EPR 8-K
Epr Properties (EPR)
8-K
2022-05-04
For: 2022-05-04
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Added on
April 05, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2022
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) (Zip Code) | ||||||||||||||
(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 class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
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 May 4, 2022 , the Company announced its results of operations and financial condition for the first quarter ended March 31, 2022. The public announcement was made by means of a press release, the text of which is set forth in Exhibit 99.1 hereto and is hereby incorporated by reference herein.
In addition, on May 4, 2022 , the Company made available on its website an investor slide presentation and supplemental operating and financial data for the first quarter ended March 31, 2022, 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 | ||||||||
Investor slide presentation for the first quarter ended March 31, 2022, made available by EPR Properties on | ||||||||
Supplemental Operating and Financial Data for the first quarter ended March 31, 2022, made available by EPR Properties on | ||||||||
| 104 | Cover 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: May 4, 2022
Exhibit 99.1
EPR Properties Reports First Quarter 2022 Results
Raises 2022 Earnings Guidance
Kansas City, MO, May 4, 2022 -- EPR Properties (NYSE:EPR) today announced operating results for the first quarter ended March 31, 2022 (dollars in thousands, except per share data):
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Total revenue | $ | 157,472 | $ | 111,765 | |||||||
| Net income (loss) available to common shareholders | 36,159 | (2,654) | |||||||||
| Net income (loss) available to common shareholders per diluted common share | 0.48 | (0.04) | |||||||||
| Funds From Operations as adjusted (FFOAA) (1) | 83,213 | 35,605 | |||||||||
| FFOAA per diluted common share (1) | 1.10 | 0.48 | |||||||||
| Adjusted Funds From Operations (AFFO) (1) | 87,845 | 38,926 | |||||||||
| AFFO per diluted common share (1) | 1.16 | 0.52 | |||||||||
| (1) A non-GAAP financial measure | |||||||||||
First Quarter Company Headlines
•Raises Earnings Guidance and Confirms Investment Spending Guidance for 2022 - The Company is raising FFOAA per diluted common share guidance for 2022 from a range of $4.30 to $4.50 to a range of $4.39 to $4.55 and confirming investment spending guidance of a range of $500.0 million to $700.0 million.
•Executing on Investment Pipeline - The Company's investment spending during the first quarter and subsequent to quarter-end through May 4, 2022 totaled $90.5 million and consisted of experiential acquisitions, development and redevelopment projects. In addition, the Company continues to execute on its significant investment pipeline and anticipates capital deployment will accelerate into the second half of the year.
•Rating Agency Upgrade - During March 2022, Fitch Ratings ("Fitch") issued an investment grade rating on both the Company and its unsecured debt with a stable outlook.
•Strong Liquidity Position – In addition to regular quarterly collections, during the first quarter, the Company collected $10.2 million of deferred rent and interest from accrual basis customers that reduced receivables and $1.6 million of deferred rent and interest from cash basis customers that was booked as additional revenue. As of March 31, 2022, the Company had cash on hand of $323.8 million and no borrowings on its $1.0 billion unsecured revolving credit facility.
CEO Comments
"Our ongoing portfolio recovery is evident in our first quarter results and increased earnings outlook, supported by healthy tenant performance. We have restarted our investment program, utilizing our relationships to source attractive acquisition, development and redevelopment projects across our targeted experiential categories,” stated Greg Silvers, President and CEO of EPR Properties. “Our pipeline is ramping meaningfully, and we continue to expect the pace of investment to accelerate into the back half of the year. Furthermore, we have maintained strong liquidity and financial flexibility to execute on this pipeline, and we are pleased that Fitch recognized our stabilization and disciplined leverage with investment grade ratings."
Investment Update
The Company's investment spending during the three months ended March 31, 2022 totaled $24.4 million, and included spending on experiential build-to-suit development, redevelopment projects and the acquisition of a fitness and wellness property. Additional investment spending subsequent to the end of the quarter through May 4, 2022 totaled $66.1 million (bringing the year-to-date total investment spending to $90.5 million), and consisted of spending on experiential build-to-suit development, redevelopment projects and the acquisition of an 85% interest in an experiential lodging property.
Since restarting its investment spending, the Company has been making significant progress on definitive agreements for acquisition, development and redevelopment projects. With increasing visibility and a meaningfully expanding investment pipeline, the Company is confirming its investment spending guidance for 2022 of a range of $500.0 million to $700.0 million.
Rating Agency Upgrade
During March of 2022, Fitch upgraded the Company's corporate and unsecured debt ratings to 'BBB-' from 'BB+' with a stable outlook. The investment grade rating on the Company's unsecured debt adds to its current investment grade ratings on unsecured debt from both S&P Global Ratings and Moody's Investors Services. These upgrades reflect the Company's commitment to conservative leverage metrics and the recovery in consumer demand for experiential real estate.
Strong Liquidity Position
In addition to regular quarterly collections, during the first quarter, the Company collected $10.2 million of deferred rent and interest from accrual basis customers that reduced receivables and $1.6 million of deferred rent and interest from cash basis customers that was booked as additional revenue. Through March 31, 2022, the Company has collected a total of approximately $91.0 million of rent and interest from customers that had been deferred as a result of the impact of the COVID-19 pandemic.
The Company remains focused on maintaining strong liquidity and financial flexibility. The Company had $323.8 million of cash on hand at quarter-end and no borrowings on its $1.0 billion unsecured revolving credit facility.
Portfolio Update
The Company's total investments (a non-GAAP financial measure) were approximately $6.5 billion at March 31, 2022 with Experiential investments totaling $5.9 billion, or 91%, and Education investments totaling $0.6 billion, or 9%.
The Company's Experiential portfolio (excluding property under development and undeveloped land inventory) consisted of the following property types (owned or financed) at March 31, 2022:
•175 theatre properties;
•57 eat & play properties (including seven theatres located in entertainment districts);
•18 attraction properties;
•11 ski properties;
•eight experiential lodging properties;
•one gaming property;
•three cultural properties; and
•eight fitness & wellness properties.
As of March 31, 2022, the Company's owned Experiential portfolio consisted of approximately 19.4 million square feet, which was 96% leased and included a total of $10.9 million in property under development and $20.2 million in undeveloped land inventory.
The Company's Education portfolio consisted of the following property types (owned or financed) at March 31, 2022:
•65 early childhood education center properties; and
•nine private school properties.
As of March 31, 2022, the Company's owned Education portfolio consisted of approximately 1.4 million square feet, which was 100% leased.
The combined owned portfolio consisted of 20.8 million square feet and was 96.3% leased.
Dividend Information
The Company declared regular monthly cash dividends during the first quarter of 2022 totaling $0.775 per common share. Additionally, the Board declared its regular quarterly dividends to preferred shareholders of $0.359375 per share on both the Company's 5.75% Series C cumulative convertible preferred shares and Series G cumulative redeemable preferred shares and $0.5625 per share on its 9.00% Series E cumulative convertible preferred shares.
Guidance
(Dollars in millions, except per share data):
| Measure | 2022 Guidance | |||||||||||||
| Net income available to common shareholders per diluted common share | $ | 2.09 | to | $ | 2.25 | |||||||||
| FFOAA per diluted common share | $ | 4.39 | to | $ | 4.55 | |||||||||
| Investment spending | $ | 500.0 | to | $ | 700.0 | |||||||||
The Company is increasing its 2022 guidance for FFOAA per diluted common share to a range of $4.39 to $4.55 from $4.30 to $4.50 and confirming 2022 investment spending guidance of $500.0 million to $700.0 million.
The 2022 guidance for FFOAA per diluted share is based on a FFO per diluted common share range of $4.33 to $4.49 adjusted for transaction costs and gain on insurance recovery. FFO per diluted common share for 2022 is based on a net income available to common shareholders per diluted common share range of $2.09 to $2.25 plus impairment of real estate investments, net of $0.06, estimated real estate depreciation and amortization of $2.13 and allocated share of joint venture depreciation of $0.09, less the impact of Series C and Series E dilution of $0.04 (in accordance with the NAREIT definition of FFO).
Additional earnings guidance detail can be found in the Company's supplemental information package available in the Investor Center of the Company's website located at https://investors.eprkc.com/earnings-supplementals.
Conference Call Information
Management will host a conference call to discuss the Company's financial results on May 5, 2022 at 8:30 a.m. Eastern Time. The call may also include discussion of Company developments, and forward-looking and other material information about business and financial matters. The conference will be webcast and can be accessed via the Webcasts page in the Investor Center on the Company's website located at https://investors.eprkc.com/webcasts. To access the call, audio only, dial (866) 374-5140 and when prompted, provide the passcode 74687040#.
You may watch a replay of the webcast by visiting the Webcasts page at https://investors.eprkc.com/webcasts.
Quarterly Supplemental
The Company's supplemental information package for the first quarter ended March 31, 2022 is available in the Investor Center on the Company's website located at https://investors.eprkc.com/earnings-supplementals.
