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Section 1: 8-K (8-K)

epr-20201104
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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): November 4, 2020
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,Missouri64106
(Address of principal executive offices) (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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common shares, par value $0.01 per shareEPRNew York Stock Exchange
5.75% Series C cumulative convertible preferred shares, par value $0.01 per shareEPR PrCNew York Stock Exchange
9.00% Series E cumulative convertible preferred shares, par value $0.01 per shareEPR PrENew York Stock Exchange
5.75% Series G cumulative redeemable preferred shares, par value $0.01 per shareEPR PrGNew York Stock Exchange

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

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 November 4, 2020, the Company announced its results of operations and financial condition for the third quarter and nine months ended September 30, 2020. 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 November 4, 2020, the Company made available on its website an investor slide presentation and supplemental operating and financial data for the third quarter and nine months ended September 30, 2020, 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 November 4, 2020 issued by EPR Properties announcing its results of operations and financial condition for the third quarter and nine months ended September 30, 2020.
  Investor slide presentation for the third quarter and nine months ended September 30, 2020, made available by EPR Properties on November 4, 2020.
Supplemental Operating and Financial Data for the third quarter and nine months ended September 30, 2020, made available by EPR Properties on November 4, 2020.
104Cover Page Interactive Data File (embedded within the Inline XBRL document)





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: November 4, 2020



















































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Section 2: EX-99.1 (PRESS RELEASE)

Document

Exhibit 99.1



EPR PROPERTIES REPORTS THIRD QUARTER 2020 RESULTS

Kansas City, MO, November 4, 2020 -- EPR Properties (NYSE:EPR) today announced operating results for the third quarter and nine months ended September 30, 2020 (dollars in thousands, except per share data):    
 Three Months Ended September 30,Nine Months Ended September 30,
 2020 (1)2019 (2)2020 (1)2019 (2)
Total revenue from continuing operations$63,877 $169,356 $321,249 $481,623 
Net (loss) income available to common shareholders(91,938)27,969 (129,853)147,844 
Net (loss) income available to common shareholders per diluted common share(1.23)0.36 (1.70)1.94 
Funds From Operations as adjusted (FFOAA) (a non-GAAP financial measure)(11,699)115,309 95,645 323,519 
FFOAA per diluted common share (a non-GAAP financial measure)(0.16)1.46 1.25 4.19 
Adjusted Funds From Operations (AFFO) (a non-GAAP financial measure)2,698 113,647 126,078 323,567 
AFFO per diluted common share (a non-GAAP financial measure)0.04 1.44 1.65 4.19 
(1) The operating results for the three and nine months ended September 30, 2020, include $49.8 million of straight-line and other receivable write-offs, or $0.67 per share, related to moving two customers to cash basis for revenue recognition purposes at the end of the third quarter. These write-offs are reflected in all metrics in these columns except that AFFO per diluted share for the three and nine months ended September 30, 2020 excludes the impact of the straight-line portion of these write-offs totaling $23.9 million.

(2) The operating results of the Company's public charter school portfolio for the three and nine months ended September 30, 2019, include $11.3 million and $22.9 million in termination fees, respectively, and are included in all metrics in these columns except for total revenue from continuing operations. The remaining public charter school portfolio was sold subsequent to September 30, 2019.

Third Quarter Company Headlines

Collections Ramping Up - For July, August and September, cash collections from customers continued to improve and were approximately 35%, 40% and 48% of contractual cash revenue, respectively.
Property Openings Increase - Approximately 93% of non-theatre properties and 63% of theatre properties were open as of November 3, 2020. In addition, New York and California are making progress in reopening theatres.
Strong Liquidity Position - The Company had minimal cash burn during the quarter and with nearly $1.0 billion of cash on hand at quarter-end, the Company believes it has sufficient liquidity to navigate through the impact of the pandemic.
Extension of Covenant Waivers - Waivers of certain covenants related to the Company’s bank credit facilities have been extended through December 31, 2021, providing additional flexibility to work through issues with customers as needed. The Company is currently negotiating a similar covenant waiver extension relating to its private placement notes.
Two Customers Placed on Cash Basis – At the end of the quarter, two customers were placed on cash basis for revenue recognition purposes and, as a result, all of the associated receivables related to these two customers were written-off.

CEO Comments
“As the impact of the COVID-19 pandemic persists, we continue to focus on ensuring our strong liquidity position and helping to facilitate on-going property openings and tenant recovery,” stated Greg Silvers, Company President and CEO. “We limited our cash burn during the quarter and reached rent resolution with the vast majority of our customers and have seen an improvement in cash collections. We have also extended our debt covenant waivers on our bank credit facilities to provide additional flexibility through the end of next year. While uncertainty remains, particularly around the timing of a widespread reopening of theatres, we are encouraged by the return to business of the rest of our customers and our stable balance sheet position.”






COVID-19 Response and Update

Collections and Property Openings
Approximately 93% of the Company's non-theatre and 63% of the Company's theatre locations were open for business as of November 3, 2020. Cash collections from tenants and borrowers during the third quarter continued to improve and were 35%, 40% and 48% for July, August and September, respectively. The Company has reached resolution with customers representing approximately 90% of its annualized pre-COVID contractual cash rent and interest payments, however, additional deferral agreements related to certain theatre tenants are currently being negotiated as discussed below. Based on the Company's current agreements and ongoing negotiations with customers, permanent rent and interest payment adjustments are currently expected to lower annualized pre-COVID contractual cash rent and interest payments by approximately 5% to 7%. However, there can be no assurance that additional permanent rent or interest payment reductions or other term modifications will not occur in future periods in light of the continued adverse impact of the pandemic, particularly ongoing uncertainty in the theatre industry.

Theatre Update
The customers occupying the Company's theatre properties are facing several challenges as they diligently try to reopen. As a result of the impact of the COVID-19 pandemic, some of our theatre locations remain closed due to state and local restrictions, including key markets in New York and California. Other theatres are currently closed by operator choice, including 52 of our theatres operated by Regal Cinemas ("Regal"), a subsidiary of Cineworld Group, as movie studios continue to delay the release of blockbuster movies in hopes that larger audiences will be available as additional markets open. The delay of these movie releases has had a significant negative impact on current and expected box office performance. Although the Company previously completed deferral agreements with respect to substantially all of its theatre properties, the Company is currently working on additional deferral agreements with certain of its theatre customers as a result of these continuing challenges.

Due to the challenges facing theatres and the continued uncertainty caused by the pandemic, at the end of the third quarter, the Company determined it was appropriate to begin recognizing revenue from Regal on a cash basis. Accordingly, the Company recorded write-offs of accounts receivable of approximately $49.8 million, or $0.67 per share, at the end of the quarter ended September 30, 2020 related to Regal as well as one attraction tenant where a similar assessment was made that cash accounting is appropriate. The write-offs were recorded primarily as a reduction in rental revenue and consisted of $23.9 million in straight line rent receivables and $25.9 million of other receivables.

Below provides an update of classification of customers as of September 30, 2020:
Classification of Customers
($ in millions)




 Annualized Revenue (1)
No Payment Deferral $107 17 %
Payments Deferred and Recognized as Revenue During Deferral Period233 37 %
Payments Deferred But Not Recognized as Revenue During Deferral Period29 %
Cash Basis/Lease Restructurings (2)245 39 %
New Vacancies10 %
Total$624 100 %
(1) Represents annualized pre-COVID contractual revenue which includes cash rent (including tenant reimbursements) and interest payments.
(2) Includes leases for tenants accounted for on a cash basis and/or leases for tenants that have been or are expected to be restructured. This category includes AMC and Regal.

