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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 8, 2018
 
EPR Properties
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Maryland
 
001-13561
 
43-1790877
(State or other jurisdiction of
incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
909 Walnut Street, Suite 200
Kansas City, Missouri 64106
(Address of principal executive office)(Zip Code)
(816) 472-1700
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o









Item 2.02 Results of Operations and Financial Condition.

On May 8, 2018, the Company announced its results of operations and financial condition for the first quarter ended March 31, 2018. The public announcement was made by means of a press release, the text of which is set forth in Exhibit 99.1 hereto and is hereby incorporated by reference herein.
In addition, on May 8, 2018, the Company made available on its website supplemental operating and financial data for the first quarter ended March 31, 2018, the text of which is set forth in Exhibit 99.2 hereto and is hereby incorporated by reference herein.
The information set forth in Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, is being “furnished” and shall not be deemed “filed” for the purposes of or otherwise subject to liabilities under Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.


Item 9.01 Financial Statements and Exhibits.
 
 
 
 
Exhibit
No.
  
Description
  
  
Press Release dated May 8, 2018 issued by EPR Properties announcing its results of operations and financial condition for the first quarter ended March 31, 2018.
 
 
  
Supplemental Operating and Financial Data for the first quarter ended March 31, 2018, made available by EPR Properties on May 8, 2018.







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
EPR PROPERTIES
 
 
 
 
By:
 
/s/ Mark A. Peterson
 
 
 
Mark A. Peterson
 
 
 
Executive Vice President, Treasurer and Chief Financial
Officer
Date: May 8, 2018
 




















































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Section 2: EX-99.1 (PRESS RELEASE)

Exhibit
Exhibit 99.1






EPR PROPERTIES REPORTS FIRST QUARTER 2018 RESULTS
Company Reports Record Quarterly Revenue and Increases 2018 Earnings Guidance

Kansas City, MO, May 8, 2018 -- EPR Properties (NYSE:EPR) today announced operating results for the first quarter ended March 31, 2018.
    
Three Months Ended March 31, 2018
Total revenue was $155.0 million for the first quarter of 2018, representing a 20% increase from $129.1 million for the same quarter in 2017.
Net income available to common shareholders was $23.5 million, or $0.32 per diluted common share, for the first quarter of 2018 compared to $48.0 million, or $0.75 per diluted common share, for the same quarter in 2017.
Funds From Operations (FFO) (a non-GAAP financial measure) for the first quarter of 2018 was $61.0 million, or $0.82 per diluted common share, compared to $73.9 million, or $1.15 per diluted common share, for the same period in 2017.
FFO as adjusted (a non-GAAP financial measure) for the first quarter of 2018 was $94.0 million, or $1.26 per diluted common share, compared to $76.5 million, or $1.19 per diluted common share, for the same quarter in 2017, representing a 6% increase in per share results.

“In the first quarter, we delivered record revenues and have increased our earnings guidance for the year,” stated Company President and CEO Greg Silvers. “We are also effectively executing on our strategy of recycling capital to fund our investments. To that end, subsequent to the end of the quarter, we realized a very attractive yield from the Boyne mortgage repayment due to the upside consideration we included as part of the deal structure.  We remain focused on disciplined capital allocation by recycling capital within our portfolio to pursue accretive investments.”  
A reconciliation of FFO to FFO as adjusted follows (unaudited, dollars in thousands, except per share amounts):
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
Amount
 
FFO/share
 
Amount
 
FFO/share
FFO available to common shareholders
$
61,024

 
$
0.82

 
$
73,894

 
$
1.15

 
Costs associated with loan refinancing or payoff
31,943

 
0.43

 
5

 

 
Transaction costs
609

 
0.01

 
57

 

 
Termination fee included in gain on sale

 

 
1,920

 
0.03

 
Deferred income tax expense
428

 
0.01

 
634

 
0.01

 
Impact of Series C and Series E dilution

 
(0.01
)
 

 

FFO as adjusted available to common shareholders
$
94,004

 
$
1.26

 
$
76,510

 
$
1.19

 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
 
$
1.08

 
 
 
$
1.02

FFO as adjusted available to common shareholders payout ratio
 
 
86
%
 
 
 
86
%

Portfolio Update

The Company's investment portfolio (excluding property under development) consisted of the following at March 31, 2018:

The Entertainment segment included investments in 149 megaplex theatre properties, seven entertainment retail centers (which include seven additional megaplex theatre properties) and 11 family entertainment centers. The Company’s portfolio of owned entertainment properties consisted of 13.2 million square feet and was 99% leased, including megaplex theatres that were 100% leased.
The Recreation segment included investments in 25 ski areas, 20 attractions, 31 golf entertainment complexes and ten other recreation facilities. The Company’s portfolio of owned recreation properties was 100% leased.
The Education segment included investments in 65 public charter schools, 67 early education centers and 14 private schools. The Company’s portfolio of owned education properties consisted of 4.7 million square feet and was 98% leased.



The Other segment consisted primarily of the land under ground lease, property under development and land held for development related to the Resorts World Catskills casino and resort project in Sullivan County, New York.

The combined owned portfolio consisted of 21.0 million square feet and was 99% leased. As of March 31, 2018, the Company also had a total of $249.9 million invested in property under development.

Investment Update

The Company's investment spending for the three months ended March 31, 2018 totaled $108.6 million, and included investments in each of its primary operating segments:

Entertainment investment spending during the three months ended March 31, 2018 totaled $25.5 million, including spending on build-to-suit development and redevelopment of megaplex theatres, entertainment retail centers and family entertainment centers, as well as a $7.5 million megaplex theatre acquisition.
Recreation investment spending during the three months ended March 31, 2018 totaled $62.0 million, including investment spending on build-to-suit development of golf entertainment complexes and attractions, redevelopment of ski areas, a $7.8 million acquisition of a recreation facility and an investment of $10.3 million in a mortgage note secured by one other recreation facility.
Education investment spending during the three months ended March 31, 2018 totaled $21.1 million, including spending on build-to-suit development and redevelopment of public charter schools, early education centers and private schools, as well as $8.4 million on two early education center acquisitions.

