EPR Properties (NYSE:EPR) today announced operating results for
the third quarter ended September 30, 2024 (dollars in thousands,
except per share data):
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023 (2)
2024
2023 (2)
Total revenue
$
180,507
$
189,384
$
520,834
$
533,687
Net income available to common
shareholders
40,618
50,228
136,357
109,412
Net income available to common
shareholders per diluted common share
0.53
0.66
1.80
1.45
Funds From Operations as adjusted
(FFOAA)(1)
100,382
113,156
279,620
306,954
FFOAA per diluted common share (1)
1.30
1.47
3.64
4.00
Adjusted Funds From Operations
(AFFO)(1)
99,309
113,333
277,270
312,168
AFFO per diluted common share (1)
1.29
1.47
3.61
4.07
Note: Each of the measures above include
deferred rent and interest collections from cash basis customers
that were recognized as revenue of $19.3 million for the three
months ended September 30, 2023 and $0.6 million and $35.7 million
for the nine months ended September 30, 2024 and 2023,
respectively.
(1) A non-GAAP financial measure.
(2) Each measure for 2023, except for AFFO
and AFFO per diluted share, includes $2.1 million of additional
straight-line rent revenue related primarily to recording a
straight-line rent receivable for Regal ground leases in connection
with reestablishing accrual basis accounting for Regal at August 1,
2023.
Third Quarter Company Headlines
- New $1.0 Billion Revolving Credit Facility - In
September 2024, the Company entered into a new amended and restated
$1.0 billion revolving credit facility that matures in October 2028
with options to extend for a total of 12 additional months, subject
to conditions.
- Executes on Investment Pipeline - During the third
quarter of 2024, the Company's investment spending totaled $82.0
million, bringing year-to-date investment spending to $214.6
million. Additionally, the Company has committed approximately
$150.0 million for experiential development and redevelopment
projects, which is expected to be funded over the next two
years.
- Strong Liquidity Position - As of September 30, 2024,
the Company had cash on hand of $35.3 million, $169.0 million
outstanding on its $1.0 billion unsecured revolving credit facility
and a consolidated debt profile that is all at fixed rates with
only $300.0 million maturing through December 31, 2025.
- Updates 2024 Guidance - The Company is narrowing FFOAA
per diluted common share guidance for 2024 to a range of $4.80 to
$4.92 from a range $4.76 to $4.96, representing an increase of 3.2%
at the midpoint over 2023 after excluding the impact from both
years of out-of-period deferred rent and interest collections from
cash-basis customers included in income. The Company is also
narrowing investment spending guidance for 2024 to a range of
$225.0 million to $275.0 million from a range of $200.0 million to
$300.0 million, and updating disposition proceeds guidance to a
range of $70.0 million to $100.0 million from a range of $60.0
million to $75.0 million. Additional earnings guidance detail can
be found on page 24 in the Company's supplemental information
package available in the Investor Center of the Company's website
located at https://investors.eprkc.com/earnings-supplementals.
“In the third quarter, we made meaningful progress in further
positioning the Company for continued growth,” stated Company
Chairman and CEO Greg Silvers. “We entered into a new $1.0 billion
revolving credit facility, which further enhances our already
strong liquidity position with more favorable terms. Our investment
strategy remains on track, including recycling proceeds from the
sale of non-core assets into diversified experiential assets. With
a promising future box office forecast, sustained consumer demand
in our customer categories, a strong balance sheet, and our unique
ability to source differentiated high-quality experiential assets,
we believe that we are well-positioned to deliver long-term value
for our shareholders."
Amended Credit Agreement and Series A Private Placement Note
Payoff
On September 19, 2024, the Company entered into a Fourth
Amended, Restated and Consolidated Credit Agreement (the "Amended
Credit Agreement"). The Amended Credit Agreement amended, restated
and replaced the Company’s prior senior unsecured revolving credit
facility. The Amended Credit Agreement, among other things (i)
extended the maturity date of the revolving credit facility; (ii)
generally reduced the interest rate payable on outstanding loans;
(iii) eliminated the tangible net worth covenant; (iv) modified the
secured debt to total assets financial covenant to permit increased
secured debt if the Company so elects; and (v) modified and
simplified the capitalization rates used to value assets under the
facility.
