receivables.

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

	2013			2012			2011

	(In thousands)
Balance as of January 1	$	8,914		$	8,496		$	10,966
Change in provision *		2,008			1,224			(235	)
Write-offs		(3,532	)		(806	)		(2,235	)


Balance as of December 31	$	7,390		$	8,914		$	8,496

Municipal Utility District receivables

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

Warrants

Warrants

Stock Plans

Stock Plans

Earnings Per Share

Earnings Per Share

Information related to our EPS calculations is summarized as follows:

	Years Ended December 31,

	2013			2012			2011
	(In thousands, except per share amounts)
Basic EPS:
Numerator:
Net income (loss)	$	(73,695	)	$	(127,543	)	$	148,470
Net income attributable to noncontrolling interests		(95	)		(745	)		(1,290	)


Net income (loss) attributable to common stockholders	$	(73,790	)	$	(128,288	)	$	147,180




Denominator:
Weighted average number of common shares outstanding		39,449			38,127			37,908




Diluted EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	(73,790	)	$	(128,288	)	$	147,180
Less: Warrant liability gain		—			—			(101,584	)


Adjusted net income (loss) available to common stockholders	$	(73,790	)	$	(128,288	)	$	45,596




Denominator:
Weighted average number of common shares outstanding		39,449			38,127			37,908
Warrants		—			—			1,074


Weighted average diluted common shares oustanding		39,449			38,127			38,982




Basic earnings (loss) per share	$	(1.87	)	$	(3.36	)	$	3.88
Diluted earnings (loss) per share	$	(1.87	)	$	(3.36	)	$	1.17

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2013

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,

	2013		2012
	(In thousands)
Land & improvements	$	194,282	$	172,614
Development costs		293,874		78,198
Condominium rights		—		22,801


Total Developments	$	488,156	$	273,613

Summary of changes in allowance for doubtful accounts against accounts receivables

	2013			2012			2011

	(In thousands)
Balance as of January 1	$	8,914		$	8,496		$	10,966
Change in provision *		2,008			1,224			(235	)
Write-offs		(3,532	)		(806	)		(2,235	)


Balance as of December 31	$	7,390		$	8,914		$	8,496

Summary of information related to the entity's EPS calculations

	Years Ended December 31,

	2013			2012			2011
	(In thousands, except per share amounts)
Basic EPS:
Numerator:
Net income (loss)	$	(73,695	)	$	(127,543	)	$	148,470
Net income attributable to noncontrolling interests		(95	)		(745	)		(1,290	)


Net income (loss) attributable to common stockholders	$	(73,790	)	$	(128,288	)	$	147,180




Denominator:
Weighted average number of common shares outstanding		39,449			38,127			37,908




Diluted EPS:
Numerator:
Net income (loss) attributable to common stockholders	$	(73,790	)	$	(128,288	)	$	147,180
Less: Warrant liability gain		—			—			(101,584	)


Adjusted net income (loss) available to common stockholders	$	(73,790	)	$	(128,288	)	$	45,596




Denominator:
Weighted average number of common shares outstanding		39,449			38,127			37,908
Warrants		—			—			1,074


Weighted average diluted common shares oustanding		39,449			38,127			38,982




Basic earnings (loss) per share	$	(1.87	)	$	(3.36	)	$	3.88
Diluted earnings (loss) per share	$	(1.87	)	$	(3.36	)	$	1.17

ACQUISITIONS AND DISPOSITIONS (Tables)

12 Months Ended

Dec. 31, 2013

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

	(In thousands)
Total revenues	$	357,472
Net income (loss)		157,520

REAL ESTATE AFFILIATES (Tables)

12 Months Ended

Dec. 31, 2013

REAL ESTATE AFFILIATES

Schedule of information related to investments in real estate affiliates

	Economic/ Legal Ownership						Carrying Value				Share of Earnings/Dividends

	December 31,						December 31,				December 31,
	2013			2012			2013		2012		2013			2012			2011
	(In percentages)						(In thousands)				(In thousands)
Equity Method Investments:
Circle T Ranch and Power Center		50.00	%		50.00	%	$	9,004	$	9,004	$	—		$	—		$	(1	)
Forest View /Timbermill Apartments (a)		—			—			—		—		—			4			5
HHMK Development, LLC (d)		50.00	%		50.00	%		13		1,257		732			—			—
KR Holdings, LLC (d)		50.00	%		50.00	%		19,764		—		9,877			—			—
Millennium Waterway Apartments (c)		100.00	%		100.00	%		—		—		—			407			682
Millennium Woodlands Phase II, LLC (d)		81.43	%		81.43	%		2,174		2,190		(74	)		—			—
Parcel C (d)		50.00	%		—			5,801		—		—			—			—
Stewart Title		50.00	%		50.00	%		3,843		3,871		1,223			902			204
Summerlin Las Vegas Baseball Club (d)		50.00	%		—			10,636		300		(13	)		—			—
The Metropolitan Downtown Columbia Project (b)		50.00	%		50.00	%		3,461		4,330		—			—			—
The Woodlands (e)		100.00	%		100.00	%		—		—		—			—			3,731
Woodlands Sarofim #1		20.00	%		20.00	%		2,579		2,450		180			(6	)		64


								57,275		23,402		11,925			1,307			4,685
Cost basis investments (g)								3,746		8,777		2,503	(f)		2,376	(f)		3,893	(f)


Investment in Real Estate Affiliates							$	61,021	$	32,179	$	14,428		$	3,683		$	8,578

(a): 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.
(b): These entities were previously considered VIEs, whose reassessment in 2013 caused them to no longer be considered VIEs. Please refer to discussion in section following the table.
(c): On May 31, 2012, we acquired our partner's interest for $6.9 million and consolidated this property.
(d): Equity method VIEs.
(e): 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.
(f): Includes distribution received from Summerlin Hospital Medical Center.
(g): The lower carrying value as of December 31, 2013 is attributable to the sale of our interest in Head Acquisition, LP (Hexalon) on October 30, 2013 that resulted in a gain of approximately $8.5 million.

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2013

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

	December 31, 2013								December 31, 2012

			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	$	305,560	$	—	$	—	$	305,560	$	123,573	$	—	$	—	$	123,573
Interest rate swaps	$	4,164	$	—	$	4,164	$	—	$	7,183	$	—	$	7,183	$	—

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

	December 31,

	2013		2012			2011
	(In thousands)
Beginning of year	$	123,573	$	127,764		$	227,348
Warrant liability loss (gain) (a)		181,987		185,017			(101,584	)
Settlements (b)		—		(189,208	)		—
Purchases		—		—			2,000


End of year	$	305,560	$	123,573		$	127,764

(a): The unrealized losses during 2013 and 2012 related to the Sponsors and Management warrants held as of December 31, 2013 and 2012, of $182.0 million and $73.8 million, respectively. The gain for 2011 was also 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	$	305,560	Option Pricing Valuation Model	Expected Volatility (a)	32.9	%

(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	$	—	$	—	$	—

(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.

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

	December 31, 2013					December 31, 2012

	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(In thousands)
Assets:
Notes receivable, net	$	20,554	$	20,554		$	27,953	$	27,953
Tax indemnity receivable, including interest		320,494		(a	)		319,622		(a	)
Liabilities:
Fixed-rate debt	$	971,786	$	1,012,461		$	158,636	$	158,879
Variable-rate debt (b)		509,737		509,737			479,964		479,964
SID bonds		33,100		32,837			49,712		56,475


Total mortgages, notes and loans payable	$	1,514,623	$	1,555,035		$	688,312	$	695,318

(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.

MORTGAGES, NOTES AND LOANS PAYABLE (Tables)

12 Months Ended

Dec. 31, 2013

MORTGAGES, NOTES AND LOANS PAYABLE

Summary of mortgages, notes and loans payable

	December 31,

	2013		2012
	(In thousands)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable	$	971,786	$	158,636
Special Improvement District bonds		33,100		49,712
Variable-rate debt:
Collateralized mortgages, notes and loans payable (a)		509,737		479,964


Total mortgages, notes and loans payable	$	1,514,623	$	688,312

(a): 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.

Schedule of mortgages, notes and loans payable by property

							Carrying Value

							December 31,			December 31,
		Interest Rate			Maximum Facility Amount		December 31,			December 31,
$ In thousands	Maturity (a)	Interest Rate			Maximum Facility Amount		2013			2012
							(In thousands)
Master Planned Communities
Bridgeland Land Loan (b)	June 2022		5.50	%			$	18,066		$	18,066
Bridgeland Development Loan (c)	June 2015		5.00	%	$	30,000		—			—
Summerlin West SID Bonds – S808/S810	April 2031		7.13	%				11,168			22,185
Summerlin South SID Bonds – S151	June 2025		6.00	%				6,623			10,501
Summerlin South SID Bonds – S128C	December 2030		6.05	%				5,511			5,739
Summerlin South SID Bonds – S132	December 2020		6.00	%				3,962			4,822
Summerlin South SID Bonds – S108	December 2016		5.95	%				823			1,067
Summerlin South SID Bonds – S128	December 2020		7.30	%				707			787
Summerlin South SID Bonds – S124	December 2019		5.95	%				285			324
The Woodlands Master Credit Facility (d)	August 2018		2.92	%		250,000		176,663			176,704


