Stratus Properties Inc. (NASDAQ: STRS), a diversified real
estate company with multi-family and single-family residential real
estate development, real estate leasing, hotel and entertainment
businesses in the Austin, Texas area and other select Texas
markets, today reported third-quarter and nine-month 2018 results
and the purchase of land for a future development project in New
Caney, Texas.
Highlights:
- In October 2018, Stratus, in
partnership with H-E-B, L.P. (HEB), purchased a 38-acre tract of
land for approximately $9.5 million in New Caney, Texas, for
the future development of an HEB-anchored, mixed-use project.
- Completed site clearing for Kingwood
Place, an HEB-anchored, mixed-use project in Kingwood, Texas.
Construction is expected to begin in November 2018 subject to
closing of construction financing. The HEB grocery store is
anticipated to open in third-quarter 2019.
- Sold three lots for a total of $2.0
million, including one Amarra Drive Phase II lot and two
Amarra Drive Phase III lots. Since the end of third-quarter
2018, Stratus closed on the sale of one Amarra Villas townhome, one
Amarra Drive Phase II lot and one Amarra Drive Phase III lot for a
total of $3.2 million. Two Amarra Villas townhomes and nine Amarra
Drive Phase III lots are currently under contract.
- Completed construction of the 99,379
square-foot first phase at Lantana Place, a mixed-use
development in southwest Austin consisting of approximately 320,000
square feet of retail, hotel and office space. As of the end of
third-quarter 2018, Stratus has executed leases for a Marriott A/C
hotel and 61 percent of the retail space and tenant improvement
work is progressing.
- Completed construction of Jones
Crossing, an HEB-anchored, mixed-use development in College
Station, Texas. The HEB grocery store opened in September 2018, as
scheduled and the retail component is approximately 80 percent
leased. In addition, Stratus has begun preliminary planning work on
the phased 600-unit multi-family component.
- Construction of Santal Phase II,
a 212-unit garden style, multi-family project located directly
adjacent to Santal Phase I in the upscale, highly populated Barton
Creek community, is continuing to advance on schedule and on
budget, with completion expected by year-end 2018. The first
Phase II units became available for occupancy in August 2018 and 64
units were placed into service during third-quarter 2018. As of the
end of third-quarter 2018, 28 of the Phase II units were leased and
the 236-unit Santal Phase I was 96 percent leased and
stabilized. Stratus currently plans to evaluate refinancing the
combined 448-unit Santal property upon stabilization of Phase II,
which is currently expected by the end of 2019, subject to market
conditions and leasing progress.
- Leasing activity continues at West
Killeen Market, a retail development project anchored by a
90,000-square-foot HEB grocery store. As of September 30, 2018,
Stratus has executed leases for 68 percent of the 44,000 square
feet of retail space and all tenants are currently open for
business. Stratus intends to explore opportunities to sell
this property in 2019 depending on leasing progress and market
conditions.
- Construction on The Saint Mary,
a 240-unit luxury garden-style apartment project in the Circle C
community, continues and remains on budget. The first units are
expected to be available for occupancy in third-quarter 2019, with
projected completion expected by the end of 2019.
William H. Armstrong III, Chairman, President and Chief
Executive Officer, stated, “We are pleased to announce that we have
partnered with Texas grocery chain HEB to purchase a 38-acre tract
in New Caney, Texas to develop a new HEB-anchored, mixed-use
project. The property is located in a fast-growing, dynamic area,
approximately eight miles north of our Kingwood Place project, and
will be our second project in the Houston area. This will be our
seventh HEB-anchored project. We believe this is another example of
the value we can create by leveraging our strong working
relationships and long track record operating in growing Texas
markets.”
Armstrong continued, “This year we offered for the first time
project-level equity financing structures and we were pleased with
the strong interest we received from highly-qualified third-party
limited partners. These arrangements make efficient use of our
balance sheet and enable further portfolio diversification,
allowing us to continue to expand our portfolio of development
projects and create value for our shareholders.”