The Amended Credit Agreement provides for an initial maximum
principal amount of borrowing availability of $1.0 billion and
contains an accordion feature under which the Company may increase
the total maximum principal amount available by $1.0 billion, to a
total of $2.0 billion, subject to lender consent. The new credit
facility matures on October 2, 2028. The Company has two options to
extend the maturity date of the new credit facility by an
additional six months each (for a total of 12 months), subject to
applicable fees and the absence of any default.
On August 22, 2024, the Company repaid its $136.6 million Series
A unsecured private placement notes due 2024 using funds available
under its $1.0 billion senior unsecured revolving credit
facility.
Investment Update
The Company's investment spending during the three months ended
September 30, 2024 totaled $82.0 million, bringing the total
investment spending for the nine months ended September 30, 2024 to
$214.6 million. Investment spending for the quarter included $52.0
million for the financing of a fitness & wellness property in
Colorado as well as experiential build-to-suit development and
redevelopment projects.
As of September 30, 2024, the Company has committed
approximately $150.0 million in additional spending for
experiential development and redevelopment projects, which is
expected to be funded over the next two years. The Company will
continue to be more selective in making investments, utilizing cash
on hand, excess cash flow, disposition proceeds and borrowings
under our line of credit, until such time as the Company's cost of
capital improves.
Strong Liquidity Position
The Company remains focused on maintaining strong liquidity and
financial flexibility. At September 30, 2024, the Company had $35.3
million of cash on hand, $169.0 million outstanding on its $1.0
billion unsecured revolving credit facility and a consolidated debt
profile that is all at fixed rates with only $300.0 million
maturing through December 31, 2025.
Capital Recycling
During the third quarter of 2024, the Company completed the sale
of two theatre properties and one early childhood education center
for net proceeds totaling $8.7 million and recognized a loss on
sale of $3.4 million for the quarter. The Company recognized a net
gain on sale of $16.0 million during the nine months ended
September 30, 2024 on disposition proceeds totaling $65.1
million.
Impairment Charges on Joint Ventures
During and subsequent to the third quarter of 2024, two
experiential lodging properties located in St. Pete Beach, Florida,
in which the Company holds as equity investments through joint
ventures, were significantly damaged by two weather events. On
September 26, 2024, Hurricane Helene made landfall on St. Pete
Beach as a Category 3 storm and damaged the joint ventures'
experiential lodging properties. On October 9, 2024, further damage
was caused by Hurricane Milton. The properties will remain closed
as the joint ventures continue to assess and repair damage and the
Company does not anticipate that the properties will re-open until
well into 2025. The Company plans to work in good faith with its
joint venture partners, the non-recourse debt provider and the
insurance companies to identify a path forward which the Company
expects will result in the eventual removal of both experiential
lodging properties from the Company's portfolio. Accordingly, the
Company determined that its investment in these joint ventures was
not recoverable and during the third quarter of 2024, recognized
$12.1 million in impairment charges on these joint ventures to
fully write-off their carrying values.
Portfolio Update
The Company's total assets were $5.7 billion (after accumulated
depreciation of approximately $1.5 billion) and total investments
(a non-GAAP financial measure) were $6.9 billion at September 30,
2024, with Experiential investments totaling $6.4 billion, or 93%,
and Education investments totaling $0.5 billion, or 7%.
The Company's Experiential portfolio (excluding property under
development and undeveloped land inventory) consisted of the
following property types (owned or financed) at September 30,
2024:
- 159 theatre properties;
- 58 eat & play properties (including seven theatres located
in entertainment districts);
- 24 attraction properties;
- 11 ski properties;
- seven experiential lodging properties;
- 22 fitness & wellness properties;
- one gaming property; and
- one cultural property.
As of September 30, 2024, the Company's owned Experiential
portfolio consisted of approximately 19.5 million square feet,
which includes 0.4 million square feet of properties the Company
intends to sell. The Experiential portfolio, excluding the
properties the Company intends to sell, was 99% leased and included
a total of $76.9 million in property under development and $20.2
million in undeveloped land inventory.
The Company's Education portfolio consisted of the following
property types (owned or financed) at September 30, 2024:
- 60 early childhood education center properties; and
- nine private school properties.
As of September 30, 2024, the Company's owned Education
portfolio consisted of approximately 1.3 million square feet, which
includes 39 thousand square feet of properties the Company intends
to sell. The Education portfolio, excluding the properties the
Company intends to sell, was 100% leased.
The combined owned portfolio consisted of 20.8 million square
feet and was 99% leased excluding the 0.4 million square feet of
properties the Company intends to sell.
