Stratus Properties Inc. · NASDAQ:STRS
Stratus Properties — Proxy Contest (May 2021)
29 slides from Stratus Properties's proxy contest presentation, May 6, 2021
Slide 1: A Better Stratus: Investor Presentation
STRATUS A BETTER STRATUS Investor Presentation May 6,2021 OASIS sl ae
Slide 2: Legal Disclaimer
Legal Disclaimer ‘The information and opiions this document are provided by sis Management Company Lt. Oasis) for informational purposes nl andonoud not be construed Grane legal tat ester accouting aur any he pe ef professional ace, Oasis ‘ot and shuld net be regarde or deemed in yay whatsoever tobe
Slide 3: I. Stratus Overview
|. Stratus Overview OASIS
Slide 4: Stratus Overview
Stratus Overview ‘whose portfolios comprised of commercial, (ES Seino see pomonn ss os ‘Company Overview Estimated Pre-TaxNAV/ Share? + stratus was formed in 1992 as a spin-off from Freeport-MeMoran to hold, operate and develop its domestic ral estate and oil and gas properties. 0 Stratus sod off it
Slide 5: Oasis' Involvement With Stratus
Oasis’ Involvement With Stratus + Onsshas been a shareholder of satus properties sine August 2016 and curently omns 12.66% ofthe stock mabing us on Stats lirgestsharenoiers- Our US Ofc isbasedin hurt, and have snes rshand the merece grt tat thy he perience. As we were 2016 we feman opumstc about Rus
Slide 6: Stratus Has Relied on a Trite Activist Defense Playbook
Stratus Has Relied on a Trite Activist Defense Playbook | PRP noses Son Same defenses and insisting that ts own ‘value. Do not be fooled. WrHAAMGEPlaybooR), 7 aauoyanaon women 7 seb 2 208 ed. ‘tom Checklist ‘ond {Rights rand sors Siguiscaoatontny sheet 1 Putin/ amend pon pil fur tegatrntnoprontsesot
Slide 7: Stratus' Promises to Create Shareholder Value Have Not Materialized
Stratus’ Promises to Create Shareholder Value Have Not Materialized online explore the posite ‘Webstee thee are sgticant ‘infra. corde ‘cppotntiswe see interea ‘appar so 0 0 so “eatevolefor sharers by tmethadesy esting Heh ‘ly reidentalndcommer Prjetusing ow estingassets Slee} pusung now development
Slide 8: Stratus' Operating Performance Has Lagged
Stratus’ Operating Performance Has Lagged pure Yeal estate holdings, the Companys AFFOhave been consistently negative. Adjusted Funds rom Operations OASIS setesauarsnnartonspnatnmanrssingnemeptadererinien gan onpape lear:
Slide 9: Stratus Has Underperformed Peers on All Relevant Metrics
Stratus Has Underperformed Peers on All Relevant Metrics ‘Stratus Total Return Has Underperformed ‘Stratus ROICis Consistently BelowPeers se as es es. ” ease erate Wow reams Wome 2070 So SS SS OASIS ote ea etundneon etree Rvengh 08020 pote Os eae stmt sees pp pelepeernsapeeectpeninaeay
Slide 10: Stratus Has Underperformed Peers on All Relevant Metrics cont'd
Stratus Has Underperformed Peers on All Relevant Metrics cont'd (asi Witness 21 Total Receipts Phan 2% = i i li > Ahi Mi wit | a ee 4 Total Receipts 24% 4% a ivi | lia
Slide 11: Stratus' Underperformance in Contrast to Austin Market Tailwinds
Stratus’ Underperformance is in Stark Contrast to the Numerous Tailwinds in the Austin Market ma —-—~- uttary otfice salesce/ it Sales Pricey Saue Fook me ea ae = , 6 oy x fea io = a0 aS = ee Pages OASIS »
Slide 12: Austin Market Tailwinds cont'd
Stratus’ Underperformance is in Stark Contrast to the Numerous Tailwinds in the Austin Market cont'd OASIS SOR aula ase: Restos Ge casaa Rae paced ones vena sinocoiocane
Slide 13: Austin Market Tailwinds cont'd
Stratus’ Underperformance is in Stark Contrast to the Numerous Tailwinds in the Austin Market cont’d Tico reo vos nn swore eeiconab pens opine Gee on ETRY | swovetan 100 employees and isa vate mvesment nthe company's and wor BAe ptoms/172020 Sc Le 35 | SS eee ae TSS | peanecien eetes eesarcrperear s
Slide 14: Austin Market Tailwinds: Office and Retail Rent and Vacancy
Stratus’ Underperformance is in Stark Contrast to the Numerous Tailwinds in the Austin Market cont'd Office Rent and Vacancy Retail Rent and Vacancy ee s2000 2500 s1so0 ze 1500 42006 200? 2009 2o1L 2013 mis 217 218 OASIS “ Testes Abaisitaane siteanian rote cho tis eonns
Slide 15: Why Has Stratus Underperformed?
