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Section 1: 8-K (8-K)

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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): April 29, 2019
 
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 April 29, 2019, the Company announced its results of operations and financial condition for the first quarter ended March 31, 2019. 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 April 29, 2019, the Company made available on its website an investor slide presentation and supplemental operating and financial data for the first quarter ended March 31, 2019, the text of which are set forth in Exhibits 99.2 and 99.3 hereto, respectively, and are 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, 99.2 and 99.3, 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 April 29, 2019 issued by EPR Properties announcing its results of operations and financial condition for the first quarter ended March 31, 2019.
 
 
  
Investor slide presentation for the first quarter ended March 31, 2019, made available by EPR Properties on April 29, 2019.
 
 
 
 
Supplemental Operating and Financial Data for the first quarter ended March 31, 2019, made available by EPR Properties on April 29, 2019.







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: April 29, 2019
 




















































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Section 2: EX-99.1 (PRESS RELEASE)

Exhibit
Exhibit 99.1










EPR PROPERTIES REPORTS FIRST QUARTER 2019 RESULTS

Kansas City, MO, April 29, 2019 -- EPR Properties (NYSE:EPR) today announced operating results for the first quarter ended March 31, 2019.    
    
Total revenue was $164.5 million for the first quarter of 2019, representing a 6% increase from $155.0 million for the same quarter in 2018.
Net income available to common shareholders was $59.3 million, or $0.79 per diluted common share, for the first quarter of 2019 compared to $23.5 million, or $0.32 per diluted common share, for the same quarter in 2018.
Funds From Operations (FFO) (a non-GAAP financial measure) for the first quarter of 2019 was $93.1 million, or $1.23 per diluted common share, compared to $61.0 million, or $0.82 per diluted common share, for the same quarter in 2018.
FFO as adjusted (FFOAA) (a non-GAAP financial measure) for the first quarter of 2019 was $102.6 million, or $1.36 per diluted common share, compared to $94.0 million, or $1.26 per diluted common share, for the same quarter in 2018, representing an 8% increase in per share results.

“We are pleased with the sustained momentum demonstrated by our first quarter results,“ stated Company President and CEO Greg Silvers. “We continue to source additional growth opportunities consistent with our focus on experiential activities which play directly into the Company’s differentiated and deep expertise. With the expected payoff of the mortgage associated with the Schlitterbahn water parks, we are well-positioned with additional capital for reinvestment. As we further expand, we will adhere to our core underwriting principles as we seek both accretive initial returns and growth in yield.”

Portfolio Update

The Company's investment portfolio (excluding property under development) consisted of the following at March 31, 2019:

The Entertainment segment included investments in 157 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 13.7 million square feet and was 99% leased, including megaplex theatres that were 100% leased.
The Recreation segment included investments in 12 ski areas, 20 attractions, 34 golf entertainment complexes and 13 other recreation facilities. The Company’s portfolio of owned recreation properties was 100% leased.
The Education segment included investments in 56 public charter schools, 69 early education centers and 15 private schools. The Company’s portfolio of owned education properties consisted of 4.6 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 project in Sullivan County, New York.

The Company's combined owned portfolio consisted of 22.4 million square feet and was 99% leased. As of March 31, 2019, the Company also had a total of $315.2 million invested in property under development.

Investment Update

The Company's investment spending for the three months ended March 31, 2019 totaled $174.6 million, and included investments in each of its operating segments:

Entertainment investment spending during the three months ended March 31, 2019 totaled $117.9 million, including spending on the acquisition of five megaplex theatres totaling $93.3 million, build-to-suit development and redevelopment of megaplex theatres, entertainment retail centers and family entertainment centers.




Recreation investment spending during the three months ended March 31, 2019 totaled $44.2 million, including spending on build-to-suit development of golf entertainment complexes and attractions.

Education investment spending during the three months ended March 31, 2019 totaled $12.3 million, including spending on build-to-suit development and redevelopment of public charter schools, early education centers and private schools.

Other investment spending during the three months ended March 31, 2019 totaled $0.2 million, and was related to the Resorts World Catskills project in Sullivan County, New York.

Capital Recycling

During the first quarter of 2019, pursuant to tenant purchase options, the Company completed the sale of two public charter schools located in Florida and North Carolina for net proceeds totaling $23.3 million. In connection with these sales, the Company recognized a gain on sale of $5.4 million.

During the first quarter of 2019, the Company completed the sale of one recreation property and four education properties for net proceeds totaling $14.4 million and recognized a net gain on sale of $0.9 million.

Disposition proceeds totaled $37.7 million for the first quarter of 2019. Additionally, the Company expects the payoff of the mortgages associated with the Schlitterbahn waterparks of approximately $190.0 million during the second quarter.
Balance Sheet Update
Excluding prepayment penalties from earnings, the Company had a net debt to adjusted EBITDA ratio (a non-GAAP financial measure) of 5.7x at March 31, 2019. The Company had $11.1 million of unrestricted cash on hand and $70.0 outstanding balance under its $1.0 billion unsecured revolving credit facility at March 31, 2019.
During the quarter, the Company issued 1,059,656 common shares under its Direct Share Purchase Plan (DSPP) for net proceeds of $78.6 million.
Dividend Information

The Company declared regular monthly cash dividends during the first quarter of 2019 totaling $1.125 per common share. This dividend represents an annualized dividend of $4.50 per common share, an increase of 4.2% over the prior year, and is the Company's ninth 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.