Land Purchase for Future Development
Project in New Caney, Texas
In October 2018, Stratus, in partnership with HEB, purchased a
38-acre tract of land for approximately $9.5 million in New Caney,
Texas, for the future development of an HEB-anchored, mixed-use
project. Stratus and HEB entered into a partnership agreement in
which each party owns a 50 percent interest and each funded half of
the land purchase. Subject to completion of development plans,
Stratus currently expects the New Caney project will be anchored by
an HEB grocery store, and will include approximately 145,000 square
feet of retail space (inclusive of the HEB grocery store), 5 pad
sites, and a 10-acre multi-family parcel. Upon completion of
certain pre-development work, which is currently underway, Stratus
intends to enter into a lease with HEB, at which time Stratus will
acquire HEB’s interest in the partnership for the amount of HEB’s
investment. Stratus is reviewing its plans for timing of
commencement of construction, which Stratus currently expects to be
in approximately three years.
Third-Quarter 2018 Financial
Results
Stratus reported a net loss attributable to common stockholders
of $2.4 million, $0.29 per share, in third-quarter 2018, compared
to net income attributable to common stockholders of $14.3 million,
$1.75 per share, in third-quarter 2017. The 2017 period included a
gain on the sale of assets of $24.3 million ($15.7 million to net
income attributable to common stockholders or $1.92 per share)
associated with recognition of a portion of the deferred gain on
the sale of The Oaks at Lakeway, which closed in first-quarter
2017.
Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization) totaled $1.4 million in the third quarters of
2018 and 2017. For a reconciliation of net loss attributable to
common stockholders to Adjusted EBITDA, see the supplemental
schedule on page VI, "Adjusted EBITDA," which is available on
Stratus' website.
Summary Financial
Results
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2018 2017 2018 2017 (In Thousands, Except Per Share
Amounts)
Revenues
Real Estate Operations $ 2,108 $ 3,038 $ 10,297 $ 9,244 Leasing
Operations 3,040 2,145 7,851 6,668 Hotel 8,244 7,795 27,281 28,047
Entertainment 4,859 4,655 14,569 16,517 Eliminations and other (328
) (411 ) (1,000 ) (1,161 ) Total Consolidated Revenue $ 17,923
$ 17,222 $ 58,998 $ 59,315
Operating (loss)
income
Real Estate Operations $ (236 ) $ 777 $ 702 a $ 1,025 Leasing
Operations 942 24,612 b 1,861 23,708 c Hotel 719 231 3,745 4,070
Entertainment 314 472 1,548 2,624 Corporate and other (2,776 )
(2,452 ) (9,022 ) (8,991 ) Total consolidated operating (loss)
income $ (1,037 ) $ 23,640 $ (1,166 ) $ 22,436
Net (loss) income attributable to common stockholders $ (2,372 ) $
14,308 b $ (5,099 ) $ 10,745 c Diluted net (loss) income per
share $ (0.29 ) $ 1.75 b $ (0.63 ) $ 1.32 c Adjusted EBITDA
$ 1,361 $ 1,366 $ 5,243 $ 5,473 Capital expenditures and
purchases and development of real estate properties $ 31,687 $
12,485 $ 82,368 $ 25,559 Diluted weighted-average shares of
common stock outstanding 8,156 8,172 8,149 8,169
a.
Includes $0.4 million of reductions to
cost of sales associated with collection of prior-years'
assessments of properties in Barton Creek.
b.
Includes a gain of $24.3 million ($15.7
million to net income attributable to common stockholders or $1.92
per share) associated with recognition of a portion of the deferred
gain on the sale of The Oaks at Lakeway.
c.
Includes gains of $25.4 million ($16.4
million to net income attributable to common stockholders or $2.01
per share) associated with recognition of a portion of the deferred
gain on the sale of The Oaks at Lakeway and the sale of a bank
building and an adjacent undeveloped 4.1 acre tract of land at
Barton Creek, partly offset by a charge of $2.5 million ($1.6
million to net income attributable to common stockholders or $0.20
per share) for profit participation costs associated with Stratus'
sale of The Oaks at Lakeway.