Strong Liquidity Position
The Company remains focused on maintaining strong liquidity and financial flexibility through the pandemic. The Company’s cash provided by operations (which includes interest payments) of $2.0 million, less preferred dividends paid of $6.0 million, resulted in an outflow of $4.0 million during the quarter. The Company has no scheduled debt maturities until 2022 and had over $985.0 million of cash on hand at quarter-end. As discussed in more detail below, the Company amended the agreement governing its bank credit facilities to, among other things, extend the waiver of the Company's obligations to comply with certain covenants through the earlier of December 31, 2021, or when the Company provides notice that it elects to terminate the covenant relief period, subject to certain conditions.




Other Charges
As a result of the COVID-19 pandemic, the Company reassessed the expected holding periods of two Eat & Play properties during the third quarter, and determined that the estimated cash flows were not sufficient to recover the carrying values. Accordingly, during the three months ended September 30, 2020, the Company recognized non-cash impairment charges on real estate investments of $11.6 million for these two properties. Also during the third quarter, the Company recognized credit loss expense totaling $5.7 million that primarily related to reserving the outstanding principal balance of one note receivable due to recent changes in the borrower's financial status as a result of the COVID-19 pandemic.

During the third quarter, the Company recognized $18.4 million in income tax expense that primarily related to recognizing a full valuation allowance of $18.0 million on deferred tax assets related to the Company's taxable REIT subsidiary and Canadian tax paying entity as a result of the uncertainty of realization created by the COVID-19 pandemic.

Portfolio Update
The Company's total investments (a non-GAAP financial measure) were approximately $6.7 billion at September 30, 2020 with Experiential totaling $5.9 billion, or 89%, and Education totaling $0.8 billion, or 11%.

The Company's Experiential portfolio (excluding property under development) consisted of the following property types (owned or financed) at September 30, 2020:
180 theatre properties;
56 eat & play properties (including seven theatres located in entertainment districts);
18 attraction properties;
13 ski properties;
six experiential lodging properties;
one gaming property;
three cultural properties; and
seven fitness & wellness properties.

As of September 30, 2020, the Company's owned Experiential portfolio consisted of approximately 19.5 million square feet, which was 96.4% leased and included $44.1 million in property under development and $22.8 million in undeveloped land inventory.

The Company's Education portfolio consisted of the following property types (owned or financed) at September 30, 2020:
69 early childhood education center properties; and
16 private school properties.

As of September 30, 2020, the Company's owned Education portfolio consisted of approximately 1.9 million square feet, which was 100% leased and included $3.0 million in undeveloped land inventory.

The combined owned portfolio consisted of 21.4 million square feet and was 96.7% leased.

Investment Update
The Company's investment spending for the three months ended September 30, 2020 totaled $8.7 million (bringing the year-to-date investment spending to $62.3 million), and included spending on Experiential build-to-suit development and redevelopment projects.

Balance Sheet and Liquidity Update
At September 30, 2020, the Company's net debt to gross assets ratio (a non-GAAP Financial Measure) was 42%.

At September 30, 2020, the Company had $985.4 million of unrestricted cash on hand and $750.0 million outstanding under its $1.0 billion unsecured revolving credit facility. The Company has no scheduled debt maturities until 2022 when its unsecured revolving credit facility comes due.




During the quarter ended September 30, 2020, Moody's downgraded the credit rating for the Company's unsecured debt to Baa3. As a result, the interest rate spreads on the Company's outstanding borrowings under its bank credit facilities increased by 0.25%. Subsequent to September 30, 2020, Fitch and Standard and Poor's downgraded the credit ratings for the Company's unsecured debt to BB+. As a result, the interest rate payable on the Company's outstanding private placement notes increased by 0.60%. In addition, as a result of these downgrades, the Company is in the process of causing certain of its key subsidiaries to guarantee the Company's obligations under its bank credit facilities, private placement notes and other outstanding senior unsecured notes in accordance with existing agreements with the holders of such indebtedness.

On November 3, 2020, the Company amended the agreement governing its bank credit facilities (including its revolving credit facility and $400.0 million term loan). The amendment modified certain provisions and extended the waiver of the Company's obligation to comply with certain covenants under these facilities through December 31, 2021 in light of the continuing financial and operational impacts of the COVID-19 pandemic on the Company and its tenants and borrowers. The Company can elect to terminate the covenant relief period early, subject to certain conditions. The loans subject to the modifications continue to bear interest at the same higher rates during the covenant relief period as specified in the previous waiver, and will return to the original pre-waiver levels at the end of such period, subject to certain conditions. The rates during and after the covenant relief period continue to be subject to change based on long-term unsecured debt ratings, as defined in the agreements.

The amendment to the agreement governing the Company's bank credit facilities continues to impose additional restrictions on the Company during the covenant relief period, including limitations on certain investments, incurrences of indebtedness, capital expenditures, payment of dividends or other distributions, minimum liquidity and share repurchases, in each case subject to certain exceptions. The Company is currently negotiating a similar covenant waiver extension relating to its $340.0 million of private placement notes.

Dividend Information
The monthly cash dividend to common shareholders was suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. The Company is restricted from paying dividends on its common shares during the covenant relief period, subject to certain limited exceptions, and there can be no assurances as to the Company's ability to reinstitute cash dividend payments to common shareholders or the timing thereof.

The Board declared its regular quarterly dividends to preferred shareholders 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.

Conference Call Information
Management will host a conference call to discuss the Company's financial results on November 5, 2020 at 8:30 a.m. Eastern Time. The call may also include discussion of Company developments, and forward-looking and other material information about business and financial matters. The conference will be webcast and can be accessed via the Webcasts page in the Investor Center on the Company's website located at http://investors.eprkc.com/webcasts. To access the call, audio only, dial (866) 587-2930 and when prompted, provide the passcode 1372156.

You may watch a replay of the webcast by visiting the Webcasts page at http://investors.eprkc.com/webcasts.

Quarterly Supplemental
The Company's supplemental information package for the third quarter and nine months ended September 30, 2020 is available in the Investor Center on the Company's website located at http://investors.eprkc.com/earnings-supplementals.



EPR Properties
Consolidated Statements of (Loss) Income
(Unaudited, dollars in thousands except per share data)
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Rental revenue$55,591 $150,962 $288,165 $438,257 
Other income182 11,464 8,171 17,534 
Mortgage and other financing income8,104 6,930 24,913 25,832 
Total revenue63,877 169,356 321,249 481,623 
Property operating expense13,759 14,494 42,181 44,642 
Other expense2,680 11,403 15,012 19,494 
General and administrative expense10,034 11,600 31,454 35,540 
Severance expense— 1,521 — 1,941 
Costs associated with loan refinancing or payoff— 38,269 820 38,269 
Interest expense, net41,744 36,667 114,837 107,088 
Transaction costs2,776 5,959 4,622 18,005 
Credit loss expense5,707 — 10,383 — 
Impairment charges11,561 — 62,825 — 
Depreciation and amortization42,059 41,644 128,319 116,436 
(Loss) income before equity in (loss) income from joint ventures, other items and discontinued operations(66,443)7,799 (89,204)100,208 
Equity in (loss) income from joint ventures(1,044)(435)(3,188)524 
Impairment charges on joint ventures— — (3,247)— 
Gain on sale of real estate— 845 242 457 
(Loss) income before income taxes(67,487)8,209 (95,397)101,189 
Income tax (expense) benefit(18,417)600 (16,354)2,505 
(Loss) income from continuing operations$(85,904)$8,809 $(111,751)$103,694 
Discontinued operations:
Income from discontinued operations before other items— 11,736 — 32,304 
Gain on sale of real estate from discontinued operations— 13,458 — 29,948 
Income from discontinued operations— 25,194 — 62,252 
Net (loss) income(85,904)34,003 (111,751)165,946 
Preferred dividend requirements(6,034)(6,034)(18,102)(18,102)
Net (loss) income available to common shareholders of EPR Properties$(91,938)$27,969 $(129,853)$147,844 
Net (loss) income available to common shareholders of EPR Properties per share:
Continuing operations$(1.23)$0.04 $(1.70)$1.12 
Discontinued operations— 0.32 — 0.82 
Basic$(1.23)$0.36 $(1.70)$1.94 
Continuing operations$(1.23)$0.04 $(1.70)$1.12 
Discontinued operations— 0.32 — 0.82 
Diluted$(1.23)$0.36 $(1.70)$1.94 
Shares used for computation (in thousands):
Basic74,613 77,632 76,456 76,169 
Diluted74,613 77,664 76,456 76,207 