Master Planned Communities Total								223,808			240,195


Operating Assets
110 N. Wacker (e)	October 2019		5.21	%				29,000			29,000
20/25 Waterway Avenue	May 2022		4.79	%				14,450			14,450
3 Waterway Square (f)	August 2028		3.94	%				52,000			9,150
4 Waterway Square	December 2023		4.88	%				39,237			40,140
70 Columbia Corporate Center	August 2017		4.25	%				16,287			16,037
9303 New Trails	December 2023		4.88	%				13,398			13,706
Columbia Regional Building (g)	March 2018		2.17	%		23,008		9,207			—
Millennium Waterway Apartments	June 2022		3.75	%				55,584			55,584
One Hughes Landing (h)	November 2017		2.82	%		38,000		19,128			10
Riverwalk Marketplace (i)	October 2018		2.92	%		64,400		—			—
The Woodlands Resort & Conference Center (j)	February 2019		3.67	%		95,000		36,100			36,100
Victoria Ward (k)	September 2016		3.35	%		250,000		238,716			229,000
Capital lease obligation	various		3.60	%				205			41


Operating Assets Total								523,312			443,218


Strategic Developments
Hughes Landing Retail (m)	December 2018		2.12	%		36,575		913			—
One Lake's Edge (l)	November 2018		2.67	%		73,525		—			—
The Shops at Summerlin SID Bonds – S128	December 2030		6.05	%				3,569			3,701
The Shops at Summerlin SID Bonds – S108	December 2016		5.95	%				452			586
Two Hughes Landing (h)	September 2018		2.82	%		41,230		10			—


Strategic Developments Total								4,944			4,287


Other Corporate Financing Arrangements (n)	Various		3.00	%		22,700		21,309			612
Senior Notes (o)	October 2021		6.88	%				750,000			—
Unamortized underwriting fees	n/a		n/a					(8,750	)		—


Total mortgages, notes, and loans payable							$	1,514,623		$	688,312

(a): Maturity date includes any extension periods which can be exercised at our option.
(b): Loan is fixed at 5.50% through June 2017 and is floating based on three-month LIBOR +2.75% thereafter.
(c): Revolving development loan provides for a maximum of $30.0 million outstanding balance at any one time with all draws not exceeding $140.0 million. The loan bears interest at the greater of 5.00% or LIBOR + 3.25%.
(d): On August 8, 2013, the loan was modified and extended to a August 2018 final maturity date. The interest rate was reduced from one-month LIBOR + 4.00%, with a 5.00% minimum rate to a LIBOR + 2.75% with no floor. The maximum available balance was reduced to $250.0 million from $270.0 million.
(e): 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.
(f): On August 2, 2013, the loan was refinanced with a $52.0 million loan bearing interest at 3.94% and maturity in August 2028.
(g): Loan bears interest at prime rate for draws less than $0.5 million. For draws over $0.5 million, we elect to use one-month LIBOR + 2.00% or the prime rate.
(h): Loan bears interest at one-month LIBOR + 2.65%.
(i): On October 24, 2013, we closed on a $64.4 million partial-recourse construction loan bearing interest at one-month LIBOR plus 2.75% with an initial maturity date of October 24, 2016, with two, one-year extension options.
(j): Loan was refinanced in February 2013 and bears interest at one-month LIBOR + 3.50%.
(k): 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.
(l): On November 25, 2013, we closed on a $73.5 million non-recourse loan bearing interest at one-month LIBOR plus 2.50% with an initial maturity date of November 25, 2016, with two, one-year extension options.
(m): On December 20, 2013, we closed on a $36.6 million non-recourse loan bearing interest at one-month LIBOR plus 1.95% with an initial maturity date of December 20, 2016, with two, one-year extension options.
(n): Includes the partial funding of a $22.7 million loan used to acquire a company airplane, of which $21.3 million is drawn as of December 31, 2013. The loan bears interest at 3.00% and requires approximately $1.0 million annual amortization through maturity in July 2018.
(o): On October 2, 2013, we issued $750.0 million in aggregate principal amount of 6.875% Senior Notes due 2021 (the "Senior Notes"). Interest is payable semiannually, on April 1 and October 1 of each year starting in April 2014. At any time prior to October 1, 2016, we may redeem up to 35% of the Notes using the proceeds from equity offerings or we may redeem some or all of the Notes at a price equal to 106.875% of the principal amount. We may redeem all or part of the Notes at any time on or after October 1, 2016 with a declining call premium thereafter to maturity.

Summary of contractual obligations relating to the entity's long-term debt based on initial maturity dates

	Mortgages, notes and loans payable principal payments

	(In thousands)
2014	$	5,462
2015		26,958
2016		470,784
2017		25,885
2018		26,683
Thereafter		958,851


Total	$	1,514,623

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.

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Schedule of provision for (benefit from) income taxes

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES

	2013		2012		2011

	(In thousands)
Current	$	1,218	$	2,439	$	936
Deferred		8,352		4,448		(19,261	)(*)


Total	$	9,570	$	6,887	$	(18,325	)

(*): 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.

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

	2013			2012			2011

	(In thousands)
Tax at statutory rate on earnings from continuing operations before income taxes	$	(22,477	)	$	(42,490	)	$	45,099
Increase (decrease) in valuation allowance, net		(88,826	)		(32,172	)		(13,110	)
State income taxes, net of Federal income tax benefit		1,562			1,328			2,243
Tax at statutory rate on REIT entity earnings not subject to Federal income taxes		(2,648	)		(3,087	)		1,204
Tax expense (benefit) from change in rates, prior period adjustments and other permanent differences		4,339			13,908			(20,829	)
Record deferred tax liability on captive REIT and REIT land distribution		53,973			—			—
Non-deductible warrant liability (gain) loss		63,695			65,311			(35,859	)
Non-taxable interest income		(363	)		(2,863	)		(2,990	)
Uncertain tax position expense, excluding interest		(1,034	)		1,765			364
Uncertain tax position interest, net of Federal income tax benefit		1,349			5,187			5,553


Income tax expense (benefit)	$	9,570		$	6,887		$	(18,325	)

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

As of December 31, 2013, 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	$	94,715	2024-2033
Net operating loss carryforwards – State		254,533	2014-2033
Capital loss carryforward		16,397	2018
Tax credit carryforwards – Federal AMT		2,045	n/a

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

	2013			2012

	(In thousands)
Deferred tax assets:
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities	$	201,993		$	291,845
Interest deduction carryforwards		85,671			86,963
Operating loss and tax credit carryforwards		48,971			31,643


Total deferred tax assets		336,635			410,451
Valuation allowance		(12,624	)		(101,518	)


Total net deferred tax assets		324,011			308,933


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	$	(137,930	)		(172,914	)
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities		(48,007	)		—
Deferred income		(227,439	)		(213,166	)


Total deferred tax liabilities		(413,376	)		(386,080	)


Net deferred tax liabilities	$	(89,365	)	$	(77,147	)

Schedule of reconciliation of Unrecognized Tax Benefits

	2013			2012			2011

	(In thousands)
Unrecognized tax benefits, opening balance	$	95,917		$	101,408		$	120,816
Gross increases – tax positions in prior period		9,162			841			—
Gross decreases – tax positions in prior periods		(14,547	)		(6,332	)		(19,408	)


Unrecognized tax benefits, ending balance	$	90,532		$	95,917		$	101,408

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2013

COMMITMENTS AND CONTINGENCIES

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

	2014		2015		2016		2017		2018		Subsequent / Other		Total

	(In thousands)
Mortgages, notes and loans payable (a)	$	5,462	$	26,958	$	470,784	$	25,885	$	26,683	$	958,851	$	1,514,623
Ground lease and other leasing commitments (b)		5,152		7,152		8,787		7,883		6,744		332,867		368,585
Uncertainty in income taxes, including interest (c)		—		—		—		—		—		129,183		129,183


Total	$	10,614	$	34,110	$	479,571	$	33,768	$	33,427	$	1,420,901	$	2,012,391

(a): Refinanced The Woodlands Credit Facility $250.0 million, new financing for 3 Waterway $52.0 million, One Hughes Landing $38.0 million, Columbia Regional Building $23.0 million and Other Corporate financing $21.3 million.
(b): Executed new lease at South Street Seaport.
(c): Please refer to Note 9 – Income Taxes for our obligations related to uncertain tax positions for disclosure of additional contingencies.

OTHER ASSETS AND LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2013

OTHER ASSETS AND LIABILITIES

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

	December 31,

	2013		2012
	(In thousands)
Special Improvement District receivable	$	39,688	$	39,659
Equipment, net of accumulated depreciation of $0.7 million		21,978		—
Tenant incentives and other receivables		6,757		2,346
Federal income tax receivable		6,053		5,367
Prepaid expenses		4,744		4,757
Below-market ground leases (Note 12)		20,002		20,341
Condominium deposits		12,405		19,616
Security and escrow deposits		28,082		12,865
Above-market tenant leases (Note 12)		1,095		1,896
Uncertain tax position asset		13,528		12,801
In-place leases (Note 12)		9,306		11,516
Intangibles		3,714		3,714
Other		6,588		8,592


	$	173,940	$	143,470

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

	December 31,

	2013		2012
	(In thousands)
Construction payables	$	106,741	$	17,501
Accounts payable and accrued expenses		46,998		39,634
Condominium deposits		12,405		19,616
Membership deposits		24,830		20,248
Above-market ground leases (Note 12)		2,431		2,590
Deferred income		18,963		7,767
Accrued interest		17,463		2,425
Accrued real estate taxes		8,581		6,622
Tenant and other deposits		9,490		8,096
Insurance reserve		1,417		9,037
Accrued payroll and other employee liabilities		15,666		11,514
Interest rate swaps		4,164		7,183
Special Assessement		2,603		2,868
Other		12,239		15,420


	$	283,991	$	170,521

INTANGIBLES (Tables)

12 Months Ended

Dec. 31, 2013

INTANGIBLES

Summary of intangible assets and liabilities

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

	(In thousands)
As of December 31, 2013
Tenant leases:
In-place value	$	14,633		$	(5,327	)	$	9,306
Above-market		1,596			(501	)		1,095
Below-market		(482	)		150			(332	)
Ground leases:
Above-market		(3,546	)		1,115			(2,431	)
Below-market		23,096			(3,094	)		20,002
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

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2013

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,

	2013		2012
	(In thousands)
Interest rate swaps	$	4,164	$	7,183


Total derivatives designated as hedging instruments	$	4,164	$	7,183

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

	Year Ended December 31,						Year Ended December 31,

	2013		2012				2013			2012
Cash Flow Hedges	Amount of Income 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	$	1,306	$	(4,703	)	Interest expense	$	(1,236	)	$	(1,933	)


	$	1,306	$	(4,703	)		$	(1,236	)	$	(1,933	)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

12 Months Ended

Dec. 31, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Summary of AOCI

Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)

Gains and (Losses) on Cash Flow Hedges
(In Thousands)

	For the Year Ended December 31, 2013

Balance as of January 1, 2013	$	(9,575	)


Other comprehensive income (loss) before reclassifications		117
Amounts reclassified from accumulated other comprehensive income (loss)		1,236


Net current-period other comprehensive income		1,353


Balance as of December 31, 2013	$	(8,222	)

(a): All amounts are net of tax.