The decreases in revenue and operating income from the Real
Estate Operations segment in third-quarter 2018, compared to
third-quarter 2017, primarily reflect fewer developed property
sales. During third-quarter 2018, Stratus sold one Amarra Drive
Phase II lot and two Amarra Drive Phase III lots for a total of
$2.0 million, compared with the sales of one Amarra Drive Phase II
lot, two Amarra Drive Phase III lots and three Meridian lots for
$2.9 million during third-quarter 2017.
The increase in revenue from the Leasing Operations
segment in third-quarter 2018, compared to third-quarter 2017,
primarily reflects leasing activity at our recently completed
retail properties, Lantana Place, Jones Crossing and West Killeen
Market.
The increases in revenue and operating income from the
Hotel segment in third-quarter 2018, compared to
third-quarter 2017, primarily reflect higher room revenues
resulting from higher occupancy during the quarter. Revenue per
available room (RevPAR), which is calculated by dividing total room
revenue by the average number of total rooms available, was $214 in
third-quarter 2018, compared with $199 for third-quarter 2017.
While Stratus remains positive on the long-term outlook of the W
Austin Hotel based on continued population growth and increased
tourism in the Austin market, a continued increase in competition
resulting from the anticipated opening of additional hotel rooms in
downtown Austin during the remainder of 2018 and 2019 is expected
to have an ongoing impact on Stratus' hotel revenues.
The increase in revenue from the Entertainment segment in
third-quarter 2018, compared to third-quarter 2017, primarily
reflects higher ticket prices at ACL Live and an increase in
revenue from sponsorships and sales of suites and personal seat
licenses. ACL Live hosted 49 events and sold approximately 48
thousand tickets in third-quarter 2018, compared with 43 events and
the sale of approximately 56 thousand tickets in third-quarter
2017. Additionally, 3TEN ACL Live, hosted 55 events in
third-quarter 2018, compared with 47 events in third-quarter
2017.
Debt and Liquidity
At September 30, 2018, consolidated debt totaled $293.7
million and consolidated cash totaled $21.2 million, compared with
consolidated debt of $221.5 million and consolidated cash of $14.6
million at December 31, 2017.
Purchases and development of real estate properties (included in
operating cash flows) and capital expenditures (included in
investing cash flows) totaled $82.4 million for the first nine
months of 2018, primarily related to the purchase of the Kingwood
Place land and development of the Santal Phase II, Lantana Place,
Jones Crossing and The Saint Mary projects. This compares with
$25.6 million for the first nine months of 2017, primarily for the
development of the Barton Creek properties, Lantana Place, West
Killeen Market and Jones Crossing projects.
Stratus Kingwood Place, L.P. has secured a commitment to modify
its loan agreement with Comerica Bank to increase the original
commitment from $6.75 million to $32.9 million, guaranteed by
Stratus, to finance a portion of the construction of Kingwood
Place. The loan modification is expected to close in November
2018.
Conference Call
Information
Stratus will conduct an investor conference call to discuss its
unaudited third-quarter 2018 financial and operating results today,
November 9, 2018, at 11:00 a.m. ET. The public is invited to
listen to the conference call by dialing (877) 418-4843 for
domestic access and (412) 902-6766 for international access. A
replay of the conference call will be available at the conclusion
of the call for five days by dialing (877) 344-7529 domestically
and (412) 317-0088 internationally. Please use replay ID:
10125047. The replay will be available on Stratus' website at
stratusproperties.com until November 14, 2018.
