Good day, everyone and welcome to Stratus Properties First Quarter 2019 Earnings Conference Call. [Operator Instructions] At this time, I'd like to turn the conference call over to Mr. Armstrong.

Welcome to the Stratus Properties' first quarter 2019 earnings conference call. Earlier this morning, Stratus released its financial results, which are available on its website at stratusproperties.com. Following management's remarks, we'll host a question-and-answer session. Please note, this call is being recorded and will be available for telephone replay through May 15, 2019. Anyone listening to the taped replay should note that all information presented is current as of today, May 10, 2019, and should be considered valid only as of this date. I would now like to turn the call over to Mr. Beau Armstrong, Chairman, President and Chief Executive Officer of Stratus Properties.

Thank you, everyone for joining me on this first quarter 2019 earnings conference call. Our Chief Financial Officer, Erin Pickens is here today as well. As a reminder, today's press release and certain comments that we will make on this call include forward-looking statements and actual results may differ materially. I would like to refer everyone to the cautionary language included in Stratus' press release issued today into the risk factors described in Stratus' 2018 Form 10-K and subsequent SEC filings that could cause actual results to differ materially from those projected by us. In addition, we will discuss adjusted earnings before interest, taxes, depreciation and amortization also referred to as an after tax net asset value, which are financial measure not recognized under US Generally Accepted Accounting Principles also referred to as GAAP. As required by SEC rules and regulations these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in the supplemental schedules of Stratus' press release issued today. This morning, I will cover our operational highlights, including the status of current projects in our development program, Erin will discuss our first quarter 2019 financial results and updated after tax net asset value, and I will end the call with some brief comments about our business strategy and outlook. As a reminder, part of our strategy at Stratus Properties is to focus on our active development program that includes three stages. First, acquiring, securing and maintaining development entitlements. Second, constructing and stabilizing these properties. And third, preparing these properties for a capital event either a sale or a refinancing depending on market conditions. We currently have projects in each of these stages. Our future HEB-anchored mixed use project in New County, Texas is in the first stage of our development process, which typically includes formulating…

Thank you, Beau. Today Stratus reported earnings for the first quarter of 2019 as detailed in our press release issued this morning. Stratus reported net income attributable to common stockholders at $0.9 million or $0.10 cents per share in the first quarter of 2019 compared to a net loss attributable to common stockholders of $1.9 million or $0.23 per share in the first quarter of 2018. In the first quarter of 2019 our revenues totaled $19.7 million, up from $17.8 million a year ago. The increase in revenues this quarter primarily reflects higher revenues from single family residential property sales and increased revenues associated with execution of new leases for recently completed properties, partly offset by reduced Hotel Group business and entertainment event attendance. Adjusted EBITDA for the first quarter of 2019 totaled $0.8 million compared with one $1 in the first quarter of 2018. Our real estate operations segment revenues increased to $3 million in the first quarter of 2019, up from $1.2 million in the first quarter of 2018. Operating income increased to $2.8 million from a loss of $0.4 million. The increase in revenues from the first quarter of 2018 reflects the sale of an Amarra Villas townhome in the first quarter of 2019. During the first quarter of 2019 we sold two Amarra Drive Phase III lots and one Amarra Villas townhome for a total of $2.8 million compared to the sale of one Amarra Drive Phase II lot and one Amarra Drive Phase III lot for $1.2 million during the first quarter 2018. Operating income in the first quarter of 2019 also included $3.4 million of the bond proceeds related to Travis County MUD reimbursements that Beau mentioned earlier. Subsequent to the end of the first quarter of 2019 Stratus closed on the sale of…

Thank you, Erin. We were pleased to report that our after tax net asset value NAV increased year-over-year. We believe this measure is meaningful for our shareholders as it is an assessment of the value we are creating. On an annual basis, Stratus lenders engaged independent appraisers to perform appraisals of our properties which provides the basis of our NAV calculation. I'm encouraged by the success of our current projects, our future pipeline, the opportunities that Austin and the surrounding markets continue to offer and the continued growth of net asset value. As a diversified real estate company with approximately 18,000 acres of commercial, multifamily and single family residential projects in various stages of development and Texas, Stratus creates shareholder value by significantly enhancing the value of its properties through a disciplined development program. We expect to sustain our momentum throughout this year by stabilizing our properties and preparing them for potential sale or refinancing. We believe that Austin and other select fast growing markets in Texas where we operate, including the greater Houston area, continue to be desirable locations to apply our strategy and maximize value for Stratus's shareholders. In addition, as Austin continues to grow, we remain in position at Stratus to thoughtfully leverage our experience, relationships and access to capital to continue delivering steady returns for our shareholders. Now we are happy to take any questions you may have.

And our first question today comes from Fred Burtner from Burtner Investments. Please go ahead with your question.

Good morning. I'm curious what parts of Stratus are unappreciated and misunderstood by investors and what parts are doing less well than you would like?

Good morning, Fred. Thank you for that. I'll start with the second part. The - what parts are doing less well, I think generally this is obviously a very good moment in the real estate business. All aspects of our business are performing very well. I would say that the - as it relates to our situation specifically the transition to Marriott has been disruptive for us. We saw some weakness in the first quarter that was independent of the market, it had to do with the rollout of a new reservation system. And while I think they have it under control, it has been a bit disruptive for us. I guess, the only thing I would add is you know, the time it takes to get things done these days is continues to stretch out, whether it's leases or permitting, what leases - which used to take maybe a month now takes you know 90 days and our permitting process and Austin has always been challenging, but with the growth in Austin it just has become even more difficult to stick to a schedule given the workload at the city. So again those are minor things, but those are couple of things around my mind. Relative to what's underappreciated or misunderstood. You know, I've talked about this before, I think that you know our sizable land portfolio team can be challenging for people to fully understand. We talked a little bit earlier about our NAV process. And we think that that is a very good way for people to understand the value because those are the third party appraisals that we play no role in and that is an independent assessment. But we have amazing property in a highly regulated market much of that we've owned for almost 30 years and it's been expensive to carry this land all that time. But we believe we have a low basis and are - position those properties for it to be sold or developed on a very favorable basis. But for the - I think for most investors certainly with most real estate investors they tend to - it's much easier to look at income and apply cap rate. And that's just something you can't do with land. So I think that while our land - our own holdings are extraordinary and, we think, extremely valuable, they don't produce cash flow like traditional real estate investments. And I think therefore perhaps they're a little bit underappreciated and misunderstood.

Okay. Thank you, Beau. That's very helpful.

[Operator Instructions] And ladies and gentlemen, at this time I am showing no additional questions. I would like to turn the conference call back over to management for any closing remarks.

Thank you, Jamie. I believe we're all set. Thank you. Thanks for those who participated this morning.

Ladies and gentlemen, that does conclude today's conference call. We do thank you for participating. You may now disconnect your lines.