Dividend Information
The Company declared regular monthly cash dividends during the
third quarter of 2024 totaling $0.855 per common share, which
represents an annualized dividend of $3.42 per common share, an
increase of 3.6% over the prior year's annualized dividend (based
on the monthly dividend at the end of the prior year).
Additionally, the Company declared its regular quarterly
dividends to preferred shareholders of $0.359375 per share on both
the Company's 5.75% Series C cumulative convertible preferred
shares and Series G cumulative redeemable preferred shares and
$0.5625 per share on its 9.00% Series E cumulative convertible
preferred shares.
2024 Guidance
(Dollars in millions, except per share
data):
Current
Prior
Net income available to common
shareholders per diluted common share
$
2.40
to
$
2.52
$
2.58
to
$
2.78
FFOAA per diluted common share
$
4.80
to
$
4.92
$
4.76
to
$
4.96
Investment spending
$
225.0
to
$
275.0
$
200.0
to
$
300.0
Disposition proceeds
$
70.0
to
$
100.0
$
60.0
to
$
75.0
The Company is narrowing its 2024 earnings guidance for FFOAA
per diluted common share to a range of $4.80 to $4.92 from a range
of $4.76 to $4.96, representing an increase of 3.2% at the midpoint
over 2023 after excluding the impact from both years of
out-of-period deferred rent and interest collections from
cash-basis customers included in income. The 2024 guidance for
FFOAA per diluted common share is based on a FFO per diluted common
share range of $4.76 to $4.88 adjusted for retirement and severance
expense, transaction costs, provision (benefit) for credit losses,
net, and deferred income tax expense. FFO per diluted common share
for 2024 is based on a net income available to common shareholders
per diluted common share range of $2.40 to $2.52 plus impairment
charges of $0.16, estimated real estate depreciation and
amortization of $2.17, allocated share of joint venture
depreciation of $0.13 and impairment charges on joint ventures of
$0.16, less estimated gain on sale of real estate of $0.21 and the
impact of Series C and Series E dilution of $0.05 (in accordance
with the NAREIT definition of FFO).
Additional earnings guidance detail can be found in the
Company's supplemental information package available in the
Investor Center of the Company's website located at
https://investors.eprkc.com/earnings-supplementals.
Conference Call Information
Management will host a conference call to discuss the Company's
financial results on October 31, 2024 at 8:30 a.m. Eastern Time.
The call may also include discussion of Company developments and
forward-looking and other material information about business and
financial matters. The conference will be webcast and can be
accessed via the Webcasts page in the Investor Center on the
Company's website located at https://investors.eprkc.com/webcasts.
To access the audio-only call, visit the Webcasts page for the link
to register and receive dial-in information and a PIN providing
access to the live call. It is recommended that you join 10 minutes
prior to the start of the event (although you may register and
dial-in at any time during the call).
You may watch a replay of the webcast by visiting the Webcasts
page at https://investors.eprkc.com/webcasts.
Quarterly Supplemental
The Company's supplemental information package for the third
quarter and nine months ended September 30, 2024 is available in
the Investor Center on the Company's website located at
https://investors.eprkc.com/earnings-supplementals.