EPR Properties
Consolidated Statements of Income (Loss)
(Unaudited, dollars in thousands except per share data)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Rental revenue | $ | 139,603 | $ | 102,614 | |||||||
| Other income | 9,305 | 678 | |||||||||
| Mortgage and other financing income | 8,564 | 8,473 | |||||||||
| Total revenue | 157,472 | 111,765 | |||||||||
| Property operating expense | 13,939 | 15,313 | |||||||||
| Other expense | 8,097 | 2,552 | |||||||||
| General and administrative expense | 13,224 | 11,336 | |||||||||
| Costs associated with loan refinancing or payoff | — | 241 | |||||||||
| Interest expense, net | 33,260 | 39,194 | |||||||||
| Transaction costs | 2,247 | 548 | |||||||||
| Credit loss benefit | (306) | (2,762) | |||||||||
| Impairment charges | 4,351 | — | |||||||||
| Depreciation and amortization | 40,044 | 40,326 | |||||||||
| Income before equity in loss from joint ventures and other items | 42,616 | 5,017 | |||||||||
| Equity in loss from joint ventures | (106) | (1,431) | |||||||||
| Gain on sale of real estate | — | 201 | |||||||||
| Income before income taxes | 42,510 | 3,787 | |||||||||
| Income tax expense | (318) | (407) | |||||||||
| Net income | 42,192 | 3,380 | |||||||||
| Preferred dividend requirements | (6,033) | (6,034) | |||||||||
| Net income (loss) available to common shareholders of EPR Properties | $ | 36,159 | $ | (2,654) | |||||||
| Net income (loss) available to common shareholders of EPR Properties per share: | |||||||||||
| Basic | $ | 0.48 | $ | (0.04) | |||||||
| Diluted | $ | 0.48 | $ | (0.04) | |||||||
| Shares used for computation (in thousands): | |||||||||||
| Basic | 74,843 | 74,627 | |||||||||
| Diluted | 75,047 | 74,627 | |||||||||
EPR Properties
Condensed Consolidated Balance Sheets
(Unaudited, dollars in thousands)
| March 31, 2022 | December 31, 2021 | ||||||||||
| Assets | |||||||||||
| Real estate investments, net of accumulated depreciation of $1,206,317 and $1,167,734 at March 31, 2022 and December 31, 2021, respectively | $ | 4,738,887 | $ | 4,713,091 | |||||||
| Land held for development | 20,168 | 20,168 | |||||||||
| Property under development | 10,885 | 42,362 | |||||||||
| Operating lease right-of-use assets | 177,174 | 180,808 | |||||||||
| Mortgage notes and related accrued interest receivable | 370,021 | 370,159 | |||||||||
| Investment in joint ventures | 36,564 | 36,670 | |||||||||
| Cash and cash equivalents | 323,761 | 288,822 | |||||||||
| Restricted cash | 2,956 | 1,079 | |||||||||
| Accounts receivable | 60,704 | 78,073 | |||||||||
| Other assets | 76,950 | 69,918 | |||||||||
| Total assets | $ | 5,818,070 | $ | 5,801,150 | |||||||
| Liabilities and Equity | |||||||||||
| Accounts payable and accrued liabilities | $ | 92,999 | $ | 73,462 | |||||||
| Operating lease liabilities | 215,112 | 218,795 | |||||||||
| Dividends payable | 26,979 | 24,930 | |||||||||
| Unearned rents and interest | 76,013 | 61,559 | |||||||||
| Debt | 2,805,853 | 2,804,365 | |||||||||
| Total liabilities | 3,216,956 | 3,183,111 | |||||||||
| Total equity | $ | 2,601,114 | $ | 2,618,039 | |||||||
| Total liabilities and equity | $ | 5,818,070 | $ | 5,801,150 | |||||||
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 (loss) 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 and credit loss (benefit) expense and subtracting gain on insurance recovery and deferred income tax (benefit) expense. AFFO is presented by adding to FFOAA non-real estate depreciation and amortization, deferred financing fees amortization, 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 the 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 supplemental measures to GAAP net income (loss) 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 months ended March 31, 2022 and 2021 and reconciles such measures to net income (loss) 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 March 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| FFO: | ||||||||||||||
| Net income (loss) available to common shareholders of EPR Properties | $ | 36,159 | $ | (2,654) | ||||||||||
| Gain on sale of real estate | — | (201) | ||||||||||||
| Impairment of real estate investments, net | 4,351 | — | ||||||||||||
| Real estate depreciation and amortization | 39,827 | 40,109 | ||||||||||||
| Allocated share of joint venture depreciation | 1,487 | 354 | ||||||||||||
| FFO available to common shareholders of EPR Properties | $ | 81,824 | $ | 37,608 | ||||||||||
| FFO available to common shareholders of EPR Properties | $ | 81,824 | $ | 37,608 | ||||||||||
| Add: Preferred dividends for Series C preferred shares | 1,938 | — | ||||||||||||
| Add: Preferred dividends for Series E preferred shares | 1,939 | — | ||||||||||||
| Diluted FFO available to common shareholders of EPR Properties | $ | 85,701 | $ | 37,608 | ||||||||||
| FFOAA: | ||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | 81,824 | $ | 37,608 | ||||||||||
| Costs associated with loan refinancing or payoff | — | 241 | ||||||||||||
| Transaction costs | 2,247 | 548 | ||||||||||||
| Credit loss benefit | (306) | (2,762) | ||||||||||||
| Gain on insurance recovery (included in other income) | (552) | (30) | ||||||||||||
| FFOAA available to common shareholders of EPR Properties | $ | 83,213 | $ | 35,605 | ||||||||||
| FFOAA available to common shareholders of EPR Properties | $ | 83,213 | $ | 35,605 | ||||||||||
| Add: Preferred dividends for Series C preferred shares | 1,938 | — | ||||||||||||
| Add: Preferred dividends for Series E preferred shares | 1,939 | — | ||||||||||||
| Diluted FFOAA available to common shareholders of EPR Properties | $ | 87,090 | $ | 35,605 | ||||||||||
| AFFO: | ||||||||||||||
| FFOAA available to common shareholders of EPR Properties | $ | 83,213 | $ | 35,605 | ||||||||||
| Non-real estate depreciation and amortization | 217 | 217 | ||||||||||||
| Deferred financing fees amortization | 2,071 | 1,547 | ||||||||||||
| Share-based compensation expense to management and trustees | 4,245 | 3,784 | ||||||||||||
| Amortization of above and below market leases, net and tenant allowances | (87) | (96) | ||||||||||||
| Maintenance capital expenditures (1) | (1,351) | (756) | ||||||||||||
| Straight-lined rental revenue | (595) | (1,288) | ||||||||||||
| Straight-lined ground sublease expense | 248 | 84 | ||||||||||||
| Non-cash portion of mortgage and other financing income | (116) | (171) | ||||||||||||
| AFFO available to common shareholders of EPR Properties | $ | 87,845 | $ | 38,926 | ||||||||||
| AFFO available to common shareholders of EPR Properties | $ | 87,845 | $ | 38,926 | ||||||||||
| Add: Preferred dividends for Series C preferred shares | 1,938 | — | ||||||||||||
| Add: Preferred dividends for Series E preferred shares | 1,939 | — | ||||||||||||
| Diluted AFFO available to common shareholders of EPR Properties | $ | 91,722 | $ | 38,926 | ||||||||||
| Three Months Ended March 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| FFO per common share: | ||||||||||||||
| Basic | $ | 1.09 | $ | 0.50 | ||||||||||
| Diluted | 1.09 | 0.50 | ||||||||||||
| FFOAA per common share: | ||||||||||||||
| Basic | $ | 1.11 | $ | 0.48 | ||||||||||
| Diluted | 1.10 | 0.48 | ||||||||||||
| AFFO per common share: | ||||||||||||||
| Basic | $ | 1.17 | $ | 0.52 | ||||||||||
| Diluted | 1.16 | 0.52 | ||||||||||||
| Shares used for computation (in thousands): | ||||||||||||||
| Basic | 74,843 | 74,627 | ||||||||||||
| Diluted | 75,047 | 74,669 | ||||||||||||
| Weighted average shares outstanding-diluted EPS | 75,047 | 74,669 | ||||||||||||
| Effect of dilutive Series C preferred shares | 2,241 | — | ||||||||||||
| Effect of dilutive Series E preferred shares | 1,664 | — | ||||||||||||
| Adjusted weighted average shares outstanding-diluted Series C and Series E | 78,952 | 74,669 | ||||||||||||
| Other financial information: | ||||||||||||||
| Dividends per common share | $ | 0.7750 | $ | — | ||||||||||
(1) Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions.
The additional common shares that would result from the conversion of the 5.75% Series C cumulative convertible preferred shares and the 9.00% Series E cumulative convertible preferred shares for the three months ended March 31, 2021, and the corresponding add-back of the preferred dividends declared on those shares are not included in the calculation of diluted FFO, FFOAA and AFFO per share because the effect is anti-dilutive. The conversion of the 5.75% Series C cumulative convertible preferred shares and the 9.00% Series E cumulative convertible preferred shares would be dilutive to FFO, FFOAA and AFFO for the three months ended March 31, 2022. Therefore, the additional common shares that would result from the conversion and the corresponding add-back of the preferred dividends declared on those shares are included in the calculation of diluted FFO, FFOAA and AFFO per share.
Net Debt
Net Debt represents debt (reported in accordance with GAAP) adjusted to exclude deferred financing costs, net and reduced for cash and cash equivalents. By excluding deferred financing costs, net and reducing debt for cash and cash equivalents on hand, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. The Company believes this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding our financial condition. The Company's method of calculating Net Debt may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Gross Assets
Gross Assets represents total assets (reported in accordance with GAAP) adjusted to exclude accumulated depreciation and reduced for cash and cash equivalents. By excluding accumulated depreciation and reducing cash and cash equivalents, the result provides an estimate of the investment made by the Company. The Company believes that investors commonly use versions of this calculation in a similar manner. The Company's method of calculating Gross Assets may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Net Debt to Gross Assets Ratio
Net Debt to Gross Assets Ratio is a supplemental measure derived from non-GAAP financial measures that the Company uses to evaluate capital structure and the magnitude of debt to gross assets. The Company believes that investors commonly use versions of this ratio in a similar manner. The Company's method of calculating the Net Debt to Gross Assets Ratio may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
EBITDAre
NAREIT developed EBITDAre as a relative non-GAAP financial measure of REITs, independent of a company's capital structure, to provide a uniform basis to measure the enterprise value of a company. Pursuant to the definition of EBITDAre by the Board of Governors of NAREIT, the Company calculates EBITDAre as net income (loss), 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 EBITDAre
Management uses Adjusted EBITDAre in its analysis of the performance of the business and operations of the Company. Management believes Adjusted EBITDAre is useful to investors because it excludes various items that management believes are not indicative of operating performance, and that it is an informative measure to use in computing various financial ratios to evaluate the Company. The Company defines Adjusted EBITDAre as EBITDAre (defined above) for the quarter excluding gain on insurance recovery, severance expense, credit loss (benefit) expense, transaction costs, impairment losses on operating lease right-of-use assets and prepayment fees.
The Company's method of calculating Adjusted EBITDAre may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. Adjusted EBITDAre is not a measure of performance under GAAP, does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. This measure should not be considered as an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or cash flows or liquidity as defined by GAAP.
Net Debt to Adjusted EBITDAre Ratio
Net Debt to Adjusted EBITDAre Ratio is a supplemental measure derived from non-GAAP financial measures that the Company uses to evaluate our capital structure and the magnitude of our debt against our operating performance. The Company believes that investors commonly use versions of this ratio in a similar manner. In addition, financial institutions use versions of this ratio in connection with debt agreements to set pricing and covenant limitations. The Company's method of calculating the Net Debt to Adjusted EBITDAre Ratio may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Reconciliations of debt, total assets and net income (loss) (all reported in accordance with GAAP) to Net Debt, Gross Assets, Net Debt to Gross Assets Ratio, EBITDAre, Adjusted EBITDAre and Net Debt to Adjusted EBITDAre Ratio (each of which is a non-GAAP financial measure), as applicable, are included in the following tables (unaudited, in thousands except ratios):
| March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net Debt: | |||||||||||
| Debt | $ | 2,805,853 | $ | 3,171,193 | |||||||
| Deferred financing costs, net | 35,376 | 35,036 | |||||||||
| Cash and cash equivalents | (323,761) | (538,077) | |||||||||
| Net Debt | $ | 2,517,468 | $ | 2,668,152 | |||||||
| Gross Assets: | |||||||||||
| Total Assets | $ | 5,818,070 | $ | 6,208,102 | |||||||
| Accumulated depreciation | 1,206,317 | 1,101,727 | |||||||||
| Cash and cash equivalents | (323,761) | (538,077) | |||||||||
| Gross Assets | $ | 6,700,626 | $ | 6,771,752 | |||||||
| Net Debt to Gross Assets Ratio | 38 | % | 39 | % | |||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| EBITDAre and Adjusted EBITDAre: | |||||||||||
| Net income | $ | 42,192 | $ | 3,380 | |||||||
| Interest expense, net | 33,260 | 39,194 | |||||||||
| Income tax expense | 318 | 407 | |||||||||
| Depreciation and amortization | 40,044 | 40,326 | |||||||||
| Gain on sale of real estate | — | (201) | |||||||||
| Impairment of real estate investments, net | 4,351 | — | |||||||||
| Costs associated with loan refinancing or payoff | — | 241 | |||||||||
| Allocated share of joint venture depreciation | 1,487 | 354 | |||||||||
| Allocated share of joint venture interest expense | 1,121 | 789 | |||||||||
| EBITDAre | $ | 122,773 | $ | 84,490 | |||||||
| Gain on insurance recovery (1) | (552) | (30) | |||||||||
| Transaction costs | 2,247 | 548 | |||||||||
| Credit loss benefit | (306) | (2,762) | |||||||||
| Adjusted EBITDAre | $ | 124,162 | $ | 82,246 | |||||||
| Adjusted EBITDAre (annualized) (2) | $ | 496,648 | Footnote 3 | ||||||||
| Net Debt/Adjusted EBITDA Ratio | 5.1 | Footnote 3 | |||||||||
| (1) Included in other income in the accompanying consolidated statements of income (loss) and comprehensive income for the quarter. Other income includes the following: | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Income from settlement of foreign currency swap contracts | $ | 45 | $ | 52 | |||||||
| Gain on insurance recovery | 552 | 30 | |||||||||
| Operating income from operated properties | 8,648 | 295 | |||||||||
| Miscellaneous income | 60 | 301 | |||||||||
| Other income | $ | 9,305 | $ | 678 | |||||||
| (2) Adjusted EBITDA for the quarter is multiplied by four to calculate an annualized amount. | |||||||||||
| (3) Not presented as this ratio is not meaningful given the disruption caused by COVID-19 and the associated accounting for tenant rent deferrals and other lease modifications. | |||||||||||
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):
| March 31, 2022 | December 31, 2021 | ||||||||||
| Total Investments: | |||||||||||
| Real estate investments, net of accumulated depreciation | $ | 4,738,887 | $ | 4,713,091 | |||||||
| Add back accumulated depreciation on real estate investments | 1,206,317 | 1,167,734 | |||||||||
| Land held for development | 20,168 | 20,168 | |||||||||
| Property under development | 10,885 | 42,362 | |||||||||
| Mortgage notes and related accrued interest receivable | 370,021 | 370,159 | |||||||||
| Investment in joint ventures | 36,564 | 36,670 | |||||||||
| Intangible assets, gross (1) | 60,109 | 57,962 | |||||||||
| Notes receivable and related accrued interest receivable, net (1) | 7,222 | 7,254 | |||||||||
| Total investments | $ | 6,450,173 | $ | 6,415,400 | |||||||
| Total investments | $ | 6,450,173 | $ | 6,415,400 | |||||||
| Operating lease right-of-use assets | 177,174 | 180,808 | |||||||||
| Cash and cash equivalents | 323,761 | 288,822 | |||||||||
| Restricted cash | 2,956 | 1,079 | |||||||||
| Accounts receivable | 60,704 | 78,073 | |||||||||
| Less: accumulated depreciation on real estate investments | (1,206,317) | (1,167,734) | |||||||||
| Less: accumulated amortization on intangible assets (1) | (20,976) | (20,163) | |||||||||
| Prepaid expenses and other current assets (1) | 30,595 | 24,865 | |||||||||
| Total assets | $ | 5,818,070 | $ | 5,801,150 | |||||||
| (1) Included in other assets in the accompanying consolidated balance sheet. Other assets include the following: | |||||||||||
| March 31, 2022 | December 31, 2021 | ||||||||||
| Intangible assets, gross | $ | 60,109 | $ | 57,962 | |||||||
| Less: accumulated amortization on intangible assets | (20,976) | (20,163) | |||||||||
| Notes receivable and related accrued interest receivable, net | 7,222 | 7,254 | |||||||||
| Prepaid expenses and other current assets | 30,595 | 24,865 | |||||||||
| Total other assets | $ | 76,950 | $ | 69,918 | |||||||
About EPR Properties
EPR Properties (NYSE:EPR) is the leading diversified experiential net lease real estate investment trust (REIT), specializing in select enduring experiential properties in the real estate industry. We focus on real estate venues 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 $6.5 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 our guidance, the uncertain financial impact of the COVID-19 pandemic, our capital resources and liquidity, our pursuit of growth opportunities, the timing of transaction closings and investment spending, our expected cash flows, the performance of our customers, our expected cash collections and our results of operations and financial condition. The forward-looking statements presented herein are based on the Company's current expectations. Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the forward-looking statements will occur. You can identify forward-looking statements by use of words such as “will be,” “intend,” “continue,” “believe,” “may,” “expect,” “hope,” “anticipate,” “goal,” “forecast,” “pipeline,” “estimates,” “offers,” “plans,” “would” or other similar expressions or other comparable terms or discussions of strategy, plans or intentions contained or incorporated by reference herein. Forward-looking statements necessarily are dependent on assumptions, data or methods that may be incorrect or imprecise. These forward-looking statements represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. For further discussion of these factors see “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K and, to the extent applicable, our Quarterly Reports on Form 10-Q.