2019 Guidance

The Company's updated 2019 guidance for net income per diluted share is $3.10 to $3.30. The Company is increasing its guidance for 2019 FFO as adjusted per diluted share to a range of $5.30 to $5.50 and confirming its 2019 investment spending guidance of a range of $600.0 million to $800.0 million. The Company is increasing its 2019 expected disposition proceeds to a range of $300.0 million to $400.0 million from a range of $100.0 million to $200.0 million.

FFO as adjusted guidance for 2019 is based on FFO per diluted share of $4.91 to $5.06 adjusted for estimated transaction costs, termination fees related to public charter schools, deferred income tax expense and the impact of Series C and Series E dilution. FFO per diluted share is based on a net income per diluted share range of $3.10 to $3.30 less estimated gain on sale of real estate of a range of $0.29 to $0.34 and the impact of Series C and Series E dilution of $0.05, plus



estimated real estate depreciation of $2.11 and allocated share of joint venture depreciation of $0.04 (in accordance with the NAREIT definition of FFO).

Quarterly Supplemental

The Company's supplemental information package for the first quarter ended March 31, 2019 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,
 
 
2019
 
2018
 
Rental revenue
$
150,723

 
$
132,924

 
Other income
344

 
630

 
Mortgage and other financing income
13,475

 
21,414

 
Total revenue
164,542

 
154,968

 
Property operating expense
15,793

 
7,564

 
General and administrative expense
12,130

 
12,324

 
Costs associated with loan refinancing or payoff

 
31,943

 
Interest expense, net
33,826

 
34,337

 
Transaction costs
5,123

 
609

 
Depreciation and amortization
39,743

 
37,684

 
Income before equity in income from joint ventures and other items
57,927

 
30,507

 
Equity in income from joint ventures
489

 
51

 
Gain on sale of real estate
6,328

 

 
Income before income taxes
64,744

 
30,558

 
Income tax benefit (expense)
605

 
(1,020
)
 
Net income
65,349

 
29,538

 
Preferred dividend requirements
(6,034
)
 
(6,036
)
 
Net income available to common shareholders of EPR Properties
$
59,315

 
$
23,502

 
Per share data attributable to EPR Properties common shareholders:
 
 
 
 
Basic earnings per share data:
 
 
 
 
Net income available to common shareholders
$
0.79

 
$
0.32

 
Diluted earnings per share data:
 
 
 
 
Net income available to common shareholders
$
0.79

 
$
0.32

 
Shares used for computation (in thousands):
 
 
 
 
Basic
74,679

 
74,146

 
Diluted
74,725

 
74,180

 










EPR Properties
Condensed Consolidated Balance Sheets
(Unaudited, dollars in thousands)
 
March 31, 2019
 
December 31, 2018
Assets
 
 
 
Rental properties, net of accumulated depreciation of $920,409 and $883,174 at March 31, 2019 and December 31, 2018, respectively
$
5,072,298

 
$
5,024,057

Land held for development
28,080

 
34,177

Property under development
315,237

 
287,546

Operating lease right-of-use assets
211,299

 

Mortgage notes and related accrued interest receivable
527,627

 
517,467

Investment in direct financing leases, net
20,616

 
20,558

Investment in joint ventures
35,188

 
34,486

Cash and cash equivalents
11,116

 
5,872

Restricted cash
11,166

 
12,635

Accounts receivable
111,146

 
98,369

Other assets
87,458

 
96,223

Total assets
$
6,431,231

 
$
6,131,390

Liabilities and Equity
 
 
 
Accounts payable and accrued liabilities
$
117,746

 
$
168,463

Operating lease liabilities
235,612

 

Dividends payable
34,340

 
32,799

Unearned rents and interest
85,012

 
79,051

Debt
3,045,742

 
2,986,054

Total liabilities
3,518,452

 
3,266,367

Total equity
$
2,912,779

 
$
2,865,023

Total liabilities and equity
$
6,431,231

 
$
6,131,390




EPR Properties
Reconciliation of Non-GAAP Financial Measures
(Unaudited, dollars in thousands except per share data)
 
 
Three Months Ended March 31,
 
 
 
2019
 
2018
 
FFO: (A)
 
 
 
 
Net income available to common shareholders of EPR Properties
$
59,315

 
$
23,502

 
Gain on sale of real estate
(6,328
)
 

 
Real estate depreciation and amortization
39,514

 
37,464

 
Allocated share of joint venture depreciation
555

 
58

 
FFO available to common shareholders of EPR Properties
$
93,056

 
$
61,024

 
 
 
 
 
 
 
FFO available to common shareholders of EPR Properties
$
93,056

 
$
61,024

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

 

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

 