CAUTIONARY STATEMENT 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 statements regarding the
implementation, projections or expectations related to the future
development, construction and completion of Stratus' projects, and
potential results of Stratus' active development plan, projections
or expectations related to operational and financial performance or
liquidity, reimbursements for infrastructure costs, financing and
regulatory matters, development plans and sales of properties,
including, but not limited to, Amarra Drive lots and townhomes,
exploring opportunities to sell West Killeen Market and the retail
complex in Barton Creek Village, evaluating refinancing of Santal
Phase I and II, leasing activities, timeframes for development,
capital expenditures, possible joint venture, partnership or other
arrangements, Stratus’ projections with respect to its obligations
under the master lease agreements entered into in connection with
the sale of The Oaks at Lakeway, and other plans and objectives of
management for future operations and activities and future dividend
payments. The words “anticipates,” “may,” “can,” “plans,”
“believes,” “potential,” “estimates,” “expects,” “projects,”
“intends,” “likely,” “will,” “should,” “to be” and any similar
expressions and/or statements that are not historical fact are
intended to identify those assertions as forward-looking
statements. Nothing contained in this press release should be
construed as an offer to sell or the solicitation of an offer to
buy any securities. Under Stratus’ loan agreement with Comerica
Bank, Stratus is not permitted to pay dividends on common stock
without Comerica’s prior written consent. The declaration of
dividends is at the discretion of Stratus’ Board of Directors
(Board), subject to restrictions under Stratus’ loan agreement with
Comerica Bank, 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,
Stratus’ ability to refinance and service its debt and the
availability of financing for development projects and other
corporate purposes, Stratus' ability to sell properties at prices
its Board considers acceptable, a decrease in the demand for real
estate in the Austin, Texas area and other select Texas markets
where Stratus operates, changes in economic and business
conditions, reductions in discretionary spending by consumers and
corporations, competition from other real estate developers, hotel
operators and/or entertainment venue operators and promoters, the
termination of sales contracts or letters of intent due to, among
other factors, the failure of one or more closing conditions or
market changes, Stratus’ ability to secure qualifying tenants for
the space subject to the master lease agreements entered into in
connection with the sale of The Oaks at Lakeway and to assign such
leases to the purchaser and remove the corresponding property from
the master leases, the failure to attract customers or tenants for
its developments or such customers’ or tenants' failure to satisfy
their purchase commitments, increases in interest rates, declines
in the market value of Stratus' assets, increases in operating
costs, including real estate taxes and the cost of construction
materials, changes in external perception of the W Austin Hotel,
changes in consumer preferences, changes in laws, regulations or
the regulatory environment affecting the development of real
estate, opposition from special interest groups with respect to
development projects, weather-related risks 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, 2017, filed with the SEC. In addition,
forward-looking statements and estimates regarding the effects of
the Tax Cuts and Jobs Act, which are based on Stratus' current
interpretation of this legislation and on reasonable estimates, may
change as a result of new guidance issued by regulators or changes
in our estimates.
This press release also includes Adjusted 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. Adjusted EBITDA is a financial measure
frequently used by securities analysts, lenders and others to
evaluate Stratus' recurring operating performance. Adjusted EBITDA
is intended to be a performance measure that should not be regarded
as more meaningful than a GAAP measure. Other companies may
calculate Adjusted EBITDA differently. As required by SEC
Regulation G, a reconciliation of Stratus' net loss attributable to
common stockholders to Adjusted EBITDA is 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 forward-looking statements are made. Further, Stratus may
make changes to its business plans that could affect its results.
Stratus cautions investors that it does not intend to update its
forward-looking statements more frequently than quarterly
notwithstanding any changes in its assumptions, business plans,
actual experience, or other changes, and Stratus undertakes no
obligation to update any forward-looking statements.