On February 16, 2018, a borrower exercised its put option to convert its mortgage note agreement, totaling $142.9 million and secured by 28 education facilities including both early education and private school properties, to a lease agreement. As a result, the Company recorded the rental property at the carrying value, which approximated fair value, of the mortgage note on the conversion date and allocated this cost on a relative fair value basis. The properties are leased pursuant to a triple-net master lease with a 23-year remaining term.

Capital Recycling

On May 7, 2018, Boyne USA, Inc. (Boyne) purchased seven resort and attraction assets from Och-Ziff Real Estate (OZRE). These properties partially secure the Company’s mortgage note receivable due from OZRE with a carrying value of $249.2 million at March 31, 2018. Following the acquisition by Boyne, OZRE made a partial prepayment to the Company of approximately $175.4 million on this mortgage note receivable, leaving a carrying value of approximately $73.8 million that is secured by the remaining six ski properties. In connection with the partial prepayment of this note, the Company will recognize a prepayment fee totaling approximately $45.0 million during the second quarter of 2018.
Balance Sheet Update

The Company had a net debt to adjusted EBITDA ratio (a non-GAAP financial measure) of 5.80x at March 31, 2018. This ratio was outside of the Company's targeted range of 4.6x to 5.6x for this measure, however, the Company has reduced its net debt subsequent to March 31, 2018 in conjunction with the OZRE partial prepayment described above and anticipates additional dispositions over the remainder of 2018. These dispositions are expected to have the impact of reducing this ratio.
The Company had $24.5 million of unrestricted cash on hand and $570.0 million outstanding under its $1.0 billion unsecured revolving credit facility at March 31, 2018.

On February 28, 2018, the Company redeemed all of its outstanding 7.75% Senior Notes due July 15, 2020. The notes were redeemed at a price equal to the principal amount of $250.0 million plus a premium calculated pursuant to the terms of the indenture of $28.6 million, together with accrued and unpaid interest of $2.3 million. In connection with the redemption, the Company recorded a non-cash write off of $3.3 million in deferred financing costs. Additionally,



the Company prepaid in full a mortgage note payable totaling $11.7 million with an annual interest rate of 6.19%, which was secured by one theatre property. Subsequent to these transactions, the Company has no debt maturities until 2022.

Subsequent to March 31, 2018, the Company issued $400.0 million in senior unsecured notes due April 15, 2028. The notes bear interest at an annual rate of 4.95%. The Company used the net proceeds from the note offering to pay down its unsecured revolving credit facility.

Dividend Information

The Company declared regular monthly cash dividends during the first quarter of 2018 totaling $1.08 per common share. This dividend represents an annualized dividend of $4.32 per common share, an increase of almost 6% over the prior year, and would be the Company's eighth consecutive year with a significant annual dividend increase.

The Company also declared first quarter cash dividends of $0.359375 per share on its 5.75% Series C cumulative convertible preferred shares, $0.5625 per share on its 9.00% Series E cumulative convertible preferred shares and $0.359375 per share on its 5.75% Series G cumulative redeemable preferred shares.

2018 Guidance

The Company is increasing its 2018 guidance for FFO as adjusted per diluted share to a range of $5.75 to $5.90 from a range of $5.23 to $5.38. In addition, the Company is confirming its 2018 investment spending guidance of a range of $400.0 million to $700.0 million and its 2018 disposition proceeds guidance of a range of $350.0 million to $450.0 million.

FFO as adjusted guidance for 2018 is based on FFO per diluted share of $5.17 to $5.27 adjusted for estimated costs associated with loan refinancing or payoff, transaction costs, termination fees related to public charter schools and deferred income tax expense. FFO per diluted share is based on a net income per diluted share range of $3.44 to $3.59 less estimated gain on sale of real estate of a range of $0.24 to $0.29 and the impact of Series C and Series E dilution of $0.08, plus estimated real estate depreciation of $2.05 per diluted share (in accordance with the NAREIT definition of FFO).

Quarterly Supplemental

The Company's supplemental information package for the first quarter ended March 31, 2018 is available on the Company's website at http://investors.eprkc.com/earnings-supplementals.




EPR Properties
Consolidated Statements of Income
(Unaudited, dollars in thousands except per share data)
 
Three Months Ended March 31,
 
2018
 
2017
Rental revenue
$
128,933

 
$
107,037

Tenant reimbursements
3,991

 
3,749

Other income
630

 
692

Mortgage and other financing income
21,414

 
17,634

Total revenue
154,968

 
129,112

Property operating expense
7,564

 
6,350

General and administrative expense
12,324

 
11,057

Costs associated with loan refinancing or payoff
31,943

 
5

Interest expense, net
34,337

 
30,692

Transaction costs
609

 
57

Depreciation and amortization
37,684

 
28,077

Income before equity in income from joint ventures and other items
30,507

 
52,874

Equity in income (loss) from joint ventures
51

 
(8
)
Gain on sale of real estate

 
2,004

Income before income taxes
30,558

 
54,870

Income tax expense
(1,020
)
 
(954
)
Net income
29,538

 
53,916

Preferred dividend requirements
(6,036
)
 
(5,952
)
Net income available to common shareholders of EPR Properties
$
23,502

 
$
47,964

Per share data attributable to EPR Properties common shareholders:
 
 
 
Basic earnings per share data:
 
 
 
Net income available to common shareholders
$
0.32

 
$
0.75

Diluted earnings per share data:
 
 
 
Net income available to common shareholders
$
0.32

 
$
0.75

Shares used for computation (in thousands):
 
 
 