 
Diluted FFO available to common shareholders of EPR Properties
$
96,934

 
$
61,024

 
 
 
 
 
 
FFOAA: (A)
 
 
 
 
FFO available to common shareholders of EPR Properties
$
93,056

 
$
61,024

 
Costs associated with loan refinancing or payoff

 
31,943

 
Transaction costs
5,123

 
609

 
Termination fee included in gain on sale
5,001

 

 
Deferred income tax (benefit) expense
(609
)
 
428

 
FFOAA available to common shareholders of EPR Properties
$
102,571

 
$
94,004

 
 
 
 
 
 
FFOAA available to common shareholders of EPR Properties
$
102,571

 
$
94,004

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

 
1,940

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

 
1,939

 
Diluted FFOAA available to common shareholders of EPR Properties
$
106,449

 
$
97,883

 
 
 
 
 
 
FFO per common share:
 
 
 
 
Basic
$
1.25

 
$
0.82

 
Diluted
1.23

 
0.82

 
FFOAA per common share:
 
 
 
 
Basic
$
1.37

 
$
1.27

 
Diluted
1.36

 
1.26

 
Shares used for computation (in thousands):
 
 
 
 
Basic
74,679

 
74,146

 
Diluted
74,725

 
74,180

 
 
 
 
 
 
 
Weighted average shares outstanding-diluted EPS
74,725

 
74,180

 
Effect of dilutive Series C preferred shares
2,145

 
2,098

 
Adjusted weighted average shares outstanding-diluted Series C
76,870

 
76,278

 
Effect of dilutive Series E preferred shares
1,622

 
1,598

 
Adjusted weighted average shares outstanding-diluted Series C and Series E
78,492

 
77,876

 
 
 
 
 
 
Other financial information:
 
 
 
 
Straight-lined rental revenue
$
2,414

 
$
1,874

 
Dividends per common share
$
1.125

 
$
1.080

 
 
 

(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 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 FFO as adjusted (FFOAA). Management believes it is useful to provide FFOAA as a supplemental measure to GAAP net income available to common shareholders and earnings per share. FFOAA is FFO plus costs (gain) associated with loan refinancing or payoff, transaction costs, severance expense, litigation settlement 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 on insurance recovery and deferred tax benefit (expense). FFO and FFOAA are non-GAAP financial measures. FFO and FFOAA 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 FFOAA 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 FFO and FFOAA per share for the three months ended March 31, 2019. Therefore, the additional 2.1 million common shares 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 FFO per share and diluted FFOAA per share for the three months ended March 31, 2019.

The effect of the conversion of the 5.75% Series C cumulative 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 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.

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,
 
2019
 
2018
Net Debt: (B)
 
 
 
Debt
$
3,045,742

 
$
3,131,437

Deferred financing costs, net
32,838

 
28,558

Cash and cash equivalents
(11,116
)
 
(24,514
)
Net Debt
$
3,067,464

 
$
3,135,481

 
 
 
 
 
Three Months Ended March 31,
 
2019
 
2018
EBITDAre and Adjusted EBITDA:
 
 
 
Net income
$
65,349

 
$
29,538

Interest expense, net
33,826

 
34,337

Income tax (benefit) expense
(605
)
 
1,020

Depreciation and amortization
39,743

 
37,684

Gain on sale of real estate
(6,328
)
 

Costs associated with loan refinancing or payoff

 
31,943

Equity in income from joint ventures
(489
)
 
(51
)
EBITDAre (for the quarter) (C)
$
131,496

 
$
134,471

 
 
 
 
Transaction costs
5,123

 
609

Prepayment fees
(900
)
 

Adjusted EBITDA (for the quarter)
$
135,719

 
$
135,080

 
 
 
 
Adjusted EBITDA (1) (D)
$
542,876

 
$
540,320

 
 
 
 
Net Debt/Adjusted EBITDA Ratio
5.7

 
5.8

 
 
 
 
(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 disposition of real estate, impairment losses on 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, severance expense, litigation settlement



expense, impairment of direct financing lease (allowance for lease loss portion), the provision for loan losses, transaction costs and prepayment fees, 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 are nearly $7.0 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 (EARNINGS RELEASE PRESENTATION)

q12019earningscall
Q1 2019 EARNINGS CALL APRIL 30, 2019


 
INTRODUCTORY COMMENTS This information is as of the date indicated and, to our knowledge, was timely and accurate when presented. We are under no obligation to update or remove outdated information other than as required by applicable law or regulation. 2


 
HEADLINES 1. Solid Fundamentals, Continued Investment Spending Momentum 3


 
HEADLINES 1. Solid Fundamentals, Continued Investment Spending Momentum 2. Investment Segments Remain Healthy 4


 
HEADLINES 1. Solid Fundamentals, Continued Investment Spending Momentum 2. Investment Segments Remain Healthy 3. New Leadership for Focused Growth 5


 
HEADLINES 1. Solid Fundamentals, Continued Investment Spending Momentum 2. Investment Segments Remain Healthy 3. New Leadership for Focused Growth 4. Significant Growth Capacity 6


 
PORTFOLIO UPDATE 7


 
PORTFOLIO STATISTICS $6.9B+ TOTAL INVESTMENTS 395 PROPERTIES IN SERVICE 99% OCCUPANCY $174.6M Q1 INVESTMENT SPENDING 1.86X RENT * Coverage is weighted average for the segments. Theatres and Family Entertainment Centers data is COVERAGE* TTM December 2018. Golf Entertainment Complexes and Other Recreation data is TTM December 2018. Ski Area data is TTM April 2018 and Attractions data is TTM August 2018. Public Charter School data is 8 TTM June 2018, Private school data is TTM June 2018 and Early Childhood Education data is TTM December 2018.


