Consolidated-Tomoka Land Co. Reports Revenue of $91.4 Million and Earnings of $7.53 Per Share for Full Year 2017

Consolidated-Tomoka Land Co. (NYSE American: CTO) (the “Company”) today announced its operating results and earnings for the quarter and year ended December 31, 2017.

OPERATING RESULTS

Operating results for the 4th Quarter ended December 31, 2017 (as compared to the same period in 2016):

• Net income was $4.42 per basic share, an increase of $3.51 per share, or 386%;
• Excluding the adjustment for the reduction in the corporate tax rate from 35% to 21%, which reduced our net deferred tax liabilities, net income was $0.38 per basic share;
• Operating income was approximately $5.6 million, a decrease of approximately $4.7 million, or (46%); and
• Revenues from our Operating Segments were as follows:

Operating results for the Year ended December 31, 2017 (as compared to the same period in 2016):

• Net income was $7.53 per basic share, an increase of $4.67 per share, or 163%;
• Excluding the adjustment for the reduction in the corporate tax rate from 35% to 21%, which reduced our net deferred tax liabilities, net income was $3.51 per basic share;
• Operating income was approximately $40.3 million, an increase of approximately $3.0 million, or 8%; and

• Revenues from our Operating Segments were as follows:

Income Property Operations Update

During 2017, the Company completed the acquisition of 6 income properties with approximately 440,000 square feet of rentable space for an aggregate purchase price of approximately $79.8 million, representing an average price per square foot of approximately $180 and a weighted average investment cap rate of approximately 7.4%, with a weighted average remaining lease term of 8.6 years. The Company’s acquisition guidance for 2017 was a range of $50 million to $70 million at a weighted average cap rate of 6% - 8%.

Completion of Two Single-Tenant Net Lease Restaurants

In January 2018, the Company completed the development of two single-tenant net lease restaurant properties, the LandShark Bar & Grill and Cocina 214 Restaurant & Bar, each approximately 6,000 square feet, on the Company’s 6-acre beach parcel in Daytona Beach, Florida. The restaurants opened in late January 2018, with rent commencing from both tenants in the first quarter of 2018.

Including the two new restaurant properties, the Company’s income property portfolio consisted of the following as of February 7, 2018:

Land and Subsurface Update

For 2017, the Company completed the disposition of approximately 1,701 acres, or more than 17% of our land holdings at the beginning of the year, with an aggregate sales price of approximately $47.0 million, or approximately $28,000 per acre, and resulting in net gains of approximately $31.8 million, or approximately $3.53 per share after tax. Including the sale of subsurface interests, the total dispositions in 2017 totaled $49.1 million. The Company’s guidance for the sales value of land transactions closed in 2017 was a range of $30 million to $50 million.

Land Pipeline Update

As of February 7, 2018, the Company’s pipeline of potential land sales transactions, including the non-binding term sheet for the mitigation bank joint venture, includes the following seventeen (17) potential transactions with fifteen (15) different buyers, representing more than 6,000 acres or approximately 74% of our land holdings:

In January 2018, Buc-ee’s received its initial approval from the planning board of the City of Daytona Beach, a key milestone in their process for obtaining final zoning and entitlement approvals, which is on track for final site plan approval before the end of the first quarter.

Also in January 2018, the contract for the 21 acres surrounding the RaceTrac property at the southeast corner of LPGA Boulevard and Williamson Boulevard in the amount of $4.8 million was terminated by the purchaser. The Company may determine to complete the site-work or develop some or all of this parcel.