EPR Properties
Consolidated Statements of
Income
(Unaudited, dollars in
thousands except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Rental revenue
$
148,677
$
163,940
$
436,051
$
467,401
Other income
17,419
14,422
43,874
33,879
Mortgage and other financing income
14,411
11,022
40,909
32,407
Total revenue
180,507
189,384
520,834
533,687
Property operating expense
14,611
14,592
43,958
42,719
Other expense
15,631
13,124
43,440
31,235
General and administrative expense
11,935
13,464
37,863
42,677
Retirement and severance expense
—
—
1,836
547
Transaction costs
175
847
375
1,153
Provision (benefit) for credit losses,
net
(770
)
(719
)
2,371
(407
)
Impairment charges
—
20,887
11,812
64,672
Depreciation and amortization
42,795
42,432
124,738
127,341
Total operating expenses
84,377
104,627
266,393
309,937
(Loss) gain on sale of real estate
(3,419
)
2,550
15,989
1,415
Income from operations
92,711
87,307
270,430
225,165
Costs associated with loan refinancing or
payoff
337
—
337
—
Interest expense, net
32,867
31,208
97,338
94,521
Equity in loss (income) from joint
ventures
851
(533
)
5,384
2,067
Impairment charges on joint ventures
12,130
—
12,130
—
Income before income taxes
46,526
56,632
155,241
128,577
Income tax (benefit) expense
(124
)
372
780
1,060
Net income
$
46,650
$
56,260
$
154,461
$
127,517
Preferred dividend requirements
6,032
6,032
18,104
18,105
Net income available to common
shareholders of EPR Properties
$
40,618
$
50,228
$
136,357
$
109,412
Net income available to common
shareholders of EPR Properties per share:
Basic
$
0.54
$
0.67
$
1.80
$
1.45
Diluted
$
0.53
$
0.66
$
1.80
$
1.45
Shares used for computation (in
thousands):
Basic
75,723
75,325
75,604
75,236
Diluted
76,108
75,816
75,945
75,655
EPR Properties
Condensed Consolidated Balance
Sheets
(Unaudited, dollars in
thousands)
September 30, 2024
December 31, 2023
Assets
Real estate investments, net of
accumulated depreciation of $1,546,509 and $1,435,683 at September
30, 2024 and December 31, 2023, respectively
$
4,534,450
$
4,537,359
Land held for development
20,168
20,168
Property under development
76,913
131,265
Operating lease right-of-use assets
175,451
186,628
Mortgage notes and related accrued
interest receivable, net
657,636
569,768
Investment in joint ventures
32,426
49,754
Cash and cash equivalents
35,328
78,079
Restricted cash
2,992
2,902
Accounts receivable
79,726
63,655
Other assets
74,072
61,307
Total assets
$
5,689,162
$
5,700,885
Liabilities and Equity
Accounts payable and accrued
liabilities
$
99,334
$
94,927
Operating lease liabilities
214,809
226,961
Dividends payable
29,843
31,307
Unearned rents and interest
88,503
77,440
Debt
2,852,970
2,816,095
Total liabilities
3,285,459
3,246,730
Total equity
$
2,403,703
$
2,454,155
Total liabilities and equity
$
5,689,162
$
5,700,885
Non-GAAP Financial Measures
Funds From Operations (FFO), Funds From Operations As
Adjusted (FFOAA) and Adjusted Funds From Operations (AFFO)
The National Association of Real Estate Investment Trusts
(NAREIT) developed FFO as a relative non-GAAP financial measure of
performance of an equity REIT in order to recognize that
income-producing real estate historically has not depreciated on
the basis determined under GAAP. Pursuant to the definition of FFO
by the Board of Governors of NAREIT, the Company calculates FFO as
net income available to common shareholders, computed in accordance
with GAAP, excluding gains and losses from disposition of real
estate and impairment losses on real estate, plus real estate
related depreciation and amortization, and after adjustments for
unconsolidated partnerships, joint ventures and other affiliates.
Adjustments for unconsolidated partnerships, joint ventures and
other affiliates are calculated to reflect FFO on the same basis.
The Company has calculated FFO for all periods presented in
accordance with this definition.
In addition to FFO, the Company presents FFOAA and AFFO. FFOAA
is presented by adding to FFO retirement and severance expense,
transaction costs, provision (benefit) for credit losses, net,
costs associated with loan refinancing or payoff, preferred share
redemption costs and impairment of operating lease right-of-use
assets and subtracting sale participation income, gain on insurance
recovery and deferred income tax (benefit) expense. AFFO is
presented by adding to FFOAA non-real estate depreciation and
amortization, deferred financing fees amortization and share-based
compensation expense to management and Trustees; and subtracting
amortization of above and below market leases, net and tenant
allowances, maintenance capital expenditures (including second
generation tenant improvements and leasing commissions),
straight-lined rental revenue (removing the impact of
straight-lined ground sublease expense), the non-cash portion of
mortgage and other financing income and the allocated share of
joint venture non-cash items.
FFO, FFOAA and AFFO are widely used measures of the operating
performance of real estate companies and are provided here as
supplemental measures to GAAP net income available to common
shareholders and earnings per share, and management provides FFO,
FFOAA and AFFO herein because it believes this information is
useful to investors in this regard. FFO, FFOAA and AFFO are
non-GAAP financial measures. FFO, FFOAA and AFFO do not represent
cash flows from operations as defined by GAAP and are not
indicative that cash flows are adequate to fund all cash needs and
are not to be considered alternatives to net income or any other
GAAP measure as a measurement of the results of our operations or
our cash flows or liquidity as defined by GAAP. It should also be
noted that not all REITs calculate FFO, FFOAA and AFFO the same way
so comparisons with other REITs may not be meaningful.
