Stratus Properties Inc. Reports First-Quarter 2024 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations in the Austin, Texas area and other select markets in Texas, today reported first-quarter 2024 results. Highlights and Recent Developments: Net income attributable to common stockholders totaled $4.6 million, or $0.56 per diluted share, in first-quarter 2024, compared to net loss attributable to common stockholders of $(5.8) million, or $(0.73) per di.
- 05/14/2024
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Stratus Properties Inc. Reports Year Ended December 31, 2023 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations in the Austin, Texas area and other select markets in Texas, today reported year ended December 31, 2023 results. Highlights and Recent Developments: Net loss attributable to common stockholders totaled $(14.8) million, or $(1.85) per diluted share, in the year ended December 31, 2023, compared to net income attributable to common stockholders of $90.
- 03/28/2024
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Stratus Properties Inc. Completes Sale of Approximately 47 Acres at Magnolia Place for $14.5 Million
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) today announced that it completed the previously disclosed sale of approximately 47 acres at Magnolia Place for $14.5 million. The sale generated pre-tax net cash proceeds to Stratus of approximately $5.3 million, after transaction expenses and payment of the remaining $8.8 million project loan. With the completion of this sale and prior sales of portions of the project, Magnolia Place, which is.
- 02/27/2024
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Stratus Properties Inc. Responds to Unsolicited, Non-Binding Acquisition Proposal
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) today confirmed that on January 24, 2024 it received an unsolicited, non-binding proposal from NXSTEP Opportunity Partners (“NXSTEP”) to acquire Stratus for $27.18 per share in cash, subject to adjustments. NXSTEP's proposal was subject to a number of conditions and assumptions, including important assumptions that were incorrect. Stratus' Board of Directors (“Board”) considered the proposal and.
- 02/21/2024
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Stratus Properties Inc. Reports Third-Quarter 2023 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations in the Austin, Texas area and other select markets in Texas, today reported third-quarter 2023 results. Highlights and Recent Developments: Net loss attributable to common stockholders totaled $2.8 million, or $0.35 per diluted share, in third-quarter 2023, compared to net loss attributable to common stockholders of $2.4 million, or $0.29 per diluted.
- 11/14/2023
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Stratus Properties Inc. Reports Second-Quarter 2023 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations in the Austin, Texas area and other select markets in Texas, today reported second-quarter 2023 results. Highlights and Recent Developments: Net loss attributable to common stockholders totaled $5.3 million, or $0.64 per diluted share, in second-quarter 2023, compared to net income attributable to common stockholders of $96.6 million, or $11.53 per di.
- 08/14/2023
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Stratus Properties, Inc. (STRS) Q3 2022 Earnings Call Transcript
- Stratus Properties, Inc. (NASDAQ:STRS ) Q3 2022 Earnings Conference Call November 14, 2022 11:00 AM ET Company Participants Beau Armstrong - Chairman, President and Chief Executive Officer Erin Pickens - Chief Financial Officer Conference Call Participants Operator Good day and welcome to the Stratus Properties Third Quarter 2022 Financial and Operational Conference Call. Earlier this morning, Stratus released its third quarter 2022 financial results and provided business updates, which are available on its website at stratusproperties.com.
- 11/14/2022
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Stratus Properties Inc. Reports Third-Quarter 2022 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations in the Austin, Texas area and other select markets in Texas, today reported third-quarter 2022 results. Highlights and Recent Developments: On September 1, 2022, Stratus’ Board of Directors (Board) declared a special cash dividend of $4.67 per share (totaling $40.0 million) on Stratus’ common stock, which was paid on September 29, 2022, to shareholders of record as of September 19, 2022. Stratus’ Board also approved a new share repurchase program, which authorizes repurchases of up to $10.0 million of Stratus’ common stock. The repurchase program authorizes Stratus, in management’s discretion, to repurchase shares from time to time, subject to market conditions and other factors. Through November 4, 2022, Stratus has acquired 105,415 shares of its common stock for a total cost of $2.6 million at an average price of $25.02 per share. As a result of its strategic planning process, in addition to returning cash to shareholders, and after streamlining Stratus’ business through the sale of Block 21 in May 2022, the Board decided to continue Stratus’ successful development program, with Stratus’ proven team focusing on pure residential and residential-centric mixed-use projects in Austin and other select markets in Texas. Stratus’ total stockholders’ equity increased to $219.8 million at September 30, 2022, from $158.1 million at December 31, 2021, and $98.9 million at December 31, 2020, primarily as a result of gains realized on Stratus’ sales of Block 21, The Santal and The Saint Mary. Net loss attributable to common stockholders totaled $2.4 million, $0.29 per diluted share, in third-quarter 2022, compared to a net loss attributable to common stockholders of $3.8 million, $0.46 per diluted share, in third-quarter 2021. Net income attributable to common stockholders totaled $96.5 million, or $11.50 per diluted share, in the nine months ended September 30, 2022, compared to a net loss attributable to common stockholders of $5.0 million, or $0.61 per share, in the nine months ended September 30, 2021. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) totaled $(1.2) million in third-quarter 2022, compared to $(0.2) million in third-quarter 2021. For a reconciliation of net (loss) income from continuing operations to EBITDA, see the supplemental schedule, “Reconciliation of Non-GAAP Measure EBITDA,” on page VI. In October 2022, Stratus closed on the sale of a multi-family tract of land at Kingwood Place for $5.5 million. During third-quarter 2022, Stratus sold 28 acres of undeveloped residential land at Magnolia Place for $3.2 million, and also sold a completed pad site at the project for $1.1 million. Stratus also sold the last remaining pad site at West Killeen Market for $1.0 million and a 0.3 acre tract of undeveloped land in Austin for $1.6 million. Stratus continues construction on The Saint June, a 182-unit luxury garden-style multi-family project within the Amarra development in Barton Creek; and on the last 12 Amarra Villas homes. Stratus substantially completed construction on the first phase of development of Magnolia Place, an H-E-B grocery shadow-anchored, mixed-use project in Magnolia, Texas, and in third-quarter 2022 two retail buildings were turned over to retail tenants to begin their finish-out process. H-E-B opened its grocery store on an adjoining site on November 2, 2022. In third-quarter 2022, Stratus began construction on The Saint George, a 316-unit luxury wrap-style, multi-family project in north-central Austin. Stratus also entered into a $56.8 million construction loan to provide financing for the construction of the project. Stratus’ three stabilized mixed-use projects anchored or shadow-anchored by H-E-B grocery stores, Kingwood Place, Jones Crossing, and West Killeen Market, and its fourth stabilized mixed-use project Lantana Place, continue to perform well. Stratus recently explored a potential sale or refinancing of Kingwood Place, Jones Crossing and West Killeen Market. Subsequently, Stratus has decided to retain these cash-flowing properties given current market conditions. William H. Armstrong III, Chairman of the Board and Chief Executive Officer of Stratus, stated, “This quarter Stratus delivered on its promise to return $50 million to shareholders, paying a special cash dividend totaling $40 million and authorizing a new $10 million share repurchase program. In the third quarter, Stratus continued its successful development strategy, seeing good progress on the construction of The Saint June, Amarra Villas and The Saint George, and substantially completing construction on the first phase of development at Magnolia Place. We also successfully completed the sale of substantially all of our non-core assets. “Given current market conditions, we remain focused on completing our projects under construction, controlling costs as much as possible and continuing to advance other projects in our pipeline. I am extremely proud of our team’s dedication and performance this quarter. Thanks to their efforts, Stratus remains well-positioned to continue capitalizing on value-creating opportunities for our shareholders. I also want to express our thanks to Jim Leslie for his 26 years of service as a director at Stratus.” Summary Financial Results Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In Thousands, Except Per Share Amounts) (Unaudited) Revenues Real Estate Operations $ 6,887 $ 892 $ 14,837 $ 8,225 Leasing Operations 3,090 5,376 9,370 15,057 Eliminations and other — — (6 ) (9 ) Total Consolidated Revenue $ 9,977 $ 6,268 $ 24,201 $ 23,273 Operating (loss) income Real Estate Operations $ (89 ) $ (1,904 ) $ 1,014 $ (575 ) Leasing Operations a 853 1,689 8,374 26,981 Corporate, eliminations and other b (3,594 ) (5,213 ) (10,202 ) (15,731 ) Total consolidated operating (loss) income $ (2,830 ) $ (5,428 ) $ (814 ) $ 10,675 Net (loss) income from continuing operations $ (2,574 ) $ (2,656 ) $ (230 ) $ 11,212 Net (loss) income from discontinued operations c $ — $ (1,541 ) $ 96,300 $ (9,947 ) Net (loss) income $ (2,574 ) $ (4,197 ) $ 96,070 $ 1,265 Net loss (income) attributable to noncontrolling interests in subsidiaries d $ 214 $ 433 $ 463 $ (6,248 ) Net (loss) income attributable to common stockholders $ (2,360 ) $ (3,764 ) $ 96,533 $ (4,983 ) Basic net (loss) income per share: Continuing operations $ (0.29 ) $ (0.27 ) $ 0.03 $ 0.60 Discontinued operations — (0.19 ) 11.65 (1.21 ) $ (0.29 ) $ (0.46 ) $ 11.68 $ (0.61 ) Diluted net (loss) income per share: Continuing operations $ (0.29 ) $ (0.27 ) $ 0.03 $ 0.60 Discontinued operations — (0.19 ) 11.47 (1.21 ) $ (0.29 ) $ (0.46 ) $ 11.50 $ (0.61 ) EBITDA $ (1,247 ) $ (208 ) $ 2,608 $ 18,816 Capital expenditures and purchases and development of real estate properties $ 17,517 $ 30,292 $ 57,183 $ 37,549 Weighted-average shares of common stock outstanding: Basic 8,275 8,239 8,266 8,232 Diluted 8,275 8,239 8,397 8,232 a. The first nine months of 2022 includes a $4.8 million pre-tax gain recognized on the reversal of accruals for costs to lease and construct buildings under a master lease arrangement that Stratus entered into in connection with its sale of The Oaks at Lakeway in 2017. The first nine months of 2021 includes a $22.9 million pre-tax gain on the January 2021 sale of The Saint Mary. b. Includes consolidated general and administrative expenses and eliminations of intersegment amounts. The decreases in 2022 from the comparable prior year periods are primarily the result of $3.8 million incurred for the first nine months of 2021 for consulting, legal and public relation costs for Stratus’ successful proxy contest and the real estate investment trust (REIT) exploration process in addition to $2.8 million incurred in third-quarter 2021 and $3.5 million incurred during the first nine months of 2021 for employee incentive compensation costs associated with Stratus’ Profit Participation Incentive Plan (PPIP) resulting primarily from an increased valuation for The Santal. c. The first nine months of 2022 includes a $119.7 million pre-tax gain on the May 2022 sale of Block 21. d. Represents noncontrolling interest partners' share in the results of the consolidated projects in which they participate. The first nine months of 2021 includes a $6.7 million gain from the sale of The Saint Mary attributable to noncontrolling interest owners. Continuing Operations The increase in revenue and lower operating loss from the Real Estate Operations segment in third-quarter 2022, compared to third-quarter 2021, reflects the third-quarter 2022 undeveloped property sales consisting of (i) 28 acres of residential land for $3.2 million at Magnolia Place, (ii) a 0.3 acre tract of land in Austin for $1.6 million, (iii) a pad site at Magnolia Place for $1.1 million, and (iv) a pad site at West Killeen Market for $1.0 million. There were no developed property sales in third-quarter 2022 or 2021. The decrease in revenue and operating income from the Leasing Operations segment in third-quarter 2022, compared to third-quarter 2021, primarily reflects the sale of The Santal in December 2021, partly offset by increased revenue at Lantana Place and Kingwood Place. The Santal had rental revenue of $2.3 million in third-quarter 2021. Debt and Liquidity At September 30, 2022, consolidated debt totaled $124.2 million and consolidated cash and cash equivalents totaled $63.5 million, compared with consolidated debt of $106.6 million and consolidated cash and cash equivalents of $24.2 million at December 31, 2021. Consolidated debt at December 31, 2021, excluded the Block 21 loan of approximately $137 million, which was presented in liabilities held for sale - discontinued operations. Using proceeds from the sale of Block 21, Stratus repaid the outstanding amount under its $60.0 million Comerica Bank credit facility in June 2022. As of September 30, 2022, Stratus had $49.0 million available under the credit facility. Letters of credit, totaling $11.0 million, have been issued under the credit facility, and secure Stratus’ obligation to build certain roads and utilities facilities benefiting Holden Hills and Section N. In November 2022, Comerica Bank extended the maturity date of Stratus’ credit facility from December 26, 2022, to March 27, 2023. Stratus is in discussions with the lender to remove Holden Hills from the collateral pool for the facility, finance the Holden Hills project under a separate loan agreement and enter into a revised revolving credit facility with a lower borrowing limit secured by the remaining collateral under the facility. Stratus plans to make a federal income tax payment of approximately $10 million in December 2022 to satisfy estimated taxes due associated with current year taxable income, including the gain on the sale of Block 21. Purchases and development of real estate properties (included in operating cash flows) and capital expenditures (included in investing cash flows) totaled $57.2 million for the first nine months of 2022, primarily related to the development of Barton Creek properties, including The Saint June and Amarra Villas, The Saint George and Magnolia Place, compared with $37.5 million for the first nine months of 2021, primarily related to the purchase of the land for The Annie B and development of Barton Creek properties, including The Saint June and Amarra Villas, and Magnolia Place. ---------------------------------------------- Conference Call Information Stratus will conduct an investor conference call to discuss its unaudited third-quarter 2022 financial and operating results today, November 14, 2022, at 11:00 a.m. Eastern Time. The public is invited to listen to the conference call by dialing (877) 418-4843 for domestic access and +1 (412) 902-6766 for international access. A replay of the conference call will be available until November 28, 2022, by dialing (877) 344-7529 for domestic access and by dialing +1 (412) 317-0088 for international access. Please use replay ID: 1633288. The replay will also be available on Stratus’ website at stratusproperties.com until November 28, 2022. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND REGULATION G DISCLOSURE This press release contains forward-looking statements in which Stratus discusses factors it believes may affect its future performance. Forward-looking statements are all statements other than statements of historical fact, such as plans, projections or expectations related to the impacts of the COVID-19 pandemic, the impact of inflation and interest rate changes, supply chain constraints and tightening bank credit, Stratus’ ability to meet its future debt service and other cash obligations, future cash flows and liquidity, Stratus’ expectations about the Austin and Texas real estate markets, the planning, financing, development, construction, completion and stabilization of Stratus’ development projects, plans to sell, recapitalize, or refinance properties, future operational and financial performance, municipal utility district reimbursements for infrastructure costs, regulatory matters, leasing activities, tax rates, future capital expenditures and financing plans, possible joint ventures, partnerships, or other strategic relationships, other plans and objectives of management for future operations and development projects, and future cash returns to shareholders, including the timing and amount of repurchases under Stratus’ share repurchase program. The words “anticipate,” “may,” “can,” “plan,” “believe,” “potential,” “estimate,” “expect,” “project,” "target," “intend,” “likely,” “will,” “should,” “to be” and any similar expressions and/or statements are intended to identify those assertions as forward-looking statements. Under Stratus’ Comerica Bank debt agreements, Stratus is not permitted to repurchase its common stock in excess of $1.0 million or pay dividends on its common stock without Comerica Bank’s prior written consent, which was obtained in connection with the special cash dividend and share repurchase program. Any future declaration of dividends or decision to repurchase Stratus’ common stock is at the discretion of Stratus’ Board, subject to restrictions under Stratus’ Comerica Bank debt agreements, and will depend on Stratus’ financial results, cash requirements, projected compliance with covenants in its debt agreements, outlook and other factors deemed relevant by the Board. Stratus’ future debt agreements, future refinancings of or amendments to existing debt agreements or other future agreements may restrict Stratus’ ability to declare dividends or repurchase shares. Stratus cautions readers that forward-looking statements are not guarantees of future performance, and its actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause Stratus’ actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, the ongoing COVID-19 pandemic and any future major public health crisis, increases in inflation and interest rates, supply chain constraints, declines in the market value of Stratus’ assets, increases in operating and construction costs, including real estate taxes and the cost of building materials and labor, defaults by contractors and subcontractors, Stratus’ ability to pay or refinance its debt, extend maturity dates of its loans or comply with or obtain waivers of financial and other covenants in debt agreements and to meet other cash obligations, Stratus’ ability to collect anticipated rental payments and close projected asset sales, the availability and terms of financing for development projects and other corporate purposes, Stratus’ ability to enter into and maintain joint ventures, partnerships, or other strategic relationships, including risks associated with such joint ventures, Stratus’ ability to implement its business strategy successfully, including its ability to develop, construct and sell or lease properties on terms its Board considers acceptable, market conditions or corporate developments that could preclude, impair or delay any opportunities with respect to plans to sell, recapitalize or refinance properties, Stratus’ ability to obtain various entitlements and permits, a decrease in the demand for real estate in select markets in Texas where Stratus operates, changes in economic, market, tax