Cto Realty Growth, Inc. · NYSE:CTO
Cto Realty Growth — Consolidated Tomoka Land — Proxy Contest (April 2017)
48 slides from Cto Realty Growth's proxy contest presentation, Apr 6, 2017
Slide 1: Investor Presentation: On the Right Path
(NYSE MKT: CTO) Investor Presentation On the Right Path 3600 Peterson Way, Santa Clara, California April 6, 2017
Slide 2: Forward Looking Statements
Forward Looking Statements 2 Forward Looking Statements If we refer to “we,” “us,” “our,” or “the Company,” we mean Consolidated-Tomoka Land Co. and its consolidated subsidiaries. Certain statements contained in this presentation (other than statements of historical fact) are forward-looking stateme
Slide 3: Discussion Agenda
Discussion Agenda 3 PART I Executive Summary PART II Creating Value – CTO’s Stock and Operating Performance PART III Consistently Executing CTO’s Strategy PART IV Wintergreen’s Intentions, Claims and Performance PART V Endorsements & Quotes: From Business Leaders & David Winters PART VI Conclusion A
Slide 4: Executive Summary
Executive Summary 4 Wintergreen Already Has Representation On CTO’s Board PART I CTO Board and Management: Track Record of Outstanding Performance Consistent Strategy since 2011 that is Maximizing Shareholder Value CTO Has the Right Board in Place – Industry & Public Co. Experience Crescent Real Est
Slide 5: Executive Summary: About CTO
Executive Summary About CTO Consolidated-Tomoka Land Co. (NYSE: CTO) is a 107-year old Florida-based publicly traded real estate company, which owns a high-quality portfolio of income investments in diversified markets in the United States including: 1.8 million sq. ft. of income properties 8,20
Slide 6: Snapshot of CTO
Executive Summary 6 Snapshot of CTO As of December 31, 2016 (unless otherwise noted) Operating Segments (2) Land Holdings (2) Income Properties Loan Investments Subsurface Interests (2) 8,200 Acres Undeveloped Land 33 Properties (1) >1.8 million SQ. FT (1) Retail & Office 3 Loans Hotel & Retail ≈50
Slide 7: David Winters' Own Words
David Winters’ Own Words 7 Wintergreen Letter to Wintergreen Fund Investors, March 2015 “Wintergreen’s actions at CTO has put a strong lineup of directors on CTO’s Board. The Board, in turn hired a very capable management team, which has transformed the Company into the profitable and growing enterp
Slide 8: Shareholder Return vs Peers & Indexes (5 Year)
12% Annualized Return Shareholder Return vs Peers & Indexes Despite headwinds of Wintergreen Activism 8 5 Year Return Vs. Peer Group & Indexes, (3/6/2012– 3/6/2017) Vs. Land Companies, (3/6/2012– 3/6/2017) PART I 91.19% 6.04% (11.96%) (19.02%) Consolidated-Tomoka Land Co. 2017 Peer Group MSCI REIT I
Slide 9: Shareholder Return vs Peers & Indexes (3 Year and 1 Year)
9 3 Year Return (3/6/2014 – 3/6/2017) Original Shareholder Return vs Peers & Indexes Despite headwinds of Wintergreen Activism PART Il 1 Year Return (3/4/2016 – 3/6/2017) Outperforming Peers & Indexes for 3 Year & 5 Year Returns 1 Year Return Adversely Impacted by Wintergreen Attacks Consolidated-To
Slide 10: Operating Performance: Track Record of Strong Operating Results
10 Total Revenues ($000’s) Operating Income ($000’s) Basic Earnings Per Share Book Value Per Share Operating Performance PART Il Track Record of Strong Operating Results Annual Results for 2012 – 2016 Consistent Growth in Key Metrics Highest EPS in CTO History $16,581 $26,070 $36,057 $42,998 $71,075
Slide 11: Board is independent, experienced and committed to all shareholders
John J. Allen President, Allen Land Group, Inc. and Mitigation Solutions, Inc. Laura M. Franklin Former (Retired) Exec. Vice Pres., Accounting and Administration & Corp. Secretary, Washington REIT Experience New Perspectives Wintergreen Casey R. Wold Founder, Managing Partner and Chief Executive Off
Slide 12: CTO's Director Nominees
Board Nominee Years of Real Estate Experience Public Co. Leadership Public Co. Board Experience Real Estate Operations Real Estate Finance Finance & Capital Management Accounting & Tax John J. Allen 40+ Howard C. Serkin 40+ Thomas P. Warlow, III 40+ John P. Albright 30+ William L. Olivari Laura M. F