Why Has Stratus Underperformed? ofa 2 es Ineffective Strategy Execution Poor Corporate Governance + Failure to adhere to five-year plan to develop and * Legacy Board of Directors acs diversity and sella estate and return cash to shareholders independence ‘Insufficient asset churn ‘Board and Committe
Slide 16: II. Business Strategy
Il. Business Strategy OASIS *
Slide 17: Stratus Has Failed to Execute on its Five-Year Plan
Stratus Has Failed to Execute on its Five-Year Plan Excerpts from Stratus’ April 20, 2015 Presentation Outlining it Five-Year Plan: ———______ any Overview, Plan fo Retun Cash to Shareholders
Slide 18: Stratus Has Failed to Execute on its Five-Year Plan cont'd
Stratus Has Failed to Execute on its Five-Year Plan cont'd Objective Result ‘of Goal Achieved “Monetize a large portion ofits assets on an | An insignificant portion of Stratus’ assets were | N/A ‘orderly basis over the next five years and ‘monetized. The only cash shareholders a return cash to shar
Slide 19: Management and LPs Benefit from Saint Mary Sale, Shareholders Little
While Management and LPs Will Directly Benefit from Stratus’ Sale of the Saint Mary, Shareholders Have Seen Little Gains Janvary 2021 has not created value for and related partes ahead of shareholders. Status lim: Thesaleo The sut Navy nator example he sabaneal sive we crest for ur sharers vith or p
Slide 20: Stock Trades at a Large, Persistent Discount to NAV
As a Result of Stratus’ Failure to Develop and Sell Real Estate, It’s Stock Trades at a Large, Persistent Discount to NAV Stratus Discount to NAV ‘er the ast five years and curently trades at sto increase asset churn, ‘Seasoned Operators Rely on Asset churn to Narrow INAV Discount _wetateve tat expo
Slide 21: Stratus' COVID Cost Control Strategy Was Inadequate
Stratus’ COVID Cost Control Strategy Was Inadequate asic Suggestions + In response to COVID, Oasis urged Stratus to look at negotiating down costs with ts various advisors (accountants, law firms, consultant). + Oasis provided examples of companies that had done this, citing news articles and anecdo
Slide 22: Stratus' Idea to Consider a REIT Conversion is Nonsensical
Stratus’ Idea to Consider a REIT Conversion is, in Oasis’ view, Nonsensical are not conducive to a REIT structure. Unsuitable Porttoto UnsutablePeriomance TIES Ste aa Stratus Stratus RET Stratus REIT Trea a | roy oe {SRS Meow” Rous watts inglefomy, tendtowade airy] /entba" rte come Seremon tiny” Sea
Slide 23: III. A Better Stratus
Ill. A Better Stratus OASIS
Slide 24: Oasis' Plan to Improve Stratus' Performance
Oasis’ Plan to Improve Stratus’ Performance 1. Halt REIT exploration 2. Conduct a genuine, fll portfolio review ofall assets inall stages ofthe development process ‘and determine NPV of selling vs. developing Based on portfolio review, identify assets to be 01d, sales timeline, and range of acceptab
Slide 25: Oasis' Plan for a Better Stratus - Develop and Execute Effective Strategy
Oasis’ Plan for a Better Stratus - Develop and Execute Effective Strategy onthe plan thatthe Company lad out 4. stratus should pause the REIT exploration. 2, ‘stratus needs to conduct thorough review of every asst in its porto. + stabled acets should be slated forsale, + Forassetsin various stages o
Slide 26: Oasis' Plan for a Better Stratus - Improve Corporate Governance
’ Plan for a Better Stratus — Improve Corporate Governance Need for Better Oversight: steatus’ Legacy Soard has overseen years of inaction at Stratus. Under the Legacy Board's watch, Me Armstrong failed to meet every single objective of the five-year plan that prioritizes shareholder interests | pub
Slide 27: IV. Appendix: Overview of Stratus' Major Assets
IV. Appendix: Overview of Stratus’ Major Assets OASIS
Slide 28: Appendix: Stratus Asset Overview
Appendix: Stratus Asset Overview Assat Desaipton ea Jnventoy. be ‘Community located near the Barton Creek go coursein Southwest Austin een Li) ‘hat contains developed os singe family homes and townhomes Fears deaciasat Seuthwest austin, ie, meds development acted inthe Baton Creek KingwoodPlow _MeBa
Slide 29: Important Information
Important Information (Oasis Management Company Lt, Seth Fischer, lla Benson, Laurie L. Dotter and Jaime Eugenio De la Garza Diaz (collectively, the Participant”) have filed withthe Securities and Exchange Commission (the "SEC”) definitive proxy statement and accompanying form of GOLD proxy card tob