The following table summarizes FFO, FFOAA and AFFO for the three
and nine months ended September 30, 2024 and 2023 and reconciles
such measures to net income available to common shareholders, the
most directly comparable GAAP measure:
EPR Properties
Reconciliation of Non-GAAP
Financial Measures
(Unaudited, dollars in
thousands except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
FFO:
Net income available to common
shareholders of EPR Properties
$
40,618
$
50,228
$
136,357
$
109,412
Loss (gain) on sale of real estate
3,419
(2,550
)
(15,989
)
(1,415
)
Impairment of real estate investments,
net
—
20,887
11,812
64,672
Real estate depreciation and
amortization
42,620
42,224
124,191
126,718
Allocated share of joint venture
depreciation
2,581
2,315
7,454
6,532
Impairment charges on joint ventures
12,130
—
12,130
—
FFO available to common shareholders of
EPR Properties
$
101,368
$
113,104
$
275,955
$
305,919
FFO available to common shareholders of
EPR Properties
$
101,368
$
113,104
$
275,955
$
305,919
Add: Preferred dividends for Series C
preferred shares
1,938
1,938
5,814
5,814
Add: Preferred dividends for Series E
preferred shares
1,938
1,938
5,814
5,814
Diluted FFO available to common
shareholders of EPR Properties
$
105,244
$
116,980
$
287,583
$
317,547
FFOAA:
FFO available to common shareholders of
EPR Properties
$
101,368
$
113,104
$
275,955
$
305,919
Retirement and severance expense
—
—
1,836
547
Transaction costs
175
847
375
1,153
Provision (benefit) for credit losses,
net
(770
)
(719
)
2,371
(407
)
Costs associated with loan refinancing or
payoff
337
—
337
—
Deferred income tax benefit
(728
)
(76
)
(1,254
)
(258
)
FFOAA available to common shareholders of
EPR Properties
$
100,382
$
113,156
$
279,620
$
306,954
FFOAA available to common shareholders of
EPR Properties
$
100,382
$
113,156
$
279,620
$
306,954
Add: Preferred dividends for Series C
preferred shares
1,938
1,938
5,814
5,814
Add: Preferred dividends for Series E
preferred shares
1,938
1,938
5,814
5,814
Diluted FFOAA available to common
shareholders of EPR Properties
$
104,258
$
117,032
$
291,248
$
318,582
AFFO:
FFOAA available to common shareholders of
EPR Properties
$
100,382
$
113,156
$
279,620
$
306,954
Non-real estate depreciation and
amortization
175
208
547
623
Deferred financing fees amortization
2,211
2,170
6,657
6,449
Share-based compensation expense to
management and trustees
3,264
4,354
10,494
13,153
Amortization of above and below market
leases, net and tenant allowances
(84
)
(182
)
(252
)
(456
)
Maintenance capital expenditures (1)
(2,561
)
(1,753
)
(5,437
)
(7,384
)
Straight-lined rental revenue
(4,414
)
(4,407
)
(13,335
)
(7,661
)
Straight-lined ground sublease expense
20
77
77
1,043
Non-cash portion of mortgage and other
financing income
(396
)
(290
)
(1,813
)
(553
)
Allocated share of joint venture non-cash
items
712
—
712
—
AFFO available to common shareholders of
EPR Properties
$
99,309
$
113,333
$
277,270
$
312,168
AFFO available to common shareholders of
EPR Properties
$
99,309
$
113,333
$
277,270
$
312,168
Add: Preferred dividends for Series C
preferred shares
1,938
1,938
5,814
5,814
Add: Preferred dividends for Series E
preferred shares
1,938
1,938
5,814
5,814
Diluted AFFO available to common
shareholders of EPR Properties
$
103,185
$
117,209
$
288,898
$
323,796
FFO per common share:
Basic
$
1.34
$
1.50
$
3.65
$
4.07
Diluted
1.31
1.47
3.60
3.99
FFOAA per common share:
Basic
$
1.33
$
1.50
$
3.70
$
4.08
Diluted
1.30
1.47
3.64
4.00
AFFO per common share:
Basic
$
1.31
$
1.50
$
3.67
$
4.15
Diluted
1.29
1.47
3.61
4.07
Shares used for computation (in
thousands):
Basic
75,723
75,325
75,604
75,236
Diluted
76,108
75,816
75,945
75,655
Weighted average shares
outstanding-diluted EPS
76,108
75,816
75,945
75,655
Effect of dilutive Series C preferred
shares
2,319
2,287
2,310
2,279
Effect of dilutive Series E preferred
shares
1,664
1,663
1,664
1,663
Adjusted weighted average shares
outstanding-diluted Series C and Series E
80,091
79,766
79,919
79,597
Other financial information:
Dividends per common share
$
0.855
$
0.825
$
2.545
$
2.475
(1) Includes maintenance capital
expenditures and certain second generation tenant improvements and
leasing commissions.