 
ENTERTAINMENT SEGMENT HIGHLIGHTS UPDATES • As anticipated Q1 2019 Box Office revenue softer vs. prior year − 2018 period included Black Panther which made for a difficult comp $3.1B • Avengers: Endgame largest opening weekend in history of North INVESTED American Box Office* 175 PROPERTIES IN SERVICE 24 OPERATORS** MEGAPLEX THEATRES 1.84x RENT COVERAGE $117.9 Q1 INVESTMENT SPENDING FAMILY ENTERTAINMENT CENTERS ENTERTAINMENT RETAIL CENTERS *Source: Box Office Mojo // **Does not include operators at ERCs 9


 
RECREATION SEGMENT UPDATES HIGHLIGHTS • Ski attendance up 16% and revenue up 14% through February • Investment spending $2.3B INVESTED – Kartrite Waterpark Hotel grand opening scheduled for May 10 – Anticipate Schlitterbahn mortgage note will be paid off during Q2 o Extended the maturity to June 1, 2019 79 PROPERTIES IN SERVICE 3 PROPERTIES UNDER DEVELOPMENT* GOLF ENTERTAINMENT COMPLEXES ATTRACTIONS 18 OPERATORS 2.12x RENT COVERAGE $44.2 SKI AREAS OTHER RECREATION Q1 INVESTMENT SPENDING * Properties not yet in service 10


 
EDUCATION SEGMENT UPDATES HIGHLIGHTS • Received $33.7 million in disposition proceeds • Investment spending of $12.3M primarily on build-to-suit $1.4B developments and redevelopments INVESTED 140 PROPERTIES IN SERVICE 4 PROPERTIES UNDER DEVELOPMENT* PUBLIC CHARTER SCHOOLS 57 OPERATORS 1.37x RENT COVERAGE PRIVATE SCHOOLS EARLY CHILDHOOD EDUCATION $12.3 Q1 INVESTMENT SPENDING *Properties not yet in service 11


 
FINANCIAL REVIEW 12


 
FINANCIAL HIGHLIGHTS FINANCIAL PERFORMANCE Quarter ended March 31, (In millions except per-share data) 2019 2018 $ CHANGE % CHANGE Total Revenue $164.5 $155.0 $9.5 6% Net Income - Common 59.3 23.5 35.8 152% FFO – Common* 93.1 61.0 32.1 53% FFO as adj. – Common* 102.6 94.0 8.6 9% Net Income/share – Common 0.79 0.32 0.47 147% FFO/share – Common* 1.23 0.82 0.41 50% FFO/share - Common, as adj.* 1.36 1.26 0.10 8% * See investor supplementals for the applicable periods for definitions and calculations of these non- GAAP measures 13


 
LEASE ACCOUNTING IMPACT OF ADOPTION ASC 842 - LEASES (In millions) Adoption Entries – January 1, 2019 Operating lease right-of-use asset $215 Straight-line receivable $24 Operating lease liability $239 Quarter Ended – March 31, 2019 Rental revenue $7.9 Operating ground lease expense (property $5.7 operating expense) Tenant reimbursed expenses (property operating $2.2 expense) 14


 
FINANCIAL HIGHLIGHTS KEY RATIOS Quarter ended March 31, 2019 2018 Fixed charge coverage 3.2x 3.2x Debt service coverage 3.7x 3.7x Interest coverage 3.7x 3.7x Net debt to Adjusted EBITDA 5.7x 5.8x FFO as adjusted payout 83% 86% *See investor supplementals for the applicable periods for definitions and calculations for these non-GAAP measures. Ratios exclude all termination and prepayment fees except FFO as adjusted payout percentage. 15


 
CAPITAL MARKETS & LIQUIDITY UPDATE 16


 
CAPITAL MARKETS UPDATE TOTAL DEBT IS $3.0B AT 3/31/19 • $2.9B is fixed rate or fixed through interest rate swaps, wtd. avg. = 4.6% • $70M outstanding on $1B revolver at 3/31/19; $11.1M unrestricted cash • Weighted average debt maturity of ~7 years; No debt maturities until 2022 LOW COST EQUITY ISSUANCE • Issued 1.1M common shares under our DSPP for net proceeds of $78.6M. INTEREST RATE SWAP ACTIVITY • Subsequent to 3/31/19, entered into an int. rate swap agreement to fix the int. rate at 3.35% on the remaining $50.0M of our $400M term loan through 2/7/22. 17


