Stratus Properties Inc. (NASDAQ:STRS) Q1 2020 Earnings Conference Call - Final Transcript
Jun 25, 2020 • 11:00 am ET
Good day and welcome to the Stratus Properties First Quarter 2020 Financial and Operational Conference Call. Earlier this morning, Stratus released its first quarter 2020 financial results, and provided business updates, which are available on its website at stratusproperties.com.
Following management's remarks, we will host a question-and-answer session. Please note this call is being recorded and will be available for telephone replay on Stratus's website through June 30, 2020. Anyone listening to the taped replay should note that all information presented is current as of today, June 25, 2020, and should be considered valid only as of this date.
As a reminder, today's press release and certain comments that will be made on this call include forward-looking statements and actual results may differ materially. Please review and refer to the cautionary language included in Stratus's press release issued today and the risk factors described in Stratus's 2019 Form 10-K and first quarter 2020 Form 10-Q that could cause actual results to differ materially from those projected by Stratus.
In addition, management will discuss earnings before interest, taxes, depreciation and amortization, also referred to as EBITDA, which is a financial measure not recognized under U.S. generally accepted accounting principles, also referred to as GAAP. As required by SEC rules and regulations, this non-GAAP financial measure is reconciled to its most comparable GAAP financial measure in the supplemental schedule of Stratus's press release issued today.
I would now like to turn the conference over to Mr. Beau Armstrong, Chairman, President and Chief Executive Officer of Stratus Properties.
William H. Armstrong III
Thank you for joining our first quarter 2020 financial and operational conference call. Our Chief Financial Officer, Erin Pickens is here with me today. We hope that you and your families are staying safe and healthy. Given events over the last several months, we have a lot to cover on today's call.
First, I'll provide an update on Block 21, our hotel and entertainment property in downtown Austin and discuss the impacts of the COVID-19 pandemic on our operations, and how we've responded since the pandemic started. I'll also provide updates on our development projects, then I'll turn the call over to Erin to discuss our liquidity and first quarter 2020 results.
On May 22, we announced that Ryman Hospitality Properties terminated its agreement to purchase Block 21 for $275 million. Ryman said that its decision was due to the capital markets and economic environment caused by the pandemic. We are disappointed that prevailing market conditions led Ryman to make this decision. However, we have tremendous respect for Ryman and wish them well throughout these difficult times. As required by the purchase agreements, Ryman forfeited its $15 million earnest money deposit to us. We used $13.8 million of this earnest money to pay down our Comerica credit facility and used the remaining $1.2 million for Block 21 debt service and required monthly reserves. We will record the $15 million as income in the second quarter of 2020. Block 21 continues to be a unique and valuable