Summary of the amounts reclassified out of AOCI

Reclassifications out of Accumulated Other Comprehensive Income (Loss)
(In Thousands)

	Amounts reclassified from Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income Components	For the Year Ended December 31, 2013			Affected line item in the Statement of Operations
Gains and losses on cash flow hedges
Interest rate swap contracts	$	(967	)	Interest (expense)
		(269	)	Provision for income taxes


Total reclassifications for the period	$	(1,236	)	Net of tax

STOCK BASED PLANS (Tables)

12 Months Ended

Dec. 31, 2013

STOCK BASED PLANS

Summary of stock option plan activity

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

					(In years)
Stock options outstanding at January 1, 2012	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




Granted	132,100			99.38
Exercised	—			—
Forfeited	(28,600	)		62.40
Expired	—			—


Stock options outstanding at December 31, 2013	965,440		$	64.57		7.8	$	53,607,886




Stock options exercisable at December 31, 2013	400			57.77		3.5		24,932




Remaining unvested options outstanding and expected to vest	936,680		$	64.48		7.8	$	52,101,542

Schedule of information related to stock options outstanding

Information related to stock options outstanding as of December 31, 2013 is summarized below:

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

				(In years)
$46.49 – 55.82	64,500	$	51.19		7.8	—
$57.77 – 60.33	597,400		57.98		7.3	—
$61.64 – 69.75	175,440		66.26		8.2	—
$81.80 – 110.50	128,100		99.77		9.5	—


	965,440	$	64.57		7.8	—

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

	2013

	Weighted Average			Range
Grant date fair value	$	28.04		$	18.12 – $36.55
Expected life of options (in years)		7.34			7.0 – 7.5
Risk-free interest rate		1.8	%		1.26% – 2.30	%
Expected volatility		22	%		18% – 26	%
Expected annual dividend per share		—			—

Summary of restricted stock activity

			Weighted Average Grant Date Fair Value

Restricted stock outstanding at January 1, 2012	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




Granted	77,434		$	79.77
Vested	(13,033	)		60.15
Cancelled	—			—


Restricted stock outstanding at December 31, 2013	122,334		$	75.21

RENTALS UNDER OPERATING LEASES (Tables)

12 Months Ended

Dec. 31, 2013

RENTALS UNDER OPERATING LEASES

Schedule of minimum future rentals under operating leases

Year	Total Minimum Rent

	(In thousands)
2014	$	60,158
2015		57,543
2016		50,478
2017		45,111
2018		39,322
Subsequent		140,910

SEGMENTS (Tables)

12 Months Ended

Dec. 31, 2013

SEGMENTS

Schedule of segment operating results

	Year Ended December 31,

	2013			2012			2011
	Segment Basis			Segment Basis			Consolidated Properties			Real Estate Affiliates			Segment Basis
	(In thousands)
Master Planned Communities
Land sales	$	251,217		$	182,643		$	114,610		$	46,773		$	161,383
Builder price participation		9,356			5,747			3,816			1,108			4,924
Minimum rents		781			576			659			14			673
Other land revenues		13,416			18,073			13,133			3,924			17,057


Total revenues		274,770			207,039			132,218			51,819			184,037


Cost of sales – land		124,040			89,298			70,108			23,932			94,040
Land sales operations		30,826			32,817			24,533			7,432			31,965
Land sales real estate and business taxes		7,588			7,558			7,713			1,906			9,619
Depreciation and amortization		32			72			2			46			48
Interest income		(16	)		(45	)		(144	)		(364	)		(508	)
Interest expense (*)		(18,678	)		(14,598	)		(11,920	)		2,132			(9,788	)


Total expenses		143,792			115,102			90,292			35,084			125,376


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


MPC EBT		130,978			91,937			41,926			8,786			50,712


Operating Assets
Minimum rents		80,124			81,140			69,602			2,803			72,405
Tenant recoveries		20,901			23,210			19,193			1,061			20,254
Resort and conference center revenues		39,201			39,782			15,744			19,106			34,850
Other rental and property revenues		20,360			20,959			14,072			6,992			21,064


Total revenues		160,586			165,091			118,611			29,962			148,573


Other property operating costs		64,608			60,072			46,522			9,223			55,745
Rental property real estate taxes		12,065			11,292			9,666			972			10,638
Rental property maintenance costs		7,552			8,073			6,405			517			6,922
Resort and conference center operations		29,454			29,112			13,220			13,904			27,124
Provision for (recovery of) doubtful accounts		835			1,335			(98	)		(9	)		(107	)
Demolition costs		2,078			—			—			—			—
Depreciation and amortization		31,427			23,318			16,341			3,968			20,309
Interest income		(135	)		(185	)		(125	)		(2	)		(127	)
Interest expense		19,146			16,289			10,586			2,316			12,902
Early extinguishment of debt		—			—			11,305			—			11,305
Equity in Earnings from Real Estate Affiliates		(3,893	)		(3,683	)		—			(3,926	)		(3,926	)


Total expenses		163,137			145,623			113,822			26,963			140,785


Venture partner share of The Woodlands EBT		—			—			—			425			425


Operating Assets EBT		(2,551	)		19,468			4,789			3,424			8,213


Strategic Developments
Minimum rents		763			905			917			—			917
Tenant recoveries		167			141			130			—			130
Condominium rights and unit sales		32,969			267			22,067			—			22,067
Other land revenues		3,899			—			—			—			—
Other rental and property revenues		1,456			3,443			1,746			—			1,746


Total revenues		39,254			4,756			24,860			—			24,860


Condominium rights and unit cost of sales		16,572			96			14,465			—			14,465
Other property operating costs		8,578			3,094			5,428			—			5,428
Real estate taxes		2,226			2,351			604			—			604
Rental property maintenance costs		531			582			671			—			671
Provision for (recovery of) doubtful accounts		1			(111	)		(137	)		—			(137	)
Depreciation and amortization		189			225			234			—			234
Interest expense (*)		(4,318	)		219			323			—			323
Equity in Earnings from Real Estate Affiliates		(10,535	)		—			—			—			—


Total expenses		13,244			6,456			21,588			—			21,588


Strategic Developments EBT		26,010			(1,700	)		3,272			—			3,272


REP EBT	$	154,437		$	109,705		$	49,987		$	12,210		$	62,197

(*): Negative interest expense amounts relate to interest capitalized on debt assigned to our Operating Assets Segment and Corporate for the years ended December 31, 2013, 2012 and 2011.

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

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

	2013			2012			2011
	(In thousands)
Real Estate Property EBT:
Segment basis	$	154,437		$	109,705		$	62,197
Real Estate Affiliates		(14,428	)		(3,683	)		(12,210	)


REP EBT		140,009			106,022			49,987
General and administrative		(48,466	)		(36,548	)		(32,342	)
Corporate interest income, net		(10,575	)		10,153			8,595
Warrant liability gain (loss)		(181,987	)		(185,017	)		101,584
Benefit (provision) for income taxes		(9,570	)		(6,887	)		18,325
Reduction in tax indemnity receivable		(1,206	)		(20,260	)		—
Equity in earnings from Real Estate Affiliates		14,428			3,683			8,578
Investment in Real Estate Affiliate basis adjustment		—			—			(6,053	)
Other income		25,869			2,125			—
Corporate depreciation		(2,197	)		(814	)		(204	)


Net income (loss)	$	(73,695	)	$	(127,543	)	$	148,470

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

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

	2013		2012		2011
	(In thousands)
Master Planned Communities	$	274,770	$	207,039	$	184,037
Operating Assets		160,586		165,091		148,573
Strategic Developments		39,254		4,756		24,860


Total revenues		474,610		376,886		357,470
Less: The Woodlands Partnerships revenues		—		—		(81,781	)


Total revenues – GAAP basis	$	474,610	$	376,886	$	275,689

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

	Year Ended December 31,

	2013		2012		2011
	(In thousands)
Master Planned Communities	$	1,760,639	$	1,756,625	$	1,780,596
Operating Assets (a)		1,344,005		944,562		871,549
Strategic Developments		462,525		288,287		189,807


Total segment assets		3,567,169		2,989,474		2,841,952
Corporate and other (b)		1,000,699		513,568		557,641


Total assets	$	4,567,868	$	3,503,042	$	3,399,593

(a): Certain assets included in our Operating Asset segment are in various stages of redevelopment and are included in Developments on our Consolidated Balance Sheets.
(b): Assets included in Corporate and other consist primarily of the Tax Indemnity receivable, including interest, and Cash and cash equivalents.

QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2013

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Schedule of quarterly financial information

	2013

	First Quarter			Second Quarter			Third Quarter		Fourth Quarter
	(In thousands, except for per share amounts)
Total revenues	$	90,091		$	147,052		$	103,514	$	133,953
Operating income		9,294			47,790			10,700		43,430
Net income (loss)		(23,170	)		(76,496	)		7,433		18,538
Net income (loss) attributable to common stockholders		(23,124	)		(76,554	)		7,335		18,553
Earnings (loss) per share:
Basic		(0.59	)		(1.94	)		0.19		0.47
Diluted		(0.59	)		(1.94	)		0.17		0.44
Weighted average shares outstanding:
Basic		39,441			39,445			39,454		39,454
Diluted		39,441			39,445			42,439		42,529

	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	(a)
Operating income		9,104			19,057		17,362			26,942
Net income (loss)		(111,522	)		34,992		(50,192	)		(821	)
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 shares outstanding:
Basic		37,903			37,907		37,916			39,778
Diluted		37,903			40,251		37,916			39,778

(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.

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 Thousands		12 Months Ended
	Aug. 22, 2013 USD ($) item	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of mixed-use towers at Ward Village for which unanimous approval has been received from HCDA \| item	2
Summary of significant accounting policies
Depreciation due to change in estimated useful life		$ 29,637	$ 19,455	$ 14,012
Change in estimate of economic lives \| Ward Village
Summary of significant accounting policies
Depreciation due to change in estimated useful life	$ 1,200

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Developments
Land & improvements	$ 194,282	$ 172,614
Development costs	293,874	78,198
Condominium rights		22,801
Total Developments	488,156	273,613
Rental Revenue
Straight-line rent receivables	$ 10,200	$ 6,900
Minimum \| Master Planned Communities
Useful lives of assets
Estimated useful lives	20 years
Residual value	$ 0
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) - USD ($) $ in Millions		12 Months Ended
	Sep. 30, 2013	Dec. 31, 2013
Other income
Gain on insurance recoveries related to casualty losses at South Street Seaport from Superstorm Sandy		$ 12.2
Rio West
Other income
Gain on sale of property	$ 0.6	0.6
Head Acquisition, LP
Other income
Gain from sale		8.5
Riverwalk
Other income
Income from legal settlement		$ 4.5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) $ in Thousands	12 Months Ended
	Dec. 31, 2013 USD ($) item	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
Allowance for doubtful accounts and notes receivable
Balance of note receivable from GGP	$ 20,554	$ 27,953
Notes receivable from various tenants, net of an allowance for uncollectible notes receivable included in Notes receivable	400	800
Changes in allowance for doubtful accounts and notes receivable accounts
Change in provision	836	1,224	$ (235)
Municipal Utility District receivables
Receivables net of allowances	$ 5,300	5,300
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	$ 36,600	12,900
GGP
Allowance for doubtful accounts and notes receivable
Balance of note receivable from GGP	$ 13,200	19,300
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	8,914	8,496	10,966
Change in provision	2,008	1,224	(235)
Write-offs	(3,532)	(806)	(2,235)
Balance at the end of the period	$ 7,390	$ 8,914	$ 8,496

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Numerator:
Net income (loss)	$ 18,538	$ 7,433	$ (76,496)	$ (23,170)	$ (821)	$ (50,192)	$ 34,992	$ (111,522)	$ (73,695)	$ (127,543)	$ 148,470
Net income attributable to noncontrolling interests									(95)	(745)	(1,290)
Net income (loss) attributable to common stockholders	$ 18,553	$ 7,335	$ (76,554)	$ (23,124)	$ (929)	$ (49,411)	$ 34,310	$ (112,258)	$ (73,790)	$ (128,288)	$ 147,180
Denominator:
Weighted average number of common shares outstanding	39,454,000	39,454,000	39,445,000	39,441,000	39,778,000	37,916,000	37,907,000	37,903,000	39,449,000	38,127,000	37,908,000
Numerator:
Net income (loss) attributable to common stockholders									$ (73,790)	$ (128,288)	$ 147,180
Less: Warrant liability gain											(101,584)
Adjusted net income (loss) attributable to common stockholders									$ (73,790)	$ (128,288)	$ 45,596
Denominator:
Weighted average number of common shares outstanding	39,454,000	39,454,000	39,445,000	39,441,000	39,778,000	37,916,000	37,907,000	37,903,000	39,449,000	38,127,000	37,908,000
Warrants (in shares)											1,074,000
Weighted average diluted common shares outstanding	42,529,000	42,439,000	39,445,000	39,441,000	39,778,000	37,916,000	40,251,000	37,903,000	39,449,000	38,127,000	38,982,000
Basic earnings (loss) per share: (in dollars per share)	$ 0.47	$ 0.19	$ (1.94)	$ (0.59)	$ (0.01)	$ (1.30)	$ 0.91	$ (2.96)	$ (1.87)	$ (3.36)	$ 3.88
Diluted earnings (loss) per share: (in dollars per share)	$ 0.44	$ 0.17	$ (1.94)	$ (0.59)	$ (0.01)	$ (1.30)	$ 0.27	$ (2.96)	$ (1.87)	$ (3.36)	$ 1.17
Stock Options
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares)									965,440	861,940	715,137
Restricted stock
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares)									122,334	57,933	42,553
Sponsors Warrants
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares)									1,916,667	1,916,667
Management Warrants
Denominator:
Antidilutive securities excluded from computation of diluted earnings per share (in shares)									2,862,687	2,862,687

SPONSORS AND MANAGEMENT WARRANTS (Details) $ in Thousands			1 Months Ended	12 Months Ended
SPONSORS AND MANAGEMENT WARRANTS (Details) $ in Thousands	Dec. 07, 2012 USD ($) $ / shares shares	Nov. 09, 2012 USD ($) $ / shares shares	Feb. 28, 2011 USD ($) $ / shares shares	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2013 USD ($) shares	Nov. 09, 2010 USD ($) $ / shares shares
Sponsors and Management Warrants
Issuance of warrants to purchase common stock (in shares) \| shares						1,525,272
Proceeds from issuance of management warrants					$ 2,000
Payments for repurchase of warrants	$ 67,500			$ 80,548
Warrant liabilities				123,573		$ 305,560
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 Fund and the Fairholme Focused Income Fund
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		$ 141,800
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
Management Warrants
Sponsors and Management Warrants
Issuance of warrants to purchase common stock (in shares) \| shares			2,862,687			2,862,687
Proceeds from issuance of management warrants			$ 19,000
Warrant liabilities				$ 65,100		$ 163,800
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 Millions		1 Months Ended	12 Months Ended
ACQUISITIONS AND DISPOSITIONS (Details) $ in Millions	Sep. 30, 2013 USD ($) a ft²	Jul. 31, 2012 USD ($)	Dec. 31, 2013 USD ($)	Jul. 06, 2012 a ft²
Rio West Mall
Recent transactions
Area of property sold (in square feet) \| ft²	521,194
Area of site sold (in acres) \| a	50
Proceeds from sale of property	$ 12.0
Pre-tax gain recognized on the sale	$ 0.6		$ 0.6
Site in Pocatello, Idaho (Alameda Plaza)
Recent transactions
Area of property sold (in square feet) \| ft²				104,705
Area of site sold (in acres) \| a				11.5
Proceeds from sale of property		$ 4.5
Pre-tax gain recognized on the sale		$ 2.0

ACQUISITIONS AND DISPOSITIONS (Details 2) $ in Thousands					1 Months Ended		3 Months Ended	6 Months Ended	12 Months Ended
ACQUISITIONS AND DISPOSITIONS (Details 2) $ in Thousands	Aug. 15, 2012 USD ($) ft²	May 31, 2012 USD ($) item	May 14, 2012 item	Jul. 02, 2011 USD ($) a ft² item	Aug. 31, 2012 USD ($) ft²	Jul. 31, 2011	Jun. 30, 2011 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2013	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
Acquisitions
Percentage distribution of excess proceeds after repayment of outstanding debt and preferred return					70.00%
Portion of refinanced mortgage proceeds used to acquire partner's interest										$ 2,721
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
Percentage of appreciation in the market value of building					30.00%
Interest rate (as a percent)									4.25%
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%
Purchase price	$ 17,500
Millennium Waterway Apartments
Acquisitions
Interest rate (as a percent)		3.75%
Number of units acquired in real estate property \| item		393
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
Total assets consolidated into financial statements at fair value as of the acquisition date		$ 78,600
Liabilities acquired consolidated		$ 56,400
Ownership interest (as a percent)		100.00%
Revenues										4,400
Net income (loss)										$ (1,300)
Number of units in Class A multi-family unit in The Woodlands Town Center to be constructed \| item		314
Amounts recorded for the assets acquired and liabilities assumed at the acquisition date
Total assets		$ 78,600
The Woodlands
Acquisitions
Purchase price				$ 117,500
Number of units acquired in real estate property \| item				865
Portion of refinanced mortgage proceeds used to acquire partner's interest				$ 20,000
Total assets consolidated into financial statements at fair value as of the acquisition date				587,558
Liabilities acquired consolidated				$ 338,600
Revenues								$ 84,600
Net income (loss)								500
Percentage of economic interest acquired				47.50%
Percentage of legal interest acquired				57.50%
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
Area of office space acquired (in square feet) \| ft²				434,328
Area of retail and service space acquired (in square feet) \| ft²				203,282
Number of room resorts and conference centre \| item				440
Number of holes on the golf and country club acquired \| item				36
Acquisition price represented by a non-interest bearing promissory note				$ 97,500
Contingent consideration				0
Estimated useful life						40 years
After-tax loss on the remeasurement relating to existing economic interest							$ (3,900)
Existing economic interest (as a percent)							52.50%
Net book value of existing economic interest							$ 134,800
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
Impact of increase in cost of sales on net loss								$ 6,100
Pro Forma Information
Total revenues											$ 357,472
Net income (loss)											$ 157,520
Effective tax rate (as a percent)									36.00%