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date hereof or the date of any document incorporated by reference herein. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except as required by law, we do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date hereof.
EPR Properties
Brian Moriarty, 888-EPR-REIT
www.eprkc.com
FIRST QUARTER 2022 EARNINGS CALL May 5, 2022
2 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 the COVID-19 pandemic, our guidance, our capital resources and liquidity, our expected dividend payments, our expected cash flows and liquidity, the performance of our customers, our expected cash collections, expected use of proceeds from dispositions 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 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. 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. DISCLAIMER
INTRODUCTORY COMMENTS
PORTFOLIO UPDATE
5 PORTFOLIO OVERVIEW Education Portfolio 74 Properties; 8 Operators Occupancy at 100% *See Supplemental Operating and Financial Data – First Quarter Ended March 31, 2022 for definitions and calculations of these non-GAAP measures **YTD investment spending through May 4, 2022 Experiential Portfolio 281 Properties; 42 Operators Occupancy at 96% $5.9B Total Investments* Total Portfolio Snapshot ~$6.5B Total Investments* 355 Properties Occupancy at 96% Q1 Investment Spending $24.4M YTD 2022 Spending $90.5M**
6 THEATRES *BoxOfficeMojo $0.0 $1.5 Jan Feb Mar 2021 2022 Not a Demand Issue, It’s a Supply Issue $360M+ Domestic Gross The Batman Q1 2022 Highest Grossing Movie* Box Office* Recovery (in billions, cumulative) Solid Film Slate for 2022 $237M $1.33B
7 PORTFOLIO UPDATE Ski Revenue growth across portfolio Eat & Play Strong attendance and revenue in Q1 Attractions & Cultural Most properties closed seasonally Q1; anticipate solid demand in 2022 Experiential Lodging Continued growth in occupancy & ADR Fitness & Wellness Memberships up in Q1 over prior year
8 INVESTMENT SPENDING *YTD investment spending through May 4, 2022 Return to Growth • Seeing increased opportunities throughout most verticals • Acquired Movement Climbing-Fitness-Yoga in Chicago for $19.9M • Subsequent to quarter end, acquired Cajun Palms RV park in JV with Northgate Resorts o EPR has 85% ownership interest; overall investment exceeds $60M • $90.5M investments funded in 2022* 2022 Investment Spending Guidance $500M-$700M
FINANCIAL REVIEW
1 0 (In millions except per-share data) *See Supplemental Operating and Financial Data for the applicable periods for definitions and calculations of these non-GAAP measures FINANCIAL HIGHLIGHTS Financial Performance Quarter ended March 31, 2022 2021 $ Change % Change Total Revenue $157.5 $111.8 45.7 41% Net Income (Loss) – Common 36.2 (2.7) 38.9 1,441% FFO as adj. – Common* 83.2 35.6 47.6 134% AFFO – Common* 87.8 38.9 48.9 126% Net Income (Loss)/share – Common 0.48 (0.04) 0.52 1,300% FFO/share - Common, as adj.* 1.10 0.48 0.62 129% AFFO/share - Common* 1.16 0.52 0.64 123%
1 1 FINANCIAL HIGHLIGHTS Key Ratios Quarter ended March 31, 2022 Fixed charge coverage 3.2x Debt service coverage 3.7x Interest coverage 3.7x Net Debt to Adjusted EBITDA 5.1x Net Debt to Gross Assets 38% AFFO payout 67% *See Supplemental Operating and Financial Data for the applicable periods for definitions and calculations of these non-GAAP measures
1 2 Rating Agency Upgrade • During March 2022, Fitch issued an investment grade rating on both the Company and its unsecured debt with a stable outlook • EPR’s unsecured debt now has investment grade ratings from Fitch, S&P and Moody’s Debt • $2.8B total debt; all fixed rate or fixed through int. rate swaps at wtd. avg. = 4.3% • Weighted avg. debt maturity of six years; no scheduled debt maturities until 2024 Liquidity Position at 3/31/22 • $323.8M unrestricted cash • No balance on $1B revolver CAPITAL MARKETS UPDATE
1 3 2022 GUIDANCE *See Supplemental Operating and Financial Data - First Quarter Ended March 31, 2022 for definition of this non-GAAP measure FFO AS ADJUSTED PER SHARE* Revised Guidance $4.39 - $4.55 Prior Guidance $4.30 - $4.50 INVESTMENT SPENDING Guidance $500M - $700M DISPOSITION PROCEEDS Guidance $0M - $10M
CLOSING COMMENTS
EPR Properties 909 Walnut Street, Suite 200 Kansas City, MO 64106 www.eprkc.com 816-472-1700 [email protected]
Exhibit 99.3
| 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 | ||||||||||||||||||||||||||
| Investment Spending and Disposition Summaries | ||||||||||||||||||||||||||
| Property Under Development - Investment Spending Estimates | ||||||||||||||||||||||||||
| Portfolio Detail | ||||||||||||||||||||||||||
| Lease Expirations | ||||||||||||||||||||||||||
| Top Ten Customers by Total Revenue | ||||||||||||||||||||||||||
| Guidance | ||||||||||||||||||||||||||
| Definitions-Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| Appendix-Reconciliation of Certain Non-GAAP Financial Measures | ||||||||||||||||||||||||||
 | ||||||||
| Q1 2022 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 our guidance, the uncertain financial impact of the COVID-19 pandemic, our capital resources and liquidity, our pursuit of growth opportunities, the timing of transaction closings and investment spending, our expected cash flows, the performance of our customers, our expected cash collections and our results of operations and financial condition. 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. 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 24 through 26 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 27 through 31.
| ||||||||
| Q1 2022 Supplemental | Page 3 | |||||||
| COMPANY PROFILE | ||||||||||||||
| THE COMPANY | COMPANY STRATEGY | |||||||
| EPR Properties ("we," "us," "our," "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. | Our primary business objective is to enhance shareholder value by achieving predictable growth in Funds from Operations As Adjusted ("FFOAA") and dividends per share. | |||||||
| Our strategic growth is focused on acquiring or developing a diversified portfolio of 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. This strategy is driven by the long-term trends of the growing experience economy. | ||||||||
| 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. | ||||||||
| 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. | ||||||||
 | ||||||||
| As part of our strategic planning and portfolio management process we assess new opportunities against the following underwriting principles: | ||||||||
 | ||||||||
| BUILDING THE PREMIER EXPERIENTIAL REAL ESTATE PORTFOLIO | ||||||||||||||||||||
 |  |  |  | |||||||||||||||||
| ||||||||
| Q1 2022 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 | |||||||
| Executive Vice President, General Counsel and Secretary | Executive Vice President and Chief Investment Officer | |||||||
| Tonya Mater | Elizabeth Grace | |||||||
| Senior Vice President and Chief Accounting Officer | Senior Vice President - Human Resources and Administration | |||||||
| 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 | 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/Todd Thomas | 917-368-2286 | ||||||
| Ladenburg Thalmann | John Massocca | 212-409-2056 | ||||||
| Raymond James & Associates | RJ Milligan | 727-567-2585 | ||||||
| RBC Capital Markets | Michael Carroll | 440-715-2649 | ||||||
| Stifel | Simon Yarmak | 443-224-1345 | ||||||
| Truist | 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.
