Stratus Properties Inc. (NASDAQ: STRS), a diversified real
estate company engaged primarily in the acquisition, entitlement,
development, management, operation 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, today reported second-quarter 2019
results and announced plans for the first phase of development of
Magnolia Place, a new mixed-use project in Magnolia, Texas.
Highlights:
- Sold four Amarra Drive Phase III lots for a total of
$2.3 million and one Amarra Villas townhome for $1.8
million. Since the end of second-quarter 2019, Stratus closed on
the sale of two Amarra Drive Phase III lots for a total of $1.3
million. As of August 5, 2019, six Amarra Drive Phase III lots were
under contract. Stratus expects to commence construction of four
new Amarra Villas townhomes during third-quarter 2019.
- As of June 30, 2019, both Santal Phase I and Santal
Phase II, multi-family projects in Barton Creek, were fully
leased and stabilized. Stratus continues to explore options to sell
or refinance the combined 448-unit Santal property, subject to
market conditions.
- Construction of The Saint Mary, a 240-unit luxury
garden-style apartment project in the Circle C community, is
progressing ahead of schedule and on budget. The clubhouse and
first two apartment buildings were completed in June 2019 and
leasing activity has commenced. The first tenants took occupancy
during July 2019. Stratus expects to complete construction in
fourth-quarter 2019.
- Stratus continues to explore various opportunities with respect
to Block 21, a mixed-use development in downtown Austin,
Texas, that contains the W Austin Hotel & Residences and
office, retail and entertainment space, which may include, but are
not limited to, a possible sale, recapitalization or other venture,
subject to market conditions.
- Stratus is planning to proceed, subject to financing, with the
first phase of development of Magnolia Place, a new
mixed-use project in Magnolia, Texas, currently planned for 81,000
square feet of retail space; six pad sites; two hotel sites; and 50
acres of residential land allowing up to 1,200 units. Magnolia
Place will be shadow-anchored by a 95,000-square-foot H-E-B, L.P.
(HEB) grocery store to be constructed by HEB on an adjoining
18-acre site owned by HEB.
William H. Armstrong III, Chairman, President and Chief
Executive Officer, stated, “Our steady progress continued through
the second quarter. We are continuing to explore our options to
sell or refinance our Santal and Block 21 properties, subject to
market conditions. Our mixed-use development projects are advancing
as planned and several, including Jones Crossing, Lantana Place and
West Killeen, will soon be stabilized. We look forward to continued
progress on all of our projects during the second half of the year,
including the opening of the Kingwood Place HEB grocery store and
commencing construction of our new Magnolia Place project. I am
encouraged by the opportunities available to Stratus and its
shareholders in Austin and surrounding Texas markets.”
Plans for First Phase of Development of
Magnolia Place
Stratus is planning to proceed, subject to financing, with the
first phase of development of Magnolia Place, a new mixed-use
project in Magnolia, Texas, currently planned for 81,000 square
feet of retail space; six pad sites; two hotel sites; and 50 acres
of residential land allowing up to 1,200 units. Magnolia Place will
be shadow-anchored by a 95,000-square-foot HEB grocery store to be
constructed by HEB on an adjoining 18-acre site owned by HEB.
The first phase of development is expected to consist of
approximately 41,000 square feet of retail space, three pads for
lease and three pads to be held for sale. Stratus is currently in
the process of securing a construction loan to finance the first
phase of development and expects to begin site work and joint use
road and utility infrastructure that will support the entire
project, including future phases, in the third quarter of 2019.
Stratus expects substantially all of the infrastructure costs to be
eligible for future reimbursement by the Magnolia East municipal
utility district (MUD). The HEB grocery store is currently expected
to open by third-quarter 2020.
Second-Quarter 2019 Financial
Results
Stratus reported a net loss attributable to common stockholders
of $2.4 million, $0.29 per share, in second-quarter 2019, compared
to a net loss attributable to common stockholders of $0.9 million,
$0.11 per share, in second-quarter 2018. Stratus' second-quarter
2019 revenues totaled $23.7 million, compared with $23.3 million
for second-quarter 2018. The increase in revenues in second-quarter
2019 primarily reflects increased revenues associated with the
commencement of leases at Stratus' recently completed properties
and an increase in the number of events hosted and higher event
attendance at ACL Live, partly offset by lower revenues from
single-family residential property sales and the Hotel segment.
Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization) totaled $3.3 million in second-quarter 2019,
compared to $2.8 million in second-quarter 2018. 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 at
stratusproperties.com.
Summary Financial
Results
Three Months Ended June 30,
Six Months Ended June 30,
2019
2018
2019
2018
(In Thousands, Except Per Share
Amounts)
Revenues
Real Estate Operations
$
4,133
$
6,987
$
7,086
$
8,189
Leasing Operations
4,642
2,556
8,501
4,811
Hotel
9,042
9,643
17,414
19,037
Entertainment
6,265
4,451
11,090
9,710
Corporate, eliminations and other
(358
)
(327
)
(669
)
(672
)
Total consolidated revenue
$
23,724
$
23,310
$
43,422
$
41,075
Summary Financial Results
(continued)
Three Months Ended June 30,
Six Months Ended June 30,
2019
2018
2019
2018
(In Thousands, Except Per Share
Amounts)
Operating income
(loss)
Real Estate Operations
$
274
$
1,363
$
3,120
$
938
Leasing Operations
642
487
3,063
919
Hotel
1,275
1,565
2,049
3,026
Entertainment
1,284
499
2,108
1,234
Corporate, eliminations and other
(3,048
)
(3,140
)
(6,270
)
(6,246
)
Total consolidated operating income
(loss)
$
427
$
774
$
4,070
$
(129
)
Net loss attributable to common
stockholders
$
(2,389
)
$
(857
)
$
(1,527
)
$
(2,727
)
Diluted net loss per share
$
(0.29
)
$
(0.11
)
$
(0.19
)
$
(0.33
)
Adjusted EBITDA
$
3,291
$
2,835
$
4,107
$
3,882
Capital expenditures and purchases and
development of real estate properties
$
18,005
$
22,693
$
50,746
$
50,681
Diluted weighted-average shares of common
stock outstanding
8,177
8,153
8,172
8,145
The decreases in revenue and operating income from the Real
Estate Operations segment in second-quarter 2019, compared to
second-quarter 2018, primarily reflect fewer sales of developed
properties in second-quarter 2019. During second-quarter 2019,
Stratus sold four Amarra Drive Phase III lots and the last
completed Amarra Villas townhome for a total of $4.0 million,
compared with the sales of three Amarra Drive Phase III lots, two
Amarra Villas townhomes and one W Austin Hotel & Residences
condominium for a total of $6.9 million during second-quarter 2018.
Since the end of second-quarter 2019, Stratus closed on the sale of
two Amarra Drive Phase III lots for a total of $1.3 million. As of
August 5, 2019, six Amarra Drive Phase III lots were under
contract.
The increases in revenue and operating income from the
Leasing Operations segment in second-quarter 2019, compared
to second-quarter 2018, primarily reflect the commencement of new
leases at Santal Phase II, Lantana Place and Jones Crossing.
The decreases in revenue and operating income from the
Hotel segment in second-quarter 2019, compared to
second-quarter 2018, are primarily a result of reduced transient
weekend business and lower food and beverage sales. Revenue per
available room (RevPAR), which is calculated by dividing total room
revenue by the average number of total rooms available, was $242 in
second-quarter 2019, compared to $254 for second-quarter 2018.
While Stratus remains optimistic about the long-term outlook of the
W Austin Hotel based on office growth downtown, 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
second half of 2019 and throughout 2020 are expected to have an
ongoing impact on Stratus' hotel revenues. Stratus continues to
explore various opportunities with respect to Block 21, which may
include, but are not limited to, a possible sale, recapitalization
or other venture, subject to market conditions. There can be no
assurance that any transaction will be pursued or consummated.