and business conditions, including as a result of the war in Ukraine, reductions in discretionary spending by consumers and businesses, competition from other real estate developers, the termination of sales contracts or letters of intent because of, among other factors, the failure of one or more closing conditions or market changes, the failure to attract customers or tenants for its developments or such customers’ or tenants’ failure to satisfy their purchase commitments or leasing obligations, changes in consumer preferences, potential additional impairment charges, industry risks, changes in laws, regulations or the regulatory environment affecting the development of real estate, opposition from special interest groups or local governments with respect to development projects, weather- and climate-related risks, loss of key personnel, environmental and litigation risks, cybersecurity incidents and other factors described in more detail under the heading “Risk Factors” in Stratus’ Annual Report on Form 10-K for the year ended December 31, 2021, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, each filed with the Securities Exchange Commission (SEC). This press release also includes EBITDA, which is not recognized under U.S. generally accepted accounting principles (GAAP). Stratus believes this measure can be helpful to investors in evaluating its business. EBITDA is a financial measure frequently used by securities analysts, lenders and others to evaluate Stratus’ recurring operating performance. EBITDA is intended to be a performance measure that should not be regarded as more meaningful than a GAAP measure. Other companies may calculate EBITDA differently. As required by SEC Regulation G, a reconciliation of Stratus’ net income (loss) from continuing operations to EBITDA is included in the supplemental schedule of this press release. Investors are cautioned that many of the assumptions upon which Stratus’ forward-looking statements are based are likely to change after the date the forward-looking statements are made. Further, Stratus may make changes to its business plans that could affect its results. Stratus cautions investors that it undertakes no obligation to update any forward-looking statements, which speak only as of the date made, notwithstanding any changes in its assumptions, business plans, actual experience, or other changes. A copy of this release is available on Stratus’ website, stratusproperties.com. STRATUS PROPERTIES INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) (In Thousands, Except Per Share Amounts) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues: Real estate operations $ 6,887 $ 892 $ 14,831 $ 8,216 Leasing operations 3,090 5,376 9,370 15,057 Total revenues 9,977 6,268 24,201 23,273 Cost of sales: Real estate operations 6,228 2,110 13,026 8,002 Leasing operations 1,350 2,237 3,204 6,481 Depreciation 907 1,472 2,664 4,624 Total cost of sales 8,485 5,819 18,894 19,107 General and administrative expenses a 3,602 5,252 10,213 15,797 Impairment of real estate b 720 625 720 625 Gain on sale of assets c — — (4,812 ) (22,931 ) Total 12,807 11,696 25,015 12,598 Operating (loss) income (2,830 ) (5,428 ) (814 ) 10,675 Interest expense, net — (855 ) (15 ) (2,690 ) Net gain on extinguishment of debt — 3,680 — 3,454 Other income, net 680 70 766 74 (Loss) income before income taxes and equity in unconsolidated affiliate’s loss (2,150 ) (2,533 ) (63 ) 11,513 Provision for income taxes (420 ) (121 ) (159 ) (290 ) Equity in unconsolidated affiliate’s loss (4 ) (2 ) (8 ) (11 ) Net (loss) income from continuing operations (2,574 ) (2,656 ) (230 ) 11,212 Net (loss) income from discontinued operations d — (1,541 ) 96,300 (9,947 ) Net (loss) income and total comprehensive (loss) income (2,574 ) (4,197 ) 96,070 1,265 Total comprehensive loss (income) attributable to noncontrolling interests e 214 433 463 (6,248 ) Net (loss) income and total comprehensive (loss) income attributable to common stockholders $ (2,360 ) $ (3,764 ) $ 96,533 $ (4,983 ) Basic net (loss) income per share attributable to common stockholders: Continuing operations $ (0.29 ) $ (0.27 ) $ 0.03 $ 0.60 Discontinued operations — (0.19 ) 11.65 (1.21 ) $ (0.29 ) $ (0.46 ) $ 11.68 $ (0.61 ) Diluted net (loss) income per share attributable to common stockholders: Continuing operations $ (0.29 ) $ (0.27 ) $ 0.03 $ 0.60 Discontinued operations — (0.19 ) 11.47 (1.21 ) $ (0.29 ) $ (0.46 ) $ 11.50 $ (0.61 ) Weighted-average shares of common stock outstanding: Basic 8,275 8,239 8,266 8,232 Diluted 8,275 8,239 8,397 8,232 Dividends declared per share of common stock $ 4.67 $ — $ 4.67 $ — a. The decreases in 2022 from the comparable prior year periods are primarily the result of $3.8 million incurred for the first nine months of 2021 for consulting, legal and public relation costs for Stratus’ successful proxy contest and the REIT exploration process in addition to $2.8 million incurred in third-quarter 2021 and $3.5 million incurred during the first nine months of 2021 for employee incentive compensation costs associated with the PPIP resulting primarily from an increased valuation for The Santal. b. For the three and nine months ended September 30, 2022, reflects a $650 thousand impairment charge for one of the Amarra Villas homes that is under contract to sell for $2.4 million and an additional $70 thousand impairment charge for the multi-family tract of land at Kingwood Place. For the three and nine months ended September 30, 2021, reflects a $625 thousand impairment charge for the multi-family tract of land at Kingwood Place that sold for $5.5 million in October 2022. c. For the first nine months of 2022, a pre-tax gain was recognized on the reversal of accruals for costs to lease and construct buildings under a master lease arrangement that Stratus entered into in connection with its sale of The Oaks at Lakeway in 2017. For the first nine months of 2021, a pre-tax gain was recognized on the January 2021 sale of The Saint Mary. d. The first nine months of 2022 includes a $119.7 million pre-tax gain on the May 2022 sale of Block 21. e. Represents noncontrolling interest partners' share in the results of the consolidated projects in which they participate. The first nine months of 2021 includes a $6.7 million gain from the sale of The Saint Mary attributable to noncontrolling interest owners. STRATUS PROPERTIES INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands) September 30, 2022 December 31, 2021 ASSETS Cash and cash equivalents a $ 63,537 $ 24,229 Restricted cash 13,776 18,294 Real estate held for sale 1,773 1,773 Real estate under development 224,813 181,224 Land available for development 40,331 40,659 Real estate held for investment, net 93,446 90,284 Lease right-of-use assets 10,910 10,487 Deferred tax assets 47 6,009 Other assets 14,204 17,214 Assets held for sale - discontinued operations — 151,053 Total assets $ 462,837 $ 541,226 LIABILITIES AND EQUITY Liabilities: Accounts payable $ 13,187 $ 14,118 Accrued liabilities, including taxes 15,951 22,069 Debt 124,170 106,648 Lease liabilities 14,945 13,986 Deferred gain 3,748 4,801 Other liabilities b 6,019 17,894 Liabilities held for sale - discontinued operations — 153,097 Total liabilities 178,020 332,613 Commitments and contingencies Equity: Stockholders' equity: Common stock 94 94 Capital in excess of par value of common stock 195,123 188,759 Retained earnings (accumulated deficit) 47,559 (8,963 ) Common stock held in treasury (23,004 ) (21,753 ) Total stockholders' equity 219,772 158,137 Noncontrolling interests in subsidiaries 65,045 50,476 Total equity 284,817 208,613 Total liabilities and equity $ 462,837 $ 541,226 a. The increase from prior year end primarily reflects the proceeds received from the May 2022 sale of Block 21. b. The decrease from prior year end primarily reflects the reduction in liabilities associated with the PPIP as certain PPIP awards have been paid out in cash or restricted stock units to eligible participants. STRATUS PROPERTIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands) Nine Months Ended September 30, 2022 2021 Cash flow from operating activities: Net income $ 96,070 $ 1,265 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 2,664 8,758 Cost of real estate sold 7,510 4,028 Impairment of real estate 720 625 Gain on sale of discontinued operations (119,695 ) — Gain on sale of assets (4,812 ) (22,931 ) Net gain on extinguishment of debt — (3,454 ) Debt issuance cost amortization and stock-based compensation 1,898 1,468 Equity in unconsolidated affiliate’s loss 8 11 Deferred income taxes 5,962 — Purchases and development of real estate properties (18,294 ) (30,841 ) Decrease (increase) in other assets 4,858 (997 ) (Decrease) increase in accounts payable, accrued liabilities and other (26,213 ) 5,699 Net cash used in operating activities (49,324 ) (36,369 ) Cash flow from investing activities: Proceeds from sale of discontinued operations 105,813 — Proceeds from sale of assets — 59,488 Capital expenditures (38,889 ) (6,708 ) Payments on master lease obligations (742 ) (1,019 ) Other, net (8 ) 36 Net cash provided by investing activities 66,174 51,797 Cash flow from financing activities: Borrowings from credit facility 30,000 37,700 Payments on credit facility (30,000 ) (26,778 ) Borrowings from project loans 25,798 39,445 Payments on project and term loans (9,761 ) (53,330 ) Payment of dividends (38,675 ) — Stock-based awards net payments (452 ) (132 ) Distributions to noncontrolling interests — (13,227 ) Noncontrolling interests’ contributions 15,032 27,977 Purchases of treasury stock (262 ) — Financing costs (1,356 ) (1,645 ) Net cash (used in) provided by financing activities (9,676 ) 10,010 Net increase in cash, cash equivalents and restricted cash 7,174 25,438 Cash, cash equivalents and restricted cash at beginning of year 70,139 34,183 Cash, cash equivalents and restricted cash at end of period $ 77,313 $ 59,621 STRATUS PROPERTIES INC. BUSINESS SEGMENTS As a result of the sale of Block 21 in May 2022, Stratus currently has two operating segments: Real Estate Operations and Leasing Operations. Block 21, which encompassed Stratus’ hotel and entertainment segments, along with some leasing operations, is reflected as discontinued operations through its sale in May 2022. The Real Estate Operations segment is comprised of Stratus’ real estate assets (developed for sale, under development and available for development), which consists of its properties in Austin, Texas (including Section N, Holden Hills, Amarra multi-family and commercial land, Amara Villas, The Saint June and other vacant land in the Barton Creek community; the Circle C community; the Lantana community, including a portion of Lantana Place planned for a multi-family phase now known as The Saint Julia; The Saint George; and the land for The Annie B); in Lakeway, Texas, located in the greater Austin area (Lakeway); in College Station, Texas (a portion of Jones Crossing and vacant pad sites); and in Magnolia, Texas (Magnolia Place), Kingwood, Texas (land for future multi-family development, for which a sale closed in October 2022, and a vacant pad site) and New Caney, Texas (New Caney), located in the greater Houston area. The Leasing Operations segment is comprised of Stratus’ real estate assets, both residential and commercial, that are leased or available for lease and includes West Killeen Market, Lantana Place, Kingwood Place and the completed portion of Jones Crossing. The segment also included The Saint Mary until its sale in January 2021 and The Santal until its sale in December 2021. Stratus uses operating income or loss to measure the performance of each segment. General and administrative expenses, which primarily consist of employee salaries, wages and other costs, are managed on a consolidated basis and are not allocated to Stratus’ operating segments. The following segment information reflects management determinations that may not be indicative of what the actual financial performance of each segment would be if it were an independent entity. Summarized financial information by segment for the three months ended September 30, 2022, based on Stratus’ internal financial reporting system utilized by its chief operating decision maker, follows (in thousands): Real Estate Operations a Leasing Operations Corporate, Eliminations and Other b Total Revenues: Unaffiliated customers $ 6,887 $ 3,090 $ — $ 9,977 Cost of sales, excluding depreciation 6,232 1,350 (4 ) 7,578 Depreciation 24 887 (4 ) 907 General and administrative expenses — — 3,602 3,602 Impairment of real estate c 720 — — 720 Operating (loss) income $ (89 ) $ 853 $ (3,594 ) $ (2,830 ) Capital expenditures and purchases and development of real estate properties $ 6,203 $ 11,314 $ — $ 17,517 Total assets at September 30, 2022 274,397 111,938 76,502 462,837 a. Includes sales commissions and other revenues together with related expenses. b. Includes consolidated general and administrative expenses and eliminations of intersegment amounts. c. Includes a $650 thousand impairment charge for one of the Amarra Villas homes that is under contract to sell for $2.4 million and a $70 thousand impairment charge for the multi-family tract of land at Kingwood Place that sold for $5.5 million in October 2022. Summarized financial information by segment for the three months ended September 30, 2021, based on Stratus’ internal financial reporting system utilized by its chief operating decision maker, follows (in thousands): Real Estate Operations a Leasing Operations Corporate, Eliminations and Other b Total Revenues: Unaffiliated customers $ 892 $ 5,376 $ — $ 6,268 Cost of sales, excluding depreciation 2,134 2,238 (25 ) 4,347 Depreciation 37 1,449 (14 ) 1,472 General and administrative expenses c — — 5,252 5,252 Impairment of real estate d 625 — — 625 Operating (loss) income $ (1,904 ) $ 1,689 $ (5,213 ) $ (5,428 ) Capital expenditures and purchases and development of real estate properties $ 25,962 $ 4,120 $ 210 $ 30,292 Total assets at September 30, 2021 e 211,423 180,057 167,620 559,100 a. Includes sales commissions and other revenues together with related expenses. b. Includes consolidated general and administrative expenses and eliminations of intersegment amounts. c. Includes $2.8 million in employee incentive compensation costs associated with the PPIP resulting primarily from an increased valuation for The Santal. d. Includes a $625 thousand impairment charge for the multi-family tract of land at Kingwood Place. e. Leasing operations includes $67.3 million of assets held for sale related to the December 2021 sale of The Santal. Corporate, eliminations and other includes $147.8 million of assets held for sale associated with discontinued operations at Block 21. Summarized financial information by segment for the nine months ended September 30, 2022, based on Stratus’ internal financial reporting system utilized by its chief operating decision maker, follows (in thousands): Real Estate Operations a Leasing Operations Corporate, Eliminations and Other b Total Revenues: Unaffiliated customers $ 14,831 $ 9,370 $ — $ 24,201 Intersegment 6 — (6 ) — Cost of sales, excluding depreciation 13,030 3,204 (4 ) 16,230 Depreciation 73 2,604 (13 ) 2,664 General and administrative expenses — — 10,213 10,213 Gain on sale of assets c — (4,812 ) — (4,812 ) Impairment of real estate d 720 — — 720 Operating income (loss) $ 1,014 $ 8,374 $ (10,202 ) $ (814 ) Capital expenditures and purchases and development of real estate properties $ 18,294 $ 38,676 $ 213 $ 57,183 a. Includes sales commissions and other revenues together with related expenses. b. Includes consolidated general and administrative expenses and eliminations of intersegment amounts. c. Represents a pre-tax gain recognized on the reversal of accruals for costs to lease and construct buildings under a master lease arrangement that Stratus entered into in connection with its sale of The Oaks at Lakeway in 2017. d. Includes a $650 thousand impairment charge for one of the Amarra Villas homes that is under contract to sell for $2.4 million and a $70 thousand impairment charge for the multi-family tract of land at Kingwood Place that sold for $5.5 million in October 2022. Summarized financial information by segment for the nine months ended September 30, 2021, based on Stratus’ internal financial reporting system utilized by its chief operating decision maker, follows (in thousands): Real Estate Operations a Leasing Operations Corporate, Eliminations and Other b Total Revenues: Unaffiliated customers $ 8,216 $ 15,057 $ — $ 23,273 Intersegment 9 — (9 ) — Cost of sales, excluding depreciation 8,026 6,482 (25 ) 14,483 Depreciation 149 4,525 (50 ) 4,624 General and administrative expenses c — — 15,797 15,797 Gain on sale of assets d — (22,931 ) — (22,931 ) Impairment of real estate e 625 — — 625 Operating (loss) income $ (575 ) $ 26,981 $ (15,731 ) $ 10,675 Capital expenditures and purchases and development of real estate properties $ 30,841 $ 6,233 $ 475 $ 37,549 a. Includes sales commissions and other revenues together with related expenses. b. Includes consolidated general and administrative expenses and eliminations of intersegment amounts. c. Includes $3.8 million incurred for consulting, legal and public relation costs for Stratus' successful proxy contest and the REIT exploration process as well as $3.5 million in employee incentive compensation costs associated with the PPIP resulting primarily from an increased valuation for The Santal. d. Represents the pre-tax gain on the January 2021 sale of The Saint Mary. e. Includes a $625 thousand impairment charge for the multi-family tract of land at Kingwood Place. RECONCILIATION OF NON-GAAP MEASURE EBITDA EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP (generally accepted accounting principles in the U.S.) financial measure that is frequently used by securities analysts, investors, lenders and others to evaluate companies’ recurring operating performance, including, among other things, profitability before the effect of financing and similar decisions. Because securities analysts, investors, lenders and others use EBITDA, management believes that Stratus’ presentation of EBITDA affords them greater transparency in assessing its financial performance. This information differs from net income (loss) from continuing operations determined in accordance with GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with GAAP. EBITDA may not be comparable to similarly titled measures reported by other companies, as different companies may calculate such measures differently. Management strongly encourages investors to review Stratus’ consolidated financial statements and publicly filed reports in their entirety. A reconciliation of Stratus’ net (loss) income from continuing operations to EBITDA follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net (loss) income from continuing operations a $ (2,574 ) $ (2,656 ) $ (230 ) $ 11,212 Depreciation 907 1,472 2,664 4,624 Interest expense, net — 855 15 2,690 Provision for income taxes 420 121 159 290 EBITDA b $ (1,247 ) $ (208 ) $ 2,608 $ 18,816 a. For both periods of 2022, includes a $650 thousand impairment charge for one of the Amarra Villas homes that is under contract to sell for $2.4 million and a $70 thousand impairment charge for the multi-family tract of land at Kingwood Place that sold for $5.5 million in October 2022. The first nine months of 2022 includes a $4.8 million pre-tax gain recognized on the reversal of accruals for costs to lease and construct buildings under a master lease arrangement that Stratus entered into in connection with its sale of The Oaks at Lakeway in 2017. For both periods of 2021, includes a $3.7 million gain related to forgiveness of Stratus’ Paycheck Protection Program loan and a $625 thousand impairment charge for the multi-family tract of land at Kingwood Place. The first nine months of 2021 includes a pre-tax gain on the January 2021 sale of The Saint Mary of $22.9 million ($16.2 million net of noncontrolling interests). b. The impact of accounting for the Block 21 sale as discontinued operations reduced EBITDA by $1.8 million in third-quarter 2021, $125.2 million for the first nine months of 2022, and $0.2 million for the first nine months of 2021.