EPR Properties
Condensed Consolidated Balance Sheets
(Unaudited, dollars in thousands)
 September 30, 2020December 31, 2019
Assets
Real estate investments, net of accumulated depreciation of $1,072,201 and $989,254 at September 30, 2020 and December 31, 2019, respectively$5,067,657 $5,197,308 
Land held for development25,846 28,080 
Property under development44,103 36,756 
Operating lease right-of-use assets185,459 211,187 
Mortgage notes and related accrued interest receivable362,011 357,391 
Investment in joint ventures29,571 34,317 
Cash and cash equivalents985,372 528,763 
Restricted cash2,424 2,677 
Accounts receivable129,714 86,858 
Other assets75,053 94,174 
Total assets$6,907,210 $6,577,511 
Liabilities and Equity
Accounts payable and accrued liabilities$95,429 $122,939 
Operating lease liabilities225,379 235,650 
Dividends payable6,063 35,458 
Unearned rents and interest75,415 74,829 
Debt3,854,855 3,102,830 
Total liabilities4,257,141 3,571,706 
Total equity$2,650,069 $3,005,805 
Total liabilities and equity$6,907,210 $6,577,511 

The historical financial results of the public charter schools sold by the Company in 2019 are reflected in the Company's consolidated statements of income as discontinued operations for the three and nine months ended September 30, 2019. The operating results relating to discontinued operations are as follows (unaudited, dollars in thousands):
 Three Months Ended September 30, 2019Nine Months Ended September 30, 2019
Rental revenue$10,300 $31,058 
Mortgage and other financing income5,206 12,421 
Total revenue15,506 43,479 
Property operating expense169 585 
Costs associated with loan refinancing or payoff138 138 
Interest expense, net(27)(344)
Depreciation and amortization3,490 10,796 
Income from discontinued operations before other items11,736 32,304 
Gain on sale of real estate13,458 29,948 
Income from discontinued operations$25,194 $62,252 




Non-GAAP Financial Measures

Funds From Operations (FFO), Funds From Operations As Adjusted (FFOAA) and Adjusted Funds From Operations (AFFO)
The National Association of Real Estate Investment Trusts (“NAREIT”) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. Pursuant to the definition of FFO by the Board of Governors of NAREIT, the Company calculates FFO as net income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from disposition of real estate and impairment losses on real estate, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. The Company has calculated FFO for all periods presented in accordance with this definition.

In addition to FFO, the Company presents FFOAA and AFFO. FFOAA is presented by adding to FFO costs associated with loan refinancing or payoff, transaction costs, severance expense, preferred share redemption costs, impairment of operating lease right-of-use assets, termination fees associated with tenants' exercises of public charter school buy-out options and credit loss expense and subtracting deferred income tax (benefit) expense. AFFO is presented by adding to FFOAA non-real estate depreciation and amortization, deferred financing fees amortization, share-based compensation expense to management and Trustees and amortization of above and below market leases, net and tenant allowances; and subtracting maintenance capital expenditures (including second generation tenant improvements and leasing commissions), straight-lined rental revenue (removing impact of straight-lined ground sublease expense), and the non-cash portion of mortgage and other financing income.

FFO, FFOAA and AFFO are widely used measures of the operating performance of real estate companies and are provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share, and management provides FFO, FFOAA and AFFO herein because it believes this information is useful to investors in this regard. FFO, FFOAA and AFFO are non-GAAP financial measures. FFO, FFOAA and AFFO do not represent cash flows from operations as defined by GAAP and are not indicative that cash flows are adequate to fund all cash needs and are not to be considered alternatives to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO, FFOAA and AFFO the same way so comparisons with other REITs may not be meaningful.

The following table summarizes FFO, FFOAA and AFFO for the three and nine months ended September 30, 2020 and 2019 and reconciles such measures to net income available to common shareholders, the most directly comparable GAAP measure:

EPR Properties
Reconciliation of Non-GAAP Financial Measures
(Unaudited, dollars in thousands except per share data)
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
FFO:
Net (loss) income available to common shareholders of EPR Properties
$(91,938)$27,969 $(129,853)$147,844 
Gain on sale of real estate— (14,303)(242)(30,405)
Impairment of real estate investments, net (1)11,561 — 47,816 — 
Real estate depreciation and amortization41,791 44,863 127,467 126,475 
Allocated share of joint venture depreciation369 553 1,130 1,662 
Impairment charges on joint ventures— — 3,247 — 
FFO available to common shareholders of EPR Properties$(38,217)$59,082 $49,565 $245,576 
FFO available to common shareholders of EPR Properties$(38,217)$59,082 $49,565 $245,576 
Add: Preferred dividends for Series C preferred shares— — — 5,817 
Add: Preferred dividends for Series E preferred shares— — — 5,817 
Diluted FFO available to common shareholders of EPR Properties$(38,217)$59,082 $49,565 $257,210 