The conversion of the 5.75% Series C cumulative convertible
preferred shares and the 9.00% Series E cumulative convertible
preferred shares would be dilutive to FFO, FFOAA and AFFO per share
for the three and nine months ended September 30, 2024 and 2023.
Therefore, the additional common shares that would result from the
conversion and the corresponding add-back of the preferred
dividends declared on those shares are included in the calculation
of diluted FFO, FFOAA and AFFO per share for those periods.
Net Debt
Net Debt represents debt (reported in accordance with GAAP)
adjusted to exclude deferred financing costs, net and reduced for
cash and cash equivalents. By excluding deferred financing costs,
net, and reducing debt for cash and cash equivalents on hand, the
result provides an estimate of the contractual amount of borrowed
capital to be repaid, net of cash available to repay it. The
Company believes this calculation constitutes a beneficial
supplemental non-GAAP financial disclosure to investors in
understanding our financial condition. The Company's method of
calculating Net Debt may be different from methods used by other
REITs and, accordingly, may not be comparable to such other
REITs.
Gross Assets
Gross Assets represents total assets (reported in accordance
with GAAP) adjusted to exclude accumulated depreciation and reduced
for cash and cash equivalents. By excluding accumulated
depreciation and reducing cash and cash equivalents, the result
provides an estimate of the investment made by the Company. The
Company believes that investors commonly use versions of this
calculation in a similar manner. The Company's method of
calculating Gross Assets may be different from methods used by
other REITs and, accordingly, may not be comparable to such other
REITs.
Net Debt to Gross Assets Ratio
Net Debt to Gross Assets Ratio is a supplemental measure derived
from non-GAAP financial measures that the Company uses to evaluate
capital structure and the magnitude of debt to gross assets. The
Company believes that investors commonly use versions of this ratio
in a similar manner. The Company's method of calculating the Net
Debt to Gross Assets Ratio may be different from methods used by
other REITs and, accordingly, may not be comparable to such other
REITs.
EBITDAre
NAREIT developed EBITDAre as a relative non-GAAP financial
measure of REITs, independent of a company's capital structure, to
provide a uniform basis to measure the enterprise value of a
company. Pursuant to the definition of EBITDAre by the Board of
Governors of NAREIT, the Company calculates EBITDAre as net income,
computed in accordance with GAAP, excluding interest expense (net),
income tax (benefit) expense, depreciation and amortization, gains
and losses from dispositions of real estate, impairment losses on
real estate, costs associated with loan refinancing or payoff and
adjustments for unconsolidated partnerships, joint ventures and
other affiliates.
Management provides EBITDAre herein because it believes this
information is useful to investors as a supplemental performance
measure because it can help facilitate comparisons of operating
performance between periods and with other REITs. The Company's
method of calculating EBITDAre may be different from methods used
by other REITs and, accordingly, may not be comparable to such
other REITs. EBITDAre is not a measure of performance under GAAP,
does not represent cash generated from operations as defined by
GAAP and is not indicative of cash available to fund all cash
needs, including distributions. This measure should not be
considered an alternative to net income or any other GAAP measure
as a measurement of the results of the Company's operations or cash
flows or liquidity as defined by GAAP.
Adjusted EBITDAre
Management uses Adjusted EBITDAre in its analysis of the
performance of the business and operations of the Company.
Management believes Adjusted EBITDAre is useful to investors
because it excludes various items that management believes are not
indicative of operating performance, and because it is an
informative measure to use in computing various financial ratios to
evaluate the Company. The Company defines Adjusted EBITDAre as
EBITDAre (defined above) for the quarter excluding sale
participation income, gain on insurance recovery, retirement and
severance expense, transaction costs, provision (benefit) for
credit losses, net, impairment losses on operating lease
right-of-use assets and prepayment fees.