- 11/14/2022
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Stratus Properties Inc. to Hold Third-Quarter 2022 Conference Call on Monday, November 14, 2022
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) announced today that it will release its third-quarter 2022 financial and operating results before the market opens on Monday, November 14, 2022, and will host a conference call at 11:00 a.m.
- 10/19/2022
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Stratus Properties, Inc.'s (STRS) CEO Beau Armstrong on Q2 2022 Results - Earnings Call Transcript
- Stratus Properties Inc. (NASDAQ:STRS ) Q2 2022 Earnings Conference Call August 15, 2022 11:00 AM ET Company Participants Beau Armstrong - Chairman, President and Chief Executive Officer Erin Pickens - Chief Financial Officer Conference Call Participants Chris Mooney - Wedbush Securities Richard Diamond - Castlewood Capital Operator Good day and welcome to the Stratus Properties Second Quarter 2022 Financial and Operational Conference Call. Earlier this morning Stratus released its second quarter 2022 financial results and provided business updates, which are available on its website at stratusproperties.com.
- 08/15/2022
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Stratus Properties Inc. Reports Second-Quarter 2022 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations in the Austin, Texas area and other select markets in Texas, today reported second-quarter 2022 results. Highlights and Recent Developments: As a result of its strategic planning process, Stratus’ Board of Directors (Board) has approved returning $50.0 million cash to shareholders, subject to obtaining required consents from Comerica Bank. This return of capital could be in the form of share repurchases, dividends or a combination. After streamlining Stratus’ business through the sale of Block 21, the Board has decided to continue Stratus’ successful development program, with Stratus’ proven team focusing on pure residential and residential-focused mixed-use projects in Austin and other select markets in Texas. On May 31, 2022, Stratus completed the previously announced sale of Block 21, a mixed-use development in downtown Austin, Texas, that contains the W Austin Hotel and office, retail and entertainment space, to Ryman Hospitality Properties, Inc. (Ryman) for $260.0 million, subject to certain adjustments. Stratus’ net proceeds of cash and restricted cash totaled $112.3 million. As a result of the sale, Stratus recorded a pre-tax gain on the sale of $119.7 million ($94.1 million net of taxes) in second-quarter 2022 included in net income (loss) from discontinued operations. Stratus’ total stockholders’ equity increased to $262.4 million at June 30, 2022, from $158.1 million at December 31, 2021, and $98.9 million at December 31, 2020, primarily as a result of gains realized on Stratus’ sales of Block 21, The Santal and The Saint Mary. Net income attributable to common stockholders totaled $96.6 million, $11.53 per diluted share, in second-quarter 2022, compared to a net loss attributable to common stockholders of $10.2 million, $1.23 per diluted share, in second-quarter 2021. Second-quarter 2022 results include net income from discontinued operations, including a gain on the sale of Block 21, of $95.9 million, compared to a net loss from discontinued operations of $5.9 million in second-quarter 2021. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) totaled $1.5 million in second-quarter 2022, compared to $(4.5) million in second-quarter 2021. For a reconciliation of income (loss) from continuing operations to EBITDA, see the supplemental schedule, “Reconciliation of Non-GAAP Measure EBITDA,” on page VI. Stratus continues construction on The Saint June, a 182-unit luxury garden-style multi-family project within the Amarra development in Barton Creek; Magnolia Place, an H-E-B grocery shadow-anchored, mixed-use project in Magnolia, Texas; and the last 12 Amarra Villas homes. In July 2022, Stratus entered into a $56.8 million construction loan to provide financing for the construction of The Saint George, a 316-unit luxury wrap-style, multi-family project in north-central Austin. Stratus began construction on the project in third-quarter 2022. Stratus’ three stabilized mixed-use projects anchored or shadow-anchored by H-E-B grocery stores, Kingwood Place, West Killeen Market and Jones Crossing, continue to perform well and generate revenue. Stratus is exploring a potential sale or refinancing of these three retail properties. William H. Armstrong III, Chairman of the Board and Chief Executive Officer of Stratus, stated, “I am proud to share that the Stratus team’s execution has resulted in a 165 percent increase in shareholders’ equity to $262.4 million at June 30, 2022, from $98.9 million at December 31, 2020. The recent quarters have marked a significant inflection point for Stratus, with several key developments for our shareholders. We successfully closed the sale of Block 21; raised a total of $33.4 million of third-party equity capital and entered into a $56.8 million construction loan with Comerica Bank for The Saint George; and continued to make good progress on several of the projects in our pipeline, including The Saint June, Holden Hills, The Annie B and The Saint Julia. We also recently closed on the sale of 28 acres of undeveloped residential land at Magnolia Place for $3.2 million in the third quarter. Stratus’ Board of Directors has approved returning $50.0 million cash to shareholders, in the form of share repurchases, dividends or a combination of both, subject to obtaining required consents from Comerica Bank. The Block 21 sale has allowed us to streamline our business and focus on pure residential and residential-focused mixed-use properties in Austin and other select Texas locations, where residential demand remains strong. The Board has also decided to continue Stratus’ successful development program, which has proven to maximize value for our shareholders. Our team’s knowledge, dedication, experience and relationships in our Texas markets continue to provide the foundation for Stratus to execute on our strategy and position us to take advantage of future opportunities.” Results of Stratus’ Strategic Planning Process As a result of its strategic planning process, Stratus’ Board has approved returning $50.0 million cash to shareholders, subject to obtaining required consents from Comerica Bank. This return of capital could be in the form of share repurchases, dividends or a combination. After streamlining Stratus’ business through the sale of Block 21, the Board has decided to continue Stratus’ successful development program, with Stratus’ proven team focusing on pure residential and residential-focused mixed-use projects in Austin and other select markets in Texas. Stratus plans to continue to develop properties using project-level debt and third-party equity capital, with Stratus receiving development management fees and asset management fees, and with potential returns to Stratus increasing above its relative equity interest in each project as negotiated return hurdles are achieved. Stratus expects to reduce its reliance on its revolving credit facility and retain sufficient cash to operate its business, taking into account risks associated with changing market conditions. Stratus is exploring a potential sale or refinancing of Kingwood Place, Jones Crossing and West Killeen Market, as previously disclosed, and is also pursuing other projects, which may produce additional cash to return to shareholders, subject to market conditions and obtaining any required consents. Stratus has undeveloped properties currently undergoing active planning, including its two large projects Holden Hills and Section N. Stratus will re-evaluate its strategy as development progresses on these and other projects in its pipeline, and as market conditions stabilize. Summary Financial Results Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In Thousands, Except Per Share Amounts) (Unaudited) Revenues Real Estate Operations $ 7,927 $ 773 $ 7,950 $ 7,333 Leasing Operations 3,200 4,863 6,280 9,681 Corporate, eliminations and other (2 ) (5 ) (6 ) (9 ) Total consolidated revenue $ 11,125 $ 5,631 $ 14,224 $ 17,005 Operating income (loss) Real Estate Operations $ 2,471 $ (807 ) $ 1,103 $ 1,329 Leasing Operations 1,465 1,139 7,521 a 25,292 b Corporate, eliminations and otherc (3,441 ) (6,212 ) (6,608 ) (10,518 ) Total consolidated operating income (loss) $ 495 $ (5,880 ) $ 2,016 $ 16,103 Net income (loss) from continuing operations $ 532 $ (4,306 ) $ 2,344 $ 13,868 Net income (loss) from discontinued operations $ 95,925 $ (5,898 ) $ 96,300 $ (8,406 ) Net loss (income) attributable to noncontrolling interests in subsidiariese $ 164 $ 41 $ 249 $ (6,681 ) Net income (loss) attributable to common stockholders $ 96,621 $ (10,163 ) $ 98,893 $ (1,219 ) Basic net income (loss) per share: Continuing operations $ 0.09 $ (0.52 ) $ 0.31 $ 0.87 Discontinued operations 11.59 (0.71 ) 11.66 (1.02 ) $ 11.68 $ (1.23 ) $ 11.97 $ (0.15 ) Diluted net income (loss) per share: Continuing operations $ 0.09 $ (0.52 ) $ 0.31 $ 0.87 Discontinued operations 11.44 (0.71 ) 11.51 (1.02 ) $ 11.53 $ (1.23 ) $ 11.82 $ (0.15 ) EBITDA $ 1,457 $ (4,483 ) $ 3,855 $ 19,024 Capital expenditures and purchases and development of real estate properties $ 20,078 $ 3,759 $ 39,666 $ 7,257 Weighted-average shares of common stock outstanding: Basic 8,273 8,235 8,262 8,229 Diluted 8,383 8,235 8,369 8,229 Continuing Operations The increase in revenue and operating income from the Real Estate Operations segment in second-quarter 2022, compared to second-quarter 2021, reflects the second-quarter 2022 sales of an Amarra Villas home for $2.4 million and the following undeveloped properties: (i) a six-acre multi-family tract of land in Amarra Drive for $2.5 million, (ii) a completed pad site at Magnolia Place for $2.3 million and (iii) a tract of land in Austin, Texas for $0.6 million. In August 2022, Stratus sold 28 acres of undeveloped residential land for $3.2 million at Magnolia Place. The decrease in revenue from the Leasing Operations segment in second-quarter 2022, compared to second-quarter 2021, primarily reflects the sale of The Santal in December 2021, partly offset by increased revenue at Lantana Place. The Santal had rental revenue of $2.3 million in second-quarter 2021. Operating income in the segment increased due to lower rental cost of sales and depreciation, primarily as a result of the sale of The Santal. Discontinued Operations - Sale of Block 21 On May 31, 2022, Stratus completed the previously announced sale of Block 21 to Ryman for $260.0 million, subject to certain purchase price adjustments, and including Ryman’s assumption of $136.2 million of existing mortgage debt, with the remainder paid in cash. Stratus’ net proceeds of cash and restricted cash totaled $112.3 million (including $6.9 million of post-closing escrow amounts to be held for 12 months after the closing, subject to a longer retention period with respect to any required reserve for pending claims). Stratus recorded a pre-tax gain on the sale of $119.7 million ($94.1 million net of taxes) in second-quarter 2022 included in net income (loss) from discontinued operations. Debt and Liquidity At June 30, 2022, consolidated debt totaled $114.6 million and consolidated cash totaled $102.4 million, compared with consolidated debt of $106.6 million and consolidated cash of $24.2 million at December 31, 2021. Consolidated debt at December 31, 2021, excluded the Block 21 loan of approximately $137 million, which was presented in liabilities held for sale - discontinued operations. Using proceeds from the sale of Block 21, Stratus repaid the outstanding amount under its $60.0 million Comerica Bank credit facility prior to June 30, 2022. As of June 30, 2022, Stratus had $49.0 million available under the credit facility. Letters of credit, totaling $11.0 million, have been issued under the credit facility, and secure Stratus’ obligation to build certain roads and utilities facilities benefiting Holden Hills and Section N. In July 2022, a Stratus subsidiary entered into a $56.8 million loan with Comerica Bank to provide financing for the construction of The Saint George multi-family project. The construction loan has a maturity date of July 19, 2026, with two options to extend the maturity for an additional 12 months, subject to satisfying specified conditions. In connection with closing the construction financing, Stratus made an additional capital contribution of $1.7 million, and the unaffiliated Class B limited partner made an additional capital contribution of $15.0 million, bringing Stratus’ total capital contributions to $3.7 million and the Class B limited partner’s total capital contributions to $33.4 million. Purchases and development of real estate properties (included in operating cash flows) and capital expenditures (included in investing cash flows) totaled $39.7 million for the first six months of 2022, primarily related to the development of The Saint June, Magnolia Place and Barton Creek properties, including Amarra Villas, compared with $7.3 million for the first six months of 2021, primarily related to the development of Barton Creek properties, including Amarra Villas, Lantana Place and Magnolia Place. ---------------------------------------------- Conference Call Information Stratus will conduct an investor conference call to discuss its unaudited second-quarter 2022 financial and operating results today, August 15, 2022, at 11:00 a.m. Eastern Time. The public is invited to listen to the conference call by dialing (877) 418-4843 for domestic access and +1 (412) 902-6766 for international access. A replay of the conference call will be available until August 29, 2022, by dialing (877) 344-7529 for domestic access and by dialing +1 (412) 317-0088 for international access. Please use replay ID: 1725319. The replay will also be available on Stratus’ website at stratusproperties.com until August 29, 2022. __________________________ CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND REGULATION G DISCLOSURE. This press release contains forward-looking statements in which Stratus discusses factors it believes may affect its future performance. Forward-looking statements are all statements other than statements of historical fact, such as plans, projections or expectations related to the impacts of the COVID-19 pandemic, Stratus’ ability to meet its future debt service and other cash obligations, future cash flows and liquidity, Stratus’ expectations about the Austin and Texas real estate markets, the planning, financing, development, construction, completion and stabilization of Stratus’ development projects, plans to sell, recapitalize, or refinance properties, future operational and financial performance, municipal utility district reimbursements for infrastructure costs, regulatory matters, leasing activities, tax rates, the impact of inflation and interest rate changes, future capital expenditures and financing plans, possible joint ventures, partnerships, or other strategic relationships, other plans and objectives of management for future operations and development projects, and future cash returns to shareholders, including any share repurchases and/or dividend payments. The words “anticipate,” “may,” “can,” “plan,” “believe,” “potential,” “estimate,” “expect,” “project,” "target," “intend,” “likely,” “will,” “should,” “to be” and any similar expressions and/or statements are intended to identify those assertions as forward-looking statements. Under Stratus’ Comerica Bank debt agreements, Stratus is not permitted to repurchase its common stock in excess of $1.0 million or pay dividends on its common stock without Comerica Bank’s prior written consent. The declaration of dividends or decision to repurchase Stratus’ common stock is at the discretion of Stratus’ Board, subject to restrictions under Stratus’ Comerica Bank debt agreements, and will depend on Stratus’ financial results, cash requirements, projected compliance with covenants in its debt agreements, outlook and other factors deemed relevant by the Board. Stratus cautions