Basic
74,146

 
64,033

Diluted
74,180

 
64,102

EPR Properties
Condensed Consolidated Balance Sheets
(Unaudited, dollars in thousands)
 
March 31, 2018
 
December 31, 2017
Assets
 
 
 
Rental properties, net of accumulated depreciation of $776,404 and $741,334 at March 31, 2018 and December 31, 2017, respectively
$
4,815,137

 
$
4,604,231

Land held for development
33,693

 
33,692

Property under development
249,931

 
257,629

Mortgage notes and related accrued interest receivable
819,837

 
970,749

Investment in direct financing leases, net
58,101

 
57,903

Investment in joint ventures
5,538

 
5,602

Cash and cash equivalents
24,514

 
41,917

Restricted cash
15,640

 
17,069

Accounts receivable, net
88,750

 
93,693

Other assets
127,725

 
109,008

Total assets
$
6,238,866

 
$
6,191,493

Liabilities and Equity
 
 
 
Accounts payable and accrued liabilities
$
117,583

 
$
136,929

Dividends payable
32,791

 
30,185

Unearned rents and interest
81,461

 
68,227

Debt
3,131,437

 
3,028,827

Total liabilities
3,363,272

 
3,264,168

Total equity
$
2,875,594

 
$
2,927,325

Total liabilities and equity
$
6,238,866

 
$
6,191,493




EPR Properties
Reconciliation of Non-GAAP Financial Measures
(Unaudited, dollars in thousands except per share data)
 
 
Three Months Ended March 31,
 
 
2018
 
2017
FFO: (A)
 
 
 
Net income available to common shareholders of EPR Properties
$
23,502

 
$
47,964

Gain on sale of real estate

 
(2,004
)
Real estate depreciation and amortization
37,464

 
27,880

Allocated share of joint venture depreciation
58

 
54

FFO available to common shareholders of EPR Properties
$
61,024

 
$
73,894

 
 
 
 
 
FFO available to common shareholders of EPR Properties
$
61,024

 
$
73,894

Add: Preferred dividends for Series C preferred shares

 
1,941

Diluted FFO available to common shareholders of EPR Properties
$
61,024

 
$
75,835

 
 
 
 
 
FFO per common share:
 
 
 
Basic
$
0.82

 
$
1.15

Diluted
0.82

 
1.15

Shares used for computation (in thousands):
 
 
 
Basic
74,146

 
64,033

Diluted
74,180

 
64,102

 
 
 
 
 
Weighted average shares outstanding-diluted EPS
74,180

 
64,102

Effect of dilutive Series C preferred shares

 
2,053

Adjusted weighted average shares outstanding-diluted
74,180

 
66,155

 
 
 
 
Other financial information:
 
 
 
Straight-lined rental revenue
$
1,874

 
$
5,051

Dividends per common share
$
1.08

 
$
1.02

 
 

(A)
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 and management provides FFO herein because it believes this information is useful to investors in this regard. FFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share. 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 sales of depreciable operating properties and impairment losses of depreciable 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 FFO as adjusted. Management believes it is useful to provide FFO as adjusted as a supplemental measure to GAAP net income available to common shareholders and earnings per share. FFO as adjusted is FFO plus costs (gain) associated with loan refinancing or payoff, transaction costs, retirement severance expense, preferred share redemption costs, termination fees associated with tenants' exercises of education properties buy-out options, impairment of direct financing lease (allowance for lease loss portion) and provision for loan losses, and by subtracting gain on early extinguishment of debt, gain (loss) on sale of land, gain on insurance recovery and deferred tax benefit (expense). FFO and FFO as adjusted are non-GAAP financial measures. FFO and FFO as adjusted 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 an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations, cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO or FFO as adjusted the same way so comparisons of each of these non-GAAP measures with other REITs may not be meaningful.




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 FFOAA per share for the three months ended March 31, 2018. Therefore, the additional 2.1 million and 1.6 million 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 FFOAA per share for the three months ended March 31, 2018. The effect of the conversion of the 5.75% Series C convertible preferred shares and the 9.00% Series E cumulative convertible preferred shares do not result in more dilution to per share results and are therefore not included in the calculation of diluted FFO per share data for the three months ended March 31, 2018.

The conversion of 5.75% Series C cumulative convertible preferred shares would be dilutive to FFO and FFOAA per share for the three months ended March 31, 2017. Therefore, the additional 2.1 million 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 and diluted FFOAA per share for the three months ended March 31, 2017. The effect of the conversion of our 9.0% Series E cumulative convertible preferred shares and the additional 1.6 million common shares that would result from the conversion do not result in more dilution to per share results and are therefore not included in the calculation of diluted FFO and FFOAA per share data for the three months ended March 31, 2017.

Net Debt to Adjusted EBITDA Ratio

Net Debt to Adjusted EBITDA Ratio is a supplemental measure derived from non-GAAP financial measures the Company uses to evaluate its capital structure and the magnitude of its debt against its 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 Net Debt to Adjusted EBITDA Ratio may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. Reconciliations of debt and net income (both reported in accordance with GAAP) to Net Debt, EBITDAre, Adjusted EBITDA, and Net Debt to Adjusted EBITDA Ratio (each of which is a non-GAAP financial measure) are included in the following tables (unaudited, in thousands):
 
March 31,
 
2018
 
2017
Net Debt: (B)
 
 
 
Debt
$
3,131,437

 
$
2,616,382

Deferred financing costs, net
28,558

 
28,231

Cash and cash equivalents
(24,514
)
 
(14,446
)
Net Debt
$
3,135,481

 
$
2,630,167

 
 
 
 
 
Three Months Ended March 31,
 
2018
 
2017
EBITDAre and Adjusted EBITDA:
 
 
 
Net income
$
29,538

 
$
53,916

Interest expense, net
34,337

 
30,692

Income tax expense
1,020

 
954

Depreciation and amortization
37,684

 
28,077

Gain on sale of real estate

 
(2,004
)
Costs associated with loan refinancing or payoff
31,943

 
5

Equity in (income) loss from joint ventures
(51
)
 
8

EBITDAre (for the quarter) (C)
$
134,471

 
$
111,648

 
 
 
 
Transaction costs
609

 
57

Adjusted EBITDA (for the quarter)
$
135,080

 
$
111,705

 
 
 
 
Adjusted EBITDA (1) (D)
$
540,320

 
$
446,820

 
 
 
 
Net Debt/Adjusted EBITDA Ratio
5.80

 
5.89

 
 
 
 
(1) Adjusted EBITDA for the quarter is multiplied by four to calculate an annual amount.