 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
FFOAA:
FFO available to common shareholders of EPR Properties$(38,217)$59,082 49,565 $245,576 
Costs associated with loan refinancing or payoff— 38,407 820 38,407 
Transaction costs2,776 5,959 4,622 18,005 
Severance expense— 1,521 — 1,941 
Termination fees included in gain on sale— 11,324 — 22,858 
Impairment of operating lease right-of-use assets (1)— — 15,009 — 
Credit loss expense5,707 — 10,383 — 
Deferred income tax expense (benefit)18,035 (984)15,246 (3,268)
FFOAA available to common shareholders of EPR Properties$(11,699)$115,309 $95,645 $323,519 
FFOAA available to common shareholders of EPR Properties$(11,699)$115,309 $95,645 $323,519 
Add: Preferred dividends for Series C preferred shares— 1,939 — 5,817 
Add: Preferred dividends for Series E preferred shares— 1,939 — 5,817 
Diluted FFOAA available to common shareholders of EPR Properties$(11,699)$119,187 $95,645 $335,153 
AFFO:
FFOAA available to common shareholders of EPR Properties$(11,699)$115,309 $95,645 $323,519 
Non-real estate depreciation and amortization268 271 852 757 
Deferred financing fees amortization1,498 1,552 4,783 4,571 
Share-based compensation expense to management and trustees3,410 3,372 10,382 9,832 
Amortization of above and below market leases, net and tenant allowances(124)(107)(384)(224)
Maintenance capital expenditures (2)(8,911)(2,370)(11,130)(3,177)
Straight-lined rental revenue17,969 (4,399)25,448 (10,036)
Straight-lined ground sublease expense 216 256 599 645 
Non-cash portion of mortgage and other financing income71 (237)(117)(2,320)
AFFO available to common shareholders of EPR Properties$2,698 $113,647 $126,078 $323,567 
AFFO available to common shareholders of EPR Properties$2,698 $113,647 $126,078 $323,567 
Add: Preferred dividends for Series C preferred shares— 1,939 — 5,817 
Add: Preferred dividends for Series E preferred shares— 1,939 — 5,817 
Diluted AFFO available to common shareholders of EPR Properties$2,698 $117,525 $126,078 $335,201 
FFO per common share:
Basic$(0.51)$0.76 $0.65 $3.22 
Diluted(0.51)0.76 0.65 3.21 
FFOAA per common share:
Basic$(0.16)$1.49 $1.25 $4.25 
Diluted(0.16)1.46 1.25 4.19 
AFFO per common share:
Basic$0.04 $1.46 $1.65 $4.25 
Diluted0.04 1.44 1.65 4.19 
Shares used for computation (in thousands):
Basic74,613 77,632 76,456 76,169 
Diluted74,613 77,664 76,456 76,207 
Weighted average shares outstanding-diluted EPS74,613 77,664 76,456 76,207 
Effect of dilutive Series C preferred shares— 2,170 — 2,158 
Effect of dilutive Series E preferred shares— 1,634 — 1,628 
Adjusted weighted average shares outstanding-diluted Series C and Series E74,613 81,468 76,456 79,993 
Other financial information:
Dividends per common share$— $1.1250 $1.5150 $3.3750 
Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of income for all periods.



(1) Impairment charges recognized during the nine months ended September 30, 2020 totaled $62.8 million, which was comprised of $47.8 million of impairments of real estate investments and $15.0 million of impairments of operating lease right-of-use assets.
(2) Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions.

The conversion of the 5.75% Series C cumulative convertible preferred shares and the 9.00% Series E cumulative convertible preferred shares would be dilutive to FFO per share for the nine months ended September 30, 2019 and FFOAA per share for the three and nine months ended September 30, 2019. Therefore, the additional common shares that would result from the conversion and the corresponding add-back of the preferred dividends declared on those shares are included in the calculation of diluted FFO and FFOAA per share for these periods.

Net Debt
Net Debt represents debt (reported in accordance with GAAP) adjusted to exclude deferred financing costs, net and reduced for cash and cash equivalents. By excluding deferred financing costs, net and reducing debt for cash and cash equivalents on hand, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. The Company believes this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding our financial condition. The Company's method of calculating Net Debt may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

Gross Assets
Gross Assets represents total assets (reported in accordance with GAAP) adjusted to exclude accumulated depreciation and reduced for cash and cash equivalents. By excluding accumulated depreciation and reducing cash and cash equivalents, the result provides an estimate of the investment made by the Company. The Company believes that investors commonly use versions of this calculation in a similar manner. The Company's method of calculating Gross Assets may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

Net Debt to Gross Assets
Net Debt to Gross Assets is a supplemental measure derived from non-GAAP financial measures that the Company uses to evaluate capital structure and the magnitude of debt to gross assets. The Company believes that investors commonly use versions of this ratio in a similar manner. The Company's method of calculating Net Debt to Gross Assets may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

EBITDAre
NAREIT developed EBITDAre as a relative non-GAAP financial measure of REITs, independent of a company's capital structure, to provide a uniform basis to measure the enterprise value of a company. Pursuant to the definition of EBITDAre by the Board of Governors of NAREIT, the Company calculates EBITDAre as net income, computed in accordance with GAAP, excluding interest expense (net), income tax (benefit) expense, depreciation and amortization, gains and losses from disposition of real estate, impairment losses on real estate, costs associated with loan refinancing or payoff and adjustments for unconsolidated partnerships, joint ventures and other affiliates.

Management provides EBITDAre herein because it believes this information is useful to investors as a supplemental performance measure as it can help facilitate comparisons of operating performance between periods and with other REITs. The Company's method of calculating EBITDAre may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDAre is not a measure of performance under GAAP, does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. This measure should not be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or cash flows or liquidity as defined by GAAP.

Adjusted EBITDA
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) for the quarter excluding severance expense, credit loss expense, transaction costs, impairment losses on operating lease right-of-use assets and prepayment fees. For the three months ended September 30, 2020, Adjusted EBITDA was further adjusted to reflect Adjusted EBITDA on a cash basis related to Regal and one attraction tenant.




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 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.

Reconciliations of debt and total assets (all reported in accordance with GAAP) to Net Debt, Gross Assets, Net Debt to Gross Assets, EBITDAre and Adjusted EBITDA (each of which is a non-GAAP financial measure) are included in the following tables (unaudited, in thousands):
September 30,
20202019
Net Debt:
Debt$3,854,855 $3,101,611 
Deferred financing costs, net35,140 38,384 
Cash and cash equivalents(985,372)(115,839)
Net Debt$2,904,623 $3,024,156 
Gross Assets:
Total Assets$6,907,210 $6,633,290 
Accumulated depreciation1,072,201 989,480 
Cash and cash equivalents(985,372)(115,839)
Gross Assets$6,994,039 $7,506,931 
Net Debt to Gross Assets42 %40 %
Three Months Ended September 30,
20202019
EBITDAre and Adjusted EBITDA:
Net (loss) income$(85,904)$34,003 
Interest expense, net41,744 36,640 
Income tax expense (benefit)18,417 (600)
Depreciation and amortization42,059 45,134 
Gain on sale of real estate— (14,303)
Impairment of real estate investments, net 11,561 — 
Costs associated with loan refinancing or payoff— 38,407 
Allocated share of joint venture depreciation369 553 
Allocated share of joint venture interest expense741 739 
EBITDAre $28,987 $140,573 
Severance expense— 1,521 
Transaction costs2,776 5,959 
Credit loss expense5,707 — 
Accounts receivable write-offs from prior periods (1)13,533 — 
Straight-line receivable write-offs from prior periods (1)19,927 — 
Prepayment fees— (1,760)
Adjusted EBITDA $70,930 $146,293 
Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income and comprehensive (loss) income.
(1) Included in rental revenue from continuing operations in the accompanying consolidated statements of income. Rental revenue includes the following:
Three Months Ended September 30,
20202019
Minimum rent$83,230 $139,844 
Accounts receivable write-offs from prior periods(13,533)— 
Tenant reimbursements2,413 5,129 
Percentage rent1,303 3,032 
Straight-line rental revenue1,958 2,866 
Straight-line receivable write-offs from prior periods(19,927)— 
Other rental revenue147 91 
Rental revenue$55,591 $150,962 