readers that forward-looking statements are not guarantees of future performance, and its actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause Stratus’ actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, the ongoing COVID-19 pandemic and any future major public health crisis, increases in inflation and interest rates, supply chain constraints, declines in the market value of Stratus’ assets, increases in operating and construction costs, including real estate taxes and the cost of building materials and labor, Stratus’ ability to pay or refinance its debt or comply with or obtain waivers of financial and other covenants in debt agreements and to meet other cash obligations, Stratus’ ability to collect anticipated rental payments and close projected asset sales, the availability and terms of financing for development projects and other corporate purposes, Stratus’ ability to enter into and maintain joint ventures, partnerships, or other strategic relationships, including risks associated with such joint ventures, Stratus’ ability to implement its business strategy successfully, including its ability to develop, construct and sell or lease properties on terms its Board considers acceptable, market conditions or corporate developments that could preclude, impair or delay any opportunities with respect to plans to sell, recapitalize or refinance properties, Stratus’ ability to obtain various entitlements and permits, a decrease in the demand for real estate in select markets in Texas where Stratus operates, changes in economic, market and business conditions, including as a result of the war in Ukraine, reductions in discretionary spending by consumers and businesses, competition from other real estate developers, the termination of sales contracts or letters of intent because of, among other factors, the failure of one or more closing conditions or market changes, the failure to attract customers or tenants for its developments or such customers’ or tenants’ failure to satisfy their purchase commitments or leasing obligations, changes in consumer preferences, industry risks, changes in laws, regulations or the regulatory environment affecting the development of real estate, opposition from special interest groups or local governments with respect to development projects, weather- and climate-related risks, loss of key personnel, environmental and litigation risks, cybersecurity incidents and other factors described in more detail under the heading “Risk Factors” in Stratus’ Annual Report on Form 10-K for the year ended December 31, 2021, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, each filed with the Securities Exchange Commission (SEC). This press release also includes EBITDA, which is not recognized under U.S. generally accepted accounting principles (GAAP). Stratus believes this measure can be helpful to investors in evaluating its business. EBITDA is a financial measure frequently used by securities analysts, lenders and others to evaluate Stratus’ recurring operating performance. EBITDA is intended to be a performance measure that should not be regarded as more meaningful than a GAAP measure. Other companies may calculate EBITDA differently. As required by SEC Regulation G, a reconciliation of Stratus’ net income (loss) from continuing operations to EBITDA is included in the supplemental schedule of this press release. Investors are cautioned that many of the assumptions upon which Stratus’ forward-looking statements are based are likely to change after the date the forward-looking statements are made. Further, Stratus may make changes to its business plans that could affect its results. Stratus cautions investors that it undertakes no obligation to update any forward-looking statements, which speak only as of the date made, notwithstanding any changes in its assumptions, business plans, actual experience, or other changes. A copy of this release is available on Stratus’ website, stratusproperties.com. STRATUS PROPERTIES INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (In Thousands, Except Per Share Amounts) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues: Real estate operations $ 7,925 $ 768 $ 7,944 $ 7,324 Leasing operations 3,200 4,863 6,280 9,681 Total revenues 11,125 5,631 14,224 17,005 Cost of sales: Real estate operations 5,432 1,532 6,798 5,892 Leasing operations 870 2,192 1,854 4,244 Depreciation 884 1,566 1,757 3,152 Total cost of sales 7,186 5,290 10,409 13,288 General and administrative expensesa 3,444 6,221 6,611 10,545 Gain on sale of assets — — (4,812 )b (22,931 )c Total 10,630 11,511 12,208 902 Operating income (loss) 495 (5,880 ) 2,016 16,103 Interest expense, net — (779 ) (15 ) (1,835 ) Loss on extinguishment of debt — (163 ) — (226 ) Other income, net 80 1 86 4 Income (loss) before income taxes and equity in unconsolidated affiliates' loss 575 (6,821 ) 2,087 14,046 (Provision for) benefit from income taxes (41 ) 2,522 261 (169 ) Equity in unconsolidated affiliates' loss (2 ) (7 ) (4 ) (9 ) Net income (loss) from continuing operations 532 (4,306 ) 2,344 13,868 Net income (loss) from discontinued operations 95,925 (5,898 ) 96,300 (8,406 ) Net income (loss) and total comprehensive income (loss) 96,457 (10,204 ) 98,644 5,462 Total comprehensive loss (income) attributable to noncontrolling interestse 164 41 249 (6,681 ) Net income (loss) and total comprehensive income (loss) attributable to common stockholders $ 96,621 $ (10,163 ) $ 98,893 $ (1,219 ) Basic net income (loss) per share attributable to common stockholders: Continuing operations $ 0.09 $ (0.52 ) $ 0.31 $ 0.87 Discontinued operations 11.59 (0.71 ) 11.66 (1.02 ) $ 11.68 $ (1.23 ) $ 11.97 $ (0.15 ) Diluted net income (loss) per share attributable to common stockholders: Continuing operations $ 0.09 $ (0.52 ) $ 0.31 $ 0.87 Discontinued operations 11.44 (0.71 ) 11.51 (1.02 ) $ 11.53 $ (1.23 ) $ 11.82 $ (0.15 ) Weighted-average shares of common stock outstanding: Basic 8,273 8,235 8,262 8,229 Diluted 8,383 8,235 8,369 8,229 STRATUS PROPERTIES INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands) June 30, 2022 December 31, 2021 ASSETS Cash and cash equivalents $ 102,372 a $ 24,229 Restricted cash 8,162 18,294 Real estate held for sale 1,773 1,773 Real estate under development 212,421 181,224 Land available for development 45,174 40,659 Real estate held for investment, net 88,935 90,284 Lease right-of-use assets 10,350 10,487 Deferred tax assets 177 6,009 Other assets 15,296 17,214 Assets held for sale - discontinued operations — 151,053 Total assets $ 484,660 $ 541,226 LIABILITIES AND EQUITY Liabilities: Accounts payable $ 15,680 $ 14,118 Accrued liabilities, including taxes 18,261 22,069 Debt 114,591 106,648 Lease liabilities 14,206 13,986 Deferred gain 4,055 4,801 Other liabilities 5,211 b 17,894 Liabilities held for sale - discontinued operations — 153,097 Total liabilities 172,004 332,613 Commitments and contingencies Equity: Stockholders' equity: Common stock 94 94 Capital in excess of par value of common stock 194,610 188,759 Retained earnings (accumulated deficit) 89,930 (8,963 ) Common stock held in treasury (22,205 ) (21,753 ) Total stockholders' equity 262,429 158,137 Noncontrolling interests in subsidiaries 50,227 50,476 Total equity 312,656 208,613 Total liabilities and equity $ 484,660 $ 541,226 STRATUS PROPERTIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands) Six Months Ended June 30, 2022 2021 Cash flow from operating activities: Net income $ 98,644 $ 5,462 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 1,757 5,926 Cost of real estate sold 3,599 3,341 Gain on sale of discontinued operations (119,695 ) — Gain on sale of assets (4,812 ) (22,931 ) Loss on extinguishment of debt — 226 Debt issuance cost amortization and stock-based compensation 1,107 969 Equity in unconsolidated affiliates' loss 4 9 Deferred income taxes 5,832 — Purchases and development of real estate properties (12,091 ) (4,879 ) Decrease (increase) in other assets 3,112 (1,309 ) Decrease in accounts payable, accrued liabilities and other (21,098 ) (1,804 ) Net cash used in operating activities (43,641 ) (14,990 ) Cash flow from investing activities: Proceeds from sale of discontinued operations 105,813 — Proceeds from sale of assets — 59,488 Capital expenditures (27,575 ) (2,378 ) Payments on master lease obligations (418 ) (643 ) Other, net — 37 Net cash provided by investing activities 77,820 56,504 Cash flow from financing activities: Borrowings from credit facility 30,000 29,000 Payments on credit facility (30,000 ) (26,778 ) Borrowings from project loans 12,455 25,355 Payments on project and term loans (5,582 ) (52,040 ) Stock-based awards net payments (452 ) (157 ) Distributions to noncontrolling interests — (13,087 ) Financing costs (205 ) (1,106 ) Net cash provided by (used in) financing activities 6,216 (38,813 ) Net increase in cash, cash equivalents and restricted cash 40,395 2,701 Cash, cash equivalents and restricted cash at beginning of year 70,139 34,183 Cash, cash equivalents and restricted cash at end of period $ 110,534 $ 36,884 STRATUS PROPERTIES INC. BUSINESS SEGMENTS As a result of the sale of Block 21, Stratus currently has two operating segments: Real Estate Operations and Leasing Operations. Block 21, which encompassed Stratus’ hotel and entertainment segments, along with some leasing operations, is reflected as discontinued operations through its sale in May 2022. The Real Estate Operations segment is comprised of Stratus’ real estate assets (developed for sale, under development and available for development), which consists of its properties in Austin, Texas (including Section N, Holden Hills, Amarra multi-family and commercial land, Amara Villas, The Saint June and other vacant land in the Barton Creek community; the Circle C community; the Lantana community, including a portion of Lantana Place planned for a multi-family phase now known as The Saint Julia; The Saint George; and the land for The Annie B); in Lakeway, Texas, located in the greater Austin area (Lakeway); in College Station, Texas (a portion of Jones Crossing and vacant pad sites); in Killeen, Texas (one vacant pad site at West Killeen Market, for which a sale is pending); and in Magnolia, Texas (Magnolia Place), Kingwood, Texas (land for future multi-family development, for which a sale is pending, and a vacant pad site) and New Caney, Texas (New Caney), located in the greater Houston area. The Leasing Operations segment is comprised of Stratus’ real estate assets, both residential and commercial, that are leased or available for lease and includes West Killeen Market, Lantana Place, Kingwood Place and the completed portion of Jones Crossing. The segment also included The Saint Mary until its sale in January 2021 and The Santal until its sale in December 2021. Stratus uses operating income or loss to measure the performance of each segment. General and administrative expenses, which primarily consist of employee salaries, wages and other costs, are managed on a consolidated basis and are not allocated to Stratus’ operating segments. The following segment information reflects management determinations that may not be indicative of what the actual financial performance of each segment would be if it were an independent entity. Segment information presented below was prepared on the same basis as Stratus’ consolidated financial statements (in thousands). Real Estate Operationsa Leasing Operations Corporate, Eliminations and Otherb Total Three Months Ended June 30, 2022: Revenues: Unaffiliated customers $ 7,925 $ 3,200 $ — $ 11,125 Intersegment 2 — (2 ) — Cost of sales, excluding depreciation 5,432 870 — 6,302 Depreciation 24 865 (5 ) 884 General and administrative expenses — — 3,444 c 3,444 Operating income (loss) $ 2,471 $ 1,465 $ (3,441 ) $ 495 Capital expenditures and purchases and development of real estate properties $ 7,227 $ 12,820 $ 31 $ 20,078 Total assets at June 30, 2022 265,929 106,020 112,711 d 484,660 Three Months Ended June 30, 2021: Revenues: Unaffiliated customers $ 768 $ 4,863 $ — $ 5,631 Intersegment 5 — (5 ) — Cost of sales, excluding depreciation 1,532 2,192 — 3,724 Depreciation 48 1,532 (14 ) 1,566 General and administrative expenses — — 6,221 6,221 Operating (loss) income $ (807 ) $ 1,139 $ (6,212 ) $ (5,880 ) Capital expenditures and purchases and development of real estate properties $ 2,390 $ 1,211 $ 158 $ 3,759 Total assets at June 30, 2021 165,624 180,428 e 164,289 f 510,341 Six Months Ended June 30, 2022: Revenues: Unaffiliated customers $ 7,944 $ 6,280 $ — $ 14,224 Intersegment 6 — (6 ) — Cost of sales, excluding depreciation 6,798 1,854 — 8,652 Depreciation 49 1,717 (9 ) 1,757 General and administrative expenses — — 6,611 c 6,611 Gain on sale of assets — (4,812 ) g — (4,812 ) Operating income (loss) $ 1,103 $ 7,521 $ (6,608 ) $ 2,016 Capital expenditures and purchases and development of real estate properties $ 12,091 $ 27,362 $ 213 $ 39,666 Six Months Ended June 30, 2021: Revenues: Unaffiliated customers $ 7,324 $ 9,681 $ — $ 17,005 Intersegment 9 — (9 ) — Cost of sales, excluding depreciation 5,892 4,244 — 10,136 Depreciation 112 3,076 (36 ) 3,152 General and administrative expenses — — 10,545 10,545 Gain on sale of assets — (22,931 ) h — (22,931 ) Operating income (loss) $ 1,329 $ 25,292 $ (10,518 ) $ 16,103 Capital expenditures and purchases and development of real estate properties $ 4,879 $ 2,113 $ 265 $ 7,257 RECONCILIATION OF NON-GAAP MEASURE EBITDA EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP (generally accepted accounting principles in the U.S.) financial measure that is frequently used by securities analysts, investors, lenders and others to evaluate companies’ recurring operating performance, including, among other things, profitability before the effect of financing and similar decisions. Because securities analysts, investors, lenders and others use EBITDA, management believes that Stratus’ presentation of EBITDA affords them greater transparency in assessing its financial performance. This information differs from net income (loss) from continuing operations determined in accordance with GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with GAAP. EBITDA may not be comparable to similarly titled measures reported by other companies, as different companies may calculate such measures differently. Management strongly encourages investors to review Stratus’ consolidated financial statements and publicly filed reports in their entirety. A reconciliation of Stratus’ net income (loss) from continuing operations to EBITDA follows (in thousands). Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income (loss) from continuing operations $ 532 $ (4,306 ) $ 2,344 a $ 13,868 b Depreciation 884 1,566 1,757 3,152 Interest expense, net — 779 15 1,835 Provision for (benefit from) income taxes 41 (2,522 ) (261 ) 169 EBITDAc $ 1,457 $ (4,483 ) $ 3,855 $ 19,024
- 08/15/2022
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Stratus Properties Inc. to Hold Second-Quarter 2022 Conference Call on Monday, August 15, 2022
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) announced today that it will release its second-quarter 2022 financial and operating results before the market opens on Monday, August 15, 2022, and will host a conference call at 11:00 a.m. Eastern Time on the same day. Investors wishing to participate in the conference call may dial: Conference Call Domestic Dial-In Number: 1-877-418-4843 International Dial-In Number: 1-412-902-6766 Conference Call Replay Domestic Dial-In
- 07/20/2022
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Stratus Properties, Inc. (STRS) CEO Beau Armstrong On Q1 2022 Results - Earnings Call Transcript
- Stratus Properties, Inc. (NASDAQ:STRS ) Q1 2022 Earnings Conference Call May 16, 2022 8:00 AM ET Company Participants Beau Armstrong - Chairman, President and CEO Erin Pickens - CFO Conference Call Participants Chris Mooney - Wedbush Securities Operator Good day and welcome to the Stratus Properties First Quarter 2022 Financial and Operational Conference Call. Earlier this morning Stratus released its first quarter 2022 financial results and provided business updates which are available on its website at stratusproperties.com.