As noted above, these agreements contemplate closing dates ranging from early 2018 through fiscal year 2020, and although some of the transactions may close in 2018, some of the buyers are not contractually obligated to close until after 2018. Each of the transactions are in varying stages of due diligence by the various buyers including, in some instances, making submissions to the planning and development departments of the City of Daytona Beach, and other permitting activities with other applicable governmental authorities including wetlands permits from the St. John’s River Water Management District and the U.S. Army Corps of Engineers and conducting traffic analyses with the Florida Department of Transportation and negotiating other matters with Volusia County. In addition to other customary closing conditions, the majority of these transactions are conditioned upon the receipt of approvals or permits from those various governmental authorities, as well as other matters that are beyond our control. If such approvals are not obtained or costs to meet governmental requirements or obligations are too high, the prospective buyers may have the ability to terminate their respective agreements prior to closing. As a result, there can be no assurances regarding the likelihood or timing of any one of these potential land transactions being completed or the final terms thereof, including the sales price.

Update Regarding Development in our Area

The following provides an update regarding the developments ongoing and recently completed on land we have sold over the past few years:

• The first phase of the 3,400-home age-restricted master-planned community, Latitude Margaritaville, being built by Minto Communities opened their first phase of approximately 400 homes for sale, and as of December 31, 2017 has contracts for more than half the available inventory – which have delivery dates beginning to occur as early as the second quarter of 2018;
• The 400,000 square-foot distribution facility for BBraun, built by VanTrust, is due to open operations in the first quarter of 2018;
• North American Development Group has broken ground and begun vertical development of its approximately 400,000 square-foot retail power center at Tomoka Town Center with tenants including Ross, Hobby Lobby, Dave & Busters, TJ Maxx, Academy Sports + Outdoors, Designer Shoe Warehouse, Ulta Beauty, and Burlington Coat Factory;
• Mosaic, the 1,000-home residential development by ICI Homes is well under way and the first homes are in construction;
• Site work on the location for a new Honda dealership has begun at the southern end of the auto mall, on the west side of Interstate 95; and
• The newest RaceTrac in Volusia County at the southeast corner of LPGA Boulevard and Williamson Boulevard opened in January.

Excluding the approximately 6,025 acres under contract or subject to a term sheet, the Company’s remaining land holdings consist of approximately 2,075 acres of undeveloped land.

Financial Results

Revenue

Total revenue for the quarter ended December 31, 2017 decreased to approximately $17.5 million, compared to approximately $27.6 million during the same period in 2016. This decrease was primarily the result of the decrease in revenues from our real estate operations, offset by an increase in our revenue from our income property operations, both of which are outlined in the following tables, respectively:

Total revenue for the quarter ended December 31, 2017 was also impacted by a decrease of approximately $212,000 in the revenue generated by our commercial loan investments, primarily as a result of the sale of our two mezzanine loans in October.

Total revenue for the year ended December 31, 2017 increased to approximately $91.4 million, compared to approximately $71.1 million during the same period in 2016, an increase of approximately $20.3 million, or 29%. This increase was primarily the result of the increases from our real estate operations and the income property operations, respectively, as outlined in the following tables, offset by reduced revenues totaling approximately $536,000 from our commercial loan investments resulting from the loan sales previously noted:

Net Income

Net income and basic net income per share for the quarter ended December 31, 2017, compared to the same period in 2016, was as follows:

The above results for the fourth quarter of 2017, excluding the impact of the non-cash adjustment for the new tax law, as compared to the same period in 2016, reflected the following significant operating elements in addition to the impacts on revenues described above:

• A decrease in direct cost of revenues of nearly $7.1 million reflecting the decrease in the direct cost of revenues for the real estate operations of approximately $8.2 million, which primarily reflects the lower level of land transactions during the fourth quarter of 2017, and an increase of approximately $0.8 million in the operating costs of the income property operations segment reflecting the larger income property portfolio; and
• An increase in depreciation and amortization of approximately $1.1 million resulting from the growth in our income property portfolio.