Total Investments
Total investments is a non-GAAP financial measure defined as the sum of the carrying values of real estate investments (before accumulated depreciation), land held for development, property under development, mortgage notes receivable (including related accrued interest receivable), investment in joint ventures, intangible assets, gross (before accumulated amortization and included in other assets) and notes receivable and related accrued interest receivable, net (included in other assets). Total investments is a useful measure for management and investors as it illustrates across which asset categories the Company's funds have been invested. Our method of calculating total investments may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. A reconciliation of total investments to total assets (computed in accordance with GAAP) is included in the following table (unaudited, in thousands):
September 30, 2020December 31, 2019
Total Investments:
Real estate investments, net of accumulated depreciation$5,067,657 $5,197,308 
Add back accumulated depreciation on real estate investments1,072,201 989,254 
Land held for development25,846 28,080 
Property under development44,103 36,756 
Mortgage notes and related accrued interest receivable362,011 357,391 
Investment in joint ventures29,571 34,317 
Intangible assets, gross (1)58,402 57,385 
Notes receivable and related accrued interest receivable, net (1)7,373 14,026 
Total investments$6,667,164 $6,714,517 
Total investments$6,667,164 $6,714,517 
Operating lease right-of-use assets185,459 211,187 
Cash and cash equivalents985,372 528,763 
Restricted cash2,424 2,677 
Accounts receivable129,714 86,858 
Less: accumulated depreciation on real estate investments(1,072,201)(989,254)
Less: accumulated amortization on intangible assets(15,385)(12,693)
Prepaid expenses and other current assets24,663 35,456 
Total assets$6,907,210 $6,577,511 
(1) Included in other assets in the accompanying consolidated balance sheet. Other assets include the following:
September 30, 2020December 31, 2019
Intangible assets, gross$58,402 $57,385 
Less: accumulated amortization on intangible assets(15,385)(12,693)
Notes receivable and related accrued interest receivable, net7,373 14,026 
Prepaid expenses and other current assets24,663 35,456 
Total other assets$75,053 $94,174 
About EPR Properties
EPR Properties is a leading experiential net lease real estate investment trust (REIT), specializing in select enduring experiential properties in the real estate industry. We focus on real estate venues which create value by facilitating out of home leisure and recreation experiences where consumers choose to spend their discretionary time and money. We have nearly $6.7 billion in total investments across 44 states. We adhere to rigorous underwriting and investing criteria centered on key industry, property and tenant level cash flow standards. We believe our focused approach provides a competitive advantage and the potential for stable and attractive returns. Further information is available at www.eprkc.com.





CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company's Quarterly Report on Form 10-Q is filed. With the exception of historical information, certain statements contained or incorporated by reference herein may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such as those pertaining to the uncertain financial impact of COVID-19, our capital resources and liquidity, expected waivers of financial covenants related to our private placement notes, expected liquidity and performance of our customers, including AMC and Regal, our expected revenue and customer deferral agreements, our expected dividend payments and share repurchases and our results of operations and financial condition. The estimates presented herein are based on the Company's current expectations and, given the current economic uncertainty, there can be no assurances that the Company will be able to continue to comply with other applicable covenants under its debt agreements, which could materially impact actual performance. 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. 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed with the Securities and Exchange Commission ("SEC") on May 11, 2020.
 
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)

q32020earningscall
Third Quarter 2020 Earnings Call November 5, 2020


 
DISCLAIMER 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 the uncertain financial impact of COVID-19, our capital resources and liquidity, expected dividend payments, expected liquidity and performance of our customers, including AMC and Regal, future expenditures for development projects and our results of operations and financial condition. The estimates presented herein are based on the Company's current expectations and, given the current economic uncertainty, there can be no assurances that the Company will be able to continue paying dividends at expected levels, or at all, or continue to comply with applicable covenants under its debt agreements, which could materially impact actual performance. 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. 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed with the Securities and Exchange Commission ("SEC") on May 11, 2020. 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. 2


 
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. 3


 
PORTFOLIO UPDATE 4


 
PORTFOLIO OVERVIEW Total Portfolio Snapshot Experiential Portfolio $6.7B Total Investments* 284 Properties; 44 Operators Occupancy at 96.7% Occupancy at 96.4% 369 Properties $6B Total Investments Q3 Investment Spending $8.7M 3 Properties under Development Education Portfolio 85 Properties; 15 Operators Occupancy at 100% * See investor supplemental for the applicable period for definitions and calculations of this Non-GAAP measure 5


 
PORTFOLIO REOPENING Theatres 2020 Reopening – 63% of theatres are open as of Nov. 3 • Openings significantly impacted by state/local restrictions • Dearth of content limits potential to create consumer demand 2021 – Strong line-up of films pushed from 2020 and those already slated • Optimistic that the industry regains momentum Exhibition Industry – there is no evidence of structural changes in movie-going habits due to pandemic • Studios are pushing major titles to 2021 and 2022 • Not releasing to PVOD as theatrical exhibition is preferred distribution 6


 
PORTFOLIO REOPENING Other Experiential and Education Reopening – 93% of non-theatre properties are open 7


 
COLLECTIONS AND DEFERRAL AGREEMENTS Collections Ramping Up • July, August and September collections were approximately 35%, 40% and 48% of contractual cash revenue • Q3 collections were 41% compared to Q2 at 24% • October collections were 43% • Q4 collections are expected to exceed Q3 collections Deferral Agreements Scope • 19 of Top 20 tenants are paying or have executed deferral agreements • Reached resolution with 90% of annualized pre-COVID contractual cash rent and interest payments Key Features • Agreements structured to ramp up through 2020 and beyond; vast majority provide repayment of all deferred rent • Where rent concessions were provided, we received greater or equal value through additional lease term, additional collateral, or other benefits 8


 
FINANCIAL REVIEW 9


 
FINANCIAL HIGHLIGHTS Financial Performance* Quarter ended September 30, $ % 2020(1) 2019(2) Change Change Total Revenue (Continuing Ops) $63.9 $169.4 ($105.5) (62%) Net Income - Common (91.9) 28.0 (119.9) (428%) FFO as adj. – Common* (11.7) 115.3 (127.0) (110%) AFFO – Common* 2.7 113.6 (110.9) (98%) Net Income/share – Common (1.23) 0.36 (1.59) (442%) FFO/share - Common, as adj.* (0.16) 1.46 (1.62) (111%) AFFO/share - Common* 0.04 1.44 (1.40) (97%) (In millions except per-share data) (1) The operating results for the three months ended September 30, 2020, include $49.8 million of straight-line and other receivable write-offs, or $0.67 per share, related to moving two customers to a cash basis of accounting for revenue recognition purposes at the end of the third quarter. These write- offs are reflected in all metrics in these columns except that AFFO – Common and AFFO/share - Common for the three months ended September 30, 2020 excludes the impact of the straight-line portion of these write-offs of $24.9 million. (2) The operating results of the Company's public charter school portfolio for the three months ended September 30, 2019, include $11.3 million in termination fees, and are included in all metrics in this column except for total revenue from continuing operations. The remaining public charter school portfolio was sold subsequent to this period. * See investor supplementals for the applicable periods for definitions and calculations of these non-GAAP measures 10


 
COVID-19 IMPACTS ON Q3 RESULTS For the quarter ended September 30, 2020 $ Per (in millions) Share FFOAA* before placing Regal (Cineworld) and one $38.1 $.51 Attraction tenant on cash basis Impact of cash basis entries: Rental revenue and interest income write-off (26.0) (.35) Straight-line rent receivable write-off (23.8) (.32) Total impact of write-offs (49.8) (.67) FFOAA* after cash basis entries (as reported) ($11.7) ($.16) Other charges impacting Q3 excluded from FFOAA* : • Impairment charges of $11.6M related to two Eat & Play properties • Credit loss expense of $5.9M related to note receivable • Valuation allowance on deferred tax asset of $18.0M * See Supplemental Operating and Financial Data for the applicable periods for definitions and calculations of these non-GAAP measures. 11