- 05/16/2022
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Stratus Properties Inc. Reports First-Quarter 2022 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations focused in the Austin, Texas area and other select, fast-growing markets in Texas, today reported first-quarter 2022 results. Highlights and Recent Developments: Stratus continues to make progress on the pending sale of Block 21, a mixed-use development in downtown Austin, Texas, that contains the W Austin Hotel and office, retail and entertainment space, to Ryman Hospitality Properties, Inc. (Ryman) for $260.0 million. The transaction is expected to close prior to June 1, 2022, but remains subject to the timely satisfaction or waiver of various closing conditions. Net income attributable to common stockholders totaled $2.3 million, $0.27 per diluted share, in first-quarter 2022, compared to $8.9 million, $1.08 per diluted share, in first-quarter 2021. First-quarter 2022 results include a pre-tax gain of $4.8 million related to the reversal of accruals for costs to lease and construct buildings under a master lease arrangement that Stratus entered into in connection with its sale of The Oaks at Lakeway in 2017. First-quarter 2021 results include a pre-tax gain of $22.9 million ($16.2 million net of noncontrolling interests) on the sale of The Saint Mary, partially offset by a $2.5 million net loss from discontinued operations as Stratus’ hotel and entertainment operations were impacted by the COVID-19 pandemic. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) totaled $2.4 million in first-quarter 2022, compared to $23.5 million in first-quarter 2021. For a reconciliation of income from continuing operations to EBITDA, see the supplemental schedule, “Reconciliation of Non-GAAP Measure EBITDA,” on page V. Stratus continues construction on The Saint June, a 182-unit luxury garden-style multi-family project within the Amarra development in Barton Creek; Magnolia Place, an H-E-B grocery shadow-anchored, mixed-use project in Magnolia, Texas; and on five Amarra Villas homes. Stratus continues to advance development plans for The Annie B, a proposed luxury high-rise rental project with ground-level retail in downtown Austin, and The Saint George, a proposed 316-unit luxury wrap-style multi-family project in north-central Austin, after purchasing the land for both projects during 2021. Stratus also continues to advance development plans for its 306-unit Lantana Place multi-family project now referred to as The Saint Julia and for Holden Hills, Stratus’ final large single-family residential development within Austin’s Barton Creek community. Stratus’ three stabilized mixed-use projects anchored or shadow-anchored by H-E-B grocery stores, Kingwood Place, West Killeen Market and Jones Crossing, continue to perform well and generate revenue. Stratus is exploring a potential sale or refinancing of these three retail properties. Stratus’ Board of Directors (Board) and management team remain engaged in a strategic planning process, which includes consideration of the uses of proceeds from recent and pending sales and of Stratus’ long-term business strategy. Stratus expects to provide additional information after the Block 21 transaction is concluded and the Board and management have had the opportunity to assess market conditions and the capital requirements for Stratus’ development pipeline. William H. Armstrong III, Chairman of the Board and Chief Executive Officer of Stratus, stated, “I am pleased with our team’s outstanding dedication and focus on executing our strategy across all areas of our business. This quarter, we continued to successfully make progress on maximizing shareholder value through our ongoing projects and development pipeline by furthering projects at all levels of the development cycle. In recent months, we have made progress on our pending sale of Block 21. Construction continues on The Saint June and Magnolia Place. We also are advancing our development plans for our multi-family projects The Annie B, The Saint George and The Saint Julia, as well as Holden Hills, our final large single-family residential development in Barton Creek, which will be one of the largest projects we have ever undertaken. Stratus continues to be well-positioned to capitalize on exceptional value-creating opportunities in all stages of our development cycle, from acquiring land, obtaining permits and managing construction, to generating cash through sales, refinancing or leasing. I look forward to seeing all that we accomplish in 2022.” Summary Financial Results Three Months Ended March 31, 2022 2021 (In Thousands, Except Per Share Amounts) (Unaudited) Revenues Real Estate Operations $ 23 $ 6,560 Leasing Operations 3,080 4,818 Corporate, eliminations and other (4 ) (4 ) Total consolidated revenue $ 3,099 $ 11,374 Operating (loss) income Real Estate Operations $ (1,368 ) $ 2,136 Leasing Operations 6,056 a 24,153 b Corporate, eliminations and other (3,167 ) (4,306 ) Total consolidated operating income $ 1,521 $ 21,983 Net income from continuing operations $ 1,812 $ 18,174 Net income (loss) from discontinued operations $ 375 $ (2,508 ) Net loss (income) attributable to noncontrolling interests in subsidiariesc $ 85 $ (6,722 ) Net income attributable to common stockholders $ 2,272 $ 8,944 Basic net income (loss) per share: Continuing operations $ 0.23 $ 1.39 Discontinued operations 0.05 (0.30 ) $ 0.28 $ 1.09 Diluted net income (loss) per share: Continuing operations $ 0.23 $ 1.38 Discontinued operations 0.04 (0.30 ) $ 0.27 $ 1.08 EBITDA $ 2,398 $ 23,507 Capital expenditures and purchases and development of real estate properties $ 19,588 $ 3,498 Weighted-average shares of common stock outstanding: Basic 8,251 8,223 Diluted 8,355 8,273 Continuing Operations The decrease in revenue and the operating loss from the Real Estate Operations segment in first-quarter 2022, compared to first-quarter 2021, reflects no sales in first-quarter 2022, as available inventory of developed properties in Stratus’ Real Estate Operations segment is limited. The decrease in revenue from the Leasing Operations segment in first-quarter 2022, compared to first-quarter 2021, primarily reflects the sale of The Santal in December 2021, partly offset by increased revenue at Lantana Place. The Santal had rental revenue of $2.2 million in first-quarter 2021. Operating income in first-quarter 2022 includes a $4.8 million gain recognized on the reversal of accruals for costs to lease and construct buildings under a master lease arrangement that Stratus entered into in connection with its sale of The Oaks at Lakeway in 2017. In the first quarter of 2022, Stratus reassessed its plans with respect to construction of the remaining buildings on three remaining unleased pad sites subject to the master lease arrangement, and determined that it is less costly to continue to pay monthly rent under the master lease agreement until the lease expires in February 2027 than to execute leases and build the buildings. Refer to Stratus’ Annual Report on Form 10-K for the year ended December 31, 2021, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, each filed with the U.S. Securities and Exchange Commission (SEC) for additional information. Operating income in first-quarter 2021 included a $22.9 million pre-tax gain on the sale of The Saint Mary. Discontinued Operations Stratus continues to make progress on the pending sale of Block 21 to Ryman for $260.0 million. The transaction is expected to close prior to June 1, 2022, but remains subject to the timely satisfaction or waiver of various closing conditions, including the consent of the loan servicers to the purchaser’s assumption of the existing mortgage loan, the consent of the hotel operator, an affiliate of Marriott, to the purchaser’s assumption of the hotel operating agreement, the absence of a material adverse effect, and other customary closing conditions. The purchase price includes the purchaser’s assumption of approximately $137 million of existing mortgage debt and is subject to an expected downward adjustment of $5.0 million. After closing costs and assumption of the outstanding Block 21 loan, the sale of Block 21 is expected to generate net pre-tax proceeds of approximately $115 million and after-tax proceeds of approximately $90 million before prorations, but including $6.9 million to be escrowed for 12 months after closing. Stratus expects to record a pre-tax gain of approximately $120 million upon the closing of the sale (approximately $95 million after-tax). Hotel revenues increased to $5.9 million in first-quarter 2022, compared to $2.1 million in first-quarter 2021, which is primarily a result of higher room reservations and food and beverage sales as the impacts of the COVID-19 pandemic had a significant impact on first-quarter 2021 results. First-quarter 2022 Hotel revenue was approximately 70 percent of pre-pandemic Hotel revenue in first-quarter 2019. Revenue per available room (RevPAR), which is calculated by dividing total room revenue by the average total rooms available, was $165 in first-quarter 2022, compared to $51 in first-quarter 2021. Entertainment revenues increased to $5.3 million in first-quarter 2022, compared to $0.6 million in first-quarter 2021, primarily reflecting an increase in the number of events hosted at ACL Live and 3TEN ACL Live as the impacts of the COVID-19 pandemic had a significant impact on first-quarter 2021 results. First-quarter 2022 Entertainment revenue was approximately 10 percent greater than pre-pandemic Entertainment revenue in first-quarter 2019. ACL Live and 3TEN ACL Live are operating at full capacity. Debt and Liquidity At March 31, 2022, consolidated debt totaled $121.4 million and consolidated cash totaled $12.3 million, compared with consolidated debt of $106.6 million and consolidated cash of $24.2 million at December 31, 2021. Consolidated debt at both dates excludes the Block 21 loan of approximately $137 million. As of March 31, 2022, Stratus had $49.7 million available under its $60.0 million Comerica Bank credit facility, with a total of $347 thousand of letters of credit committed against the credit facility. In April 2022, Stratus borrowed $20.0 million on the credit facility, of which the majority of the funds were used to make a U.S. Federal tax payment for Stratus’ 2021 tax liability. Purchases and development of real estate properties (included in operating cash flows) and capital expenditures (included in investing cash flows) totaled $19.6 million for the first three months of 2022, primarily related to the development of The Saint June, Magnolia Place and the Barton Creek properties, including Amarra Villas, compared with $3.5 million for the first three months of 2021, primarily related to the development of Barton Creek properties, including Amarra Villas. Stratus’ Board and management team are engaged in a strategic planning process, which includes consideration of the uses of proceeds from recent and pending sales and of Stratus’ long-term business strategy. Potential uses of proceeds may include a combination of further deleveraging, returning cash to shareholders and reinvesting in Stratus’ project pipeline. Stratus expects to provide additional information after the Block 21 transaction is concluded and the Board and management have had the opportunity to assess market conditions and the capital requirements for Stratus’ development pipeline. Stratus projects that it will be able to meet its debt service and other cash obligations for at least the next 12 months. In May 2022, Stratus entered into an amendment with Comerica Bank to extend the maturity date of the Comerica Bank credit facility from September 27, 2022, to December 26, 2022. Stratus is in discussions with the lender to remove Holden Hills from the collateral pool for the facility, finance the Holden Hills project under a separate loan agreement and enter into a revised revolving credit facility with a lower borrowing limit secured by the remaining collateral under the facility. Stratus expects to be able to extend or refinance all of its loans prior to their maturity dates. No assurances can be given that the results anticipated by Stratus’ projections will occur. ---------------------------------------------- Conference Call Information Stratus will conduct an investor conference call to discuss its unaudited first-quarter 2022 financial and operating results today, May 16, 2022, at 11:00 a.m. Eastern Time. The public is invited to listen to the conference call by dialing (877) 418-4843 for domestic access and +1 (412) 902-6766 for international access. A replay of the conference call will be available until May 30, 2022, by dialing (877) 344-7529 for domestic access and by dialing +1 (412) 317-0088 for international access. Please use replay ID: 5742743. The replay will also be available on Stratus’ website at stratusproperties.com until May 30, 2022. __________________________ CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND REGULATION G DISCLOSURE. This press release contains forward-looking statements in which Stratus discusses factors it believes may affect its future performance. Forward-looking statements are all statements other than statements of historical fact, such as plans, projections or expectations related to whether and when the sale of Block 21 will be completed, Stratus’ estimated gain and net cash proceeds from the sale of Block 21 and potential uses of such proceeds, potential results of the Board and management’s strategic planning process, the impacts of the COVID-19 pandemic, Stratus’ ability to meet its future debt service and other cash obligations, future cash flows and liquidity, Stratus’ expectations about the Austin and Texas real estate markets, the planning, financing, development, construction, completion and stabilization of Stratus’ development projects, plans to sell, recapitalize, or refinance properties, future operational and financial performance, MUD reimbursements for infrastructure costs, regulatory matters, leasing activities, tax rates, the impact of inflation and interest rate changes, future capital expenditures and financing plans, possible joint ventures, partnerships, or other strategic relationships, other plans and objectives of management for future operations and development projects, and future dividend payments and share repurchases. The words “anticipate,” “may,” “can,” “plan,” “believe,” “potential,” “estimate,” “expect,” “project,” "target," “intend,” “likely,” “will,” “should,” “to be” and any similar expressions and/or statements are intended to identify those assertions as forward-looking statements. Under Stratus’ Comerica Bank credit facility, Stratus is not permitted to repurchase its common stock in excess of $1.0 million or pay dividends on its common stock without Comerica Bank’s prior written consent. The declaration of dividends or decision to repurchase Stratus’ common stock is at the discretion of Stratus’ Board, subject to restrictions under Stratus’ Comerica Bank credit facility, and will depend on Stratus’ financial results, cash requirements, projected compliance with covenants in its debt agreements, outlook and other factors deemed relevant by the Board. Stratus cautions readers that forward-looking statements are not guarantees of future performance, and its actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause Stratus’ actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, the occurrence of any event, change or other circumstance that could delay the closing of the sale of Block 21, or result in the termination of the agreements to sell Block 21, the results of Stratus’ Board and management’s strategic planning process, the ongoing COVID-19 pandemic and any future major public health crisis, increases in inflation and interest rates, supply chain disruptions, declines in the market value of Stratus’ assets, increases in operating costs, including real estate taxes and the cost of building materials and labor, Stratus’ ability to pay or refinance its debt or comply with or obtain waivers of financial and other covenants in debt agreements and to meet other cash obligations, Stratus’ ability to collect anticipated rental payments and close projected asset sales, the availability and terms of financing for development projects and other corporate purposes, Stratus’ ability to enter into and maintain joint ventures, partnerships, or other strategic relationships, including risks associated with such joint ventures, Stratus’ ability to implement its business strategy successfully, including its ability to develop, construct and sell or lease properties on terms its Board considers acceptable, market conditions or corporate developments that could preclude, impair or delay any opportunities with respect to plans to sell, recapitalize or refinance properties, Stratus’ ability to obtain various entitlements and permits, a decrease in the demand for real estate in select markets in Texas where Stratus operates, changes in economic, market and business conditions, including as a result of the war in Ukraine, reductions in discretionary spending by consumers and businesses, competition from other real estate developers, the termination of sales contracts or letters of intent because of, among other factors, the failure of one or more closing conditions or market changes, the failure to attract customers or tenants for its developments or such customers’ or tenants’ failure to satisfy their purchase commitments or leasing obligations, changes in consumer preferences, industry risks, changes in laws, regulations or the regulatory environment affecting the development of real estate, opposition from special interest groups or local governments with respect to development projects, weather- and climate-related risks, loss of key personnel, environmental and litigation risks, cybersecurity incidents and other factors described in more detail under the heading “Risk Factors” in Stratus’ Annual Report on Form 10-K for the year ended December 31, 2021, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, each filed with the SEC. This press release also includes EBITDA, which is not recognized under U.S. generally accepted accounting principles (GAAP). Stratus believes this measure can be helpful to investors in evaluating its business. EBITDA is a financial measure frequently used by securities analysts, lenders and others to evaluate Stratus’ recurring operating performance. EBITDA is intended to be a performance measure that should not be regarded as more meaningful than a GAAP measure. Other companies may calculate EBITDA differently. As required by SEC Regulation G, a reconciliation of Stratus’ net income from continuing operations to EBITDA is included in the supplemental schedule of this press release. Investors are cautioned that many of the assumptions upon which Stratus’ forward-looking statements are based are likely to change after the date the forward-looking statements are made. Further, Stratus may make changes to its business plans that could affect its results. Stratus cautions investors that it undertakes no obligation to update any forward-looking statements, which speak only as of the date made, notwithstanding any changes in its assumptions, business plans, actual experience, or other changes. A copy of this release is available on Stratus’ website, stratusproperties.com. STRATUS PROPERTIES INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In Thousands, Except Per Share Amounts) Three Months Ended March 31, 2022 2021 Revenues: Real estate operations $ 19 $ 6,556 Leasing operations 3,080 4,818 Total revenues 3,099 11,374 Cost of sales: Real estate operations 1,366 4,360 Leasing operations 984 2,052 Depreciation 873 1,586 Total cost of sales 3,223 7,998 General and administrative expenses 3,167 a 4,324 Gain on sale of assets (4,812 ) b (22,931 ) c Total 1,578 (10,609 ) Operating income 1,521 21,983 Interest expense, net (15 ) (1,056 ) Loss on extinguishment of debt — (63 ) Other income, net 6 3 Income before income taxes and equity in unconsolidated affiliates' loss 1,512 20,867 Benefit from (provision for) income taxes 302 (2,691 ) Equity in unconsolidated affiliates' loss (2 ) (2 ) Net income from continuing operations 1,812 18,174 Net income (loss) from discontinued operations 375 (2,508 ) Net income and total comprehensive income 2,187 15,666 Total comprehensive loss (income) attributable to noncontrolling interestsd 85 (6,722 ) Net income and total comprehensive income attributable to common stockholders $ 2,272 $ 8,944 Basic net income per share attributable to common stockholders: Continuing operations $ 0.23 $ 1.39 Discontinued operations 0.05 (0.30 ) $ 0.28 $ 1.09 Diluted net income per share attributable to common stockholders: Continuing operations $ 0.23 $ 1.38 Discontinued operations 0.04 (0.30 ) $ 0.27 $ 1.08 Weighted-average shares of common stock outstanding: Basic 8,251 8,223 Diluted 8,355 8,273 STRATUS PROPERTIES INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands) March 31, 2022 December 31, 2021 ASSETS Cash and cash equivalents $ 12,273 $ 24,229 Restricted cash 10,859 18,294 Real estate held for sale 1,773 1,773 Real estate under development 206,191 181,224 Land available for development 34,816 40,659 Real estate held for investment, net 89,760 90,284 Lease right-of-use assets 10,460 10,487 Deferred tax assets 4,843 6,009 Other assets 22,621 17,214 Assets held for sale - discontinued operations 151,172 151,053 Total assets $ 544,768 $ 541,226 LIABILITIES AND EQUITY Liabilities: Accounts payable $ 14,573 $ 14,118 Accrued liabilities, including taxes 19,682 22,069 Debt 121,446 106,648 Lease liabilities 14,135 13,986 Deferred gain 4,274 4,801 Other liabilities 10,381 17,894 Liabilities held for sale - discontinued operations 149,717 153,097 Total liabilities 334,208 332,613 Commitments and contingencies Equity: Stockholders' equity: Common stock 94 94 Capital in excess of par value of common stock 188,971 188,759 Accumulated deficit (6,691 ) (8,963 ) Common stock held in treasury (22,205 ) (21,753 ) Total stockholders' equity 160,169 158,137 Noncontrolling interests in subsidiaries 50,391 50,476 Total equity 210,560 208,613 Total liabilities and equity $ 544,768 $ 541,226 STRATUS PROPERTIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands) Three Months Ended March 31, 2022 2021 Cash flow from operating activities: Net income $ 2,187 $ 15,666 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 873 3,002 Cost of real estate sold — 3,112 Gain on sale of assets (4,812 ) (22,931 ) Loss on extinguishment of debt — 63 Amortization of debt issuance costs and stock-based compensation 515 529 Equity in unconsolidated affiliates' loss 2 2 Deferred income taxes 1,167 — Purchases and development of real estate properties (4,864 ) (2,489 ) (Increase) decrease in other assets (5,559 ) 238 Decrease in accounts payable, accrued liabilities, deposits and other (7,629 ) (7,563 ) Net cash used in operating activities (18,120 ) (10,371 ) Cash flow from investing activities: Capital expenditures (14,724 ) (1,009 ) Proceeds from sale of assets — 59,488 Payments on master lease obligations (182 ) (270 ) Other, net — (5 ) Net cash (used in) provided by investing activities (14,906 ) 58,204 Cash flow from financing activities: Borrowings from credit facility 10,000 17,000 Payments on credit facility — (26,227 ) Borrowings from project loans 5,111 458 Payments on project and term loans (1,172 ) (28,708 ) Stock-based awards net payments (452 ) (157 ) Distributions to noncontrolling interests — (13,087 ) Financing costs (17 ) (53 ) Net cash provided by (used in) financing activities 13,470 (50,774 ) Net decrease in cash, cash equivalents and restricted cash (19,556 ) (2,941 ) Cash, cash equivalents and restricted cash at beginning of year 70,139 34,183 Cash, cash equivalents and restricted cash at end of period $ 50,583 $ 31,242 STRATUS PROPERTIES INC. BUSINESS SEGMENTS As a result of the pending sale of Block 21, Stratus currently has two operating segments: Real Estate Operations and Leasing Operations. Block 21, which encompassed Stratus’ hotel and entertainment segments, along with some leasing operations, is reflected as discontinued operations. The Real Estate Operations segment is comprised of Stratus’ real estate assets (developed for sale, under development and available for development), which consists of its properties in Austin, Texas (including the Barton Creek community; the Circle C community; the Lantana community, including a portion of Lantana Place planned for a multi-family phase, and the land for The Saint George and The Annie B); in Lakeway, Texas, located in the greater Austin area (Lakeway); in College Station, Texas (a portion of Jones Crossing and vacant pad sites); in Killeen, Texas (one vacant pad site at West Killeen Market); and in Magnolia, Texas (Magnolia Place), Kingwood, Texas (land for future multi-family development, for which a sale is pending, and a vacant pad site) and New Caney, Texas (New Caney), located in the greater Houston area. The Leasing Operations segment is comprised of Stratus’ real estate assets, both residential and commercial, that are leased or available for lease and includes West Killeen Market, Lantana Place, Kingwood Place and the completed portion of Jones Crossing. The segment also included The Saint Mary until its sale in January 2021 and The Santal until its sale in December 2021. Stratus uses operating income or loss to measure the performance of each segment. General and administrative expenses, which primarily consist of employee salaries, wages and other costs, are managed on a consolidated basis and are not allocated to Stratus’ operating segments. The following segment information reflects management determinations that may not be indicative of what the actual financial performance of each segment would be if it were an independent entity. Segment information presented below was prepared on the same basis as Stratus’ consolidated financial statements (in thousands). Real Estate Operationsa Leasing Operations Corporate, Eliminations and Otherb Total Three Months Ended March 31, 2022: Revenues: Unaffiliated customers $ 19 $ 3,080 $ — $ 3,099 Intersegment 4 — (4 ) — Cost of sales, excluding depreciation 1,366 984 — 2,350 Depreciation 25 852 (4 ) 873 General and administrative expenses — — 3,167 c 3,167 Gain on sale of assets — (4,812 ) d — (4,812 ) Operating (loss) income $ (1,368 ) $ 6,056 $ (3,167 ) $ 1,521 Capital expenditures and purchases and development of real estate properties $ 4,864 $ 14,542 $ 182 $ 19,588 Total assets at March 31, 2022 254,212 106,652 183,904 e 544,768 Three Months Ended March 31, 2021: Revenues: Unaffiliated customers $ 6,556 $ 4,818 $ — $ 11,374 Intersegment 4 — (4 ) — Cost of sales, excluding depreciation 4,360 2,052 — 6,412 Depreciation 64 1,544 (22 ) 1,586 General and administrative expenses — — 4,324 4,324 Gain on sale of assets — (22,931 ) f — (22,931 ) Operating income (loss) $ 2,136 $ 24,153 $ (4,306 ) $ 21,983 Capital expenditures and purchases and development of real estate properties $ 2,489 $ 902 $ 107 $ 3,498 Total assets at March 31, 2021 161,488 180,758 g 159,625 e 501,871 RECONCILIATION OF NON-GAAP MEASURE EBITDA EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP (generally accepted accounting principles in the U.S.) financial measure that is frequently used by securities analysts, investors, lenders and others to evaluate companies’ recurring operating performance, including, among other things, profitability before the effect of financing and similar decisions. Because securities analysts, investors, lenders and others use EBITDA, management believes that Stratus’ presentation of EBITDA affords them greater transparency in assessing its financial performance. This information differs from net income from continuing operations determined in accordance with GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with GAAP. EBITDA may not be comparable to similarly titled measures reported by other companies, as different companies may calculate such measures differently. Management strongly encourages investors to review Stratus’ consolidated financial statements and publicly filed reports in their entirety. A reconciliation of Stratus’ net income from continuing operations to EBITDA follows (in thousands). Three Months Ended March 31, 2022 2021 Net income from continuing operations $ 1,812 a $ 18,174 b Depreciation 873 1,586 Interest expense, net 15 1,056 (Benefit from) provision for income taxes (302 ) 2,691 EBITDAc $ 2,398 $ 23,507
- 05/16/2022
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Stratus Properties, Inc. (STRS) CEO Beau Armstrong On Q4 2021 Results - Earnings Call Transcript
- Stratus Properties, Inc. (STRS) CEO Beau Armstrong On Q4 2021 Results - Earnings Call Transcript
- 03/31/2022
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Stratus Properties Inc. Reports Year Ended December 31, 2021 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations focused in the Austin, Texas area and other select, fast growing markets in Texas, today reported year ended December 31, 2021 results. Highlights and Recent Developments: Stratus continues to make progress on the pending sale of Block 21, a mixed-use development in downtown Austin, Texas, that contains the W Austin Hotel and office, retail and entertainment space, to Ryman Hospitality Properties, Inc. (Ryman) for $260.0 million. The transaction is expected to close sometime prior to June 1, 2022, subject to the timely satisfaction or waiver of various closing conditions. In December 2021, Stratus sold The Santal for $152.0 million. The Santal was Stratus’ wholly owned 448-unit luxury garden-style multi-family apartment project located in Section N of Austin’s Barton Creek community. After closing costs and repayment of the project loan, the sale generated net proceeds of approximately $74 million and Stratus recorded a pre-tax gain on the sale of $83.0 million in 2021. In January 2021, Stratus sold The Saint Mary for $60.0 million. The Saint Mary was Stratus’ 240-unit luxury garden-style multi-family apartment project located in Austin. After closing costs and repayment of the construction loan, the sale generated net proceeds of approximately $34 million, of which Stratus received $21.9 million. Stratus recognized a pre-tax gain on the sale of $22.9 million ($16.2 million net of noncontrolling interests) in 2021. Net income attributable to common stockholders totaled $57.4 million, $6.90 per diluted share, for 2021, compared to a net loss of $22.8 million, $2.78 per diluted share, for 2020. Net income in 2021, compared to the net loss in 2020, is primarily the result of the gains recognized on the sales of The Santal and The Saint Mary, which totaled $106.0 million combined. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $90.7 million for 2021, compared to $1.1 million for 2020. For a reconciliation of net income (loss) from continuing operations to EBITDA, see the supplemental schedule, “EBITDA,” starting on page V. In December 2021, Stratus purchased the land for The Saint George, a proposed 317-unit luxury multi-family apartment project in Austin. The financing to purchase the land for The Saint George included third-party equity capital. Stratus continues construction on The Saint June, a 182-unit luxury garden-style multi-family apartment project within the Amarra development in Barton Creek, and Magnolia Place, an H-E-B grocery shadow-anchored, mixed-use project in Magnolia, Texas. Stratus also continues to advance development plans for The Annie B, a proposed luxury high-rise rental project with ground-level retail in downtown Austin, and Holden Hills, Stratus’ final large single-family residential development within Austin’s Barton Creek community. Stratus successfully achieved its Board of Director (Board) refreshment objectives, enhancing the skills, experience and diversity of the Board, by adding three new independent directors in the last 18 months: Laurie L. Dotter, Kate B. Henriksen and Neville L. Rhone, Jr. William H. Armstrong III, Chairman of the Board and Chief Executive Officer of Stratus, stated, “We had our most productive year in Stratus’ history during 2021 and produced record net earnings. Our total stockholders’ equity increased 60 percent to $158.1 million at year-end 2021 from year-end 2020, and upon the completion of the pending sale of Block 21 we expect to record a pre-tax gain of approximately $120 million (approximately $95 million after-tax). Our strategy, combined with favorable market conditions, allowed us to capture remarkable value for our properties, including the sales of The Santal and The Saint Mary for a combined sales price of $212 million and a combined pre-tax gain of $106 million. These sales represent the successful execution of our full cycle development strategy. During 2021, we raised $46.3 million of third-party equity capital for three new projects - The Saint June, The Annie B and The Saint George - which contributed to the 90 percent increase in total equity to $208.6 million at year-end 2021 from year-end 2020 and demonstrates our ability to source outside equity capital with an attractive promote structure for Stratus, as we did with The Saint Mary and Kingwood Place in 2018. We also began construction on The Saint June and Magnolia Place and advanced development plans for our Holden Hills residential community. We have projects in all stages of our development cycle, from acquiring land, obtaining entitlements, finalizing development plans, raising capital and managing construction, to generating cash through sales, refinancing and leasing. Our ongoing projects and development pipeline position us to continue to capitalize on growth across Austin and other Texas markets. I am immensely proud of our team’s performance this year and excited about Stratus’ future and the opportunities we are pursuing to continue creating value for our shareholders.” Summary Financial Results Years Ended December 31, 2021 2020 (In Thousands, Except Per Share Amounts) Revenues Real estate operations $ 8,466 $ 22,595 Leasing operations 19,787 21,755 (17 (17 Total consolidated revenue $ 28,236 $ 44,333 Operating income (loss): Real estate operations $ (3,272 ) a $ 3,738 Leasing operations 111,369 b 3,074 c Corporate, eliminations and other (24,437 ) d (13,467 ) Total consolidated operating income (loss) $ 83,660 $ (6,655 ) Net income (loss) from continuing operations $ 69,457 e $ (18,008 ) Net loss from discontinued operationsf $ (6,208 ) $ (6,467 ) Net income (loss) attributable to common stockholdersg $ 57,394 $ (22,790 ) Diluted net income (loss) per share: Continuing operations $ 7.72 $ (1.99 ) Discontinued operations (0.75 ) (0.79 ) $ 6.90 $ (2.78 ) EBITDA $ 90,676 a,b,e $ 1,110 c Capital expenditures and purchases and development of real estate properties $ 72,334 h $ 19,966 Diluted weighted average shares of common stock outstanding 8,313 8,211 Continuing Operations The decrease in revenue and the operating loss from the Real Estate Operations segment in 2021, compared to 2020, primarily reflects a decrease in the number of lots sold during 2021 as available inventory decreased. The operating loss in 2021 also includes impairment charges of $700 thousand for two Amarra Villas homes under construction and under contract, $625 thousand for the multi-family tract of land at Kingwood Place, for which a sale is pending, and $500 thousand for an office building in Austin that Stratus is renovating and may occupy as its headquarters after the closing of the sale of Block 21. As of December 31, 2021, Stratus had only two unsold developed Amarra Drive Phase III lots. In addition, in 2021 Stratus sold its last condominium at the W Austin Residences at Block 21. The decrease in revenue from the Leasing Operations segment in 2021, compared to 2020, primarily reflects the sale of The Saint Mary in January 2021, partly offset by increased revenue at Lantana Place. The Saint Mary had rental revenue of $0.1 million in 2021 prior to its sale as compared to $3.2 million in the full year 2020. Operating income from the Leasing Operations segment in 2021, compared to 2020, increased significantly primarily because of the gains recognized on the sales of The Santal and The Saint Mary, which totaled $106.0 million combined. Despite the COVID-19 pandemic, Stratus has retained substantially all of its pre-pandemic retail tenants, added new tenants, and all of its tenants are currently paying rent per their leases, as well as monthly payments pursuant to previously disclosed base rent deferral arrangements as applicable. General and administrative expenses, included in corporate, eliminations and other, increased to $24.5 million in 2021, compared to $13.6 million in 2020, primarily reflecting a $7.4 million increase in employee incentive compensation costs associated with the Profit Participation Incentive Plan primarily for The Santal and Lantana Place projects, and a $2.7 million increase in consulting, legal and public relation costs for Stratus' successful proxy contest. Discontinued Operations Stratus continues to make progress on the pending sale of Block 21 to Ryman for $260.0 million. The transaction is expected to close sometime prior to June 1, 2022, subject to the timely satisfaction or waiver of various closing conditions, including the consent of the loan servicers to the purchaser’s assumption of the existing mortgage loan, the consent of the hotel operator, an affiliate of Marriott, to the purchaser’s assumption of the hotel operating agreement, the absence of a material adverse effect, and other customary closing conditions. The purchase price includes the purchaser’s assumption of approximately $138 million of existing mortgage debt and is subject to downward adjustments up to $5.0 million. After closing costs and assumption of the outstanding Block 21 loan, the sale of Block 21 is expected to generate net pre-tax proceeds of approximately $115 million and after-tax proceeds of approximately $90 million before prorations and including $6.9 million to be escrowed for 12 months after closing. Stratus expects to record a pre-tax gain of approximately $120 million upon the closing of the sale (approximately $95 million after-tax). Hotel revenues increased to $18.3 million in 2021, compared to $9.9 million in 2020, which is primarily a result of higher room reservations and food and beverage sales as the impacts of the COVID-19 pandemic continued to lessen throughout 2021. Revenue per available room (RevPAR), which is calculated by dividing total room revenue by the average total rooms available during the year, was $115 in 2021, compared with $61 in 2020. Entertainment revenues increased to $12.9 million in 2021, compared to $5.2 million in 2020, which primarily reflects an increase in the number of events hosted at ACL Live and 3TEN ACL Live as the impacts of the COVID-19 pandemic continued to lessen throughout 2021. Seating capacity remained limited at Stratus’ entertainment venues until opening up to full capacity in August 2021. Debt and Liquidity At December 31, 2021, consolidated debt totaled $106.6 million and consolidated cash totaled $24.2 million, compared with consolidated debt of $137.7 million and consolidated cash of $9.3 million at December 31, 2020. Consolidated debt at both dates excluded the Block 21 loan of approximately $138 million, and at December 31, 2020, also excluded The Santal loan of approximately $75 million and The Saint Mary construction loan of approximately $25 million, as a result of these properties being classified as held for sale at those dates. After using a portion of the proceeds from the sale of The Santal to pay down the balance under Stratus’ $60.0 million Comerica Bank credit facility, as of December 31, 2021, Stratus had $59.7 million available under the credit facility, with letters of credit totaling $347 thousand committed against the credit facility. In November 2021, a Stratus subsidiary formed a limited partnership to purchase the land for and develop, construct and lease The Saint George, a 317-unit luxury wrap-style multi-family apartment project in Austin. In December 2021, an unrelated equity investor contributed $18.3 million to The Saint George partnership for a 90.0 percent interest. Stratus has a 10.0 