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, 2018 2017 2018 2017 Revenues: Real estate
operations $ 2,100 $ 2,923 $ 10,273 $ 9,108 Leasing operations
2,813 1,923 7,148 6,015 Hotel 8,172 7,738 27,087 27,817
Entertainment 4,838 4,638 14,490 16,375
Total revenues 17,923 17,222 58,998 59,315 Cost of sales: Real
estate operations 2,279 2,204 9,405 8,048 Leasing operations 1,227
1,091 3,732 3,749 Hotel 6,625 6,676 20,803 21,277 Entertainment
4,008 3,666 11,412 12,298 Depreciation 2,171 2,031
6,166 5,928 Total cost of sales 16,310 15,668 51,518
51,300 General and administrative expenses 2,650 2,220 8,646 8,462
Profit participation in sale of The Oaks at Lakeway — — — 2,538
Gain on sales of assets — (24,306 ) — (25,421 ) Total
18,960 (6,418 ) 60,164 36,879 Operating (loss)
income (1,037 ) 23,640 (1,166 ) 22,436 Interest expense, net (2,150
) (1,577 ) (5,451 ) (5,060 ) Gain on interest rate derivative
instruments 56 54 314 136 Loss on early extinguishment of debt — —
— (532 ) Other income, net 17 6 39 24
(Loss) income before income taxes and equity in unconsolidated
affiliates' income (loss) (3,114 ) 22,123 (6,264 ) 17,004 Equity in
unconsolidated affiliates' income (loss) 210 (5 ) 204 (24 ) Benefit
from (provision for) income taxes 532 (7,810 ) 961
(6,227 ) Net (loss) income and total comprehensive (loss) income
(2,372 ) 14,308 (5,099 ) 10,753 Total comprehensive income
attributable to noncontrolling interests in subsidiaries — —
— (8 ) Net (loss) income and total comprehensive
(loss) income attributable to common stockholders $ (2,372 ) $
14,308 $ (5,099 ) $ 10,745 Basic net (loss)
income per share attributable to common stockholders $ (0.29 ) $
1.76 $ (0.63 ) $ 1.32 Diluted net (loss) income per
share attributable to common stockholders $ (0.29 ) $ 1.75 $
(0.63 ) $ 1.32 Weighted average common shares
outstanding: Basic 8,156 8,128 8,149 8,119
Diluted 8,156 8,172 8,149 8,169
Dividends declared per share of common stock $ — $ —
$ — $ 1.00
STRATUS PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
September 30,2018
December 31,2017 ASSETS Cash and cash equivalents $ 21,182 $ 14,611
Restricted cash 25,910 24,779 Real estate held for sale 18,980
22,612 Real estate under development 136,645 118,484 Land available
for development 23,947 14,804 Real estate held for investment, net
234,796 188,390 Deferred tax assets 12,542 11,461 Other assets
14,054 10,852 Total assets $ 488,056 $ 405,993
LIABILITIES AND EQUITY Liabilities: Accounts payable
$ 20,976 $ 22,809 Accrued liabilities, including taxes 10,428
13,429 Debt 293,739 221,470 Deferred gain 9,926 11,320 Other
liabilities 12,620 9,575 Total liabilities 347,689
278,603 Commitments and contingencies
Equity: Stockholders' equity: Common stock 93 93 Capital in excess
of par value of common stock 186,024 185,395 Accumulated deficit
(42,220 ) (37,121 ) Common stock held in treasury (21,260 ) (21,057
) Total stockholders' equity 122,637 127,310 Noncontrolling
interests in subsidiaries 17,730 a 80 Total equity
140,367 127,390 Total liabilities and equity $
488,056 $ 405,993
a.
Includes $10.7 million and $7.0 million of
contributions from investors associated with financing the Kingwood
Place and The Saint Mary development projects, respectively.