 
DEFERRAL INFORMATION Classification of Customers and Deferral Information ($ in millions) Annualized Revenue1 No Payment Deferral $ 107 17% Payments Deferred and Recognized as Revenue During 233 37% Deferral Period Payments Deferred But Not Recognized as Revenue 29 5% During Deferral Period Cash Basis/Lease Restructurings2 245 39% New Vacancies 10 2% Total $ 624 100% (1) Represents annualized pre-COVID contractual revenue which includes cash rent (including tenant reimbursements) and interest payments. (2) Includes leases for tenants accounted for on a cash basis and/or leases for tenants that have been or are expected to be restructured. This category includes AMC and Regal. n/a (3) 12


 
CAPITAL MARKETS UPDATE Net Debt to Gross Assets was 42% at 9/30/20 • $3.9B total debt; $3.1B fixed rate or fixed through int. rate swaps at wtd. avg. = 4.5% • $750M drawn on $1B revolver • Weighted average debt maturity ~5 years; No scheduled debt maturities until revolver matures in 2022 • On 11/3/20, further amended Bank Credit Facilities to extend certain covenant waivers through December 2021 Liquidity Position • ~$1.0B unrestricted cash; Q3 had minimal cash burn Bank Credit Facilities and Private Placement Notes • Moody’s downgraded to Baa3 during Q3; Subsequent to 9/30/20, S&P and Fitch downgraded to BB+ Amount Outstanding Current Rates - Rates After Covenant at 9/30/2020 Covenant Relief Period Relief Period Revolving Credit Facility $750M LIBOR + 1.625%(1) LIBOR + 1.20%(1) Revolving Credit Facility Fee 0.375% 0.25%(1) Term Loan Facility $400M LIBOR + 2.00%(1) LIBOR + 1.35%(1) Private Placement Notes due 2024 $148M 5.60% 4.35% Private Placement Notes due 2026 $192M 5.81% 4.56% (1) Based on unsecured debt ratings as of 11/4/20; subject to change based on changes to these ratings. LIBOR rate on the term loan facility has been fixed with interest rate swaps. 13


 
EXPECTED REVENUE RECOGNITION AND COLLECTIONS Q4 Full Year 2020 2020 % of pre-COVID contractual cash 53% - 63% 67% - 70% revenue to be recognized % of pre-COVID contractual cash 40% - 50% 50% - 53% revenue to be collected 14


 
CLOSING COMMENTS 15


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


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

Document
Exhibit 99.3

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Supplemental Operating and Financial Data
Third Quarter and Nine Months Ended September 30, 2020



TABLE OF CONTENTS
SECTIONPAGE
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
Investment Spending and Disposition Summaries
Property Under Development - Investment Spending Estimates
Lease Expirations
Top Ten Customers by Total Revenue
Definitions-Non-GAAP Financial Measures
Appendix-Reconciliation of Certain Non-GAAP Financial Measures

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Q3 2020 Supplemental
Page 2


CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS


The financial results in this document reflect preliminary, unaudited results, which are not final until the Company's Quarterly Report on Form 10-Q is filed. With the exception of historical information, certain statements contained or incorporated by reference herein may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such as those pertaining to the uncertain financial impact of COVID-19, expected waivers of financial covenants related to our private placement notes, our capital resources and liquidity, expected dividend payments, expected liquidity and performance of our customers, including AMC and Regal, our expected revenue and customer deferral agreements, future expenditures for development projects and our results of operations and financial condition. The estimates presented herein are based on the Company's current expectations and, given the current economic uncertainty, there can be no assurances that the Company will be able to continue paying dividends at expected levels, or at all, or continue to comply with applicable covenants under its debt agreements, which could materially impact actual performance. 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. 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed with the Securities and Exchange Commission ("SEC") on May 11, 2020.

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 22 through 24 for definitions of certain non-GAAP financial measures used in this document and the reconciliations of certain non-GAAP measures on pages 9 and 10 and in the Appendix on pages 25 through 29.



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Q3 2020 Supplemental
Page 3


COMPANY PROFILE
THE COMPANYCOMPANY STRATEGY
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.EPR's primary business objective is to enhance shareholder value by achieving predictable growth in Funds from Operations As Adjusted ("FFOAA") and dividends per share.
Since that time, the Company has been a leading Experiential net lease REIT, specializing in select enduring experiential properties. We are focused on growing our Experiential portfolio with properties that offer a variety of enduring, congregate entertainment, recreation and leisure activities. Separately, our Education portfolio is a legacy investment that provides additional geographic and operator diversity.Our strategic growth is focused on acquiring or developing experiential real estate venues which create value by facilitating out of home congregate entertainment, recreation and leisure experiences where consumers choose to spend their discretionary time and money. These are properties which make up the social infrastructure of society.
This focus is consistent with our depth of knowledge across each of our property types, creating a competitive advantage that allows us to more quickly identify key market trends. We deliberately apply information and our ingenuity to target properties that represent logical extensions within each of our existing property types or potential future investments.
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As part of our strategic planning and portfolio management process we assess new opportunities against the following underwriting principles:
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BUILDING THE PREMIER EXPERIENTIAL REAL ESTATE PORTFOLIO
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Q3 2020 Supplemental
Page 4


INVESTOR INFORMATION
SENIOR MANAGEMENT
Greg SilversMark Peterson
President and Chief Executive OfficerExecutive Vice President and Chief Financial Officer
Craig EvansGreg Zimmerman
Executive Vice President, General Counsel and SecretaryExecutive Vice President and Chief Investment Officer
Tonya MaterMike Hirons
Senior Vice President and Chief Accounting OfficerSenior Vice President - Asset Management
COMPANY INFORMATION
CORPORATE HEADQUARTERSTRADING SYMBOLS
909 Walnut Street, Suite 200Common Stock:
Kansas City, MO 64106EPR
888-EPR-REITPreferred Stock:
www.eprkc.comEPR-PrC
EPR-PrE
STOCK EXCHANGE LISTINGEPR-PrG
New York Stock Exchange
EQUITY RESEARCH COVERAGE
Bank of America Merrill LynchJeffrey Spector/Joshua Dennerlein646-855-1363
Citi Global MarketsMichael Bilerman/Nick Joseph212-816-4471
Janney Montgomery ScottRob Stevenson646-840-3217
J.P. MorganAnthony Paolone/Nikita Bely212-622-6682
Kansas City Capital AssociatesJonathan Braatz816-932-8019
Keybanc Capital MarketsJordan Sadler/Todd Thomas917-368-2286
Ladenburg ThalmannJohn Massocca212-409-2056
Raymond James & AssociatesRJ Milligan727-567-2585
RBC Capital MarketsMichael Carroll440-715-2649
StifelSimon Yarmak443-224-1345
SunTrust Robinson HumphreyKi Bin Kim212-303-4124

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.
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Q3 2020 Supplemental
Page 5