percent interest in the partnership following its contribution of pursuit costs and $0.5 million of cash. In December 2021, the partnership also purchased the land for The Saint George project for $18.5 million. Discussions with a lender are ongoing to provide a construction loan for development. In addition to The Saint George equity financing, during 2021 Stratus engaged in a number of transactions to finance development of its projects. In June 2021, The Saint June, L.P. raised $16.3 million in third-party equity capital and entered into an approximately $30 million construction loan. Also in June 2021, the Jones Crossing loan was refinanced with a new $24.5 million loan. In August 2021, Stratus entered into a $14.8 million loan for the development of Magnolia Place. In September 2021, Stratus Block 150, L.P. raised $11.7 million in third-party equity capital and entered into a $14.0 million loan to finance part of the costs of land acquisition and budgeted pre-development costs for The Annie B. Purchases and development of real estate properties (included in operating cash flows) and capital expenditures (included in investing cash flows) totaled $72.3 million for 2021, primarily related to the purchases of the land for The Saint George and The Annie B, the development of The Saint June and other Barton Creek properties, including Amarra Villas, and the Magnolia Place and Lantana Place projects. This compares with $20.0 million for 2020, primarily related to the development of Kingwood Place, Lantana Place and Barton Creek properties and the purchase of an office building in Austin. The sale of The Santal generated net cash proceeds of approximately $74 million and allowed Stratus to pay down the balance of its Comerica Bank credit facility. If completed, the sale of Block 21 will result in Stratus receiving substantial additional cash proceeds of approximately $115 million pre-tax and $90 million after-tax, before prorations and including $6.9 million to be escrowed for 12 months after closing. Stratus’ Board and management team are engaged in a strategic planning process, which includes consideration of the uses of proceeds from the sales and of Stratus’ long-term business strategy. Potential uses of proceeds may include a combination of further deleveraging, returning cash to shareholders and reinvesting in Stratus’ project pipeline. Stratus expects to provide additional information after the Block 21 transaction is concluded and the Board and management have had the opportunity to assess market conditions and the capital desired for use in Stratus’ development pipeline. In the meantime, after careful consideration, the Board has concluded that Stratus converting to a real estate investment trust is not the best path forward for Stratus and its shareholders. Among the factors the Board considered in reaching its conclusion are Stratus’ continued success in generating attractive returns by developing and selling its properties, Stratus’ large undeveloped land holdings which provide ongoing and future opportunities for development and sale, and the promising nature of other projects in Stratus’ development pipeline. Stratus projects that it will be able to meet its debt service and other cash obligations for at least the next 12 months. Stratus’ $60.0 million revolving credit facility with Comerica Bank matures on September 27, 2022. Stratus is in discussions with the lender to remove Holden Hills from the collateral pool for the facility, finance the Holden Hills project under a separate loan agreement and enter into a revised revolving credit facility with a lower borrowing limit secured by the remaining collateral under the facility. If these discussions are not concluded timely, Stratus expects to be able to extend or refinance the facility prior to the maturity date. No assurances can be given that the results anticipated by Stratus’ projections will occur. Net Asset Value Stratus' total stockholders' equity was $158.1 million at December 31, 2021, compared with $98.9 million at December 31, 2020. Stratus' after-tax Net Asset Value (NAV) increased to $408.9 million, or $48.80 per share, as of December 31, 2021, compared with $337.3 million, or $40.65 per share, as of December 31, 2020. The increase in the after-tax NAV was primarily driven by the increase in the gross value of Block 21, which, as of December 31, 2020, was determined using an appraisal obtained during the COVID-19 pandemic and as of December 31, 2021, was determined using the contract price with Ryman. For additional information regarding NAV, see "Cautionary Statement," and the supplemental schedule, “After-Tax Net Asset Value” beginning on page VI. Additional after-tax NAV information is available on Stratus’ website. ---------------------------------------------- Conference Call Information Stratus will conduct an investor conference call to discuss its year ended December 31, 2021, financial and operating results today, March 31, 2022, at 11:00 a.m. Eastern Time. The public is invited to listen to the conference call by dialing (877) 418-4843 for domestic access or +1 (412) 902-6766 for international access. A replay of the conference call will be available until April 14, 2022, by dialing (877) 344-7529 for domestic access or +1 (412) 317-0088 for international access. Please use replay ID: 2465645. The replay will also be available on Stratus’ website at stratusproperties.com until April 14, 2022. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND REGULATION G DISCLOSURE. This press release contains forward-looking statements in which Stratus discusses factors it believes may affect its future performance. Forward-looking statements are all statements other than statements of historical fact, such as plans, projections or expectations related to whether and when the sale of Block 21 will be completed, Stratus’ estimated gains and net cash proceeds from the sale of Block 21 and potential uses of such proceeds, potential results of the Board and management’s strategic planning process, the impacts of the COVID-19 pandemic, Stratus’ ability to meet its future debt service and other cash obligations, future cash flows and liquidity, Stratus’ expectations about the Austin and Texas real estate markets, the planning, financing, development, construction, completion and stabilization of Stratus’ development projects, plans to sell, recapitalize, or refinance properties, future operational and financial performance, municipal utility district reimbursements for infrastructure costs, regulatory matters, leasing activities, tax rates, the impact of inflation and interest rate changes, future capital expenditures and financing plans, possible joint ventures, partnerships, or other strategic relationships, other plans and objectives of management for future operations and development projects, and future dividend payments and share repurchases. The words “anticipates,” “may,” “can,” “plans,” “believes,” “potential,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “to be” and any similar expressions and/or statements are intended to identify those assertions as forward-looking statements. Under Stratus’ Comerica Bank credit facility, Stratus is not permitted to repurchase its common stock in excess of $1.0 million or pay dividends on its common stock without Comerica Bank’s prior written consent. The declaration of dividends or decision to repurchase Stratus’ common stock is at the discretion of Stratus’ Board, subject to restrictions under Stratus’ Comerica Bank credit facility, and will depend on Stratus’ financial results, cash requirements, projected compliance with covenants in its debt agreements, outlook and other factors deemed relevant by the Board. Stratus cautions readers that forward-looking statements are not guarantees of future performance, and its actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause Stratus’ actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, the occurrence of any event, change or other circumstance that could delay the closing of the sale of Block 21, or result in the termination of the agreements to sell Block 21, the results of Stratus’ Board and management’s strategic planning process, the ongoing COVID-19 pandemic and any future major public health crisis, increases in inflation and interest rates, declines in the market value of Stratus’ assets, increases in operating costs, including real estate taxes and the cost of building materials and labor, Stratus’ ability to pay or refinance its debt or comply with or obtain waivers of financial and other covenants in debt agreements and to meet other cash obligations, Stratus’ ability to collect anticipated rental payments and close projected asset sales, the availability and terms of financing for development projects and other corporate purposes, Stratus’ ability to enter into and maintain joint ventures, partnerships, or other strategic relationships, including risks associated with such joint ventures, Stratus’ ability to implement its business strategy successfully, including its ability to develop, construct and sell or lease properties on terms its Board considers acceptable, market conditions or corporate developments that could preclude, impair or delay any opportunities with respect to plans to sell, recapitalize or refinance properties, Stratus’ ability to obtain various entitlements and permits, a decrease in the demand for real estate in select markets in Texas where Stratus operates, changes in economic, market and business conditions, including as a result of the war in Ukraine, reductions in discretionary spending by consumers and businesses, competition from other real estate developers, the termination of sales contracts or letters of intent because of, among other factors, the failure of one or more closing conditions or market changes, the failure to attract customers or tenants for its developments or such customers’ or tenants’ failure to satisfy their purchase commitments or leasing obligations, changes in consumer preferences, industry risks, changes in laws, regulations or the regulatory environment affecting the development of real estate, opposition from special interest groups or local governments with respect to development projects, weather- and climate-related risks, loss of key personnel, environmental and litigation risks, cybersecurity incidents and other factors described in more detail under the heading “Risk Factors” in Stratus’ Annual Report on Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission (SEC). This press release also includes EBITDA and NAV, and financial measures calculated by reference to NAV, including after-tax NAV and after-tax NAV per share, which are not recognized under U.S. generally accepted accounting principles (GAAP). Stratus believes these measures can be helpful to investors in evaluating its business. EBITDA is a financial measure frequently used by securities analysts, lenders and others to evaluate Stratus' recurring operating performance. After-tax NAV illustrates current embedded value in Stratus' real estate, which is carried on its GAAP balance sheet primarily at cost. Management uses after-tax NAV as one of the metrics in evaluating progress on Stratus' active development plan. EBITDA and after-tax NAV are intended to be performance measures that should not be regarded as more meaningful than GAAP measures. Other companies may calculate EBITDA and after-tax NAV differently. As required by SEC Regulation G, a reconciliation of Stratus' net income (loss) from continuing operations to EBITDA and of Stratus’ total stockholders’ equity to after-tax NAV in its consolidated balance sheet are included in the supplemental schedules of this press release. Investors are cautioned that many of the assumptions upon which Stratus’ forward-looking statements are based are likely to change after the date the forward-looking statements are made. Further, Stratus may make changes to its business plans that could affect its results. Stratus cautions investors that it undertakes no obligation to update any forward-looking statements, which speak only as of the date made, notwithstanding any changes in its assumptions, business plans, actual experience, or other changes. A copy of this release is available on Stratus’ website, stratusproperties.com. STRATUS PROPERTIES INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (In Thousands, Except Per Share Amounts) Years Ended December 31, 2021 2020 Revenues: Real estate operations $ 8,449 $ 22,578 Leasing operations 19,787 21,755 Total revenues 28,236 44,333 Cost of sales: Real estate operations 9,733 18,628 Leasing operations 9,030 11,201 a Depreciation 5,449 7,581 Total cost of sales 24,212 37,410 General and administrative expenses 24,509 b 13,578 Impairment of real estate 1,825 c — Gain on sales of assets (105,970 ) d — Total (55,424 ) 50,988 Operating income (loss) 83,660 (6,655 ) Interest expense, net (3,193 ) (6,697 ) Net gain on extinguishment of debt 1,529 — Other income, net 65 200 Income (loss) before income taxes and equity in unconsolidated affiliates’ loss 82,061 (13,152 ) Provision for income taxese (12,577 ) (4,840 ) Equity in unconsolidated affiliates’ loss (27 ) (16 ) Income (loss) from continuing operations 69,457 (18,008 ) Net loss from discontinued operations (6,208 ) (6,467 ) Net income (loss) and total comprehensive income (loss) 63,249 (24,475 ) Total comprehensive (income) loss attributable to noncontrolling interestsf (5,855 ) 1,685 Net income (loss) and total comprehensive income (loss) attributable to common stockholders $ 57,394 $ (22,790 ) Basic net income (loss) per share attributable to common stockholders: Continuing operations $ 7.72 $ (1.99 ) Discontinued operations (0.75 ) (0.79 ) $ 6.97 $ (2.78 ) Diluted net income (loss) per share attributable to common stockholders: $ 7.65 $ (1.99 ) Continuing operations (0.75 ) (0.79 ) Discontinued operations $ 6.90 $ (2.78 ) Weighted-average shares of common stock outstanding: Basic 8,236 8,211 Diluted 8,313 8,211 STRATUS PROPERTIES INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands) December 31, 2021 2020 ASSETS Cash and cash equivalents $ 24,229 $ 9,309 Restricted cash 18,294 a 8,899 Real estate held for sale 1,773 4,204 Real estate under development 181,224 98,137 Land available for development 40,659 53,432 Real estate held for investment, net 90,284 92,699 Lease right-of-use assets 10,487 10,796 Deferred tax assetsb 6,009 44 Other assets 17,214 17,960 Assets held for sale, including discontinued operationsc 151,053 248,536 Total assets $ 541,226 $ 544,016 LIABILITIES AND EQUITY Liabilities: Accounts payable $ 14,118 $ 7,455 Accrued liabilities, including taxes 22,069 7,994 Debt 106,648 137,699 Lease liabilities 13,986 13,195 Deferred gain 4,801 6,173 Other liabilities 17,894 9,600 Liabilities held for sale, including discontinued operationsc 153,097 252,136 Total liabilities 332,613 434,252 Commitments and contingencies Equity: Stratus stockholders’ equity: Common stock, par value of $0.01 per share, 150,000 shares authorized, 9,388 and 9,358 shares issued, respectively and 8,245 and 8,221 shares outstanding, respectively 94 94 Capital in excess of par value of common stock 188,759 186,777 Accumulated deficit (8,963 ) (66,357 ) Common stock held in treasury, 1,143 shares and 1,137 shares at cost, respectively (21,753 ) (21,600 ) Total stockholders’ equity 158,137 98,914 Noncontrolling interests in subsidiaries 50,476 d 10,850 Total equity 208,613 109,764 Total liabilities and equity $ 541,226 $ 544,016 STRATUS PROPERTIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands) Years Ended December 31, 2021 2020 Cash flow from operating activities: Net income (loss) $ 63,249 $ (24,475 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 9,964 13,670 Cost of real estate sold 4,056 12,092 Impairment of real estate 1,825 — Gain on sales of assets (105,970 ) — Net gain on extinguishment of debt (1,529 ) — Debt issuance cost amortization and stock-based compensation 2,007 2,099 Equity in unconsolidated affiliates’ loss 27 16 Deferred income taxes (5,965 ) 12,267 Purchases and development of real estate properties (52,772 ) (13,775 ) Write-off of capitalized hotel remodel costs 287 1,584 Increase in other assets (2,212 ) (5,134 ) Increase (decrease) in accounts payable, accrued liabilities and other 33,423 a (2,402 ) Net cash used in operating activities (53,610 ) (4,058 ) Cash flow from investing activities: Capital expenditures (19,562 ) (6,191 ) Proceeds from sales of assets 209,947 — Payments on master lease obligations (1,501 ) (1,637 ) Other, net 56 6 Net cash provided by (used in) investing activities 188,940 (7,822 ) Cash flow from financing activities: Borrowings from credit facility 39,700 29,300 Payments on credit facility (83,004 ) (28,478 ) Borrowings from project loans 42,661 16,322 Payments on project and term loans (130,723 ) (8,708 ) Stock-based awards net payments (132 ) (78 ) Distributions to noncontrolling interests (12,529 ) (448 ) Noncontrolling interests' contributions 46,300 — Financing costs (1,647 ) (438 ) Net cash (used in) provided by financing activities (99,374 ) 7,472 Net increase (decrease) in cash, cash equivalents and restricted cash 35,956 (4,408 ) Cash, cash equivalents and restricted cash at beginning of year 34,183 38,591 Cash, cash equivalents and restricted cash at end of year $ 70,139 $ 34,183 STRATUS PROPERTIES INC. BUSINESS SEGMENTS As a result of the pending sale of Block 21, Stratus has two operating segments: Real Estate Operations and Leasing Operations. Block 21, which encompassed Stratus’ hotel and entertainment segments, along with some leasing operations, is reflected as discontinued operations. The Real Estate Operations segment is comprised of Stratus’ real estate assets (developed for sale, under development and available for development), which consists of its properties in Austin, Texas (including the Barton Creek community; the Circle C community; and the Lantana community, including a portion of Lantana Place planned for a future multi-family phase); in Lakeway, Texas, located in the greater Austin area (Lakeway); in College Station, Texas (a portion of Jones Crossing and vacant pad sites); in Killeen, Texas (vacant pad sites at West Killeen Market); and in Magnolia, Texas (Magnolia Place), Kingwood, Texas (land for future multi-family development, for which a sale is pending, and a vacant pad site) and New Caney, Texas (New Caney), located in the greater Houston area. The Leasing Operations segment is comprised of Stratus’ real estate assets, both residential and commercial, that are leased or available for lease and includes West Killeen Market and completed portions of Lantana Place, Jones Crossing and Kingwood Place. The segment also included The Saint Mary until its sale in January 2021 and The Santal until its sale in December 2021. Stratus uses operating income or loss to measure the performance of each segment. General and administrative expenses, which primarily consist of employee salaries, wages and other costs, are managed on a consolidated basis and are not allocated to Stratus’ operating segments. The following segment information reflects management determinations that may not be indicative of what the actual financial performance of each segment would be if it were an independent entity. Segment information presented below was prepared on the same basis as Stratus’ consolidated financial statements (in thousands). Real Estate Operationsa Leasing Operations Corporate, Eliminations and Otherb Total Year Ended December 31, 2021: Revenues: Unaffiliated customers $ 8,449 $ 19,787 $ — $ 28,236 Intersegment 17 — (17 ) — Cost of sales, excluding depreciation 9,758 9,030 (25 ) 18,763 Depreciation 155 5,358 (64 ) 5,449 General and administrative expenses — — 24,509 c 24,509 Impairment of real estate 1,825 d — — 1,825 Gain on sales of assets — (105,970 ) e — (105,970 ) Operating (loss) income $ (3,272 ) $ 111,369 $ (24,437 ) $ 83,660 Capital expenditures and purchases and development of real estate properties $ 52,772 f $ 19,024 $ 538 $ 72,334 Total assets at December 31, 2021 241,225 107,990 192,011 g 541,226 STRATUS PROPERTIES INC. BUSINESS