Slide 13: Consistently Executed Strategy Since 2011
Executing Our Strategy 13 Consistently Executed Since 2011 PART Ill Monetize the Company’s Land Holdings Using 1031 structure Under current management. - sold 2,564 acres of land (1) with additional 2,200 acres under contract (2) Deploy the Proceeds from Land Sales into Income-Producing Assets Portf
Slide 14: Momentum in Monetizing Land
14 (Land Sales in $000’s) (A) Executing Our Strategy PART Ill Momentum in Monetizing Land With Tax Deferred Strategy Annual Land Sales for 2005 – YTD 2017 & Pipeline (A) as of 4/5/17 Dramatic Acceleration Monetizing Land 2012 – YTD 2017 Total Sales $80.6mm Acres Sold 2,564 Current Management Tea
Slide 15: Substantial Pipeline for Continued Growth
1 2 4 7 8 3 9 6 5 15 SF – Single Family; AR – Age Restricted Commercial/Retail Contract/Parcel Acres Contract Amount Price per Acre (rounded) Timing Minto (AR Residential) 1,686 $31.4mm $19,000 ’18 - ‘19 ICI (SF) – Option Parcel 146 $1.4mm $10,000 ’18 - ‘19 Residential (SF) 194 $3.3mm $17,000 ’18 -
Slide 16: Diversified High Quality Portfolio
16 Total Portfolio NOI(D) ≈ $20.4mm Executing Our Strategy PART Ill Diversified High Quality Portfolio As of April 5, 2017 City % of NOI Raleigh 16.8% Santa Clara 10.9% Orlando 9.4% Jacksonville 9.3% Sarasota 7.6% All Other 46.1% Largest Markets(D) Approx. 33% of NOI from Investment Grade Tenants Be
Slide 17: More Than Doubled NOI While Diversifying and Upgrading Portfolio
17 Total Square Feet 589,000 Total NOI (annualized) $9.1mm Properties 29 Properties vacant/subleased 6 60.4% Year 2011 as of August 11, 2011 Year 2017 as of April 5, 2017 18.2% 21.4% More Than Doubled NOI While Diversifying and Upgrading Portfolio PART Ill Executing Our Strategy 2011(1) 2017(2) Nort
Slide 18: Opportunistic Investments
Expected opening Q1 2018 Total estimated investment: $16.8 million Prior owner (developer) acquired the land in 2007 for approximately $34.5 million Received Entitlement for 1 million Sq. Ft. 18 PART Ill Executing Our Strategy Opportunistic Investments Finding Value Creating Favorable Returns Targ
Slide 19: Relationships Matter: CTO is a Trusted Counterparty
19 PART Ill Executing Our Strategy Relationships Matter: CTO is a Trusted Counterparty
Slide 20: G&A Expenses vs Peers
20 (% of Total Enterprise Value) 2017 Peer Group. Excludes peer companies that are not December 31st year-end and Preferred Apartments which is an externally advised REIT Adjusted for ≈ $1.5 million in legal, accounting, director fees and other expenses associated with Board’s investigations of alle
Slide 21: Returning Capital to Shareholders
21 Shares Purchased Returning Capital to Shareholders Cumulative From 2012 Through April 5, 2017 Opportunistically Repurchasing Accretive to NAV PART Ill Executing Our Strategy $ Returned Buybacks per year $ Amount # of Shares 2012 $453,654 14,634 2013 $- - 2014 $927,913 25,836 2015 $6,484,844 119
Slide 22: Shareholder Friendly Governance Changes
Shareholder Friendly 22 Under Current Management: Decreased Board Size: Reduced from 11 to 7, Added 4 Wintergreen Nominees Eliminated Staggered Board Terms: All Directors are Elected Annually Adopted Claw-Back Policy: For Equity Incentive Plan and Cash Incentive Plan Eliminated Executive Perks: Pens
Slide 23: Listening to Our Shareholders: Enhancing Compensation Alignment
23 Changes in Executive Compensation Led by the Compensation Committee — comprised of our 3 Wintergreen Nominees and new director Laura Franklin Hired nationally-recognized compensation consultants PART Ill Executing Our Strategy Listening to Our Shareholders Enhancing Compensation Alignment Named
Slide 24: The Strategic Alternatives Review Process
24 The Strategic Alternatives Review Process 8 Month Review: November 2015 – June 2016 ORGANIZATION Announced commencement of strategic alternatives process Led by Special Committee Committee hired Deutsche Bank as financial advisor No retainer Success fee only Evaluated eight other financial adviso