STRATUS PROPERTIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
Nine Months Ended September 30, 2018 2017 Cash flow from
operating activities: Net (loss) income $ (5,099 ) $ 10,753
Adjustments to reconcile net (loss) income to net cash used in
operating activities: Depreciation 6,166 5,923 Cost of real estate
sold 5,780 5,086 Gain on sale of assets — (25,421 ) Gain on
interest rate derivative contracts (314 ) (136 ) Loss on early
extinguishment of debt — 532 Debt issuance cost amortization and
stock-based compensation 1,389 1,227 Equity in unconsolidated
affiliates' (income) loss (204 ) 24 Increase (decrease) in deposits
1,242 (145 ) Deferred income taxes (1,081 ) (1,264 ) Purchases and
development of real estate properties (28,900 ) (11,196 ) Municipal
utility district reimbursement — 2,172 Increase in other assets
(2,965 ) (160 ) Decrease in accounts payable, accrued liabilities
and other (2,607 ) (320 ) Net cash used in operating activities
(26,593 ) (12,925 ) Cash flow from investing activities:
Capital expenditures (53,468 ) (14,363 ) Proceeds from sale of
assets — 117,261 Payments on master lease obligations (1,476 )
(1,653 ) Other, net 378 (49 ) Net cash (used in) provided by
investing activities (54,566 ) 101,196 Cash flow from
financing activities: Borrowings from credit facility 32,436 45,200
Payments on credit facility (6,112 ) (53,651 ) Borrowings from
project loans 50,062 8,725 Payments on project and term loans
(3,799 ) (64,228 ) Cash dividend paid — (8,133 ) Stock-based awards
net payments (203 ) (234 ) Noncontrolling interests contributions
17,650 a — Financing costs (1,173 ) (1,536 ) Net cash provided by
(used in) financing activities 88,861 (73,857 ) Net increase
in cash, cash equivalents and restricted cash 7,702 14,414 Cash,
cash equivalents and restricted cash at beginning of year 39,390
25,489 Cash, cash equivalents and restricted cash at
end of period $ 47,092 $ 39,903
a.
Represents contributions from investors
associated with financing the Kingwood Place and The Saint Mary
development projects.
STRATUS PROPERTIES INC.
BUSINESS SEGMENTS
Stratus currently has four operating segments: Real Estate
Operations, Leasing Operations, Hotel and Entertainment.
The Real Estate Operations segment is comprised of Stratus’ real
estate assets (developed, under development and available for
development), which consists of its properties in Austin, Texas
(the Barton Creek community, including portions of Santal Phase II;
the Circle C community, including The Saint Mary; the Lantana
community, including Lantana Place; and one condominium unit at the
W Austin Hotel & Residences); in Lakeway, Texas located in the
greater Austin area (Lakeway); in College Station, Texas (Jones
Crossing); and in Magnolia, Texas (Magnolia) and Kingwood, Texas
(Kingwood Place), both located in the greater Houston area.
The Leasing Operations segment includes the office and retail
space at the W Austin Hotel & Residences, a retail building in
Barton Creek Village, Santal Phase I and the West Killeen Market in
Killeen, Texas, and portions of the Santal Phase II, Lantana Place
and Jones Crossing projects.
The Hotel segment includes the W Austin Hotel located at the W
Austin Hotel & Residences in downtown Austin, Texas.
The Entertainment segment includes ACL Live, a live music and
entertainment venue and production studio, and 3TEN ACL Live, both
at the W Austin Hotel & Residences. In addition to hosting
concerts and private events, ACL Live is the home of Austin City
Limits, a television program showcasing popular music legends. The
Entertainment segment also includes revenues and costs associated
with events hosted at other venues.
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 EstateOperationsa
LeasingOperations
Hotel Entertainment
Eliminationsand Otherb
Total Three Months Ended September 30, 2018: Revenues:
Unaffiliated customers $ 2,100 $ 2,813 $ 8,172 $ 4,838 $ — $ 17,923
Intersegment 8 227 72 21 (328 ) — Cost of sales, excluding
depreciation 2,279 1,235 6,639 4,154 (168 ) 14,139 Depreciation 65
863 886 391 (34 ) 2,171 General and administrative expenses —
— — — 2,650 2,650
Operating (loss) income $ (236 ) $ 942 $ 719 $ 314
$ (2,776 ) $ (1,037 ) Capital expenditures and purchases and
development of real estate properties $ 21,201 $ 10,334 $ 128 $ 24
$ — $ 31,687 Total assets at September 30, 2018 183,857 157,706
102,069 36,377 8,047 488,056 Three Months Ended September 30, 2017:
Revenues: Unaffiliated customers $ 2,923 $ 1,923 $ 7,738 $ 4,638 $
— $ 17,222 Intersegment 115 222 57 17 (411 ) — Cost of sales,
excluding depreciation 2,204 1,100 6,678 3,799 (144 ) 13,637
Depreciation 57 739 886 384 (35 ) 2,031 General and administrative
expenses — — — — 2,220 2,220 Gain on sales of assets —
(24,306 ) c — — — (24,306 ) Operating income
(loss) $ 777 $ 24,612 $ 231 $ 472 $
(2,452 ) $ 23,640 Capital expenditures and purchases and
development of real estate properties $ 3,222 $ 9,066 $ 15 $ 182 $
— $ 12,485 Total assets at September 30, 2017 183,643 71,041
103,560 36,888 15,332 410,464
STRATUS PROPERTIES INC.