REAL ESTATE AFFILIATES (Details)												1 Months Ended		12 Months Ended
REAL ESTATE AFFILIATES (Details)	Oct. 04, 2013 USD ($) a ft² item	Jul. 11, 2013 USD ($)	May 15, 2013 USD ($)	Oct. 30, 2012 USD ($)	Sep. 17, 2012 USD ($) item	Aug. 06, 2012	Jul. 05, 2012 USD ($) a	Jun. 14, 2012	May 31, 2012 USD ($) item	May 14, 2012 item	Apr. 19, 2012 USD ($)	May 31, 2013 USD ($)	Aug. 31, 2012 USD ($)	Dec. 31, 2013 USD ($) item	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Oct. 27, 2011	Jun. 30, 2011
Investment in Real Estate Affiliates
Carrying Value														$ 61,021,000	$ 32,179,000
Share of Earnings/Dividends														14,428,000	3,683,000	$ 8,578,000
Share of distributable cash																1,429,000
Portion of refinanced mortgage proceeds used to acquire partner's interest															2,721,000
Aggregate carrying value of unconsolidated VIEs														$ 38,400,000	7,800,000
Number of variable interest entities in which entity is primary beneficiary \| item														2
Carrying values of the assets associated with the operations of the consolidated VIEs														$ 31,700,000	28,300,000
Carrying values of the liabilities associated with the operations of the consolidated VIEs														800,000	1,000,000
Millennium Waterway Apartments
Investment in Real Estate Affiliates
Portion of refinanced mortgage proceeds used to acquire partner's interest									$ 6,900,000
Number of units in Class A apartment building to be constructed \| item									314
Equity method investments
Investment in Real Estate Affiliates
Carrying Value														57,275,000	23,402,000
Share of Earnings/Dividends														11,925,000	1,307,000	4,685,000
Cost basis investments
Investment in Real Estate Affiliates
Carrying Value														3,746,000	8,777,000
Share of Earnings/Dividends														2,503,000	$ 2,376,000	3,893,000
Hexalon
Investment in Real Estate Affiliates
Gain from sale														$ 8,500,000
Circle T Ranch and Power Center \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														50.00%	50.00%
Carrying Value														$ 9,004,000	$ 9,004,000
Share of Earnings/Dividends																(1,000)
Forest View/Timbermill Apartments
Investment in Real Estate Affiliates
Share of distributable cash											$ 8,600,000
Forest View/Timbermill Apartments \| Equity method investments
Investment in Real Estate Affiliates
Share of Earnings/Dividends															$ 4,000	5,000
HHMK Development, LLC
Investment in Real Estate Affiliates
Deferred profit														$ 6,900,000
HHMK Development, LLC \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														50.00%	50.00%
Carrying Value														$ 13,000	$ 1,257,000
Share of Earnings/Dividends														732,000
KR Holdings, LLC
Investment in Real Estate Affiliates
Ownership ratio in a joint venture (as a percent)								50.00%
Preferred return, on capital (as a percent)					13.00%
Net cash proceeds from sale of condominium rights			$ 30,800,000
Percentage of in substance real estate sold			50.00%
Cash contributed by joint venture partner			$ 16,800,000
Percentage of ownership interest of partners in joint venture			50.00%
Total assets														189,000,000
Total liabilities														135,700,000
Revenues														131,200,000
Net income														$ 19,700,000
KR Holdings, LLC \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														50.00%	50.00%
Carrying Value														$ 19,764,000
Share of Earnings/Dividends														9,877,000
KR Holdings, LLC \| A & B Properties, Inc.
Investment in Real Estate Affiliates
Maximum share in the profits of joint venture					$ 3,000,000
KR Holdings, LLC \| Mezzanine loan agreements
Investment in Real Estate Affiliates
Number of debt instruments \| item					2
Aggregate principal amount of debt issued					$ 20,000,000
Blended interest rate (as a percent)					12.00%
Option to extend, term					1 year
KR Holdings, LLC \| Construction loan
Investment in Real Estate Affiliates
Maximum Facility Amount														$ 132,000,000
Variable rate basis														one-month LIBOR
Interest rate margin (as a percent)														3.00%
Millennium Waterway Apartments \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														100.00%	100.00%
Share of Earnings/Dividends															$ 407,000	682,000
Millennium Woodlands Phase II, LLC
Investment in Real Estate Affiliates
Area of land contributed to the joint venture (in acres) \| a							4.8
Number of units in Class A apartment building to be constructed \| item										314
Fair value of the land contributed to joint venture							$ 15,500,000
Cash contributed by joint venture partner							3,000,000
Construction loan secured							$ 37,700,000
Millennium Woodlands Phase II, LLC \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														81.43%	81.43%
Carrying Value														$ 2,174,000	$ 2,190,000
Share of Earnings/Dividends														$ (74,000)
Stewart Title \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														50.00%	50.00%
Carrying Value														$ 3,843,000	$ 3,871,000
Share of Earnings/Dividends														$ 1,223,000	$ 902,000	204,000
Summerlin Las Vegas Baseball Club
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)						50.00%
Amount funded in cash to joint venture												$ 10,200,000	$ 300,000
Summerlin Las Vegas Baseball Club \| Las Vegas 51S LLC
Investment in Real Estate Affiliates
Ownership ratio in a joint venture (as a percent)						100.00%
Summerlin Las Vegas Baseball Club \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														50.00%	50.00%
Carrying Value														$ 10,636,000	$ 300,000
Share of Earnings/Dividends														$ (13,000)
The Metropolitan Downtown Columbia Project
Investment in Real Estate Affiliates
Fair value of the land contributed to joint venture		$ 20,300,000
Transaction value, per constructed unit of land contributed to joint venture		53,500
Cash contributed by joint venture partner		13,300,000
Percentage of ownership interest of partners in joint venture																	50.00%
Additional improvements made in the venture		16,400,000
Future contribution required in accordance with the loan agreement		3,100,000
Distribution of the cash contributed by joint venture partner		7,000,000
Net profit recognized on partial sale of joint venture interest		700,000
The Metropolitan Downtown Columbia Project \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														50.00%	50.00%
Carrying Value														$ 3,461,000	$ 4,330,000
The Metropolitan Downtown Columbia Project \| Construction loan
Investment in Real Estate Affiliates
Aggregate principal amount of debt issued		$ 64,100,000
Variable rate basis		one-month LIBOR
Interest rate margin (as a percent)		2.40%
The Woodlands \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														100.00%	100.00%			52.50%
Share of Earnings/Dividends																3,731,000
Woodlands Sarofim # 1 \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														20.00%	20.00%
Carrying Value														$ 2,579,000	$ 2,450,000
Share of Earnings/Dividends														180,000	$ (6,000)	$ 64,000
Bridges at Mint Hill, LLC
Investment in Real Estate Affiliates
Amount funded in cash to joint venture				$ 4,500,000
Economic interest (as a percent)				90.50%
Ownership percentage before acquiring additional interest				79.00%
Properties owned by real estate affiliates
Investment in Real Estate Affiliates
Secured debt														69,200,000
Share of the entity in secured debt														$ 39,000,000
Parcel C
Investment in Real Estate Affiliates
Area of land contributed to the joint venture (in acres) \| a	5
Number of units in Class A apartment building to be constructed \| item	437
Area of real estate property to be constructed (in square feet) \| ft²	31,000
Fair value of the land contributed to joint venture	$ 4,000,000
Transaction value of the land contributed to joint venture	23,400,000
Transaction value, per constructed unit of land contributed to joint venture	$ 53,500
Parcel C \| Equity method investments
Investment in Real Estate Affiliates
Economic/Legal ownership (as a percent)														50.00%	50.00%
Carrying Value														$ 5,801,000

IMPAIRMENT (Details) - USD ($) $ in Millions	12 Months Ended
IMPAIRMENT (Details) - USD ($) $ in Millions	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
IMPAIRMENT
Impairment charges	$ 0.0	$ 0.0	$ 0.0
Provisions for impairment related to investment in real estate affiliates	$ 0.0	$ 0.0	$ 0.0

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Liabilities
Warrants	$ 305,560	$ 123,573
Interest rate swaps	4,164	7,183
Recurring basis \| Total Fair Value Measurement
Liabilities
Warrants	305,560	123,573
Interest rate swaps	4,164	7,183
Recurring basis \| Significant Other Observable Inputs (Level 2)
Liabilities
Interest rate swaps	4,164	7,183
Recurring basis \| Significant Unobservable Inputs (Level 3)
Liabilities
Warrants	$ 305,560	$ 123,573

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
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	$ 123,573	$ 127,764	$ 227,348
Warrant liability loss (gain)	181,987	185,017	(101,584)
Settlements		(189,208)
Purchases			2,000
Balance at the end of the period	$ 305,560	$ 123,573	$ 127,764
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)	32.90%

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Millennium Waterway Apartments
Assets:
Percentage of economic interest acquired	23.50%
Non-recurring basis \| Total Fair Value Measurement
Assets:
Investment in Real Estate Affiliates		$ 22,405
Non-recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Investment in Real Estate Affiliates		$ 22,405