 
CONFIRMING 2019 GUIDANCE 2019 GUIDANCE FF0 AS ADJUSTED PER SHARE Guidance $5.30 - $5.50 INVESTMENT SPENDING Guidance $600M - $800M DISPOSITION PROCEEDS Revised Guidance $300M - $400M Prior Guidance $100M - $200M 18


 
CLOSING COMMENTS 19


 
EPR Properties 909 Walnut Street, Suite 200 Kansas City, MO 64106 www.eprkc.com 816-472-1700 [email protected]


 
(Back To Top)

Section 4: EX-99.3 (SUPPLEMENTAL OPERATING AND FINANCIAL DATA)

Exhibit



Exhibit 99.3


397707049_eprsupplementalcoverva07.jpg




397707049_image0a17.jpg                
Supplemental Operating and Financial Data
First Quarter Ended March 31, 2019








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 Total Revenue
Net Asset Value (NAV) Components
Annualized GAAP Net Operating Income
Guidance
Definitions-Non-GAAP Financial Measures
Appendix-Reconciliation of Certain Non-GAAP Financial Measures


397707049_image5a08.jpg
 
 
Q1 2019 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.



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Q1 2019 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.

 
397707049_eprsegmentsv2a04.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



397707049_image5a08.jpg
 
 
Q1 2019 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
 
Greg Zimmerman
Senior Vice President, General Counsel and Secretary
 
Executive Vice President and Chief Investment Officer
 
 
 
Tonya Mater
 
Mike Hirons
Vice President and Chief Accounting Officer
 
Senior Vice President - Strategy and Asset Management
 
 
 
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
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
Raymond James & Associates
Collin Mings
727-567-2585
RBC Capital Markets
Michael Carroll
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.

397707049_image5a08.jpg
 
 
Q1 2019 Supplemental
Page 5
 
 
 




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

 
 
 
 
 
 
THREE MONTHS ENDED MARCH 31,
 
Operating Information:
2019
 
2018
 
Revenue
$
164,542

 
$
154,968

 
Net income available to common shareholders of EPR Properties
59,315

 
23,502

 
EBITDAre (1)
131,496

 
134,471

 
Adjusted EBITDA (1)
135,719

 
135,080

 
Interest expense, net
33,826

 
34,337

 
Capitalized interest
3,137

 
2,244

 
Straight-lined rental revenue
2,414

 
1,874

 
Dividends declared on preferred shares
6,034

 
6,036

 
Dividends declared on common shares
84,343

 
80,262

 
General and administrative expense
12,130

 
12,324

 
 
 
 
 
 
 
MARCH 31,
 
Balance Sheet Information:
2019
 
2018
 
Total assets
$
6,431,231

 
$
6,238,866

 
Accumulated depreciation
920,409

 
776,404

 
Total assets before accumulated depreciation (gross assets)
7,351,640

 
7,015,270

 
Cash and cash equivalents
11,116

 
24,514

 
Debt
3,045,742

 
3,131,437

 
Deferred financing costs, net
32,838

 
28,558

 
Net debt (1)
3,067,464

 
3,135,481

 
Equity
2,912,779

 
2,875,594

 
Common shares outstanding
75,483

 
74,319

 
Total market capitalization (using EOP closing price)
9,243,164

 
7,623,911

 
Net debt/total market capitalization
33
%
 
41
%
 
Net debt/gross assets
42
%
 
45
%
 
Net debt/Adjusted EBITDA (2)
5.7

 
5.8

 
Adjusted net debt/Annualized adjusted EBITDA (1)(3)(4)
5.4

 
5.6

 
 
 
 
 
 
(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 38 under the reconciliation of Adjusted EBITDA and Annualized Adjusted EBITDA. See pages 29 through 31 for definitions.

397707049_image5a08.jpg
 
 
Q1 2019 Supplemental
Page 6
 
 
 




SELECTED BALANCE SHEET INFORMATION
(UNAUDITED, DOLLARS IN THOUSANDS)
 
 
 
 
 
 
 
 
 
 
 
 
 
ASSETS
 
1ST QUARTER 2019
 
4TH QUARTER 2018
 
3RD QUARTER 2018
 
2ND QUARTER 2018
 
1ST QUARTER 2018
 
4TH QUARTER 2017
Rental properties:
 
 
 
 
 
 
 
 
 
 
 
 
Entertainment
 
$
3,018,987

 
$
2,909,024

 
$
2,875,959

 
$
2,854,274

 
$
2,812,120

 
$
2,762,801

Recreation
 
1,610,071

 
1,614,100

 
1,502,639

 
1,476,759

 
1,452,087

 
1,420,690

Education
 
1,188,959

 
1,209,393

 
1,204,851

 
1,175,973

 
1,170,548

 
1,005,340

Other
 
174,690

 
174,714

 
156,786

 
156,786

 
156,786

 
156,734

Less: accumulated depreciation
 
(920,409
)
 
(883,174
)
 
(848,280
)
 
(810,604
)
 
(776,404
)
 