| ||||||||
| Q1 2022 Supplemental | Page 5 | |||||||
| SELECTED FINANCIAL INFORMATION | ||||||||||||||
| (UNAUDITED, DOLLARS AND SHARES IN THOUSANDS) | ||||||||||||||
| THREE MONTHS ENDED MARCH 31, | ||||||||||||||
| Operating Information: | 2022 | 2021 | ||||||||||||
| Revenue | $ | 157,472 | $ | 111,765 | ||||||||||
| Net income (loss) available to common shareholders of EPR Properties | 36,159 | (2,654) | ||||||||||||
| EBITDAre (1) | 122,773 | 84,490 | ||||||||||||
| Adjusted EBITDAre (1) | 124,162 | 82,246 | ||||||||||||
| Interest expense, net | 33,260 | 39,194 | ||||||||||||
| Capitalized interest | 200 | 595 | ||||||||||||
| Straight-lined rental revenue | 595 | 1,288 | ||||||||||||
| Dividends declared on preferred shares | 6,033 | 6,034 | ||||||||||||
| Dividends declared on common shares | 58,099 | — | ||||||||||||
| General and administrative expense | 13,224 | 11,336 | ||||||||||||
| MARCH 31, | ||||||||||||||
| Balance Sheet Information: | 2022 | 2021 | ||||||||||||
| Total assets | $ | 5,818,070 | $ | 6,208,102 | ||||||||||
| Accumulated depreciation | 1,206,317 | 1,101,727 | ||||||||||||
| Cash and cash equivalents | 323,761 | 538,077 | ||||||||||||
| Total assets before accumulated depreciation less cash and cash equivalents (gross assets) | 6,700,626 | 6,771,752 | ||||||||||||
| Debt | 2,805,853 | 3,171,193 | ||||||||||||
| Deferred financing costs, net | 35,376 | 35,036 | ||||||||||||
| Net debt (1) | 2,517,468 | 2,668,152 | ||||||||||||
| Equity | 2,601,114 | 2,634,733 | ||||||||||||
| Common shares outstanding | 74,968 | 74,767 | ||||||||||||
| Total market capitalization (using EOP closing price) | 6,989,981 | 6,522,602 | ||||||||||||
| Net debt/gross assets ratio (1) | 38 | % | 39 | % | ||||||||||
| Net debt/Adjusted EBITDAre ratio (1) (2) | 5.1 | Footnote 3 | ||||||||||||
(1) See pages 24 through 26 for definitions. See calculation as applicable on page 30. | ||||||||||||||
(2) Adjusted EBITDAre in this calculation is for the three month period multiplied times four. See pages 24 through 26 for definitions. See calculation on page 30. | ||||||||||||||
| (3) Not presented as this ratio is not meaningful given the disruption caused by COVID-19 and the associated accounting for tenant rent deferrals and other lease modifications. | ||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 6 | |||||||
| SELECTED BALANCE SHEET INFORMATION | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||||||||||||||||||||||||||
| ASSETS | 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | ||||||||||||||||||||||||||||||||
| Real estate investments | $ | 5,945,204 | $ | 5,880,825 | $ | 5,943,074 | $ | 5,965,061 | $ | 5,902,833 | $ | 5,913,389 | ||||||||||||||||||||||||||
| Less: accumulated depreciation | (1,206,317) | (1,167,734) | (1,142,513) | (1,130,409) | (1,101,727) | (1,062,087) | ||||||||||||||||||||||||||||||||
| Land held for development | 20,168 | 20,168 | 21,875 | 23,225 | 23,225 | 23,225 | ||||||||||||||||||||||||||||||||
| Property under development | 10,885 | 42,362 | 20,166 | 35,082 | 94,822 | 57,630 | ||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 177,174 | 180,808 | 175,987 | 179,354 | 179,113 | 163,766 | ||||||||||||||||||||||||||||||||
| Mortgage notes and related accrued interest receivable | 370,021 | 370,159 | 369,134 | 366,064 | 364,969 | 365,628 | ||||||||||||||||||||||||||||||||
| Investment in joint ventures | 36,564 | 36,670 | 38,729 | 27,476 | 28,313 | 28,208 | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 323,761 | 288,822 | 144,433 | 509,836 | 538,077 | 1,025,577 | ||||||||||||||||||||||||||||||||
| Restricted cash | 2,956 | 1,079 | 5,142 | 3,570 | 5,928 | 2,433 | ||||||||||||||||||||||||||||||||
| Accounts receivable | 60,704 | 78,073 | 80,491 | 91,319 | 97,517 | 116,193 | ||||||||||||||||||||||||||||||||
| Other assets | 76,950 | 69,918 | 64,639 | 71,634 | 75,032 | 70,223 | ||||||||||||||||||||||||||||||||
| Total assets | $ | 5,818,070 | $ | 5,801,150 | $ | 5,721,157 | $ | 6,142,212 | $ | 6,208,102 | $ | 6,704,185 | ||||||||||||||||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 92,999 | $ | 73,462 | $ | 87,021 | $ | 103,778 | $ | 95,085 | $ | 105,379 | ||||||||||||||||||||||||||
Operating lease liabilities | 215,112 | 218,795 | 214,065 | 217,575 | 217,448 | 202,223 | ||||||||||||||||||||||||||||||||
Common dividends payable | 20,946 | 18,896 | 18,802 | 54 | 44 | 36 | ||||||||||||||||||||||||||||||||
Preferred dividends payable | 6,033 | 6,034 | 6,033 | 6,033 | 6,034 | 6,034 | ||||||||||||||||||||||||||||||||
Unearned rents and interest | 76,013 | 61,559 | 79,692 | 79,992 | 83,565 | 65,485 | ||||||||||||||||||||||||||||||||
Line of credit | — | — | — | — | 90,000 | 590,000 | ||||||||||||||||||||||||||||||||
Deferred financing costs, net | (35,376) | (36,864) | (32,166) | (34,744) | (35,036) | (35,552) | ||||||||||||||||||||||||||||||||
Other debt | 2,841,229 | 2,841,229 | 2,716,229 | 3,116,229 | 3,116,229 | 3,139,995 | ||||||||||||||||||||||||||||||||
| Total liabilities | 3,216,956 | 3,183,111 | 3,089,676 | 3,488,917 | 3,573,369 | 4,073,600 | ||||||||||||||||||||||||||||||||
| Equity: | ||||||||||||||||||||||||||||||||||||||
Common stock and additional paid-in-capital | 3,887,065 | 3,877,639 | 3,873,599 | 3,869,687 | 3,865,243 | 3,858,451 | ||||||||||||||||||||||||||||||||
Preferred stock at par value | 148 | 148 | 148 | 148 | 148 | 148 | ||||||||||||||||||||||||||||||||
Treasury stock | (269,608) | (264,817) | (264,679) | (264,660) | (263,982) | (261,238) | ||||||||||||||||||||||||||||||||
| Accumulated other comprehensive income | 10,471 | 9,955 | 9,625 | 5,265 | 2,978 | 216 | ||||||||||||||||||||||||||||||||
Distributions in excess of net income | (1,026,962) | (1,004,886) | (987,212) | (957,145) | (969,654) | (966,992) | ||||||||||||||||||||||||||||||||
| Total equity | 2,601,114 | 2,618,039 | 2,631,481 | 2,653,295 | 2,634,733 | 2,630,585 | ||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 5,818,070 | $ | 5,801,150 | $ | 5,721,157 | $ | 6,142,212 | $ | 6,208,102 | $ | 6,704,185 | ||||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 7 | |||||||
| SELECTED OPERATING DATA | |||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||||||||||||||
| 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | ||||||||||||||||||||||||||||||
| Rental revenue | $ | 139,603 | $ | 137,345 | $ | 123,040 | $ | 115,883 | $ | 102,614 | $ | 84,011 | |||||||||||||||||||||||
| Other income | 9,305 | 9,014 | 8,091 | 1,033 | 678 | 968 | |||||||||||||||||||||||||||||
| Mortgage and other financing income | 8,564 | 8,547 | 8,516 | 8,446 | 8,473 | 8,433 | |||||||||||||||||||||||||||||
| Total revenue | 157,472 | 154,906 | 139,647 | 125,362 | 111,765 | 93,412 | |||||||||||||||||||||||||||||
| Property operating expense | 13,939 | 12,933 | 13,815 | 14,678 | 15,313 | 16,406 | |||||||||||||||||||||||||||||
| Other expense | 8,097 | 8,313 | 7,851 | 3,025 | 2,552 | 1,462 | |||||||||||||||||||||||||||||
| General and administrative expense | 13,224 | 10,496 | 11,154 | 11,376 | 11,336 | 11,142 | |||||||||||||||||||||||||||||
Severance expense | — | — | — | — | — | 2,868 | |||||||||||||||||||||||||||||
Costs associated with loan refinancing or payoff | — | 20,469 | 4,741 | — | 241 | 812 | |||||||||||||||||||||||||||||
| Interest expense, net | 33,260 | 34,005 | 36,584 | 38,312 | 39,194 | 42,838 | |||||||||||||||||||||||||||||
| Transaction costs | 2,247 | 60 | 2,132 | 662 | 548 | 814 | |||||||||||||||||||||||||||||
| Credit loss (benefit) expense | (306) | (2,295) | (14,096) | (2,819) | (2,762) | 20,312 | |||||||||||||||||||||||||||||
| Impairment charges | 4,351 | — | 2,711 | — | — | 22,832 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 40,044 | 40,294 | 42,612 | 40,538 | 40,326 | 42,014 | |||||||||||||||||||||||||||||
| Income (loss) before equity in loss from joint ventures and other items | 42,616 | 30,631 | 32,143 | 19,590 | 5,017 | (68,088) | |||||||||||||||||||||||||||||
| Equity in loss from joint ventures | (106) | (2,059) | (418) | (1,151) | (1,431) | (1,364) | |||||||||||||||||||||||||||||
| Gain on sale of real estate | — | 16,382 | 787 | 511 | 201 | 49,877 | |||||||||||||||||||||||||||||
| Income tax expense | (318) | (397) | (395) | (398) | (407) | (402) | |||||||||||||||||||||||||||||
| Net income (loss) | 42,192 | 44,557 | 32,117 | 18,552 | 3,380 | (19,977) | |||||||||||||||||||||||||||||
| Preferred dividend requirements | (6,033) | (6,034) | (6,033) | (6,033) | (6,034) | (6,034) | |||||||||||||||||||||||||||||
| Net income (loss) available to common shareholders of EPR Properties | $ | 36,159 | $ | 38,523 | $ | 26,084 | $ | 12,519 | $ | (2,654) | $ | (26,011) | |||||||||||||||||||||||
| ||||||||
| Q1 2022 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 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | |||||||||||||||||||||||||||||
| Net income (loss) available to common shareholders of EPR Properties | $ | 36,159 | $ | 38,523 | $ | 26,084 | $ | 12,519 | $ | (2,654) | $ | (26,011) | |||||||||||||||||||||||
| Gain on sale of real estate | — | (16,382) | (787) | (511) | (201) | (49,877) | |||||||||||||||||||||||||||||
| Impairment of real estate investments, net | 4,351 | — | 2,711 | — | — | 22,832 | |||||||||||||||||||||||||||||
| Real estate depreciation and amortization | 39,827 | 40,095 | 42,415 | 40,332 | 40,109 | 41,786 | |||||||||||||||||||||||||||||
| Allocated share of joint venture depreciation | 1,487 | 1,561 | 966 | 459 | 354 | 361 | |||||||||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | 81,824 | $ | 63,797 | $ | 71,389 | $ | 52,799 | $ | 37,608 | $ | (10,909) | |||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | 81,824 | $ | 63,797 | $ | 71,389 | $ | 52,799 | $ | 37,608 | $ | (10,909) | |||||||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | 1,938 | — | — | — | — | — | |||||||||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | 1,939 | — | — | — | — | — | |||||||||||||||||||||||||||||
| Diluted FFO available to common shareholders of EPR Properties | $ | 85,701 | $ | 63,797 | $ | 71,389 | $ | 52,799 | $ | 37,608 | $ | (10,909) | |||||||||||||||||||||||
| FUNDS FROM OPERATIONS AS ADJUSTED ("FFOAA") (1): | |||||||||||||||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | 81,824 | $ | 63,797 | $ | 71,389 | $ | 52,799 | $ | 37,608 | $ | (10,909) | |||||||||||||||||||||||
| Costs associated with loan refinancing or payoff | — | 20,469 | 4,741 | — | 241 | 812 | |||||||||||||||||||||||||||||
| Transaction costs | 2,247 | 60 | 2,132 | 662 | 548 | 814 | |||||||||||||||||||||||||||||
| Severance expense | — | — | — | — | — | 2,868 | |||||||||||||||||||||||||||||