Net income and basic net income per share for the year ended December 31, 2017, compared to the same period in 2016, was as follows:

The above results for the year ended December 31, 2017, excluding the impact of the non-cash adjustment for the new tax law, as compared to the same period in 2016, reflected the following significant operating elements in addition to the impacts on revenues described above:

• An increase in direct cost of revenues of approximately $4.6 million primarily related to i) the increase in the direct cost of revenues for the real estate operations of approximately $3.5 million related entirely to the cost basis of the increased land sales and associated transaction costs, offset by reduced costs associated with lower impact fee and mitigation credit sales; and ii) an increase of approximately $1.7 million in the operating costs of the income property operations reflecting the larger income property portfolio;
• An increase in depreciation and amortization of approximately $4.5 million resulting from the growth in our income property portfolio;
• Non-cash earnings of approximately $2.2 million related to the transaction to acquire the land underlying our golf operations; and
• Income of approximately $12.8 million recognized in 2016 in connection with the Company’s disposition of a portfolio of 14 income properties and other dispositions of income properties offset by the recognition of approximately $2.2 million in impairment charges during the year ended December 31, 2016.

Balance Sheet Update and Other Activities

Share Repurchase Program: During the quarter, the Company repurchased 1,280 shares of its common stock for approximately $73,000, at an average purchase price of $57.00 per share. During the year, the Company repurchased 135,329 shares of its common stock for approximately $7.2 million, at an average purchase price of $53.27. As of December 31, 2017, there is approximately $5.4 million remaining on the $10 million buyback program initiated in March of 2017.

Book Value Per Share: Our book value per share increased to $32.98 as of year-end, an increase of $7.01 per share, or 27% compared to the end of 2016. The impact of the new tax law represented approximately $3.98 per share of this increase.

Unsecured Revolving Credit Facility: On January 31, 2018, the Company expanded the commitment under its revolving credit facility to $130 million, providing an additional capacity of approximately $60 million, based on the outstanding balance as of December 31, 2017 of approximately $70 million.

Quarterly Dividend: In January 2018, the Company’s board approved a quarterly dividend of $0.06 per share for the first quarter of 2018, an increase of 20% and representing an annualized dividend level of $0.24 per share.

Golf Operations: At the beginning of December 2017 we hired Arcis Golf to replace ClubCorp as manager of the LPGA International Golf Club.

Board of Directors: Christopher W. Haga, a partner and head of strategic investments at Carlson Capital L.P., joined the board of directors in November 2017.

2018 Guidance

The following summary provides a review of the Company’s updated guidance for the year ending December 31, 2018:

Year End 2017 Earnings Conference Call & Webcast

The Company will host a conference call to present its operating results for the quarter and year ended December 31, 2017 tomorrow, Thursday, February 8, 2018, at 9:00 a.m. eastern time. Shareholders and interested parties may access the Earnings Call via teleconference or webcast:

Teleconference: USA (Toll Free) 1-888-317-6003
International: 1-412-317-6061
Canada (Toll Free): 1-866-284-3684

Please dial in at least fifteen minutes prior to the scheduled start time and use the code 5952827 when prompted.

A webcast of the call can be accessed at: http://services.choruscall.com/links/cto180207.html.

To access the webcast, log on to the web address noted above or go to http://www.ctlc.com and log in at the investor relations section. Please log in to the webcast at least ten minutes prior to the scheduled time of the Earnings Call.

About Consolidated-Tomoka Land Co.

Consolidated-Tomoka Land Co. is a Florida-based publicly traded real estate company, which owns a portfolio of income investments in diversified markets in the United States including more than 2.1 million square feet of income properties, as well as approximately 8,100 acres of land in the Daytona Beach area. Visit our website at www.ctlc.com.

We encourage you to review our most recent investor presentation for the quarter and year ended December 31, 2017, available on our website at www.ctlc.com.

SAFE HARBOR

Certain statements contained in this press release (other than statements of historical fact) are forward-looking statements. Words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Although forward-looking statements are made based upon management’s expectations and beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward-looking statements. Such factors may include the completion of 1031 exchange transactions, the modification of terms of certain land sales agreements, uncertainties associated with obtaining required governmental permits and satisfying other closing conditions, as well as the uncertainties and risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 as filed with the Securities and Exchange Commission. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management.

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