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Liabilities:
SID bonds	$ 2,603	$ 2,868
Variable-rate debt that has been swapped to a fixed rate	172,000
Carrying Amount
Assets:
Notes receivable, net	20,554	27,953
Tax indemnity receivable, including interest	320,494	319,622
Liabilities:
Fixed-rate debt	971,786	158,636
Variable-rate debt	509,737	479,964
SID bonds	33,100	49,712
Total mortgages, notes and loans payable	1,514,623	688,312
Estimated Fair Value
Assets:
Notes receivable, net	20,554	27,953
Liabilities:
Fixed-rate debt	1,012,461	158,879
Variable-rate debt	509,737	479,964
SID bonds	32,837	56,475
Total mortgages, notes and loans payable	$ 1,555,035	$ 695,318

MORTGAGES, NOTES AND LOANS PAYABLE (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Mortgages, notes and loans payable
Total mortgages, notes and loans payable	$ 1,514,623	$ 688,312
Amount of variable-rate debt swapped to fixed rate	172,000
Long-term debt-principal payments
2014	5,462
2015	26,958
2016	470,784
2017	25,885
2018	26,683
Thereafter	958,851
Total	1,514,623
Collateralized mortgages, notes and loans payable
Mortgages, notes and loans payable
Fixed-rate debt:	971,786	158,636
Variable-rate debt:	509,737	479,964
Amount of variable-rate debt swapped to fixed rate	172,000
Special Improvement District bonds
Mortgages, notes and loans payable
Fixed-rate debt:	$ 33,100	$ 49,712

MORTGAGES, NOTES AND LOANS PAYABLE (Details 2)										12 Months Ended
MORTGAGES, NOTES AND LOANS PAYABLE (Details 2)	Dec. 20, 2013 USD ($) ft² item	Nov. 25, 2013 USD ($) a ft² item	Oct. 24, 2013 USD ($) item	Oct. 02, 2013 USD ($)	Sep. 11, 2013 a ft² item	Aug. 08, 2013	Aug. 06, 2013 USD ($)	Feb. 08, 2013 USD ($)	May 31, 2012 USD ($)	Dec. 31, 2013 USD ($) a item	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Jul. 26, 2013 USD ($)	Nov. 14, 2012 ft² item	Aug. 15, 2012 USD ($)	Jun. 30, 2012 USD ($)	Apr. 26, 2012 USD ($)	Feb. 02, 2012 USD ($) ft² item	Dec. 05, 2011 USD ($)
Mortgages, notes and loans payable
Land, buildings and equipment and developments in progress pledged as collateral										$ 1,600,000,000
Unamortized underwriting fees										(8,750,000)
Total mortgages, notes and loans payable										1,514,623,000	$ 688,312,000
Outstanding principal balance of debt that is swapped to fixed rate through maturity										$ 172,000,000
Weighted average interest rate (as a percent)										5.25%	4.49%
Net cash proceeds										$ 1,120,102,000	$ 68,410,000	$ 304,911,000
Interest rate cap \| Cash Flow Hedges
Mortgages, notes and loans payable
Notional amount										100,000,000	$ 100,000,000
Loan to acquire company airplane
Mortgages, notes and loans payable
Facility Amount													$ 22,700,000
Outstanding balance										21,300,000
Fixed interest rate (as a percent)													3.00%
Periodic payments										$ 1,000,000
6.875% Senior Notes Due 2021
Mortgages, notes and loans payable
Interest rate (as a percent)										6.88%
Mortgages, notes, and loans payable, gross										$ 750,000,000
Fixed interest rate (as a percent)				6.875%
Amount of debt issued				$ 750,000,000
Maximum percentage of Notes that can be redeemed using proceeds from equity offerings at any time prior to October 1, 2016				35.00%
Percentage of principal amount at which Notes can be redeemed				106.875%
Net cash proceeds				$ 739,600,000
Construction loan
Mortgages, notes and loans payable
Corporate recourse guarantee amount										32,200,000
The Woodlands \| TWL Facility
Mortgages, notes and loans payable
Facility Amount										250,000,000
3 Waterway Square
Mortgages, notes and loans payable
Total mortgages, notes and loans payable										52,000,000
Columbia Regional Building
Mortgages, notes and loans payable
Total mortgages, notes and loans payable										23,000,000
Millennium Waterway Apartments
Mortgages, notes and loans payable
Term of debt instrument									10 years
One Hughes Landing
Mortgages, notes and loans payable
Total mortgages, notes and loans payable										$ 38,000,000
Airplane loan
Mortgages, notes and loans payable
Interest rate (as a percent)										3.00%	3.00%
Mortgages, notes, and loans payable, gross										$ 21,309,000	$ 612,000
Outlet at Riverwalk \| Construction loan
Mortgages, notes and loans payable
Total mortgages, notes and loans payable			$ 64,400,000
Variable rate basis			one-month LIBOR
Interest rate margin (as a percent)			2.75%
Number of extension options \| item			2
Option to extend, term			1 year
Master Planned Communities
Mortgages, notes and loans payable
Mortgages, notes, and loans payable, gross										$ 223,808,000	$ 240,195,000
Master Planned Communities \| Bridgeland
Mortgages, notes and loans payable
Total mortgages, notes and loans payable																$ 18,100,000
Term of debt instrument										10 years
Period of real estate taxes and debt service required to be escrowed with the lender										1 year
Area of site (in acres) \| a										806
Period for which interest rate is fixed										5 years
Period for which interest rate is floating										5 years
Master Planned Communities \| 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
Master Planned Communities \| Bridgeland \| Land Loan
Mortgages, notes and loans payable
Interest rate (as a percent)										5.50%	5.50%
Mortgages, notes, and loans payable, gross										$ 18,066,000	$ 18,066,000
Variable rate basis										three-month LIBOR
Interest rate margin (as a percent)										2.75%
Fixed interest rate (as a percent)										5.50%
Annual principal payments as a percentage of outstanding principal balance										5.00%
Master Planned Communities \| Bridgeland \| Development Loan
Mortgages, notes and loans payable
Interest rate (as a percent)										5.00%
Facility Amount										$ 140,000,000
Outstanding balance										$ 30,000,000
Variable rate basis										LIBOR
Interest rate margin (as a percent)										3.25%
Term of debt instrument										3 years
Minimum interest rate (as a percent)										5.00%
Amount utilized										$ 39,200,000
Master Planned Communities \| Summerlin West \| S808/810
Mortgages, notes and loans payable
Interest rate (as a percent)										7.13%	7.13%
Mortgages, notes, and loans payable, gross										$ 11,168,000	$ 22,185,000
Master Planned Communities \| Summerlin South \| S151
Mortgages, notes and loans payable
Interest rate (as a percent)										6.00%	6.00%
Mortgages, notes, and loans payable, gross										$ 6,623,000	$ 10,501,000
Master Planned Communities \| Summerlin South \| S128C
Mortgages, notes and loans payable
Interest rate (as a percent)										6.05%	6.05%
Mortgages, notes, and loans payable, gross										$ 5,511,000	$ 5,739,000
Master Planned Communities \| Summerlin South \| S132
Mortgages, notes and loans payable
Interest rate (as a percent)										6.00%	6.00%
Mortgages, notes, and loans payable, gross										$ 3,962,000	$ 4,822,000
Master Planned Communities \| Summerlin South \| S108
Mortgages, notes and loans payable
Interest rate (as a percent)										5.95%	5.95%
Mortgages, notes, and loans payable, gross										$ 823,000	$ 1,067,000
Master Planned Communities \| Summerlin South \| S128
Mortgages, notes and loans payable
Interest rate (as a percent)										7.30%	7.30%
Mortgages, notes, and loans payable, gross										$ 707,000	$ 787,000
Master Planned Communities \| Summerlin South \| S124
Mortgages, notes and loans payable
Interest rate (as a percent)										5.95%	5.95%
Mortgages, notes, and loans payable, gross										$ 285,000	$ 324,000
Master Planned Communities \| The Woodlands \| TWL Facility
Mortgages, notes and loans payable
Interest rate (as a percent)										2.92%	2.92%
Facility Amount							$ 270,000,000			$ 250,000,000
Mortgages, notes, and loans payable, gross										$ 176,663,000	$ 176,704,000
Variable rate basis						one-month LIBOR	one-month LIBOR			one-month LIBOR
Interest rate margin (as a percent)						2.75%	4.00%
Term of debt instrument										3 years
Minimum interest rate (as a percent)							0.00%			5.00%
Extension period at borrower's option										1 year
Undrawn and available borrowing capacity										$ 73,300,000
Number of extension options \| item										2
Maximum facility amount at first extension option										$ 220,000,000
Maximum facility amount at second extension option										185,000,000
Master Planned Communities \| The Woodlands \| Term loan
Mortgages, notes and loans payable
Facility Amount										125,000,000
Master Planned Communities \| The Woodlands \| Revolving credit line
Mortgages, notes and loans payable
Facility Amount										125,000,000
Operating Assets
Mortgages, notes and loans payable
Mortgages, notes, and loans payable, gross										$ 523,312,000	$ 443,218,000
Operating Assets \| Capital lease obligation
Mortgages, notes and loans payable
Interest rate (as a percent)										3.60%	3.60%
Mortgages, notes, and loans payable, gross										$ 205,000	$ 41,000
Operating Assets \| 110 N. Wacker
Mortgages, notes and loans payable
Interest rate (as a percent)										5.21%	5.21%
Facility Amount										$ 29,000,000
Mortgages, notes, and loans payable, gross										$ 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%
Corporate recourse guarantee amount										$ 7,000,000
Amount to which debt will amortize ratably through maturity following an interest-only period										$ 12,000,000
Operating Assets \| 20/25 Waterway Avenue
Mortgages, notes and loans payable
Interest rate (as a percent)										4.79%	4.79%
Mortgages, notes, and loans payable, gross										$ 14,450,000	$ 14,450,000
Fixed interest rate (as a percent)																	4.79%
Amount of debt issued																	$ 14,500,000
Operating Assets \| 3 Waterway Square
Mortgages, notes and loans payable
Interest rate (as a percent)										3.94%	3.94%
Mortgages, notes, and loans payable, gross										$ 52,000,000	$ 9,150,000
Variable rate basis										one-month LIBOR
Interest rate margin (as a percent)										2.65%
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
Extension period at borrower's option										1 year
Number of extension options \| item										2
Amount of debt issued																		$ 43,300,000
Operating Assets \| 4 Waterway Square
Mortgages, notes and loans payable
Interest rate (as a percent)										4.88%	4.88%
Mortgages, notes, and loans payable, gross										$ 39,237,000	$ 40,140,000
Amount of debt issued																			$ 41,000,000
Operating Assets \| 70 Columbia Corporate Center
Mortgages, notes and loans payable
Interest rate (as a percent)										4.25%	4.25%
Mortgages, notes, and loans payable, gross										$ 16,287,000	$ 16,037,000
Total mortgages, notes and loans payable										$ 16,287,000
Fixed interest rate (as a percent)										4.25%
Lender participation right (as a percent)										30.00%
Percentage of cumulative preferred return on the property										10.00%
Estimated Increase in value of the participation obligation										$ 1,400,000
Amount of debt issued															$ 16,000,000
Operating Assets \| 9303 New Trails
Mortgages, notes and loans payable
Interest rate (as a percent)										4.88%	4.88%
Mortgages, notes, and loans payable, gross										$ 13,398,000	$ 13,706,000
Amount of debt issued																			$ 14,000,000
Operating Assets \| Columbia Regional Building
Mortgages, notes and loans payable
Interest rate (as a percent)										2.17%	2.17%
Facility Amount										$ 23,008,000
Mortgages, notes, and loans payable, gross										$ 9,207,000
Variable rate basis below specified limit										prime rate
Variable rate basis above specified limit										one-month LIBOR
Interest rate margin above specified limit (as a percent)										2.00%
Specified limit of draws										$ 500,000
Extension period at borrower's option										1 year
Number of extension options \| item										2
Operating Assets \| Millennium Waterway Apartments
Mortgages, notes and loans payable
Interest rate (as a percent)										3.75%	3.75%
Mortgages, notes, and loans payable, gross										$ 55,584,000	$ 55,584,000
Total mortgages, notes and loans payable									$ 55,600,000
Fixed interest rate (as a percent)										3.75%
Periodic payments										$ 257,418
Operating Assets \| One Hughes Landing
Mortgages, notes and loans payable
Interest rate (as a percent)										2.82%	2.82%
Facility Amount										$ 38,000,000
Mortgages, notes, and loans payable, gross										$ 19,128,000	$ 10,000
Variable rate basis above specified limit										one-month LIBOR
Interest rate margin (as a percent)										2.65%
Number of stories of building to be constructed with loan proceeds \| item														8
Area of office building to be constructed using proceeds from loan \| ft²														197,000
Number of extension options \| item										2
Option to extend, term										1 year
Operating Assets \| Riverwalk Marketplace
Mortgages, notes and loans payable
Interest rate (as a percent)										2.92%
Facility Amount										$ 64,400,000
Variable rate basis			one-month LIBOR
Interest rate margin (as a percent)			2.75%
Amount of a non-recourse construction financing which repaid existing debt			$ 64,400,000
Number of extension options \| item			2
Option to extend, term			1 year
Operating Assets \| The Woodlands Resort & Conference Center
Mortgages, notes and loans payable
Interest rate (as a percent)										3.67%	3.67%
Facility Amount										$ 95,000,000
Mortgages, notes, and loans payable, gross										$ 36,100,000	$ 36,100,000
Variable rate basis										one-month LIBOR
Interest rate margin (as a percent)										3.50%
Extension period at borrower's option										1 year
Amount of a non-recourse construction financing which repaid existing debt								$ 95,000,000
Number of extension options \| item										3
Number of rooms in property securing debt (in rooms) \| item										440
Area of site (in acres) \| a										40
Operating Assets \| Victoria Ward
Mortgages, notes and loans payable
Interest rate (as a percent)										3.35%	3.35%
Facility Amount										$ 250,000,000
Mortgages, notes, and loans payable, gross										$ 238,716,000	$ 229,000,000
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%
Weighted average interest rate (as a percent)										3.35%
Unused portion of the debt instrument										$ 11,300,000
Operating Assets \| Victoria Ward \| Minimum
Mortgages, notes and loans payable
Percentage of debt yield to draw additional loan proceeds										10.00%
Operating Assets \| Victoria Ward \| Maximum
Mortgages, notes and loans payable
Loan to value ratio to draw additional loan proceeds (as a percent)										65.00%
Strategic Developments
Mortgages, notes and loans payable
Mortgages, notes, and loans payable, gross										$ 4,944,000	$ 4,287,000
Strategic Developments \| The Shops at Summerlin \| S108
Mortgages, notes and loans payable
Interest rate (as a percent)										5.95%	5.95%
Mortgages, notes, and loans payable, gross										$ 452,000	$ 586,000
Strategic Developments \| The Shops at Summerlin \| S128
Mortgages, notes and loans payable
Interest rate (as a percent)										6.05%	6.05%
Mortgages, notes, and loans payable, gross										$ 3,569,000	$ 3,701,000
Strategic Developments \| Hughes Landing - Multi-family
Mortgages, notes and loans payable
Number of stories of building to be constructed with loan proceeds \| item		8
Number of extension options \| item		2
Option to extend, term		1 year
Area of site (in acres) \| a		2.92
Number of spaces in parking garage \| item		750
Number of multi-family units to be constructed \| item		390
Area of real estate property (in square foot) \| ft²		984
Strategic Developments \| Hughes Landing Retail
Mortgages, notes and loans payable
Interest rate (as a percent)										2.12%
Facility Amount										$ 36,575,000
Mortgages, notes, and loans payable, gross										913,000
Variable rate basis	one-month LIBOR
Interest rate margin (as a percent)	1.95%
Amount of a non-recourse construction financing which repaid existing debt	$ 36,600,000
Number of extension options \| item	2
Option to extend, term	1 year
Area of real estate property to be constructed (in square feet) \| ft²	123,000
Number of multi-family units to be constructed \| item		22,289
Strategic Developments \| One Lake's Edge
Mortgages, notes and loans payable
Facility Amount										$ 73,525,000
Variable rate basis		one-month LIBOR
Interest rate margin (as a percent)		2.50%
Amount of a non-recourse construction financing which repaid existing debt		$ 73,500,000
Strategic Developments \| Two Hughes Landing
Mortgages, notes and loans payable
Interest rate (as a percent)										2.82%
Facility Amount										$ 41,230,000
Mortgages, notes, and loans payable, gross										$ 10,000
Variable rate basis										one-month LIBOR
Interest rate margin (as a percent)										2.65%
Number of stories of building to be constructed with loan proceeds \| item					8
Area of office building to be constructed using proceeds from loan \| ft²					197,000
Number of extension options \| item										2
Option to extend, term										1 year
Area of site (in acres) \| a					66
Number of spaces in parking garage \| item					630
Strategic Developments \| Hughes Landing \| Maximum
Mortgages, notes and loans payable
Number of office buildings \| item					11