(741,334
)
Land held for development
 
28,080

 
34,177

 
31,076

 
31,076

 
33,693

 
33,692

Property under development
 
315,237

 
287,546

 
289,228

 
268,090

 
249,931

 
257,629

Operating lease right-of-use assets
 
211,299

 

 

 

 

 

Mortgage notes receivable: (1)
 
 
 


 
 
 
 
 
 
 
 
Entertainment
 

 

 
23,327

 
23,321

 
31,061

 
31,105

Recreation
 
375,094

 
368,655

 
365,100

 
439,759

 
614,405

 
602,145

Education
 
152,533

 
148,812

 
184,273

 
178,348

 
174,371

 
337,499

Investment in direct financing leases, net
 
20,616

 
20,558

 
20,495

 
58,305

 
58,101

 
57,903

Investment in joint ventures
 
35,188

 
34,486

 
5,018

 
4,999

 
5,538

 
5,602

Cash and cash equivalents
 
11,116

 
5,872

 
74,153

 
3,017

 
24,514

 
41,917

Restricted cash
 
11,166

 
12,635

 
22,031

 
11,283

 
15,640

 
17,069

Accounts receivable
 
111,146

 
98,369

 
104,757

 
97,804

 
88,750

 
93,693

Other assets
 
87,458

 
96,223

 
102,657

 
135,034

 
127,725

 
109,008

Total assets
 
$
6,431,231

 
$
6,131,390

 
$
6,114,070

 
$
6,104,224

 
$
6,238,866

 
$
6,191,493

 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
117,746

 
$
168,463

 
$
138,829

 
$
122,359

 
$
117,583

 
$
136,929

Operating lease liabilities
 
235,612

 

 

 

 

 

Common dividends payable
 
28,306

 
26,765

 
26,761

 
26,765

 
26,755

 
25,203

Preferred dividends payable
 
6,034

 
6,034

 
6,036

 
6,036

 
6,036

 
4,982

Unearned rents and interest
 
85,012

 
79,051

 
90,287

 
79,121

 
81,461

 
68,227

Line of credit
 
70,000

 
30,000

 

 
30,000

 
570,000

 
210,000

Deferred financing costs, net
 
(32,838
)
 
(33,941
)
 
(35,033
)
 
(36,020
)
 
(28,558
)
 
(32,852
)
Other debt
 
3,008,580

 
2,989,995

 
2,989,995

 
2,989,995

 
2,589,995

 
2,851,679

Total liabilities
 
3,518,452

 
3,266,367

 
3,216,875

 
3,218,256

 
3,363,272

 
3,264,168

Equity:
 
 
 
 
 
 
 
 
 
 
 
 
Common stock and additional paid-in- capital
 
3,597,916

 
3,505,266

 
3,497,055

 
3,492,333

 
3,487,902

 
3,479,755

Preferred stock at par value
 
148

 
148

 
148

 
148

 
148

 
148

Treasury stock
 
(146,906
)
 
(130,728
)
 
(129,801
)
 
(129,048
)
 
(128,707
)
 
(121,591
)
Accumulated other comprehensive income
 
8,397

 
12,085

 
19,246

 
17,497

 
16,481

 
12,483

Distributions in excess of net income
 
(546,776
)
 
(521,748
)
 
(489,453
)
 
(494,962
)
 
(500,230
)
 
(443,470
)
Total equity
 
2,912,779

 
2,865,023

 
2,897,195

 
2,885,968

 
2,875,594

 
2,927,325

Total liabilities and equity
 
$
6,431,231

 
$
6,131,390

 
$
6,114,070

 
$
6,104,224

 
$
6,238,866

 
$
6,191,493

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes related accrued interest receivable.

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Q1 2019 Supplemental
Page 7
 
 
 




SELECTED OPERATING DATA
(UNAUDITED, DOLLARS IN THOUSANDS)
 
 
 
 
 
 
 
 
 
 
 
 
 
1ST QUARTER 2019
 
4TH QUARTER 2018
 
3RD QUARTER 2018
 
2ND QUARTER 2018
 
1ST QUARTER 2018
 
4TH QUARTER 2017
Rental revenue:

 
 
 
 
 
 
 
 
 
 
Entertainment
$
80,513

 
$
76,742

 
$
75,552

 
$
74,640

 
$
74,848

 
$
74,383

Recreation
40,529

 
38,732

 
36,215

 
34,443

 
33,432

 
33,909

Education
26,707

 
27,757

 
26,851

 
25,649

 
22,385

 
12,862

Other
2,974

 
2,284

 
2,287

 
2,287

 
2,259

 
2,292

Mortgage and other financing income:


 
 
 
 
 
 
 
 
 
 
Entertainment
56

 
4,457

 
612

 
2,100

 
802

 
981

Recreation
9,312

 
8,277

 
29,678

 
57,540

 
13,705

 
13,590

Education
4,107

 
7,803

 
4,849

 
5,562

 
6,907

 
9,106

Other income
344

 
435

 
365

 
646

 
630

 
577

Total revenue
$
164,542

 
$
166,487

 
$
176,409

 
$
202,867

 
$
154,968

 
$
147,700

 


 
 
 
 