(B)
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.

(C)
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 expense (benefit), depreciation and amortization, gains and losses from sales of depreciable operating properties, impairment losses of depreciable real estate, costs (gain) 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 as it can help facilitate comparisons of operating performance between periods and with other REITs. EBITDAre does not represent cash flow from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to 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.

(D)
Management uses Adjusted EBITDA in its analysis of the performance of the business and operations of the Company. Management believes Adjusted EBITDA is useful to investors because it excludes various items that management believes are not indicative of operating performance, and that it is an informative measure to use in computing various financial ratios to evaluate the Company. The Company defines Adjusted EBITDA as EBITDAre (defined above) excluding gain on insurance recovery, retirement severance expense, the provision for loan losses and transaction costs, and which is then multiplied by four to get an annual amount.

The Company's method of calculating Adjusted EBITDA may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. Adjusted EBITDA 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 for the purpose of evaluating the Company's performance or to cash flows as a measure of liquidity.

About EPR Properties

EPR Properties is a specialty real estate investment trust (REIT) that invests in properties in select market segments which require unique industry knowledge, while offering the potential for stable and attractive returns. Our total investments exceed $6.8 billion and our primary investment segments are Entertainment, Recreation and Education. We adhere to rigorous underwriting and investing criteria centered on key industry and property level cash flow standards. We believe our focused niche approach provides a competitive advantage, and the potential for higher growth and better yields.




CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

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 acquisition or disposition of properties, our capital resources, future expenditures for development projects, expected dividend payments, and our results of operations and financial condition. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of actual events. There is no assurance 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. While references to commitments for investment spending are based on present commitments and agreements of the Company, we cannot provide assurance that these transactions will be completed on satisfactory terms. In addition, references to our budgeted amounts and guidance are forward-looking statements.  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.


EPR Properties
Brian Moriarty, 888-EPR-REIT
www.eprkc.com

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Section 3: EX-99.2 (SUPPLEMENTAL OPERATING AND FINANCIAL DATA)

Exhibit



Exhibit 99.2


393396759_eprsupplementalcoverva03.jpg





393396759_image0a13.jpg                
Supplemental Operating and Financial Data
First Quarter Ended March 31, 2018







TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
SECTION
 
 
 
 
 
 
 
PAGE
 
 
 
 
 
 
 
 
 
Company Profile
Investor Information
Selected Financial Information
Selected Balance Sheet Information
Selected Operating Data
Funds From Operations and Funds From Operations as Adjusted
Adjusted Funds From Operations
Capital Structure
Summary of Ratios
Summary of Mortgage Notes Receivable
Capital Spending and Disposition Summaries
Property Under Development - Investment Spending Estimates
Financial Information and Total Investment by Segment
Lease Expirations
Top Ten Customers by Revenue from Continuing Operations
Net Asset Value (NAV) Components
Annualized GAAP Net Operating Income
Guidance
Definitions-Non-GAAP Financial Measures
Appendix-Reconciliation of Certain Non-GAAP Financial Measures


393396759_image5a04.jpg
 
 
Q1 2018 Supplemental
Page 2
 
 
 




CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

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 acquisition or disposition of properties, our capital resources, future expenditures for development projects, and our results of operations and financial condition. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of actual events. There is no assurance 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. In addition, references to our budgeted amounts and guidance are forward-looking statements. 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.

NON-GAAP INFORMATION

This document contains certain non-GAAP measures. These non-GAAP measures, as calculated by the Company, are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these non-GAAP measures are not measurements of financial performance or liquidity under GAAP and should not be considered alternatives to the Company's other financial information determined under GAAP. See pages 29 through 31 for definitions of certain non-GAAP financial measures used in this document and the reconciliations of certain non-GAAP measures in the Appendix on pages 32 through 39.



393396759_image5a04.jpg
 
 
Q1 2018 Supplemental
Page 3
 
 
 




COMPANY PROFILE

    
 
THE COMPANY
 
EPR Properties (“EPR” or the “Company”) is a self-administered and self-managed real estate investment trust. EPR was formed in August 1997 as a Maryland real estate investment trust (“REIT”), and an initial public offering was completed on November 18, 1997.

 
Since that time, the Company has grown into a leading specialty real estate investment trust with an investment portfolio that includes Entertainment, Recreation, Education and Other specialty investments.