INCOME TAXES (Details) $ in Thousands	3 Months Ended	12 Months Ended
INCOME TAXES (Details) $ in Thousands	Dec. 31, 2013 USD ($)	Dec. 31, 2013 USD ($) item	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2013 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		$ 1,218	$ 2,439	$ 936
Deferred taxes		8,352	4,448	(19,261)
Provision for (benefit from) income taxes		9,570	6,887	(18,325)
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		(22,477)	(42,490)	45,099
Increase (decrease) in valuation allowance, net		(88,826)	(32,172)	(13,110)
State income taxes, net of Federal income tax benefit		1,562	1,328	2,243
Tax at statutory rate on REIT entity earnings not subject to Federal income taxes		(2,648)	(3,087)	1,204
Tax expense (benefit) from change in rates, prior period adjustments and other permanent differences		4,339	13,908	(20,829)
Record deferred tax liability on captive REIT and REIT land distribution		53,973
Non-deductible warrant liability (gain) loss		63,695	65,311	(35,859)
Non-taxable interest income		(363)	(2,863)	(2,990)
Uncertain tax position expense, excluding interest		(1,034)	1,765	364
Uncertain tax position interest, net of Federal income tax benefit		1,349	5,187	5,553
Provision for (benefit from) income taxes		9,570	6,887	(18,325)
Net operating loss carryforwards					$ 48,971	$ 31,643
Additional Disclosures
Gross deferred tax assets					336,635	410,451
Gross deferred tax liabilities					413,376	386,080
Valuation allowance					12,624	101,518
Percentage of deferred tax asset realized on successful implementation of tax planning	90.00%
Tax effects of temporary differences and carry-forwards included in the net deferred tax liabilities
Operating and Strategic Development properties, primary differences in basis of assets and liabilities					201,993	291,845
Interest deduction carryforwards					85,671	86,963
Operating loss and tax credit carryforwards					48,971	31,643
Total deferred tax assets					336,635	410,451
Valuation allowance					(12,624)	(101,518)
Total net deferred tax assets					324,011	308,933
Property Associated with Master Planned Communities, primarily differences in the tax basis of land assets and treatment of interest and other costs					(137,930)
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities					(48,007)	(172,914)
Deferred income					(227,439)	(213,166)
Total deferred tax liabilities					(413,376)	(386,080)
Net deferred tax liabilities					(89,365)	(77,147)
Reduction in the tax indemnity receivable		$ 1,200	20,300	8,800
Number of consolidated entities elected to be taxed as a REIT \| item		1
Unrecognized tax benefits that would impact effective tax rate					0	0	$ 0
Unrecognized tax benefits, excluding interest	$ 90,532	$ 95,917	95,917	101,408	90,532	95,917	$ 101,408
Accrued interest related to unrecognized tax benefits					38,700
Interest expense related to unrecognized tax benefits		2,100	8,200	8,500
Unrecognized tax benefits
Unrecognized tax benefits, opening balance		95,917	101,408	120,816
Gross increases - tax positions in prior period		9,162	841
Gross decreases - tax positions in prior periods		(14,547)	(6,332)	(19,408)
Unrecognized tax benefits, ending balance	$ 90,532	$ 90,532	$ 95,917	$ 101,408
Unrecognized tax benefits, excluding accrued interest, which could significantly increase or decrease during the next twelve months					90,500
Capital loss carryforward
Reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes
Tax credit carryforwards - Federal AMT					16,397
Head Acquisition LP [Member]
Additional Disclosures
Deferred tax assets previously believed to have had only a remote possibility of realization recorded in the current period						76,400
Federal
Reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes
Net operating loss carryforwards					94,715
Federal \| AMT
Reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes
Tax credit carryforwards - Federal AMT					2,045
State
Reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes
Net operating loss carryforwards					254,533
GGP
Tax effects of temporary differences and carry-forwards included in the net deferred tax liabilities
Number of subsidiaries involved in dispute with IRS \| item		2
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					$ 38,600	$ 36,400
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
Victoria Ward, Limited
Tax effects of temporary differences and carry-forwards included in the net deferred tax liabilities
Percentage of tax rate at which book and tax basis differences believed to be realized		0.00%