| Credit loss (benefit) expense | (306) | (2,295) | (14,096) | (2,819) | (2,762) | 20,312 | |||||||||||||||||||||||||||||
| Gain on insurance recovery (included in other income) | (552) | (1,151) | — | — | (30) | (809) | |||||||||||||||||||||||||||||
| FFO as adjusted available to common shareholders of EPR Properties | $ | 83,213 | $ | 80,880 | $ | 64,166 | $ | 50,642 | $ | 35,605 | $ | 13,088 | |||||||||||||||||||||||
| FFO as adjusted available to common shareholders of EPR Properties | $ | 83,213 | $ | 80,880 | $ | 64,166 | $ | 50,642 | $ | 35,605 | $ | 13,088 | |||||||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | 1,938 | 1,938 | — | — | — | — | |||||||||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | 1,939 | 1,939 | — | — | — | — | |||||||||||||||||||||||||||||
| Diluted FFO as adjusted available to common shareholders of EPR Properties | $ | 87,090 | $ | 84,757 | $ | 64,166 | $ | 50,642 | $ | 35,605 | $ | 13,088 | |||||||||||||||||||||||
| FFO per common share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 1.09 | $ | 0.85 | $ | 0.95 | $ | 0.71 | $ | 0.50 | $ | (0.15) | |||||||||||||||||||||||
| Diluted | 1.09 | 0.85 | 0.95 | 0.71 | 0.50 | (0.15) | |||||||||||||||||||||||||||||
| FFO as adjusted per common share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 1.11 | $ | 1.08 | $ | 0.86 | $ | 0.68 | $ | 0.48 | $ | 0.18 | |||||||||||||||||||||||
| Diluted | 1.10 | 1.08 | 0.86 | 0.68 | 0.48 | 0.18 | |||||||||||||||||||||||||||||
| Shares used for computation (in thousands): | |||||||||||||||||||||||||||||||||||
| Basic | 74,843 | 74,806 | 74,804 | 74,781 | 74,627 | 74,615 | |||||||||||||||||||||||||||||
| Diluted | 75,047 | 74,808 | 74,911 | 74,870 | 74,669 | 74,615 | |||||||||||||||||||||||||||||
| Effect of dilutive Series C preferred shares | 2,241 | 2,237 | — | — | — | — | |||||||||||||||||||||||||||||
| Effect of dilutive Series E preferred shares | 1,664 | 1,664 | — | — | — | — | |||||||||||||||||||||||||||||
| Adjusted weighted-average shares outstanding-diluted Series C and Series E | 78,952 | 78,709 | 74,911 | 74,870 | 74,669 | 74,615 | |||||||||||||||||||||||||||||
(1) See pages 24 through 26 for definitions. | |||||||||||||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 9 | |||||||
| ADJUSTED FUNDS FROM OPERATIONS | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION) | ||||||||||||||||||||||||||||||||||||||
| ADJUSTED FUNDS FROM OPERATIONS ("AFFO") (1): | 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | ||||||||||||||||||||||||||||||||
FFO available to common shareholders of EPR Properties | $ | 81,824 | $ | 63,797 | $ | 71,389 | $ | 52,799 | $ | 37,608 | $ | (10,909) | ||||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||||
Costs associated with loan refinancing or payoff | — | 20,469 | 4,741 | — | 241 | 812 | ||||||||||||||||||||||||||||||||
| Transaction costs | 2,247 | 60 | 2,132 | 662 | 548 | 814 | ||||||||||||||||||||||||||||||||
| Credit loss (benefit) expense | (306) | (2,295) | (14,096) | (2,819) | (2,762) | 20,312 | ||||||||||||||||||||||||||||||||
| Severance expense | — | — | — | — | — | 2,868 | ||||||||||||||||||||||||||||||||
| Gain on insurance recovery (included in other income) | (552) | (1,151) | — | — | (30) | (809) | ||||||||||||||||||||||||||||||||
| Non-real estate depreciation and amortization | 217 | 199 | 197 | 206 | 217 | 228 | ||||||||||||||||||||||||||||||||
| Deferred financing fees amortization | 2,071 | 2,335 | 2,210 | 1,574 | 1,547 | 1,823 | ||||||||||||||||||||||||||||||||
Share-based compensation expense to management and trustees | 4,245 | 3,685 | 3,759 | 3,675 | 3,784 | 3,437 | ||||||||||||||||||||||||||||||||
| Amortization of above/below market leases, net and tenant allowances | (87) | (92) | (98) | (99) | (96) | (96) | ||||||||||||||||||||||||||||||||
| Maintenance capital expenditures (2) | (1,351) | (1,718) | (690) | (1,467) | (756) | (247) | ||||||||||||||||||||||||||||||||
| Straight-lined rental revenue | (595) | (1,974) | (981) | (1,420) | (1,289) | (898) | ||||||||||||||||||||||||||||||||
| Straight-lined ground sublease expense | 248 | 89 | 98 | 111 | 84 | 150 | ||||||||||||||||||||||||||||||||
Non-cash portion of mortgage and other financing income | (116) | (114) | 55 | (216) | (171) | (133) | ||||||||||||||||||||||||||||||||
| AFFO available to common shareholders of EPR Properties | $ | 87,845 | $ | 83,290 | $ | 68,716 | $ | 53,006 | $ | 38,925 | $ | 17,352 | ||||||||||||||||||||||||||
| AFFO available to common shareholders of EPR Properties | $ | 87,845 | $ | 83,290 | $ | 68,716 | $ | 53,006 | $ | 38,925 | $ | 17,352 | ||||||||||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | 1,938 | 1,938 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | 1,939 | 1,939 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Diluted AFFO available to common shareholders of EPR Properties | $ | 91,722 | $ | 87,167 | $ | 68,716 | $ | 53,006 | $ | 38,925 | $ | 17,352 | ||||||||||||||||||||||||||
Weighted average diluted shares outstanding (in thousands) | 75,047 | 74,808 | 74,911 | 74,870 | 74,669 | 74,615 | ||||||||||||||||||||||||||||||||
| Effect of dilutive Series C preferred shares | 2,241 | 2,237 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of dilutive Series E preferred shares | 1,664 | 1,664 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Adjusted weighted-average shares outstanding-diluted | 78,952 | 78,709 | 74,911 | 74,870 | 74,669 | 74,615 | ||||||||||||||||||||||||||||||||
| AFFO per diluted common share | $ | 1.16 | $ | 1.11 | $ | 0.92 | $ | 0.71 | $ | 0.52 | $ | 0.23 | ||||||||||||||||||||||||||
| Dividends declared per common share | $ | 0.775 | $ | 0.750 | $ | 0.750 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||
| AFFO payout ratio (3) | 67 | % | 68 | % | 82 | % | — | % | — | % | — | % | ||||||||||||||||||||||||||
(1) See pages 24 through 26 for definitions. | ||||||||||||||||||||||||||||||||||||||
| (2) Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions. | ||||||||||||||||||||||||||||||||||||||
| (3) 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 temporarily suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. On July 13, 2021, following termination of the Covenant Relief Period, the Company resumed regular monthly cash dividends to common shareholders. | ||||||||||||||||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 10 | |||||||
CAPITAL STRUCTURE AS OF MARCH 31, 2022 | |||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||||||||||||||
| CONSOLIDATED DEBT | |||||||||||||||||||||||||||||||||||
| PRINCIPAL PAYMENTS DUE ON DEBT: | |||||||||||||||||||||||||||||||||||
| BONDS/TERM LOAN/OTHER (1) | UNSECURED CREDIT FACILITY (2) | UNSECURED SENIOR NOTES | TOTAL | WEIGHTED AVG INTEREST RATE | |||||||||||||||||||||||||||||||
| YEAR | |||||||||||||||||||||||||||||||||||
| 2022 | $ | — | $ | — | $ | — | $ | — | —% | ||||||||||||||||||||||||||
| 2023 | — | — | — | — | —% | ||||||||||||||||||||||||||||||
| 2024 | — | — | 136,637 | 136,637 | 4.35% | ||||||||||||||||||||||||||||||
| 2025 | — | — | 300,000 | 300,000 | 4.50% | ||||||||||||||||||||||||||||||
| 2026 | — | — | 629,597 | 629,597 | 4.70% | ||||||||||||||||||||||||||||||
| 2027 | — | — | 450,000 | 450,000 | 4.50% | ||||||||||||||||||||||||||||||
| 2028 | — | — | 400,000 | 400,000 | 4.95% | ||||||||||||||||||||||||||||||
| 2029 | — | — | 500,000 | 500,000 | 3.75% | ||||||||||||||||||||||||||||||
| 2030 | — | — | — | — | —% | ||||||||||||||||||||||||||||||
| 2031 | — | — | 400,000 | (2) | 400,000 | 3.60% | |||||||||||||||||||||||||||||
| 2032 | — | — | — | — | —% | ||||||||||||||||||||||||||||||
| Thereafter | 24,995 | — | — | 24,995 | 1.39% | ||||||||||||||||||||||||||||||
| Less: deferred financing costs, net | — | — | — | (35,376) | —% | ||||||||||||||||||||||||||||||
| $ | 24,995 | $ | — | $ | 2,816,234 | $ | 2,805,853 | 4.31% | |||||||||||||||||||||||||||
| BALANCE | WEIGHTED AVG INTEREST RATE | WEIGHTED AVG MATURITY | |||||||||||||||||||||||||||||||||
| Fixed rate unsecured debt | $ | 2,816,234 | 4.30 | % | 5.78 | ||||||||||||||||||||||||||||||
| Fixed rate secured debt (1) | 24,995 | 1.39 | % | 25.33 | |||||||||||||||||||||||||||||||
| Less: deferred financing costs, net | (35,376) | — | % | — | |||||||||||||||||||||||||||||||
| Total | $ | 2,805,853 | 4.31 | % | 6.00 | ||||||||||||||||||||||||||||||
| (1) Includes $25 million of secured bonds that have been fixed through interest rate swaps through September 30, 2024. | |||||||||||||||||||||||||||||||||||
| (2) Unsecured Revolving Credit Facility Summary: | |||||||||||||||||||||||||||||||||||
| BALANCE | RATE | ||||||||||||||||||||||||||||||||||
| COMMITMENT | AT 3/31/2022 | MATURITY | AT 3/31/2022 | ||||||||||||||||||||||||||||||||
| $1,000,000 | $— | October 6, 2025 | 1.657% | ||||||||||||||||||||||||||||||||
Note: This facility will mature on October 6, 2025 and has two six-month extensions available at the Company's option and includes an accordion feature pursuant to which the maximum borrowing amount can be increased from $1.0 billion to $2.0 billion, in each case, subject to certain terms and conditions. | |||||||||||||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 11 | |||||||
CAPITAL STRUCTURE AS OF MARCH 31, 2022 AND DECEMBER 31, 2021 | |||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||
| CONSOLIDATED DEBT (continued) | |||||||||||
| SUMMARY OF DEBT: | March 31, 2022 | December 31, 2021 | |||||||||
| Senior unsecured notes payable, 4.35%, due August 22, 2024 | 136,637 | 136,637 | |||||||||
| Senior unsecured notes payable, 4.50%, due April 1, 2025 | 300,000 | 300,000 | |||||||||
| Senior unsecured notes payable, 4.56%, due August 22, 2026 | 179,597 | 179,597 | |||||||||
| Senior unsecured notes payable, 4.75%, due December 15, 2026 | 450,000 | 450,000 | |||||||||
| Senior unsecured notes payable, 4.50%, due June 1, 2027 | 450,000 | 450,000 | |||||||||
| Senior unsecured notes payable, 4.95%, due April 15, 2028 | 400,000 | 400,000 | |||||||||
| Senior unsecured notes payable, 3.75%, due August 15, 2029 | 500,000 | 500,000 | |||||||||
| Senior unsecured notes payable, 3.60%, due November 15, 2031 | 400,000 | 400,000 | |||||||||
| Bonds payable, variable rate, fixed at 1.39% through September 30, 2024, due August 1, 2047 | 24,995 | 24,995 | |||||||||
| Less: deferred financing costs, net | (35,376) | (36,864) | |||||||||
| Total debt | $ | 2,805,853 | $ | 2,804,365 | |||||||
| ||||||||
| Q1 2022 Supplemental | Page 12 | |||||||
| CAPITAL STRUCTURE | |||||||||||||||||||||||
| SENIOR NOTES | |||||||||||||||||||||||