BUSINESS SEGMENTS (continued)
Real EstateOperationsa
LeasingOperations
Hotel Entertainment
Eliminationsand Otherb
Total Nine Months Ended September 30, 2018: Revenues: Unaffiliated
customers $ 10,273 $ 7,148 $ 27,087 $ 14,490 $ — $ 58,998
Intersegment 24 703 194 79 (1,000 ) — Cost of sales, excluding
depreciation 9,405 d 3,756 20,861 11,850 (520 ) 45,352 Depreciation
190 2,234 2,675 1,171 (104 ) 6,166 General and administrative
expenses — — — — 8,646 8,646
Operating income (loss) $ 702 $ 1,861 $ 3,745
$ 1,548 $ (9,022 ) $ (1,166 ) Capital expenditures
and purchases and development of real estate properties $ 28,900 $
52,619 $ 464 $ 385 $ — $ 82,368 Nine Months Ended September 30,
2017: Revenues: Unaffiliated customers $ 9,108 $ 6,015 $ 27,817 $
16,375 $ — $ 59,315 Intersegment 136 653 230 142 (1,161 ) — Cost of
sales, excluding depreciation 8,048 3,773 21,323 12,756 (528 )
45,372 Depreciation 171 2,070 2,654 1,137 (104 ) 5,928 General and
administrative expenses — — — — 8,462 8,462 Profit participation —
2,538 — — — 2,538 Gain on sales of assets — (25,421 ) c —
— — (25,421 ) Operating income (loss) $ 1,025
$ 23,708 $ 4,070 $ 2,624 $ (8,991 ) $
22,436 Capital expenditures and purchases and development of
real estate properties $ 11,196 $ 13,845 $ 273 $ 245 $ — $ 25,559
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 $24.3 million associated with recognition of a portion
of the deferred gain on the sale of The Oaks at Lakeway. d.
Includes $0.4 million of reductions to cost of sales associated
with collection of prior-years' assessments of properties in Barton
Creek.
RECONCILIATION OF NON-GAAP
MEASURE
ADJUSTED EBITDA
Adjusted 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
Adjusted EBITDA, management believes that Stratus' presentation of
Adjusted EBITDA affords them greater transparency in assessing its
financial performance. This information differs from net income
(loss) attributable to common stockholders 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. Adjusted 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 attributable to common
stockholders to Adjusted EBITDA follows (in thousands).
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2018 2017 2018 2017
Net (loss) income attributable
to common stockholders $ (2,372 ) $ 14,308 $ (5,099 ) $ 10,745
Depreciation 2,171 2,031 6,166 5,928 Interest expense, net 2,150
1,577 5,451 5,060 (Benefit from) provision for income taxes (532 )
7,810 (961 ) 6,227 Profit participation in sale of The Oaks at
Lakeway — — — 2,538 Gain on sales of assets — (24,306 ) — (25,421 )
Gain on interest rate derivative instruments (56 ) (54 ) (314 )
(136 ) Loss on early extinguishment of debt — — —
532
Adjusted EBITDA $ 1,361 $ 1,366
$ 5,243 $ 5,473
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version on businesswire.com: https://www.businesswire.com/news/home/20181109005287/en/
Stratus Properties Inc.William H. Armstrong III,
512-478-5788
Stratus Properties (NASDAQ:STRS)
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