The Company's method of calculating Adjusted EBITDAre may be
different from methods used by other REITs and, accordingly, may
not be comparable to such other REITs. Adjusted EBITDAre is not a
measure of performance under GAAP, does not represent cash
generated from operations as defined by GAAP and is not indicative
of cash available to fund all cash needs, including distributions.
This measure should not be considered as an alternative to net
income or any other GAAP measure as a measurement of the results of
the Company's operations or cash flows or liquidity as defined by
GAAP.
Net Debt to Adjusted EBITDAre Ratio
Net Debt to Adjusted EBITDAre Ratio is a supplemental measure
derived from non-GAAP financial measures that the Company uses to
evaluate our capital structure and the magnitude of our debt
against our operating performance. The Company believes that
investors commonly use versions of this ratio in a similar manner.
In addition, financial institutions use versions of this ratio in
connection with debt agreements to set pricing and covenant
limitations. The Company's method of calculating the Net Debt to
Adjusted EBITDAre Ratio may be different from methods used by other
REITs and, accordingly, may not be comparable to such other
REITs.
Reconciliations of debt, total assets and net income (all
reported in accordance with GAAP) to Net Debt, Gross Assets, Net
Debt to Gross Assets Ratio, EBITDAre, Adjusted EBITDAre and Net
Debt to Adjusted EBITDAre Ratio (each of which is a non-GAAP
financial measure), as applicable, are included in the following
tables (unaudited, in thousands except ratios):
September 30,
2024
2023
Net
Debt:
Debt
$
2,852,970
$
2,814,497
Deferred financing costs, net
20,622
26,732
Cash and cash equivalents
(35,328
)
(172,953
)
Net Debt
$
2,838,264
$
2,668,276
Gross
Assets:
Total Assets
$
5,689,162
$
5,719,377
Accumulated depreciation
1,546,509
1,400,642
Cash and cash equivalents
(35,328
)
(172,953
)
Gross Assets
$
7,200,343
$
6,947,066
Debt to Total Assets Ratio
50
%
49
%
Net Debt to Gross Assets Ratio
39
%
38
%
Three Months Ended September
30,
2024
2023
EBITDAre and
Adjusted EBITDAre:
Net income
$
46,650
$
56,260
Interest expense, net
32,867
31,208
Income tax (benefit) expense
(124
)
372
Depreciation and amortization
42,795
42,432
Loss (gain) on sale of real estate
3,419
(2,550
)
Impairment of real estate investments,
net
—
20,887
Costs associated with loan refinancing or
payoff
337
—
Allocated share of joint venture
depreciation
2,581
2,315
Allocated share of joint venture interest
expense
2,587
2,164
Impairment charges on joint ventures
12,130
—
EBITDAre
$
143,242
$
153,088
Transaction costs
175
847
Provision (benefit) for credit losses,
net
(770
)
(719
)
Adjusted EBITDAre
$
142,647
$
153,216
Adjusted EBITDAre (annualized) (1)
$
570,588
$
612,864
Net Debt/Adjusted EBITDAre Ratio
5.0
4.4
(1) Adjusted EBITDA for the quarter is
multiplied by four to calculate an annualized amount but does not
include the annualization of investments put in service, acquired
or disposed of during the quarter, as well as the potential
earnings on property under development, the annualization of
percentage rent and participating interest and adjustments for
other items. See detailed calculation and reconciliation of
Annualized Adjusted EBITDAre and Net Debt/Annualized EBITDAre ratio
that includes these adjustments in the Company's Supplemental
Operating and Financial Data for the quarter and nine months ended
September 30, 2024.