 
393396759_eprsegmentsv2.jpg
 
 
 
 
 
 
        
COMPANY STRATEGY
Our vision is to become the leading specialty REIT by focusing our unique knowledge and resources on select underserved real estate segments which provide the potential for outsized returns.
EPR’s primary business objective is to enhance shareholder value by achieving predictable growth in Funds from Operations (“FFO”) and dividends per share. Central to our growth is remaining focused on acquiring or developing properties in our primary investment segments: Entertainment, Recreation and Education. We may also pursue opportunities to provide mortgage financing for these investment segments in certain situations where this structure is more advantageous than owning the underlying real estate.
Our segment focus is consistent with our strategic organizational design which is structured around building centers of knowledge and strong operating competencies in each of our primary segments. Retention and building of this knowledge depth creates a competitive advantage allowing us to more quickly identify key market trends.
To this end we will deliberately apply information and our ingenuity to identify properties which represent potential logical extensions within each of our segments, or potential future investment segments. As part of our strategic planning and portfolio management process we assess new opportunities against the following five key underwriting principles:
INFLECTION OPPORTUNITY - Renewal or restructuring in an industry’s properties
ENDURING VALUE - Real estate devoted to and improving long-lived activities
EXCELLENT EXECUTION - Market-dominant performance that creates value beyond tenant credit
ATTRACTIVE ECONOMICS - Accretive initial returns along with growth in yield
ADVANTAGEOUS POSITION - Sustainable competitive advantages



393396759_image5a04.jpg
 
 
Q1 2018 Supplemental
Page 4
 
 
 




INVESTOR INFORMATION
 
 
 
SENIOR MANAGEMENT
 
 
 
Greg Silvers
 
Mark Peterson
President and Chief Executive Officer
 
Executive Vice President and Chief Financial Officer
 
 
 
Craig Evans
 
Mike Hirons
Senior Vice President, General Counsel and Secretary
 
Senior Vice President - Strategy and Asset Management
 
 
 
Tonya Mater
 
 
Vice President and Chief Accounting Officer
 
 
 
 
 
COMPANY INFORMATION
 
 
 
CORPORATE HEADQUARTERS
 
TRADING SYMBOLS
909 Walnut Street, Suite 200
 
Common Stock:
Kansas City, MO 64106
 
EPR
888-EPR-REIT
 
Preferred Stock:
www.eprkc.com
 
EPR-PrC
 
 
EPR-PrE
STOCK EXCHANGE LISTING
 
EPR-PrG
New York Stock Exchange
 
 
EQUITY RESEARCH COVERAGE
 
 
 
Bank of America Merrill Lynch
Jeffrey Spector/Joshua Dennerlein
646-855-1363
Citi Global Markets
Michael Bilerman/Nick Joseph
212-816-4471
FBR & Co.
David Corak
703-312-1610
Janney Montgomery Scott
Rob Stevenson
646-840-3217
J.P. Morgan
Anthony Paolone/Nikita Bely
212-622-6682
Kansas City Capital Associates
Jonathan Braatz
816-932-8019
Keybanc Capital Markets
Jordan Sadler/Craig Mailman
917-368-2280
Ladenburg Thalmann
John Massocca
212-409-2056
RBC Capital Markets
Michael Carroll/Wes Golladay
440-715-2649
Stifel
Simon Yarmak
443-224-1345
SunTrust Robinson Humphrey
Ki Bin Kim
212-303-4124

EPR Properties is followed by the analysts identified above.  Please note that any opinions, estimates, forecasts or recommendations regarding EPR Properties’ performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or recommendations of EPR Properties or its management.  EPR Properties does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

393396759_image5a04.jpg
 
 
Q1 2018 Supplemental
Page 5
 
 
 




SELECTED FINANCIAL INFORMATION
(UNAUDITED, DOLLARS AND SHARES IN THOUSANDS)

 
 
 
 
 
 
THREE MONTHS ENDED MARCH 31,
 
Operating Information:
2018
 
2017
 
Revenue
$
154,968

 
$
129,112

 
Net income available to common shareholders of EPR Properties
23,502

 
47,964

 
EBITDAre (1)
134,471

 
111,648

 
Adjusted EBITDA (1)
135,080

 
111,705

 
Interest expense, net
34,337

 
30,692

 
Recurring principal payments

 
2,415

 
Capitalized interest
2,244

 
2,791

 
Straight-lined rental revenue
1,874

 
5,051

 
Dividends declared on preferred shares
6,036

 
5,952

 
Dividends declared on common shares
80,262

 
65,619

 
General and administrative expense
12,324

 
11,057

 
 
 
 
 
 
 
MARCH 31,
 
Balance Sheet Information:
2018
 
2017
 
Total assets
$
6,238,866

 
$
5,046,782

 
Accumulated depreciation
776,404

 
661,029

 
Total assets before accumulated depreciation (gross assets)
7,015,270

 
5,707,811

 
Cash and cash equivalents
24,514

 
14,446

 
Debt
3,131,437

 
2,616,382

 
Deferred financing costs, net
28,558

 
28,231

 
Net debt (1)
3,135,481

 
2,630,167

 
Equity
2,875,594

 
2,239,409

 
Common shares outstanding
74,319

 
64,771

 
Total market capitalization (using EOP closing price)
7,623,911

 
7,745,510

 
Net debt/total market capitalization
41
%
 
34
%
 
Net debt/gross assets
45
%
 
46
%
 
Net debt/Adjusted EBITDA (2)
5.80

 
5.89

 
Adjusted net debt/Annualized adjusted EBITDA (1)(3)(4)
5.64

 
5.54

 
 
 
 
 
 
(1) See pages 29 through 31 for definitions.
 
(2) Adjusted EBITDA is for the quarter multiplied times four. See pages 29 through 31 for definitions. See calculation on page 38.
 
(3) Adjusted net debt is net debt less 40% times property under development. See pages 29 through 31 for definitions.
 
(4) Annualized adjusted EBITDA is adjusted EBITDA for the quarter further adjusted for in-service projects, percentage rent and participating interest and other non-recurring items which is then multiplied times four. These calculations can be found on page 40 under the reconciliation of Adjusted EBITDA and Annualized Adjusted EBITDA. See pages 29 through 31 for definitions.
 