SELECTED FINANCIAL INFORMATION
(UNAUDITED, DOLLARS AND SHARES IN THOUSANDS)
THREE MONTHS ENDED SEPTEMBER 30,NINE MONTHS ENDED SEPTEMBER 30,
Operating Information:2020201920202019
Revenue (1)$63,877 $169,356 $321,249 $481,623 
Net (loss) income available to common shareholders of EPR Properties(91,938)27,969 (129,853)147,844 
EBITDAre (2)28,987 140,573 202,742 409,703 
Adjusted EBITDA (2)70,930 146,293 278,748 426,990 
Interest expense, net (1)41,744 36,640 114,837 106,744 
Capitalized interest325 386 829 5,053 
Straight-lined rental revenue(17,969)4,399 (25,448)10,036 
Dividends declared on preferred shares6,034 6,034 18,102 18,102 
Dividends declared on common shares— 87,507 119,058 257,947 
General and administrative expense10,034 11,600 31,454 35,540 
SEPTEMBER 30,
Balance Sheet Information:20202019
Total assets$6,907,210 $6,633,290 
Accumulated depreciation1,072,201 989,480 
Cash and cash equivalents985,372 115,839 
Total assets before accumulated depreciation less cash and cash equivalents (gross assets)6,994,039 7,506,931 
Debt3,854,855 3,101,611 
Deferred financing costs, net35,140 38,384 
Net debt (2)2,904,623 3,024,156 
Equity2,650,069 3,040,799 
Common shares outstanding74,613 78,240 
Total market capitalization (using EOP closing price)5,327,528 9,408,682 
Net debt/gross assets42 %40 %
Net debt/Adjusted EBITDA ratio (3)Footnote 65.2 
Adjusted net debt/Annualized adjusted EBITDA ratio (2)(4)(5)Footnote 65.2 
(1) Excludes discontinued operations.
(2) See pages 22 through 24 for definitions. See calculation as applicable on page 28.
(3) Adjusted EBITDA in this calculation is for the quarter multiplied times four. See pages 22 through 24 for definitions. See calculation on page 28.
(4) Adjusted net debt is net debt less 40% times property under development. See pages 22 through 24 for definitions.
(5) Annualized adjusted EBITDA is adjusted EBITDA for the quarter further adjusted for in-service and disposed projects, percentage rent and participating interest and other non-recurring items which is then multiplied times four. These calculations can be found on page 28 under the reconciliation of Adjusted EBITDA and Annualized Adjusted EBITDA. See pages 22 through 24 for definitions.
(6) Not presented as this ratio is not meaningful given the continuing disruption caused by COVID-19 and the associated accounting for tenant rent deferrals and other lease modifications.
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SELECTED BALANCE SHEET INFORMATION
(UNAUDITED, DOLLARS IN THOUSANDS)
ASSETS3RD QUARTER 20202ND QUARTER 20201ST QUARTER 20204TH QUARTER 20193ND QUARTER 20192ND QUARTER 2019
Real estate investments$6,139,858 $6,144,830 $6,208,685 $6,186,562 $6,558,790 $6,553,052 
Less: accumulated depreciation(1,072,201)(1,034,771)(1,023,993)(989,254)(989,480)(954,806)
Land held for development25,846 26,244 28,080 28,080 28,080 28,080 
Property under development44,103 39,039 30,063 36,756 31,825 80,695 
Operating lease right-of-use assets185,459 189,058 207,605 211,187 219,459 220,758 
Mortgage notes and related accrued interest receivable362,011 357,668 356,666 357,391 413,695 550,131 
Investment in direct financing leases, net— — — — 20,727 20,675 
Investment in joint ventures29,571 28,925 33,897 34,317 35,222 35,658 
Cash and cash equivalents985,372 1,006,981 1,225,122 528,763 115,839 6,927 
Restricted cash2,424 2,615 4,583 2,677 5,929 5,010 
Accounts receivable129,714 134,774 72,537 86,858 99,190 108,433 
Other assets75,053 107,615 112,095 94,174 94,014 92,042 
Total assets$6,907,210 $7,002,978 $7,255,340 $6,577,511 $6,633,290 $6,746,655 
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued liabilities
$95,429 $96,454 $112,167 $122,939 $121,351 $126,015 
Operating lease liabilities
225,379 229,030 232,343 235,650 244,358 245,372 
Common dividends payable
29 19 30,063 29,424 29,340 29,084 
Preferred dividends payable
6,034 6,034 6,034 6,034 6,034 6,034 
Unearned rents and interest
75,415 81,096 84,190 74,829 89,797 78,629 
Line of credit
750,000 750,000 750,000 — — 240,000 
Deferred financing costs, net
(35,140)(35,907)(35,933)(37,165)(38,384)(31,957)
Other debt
3,139,995 3,139,995 3,139,995 3,139,995 3,139,995 3,008,580 
Total liabilities4,257,141 4,266,721 4,318,859 3,571,706 3,592,491 3,701,757 
Equity:
Common stock and additional paid-in-capital
3,853,581 3,849,803 3,845,911 3,835,674 3,815,278 3,759,032 
Preferred stock at par value
148 148 148 148 148 148 
Treasury stock
(260,594)(260,351)(154,357)(147,435)(147,435)(147,143)
Accumulated other comprehensive (loss) income(2,106)(4,331)(5,289)7,275 4,659 5,174 
Distributions in excess of net income
(940,960)(849,012)(749,932)(689,857)(631,851)(572,313)
Total equity2,650,069 2,736,257 2,936,481 3,005,805 3,040,799 3,044,898 
Total liabilities and equity$6,907,210 $7,002,978 $7,255,340 $6,577,511 $6,633,290 $6,746,655 
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SELECTED OPERATING DATA
(UNAUDITED, DOLLARS IN THOUSANDS)
3RD QUARTER 20202ND QUARTER 20201ST QUARTER 20204TH QUARTER 20193RD QUARTER 20192ND QUARTER 2019
Rental revenue$55,591 $97,531 $135,043 $154,765 $150,962 $147,003 
Other income182 416 7,573 8,386 11,464 5,726 
Mortgage and other financing income8,104 8,413 8,396 7,195 6,930 9,011 
Total revenue63,877 106,360 151,012 170,346 169,356 161,740 
Property operating expense13,759 15,329 13,093 16,097 14,494 14,597 
Other expense2,680 2,798 9,534 10,173 11,403 8,091 
General and administrative expense10,034 10,432 10,988 10,831 11,600 12,230 
Severance expense
— — — 423 1,521 — 
Costs associated with loan refinancing or payoff
— 820 — — 38,269 — 
Interest expense, net41,744 38,340 34,753 34,914 36,667 36,458 
Transaction costs2,776 771 1,075 5,784 5,959 6,923 
Credit loss expense5,707 3,484 1,192 — — — 
Impairment charges11,561 51,264 — 2,206 — — 
Depreciation and amortization42,059 42,450 43,810 42,398 41,644 38,790 
(Loss) income before equity in (loss) income from joint ventures, other items and discontinued operations
(66,443)(59,328)36,567 47,520 7,799 44,651 
Equity in (loss) income from joint ventures(1,044)(1,724)(420)(905)(435)470 
Impairment charges on joint ventures— (3,247)— — — — 
Gain on sale of real estate— 22 220 3,717 845 — 
Income tax (expense) benefit(18,417)1,312 751 530 600 1,300 
(Loss) income from continuing operations(85,904)(62,965)37,118 50,862 8,809 46,421 
Discontinued operations:
Income from discontinued operations before other items
— — — 4,937 11,736 10,399 
Impairment on public charter school portfolio sale
— — — (21,433)— — 
Gain on sale of real estate from discontinued operations— — — 1,931 13,458 9,774 
(Loss) income from discontinued operations
— — — (14,565)25,194 20,173 
Net (loss) income(85,904)(62,965)37,118 36,297 34,003 66,594 
Preferred dividend requirements(6,034)(6,034)(6,034)(6,034)(6,034)(6,034)