Slide 25: Improved Disclosures, Transparency and Communications
25 Disclosure, Transparency and Communications Before Current Management Under Current Management Issuance of Annual Corporate/Earnings Guidance No Annual Earnings Calls No Quarterly Investor Day No December 2016 Quarterly Investor Presentations No Quarterly + Investor Day Financial Statement Presen
Slide 26: David Winters quotes on CTO
26 “CTO has righted its ship and is busy growing shareholder value” “The actions taken by CTO’s management team and board over past four years have put the company in position to benefit from this [Daytona Beach] market rebound” “Wintergreen’s involvement with CTO has put a strong lineup of director
Slide 27: Wintergreen Fund is in Decline
Wintergreen’s Intentions, Claims, & Performance 27 So What’s Really Happening? Wintergreen Fund (WGRNX) is in Decline Source: Wintergreen Fund annual reports PART IV $1.3 Billion Loss of AUM CTO Now 2nd largest Position in Fund PART IV Wintergreen’s Intentions, Claims, & Performance 2.24% 2.29% 2.
Slide 28: Reasons to Question Wintergreen's Ability to Create Value
28 PART IV Reasons to Question Wintergreen’s Ability to Create Value Performance Periods Ended as of December 31, 2016 Wintergreen Underperforming Wintergreen’s Intentions, Claims, & Performance 6.6% - 0.8% 4.1% 11.9% 8.9% 14.6% 1.6% 14.0% 14.7% -4% 0% 4% 8% 12% 16% 1 Year 3 Years 5 Years WGRNX S&P
Slide 29: Wintergreen: Seeking Control for No Consideration
29 Wintergreen: Seeking Control for No Consideration Replace 4 CTO Directors with Wintergreen Nominees Through Proxy Contest Effectively gives Wintergreen control over CTO Wintergreen provides NO takeover premium to all other CTO shareholders Triggers default under CTO’s credit facility Replaces hig
Slide 30: Wintergreen False Claims Versus the Facts
30 Wintergreen False Claims Versus the Facts Wintergreen’s Claims The Facts CTO’s current Board and Management have overseen continued poor performance and significant value destruction CTO’s Board has not held management accountable for poor performance and value destruction Under the current board
Slide 31: Wintergreen False Claims Versus the Facts
31 Wintergreen False Claims Versus the Facts Orignal PART IV Wintergreen’s Claims The Facts CTO’s Board members are not qualified, independent advocates for shareholders rights and interests, including corporate governance 6 of 7 CTO Director nominees are independent 3 candidates were previously nom
Slide 32: Wintergreen False Claims Versus the Facts
32 Wintergreen False Claims Versus the Facts Orignal PART IV Wintergreen’s Claims The Facts Wintergreen’s objective is to run CTO in a thoughtful manner for long-term success Wintergreen has repeatedly demanded an expedited sale or liquidation of CTO. As recently as November 2016, Wintergreen has st
Slide 33: Wintergreen False Claims Versus the Facts
33 Wintergreen False Claims Versus the Facts Orignal PART IV Wintergreen’s Claims The Facts CTO’s executive compensation is excessive and not tied to performance Under the current management team, Named Executive Officer compensation has always been aligned with performance targets. In response to s
Slide 34: Wintergreen False Claims Versus the Facts
34 Wintergreen False Claims Versus the Facts Orignal PART IV Wintergreen’s Claims The Facts CTO is spending too much money on its new headquarters CTO’s new office space will be located in the vacant 7,500 square feet of the Williamson Business Park that the Company built in 2014. This provides net
Slide 35: Warren Buffett on David Winters
35 “When David Winters, who runs a fund that has underperformed by every measure from inception, five years, one year, and who draws a 150 basis point fee, when you can go to Vanguard and do it for 17 basis points and he complains about compensation not being commensurate with performance at Coke. A
Slide 36: What David Winters said in 2008