The increases in revenue and operating income from the
Entertainment segment in second-quarter 2019, compared to
second-quarter 2018, primarily reflect an increase in the number of
events hosted and higher event attendance at ACL Live. ACL Live
hosted 69 events and sold approximately 68 thousand tickets in
second-quarter 2019, compared with 45 events and the sale of
approximately 29 thousand tickets in second-quarter 2018.
Additionally, 3TEN ACL Live, hosted 52 events and sold
approximately 7 thousand tickets in second-quarter 2019, compared
with 57 events and the sale of 8 thousand tickets in second-quarter
2018.
Debt and Liquidity
At June 30, 2019, consolidated debt totaled $340.6 million and
consolidated cash totaled $18.1 million, compared with consolidated
debt of $295.5 million and consolidated cash of $19.0 million at
December 31, 2018.
Purchases and development of real estate properties (included in
operating cash flows) and capital expenditures (included in
investing cash flows) totaled $50.7 million for the first six
months of 2019, primarily for the development of Kingwood Place,
The Saint Mary and Barton Creek properties, compared with $50.7
million for the first six months of 2018, primarily for the
development of Barton Creek properties, Santal Phase II, Lantana
Place and Jones Crossing.
----------------------------------------------
Conference Call
Information
Stratus will conduct an investor conference call to discuss its
unaudited second-quarter 2019 financial and operating results
today, August 9, 2019, 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 by dialing (412) 317-0088 for international access. Please use
replay ID: 10132404. The replay will be available on Stratus'
website at stratusproperties.com until August 14, 2019.
__________________________
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 statements regarding
projections or expectations related to the planning, financing,
development, construction, completion and stabilization of Stratus’
development projects, plans to sell or refinance properties
(including, but not limited to, Amarra Drive lots, Amarra Villas
townhomes, West Killeen Market, the retail building at Barton Creek
Village, The Saint Mary, Santal and Block 21), operational and
financial performance, expectations regarding future cash flows,
MUD reimbursements for infrastructure costs, regulatory matters,
leasing activities, estimated costs and timeframes for development
and stabilization of properties, liquidity, tax rates, the impact
of interest rate changes, capital expenditures, financing plans,
possible joint venture, partnership, strategic relationships 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 in 2017, other
plans and objectives of management for future operations and
development projects, 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 are intended to identify those assertions as
forward-looking statements.
Under Stratus’ loan agreements with Comerica Bank, Stratus is
not permitted to pay dividends on common stock without Comerica
Bank’s prior written consent. The declaration of dividends is at
the discretion of Stratus’ Board of Directors (Board), subject to
restrictions under Stratus’ loan agreements 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, the
availability and terms of financing for development projects and
other corporate purposes, Stratus’ ability to enter into and
maintain joint venture, partnership, strategic relationships or
other arrangements, Stratus’ ability to effect its business
strategy successfully, including its ability to sell properties at
prices its Board considers acceptable, market conditions or
corporate developments that could preclude, impair or delay any
opportunities with respect to plans to sell or refinance properties
(including, but not limited to, Amarra Drive lots, Amarra Villas
townhomes, West Killeen Market, the retail building at Barton Creek
Village, the Saint Mary, Santal and Block 21), Stratus’ ability to
obtain various entitlements and permits, a decrease in the demand
for real estate in the Austin, Texas area and other select markets
in Texas where Stratus operates, changes in economic, market and
business conditions, reductions in discretionary spending by
consumers and businesses, competition from other real estate
developers, hotel operators and/or entertainment venue operators
and promoters, challenges associated with booking events and
selling tickets and event cancellations at Stratus’ entertainment
venues, 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 in
2017 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 or leasing obligations, increases in interest rates and
the phase out of the London Interbank Offered Rate, declines in the
market value of Stratus’ assets, increases in operating costs,
including real estate taxes and the cost of building materials and
labor, changes in external perception of the W Austin Hotel,
unanticipated issues experienced by the third-party operator of the
W Austin Hotel, 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-related risks, loss of key personnel,
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, 2018, filed with the U.S.
Securities and Exchange Commission (SEC).