393396759_image5a04.jpg
 
 
Q1 2018 Supplemental
Page 6
 
 
 




SELECTED BALANCE SHEET INFORMATION
(UNAUDITED, DOLLARS IN THOUSANDS)
 
 
 
 
 
 
 
 
 
 
 
 
 
ASSETS
 
1ST QUARTER 2018
 
4TH QUARTER 2017
 
3RD QUARTER 2017
 
2ND QUARTER 2017
 
1ST QUARTER 2017
 
4TH QUARTER 2016
Rental properties:
 
 
 
 
 
 
 
 
 
 
 
 
Entertainment
 
$
2,812,120

 
$
2,762,801

 
$
2,696,125

 
$
2,549,940

 
$
2,545,532

 
$
2,511,432

Recreation
 
1,452,087

 
1,420,690

 
1,361,445

 
1,320,216

 
754,521

 
715,323

Education
 
1,170,548

 
1,005,340

 
1,033,149

 
938,673

 
877,716

 
848,883

Other
 
156,786

 
156,734

 
156,659

 
156,420

 
156,390

 
155,659

Less: accumulated depreciation
 
(776,404
)
 
(741,334
)
 
(711,384
)
 
(676,364
)
 
(661,029
)
 
(635,535
)
Land held for development
 
33,693

 
33,692

 
33,674

 
33,672

 
22,530

 
22,530

Property under development
 
249,931

 
257,629

 
284,211

 
271,692

 
331,934

 
297,110

Mortgage notes receivable: (1)
 
 
 


 
 
 
 
 
 
 
 
Entertainment
 
31,061

 
31,105

 
39,679

 
36,418

 
33,735

 
37,669

Recreation
 
614,405

 
602,145

 
602,701

 
601,910

 
349,653

 
332,994

Education
 
174,371

 
337,499

 
329,991

 
303,271

 
288,409

 
243,315

Investment in direct financing leases, net
 
58,101

 
57,903

 
57,698

 
93,307

 
103,095

 
102,698

Investment in joint ventures
 
5,538

 
5,602

 
5,616

 
5,581

 
5,522

 
5,972

Cash and cash equivalents
 
24,514

 
41,917

 
11,412

 
70,872

 
14,446

 
19,335

Restricted cash
 
15,640

 
17,069

 
24,323

 
24,255

 
28,523

 
9,744

Accounts receivable, net
 
88,750

 
93,693

 
99,213

 
106,480

 
96,267

 
98,939

Other assets
 
127,725

 
109,008

 
108,498

 
102,543

 
99,538

 
98,954

Total assets
 
$
6,238,866

 
$
6,191,493

 
$
6,133,010

 
$
5,938,886

 
$
5,046,782

 
$
4,865,022

 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
117,583

 
$
136,929

 
$
140,582

 
$
142,526

 
$
101,438

 
$
119,758

Common dividends payable
 
26,755

 
25,203

 
25,046

 
25,044

 
22,022

 
20,367

Preferred dividends payable
 
6,036

 
4,982

 
5,951

 
5,952

 
5,952

 
5,951

Unearned rents and interest
 
81,461

 
68,227

 
85,198

 
71,098

 
61,579

 
47,420

Line of credit
 
570,000

 
210,000

 
170,000

 

 
150,000

 

Deferred financing costs, net
 
(28,558
)
 
(32,852
)
 
(33,951
)
 
(34,086
)
 
(28,231
)
 
(29,320
)
Other debt
 
2,589,995

 
2,851,679

 
2,851,876

 
2,827,006

 
2,494,613

 
2,514,945

Total liabilities
 
3,363,272

 
3,264,168

 
3,244,702

 
3,037,540

 
2,807,373

 
2,679,121

Equity:
 
 
 
 
 
 
 
 
 
 
 
 
Common stock and additional paid-in- capital
 
3,487,902

 
3,479,755

 
3,421,631

 
3,417,750

 
2,755,783

 
2,677,709

Preferred stock at par value
 
148

 
148

 
138

 
139

 
139

 
139

Treasury stock
 
(128,707
)
 
(121,591
)
 
(121,539
)
 
(121,533
)
 
(120,955
)
 
(113,172
)
Accumulated other comprehensive income
 
16,481

 
12,483

 
10,919

 
9,698

 
8,606

 
7,734

Distributions in excess of net income
 
(500,230
)
 
(443,470
)
 
(422,841
)
 
(404,708
)
 
(404,164
)
 
(386,509
)
Total equity
 
2,875,594

 
2,927,325

 
2,888,308

 
2,901,346

 
2,239,409

 
2,185,901

Total liabilities and equity
 
$
6,238,866

 
$
6,191,493

 
$
6,133,010

 
$
5,938,886

 
$
5,046,782

 
$
4,865,022

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes related accrued interest receivable.

393396759_image5a04.jpg
 
 
Q1 2018 Supplemental
Page 7
 
 
 




SELECTED OPERATING DATA
(UNAUDITED, DOLLARS IN THOUSANDS)
 
 
 
 
 
 
 
 
 
 
 
 
 
1ST QUARTER 2018
 
4TH QUARTER 2017
 
3RD QUARTER 2017
 
2ND QUARTER 2017
 
1ST QUARTER 2017
 
4TH QUARTER 2016
Rental revenue and tenant reimbursements:

 
 
 
 
 
 
 
 
 
 
Entertainment
$
74,848

 
$
74,383

 
$
70,621

 
$
69,403

 
$
68,840

 
$
69,147

Recreation
33,432

 
33,909

 
32,171

 
29,384

 
17,299

 
17,084

Education
22,385

 
12,862

 
21,479

 
22,333

 
22,357

 
22,971

Other
2,259

 
2,292

 
2,290

 
2,290

 
2,290

 
2,290

Mortgage and other financing income:


 
 
 
 
 
 
 
 
 
 
Entertainment
802

 
981

 
1,151

 
1,096

 
1,179

 
1,260

Recreation
13,705

 
13,590

 
14,140

 
13,104

 
7,906

 
7,540

Education (1)
6,907

 
9,106

 
9,023

 
8,868

 
8,549

 
7,311

Other

 

 

 

 

