STRATUS PROPERTIES INC Q2 FY2022 earnings call

• Stratus' stockholders' equity was $262.4 million as of June 30, 2022, an increase of over $150 million since the end of 2020. - Board approved returning $50 million cash to shareholders subject to Comerica Bank consent. - Progress on development portfolio: The Saint George construction began, Saint June first units expected Q4 2022, NEB expected to start construction 2023, Amarra Villas units under contract, The Saint Julia and Holden Hills in development, Section N in conceptual phase. - Retail and commercial updates: Magnolia Place infrastructure and retail buildings completed, Lantana Place 90% of retail space leased, exploring sale/refinancing of other mixed use developments.

In the second quarter of 2022, Stratus Properties' revenue totaled $11.1 million. The real estate operations segment had revenue of $7.9 million in Q2 2022 compared to $773,000 in Q2 2021. The leasing operations segment had revenue of $3.2 million in Q2 2022 compared to $4.9 million in Q2 2021. Operating income for real estate operations was $2.5 million in Q2 2022 vs. an operating loss of $807,000 in Q2 2021. Operating income for leasing operations was $1.5 million in Q2 2022 vs. $1.1 million in Q2 2021.

• Board plans to return $50 million cash to shareholders subject to Comerica Bank consent, expecting to do so in weeks. - Continue to develop residential and retail projects using project level debt and third-party equity. - Expect to attract project level third-party equity and bank debt financing for pipeline projects.

• Increases in land, construction, and labor costs. - Supply chain constraints. - Rising interest rates. - Market uncertainties affecting real estate industry.

Q: Walk us through the timing of returning $50 million to shareholders?

A: Beau Armstrong said they need Comerica Bank consent, are working on it, and expect to do so in weeks. They'll also discuss with larger shareholders.

Q: Chris Mooney asked about revenues to offset corporate overhead?

A: Beau Armstrong said revenues are lumpy and over the long haul they cover costs, but currently don't fully offset G&A, with Erin Pickens potentially providing more detail later.

Q: Richard Diamond asked about shareholder commitment given housing headlines?

A: Beau Armstrong said opinions vary on buyback, dividend, or reinvesting, but Austin has critical housing shortage and Stratus is well-positioned to deliver needed housing in Austin.