Total Investments
Total investments is a non-GAAP financial measure defined as the
sum of the carrying values of real estate investments (before
accumulated depreciation), land held for development, property
under development, mortgage notes receivable and related accrued
interest receivable, net, investment in joint ventures, intangible
assets, gross (before accumulated amortization and included in
other assets) and notes receivable and related accrued interest
receivable, net (included in other assets). Total investments is a
useful measure for management and investors as it illustrates
across which asset categories the Company's funds have been
invested. Our method of calculating total investments may be
different from methods used by other REITs and, accordingly, may
not be comparable to such other REITs. A reconciliation of total
assets (computed in accordance with GAAP) to total investments is
included in the following table (unaudited, in thousands):
September 30, 2024
December 31, 2023
Total assets
$
5,689,162
$
5,700,885
Operating lease right-of-use assets
(175,451
)
(186,628
)
Cash and cash equivalents
(35,328
)
(78,079
)
Restricted cash
(2,992
)
(2,902
)
Accounts receivable
(79,726
)
(63,655
)
Add: accumulated depreciation on real
estate investments
1,546,509
1,435,683
Add: accumulated amortization on
intangible assets (1)
31,545
30,589
Prepaid expenses and other current assets
(1)
(37,630
)
(22,718
)
Total investments
$
6,936,089
$
6,813,175
Total Investments:
Real estate investments, net of
accumulated depreciation
$
4,534,450
$
4,537,359
Add back accumulated depreciation on real
estate investments
1,546,509
1,435,683
Land held for development
20,168
20,168
Property under development
76,913
131,265
Mortgage notes and related accrued
interest receivable, net
657,636
569,768
Investment in joint ventures
32,426
49,754
Intangible assets, gross (1)
64,544
65,299
Notes receivable and related accrued
interest receivable, net (1)
3,443
3,879
Total investments
$
6,936,089
$
6,813,175
(1) Included in other assets in the
accompanying consolidated balance sheet. Other assets include the
following:
September 30, 2024
December 31, 2023
Intangible assets, gross
$
64,544
$
65,299
Less: accumulated amortization on
intangible assets
(31,545
)
(30,589
)
Notes receivable and related accrued
interest receivable, net
3,443
3,879
Prepaid expenses and other current
assets
37,630
22,718
Total other assets
$
74,072
$
61,307
About EPR Properties
EPR Properties (NYSE:EPR) is the leading diversified
experiential net lease real estate investment trust (REIT),
specializing in select enduring experiential properties in the real
estate industry. We focus on real estate venues that create value
by facilitating out of home leisure and recreation experiences
where consumers choose to spend their discretionary time and money.
We have total assets of approximately $5.7 billion (after
accumulated depreciation of approximately $1.5 billion) across 44
states. We adhere to rigorous underwriting and investing criteria
centered on key industry, property and tenant level cash flow
standards. We believe our focused approach provides a competitive
advantage and the potential for stable and attractive returns.
Further information is available at www.eprkc.com.
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
The financial results in this press release reflect preliminary,
unaudited results, which are not final until the Company’s
Quarterly Report on Form 10-Q is filed. With the exception of
historical information, certain statements contained or
incorporated by reference herein may contain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”),
such as those pertaining to our guidance, our capital resources and
liquidity, our pursuit of growth opportunities, the timing of
transaction closings and investment spending, our expected cash
flows, the performance of our customers, our expected cash
collections and our results of operations and financial condition.
The forward-looking statements presented herein are based on the
Company's current expectations. Forward-looking statements involve
numerous risks and uncertainties, and you should not rely on them
as predictions of actual events. There is no assurance that the
events or circumstances reflected in the forward-looking statements
will occur. You can identify forward-looking statements by use of
words such as “will be,” “intend,” “continue,” “believe,” “may,”
“expect,” “hope,” “anticipate,” “goal,” “forecast,” “pipeline,”
“estimates,” “offers,” “plans,” “would” or other similar
expressions or other comparable terms or discussions of strategy,
plans or intentions contained or incorporated by reference herein.
Forward-looking statements necessarily are dependent on
assumptions, data or methods that may be incorrect or imprecise.
These forward-looking statements represent our intentions, plans,
expectations and beliefs and are subject to numerous assumptions,
risks and uncertainties. Many of the factors that will determine
these items are beyond our ability to control or predict. For
further discussion of these factors see “Item 1A. Risk Factors” in
our most recent Annual Report on Form 10-K and, to the extent
applicable, our Quarterly Reports on Form 10-Q.
For these statements, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. You are cautioned not to place undue
reliance on our forward-looking statements, which speak only as of
the date hereof or the date of any document incorporated by
reference herein. All subsequent written and oral forward-looking
statements attributable to us or any person acting on our behalf
are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Except as
required by law, we do not undertake any obligation to release
publicly any revisions to our forward-looking statements to reflect
events or circumstances after the date hereof.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030063488/en/
EPR Properties Brian Moriarty, 816-472-1700 www.eprkc.com
EPR Properties (NYSE:EPR)
Historical Stock Chart
From Oct 2024 to Nov 2024
EPR Properties (NYSE:EPR)
Historical Stock Chart
From Nov 2023 to Nov 2024