 
 
 
 
 
 
Property operating expense
15,793

 
8,890

 
6,968

 
7,334

 
7,564

 
12,891

Other expense

 
325

 
118

 

 

 
242

General and administrative expense
12,130

 
12,165

 
11,424

 
12,976

 
12,324

 
9,596

Severance expense

 
5,938

 

 

 

 

Litigation settlement expense

 

 

 
2,090

 

 

Costs associated with loan refinancing or payoff

 

 

 
15

 
31,943

 
58

Interest expense, net
33,826

 
33,515

 
33,576

 
34,079

 
34,337

 
35,271

Transaction costs
5,123

 
1,583

 
1,101

 
405

 
609

 
135

Impairment charges

 
10,735

 

 
16,548

 

 

Depreciation and amortization
39,743

 
39,541

 
38,623

 
37,582

 
37,684

 
37,027

Income before equity in income in joint ventures and other items
57,927

 
53,795

 
84,599

 
91,838

 
30,507

 
52,480

Equity in income (loss) from joint ventures
489

 
(5
)
 
20

 
(88
)
 
51

 
(14
)
Gain on sale of real estate
6,328

 
349

 
2,215

 
473

 

 
13,480

Gain on sale of investment in direct financing leases

 

 
5,514

 

 

 

Income tax benefit (expense)
605

 
(108
)
 
(515
)
 
(642
)
 
(1,020
)
 
(383
)
Net income
65,349

 
54,031

 
91,833

 
91,581

 
29,538

 
65,563

Preferred dividend requirements
(6,034
)
 
(6,034
)
 
(6,036
)
 
(6,036
)
 
(6,036
)
 
(6,438
)
Preferred share redemption costs

 

 

 

 

 
(4,457
)
Net income available to common shareholders of EPR Properties
$
59,315

 
$
47,997

 
$
85,797

 
$
85,545

 
$
23,502

 
$
54,668

 
 
 
 
 
 
 
 
 
 
 
 

397707049_image5a08.jpg
 
 
Q1 2019 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 2019
 
4TH QUARTER 2018
 
3RD QUARTER 2018
 
2ND QUARTER 2018
 
1ST QUARTER 2018
 
4TH QUARTER 2017
Net income available to common shareholders of EPR Properties
 
$
59,315

 
$
47,997

 
$
85,797

 
$
85,545

 
$
23,502

 
$
54,668

Gain on sale of real estate
 
(6,328
)
 
(349
)
 
(2,215
)
 
(473
)
 

 
(13,480
)
Gain on sale of investment in direct financing leases
 

 

 
(5,514
)
 

 

 

Impairment charges
 

 
10,735

 

 
16,548

 

 

Real estate depreciation and amortization
 
39,514

 
39,297

 
38,388

 
37,359

 
37,464

 
36,797

Allocated share of joint venture depreciation
 
555

 
56

 
54

 
58

 
58

 
55

FFO available to common shareholders of EPR Properties
 
$
93,056

 
$
97,736

 
$
116,510

 
$
139,037

 
$
61,024

 
$
78,040

 
 
 
 
 
 
 
 
 
 
 
 
 
FFO available to common shareholders of EPR Properties
 
$
93,056

 
$
97,736

 
$
116,510

 
$
139,037

 
$
61,024

 
$
78,040

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

 
1,939

 
1,940

 
1,940

 

 
1,940

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

 
1,939

 
1,939

 

 

 
1,940

Diluted FFO available to common shareholders of EPR Properties
 
$
96,934

 
$
101,614

 
$
120,389

 
$
140,977

 
$
61,024

 
$
81,920

 
 
 
 
 
 
 
 
 
 
 
 
 
FUNDS FROM OPERATIONS AS ADJUSTED (1):
 
 
 
 
 
 
 
 
 
 
 
 
FFO available to common shareholders of EPR Properties
 
$
93,056

 
$
97,736

 
$
116,510

 
$
139,037

 
$
61,024

 
$
78,040

Costs associated with loan refinancing or payoff
 

 

 

 
15

 
31,943

 
58

Transaction costs
 
5,123

 
1,583

 
1,101

 
405

 
609

 
135

Severance expense
 

 
5,938

 

 

 

 

Litigation settlement expense
 

 

 

 
2,090

 

 

Preferred share redemption costs
 

 

 

 

 

 
4,457

Termination fee included in gain on sale
 
5,001

 

 
1,864

 

 

 
13,275

Deferred income tax (benefit) expense
 
(609
)
 
(182
)
 
92

 
235

 
428

 
(99
)
FFO as adjusted available to common shareholders of EPR Properties
 
$
102,571

 
$
105,075

 
$
119,567

 
$
141,782

 
$
94,004

 
$
95,866

 
 
 
 
 
 
 
 
 
 
 
 
 
FFO as adjusted available to common shareholders of EPR Properties
 
$
102,571

 
$
105,075

 
$
119,567

 
$
141,782

 
$
94,004

 
$
95,866

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

 
1,939

 
1,940

 
1,940

 
1,940

 
1,940

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

 
1,939

 
1,939

 
1,939

 
1,939

 
1,940

Diluted FFO as adjusted available to common shareholders of EPR Properties
 
$
106,449

 
$
108,953

 
$
123,446

 
$
145,661

 
$
97,883

 
$
99,746

FFO per common share:
 