SENIOR DEBT RATINGS AS OF MARCH 31, 2022 | |||||||||||||||||||||||
| Moody's | Baa3 (stable) | ||||||||||||||||||||||
| Fitch | BBB- (stable) | ||||||||||||||||||||||
| Standard and Poor's | BBB- (stable) | ||||||||||||||||||||||
| SUMMARY OF COVENANTS | |||||||||||||||||||||||
The Company had outstanding public senior unsecured notes with fixed interest rates of 3.60%, 3.75%, 4.50%, 4.75% and 4.95% at March 31, 2022. Interest on these notes is paid semiannually. These public senior unsecured notes contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the Company's debt to adjusted total assets ratio to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause the Company’s secured debt to adjusted total assets ratio to exceed 40%; (iii) a limitation on incurrence of any debt which would cause the Company’s debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of the Company’s outstanding unsecured debt. | |||||||||||||||||||||||
The following is a summary of the key financial covenants for the Company's 3.60%, 3.75%, 4.50%, 4.75% and 4.95% public senior unsecured notes, as defined and calculated per the terms of the notes. These calculations, which are not based on U.S. generally accepted accounting principles, or GAAP, measurements, are presented to investors to show the Company's ability to incur additional debt under the terms of the senior unsecured notes only and are not measures of the Company's liquidity or performance. The actual amounts as of March 31, 2022 and December 31, 2021 are: | |||||||||||||||||||||||
| Actual | Actual | ||||||||||||||||||||||
| NOTE COVENANTS | Required | 1st Quarter 2022 (1) | 4th Quarter 2021 (1) | ||||||||||||||||||||
| Limitation on incurrence of total debt (Total Debt/Total Assets) | ≤ 60% | 41% | 41% | ||||||||||||||||||||
| Limitation on incurrence of secured debt (Secured Debt/Total Assets) | ≤ 40% | —% | —% | ||||||||||||||||||||
| Limitation on incurrence of debt: Debt service coverage (Consolidated Income Available for Debt Service/Annual Debt Service) - trailing twelve months | ≥ 1.5 x | 3.3x | 2.8x | ||||||||||||||||||||
| Maintenance of total unencumbered assets (Unencumbered Assets/Unsecured Debt) | ≥ 150% of unsecured debt | 234% | 232% | ||||||||||||||||||||
| (1) See page 14 for details of calculations. | |||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 13 | |||||||
| CAPITAL STRUCTURE | |||||||||||||||||||||||||||||
| SENIOR NOTES | |||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||||||||
| COVENANT CALCULATIONS | |||||||||||||||||||||||||||||
| TOTAL ASSETS: | March 31, 2022 | TOTAL DEBT: | March 31, 2022 | ||||||||||||||||||||||||||
| Total Assets per balance sheet | $ | 5,818,070 | Secured debt obligations | $ | 24,995 | ||||||||||||||||||||||||
| Add: accumulated depreciation | 1,206,317 | Unsecured debt obligations: | |||||||||||||||||||||||||||
| Less: intangible assets, net | (39,133) | Unsecured debt | 2,816,234 | ||||||||||||||||||||||||||
| Total Assets | $ | 6,985,254 | Outstanding letters of credit | — | |||||||||||||||||||||||||
| Guarantees | — | ||||||||||||||||||||||||||||
| TOTAL UNENCUMBERED ASSETS: | March 31, 2022 | Derivatives at fair market value, net, if liability | 6,979 | ||||||||||||||||||||||||||
| Unencumbered real estate assets, gross | $ | 6,252,636 | Total unsecured debt obligations: | 2,823,213 | |||||||||||||||||||||||||
| Cash and cash equivalents | 323,761 | Total Debt | $ | 2,848,208 | |||||||||||||||||||||||||
| Land held for development | 20,168 | ||||||||||||||||||||||||||||
| Property under development | 10,885 | ||||||||||||||||||||||||||||
| Total Unencumbered Assets | $ | 6,607,450 | |||||||||||||||||||||||||||
| CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE: | 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | TRAILING TWELVE MONTHS | ||||||||||||||||||||||||
| Adjusted EBITDAre | $ | 124,162 | $ | 122,660 | $ | 108,356 | $ | 96,437 | $ | 451,615 | |||||||||||||||||||
| Less: straight-line revenue, net, included in adjusted EBITDAre | (595) | (1,974) | (981) | (1,420) | (4,970) | ||||||||||||||||||||||||
| CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE | $ | 123,567 | $ | 120,686 | $ | 107,375 | $ | 95,017 | $ | 446,645 | |||||||||||||||||||
| ANNUAL DEBT SERVICE: | |||||||||||||||||||||||||||||
| Interest expense, gross | $ | 33,483 | $ | 34,251 | $ | 36,841 | $ | 38,869 | $ | 143,444 | |||||||||||||||||||
| Less: deferred financing fees amortization | (2,071) | (2,335) | (2,210) | (1,574) | (8,190) | ||||||||||||||||||||||||
| ANNUAL DEBT SERVICE | $ | 31,412 | $ | 31,916 | $ | 34,631 | $ | 37,295 | $ | 135,254 | |||||||||||||||||||
| DEBT SERVICE COVERAGE | 3.9 | 3.8 | 3.1 | 2.5 | 3.3 | ||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 14 | |||||||
CAPITAL STRUCTURE AS OF MARCH 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS EXCEPT SHARE INFORMATION) | ||||||||||||||||||||||||||||||||||||||||||||
| EQUITY | ||||||||||||||||||||||||||||||||||||||||||||
| SECURITY | SHARES OUTSTANDING | PRICE PER SHARE AT MARCH 31, 2022 | LIQUIDATION PREFERENCE | DIVIDEND RATE | CONVERTIBLE | CONVERSION RATIO AT MARCH 31, 2022 | CONVERSION PRICE AT MARCH 31, 2022 | |||||||||||||||||||||||||||||||||||||
| Common shares | 74,968,098 | $54.71 | N/A | (1) | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||
| Series C | 5,392,916 | $25.83 | $134,823 | 5.750% | Y | 0.4155 | $60.17 | |||||||||||||||||||||||||||||||||||||
| Series E | 3,447,381 | $33.20 | $86,185 | 9.000% | Y | 0.4826 | $51.80 | |||||||||||||||||||||||||||||||||||||
| Series G | 6,000,000 | $24.00 | $150,000 | 5.750% | N | N/A | N/A | |||||||||||||||||||||||||||||||||||||
| (1) Total monthly dividends declared in the first quarter of 2022 were $0.775 per share. | ||||||||||||||||||||||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 15 | |||||||
| SUMMARY OF RATIOS | |||||||||||||||||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||||||||||||||||
| 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | ||||||||||||||||||||||||||||||
| Net debt to gross assets ratio (1) | 38% | 38% | 38% | 39% | 39% | 40% | |||||||||||||||||||||||||||||
| Net debt/Adjusted EBITDAre ratio (1)(2) | 5.1 | 5.2 | Footnote 7 | Footnote 7 | Footnote 7 | Footnote 7 | |||||||||||||||||||||||||||||
| Interest coverage ratio (3) | 3.7 | 3.5 | Footnote 7 | Footnote 7 | Footnote 7 | Footnote 7 | |||||||||||||||||||||||||||||
| Fixed charge coverage ratio (3) | 3.2 | 3.0 | Footnote 7 | Footnote 7 | Footnote 7 | Footnote 7 | |||||||||||||||||||||||||||||
| Debt service coverage ratio (3) | 3.7 | 3.5 | Footnote 7 | Footnote 7 | Footnote 7 | Footnote 7 | |||||||||||||||||||||||||||||
| FFO payout ratio (4) (8) | 71% | 88% | 79% | —% | —% | —% | |||||||||||||||||||||||||||||
| FFO as adjusted payout ratio (5) (8) | 70% | 69% | 87% | —% | —% | —% | |||||||||||||||||||||||||||||
| AFFO payout ratio (6) (8) | 67% | 68% | 82% | —% | —% | —% | |||||||||||||||||||||||||||||
(1) See pages 24 through 26 for definitions. | |||||||||||||||||||||||||||||||||||
(2) Adjusted EBITDAre is for the quarter multiplied times four. See calculation on page 30. | |||||||||||||||||||||||||||||||||||
(3) See page 28 for detailed calculation. | |||||||||||||||||||||||||||||||||||
| (4) FFO payout ratio is calculated by dividing dividends declared per common share by FFO per diluted common share. | |||||||||||||||||||||||||||||||||||
| (5) FFO as adjusted payout ratio is calculated by dividing dividends declared per common share by FFO as adjusted per diluted common share. | |||||||||||||||||||||||||||||||||||
| (6) AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share. | |||||||||||||||||||||||||||||||||||
| (7) Not presented as this ratio is not meaningful given the disruption caused by COVID-19 and the associated accounting for tenant rent deferrals and other lease modifications. | |||||||||||||||||||||||||||||||||||
| (8) The monthly cash dividend to common shareholders was temporarily suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. On July 13, 2021, following termination of the Covenant Relief Period, the Company resumed regular monthly cash dividends to common shareholders. | |||||||||||||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 16 | |||||||
| SUMMARY OF MORTGAGE NOTES RECEIVABLE | |||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||
| CARRYING AMOUNT AS OF (1) | |||||||||||||||||||||||
| DESCRIPTION | INTEREST RATE | PAYOFF DATE/MATURITY DATE | OUTSTANDING PRINCIPAL AMOUNT OF MORTGAGE | MARCH 31, 2022 | DECEMBER 31, 2021 | ||||||||||||||||||
Attraction property Powells Point, North Carolina | 7.75 | % | 6/30/2025 | $ | 28,864 | $ | 28,695 | $ | 28,243 | ||||||||||||||
| Fitness & wellness property Omaha, Nebraska | 7.85 | % | 1/3/2027 | 10,905 | 10,952 | 10,940 | |||||||||||||||||
Fitness & wellness property Merriam, Kansas | 7.55 | % | 7/31/2029 | 9,090 | 9,171 | 9,159 | |||||||||||||||||
Ski property Girdwood, Alaska | 8.20 | % | 12/31/2029 | 45,599 | 45,623 | 45,877 | |||||||||||||||||
| Fitness & wellness property Omaha, Nebraska | 7.85 | % | 6/30/2030 | 10,539 | 10,602 | 10,615 | |||||||||||||||||
Experiential lodging property Nashville, Tennessee | 7.01 | % | 9/30/2031 | 71,223 | 71,277 | 70,896 | |||||||||||||||||
Eat & play property Austin, Texas | 11.31 | % | 6/1/2033 | 10,629 | 10,629 | 10,874 | |||||||||||||||||
| Ski property West Dover and Wilmington, Vermont | 11.96 | % | 12/1/2034 | 51,050 | 51,049 | 51,047 | |||||||||||||||||
Four ski properties Ohio and Pennsylvania | 11.07 | % | 12/1/2034 | 37,562 | 37,538 | 37,519 | |||||||||||||||||
Ski property Chesterland, Ohio | 11.55 | % | 12/1/2034 | 4,550 | 4,529 | 4,516 | |||||||||||||||||
Ski property Hunter, New York | 8.88 | % | 1/5/2036 | 21,000 | 21,000 | 21,000 | |||||||||||||||||
| Eat & play property Midvale, Utah | 10.25 | % | 5/31/2036 | 17,505 | 17,505 | 17,639 | |||||||||||||||||
| Eat & play property West Chester, Ohio | 9.75 | % | 8/1/2036 | 18,068 | 18,066 | 18,198 | |||||||||||||||||
| Fitness & wellness property Fort Collins, Colorado | 7.85 | % | 1/31/2038 | 10,292 | 10,048 | 10,277 | |||||||||||||||||
| Early childhood education center Lake Mary, Florida | 7.98 | % | 5/9/2039 | 4,200 | 4,337 | 4,329 | |||||||||||||||||
Eat & play property Eugene, Oregon | 8.13 | % | 6/17/2039 | 14,700 | 15,018 | 14,996 | |||||||||||||||||
| Early childhood education center Lithia, Florida | 8.58 | % | 10/31/2039 | 3,959 | 3,982 | 4,034 | |||||||||||||||||
Total | $ | 369,735 | $ | 370,021 | $ | 370,159 | |||||||||||||||||
(1) Amounts include accrued interest and are net of allowance for credit losses.