 
1

Other income
630

 
577

 
522

 
1,304

 
692

 
3,227

Total revenue
$
154,968

 
$
147,700

 
$
151,397

 
$
147,782

 
$
129,112

 
$
130,831

 


 
 
 
 
 
 
 
 
 
 
Property operating expense
7,564

 
12,891

 
6,340

 
6,072

 
6,350

 
5,915

Other expense

 
242

 

 

 

 

General and administrative expense
12,324

 
9,596

 
12,070

 
10,660

 
11,057

 
10,234

Costs associated with loan refinancing or payoff
31,943

 
58

 
1,477

 
9

 
5

 

Gain on early extinguishment of debt

 

 

 
(977
)
 

 

Interest expense, net
34,337

 
35,271

 
34,194

 
32,967

 
30,692

 
26,834

Transaction costs
609

 
135

 
113

 
218

 
57

 
2,988

Impairment charges

 

 

 
10,195

 

 

Depreciation and amortization
37,684

 
37,027

 
34,694

 
33,148

 
28,077

 
28,351

Income before equity in income in joint ventures and other items
30,507

 
52,480

 
62,509

 
55,490

 
52,874

 
56,509

Equity in income (loss) from joint ventures
51

 
(14
)
 
35

 
59

 
(8
)
 
118

Gain on sale of real estate

 
13,480

 
997

 
25,461

 
2,004

 
1,430

Income tax (expense) benefit
(1,020
)
 
(383
)
 
(587
)
 
(475
)
 
(954
)
 
84

Net income
29,538

 
65,563

 
62,954

 
80,535

 
53,916

 
58,141

Preferred dividend requirements
(6,036
)
 
(6,438
)
 
(5,951
)
 
(5,952
)
 
(5,952
)
 
(5,951
)
Preferred share redemption costs

 
(4,457
)
 

 

 

 

Net income available to common shareholders of EPR Properties
$
23,502

 
$
54,668

 
$
57,003

 
$
74,583

 
$
47,964

 
$
52,190

 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents income from owned assets under direct financing leases and 14 mortgage notes receivable.

393396759_image5a04.jpg
 
 
Q1 2018 Supplemental
Page 8
 
 
 




FUNDS FROM OPERATIONS AND FUNDS FROM OPERATIONS AS ADJUSTED
(UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION)
FUNDS FROM OPERATIONS ("FFO") (1):
 
1ST QUARTER 2018
 
4TH QUARTER 2017
 
3RD QUARTER 2017
 
2ND QUARTER 2017
 
1ST QUARTER 2017
 
4TH QUARTER 2016
Net income available to common shareholders of EPR Properties
 
$
23,502

 
$
54,668

 
$
57,003

 
$
74,583

 
$
47,964

 
$
52,190

Gain on sale of real estate (excluding land sale)
 

 
(13,480
)
 
(997
)
 
(25,461
)
 
(2,004
)
 

Real estate depreciation and amortization
 
37,464

 
36,797

 
34,457

 
32,906

 
27,880

 
28,179

Allocated share of joint venture depreciation
 
58

 
55

 
55

 
54

 
54

 
55

Impairment of direct financing lease - residual value portion (2)
 

 

 

 
2,897

 

 

FFO available to common shareholders of EPR Properties
 
$
61,024

 
$
78,040

 
$
90,518

 
$
84,979

 
$
73,894

 
$
80,424

 
 
 
 
 
 
 
 
 
 
 
 
 
FFO available to common shareholders of EPR Properties
 
$
61,024

 
$
78,040

 
$
90,518

 
$
84,979

 
$
73,894

 
$
80,424

Add: Preferred dividends for Series C preferred shares
 

 
1,940

 
1,941

 
1,941

 
1,941

 
1,941

Add: Preferred dividends for Series E preferred shares
 

 
1,940

 

 

 

 

Diluted FFO available to common shareholders of EPR Properties
 
$
61,024

 
$
81,920

 
$
92,459

 
$
86,920

 
$
75,835

 
$
82,365

 
 
 
 
 
 
 
 
 
 
 
 
 
FUNDS FROM OPERATIONS AS ADJUSTED (1):
 
 
 
 
 
 
 
 
 
 
 
 
FFO available to common shareholders of EPR Properties
 
$
61,024

 
$
78,040

 
$
90,518

 
$
84,979

 
$
73,894

 
$
80,424

Costs associated with loan refinancing or payoff
 
31,943

 
58

 
1,477

 
9

 
5

 

Transaction costs
 
609

 
135

 
113

 
218

 
57

 
2,988

Preferred share redemption costs
 

 
4,457

 

 

 

 

Termination fee included in gain on sale
 

 
13,275

 
954

 
3,900

 
1,920

 

Impairment of direct financing lease - allowance for lease loss portion (2)
 

 

 

 
7,298

 

 

Gain on early extinguishment of debt
 

 

 

 
(977
)
 

 

Gain on sale of land
 

 

 

 

 

 
(1,430
)
Gain on insurance recovery (included in other income)
 

 

 

 
(606
)
 

 
(847
)
Deferred income tax expense (benefit)
 
428

 
(99
)
 
227

 
50

 
634

 
(401
)
FFO as adjusted available to common shareholders of EPR Properties
 
$
94,004

 
$
95,866

 
$
93,289

 
$
94,871

 
$
76,510

 
$
80,734

 
 
 
 
 
 
 
 
 
 
 
 
 
FFO as adjusted available to common shareholders of EPR Properties
 
$
94,004

 
$
95,866

 
$
93,289

 
$
94,871

 
$
76,510

 
$
80,734

Add: Preferred dividends for Series C preferred shares
 
1,940

 
1,940

 
1,941

 
1,941

 
1,941

 
1,941

Add: Preferred dividends for Series E preferred shares
 
1,939

 
1,940

 

 

 

 