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 (Unaudited)
(In Thousands, Except Per Share
Amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenues:
Real estate operations
$
4,129
$
6,979
$
7,077
$
8,173
Leasing operations
4,413
2,331
8,042
4,335
Hotel
8,962
9,593
17,287
18,915
Entertainment
6,220
4,407
11,016
9,652
Total revenues
23,724
23,310
43,422
41,075
Cost of sales:
Real estate operations
3,795
5,560
3,841
a
7,126
Leasing operations
2,447
1,323
4,586
2,505
Hotel
6,831
7,149
13,506
14,178
Entertainment
4,441
3,436
7,920
7,404
Depreciation
2,703
2,053
5,333
3,995
Total cost of sales
20,217
19,521
35,186
35,208
General and administrative expenses
2,919
3,015
6,118
5,996
Loss (gain) on sale of assets
161
—
(1,952
)
—
Total
23,297
22,536
39,352
41,204
Operating income (loss)
427
774
4,070
(129
)
Interest expense, net
(2,911
)
(1,742
)
(5,483
)
(3,301
)
(Loss) gain on interest rate derivative
instruments
(123
)
80
(182
)
258
Loss on early extinguishment of debt
—
—
(16
)
—
Other income, net
12
11
311
b
22
Loss before income taxes and equity in
unconsolidated affiliates' loss
(2,595
)
(877
)
(1,300
)
(3,150
)
Equity in unconsolidated affiliates'
loss
(13
)
(3
)
(13
)
(6
)
Benefit from (provision for) income
taxes
218
23
(215
)
429
Loss from continuing operations
(2,390
)
(857
)
(1,528
)
(2,727
)
Total comprehensive loss attributable to
noncontrolling interests in subsidiaries
1
—
1
—
Net loss and total comprehensive loss
attributable to common stockholders
$
(2,389
)
$
(857
)
$
(1,527
)
$
(2,727
)
Basic and diluted net loss per share
attributable to common stockholders
$
(0.29
)
$
(0.11
)
$
(0.19
)
$
(0.33
)
Basic and diluted weighted-average common
shares outstanding
8,177
8,153
8,172
8,145
a.
Includes $3.4 million of municipal utility
district (MUD) reimbursements which were recorded as a reduction of
cost of sales.
b.
Includes $283 thousand of interest income
associated with MUD reimbursements.
STRATUS PROPERTIES
INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
June 30, 2019
December 31, 2018
ASSETS
Cash and cash equivalents
$
18,073
$
19,004
Restricted cash
15,566
19,915
Real estate held for sale
17,897
16,396
Real estate under development
142,854
136,678
Land available for development
37,787
24,054
Real estate held for investment, net
272,274
253,074
Lease right-of-use assets
11,692
a
—
Deferred tax assets
11,873
11,834
Other assets
14,715
15,538
Total assets
$
542,731
$
496,493
LIABILITIES AND EQUITY
Liabilities:
Accounts payable
$
16,461
$
20,602
Accrued liabilities, including taxes
9,239
11,914
Debt
340,622
295,531
Lease liabilities
12,381
a
—
Deferred gain
8,647
9,270
Other liabilities
14,869
12,525
Total liabilities
402,219
349,842
Commitments and contingencies
Equity:
Stockholders' equity:
Common stock
93
93
Capital in excess of par value of common
stock
186,334
186,256
Accumulated deficit
(42,630
)
(41,103
)
Common stock held in treasury
(21,360
)
(21,260
)
Total stockholders' equity
122,437
123,986
Noncontrolling interests in
subsidiaries
18,075
b
22,665
Total equity
140,512
146,651
Total liabilities and equity
$
542,731
$
496,493
a.
Effective January 1, 2019, Stratus adopted
a new accounting standard that requires lessees to recognize most
leases on the balance sheet.
b.
Decrease primarily represents Stratus'
purchase of H-E-B, L.P.'s interests in the New Caney
partnership.