36 “ we have no desire to ‘gain control of Consolidated-Tomoka,’ nor a desire to micromanage the company .. Our director candidates are totally independent from Wintergreen and would represent the interests of all shareholders. We did not nominate them to push a certain agenda or business plan, but
Slide 37: Investors & Business Leaders: Hyatt Brown
37 PART V Investors & Business Leaders “ it is shocking to me that Consolidated-Tomoka’s management team and Board, both of which are experiencing significant success, continue to be harassed by Wintergreen...” “The Board and management...have been extremely successful in executing its business plan
Slide 38: Investors & Business Leaders: Jim Wiseman
38 PART V Investors & Business Leaders Jim Wiseman President of Development, Margaritaville Holdings “Latitude Margaritaville could not have been possible without the management team at Consolidated-Tomoka.” “Mr. Albright was instrumental in bringing Margaritaville and Minto Communities together ” “
Slide 39: CTO's Nominees versus Wintergreen's Nominees
39 CTO’s Nominees versus Wintergreen’s Nominees The Difference: Results, Experience, Independence and Duty to All Shareholders Category Consolidated-Tomoka Nominees Wintergreen Nominees Strategy Clearly articulated and executed strategy with consistently improved key operational metrics and trajecto
Slide 40: Conclusion: Shareholders Should Support CTO's Board
Conclusion 40 Shareholders Should Support CTO’s Board and its Plan to Maximize Value for All Shareholders CTO’s Board believes it is in the best interests of shareholders to vote for our seven director nominees Cast Your Vote on the WHITE Voting Card PART Vl CTO’s Board and management team have crea
Slide 41: Appendix
APPENDIX CONSOLIDATED a TOMOKA
Slide 42: Strong Lineup of Nominees
John J. Allen President of Allen Land Group Inc. and Mitigation Solutions, Inc. since 1995. Both companies are Florida-based and are involved in commercial real estate, development, and investment. John P. Albright President and Chief Executive Officer of Consolidated-Tomoka Land Co. since August 20
Slide 43: Strong Lineup of Nominees
Strong Lineup of Nominees 43 William L. Olivari Certified Public Accountant; formerly a Partner with Olivari & Associates PA, from June 1984 until February 5, 2013, and now a Consultant with the firm. He is Chairman of the Board of the Commercial Bancorp of Volusia County, Inc., past Chairman of Eas
Slide 44: Strong Lineup of Nominees
Strong Lineup of Nominees 44 Director Nominees of CTO APPENDIX Howard C. Serkin Mr. Serkin has served as Chairman of Heritage Capital Group, Inc., a regional investment banking firm, since 1996, and as a principal with Business Valuation, Inc., which provides financial consulting and valuation servi
Slide 45: Casey R. Wold
Casey R. Wold Founder, Managing Partner and Chief Executive Officer of Vanderbilt Office Properties, a real estate investment manager, since 2014. From 2004 to 2014, Mr. Wold served as Senior Managing Director at Tishman Speyer. Prior to that, Mr. Wold served as President of TrizecHahn Office Proper
Slide 46: David Winters' Own Words
David Winter’s Own Words 46 An example of this is Consolidated‐Tomoka Land Company (“CTO”), of which the Fund owns approximately 21% of the company’s outstanding stock. When Wintergreen first invested in CTO in 2006, the company was comprised of a wonderful asset, 10,500 acres of undervalued land in
Slide 47: Additional Info & End Notes
Additional Info & End Notes 47 IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT The Company, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from the Company’s shareholders in connection with the matters to be considered at the
Slide 48: Contact Us
For additional information, please see our most recent Annual Report on Form 10-K, copies of which may be obtained by writing the corporate secretary at the address above, or at www.ctlc.com. Consolidated-Tomoka Land Co. 1530 Cornerstone Boulevard Daytona Beach, FL 32117 P: 386.274.2202 F: 386.274.1
Consolidated Tomoka Land — Proxy Contest (April 2017) on 6ix