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
COMMITMENTS AND CONTINGENCIES
Amount of outstanding letters of credit and surety bonds	$ 58,700	$ 49,300
Contractual rental expense, including participation rent	6,300	5,400	$ 5,200
Mortgages, notes and loans payable
2014	5,462
2015	26,958
2016	470,784
2017	25,885
2018	26,683
Subsequent/Other	958,851
Total	1,514,623
Ground lease and other leasing commitments
2014	5,152
2015	7,152
2016	8,787
2017	7,883
2018	6,744
Subsequent/Other	332,867
Total	368,585
Uncertainty in income taxes, including interest
Subsequent/Other	129,183
Total	129,183
Total
2014	10,614
2015	34,110
2016	479,571
2017	33,768
2018	33,427
Subsequent/Other	1,420,901
Total	2,012,391
Contractual obligations relating to long-term commitments
Mortgages, notes and loans payable	1,514,623	$ 688,312
The Woodlands \| Credit Facility
Contractual obligations relating to long-term commitments
Maximum Facility Amount	250,000
3 Waterway Square
Contractual obligations relating to long-term commitments
Mortgages, notes and loans payable	52,000
One Hughes Landing
Contractual obligations relating to long-term commitments
Mortgages, notes and loans payable	38,000
Columbia Regional Building
Contractual obligations relating to long-term commitments
Mortgages, notes and loans payable	23,000
Other Corporate Financing
Contractual obligations relating to long-term commitments
Mortgages, notes and loans payable	$ 21,300

COMMITMENTS AND CONTINGENCIES (Details 2) - USD ($)	Jun. 27, 2013	Dec. 31, 2013
Commitments
Additional annual rent payments to be made through the term of the lease		$ 2,012,391,000
South Street Seaport ground lease
Commitments
Annual fixed rent	$ 1,200,000
Rent escalation rate (as a percent)	3.00%
Additional annual rent payments to be made through the term of the lease	$ 210,000

COMMITMENTS AND CONTINGENCIES (Details 3) $ in Millions	12 Months Ended
COMMITMENTS AND CONTINGENCIES (Details 3) $ in Millions	Dec. 31, 2013 USD ($)
Insurance recoveries
Amount recognized in Other income	$ 12.2
Damage due to flooding
Insurance recoveries
Insurance recoveries collected	20.5
Amount recognized in Other income	$ 12.2

OTHER ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Prepaid Expenses and Other Assets
Special Improvement District receivable	$ 39,688	$ 39,659
Equipment, net of accumulated depreciation of $0.7 million.	2,913,105	2,634,105
Tenant incentives and other receivables	6,757	2,346
Federal income tax receivable	6,053	5,367
Prepaid expenses	4,744	4,757
Condominium deposits	12,405	19,616
Security and escrow deposits	28,082	12,865
Uncertain tax position asset	13,528	12,801
Intangibles	3,714	3,714
Other	6,588	8,592
Total prepaid expenses and other assets	173,940	143,470
Accumulated depreciation	111,728	112,491
Increase in prepaid expenses and other assets	30,500
Decrease in condominium deposits	7,200
Increase in tenant and other receivables	4,400
Increase in security and escrow deposits	15,200
Increase in escrow deposits	14,700
Increase in equipment related to the airplane purchase	22,000
Accounts Payable and Accrued Expenses
Construction payables	106,741	17,501
Accounts payable and accrued expenses	46,998	39,634
Condominium deposits	12,405	19,616
Membership deposits	24,830	20,248
Deferred income	18,963	7,767
Accrued interest	17,463	2,425
Accrued real estate taxes	8,581	6,622
Tenant and other deposits	9,490	8,096
Insurance reserve	1,417	9,037
Accrued payroll and other employee liabilities	15,666	11,514
Interest rate swap	4,164	7,183
Special Assessment	2,603	2,868
Other	12,239	15,420
Total accounts payable and accrued expenses	283,991	170,521
Increase in accounts payable and accrued expenses	113,500
Increase in construction payables	89,200
Increase in deferred income	11,200
Increase in accrued interest	15,000
Decrease in condominium deposits	7,200
Airplane
Prepaid Expenses and Other Assets
Equipment, net of accumulated depreciation of $0.7 million.	21,978
Accumulated depreciation	700
Below-market ground leases
Prepaid Expenses and Other Assets
Net carrying amount	20,002	20,341
Above-market tenant leases
Prepaid Expenses and Other Assets
Net carrying amount	1,095	1,896
In-place value tenant leases
Prepaid Expenses and Other Assets
Net carrying amount	9,306	11,516
Above-market ground leases
Accounts Payable and Accrued Expenses
Net carrying amount	$ 2,431	$ 2,590

INTANGIBLES (Details) - USD ($) $ in Thousands	12 Months Ended
INTANGIBLES (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Intangible assets and liabilities
Amortization/accretion of intangible assets and liabilities	$ 3,000	$ 2,500	$ 2,000
Estimated future amortization/accretion
2014	2,300
2015	2,100
2016	1,800
2017	1,600
2018	1,100
Thereafter	18,600
In-place value tenant leases
Intangible assets and liabilities
Gross Assets	14,633	20,348
Accumulated Amortization	(5,327)	(8,832)
Net Carrying Amount	9,306	11,516
Above-market tenant leases
Intangible assets and liabilities
Gross Assets	1,596	1,904
Accumulated Amortization	(501)	(8)
Net Carrying Amount	1,095	1,896
Below-market tenant leases
Intangible assets and liabilities
Accumulated Amortization		(35)
Gross Liability	(482)	(319)
Accumulated Accretion	150
Net Carrying Amount	(332)	(354)
Above-market ground leases
Intangible assets and liabilities
Gross Liability	(3,546)	(3,546)
Accumulated Accretion	1,115	956
Net Carrying Amount	(2,431)	(2,590)
Below-market ground leases
Intangible assets and liabilities
Gross Assets	23,096	23,096
Accumulated Amortization	(3,094)	(2,755)
Net Carrying Amount	$ 20,002	$ 20,341

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Interest rate swaps
Derivative instruments and hedging activities
Estimated additional amount to be reclassified as an increase to interest expense	$ 2.3
Interest rate swaps \| Cash Flow Hedges
Derivative instruments and hedging activities
Gross notional amounts of cash flow hedges	172.0	$ 172.0
Interest rate cap \| Cash Flow Hedges
Derivative instruments and hedging activities
Gross notional amounts of cash flow hedges	$ 100.0	$ 100.0

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) - Derivatives designated as hedging instruments - Accounts payable and accrued liabilities - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Fair value of derivative instruments
Derivative liabilities	$ 4,164	$ 7,183
Interest Rate Swaps
Fair value of derivative instruments
Derivative liabilities	$ 4,164	$ 7,183

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) - Cash Flow Hedges - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Effect of the Company's derivative financial instruments on the income statement
Amount of Income (Loss) Recognized in OCI	$ 1,306	$ (4,703)
Amount of (Loss) Reclassified from AOCI into Earnings	(1,236)	(1,933)
Interest Rate Swaps \| Interest expense
Effect of the Company's derivative financial instruments on the income statement
Amount of Income (Loss) Recognized in OCI	1,306	(4,703)
Amount of (Loss) Reclassified from AOCI into Earnings	$ (1,236)	$ (1,933)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	$ (9,575)
Other comprehensive income (loss)	1,353	$ (3,997)	$ (3,951)
Balance at the end of the period	(8,222)	(9,575)
Gains and (Losses) on Cash Flow Hedges
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	(9,575)
Other comprehensive income (loss) before reclassifications	117
Amounts reclassified from accumulated other comprehensive income (loss)	1,236
Other comprehensive income (loss)	1,353
Balance at the end of the period	$ (8,222)	$ (9,575)

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.