STRATUS PROPERTIES
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
(In Thousands)
Six Months Ended
June 30,
2019
2018
Cash flow from operating activities:
Net loss
$
(1,528
)
$
(2,727
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation
5,333
3,995
Cost of real estate sold
4,324
5,053
Gain on sale of assets
(1,952
)
—
Loss (gain) on interest rate derivative
contracts
182
(258
)
Loss on early extinguishment of debt
16
—
Amortization of debt issuance costs and
stock-based compensation
546
791
Equity in unconsolidated affiliates'
loss
13
6
Increase in deposits
185
588
Deferred income taxes
(38
)
(653
)
Purchases and development of real estate
properties
(5,756
)
(7,699
)
MUD reimbursements applied to real estate
under development
920
—
Increase in other assets
(1,636
)
(2,297
)
Decrease in accounts payable, accrued
liabilities and other
(2,187
)
(5,505
)
Net cash used in operating activities
(1,578
)
(8,706
)
Cash flow from investing activities:
Capital expenditures
(44,990
)
(42,982
)
Proceeds from sale of assets
3,170
—
Payments on master lease obligations
(766
)
(932
)
Purchase of noncontrolling interest in
consolidated subsidiary
(4,589
)
—
Other, net
(4
)
(87
)
Net cash used in investing activities
(47,179
)
(44,001
)
Cash flow from financing activities:
Borrowings from credit facility
14,086
22,336
Payments on credit facility
(15,648
)
(4,225
)
Borrowings from project loans
51,006
29,948
Payments on project and term loans
(5,619
)
(3,266
)
Cash dividend paid for stock-based
awards
(17
)
—
Stock-based awards net payments
(100
)
(203
)
Noncontrolling interests contributions
—
7,000
Financing costs
(231
)
(976
)
Net cash provided by financing
activities
43,477
50,614
Net decrease in cash, cash equivalents and
restricted cash
(5,280
)
(2,093
)
Cash, cash equivalents and restricted cash
at beginning of year
38,919
39,390
Cash, cash equivalents and restricted cash
at end of period
$
33,639
$
37,297
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 for sale, under
development and available for development), which consists of its
properties in Austin, Texas (the Barton Creek community; the Circle
C community, including The Saint Mary; the Lantana community,
including a portion of Lantana Place still under development and
vacant pad sites; and one condominium unit at the W Austin Hotel
& Residences); 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),
Kingwood, Texas (Kingwood Place) and New Caney, Texas (New Caney),
located in the greater Houston area.
The Leasing Operations segment includes
the office and retail space at the W Austin Hotel & Residences,
Barton Creek Village, Santal Phase I and Phase II, West Killeen
Market in Killeen, Texas, and completed portions of the 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 3TEN ACL Live, both
located at the W Austin Hotel & Residences. In addition to
hosting concerts and private events, ACL Live is the home of Austin
City Limits, the longest running music series in American
television history.
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 Leasing Operations Hotel
Entertainment Corporate,Eliminationsand Otherb Total Three
Months Ended June 30, 2019: Revenues: Unaffiliated customers
$
4,129
$
4,413
$
8,962
$
6,220
$
—
$
23,724
Intersegment
4
229
80
45
(358
)
—
Cost of sales, excluding depreciation
3,795
2,451
6,868
4,585
(185
)
17,514
Depreciation
64
1,388
899
396
(44
)
2,703
General and administrative expenses
—
—
—
—
2,919
2,919
Loss on sale of assets
—
161
c
—
—
—
161
Operating income (loss)
$
274
$
642
$
1,275
$
1,284
$
(3,048
)
$
427
Capital expenditures and purchases and development of real estate
properties
$
2,458
$
15,391
$
156
$
—
$
—
$
18,005
Total assets at June 30, 2019
225,084
167,008
98,063
45,491
7,085
542,731
Three Months Ended June 30, 2018: Revenues:
Unaffiliated customers
$
6,979
$
2,331
$
9,593
$
4,407
$
—
$
23,310
Intersegment
8
225
50
44
(327
)
—
Cost of sales, excluding depreciation
5,560
d
1,331
7,184
3,560
(167
)
17,468
Depreciation
64
738
894
392
(35
)
2,053
General and administrative expenses
—
—
—
—
3,015
3,015
Operating income (loss)
$
1,363
$
487
$
1,565
$
499
$
(3,140
)
$
774
Capital expenditures and purchases and development of real estate
properties
$
4,087
$
18,486
$
97
$
23
$
—
$
22,693
Total assets at June 30, 2018
207,437
95,954
101,487
36,263
7,547
448,688
STRATUS PROPERTIES
INC.