Diluted FFO as adjusted available to common shareholders of EPR Properties
 
$
97,883

 
$
99,746

 
$
95,230

 
$
96,812

 
$
78,451

 
$
82,675

FFO per common share:
 


 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.82

 
$
1.06

 
$
1.23

 
$
1.16

 
$
1.15

 
$
1.26

Diluted
 
0.82

 
1.06

 
1.22

 
1.15

 
1.15

 
1.25

FFO as adjusted per common share:
 


 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.27

 
$
1.30

 
$
1.27

 
$
1.30

 
$
1.19

 
$
1.27

Diluted
 
1.26

 
1.29

 
1.26

 
1.29

 
1.19

 
1.26

Shares used for computation (in thousands):
 


 
 
 
 
 
 
 
 
 
 
Basic
 
74,146

 
73,774

 
73,663

 
73,159

 
64,033

 
63,635

Diluted
 
74,180

 
73,832

 
73,724

 
73,225

 
64,102

 
63,716

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding-Diluted EPS
 
74,180

 
73,832

 
73,724

 
73,225

 
64,102

 
63,716

Effect of dilutive Series C preferred shares
 
2,098

 
2,083

 
2,072

 
2,063

 
2,053

 
2,044

Effect of dilutive Series E preferred shares
 
1,598

 
1,592

 

 

 

 

Adjusted weighted-average shares outstanding-diluted
 
77,876

 
77,507

 
75,796

 
75,288

 
66,155

 
65,760

(1) See pages 29 through 31 for definitions.
 
 
 
 
 
 
 
 
 
 
 
 
(2) Impairment charges recognized during the three months ended June 30, 2017 total $10.2 million and related to our investment in direct financing leases, net, consisting of $2.9 million related to the residual value portion and $7.3 million related to the allowance for lease loss portion.

393396759_image5a04.jpg
 
 
Q1 2018 Supplemental
Page 9
 
 
 




ADJUSTED FUNDS FROM OPERATIONS
(UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION)
ADJUSTED FUNDS FROM OPERATIONS ("AFFO") (1):
 
1ST QUARTER 2018
 
4TH QUARTER 2017
 
3RD QUARTER 2017
 
2ND QUARTER 2017
 
1ST QUARTER 2017
 
4TH QUARTER 2016
 
 

 
 
 
 
 
 
 
 
 
 
FFO available to common shareholders of EPR Properties
 
$
61,024

 
$
78,040

 
$
90,518

 
$
84,979

 
$
73,894

 
$
80,424

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
Costs associated with loan refinancing or payoff
 
31,943

 
58

 
1,477

 
9

 
5

 

Transaction costs
 
609

 
135

 
113

 
218

 
57

 
2,988

Preferred share redemption costs
 

 
4,457

 

 

 

 

Termination fees included in gain on sale
 

 
13,275

 
954

 
3,900

 
1,920

 

Impairment of direct financing lease - allowance for lease loss portion
 

 

 

 
7,298

 

 

Gain on early extinguishment of debt
 

 

 

 
(977
)
 

 

Gain on sale of land
 

 

 

 

 

 
(1,430
)
Gain on insurance recovery (included in other income)
 

 

 

 
(606
)
 

 
(847
)
Deferred income tax expense (benefit)
 
428

 
(99
)
 
227

 
50

 
634

 
(401
)
Non-real estate depreciation and amortization
 
220

 
230

 
237

 
242

 
197

 
172

Deferred financing fees amortization
 
1,398

 
1,588

 
1,598

 
1,525

 
1,456

 
1,265

Share-based compensation expense to management and trustees
 
3,791

 
3,576

 
3,605

 
3,503

 
3,458

 
2,882

Amortization of above/below market leases, net and tenant allowances
 
(417
)
 
(66
)
 
(55
)
 
(31
)
 
45

 
45

Maintenance capital expenditures (2)
 
(698
)
 
(1,207
)
 
(1,125
)
 
(1,590
)
 
(1,601
)
 
(2,409
)
Straight-lined rental revenue
 
(1,874
)
 
7,085

 
(2,357
)
 
(4,009
)
 
(5,051
)
 
(6,062
)
Non-cash portion of mortgage and other financing income
 
(656
)
 
(719
)
 
(905
)
 
(901
)
 
(555
)
 
(862
)
AFFO available to common shareholders of EPR Properties
 
$
95,768

 
$
106,353

 
$
94,287

 
$
93,610

 
$
74,459

 
$
75,765

 
 
 
 
 
 
 
 
 
 
 
 
 
AFFO available to common shareholders of EPR Properties
 
$
95,768

 
$
106,353

 
$
94,287

 
$
93,610

 
$
74,459

 
$
75,765

Add: Preferred dividends for Series C preferred shares
 
1,940

 
1,940

 
1,941

 
1,941

 
1,941

 
1,941

Add: Preferred dividends for Series E preferred shares
 
1,939

 
1,940

 

 

 

 

Diluted AFFO available to common shareholders of EPR Properties
 
$
99,647

 
$
110,233

 
$
96,228

 
$
95,551

 
$
76,400

 
$
77,706

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding (in thousands)
 
74,180

 
73,832

 
73,724

 
73,225

 
64,102

 
63,716

Effect of dilutive Series C preferred shares
 
2,098

 
2,083

 
2,072

 
2,063

 
2,053

 
2,044

Effect of dilutive Series E preferred shares
 
1,598

 
1,592

 

 

 

 

Adjusted weighted-average shares outstanding-diluted
 
77,876

 
77,507

 
75,796

 
75,288

 
66,155

 
65,760

 
 


 
 
 
 
 
 
 
 
 
 
AFFO per diluted common share
 
$
1.28

 
$
1.42

 
$
1.27

 
$
1.27

 
$
1.15

 
$
1.18

 
 


 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
$
1.08

 
$
1.02

 
$
1.02

 
$
1.02

 
$
1.02

 
$
0.96