 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.25

 
$
1.31

 
$
1.57

 
$
1.87

 
$
0.82

 
$
1.06

Diluted
 
1.23

 
1.30

 
1.54

 
1.84

 
0.82

 
1.06

FFO as adjusted per common share:
 


 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.37

 
$
1.41

 
$
1.61

 
$
1.91

 
$
1.27

 
$
1.30

Diluted
 
1.36

 
1.39

 
1.58

 
1.87

 
1.26

 
1.29

Shares used for computation (in thousands):
 


 
 
 
 
 
 
 
 
 
 
Basic
 
74,679

 
74,343

 
74,345

 
74,329

 
74,146

 
73,774

Diluted
 
74,725

 
74,402

 
74,404

 
74,365

 
74,180

 
73,832

Effect of dilutive Series C preferred shares
 
2,145

 
2,133

 
2,122

 
2,110

 
2,098

 
2,083

Adjusted weighted-average shares outstanding-diluted Series C
 
76,870

 
76,535

 
76,526

 
76,475

 
76,278

 
75,915

Effect of dilutive Series E preferred shares
 
1,622

 
1,615

 
1,610

 
1,604

 
1,598

 
1,592

Adjusted weighted-average shares outstanding-diluted Series C and Series E
 
78,492

 
78,150

 
78,136

 
78,079

 
77,876

 
77,507

(1) See pages 29 through 31 for definitions.
 
 
 
 
 
 
 
 
 
 
 
 

397707049_image5a08.jpg
 
 
Q1 2019 Supplemental
Page 9
 
 
 




ADJUSTED FUNDS FROM OPERATIONS
(UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION)
ADJUSTED FUNDS FROM OPERATIONS ("AFFO") (1):
 
1ST QUARTER 2019
 
4TH QUARTER 2018
 
3RD QUARTER 2018
 
2ND QUARTER 2018
 
1ST QUARTER 2018
 
4TH QUARTER 2017
 
 

 
 
 
 
 
 
 
 
 
 
FFO available to common shareholders of EPR Properties
 
$
93,056

 
$
97,736

 
$
116,510

 
$
139,037

 
$
61,024

 
$
78,040

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
Costs associated with loan refinancing or payoff
 

 

 

 
15

 
31,943

 
58

Transaction costs
 
5,123

 
1,583

 
1,101

 
405

 
609

 
135

Severance expense
 

 
5,938

 

 

 

 

Litigation settlement expense
 

 

 

 
2,090

 

 

Preferred share redemption costs
 

 

 

 

 

 
4,457

Termination fees included in gain on sale
 
5,001

 

 
1,864

 

 

 
13,275

Deferred income tax (benefit) expense
 
(609
)
 
(182
)
 
92

 
235

 
428

 
(99
)
Non-real estate depreciation and amortization
 
229

 
244

 
235

 
223

 
220

 
230

Deferred financing fees amortization
 
1,502

 
1,490

 
1,470

 
1,439

 
1,398

 
1,588

Share-based compensation expense to management and trustees
 
3,280

 
3,816

 
3,687

 
3,817

 
3,791

 
3,576

Amortization of above/below market leases, net and tenant allowances
 
(59
)
 
(54
)
 
(55
)
 
(55
)
 
(417
)
 
(66
)
Maintenance capital expenditures (2)
 
(297
)
 
(336
)
 
(540
)
 
(527
)
 
(698
)
 
(1,207
)
Straight-lined rental revenue
 
(2,414
)
 
(3,216
)
 
(3,079
)
 
(2,060
)
 
(1,874
)
 
7,085

Non-cash portion of mortgage and other financing income
 
(1,014
)
 
(784
)
 
(819
)
 
(784
)
 
(656
)
 
(719
)
AFFO available to common shareholders of EPR Properties
 
$
103,798

 
$
106,235

 
$
120,466

 
$
143,835

 
$
95,768

 
$
106,353

 
 
 
 
 
 
 
 
 
 
 
 
 
AFFO available to common shareholders of EPR Properties
 
$
103,798

 
$
106,235

 
$
120,466

 
$
143,835

 
$
95,768

 
$
106,353

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

 
1,939

 
1,940

 
1,940

 
1,940

 
1,940

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

 
1,939

 
1,939

 
1,939

 
1,939

 
1,940

Diluted AFFO available to common shareholders of EPR Properties
 
$
107,676

 
$
110,113

 
$
124,345

 
$
147,714

 
$
99,647

 
$
110,233

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding (in thousands)
 
74,725

 
74,402

 
74,404

 
74,365

 
74,180

 
73,832

Effect of dilutive Series C preferred shares
 
2,145

 
2,133

 
2,122

 
2,110

 
2,098

 
2,083

Effect of dilutive Series E preferred shares
 
1,622

 
1,615

 
1,610

 
1,604

 
1,598