| ||||||||
| Q1 2022 Supplemental | Page 17 | |||||||
| INVESTMENT SPENDING AND DISPOSITION SUMMARIES | |||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||
INVESTMENT SPENDING THREE MONTHS ENDED MARCH 31, 2022 | |||||||||||||||||||||||
| INVESTMENT TYPE | TOTAL INVESTMENT SPENDING | NEW DEVELOPMENT | RE-DEVELOPMENT | ASSET ACQUISITION | MORTGAGE NOTES OR NOTES RECEIVABLE | INVESTMENT IN JOINT VENTURES | |||||||||||||||||
| Theatres | $ | 45 | $ | 5 | $ | 40 | $ | — | $ | — | $ | — | |||||||||||
| Eat & Play | 2,899 | 2,793 | 106 | — | — | — | |||||||||||||||||
| Attractions | 300 | — | 300 | — | — | — | |||||||||||||||||
| Experiential Lodging | 1,256 | 309 | 299 | — | — | 648 | |||||||||||||||||
| Cultural | 5 | — | 5 | — | — | — | |||||||||||||||||
| Fitness & Wellness | 19,858 | — | — | 19,858 | — | — | |||||||||||||||||
| Total Experiential | 24,363 | 3,107 | 750 | 19,858 | — | 648 | |||||||||||||||||
| Total Education | — | — | — | — | — | — | |||||||||||||||||
| Total Investment Spending | $ | 24,363 | $ | 3,107 | $ | 750 | $ | 19,858 | $ | — | $ | 648 | |||||||||||
Note: The Company had no significant dispositions during the three months ended March 31, 2022.
| ||||||||
| Q1 2022 Supplemental | Page 18 | |||||||
PROPERTY UNDER DEVELOPMENT - INVESTMENT SPENDING ESTIMATES AT MARCH 31, 2022 (1) | |||||||||||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||||||||||||||||||||||||||
| MARCH 31, 2022 | OWNED BUILD-TO-SUIT SPENDING ESTIMATES | ||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY UNDER DEVELOPMENT | # OF PROJECTS | 2ND QUARTER 2022 | 3RD QUARTER 2022 | 4TH QUARTER 2022 | 1ST QUARTER 2023 | THEREAFTER | TOTAL EXPECTED COSTS (2) | % LEASED | |||||||||||||||||||||||||||||||||||||||
| Total Build-to-Suit (3) | $ | 5,432 | 4 | $ | 3,625 | $ | 9,263 | $ | 9,263 | $ | 11,589 | $ | — | $ | 39,172 | 100 | % | ||||||||||||||||||||||||||||||
Non Build-to-Suit Development | 5,453 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Property Under Development | $ | 10,885 | |||||||||||||||||||||||||||||||||||||||||||||
| MARCH 31, 2022 | OWNED BUILD-TO-SUIT IN-SERVICE ESTIMATES | ||||||||||||||||||||||||||||||||||||||||||||||
| # OF PROJECTS | 2ND QUARTER 2022 | 3RD QUARTER 2022 | 4TH QUARTER 2022 | 1ST QUARTER 2023 | THEREAFTER | TOTAL IN-SERVICE (2) | ACTUAL IN-SERVICE 1ST QUARTER 2022 | ||||||||||||||||||||||||||||||||||||||||
| Total Build-to-Suit | 4 | $ | 1,545 | $ | 2,248 | $ | 4,976 | $ | 30,403 | $ | — | $ | 39,172 | $ | 48,241 | ||||||||||||||||||||||||||||||||
| MARCH 31, 2022 | MORTGAGE BUILD-TO-SUIT SPENDING ESTIMATES | ||||||||||||||||||||||||||||||||||||||||||||||
| MORTGAGE NOTES RECEIVABLE | # OF PROJECTS | 2ND QUARTER 2022 | 3RD QUARTER 2022 | 4TH QUARTER 2022 | 1ST QUARTER 2023 | THEREAFTER | TOTAL EXPECTED COSTS (2) | ||||||||||||||||||||||||||||||||||||||||
Total Build-to-Suit Mortgage Notes | $ | 56,225 | 2 | $ | 126 | $ | 2,500 | $ | 2,500 | $ | 2,500 | $ | 3,877 | $ | 67,728 | ||||||||||||||||||||||||||||||||
Non Build-to-Suit Mortgage Notes | 313,796 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Mortgage Notes Receivable | $ | 370,021 | |||||||||||||||||||||||||||||||||||||||||||||
(1) This schedule includes only those properties for which the Company has commenced construction as of March 31, 2022. | |||||||||||||||||||||||||||||||||||||||||||||||
| (2) "Total Expected Costs" and "Total In-Service" each reflect the total capital costs expected to be funded by the Company through completion (including capitalized interest or accrued interest as applicable). | |||||||||||||||||||||||||||||||||||||||||||||||
| (3) Total Build-to-Suit excludes property under development related to the Company's real estate joint ventures that own an experiential lodging property in Warrens, Wisconsin. The Company's spending for these joint ventures is estimated at $4.2 million for 2022. | |||||||||||||||||||||||||||||||||||||||||||||||
Note: This schedule includes future estimates for which the Company can give no assurance as to timing or amounts. Development projects have risks. See Item 1A - "Risk Factors" in the Company's most recent Annual Report on Form 10-K and, to the extent applicable, the Company's Quarterly Reports on Form 10-Q. | |||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 19 | |||||||
PORTFOLIO DETAIL AS OF MARCH 31, 2022 | ||||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||||
| PROPERTY TYPE | PROPERTIES | OPERATORS | CONTRACTUAL CASH REVENUE (1) | STRATEGIC FOCUS | ||||||||||||||||||||||
| Theatres (2) | 175 | 18 | 43 | % | Reduce | |||||||||||||||||||||
| Eat & Play | 57 | 8 | (3) | 29 | % | Grow | ||||||||||||||||||||
| Attractions | 18 | 5 | 7 | % | Grow | |||||||||||||||||||||
| Ski | 11 | 3 | 7 | % | Grow | |||||||||||||||||||||
| Experiential Lodging | 8 | 2 | 4 | % | Grow | |||||||||||||||||||||
| Gaming | 1 | 1 | 1 | % | Grow | |||||||||||||||||||||
| Cultural | 3 | 2 | 1 | % | Grow | |||||||||||||||||||||
| Fitness & Wellness | 8 | 3 | 1 | % | Grow | |||||||||||||||||||||
| EXPERIENTIAL PORTFOLIO | 281 | 42 | 93 | % | ||||||||||||||||||||||
| Early Childhood Education | 65 | 7 | 5 | % | (4) | Reduce | ||||||||||||||||||||
| Private schools | 9 | 1 | 2 | % | Reduce | |||||||||||||||||||||
| EDUCATION PORTFOLIO | 74 | 8 | 7 | % | ||||||||||||||||||||||
| TOTAL PORTFOLIO | 355 | 50 | 100 | % | ||||||||||||||||||||||
(1) Contractual cash revenue is an operational measure and represents aggregate cash payments to which the Company is entitled under existing contracts, excluding the impact of any temporary abatements or deferrals, percentage rent (rents received over base amounts), non-cash revenue, and revenue from taxable REIT subsidiaries (TRSs) and investments in joint ventures. | ||||||||||||||||||||||||||
| (2) Excludes seven theatres located in Entertainment Districts (included in Eat & Play) | ||||||||||||||||||||||||||
| (3) Excludes non-theatre operators at Entertainment districts | ||||||||||||||||||||||||||
| (4) Increase of 2% versus the quarter ending December 31, 2021 is due to a restructured lease related to an early childhood education tenant in which base rent increased (base rent is included in contractual cash revenue) and percentage rent decreased (percentage rent is excluded from contractual cash revenue). | ||||||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 20 | |||||||
| LEASE EXPIRATIONS | |||||||||||||||||||||||
AS OF MARCH 31, 2022 | |||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||
| YEAR | TOTAL NUMBER OF PROPERTIES | RENTAL REVENUE FOR THE TRAILING TWELVE MONTHS ENDED MARCH 31, 2022 (1) | % OF TOTAL REVENUE | ||||||||||||||||||||
| 2022 | 1 | $ | 1,586 | — | % | ||||||||||||||||||
| 2023 | 2 | 953 | — | % | |||||||||||||||||||
| 2024 | 6 | 9,410 | 2 | % | |||||||||||||||||||
| 2025 | 2 | 2,654 | — | % | |||||||||||||||||||
| 2026 | 3 | 7,349 | 1 | % | |||||||||||||||||||
| 2027 | 8 | 20,006 | 4 | % | |||||||||||||||||||
| 2028 | 12 | 19,241 | 3 | % | |||||||||||||||||||
| 2029 | 12 | 15,744 | 3 | % | |||||||||||||||||||
| 2030 | 22 | 26,822 | 5 | % | |||||||||||||||||||
| 2031 | 13 | 14,234 | 3 | % | |||||||||||||||||||
| 2032 | 20 | 23,781 | 4 | % | |||||||||||||||||||
| 2033 | 10 | 11,697 | 2 | % | |||||||||||||||||||
| 2034 | 40 | 59,026 | 10 | % | |||||||||||||||||||
| 2035 | 32 | 76,911 | 13 | % | |||||||||||||||||||
| 2036 | 27 | 43,721 | 8 | % | |||||||||||||||||||
| 2037 | 32 | 64,028 | 11 | % | |||||||||||||||||||
| 2038 | 35 | 37,331 | 7 | % | |||||||||||||||||||
| 2039 | 4 | 6,893 | 1 | % | |||||||||||||||||||
| 2040 | 3 | 6,521 | 1 | % | |||||||||||||||||||
| 2041 | 31 | 16,941 | 3 | % | |||||||||||||||||||
| Thereafter | 8 | 17,471 | 3 | % | |||||||||||||||||||
| 323 | $ | 482,320 | 84 | % | |||||||||||||||||||
Note: This schedule excludes non-theatre tenant leases within the Company's entertainment districts, properties under development, land held for development, properties operated by the Company and investments in mortgage notes receivable. | |||||||||||||||||||||||
(1) Rental revenue for the trailing twelve months ended March 31, 2022 includes lease revenue related to the Company's existing operating ground leases (leases in which the Company is a sub-lessor) as well as the gross-up of tenant reimbursed expenses recognized during the trailing twelve months ended March 31, 2022 in accordance with Accounting Standards Update (ASU) No. 2016-02 Leases (Topic 842). | |||||||||||||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 21 | |||||||
| TOP TEN CUSTOMERS BY PERCENTAGE OF TOTAL REVENUE | ||||||||||||||
| (UNAUDITED) | ||||||||||||||
| PERCENTAGE OF TOTAL REVENUE | ||||||||||||||
| FOR THE THREE MONTHS ENDED | ||||||||||||||
| CUSTOMERS | MARCH 31, 2022 | |||||||||||||
| 1. | AMC Theatres | 14.9% | ||||||||||||
| 2. | Topgolf | 14.2% | ||||||||||||
| 3. | Regal Entertainment Group | 13.5% | ||||||||||||
| 4. | Cinemark | 6.8% | ||||||||||||
| 5. | Vail Resorts | 4.4% | ||||||||||||
| 6. | VSS Southern | 3.5% | ||||||||||||
| 7. | Camelback Resort | 3.4% | ||||||||||||
| 8. | Resorts World | 3.0% | ||||||||||||
| 9. | Six Flags | 2.5% | ||||||||||||
| 10. | Creme de la Creme | 2.4% | ||||||||||||
| Total | 68.6% | |||||||||||||
| ||||||||
| Q1 2022 Supplemental | Page 22 | |||||||
| GUIDANCE | ||||||||||||||
| (UNAUDITED, DOLLARS IN MILLION, EXCEPT PER SHARE DATA) | ||||||||||||||
| MEASURE | 2022 GUIDANCE | |||||||||||||||||||||||||||||||
| YTD ACTUALS | CURRENT | PRIOR | ||||||||||||||||||||||||||||||
| Investment spending | $24.4 | $500.0 | to | $700.0 | $500.0 | to | $700.0 | |||||||||||||||||||||||||
| Disposition proceeds and mortgage note payoff | $— | $— | to | $10.0 | $— | to | $10.0 | |||||||||||||||||||||||||
| Percentage rent and participating interest income | $3.4 | $9.0 | to | $13.0 | $8.0 | to | $12.0 | |||||||||||||||||||||||||
| General and administrative expense | $13.2 | $50.0 | to | $53.0 | $49.0 | to | $52.0 | |||||||||||||||||||||||||
| FFO per diluted share | $1.09 | $4.33 | to | $4.49 | $4.24 | to | $4.44 | |||||||||||||||||||||||||
| FFO as adjusted (FFOAA) per diluted share | $1.10 | $4.39 | to | $4.55 | $4.30 | to | $4.50 | |||||||||||||||||||||||||
| RECONCILIATION FROM NET INCOME AVAILABLE TO COMMON SHAREHOLDERS OF EPR PROPERTIES (PER DILUTED SHARE): | YTD ACTUALS | 2022 GUIDANCE | ||||||||||||||||||||||||||||||
| Net income available to common shareholders of EPR Properties | $0.48 | $2.09 | to | $2.25 | ||||||||||||||||||||||||||||
| Impairment of real estate investments, net | 0.06 | 0.06 | ||||||||||||||||||||||||||||||
| Real estate depreciation and amortization | 0.53 | 2.13 | ||||||||||||||||||||||||||||||
| Allocated share of joint venture depreciation | 0.02 | 0.09 | ||||||||||||||||||||||||||||||
| Impact of Series C and Series E Dilution, if applicable | — | (0.04) | ||||||||||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $1.09 | $4.33 | to | $4.49 | ||||||||||||||||||||||||||||
| Transaction costs | 0.03 | 0.07 | ||||||||||||||||||||||||||||||
| Gain on insurance recovery (included in other income) | (0.01) | (0.01) | ||||||||||||||||||||||||||||||
| Impact of Series C and Series E Dilution, if applicable | (0.01) | — | ||||||||||||||||||||||||||||||
| FFO as adjusted (FFOAA) available to common shareholders of EPR Properties | $1.10 | $4.39 | to | $4.55 | ||||||||||||||||||||||||||||
Note: This schedule includes future estimates for which the Company can give no assurance as to timing or amounts. See cautionary statement concerning forward-looking statements on page 3.