SEGMENTS (continued) Real Estate Operationsa Leasing Operations Corporate, Eliminations and Otherb Total Year Ended December 31, 2020: Revenues: Unaffiliated customers $ 22,578 $ 21,755 $ — $ 44,333 Intersegment 17 — (17 ) — Cost of sales, excluding depreciation 18,628 11,203 h (2 ) 29,829 Depreciation 229 7,478 (126 ) 7,581 General and administrative expenses — — 13,578 13,578 Operating income (loss) $ 3,738 $ 3,074 $ (13,467 ) $ (6,655 ) Capital expenditures and purchases and development of real estate properties $ 13,775 $ 5,203 $ 988 $ 19,966 Total assets at December 31, 2020 161,608 221,890 i 160,518 g 544,016 RECONCILIATION OF NON-GAAP MEASURES EBITDA EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP (U.S. generally accepted accounting principles) financial measure that is frequently used by securities analysts, investors, lenders and others to evaluate companies’ recurring operating performance, including, among other things, profitability before the effect of financing and similar decisions. Because securities analysts, investors, lenders and others use EBITDA, management believes that Stratus’ presentation of EBITDA affords them greater transparency in assessing Stratus’ financial performance. This information differs from net income (loss) from continuing operations determined in accordance with GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with GAAP. EBITDA may not be comparable to similarly titled measures reported by other companies, as different companies may calculate such measures differently. Stratus strongly encourages investors to review Stratus’ consolidated financial statements and publicly filed reports in their entirety. A reconciliation of Stratus’ net income (loss) from continuing operations to EBITDA follows (in thousands). Years Ended December 31, 2021 2020 Net income (loss) from continuing operations $ 69,457 a $ (18,008 ) b Depreciation 5,449 7,581 Interest expense, net 3,193 6,697 Provision for income taxes 12,577 c 4,840 d EBITDAe $ 90,676 $ 1,110 AFTER-TAX NET ASSET VALUE After-tax NAV estimates the market value of Stratus' assets (gross value) and subtracts the book value of Stratus' total liabilities reported under GAAP (excluding deferred financing costs presented in debt), value attributable to third party owners, estimated H-E-B, LP (H-E-B) profits interests and Profit Participation Incentive Plan awards, and estimated income taxes computed on the difference between the estimated market values and the tax basis of the assets. Stratus also presents the non-GAAP measure after-tax NAV per share, which is after-tax NAV divided by shares of its common stock outstanding as of December 31, 2021 and 2020, plus all outstanding restricted stock units. The computation of Stratus' after-tax NAV uses third-party appraisals conducted by independent appraisal firms, which were primarily retained by Stratus' lenders as required under its financing arrangements. The appraisal firms represent in their reports that they employ certified appraisers with local knowledge and expertise who are Members of the Appraisal Institute (MAI) certified by the Appraisal Institute and/or state certified as a Certified General Real Estate Appraiser. Each appraisal states that it is prepared in conformity with the Uniform Standards of Professional Appraisal Practice and utilizes at least one of the following three approaches to value: One or more of the approaches may be selected by the appraiser depending on its applicability to the property being appraised. To the extent more than one approach is used, the appraiser performs a reconciliation of the indicated values to determine a final opinion of value for the subject property. Significant professional judgment is exercised by the appraiser in determining which inputs are used, which approaches to select, and the weight given to each selected approach in determining a final opinion as to the appraised value of the subject property. Stratus is a diversified real estate company and its portfolio of real estate assets includes commercial properties, as well as multi-family and single-family residential real estate properties. Stratus’ discontinued operations also include hotel and entertainment properties. Consequently, each appraisal is unique and certain factors reviewed and evaluated in each appraisal may be particular to the nature of the property being appraised. However, in performing their analyses, the appraisers generally (i) performed site visits to the properties, (ii) performed independent inspections and/or surveys of the market area and neighborhood, (iii) performed a highest and best use analysis, (iv) reviewed property-level information, including, but not limited to, ownership history, location, availability of utilities, topography, land improvements and zoning, and (v) reviewed information from a variety of sources about regional market data and trends applicable to the property being appraised. Depending on the valuation approach utilized, the appraisers may have used one or more of the following: the recent sales prices of comparable properties; market rents for comparable properties; operating and/ or holding costs of comparable properties; and market capitalization and discount rates. The value for Block 21 as of December 31, 2021, is based on the price in the sales contract rather than an appraised value. The appraisals of the specified properties are as of the dates so indicated, and the appraised value may be different if prepared as of a current date. As noted above, the appraisers utilize significant professional judgment in determining the appraisal methodology best suited to a particular property and the weight afforded to the various inputs considered, which could vary depending on the appraiser’s evaluation of the property being appraised. Moreover, the opinions expressed in the appraisals are based on estimates and forecasts that are prospective in nature and subject to certain risks and uncertainties. Events may occur that could cause the performance of the properties to materially differ from the estimates utilized by the appraiser, such as changes in the economy, interest rates, capitalization rates, the financial strength of certain tenants, and the behavior of investors, lenders and consumers. Additionally, in some situations, the opinions and forecasts utilized by the appraiser may be partly based on information obtained from third party sources, which information neither Stratus nor the appraiser verifies. Stratus reviews the appraisals to confirm that the information provided by Stratus to the appraiser is accurately reflected in the appraisal, but Stratus does not validate the methodologies, inputs and professional judgment utilized by the certified appraiser. The appraised values may not represent fair value, as defined under GAAP. After-tax NAV and after-tax NAV per share may not be equivalent to the enterprise value of Stratus or an appropriate trading price for its common stock for many reasons, including but not limited to the following: (1) income taxes included may not reflect the actual tax amounts that will be due upon the ultimate disposition of the assets; (2) components were calculated as of the dates specified and calculations as of different dates are likely to produce different results; (3) opinions are likely to differ regarding appropriate capitalization rates; and (4) a buyer may pay more or less for Stratus or its real estate assets as a whole than for the sum of the components used to calculate after-tax NAV. Accordingly, after-tax NAV per share is not a representation or guarantee that Stratus' common stock will or should trade at this amount, that a stockholder would be able to realize this amount in selling Stratus' shares, that a third party would offer the after-tax NAV per share in an offer to purchase all or substantially all of Stratus' common stock, or that a stockholder would receive distributions per share equal to the after-tax NAV per share upon Stratus’ liquidation. Investors should not rely on the after-tax NAV per share as being an accurate measure of the current fair market value of Stratus' common stock. Management strongly encourages investors to review Stratus' consolidated financial statements and publicly filed reports in their entirety. Below are reconciliations of Stratus' total stockholders’ equity, the most comparable GAAP measure, to after-tax NAV (in millions). December 31, 2021 2020 Total stockholders’ equity $ 158.1 $ 98.9 Less: Total assets (541.2 ) (544.0 ) Add: Noncontrolling interest in subsidiaries 50.5 10.8 Total liabilities (332.6 ) (434.3 ) Add: Gross value of assets 845.8 844.2 Lease liabilities 14.0 13.3 Less: Deferred financing costs presented in liabilities (1.7 ) (2.2 ) 21% corporate tax on built-in gain (61.8 ) (54.4 ) Value attributable to third party ownership (51.4 ) (26.1 ) Estimated H-E-B profits interests and Profit Participation Incentive Plan awards (3.3 ) (3.2 ) Rounding (0.1 ) — After-tax NAV $ 408.9 $ 337.3
- 03/31/2022
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Stratus Properties Inc. to Hold Year Ended December 31, 2021 Conference Call on Thursday, March 31, 2022
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) announced today that it will release its year ended December 31, 2021 financial and operating results before the market opens on Thursday, March 31, 2022, and will host a conference call at 11:00 a.m. Eastern Time on the same day. Investors wishing to participate in the conference call may dial: Conference Call Domestic Dial-In Number: 1-877-418-4843 International Dial-In Number: 1-412-902-6766 Conference Call Replay Domesti
- 03/16/2022
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Stratus Properties Inc. (STRS) CEO Beau Armstrong on Q3 2021 Results - Earnings Call Transcript
- Stratus Properties Inc. (STRS) CEO Beau Armstrong on Q3 2021 Results - Earnings Call Transcript
- 11/15/2021
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Stratus Properties Inc. to Hold Third-Quarter 2021 Conference Call on Monday, November 15, 2021
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) announced today that it will release its third-quarter 2021 financial and operating results before the market opens on Monday, November 15, 2021, and will host a conference call at 11:00 a.m. Eastern Time on the same day. Investors wishing to participate in the conference call may dial: Conference Call Domestic Dial-In Number: 1-877-418-4843 International Dial-In Number: 1-412-902-6766 Conference Call Replay Domestic Dial-In Number: 1-877-344-7529 International Dial-In Number: 1-412-317-0088 Access Code: 10161223 Available Through: November 29, 2021 The complete earnings release and replay of the conference call will be available on Stratus’ website, stratusproperties.com. Stratus is a diversified real estate company engaged primarily in the acquisition, entitlement, development, management, and sale of commercial, and multi-family and single-family residential real estate properties, real estate leasing, and the operation of hotel and entertainment businesses located in the Austin, Texas area and other select, fast-growing markets in Texas. ____________________________ A copy of this release is available on Stratus’ website, stratusproperties.com.
- 10/20/2021
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Stratus Properties Inc. Announces Agreement to Sell The Santal for $152 Million
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) today announced an agreement to sell The Santal for $152 million, or approximately $339 thousand per unit, in cash. The Santal is Stratus' wholly owned 448-unit garden-style, multi-family luxury apartment complex located in Section N of Austin's upscale Barton Creek community. The sales price represents a premium of approximately 96% to Stratus' estimated net asset value of The Santal (after tax
- 09/21/2021
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Stratus Properties Inc. Announces Purchase of Land and Plans to Develop Block 150 in Downtown Austin
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) today announced its plans for Block 150, a proposed luxury high-rise rental project in downtown Austin, Texas. The site at 12th and San Antonio is located just a few blocks west of the Texas State Capitol in Austin. Based on preliminary plans, Block 150 would be developed as a 400-foot tower, consisting of approximately 420,000 gross square feet with 300 Class A luxury multi-family units for leas
- 09/07/2021
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Stratus Properties Inc. (STRS) CEO Beau Armstrong on Q2 2021 Results - Earnings Call Transcript
- Stratus Properties Inc. (STRS) CEO Beau Armstrong on Q2 2021 Results - Earnings Call Transcript
- 08/16/2021
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Stratus Properties Inc. Announces New Development Plans for Magnolia Place, an H-E-B Grocery Shadow-Anchored, Mixed-Use Project in Magnolia, Texas
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) today announced its new project development plans, and on August 12, 2021, completed construction financing for the first phase of development of Magnolia Place, an H-E-B, LP (“H-E-B”) grocery shadow-anchored, mixed-use project in Magnolia, Texas. William H. Armstrong III, Chairman of the Board and Chief Executive Officer of Stratus, stated, “We are pleased to announce that we have completed fina
- 08/16/2021
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Stratus Properties Inc. to Hold Second-Quarter 2021 Conference Call on Monday, August 16, 2021
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) announced today that it will release its second-quarter 2021 financial and operating results before the market opens on Monday, August 16, 2021, and will host a conference call at 11:00 a.m. Eastern Time on the same day. Investors wishing to participate in the conference call may dial: Conference Call Domestic Dial-In Number: 1-877-418-4843 International Dial-In Number: 1-412-902-6766 Conference Call Replay Domestic Dial-In
- 07/21/2021
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Stratus Properties Inc. Reports Preliminary Results of 2021 Annual Meeting of Shareholders
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) announced at its 2021 annual meeting of shareholders earlier today that, based on the preliminary vote count provided by the Company's proxy solicitor, shareholders voted to elect Stratus' director nominees, Jim Leslie and Neville Rhone, Jr., to its Board of Directors (“Board”). Shareholders also approved, as recommended by the Board, the shareholder proposal to expand the Board and appoint Lauri
- 06/04/2021
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Leading Independent Proxy Advisory Firm ISS Recommends Stratus Shareholders Vote on Stratus' WHITE Proxy Card
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) today announced that Institutional Shareholder Services (“ISS”), a leading independent proxy advisory firm, recommends that Stratus shareholders vote on the Company's WHITE proxy card in connection with the Company's upcoming 2021 Annual Meeting of Shareholders (the “Annual Meeting”). ISS also recommends that shareholders not vote on the GOLD proxy card. In its report, ISS highlighted the Company
- 05/20/2021
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Stratus Properties Sets the Record Straight on Misleading Statements and Personal Attacks Made by Oasis
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) (“Stratus” or the “Company”) today issued the following letter to shareholders on behalf of Stratus' Chairman, President and Chief Executive Officer, William (“Beau”) Armstrong III, in response to a letter recently issued by Oasis Management Ltd. (“Oasis”). Dear fellow Stratus shareholders, We write to you to once again encourage you to vote for our highly-qualified director nominees on the WHITE Proxy Card and to address th
- 05/18/2021
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Stratus Properties' (STRS) CEO Bill Armstrong on Q1 2021 Results - Earnings Call Transcript
- Stratus Properties' (STRS) CEO Bill Armstrong on Q1 2021 Results - Earnings Call Transcript
- 05/11/2021
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Stratus Properties Inc. Reports First-Quarter 2021 Results
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS), a diversified real estate company with holdings, interests and operations focused in the Austin, Texas area and other select, fast-growing markets in Texas, today reported first-quarter 2021 results. Highlights and Recent Developments: In January 2021, Stratus sold The Saint Mary, a 240-unit luxury garden-style apartment project in the Circle C community, for $60.0 million, or $250,000 per unit. Stratus believes the sales p
- 05/10/2021
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Stratus Properties Inc (STRS) CEO William Armstrong on Q4 2020 Results - Earnings Call Transcript
- Stratus Properties Inc (STRS) CEO William Armstrong on Q4 2020 Results - Earnings Call Transcript
- 03/15/2021
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Oasis Releases Investor Presentation Recommending Changes at Stratus Properties
- AUSTIN, Texas--(BUSINESS WIRE)--Oasis Management Company Ltd. (“Oasis”) is the manager to a fund that is a significant, long-term shareholder of Stratus Properties Inc. (NASDAQ: STRS) (the “Company” or “Stratus”) that beneficially owns over 13.5% of Stratus' ordinary shares. Oasis believes that Stratus can meaningfully improve its performance and increase total shareholder return by developing and executing an effective strategy with improved corporate governance to create genuine accountabilit
- 03/01/2021
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Stratus Properties Inc. to Hold Year Ended December 31, 2020 Conference Call on Monday, March 15, 2021
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) announced today that it will release its year ended December 31, 2020 financial and operating results before the market opens on Monday, March 15, 2021, and will host a conference call at 11:00 a.m. Eastern Time on the same day. Investors wishing to participate in the conference call may dial: Conference Call Domestic Dial-In Number: 1-877-418-4843 International Dial-In Number: 1-412-902-6766 Conference Call Replay Domestic
- 02/19/2021
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Stratus Properties Inc. Announces Appointment of Kate B. Henriksen to Its Board of Directors
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) announced today the appointment of Kate B. Henriksen to its Board of Directors (“Board”). Ms. Henriksen will serve as an independent Class III director, effective immediately, and will be up for election to the Board at the 2022 Annual Meeting of Stockholders. William H. Armstrong III, Chairman of the Board, President and Chief Executive Officer of Stratus, stated, “We are pleased that Kate Henriksen has joined our Board, br
- 01/27/2021
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Stratus Properties Inc. Announces Appointment of Neville L. Rhone, Jr. to Its Board of Directors
- AUSTIN, Texas--(BUSINESS WIRE)--Stratus Properties Inc. (NASDAQ: STRS) announced today the appointment of Neville L. Rhone, Jr. to its Board of Directors (“Board”). Mr. Rhone will serve as an independent Class II director, effective immediately, and will be up for election to the Board at the 2021 Annual Meeting of Stockholders. William H. Armstrong III, Chairman of the Board, President and Chief Executive Officer of Stratus, stated, “We are pleased to welcome Neville Rhone to our Board. Nevill
- 12/17/2020
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Here is What Hedge Funds Think About Stratus Properties Inc. (STRS)
- The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Stratus Properties Inc. (NASDAQ:STRS).
- 11/26/2020
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Stratus Properties Inc (STRS) CEO William Armstrong on Q3 2020 Results - Earnings Call Transcript
- Stratus Properties Inc (STRS) CEO William Armstrong on Q3 2020 Results - Earnings Call Transcript
- 11/09/2020
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