BUSINESS SEGMENTS
(continued)
Real Estate
Operationsa
Leasing Operations
Hotel
Entertainment
Corporate, Eliminations and
Otherb
Total
Six Months Ended June 30, 2019:
Revenues:
Unaffiliated customers
$
7,077
$
8,042
$
17,287
$
11,016
$
—
$
43,422
Intersegment
9
459
127
74
(669
)
—
Cost of sales, excluding depreciation
3,841
e
4,595
13,566
8,192
(341
)
29,853
Depreciation
125
2,795
1,799
790
(176
)
5,333
General and administrative expenses
—
—
—
—
6,118
6,118
Gain on sale of assets
—
(1,952
)
c
—
—
—
(1,952
)
Operating income (loss)
$
3,120
$
3,063
$
2,049
$
2,108
$
(6,270
)
$
4,070
Capital expenditures and purchases and
development of real estate properties
$
5,756
$
44,611
$
254
$
125
$
—
$
50,746
MUD reimbursements applied to real estate
under developmente
920
—
—
—
—
920
Six Months Ended June 30, 2018:
Revenues:
Unaffiliated customers
$
8,173
$
4,335
$
18,915
$
9,652
$
—
$
41,075
Intersegment
16
476
122
58
(672
)
—
Cost of sales, excluding depreciation
7,126
d
2,521
14,222
7,696
(352
)
31,213
Depreciation
125
1,371
1,789
780
(70
)
3,995
General and administrative expenses
—
—
—
—
5,996
5,996
Operating income (loss)
$
938
$
919
$
3,026
$
1,234
$
(6,246
)
$
(129
)
Capital expenditures and purchases and
development of real estate properties
$
7,699
$
42,285
$
336
$
361
$
—
$
50,681
a.
Includes sales commissions and other
revenues together with related expenses.
b.
Includes consolidated general and
administrative expenses and eliminations of intersegment
amounts.
c.
Relates to the first-quarter 2019 sale of
a retail pad subject to a ground lease located in the Circle C
community, including adjustments recorded in second-quarter
2019.
d.
Includes $0.4 million of reductions to
cost of sales associated with collection of prior-years'
assessments of properties in Barton Creek.
e.
Stratus received $4.6 million of bond
proceeds related to MUD reimbursements of infrastructure costs
incurred for development of Barton Creek. Of the total amount,
Stratus recorded $0.9 million as a reduction of real estate under
development on the consolidated balance sheets, and $3.4 million as
a reduction in real estate cost of sales and $0.3 million in other
income, net, in the consolidated statements of comprehensive
loss.
STRATUS PROPERTIES
INC.
RECONCILIATION OF NON-GAAP
MEASURES
ADJUSTED EBITDA
Adjusted 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 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
attributable to common stockholders to Adjusted EBITDA follows (in
thousands).
Three Months Ended June 30,
Six Months Ended June 30,
2019
2018
2019
2018
Net loss attributable to common
stockholders
$
(2,389
)
$
(857
)
$
(1,527
)
$
(2,727
)
Depreciation
2,703
2,053
5,333
3,995
Interest expense, net
2,911
1,742
5,483
3,301
(Benefit from) provision for income
taxes
(218
)
(23
)
215
(429
)
Loss (gain) on sale of assets
161
—
(1,952
)
—
MUD reimbursements
—
—
(3,643
)
a
—
Loss (gain) on interest rate derivative
instruments
123
(80
)
182
(258
)
Loss on early extinguishment of debt
—
—
16
—
Adjusted EBITDA
$
3,291
$
2,835
$
4,107
$
3,882
a.
Includes $283 thousand of interest
income.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190809005219/en/
Financial and Media Contact: William H. Armstrong III
(512) 478-5788
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