Net (loss) income available to common shareholders of EPR Properties
$(91,938)$(68,999)$31,084 $30,263 $27,969 $60,560 
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FUNDS FROM OPERATIONS AND FUNDS FROM OPERATIONS AS ADJUSTED
(UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION)
FUNDS FROM OPERATIONS ("FFO") (1):3RD QUARTER 20202ND QUARTER 20201ST QUARTER 20204TH QUARTER 20193RD QUARTER 20192ND QUARTER 2019
Net (loss) income available to common shareholders of EPR Properties$(91,938)$(68,999)$31,084 $30,263 $27,969 $60,560 
Gain on sale of real estate— (22)(220)(5,648)(14,303)(9,774)
Impairment of real estate investments, net (2) 11,561 36,255 — 23,639 — — 
Real estate depreciation and amortization41,791 42,151 43,525 44,242 44,863 42,098 
Allocated share of joint venture depreciation369 378 383 551 553 554 
Impairment charges on joint ventures— 3,247 — — — — 
FFO available to common shareholders of EPR Properties$(38,217)$13,010 $74,772 $93,047 $59,082 $93,438 
FFO available to common shareholders of EPR Properties$(38,217)$13,010 $74,772 $93,047 $59,082 $93,438 
Add: Preferred dividends for Series C preferred shares— — 1,939 1,937 — 1,939 
Add: Preferred dividends for Series E preferred shares— — 1,939 1,939 — 1,939 
Diluted FFO available to common shareholders of EPR Properties$(38,217)$13,010 $78,650 $96,923 $59,082 $97,316 
FUNDS FROM OPERATIONS AS ADJUSTED ("FFOAA") (1):
FFO available to common shareholders of EPR Properties$(38,217)$13,010 $74,772 $93,047 $59,082 $93,438 
Costs associated with loan refinancing or payoff— 820 — 43 38,407 — 
Transaction costs2,776 771 1,075 5,784 5,959 6,923 
Severance expense— — — 423 1,521 — 
Termination fee included in gain on sale— — — 1,217 11,324 6,533 
Impairment of operating lease right-of-use assets (2)— 15,009 — — — — 
Credit loss expense5,707 3,484 1,192 — — — 
Deferred income tax expense (benefit)18,035 (1,676)(1,113)(847)(984)(1,675)
FFO as adjusted available to common shareholders of EPR Properties$(11,699)$31,418 $75,926 $99,667 $115,309 $105,219 
FFO as adjusted available to common shareholders of EPR Properties$(11,699)$31,418 $75,926 $99,667 $115,309 $105,219 
Add: Preferred dividends for Series C preferred shares— — 1,939 1,937 1,939 1,939 
Add: Preferred dividends for Series E preferred shares— — 1,939 1,939 1,939 1,939 
Diluted FFO as adjusted available to common shareholders of EPR Properties$(11,699)$31,418 $79,804 $103,543 $119,187 $109,097 
FFO per common share:
Basic$(0.51)$0.17 $0.95 $1.19 $0.76 $1.23 
Diluted(0.51)0.17 0.95 1.18 0.76 1.22 
FFO as adjusted per common share:
Basic$(0.16)$0.41 $0.97 $1.27 $1.49 $1.38 
Diluted(0.16)0.41 0.97 1.26 1.46 1.36 
Shares used for computation (in thousands):
Basic74,613 76,310 78,467 78,456 77,632 76,164 
Diluted74,613 76,310 78,476 78,485 77,664 76,199 
Effect of dilutive Series C preferred shares— — 2,232 2,184 2,170 2,158 
Effect of dilutive Series E preferred shares— — 1,664 1,640 1,634 1,628 
Adjusted weighted-average shares outstanding-diluted Series C and Series E74,613 76,310 82,372 82,309 81,468 79,985 
(1) See pages 22 through 24 for definitions.
(2) Impairment charges recognized during the three months ended June 30, 2020 totaled $51.3 million, which was comprised of $36.3 million of impairments of real estate investments and $15.0 million of impairments of operating lease right-of-use assets.
Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income.
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ADJUSTED FUNDS FROM OPERATIONS
(UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION)
ADJUSTED FUNDS FROM OPERATIONS ("AFFO") (1):3RD QUARTER 20202ND QUARTER 20201ST QUARTER 20204TH QUARTER 20193RD QUARTER 20192ND QUARTER 2019
FFO available to common shareholders of EPR Properties
$(38,217)$13,010 $74,772 $93,047 $59,082 $93,438 
Adjustments:
Costs associated with loan refinancing or payoff
— 820 — 43 38,407 — 
Transaction costs2,776 771 1,075 5,784 5,959 6,923 
Impairment of operating lease right-of-use assets (2)— 15,009 — — — — 
Credit loss expense5,707 3,484 1,192 — — — 
Severance expense— — — 423 1,521 — 
Termination fees included in gain on sale
— — — 1,217 11,324 6,533 
Deferred income tax expense (benefit)18,035 (1,676)(1,113)(847)(984)(1,675)
Non-real estate depreciation and amortization268 299 285 288 271 257 
Deferred financing fees amortization1,498 1,651 1,634 1,621 1,552 1,517 
Share-based compensation expense to management and trustees
3,410 3,463 3,509 3,349 3,372 3,283 
Amortization of above/below market leases, net and tenant allowances(124)(108)(152)(119)(107)(58)
Maintenance capital expenditures (3)(8,911)(1,291)(928)(2,276)(2,370)(510)
Straight-lined rental revenue17,969 (2,229)9,708 (3,516)(4,399)(3,223)
Straight-lined ground sublease expense216 207 176 237 256 205 
Non-cash portion of mortgage and other financing income
71 (97)(91)(91)(237)(1,069)
AFFO available to common shareholders of EPR Properties$2,698 $33,313 $90,067 $99,160 $113,647 $105,621 
AFFO available to common shareholders of EPR Properties$2,698 $33,313 $90,067 $99,160 $113,647 $105,621 
Add: Preferred dividends for Series C preferred shares— — 1,939 1,937 1,939 1,939 
Add: Preferred dividends for Series E preferred shares— — 1,939 1,939 1,939 1,939 
Diluted AFFO available to common shareholders of EPR Properties$2,698 $33,313 $93,945 $103,036 $117,525 $109,499 
Weighted average diluted shares outstanding (in thousands)
74,613 76,310 78,476 78,485 77,664 76,199 
Effect of dilutive Series C preferred shares— — 2,232 2,184 2,170 2,158 
Effect of dilutive Series E preferred shares— — 1,664 1,640 1,634 1,628 
Adjusted weighted-average shares outstanding-diluted74,613 76,310 82,372 82,309 81,468 79,985 
AFFO per diluted common share$0.04 $0.44 $1.14 $1.25 $1.44 $1.37 
Dividends declared per common share$— $0.3825 $1.1325 $1.1250 $1.1250 $1.1250 
AFFO payout ratio (4)— %87 %99 %90 %78 %82 %
(1) See pages 22 through 24 for definitions.
(2) Impairment charges recognized during the three months ended June 30, 2020 totaled $51.3 million, which was comprised of $36.3 million of impairments of real estate investments and $15.0 million of impairments of operating lease right-of-use assets.
(3) Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions.
(4) AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share. The monthly cash dividend to common shareholders was suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020.
Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income.
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CAPITAL STRUCTURE AS OF SEPTEMBER 30, 2020
(UNAUDITED, DOLLARS IN THOUSANDS)
CONSOLIDATED DEBT
PRINCIPAL PAYMENTS DUE ON DEBT:
BONDS/TERM LOAN/OTHER (1) (2)UNSECURED CREDIT FACILITY (3)UNSECURED SENIOR NOTESTOTALWEIGHTED AVG INTEREST RATE
YEAR
2020$— $— $— $— —%
2021—