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| Q1 2022 Supplemental | Page 23 | |||||||
| DEFINITIONS - NON-GAAP FINANCIAL MEASURES | ||||||||||||||
EBITDAre
The National Association of Real Estate Investment Trusts (“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 (loss), 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 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 (loss) or any other GAAP measure as a measurement of the results of the Company's operations or cash flows or liquidity as defined by GAAP.
ADJUSTED EBITDAre
Management uses Adjusted EBITDAre in its analysis of the performance of the business and operations of the Company. Management believes Adjusted EBITDAre is useful to investors because it excludes various items that management believes are not indicative of operating performance, and that it is an informative measure to use in computing various financial ratios to evaluate the Company. The Company defines Adjusted EBITDAre as EBITDAre (defined above) for the quarter excluding gain on insurance recovery, severance expense, credit loss (benefit) expense, transaction costs, impairment losses on operating lease right-of-use assets and prepayment fees. This number for the quarter is then multiplied by four to get an annual amount. Additionally, for the year ended December 31, 2020, Adjusted EBITDAre was further adjusted to add back prior period receivable write-offs related to certain theatre tenants placed on cash basis or receiving abatements during the respective periods.
The Company's method of calculating Adjusted EBITDAre may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. Adjusted EBITDAre is not a measure of performance under GAAP, does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. This measure should not be considered as an alternative to net income (loss) or any other GAAP measure as a measurement of the results of the Company's operations or cash flows or liquidity as defined by GAAP.
NET DEBT
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 its 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.
NET DEBT TO ADJUSTED EBITDAre RATIO AND NET DEBT TO GROSS ASSETS RATIO
Net Debt to Adjusted EBITDAre Ratio and Net Debt to Gross Asset Ratio are supplemental measures derived from non-GAAP financial measures that 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 these ratios in a similar manner. In addition, financial institutions use versions of these ratios in connection with debt agreements to set pricing and covenant limitations. The Company's method of calculating Net Debt to Adjusted EBITDAre Ratio and Net Debt to Gross Assets Ratio may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
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| Q1 2022 Supplemental | Page 24 | |||||||
FUNDS FROM OPERATIONS (“FFO”) AND FFO AS ADJUSTED
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 (loss) 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 (loss) 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, the Company presents FFO as adjusted. Management believes it is useful to provide FFO as adjusted as a supplemental measure to GAAP net income (loss) available to common shareholders and earnings per share. FFO as adjusted is FFO plus costs associated with loan refinancing or payoff, transaction costs, severance expense, preferred share redemption costs, impairment of operating lease right-of-use assets and credit loss (benefit) expense, and by subtracting gain on insurance recovery and deferred income tax expense (benefit). FFO and FFO as adjusted are non-GAAP financial measures. FFO and FFO as adjusted do not represent cash flows from operations as defined by GAAP and are not indicative that cash flows are adequate to fund all cash needs and are not to be considered an alternative to net income (loss) 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 and FFO as adjusted the same way so comparisons with other REITs may not be meaningful.
ADJUSTED FUNDS FROM OPERATIONS (“AFFO”)
In addition to FFO, the Company presents AFFO by adding to FFO costs associated with loan refinancing or payoff, transaction costs, credit loss (benefit) expense, 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, 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 by subtracting maintenance capital expenditures (including second generation tenant improvements and leasing commissions), straight-lined rental revenue (removing the impact of straight-line ground sublease expense), non-cash portion of mortgage and other financing income, gain on insurance recovery and deferred income tax (benefit) expense. AFFO 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 (loss) available to common shareholders and earnings per share and management provides AFFO herein because it believes this information is useful to investors in this regard. AFFO is a non-GAAP financial measure. AFFO does not represent cash flows 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 (loss) or any other GAAP measure as a measurement of the results of the Company's operations or its cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate AFFO the same way so comparisons with other REITs may not be meaningful.
INTEREST COVERAGE RATIO
The interest coverage ratio is calculated as the interest coverage amount divided by interest expense, gross. The Company calculates the interest coverage amount by adding to net income (loss) impairment charges, credit loss (benefit) expense, transaction costs, interest expense, gross (including interest expense in discontinued operations), severance expense, depreciation and amortization, share-based compensation expense to management and trustees and costs associated with loan refinancing or payoff; subtracting interest cost capitalized, straight-line rental revenue, gain on early extinguishment of debt, gain (loss) on sale of real estate from continuing and discontinued operations, gain on insurance recovery, gain on previously held equity interest, gain on early extinguishment of debt, prepayment fees and deferred income tax benefit (expense). The Company calculates interest expense, gross, by adding to interest expense, net, interest income and interest cost capitalized. The Company considers the interest coverage ratio to be an appropriate supplemental measure of a company’s ability to meet its interest expense obligations and management believes it is useful to investors in this regard. The Company's calculation of the interest coverage ratio may be different from the calculation used by other companies, and therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.
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| Q1 2022 Supplemental | Page 25 | |||||||
FIXED CHARGE COVERAGE RATIO
The fixed charge coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that interest expense, gross and preferred share dividends are also added to the denominator. The Company considers the fixed charge coverage ratio to be an appropriate supplemental measure of a company’s ability to make its interest and preferred share dividend payments and management believes it is useful to investors in this regard. The Company's calculation of the fixed charge coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.
DEBT SERVICE COVERAGE RATIO
The debt service coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that interest expense, gross and recurring principal payments are also added to the denominator. The Company considers the debt service coverage ratio to be an appropriate supplemental measure of a company’s ability to make its debt service payments and management believes it is useful to investors in this regard. The Company's calculation of the debt service coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.
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| Q1 2022 Supplemental | Page 26 | |||||||
| Appendix to Supplemental Operating and Financial Data | ||||||||||||||||||||||||||
| Reconciliation of Certain Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| First Quarter Ended March 31, 2022 | ||||||||||||||||||||||||||
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| Q1 2022 Supplemental | Page 27 | |||||||
| CALCULATION OF INTEREST, FIXED CHARGE AND DEBT SERVICE COVERAGE RATIOS | |||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||||||||||||||
| INTEREST COVERAGE RATIO (1): | 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 42,192 | $ | 44,557 | $ | 32,117 | $ | 18,552 | $ | 3,380 | $ | (19,977) | |||||||||||||||||||||||
| Impairment charges | 4,351 | — | 2,711 | — | — | 22,832 | |||||||||||||||||||||||||||||
| Transaction costs | 2,247 | 60 | 2,132 | 662 | 548 | 814 | |||||||||||||||||||||||||||||
| Credit loss (benefit) expense | (306) | (2,295) | (14,096) | (2,819) | (2,762) | 20,312 | |||||||||||||||||||||||||||||
| Interest expense, gross | 33,483 | 34,251 | 36,841 | 38,869 | 39,854 | 43,341 | |||||||||||||||||||||||||||||
| Severance expense | — | — | — | — | — | 2,868 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 40,044 | 40,294 | 42,612 | 40,538 | 40,326 | 42,014 | |||||||||||||||||||||||||||||
| Share-based compensation expense | |||||||||||||||||||||||||||||||||||
| to management and trustees | 4,245 | 3,685 | 3,759 | 3,675 | 3,784 | 3,437 | |||||||||||||||||||||||||||||
| Costs associated with loan refinancing or payoff | — | 20,469 | 4,741 | — | 241 | 812 | |||||||||||||||||||||||||||||
| Interest cost capitalized | (200) | (225) | (233) | (514) | (595) | (404) | |||||||||||||||||||||||||||||
| Straight-line rental revenue | (595) | (1,974) | (981) | (1,420) | (1,289) | (898) | |||||||||||||||||||||||||||||
Gain on sale of real estate | — | (16,382) | (787) | (511) | (201) | (49,877) | |||||||||||||||||||||||||||||
Gain on insurance recovery | (552) | (1,151) | — | — | (30) | (809) | |||||||||||||||||||||||||||||
| Interest coverage amount | $ | 124,909 | $ | 121,289 | $ | 108,816 | $ | 97,032 | $ | 83,256 | $ | 64,465 | |||||||||||||||||||||||
| Interest expense, net | $ | 33,260 | $ | 34,005 | $ | 36,584 | $ | 38,312 | $ | 39,194 | $ | 42,838 | |||||||||||||||||||||||
| Interest income | 23 | 21 | 24 | 43 | 65 | 99 | |||||||||||||||||||||||||||||
| Interest cost capitalized | 200 | 225 | 233 | 514 | 595 | 404 | |||||||||||||||||||||||||||||
| Interest expense, gross | $ | 33,483 | $ | 34,251 | $ | 36,841 | $ | 38,869 | $ | 39,854 | $ | 43,341 | |||||||||||||||||||||||
| Interest coverage ratio | 3.7 | 3.5 | Footnote 2 | Footnote 2 | Footnote 2 | Footnote 2 | |||||||||||||||||||||||||||||
| FIXED CHARGE COVERAGE RATIO (1): | |||||||||||||||||||||||||||||||||||
| Interest coverage amount | $ | 124,909 | $ | 121,289 | $ | 108,816 | $ | 97,032 | $ | 83,256 | $ | 64,465 | |||||||||||||||||||||||
| Interest expense, gross | $ | 33,483 | $ | 34,251 | $ | 36,841 | $ | 38,869 | $ | 39,854 | $ | 43,341 | |||||||||||||||||||||||
| Preferred share dividends | 6,033 | 6,034 | 6,033 | 6,033 | 6,034 | 6,034 | |||||||||||||||||||||||||||||
| Fixed charges | $ | 39,516 | $ | 40,285 | $ | 42,874 | $ | 44,902 | $ | 45,888 | $ | 49,375 | |||||||||||||||||||||||
| Fixed charge coverage ratio | 3.2 | 3.0 | Footnote 2 | Footnote 2 | Footnote 2 | Footnote 2 | |||||||||||||||||||||||||||||
| DEBT SERVICE COVERAGE RATIO (1): | |||||||||||||||||||||||||||||||||||
| Interest coverage amount | $ | 124,909 | $ | 121,289 | $ | 108,816 | $ | 97,032 | $ | 83,256 | $ | 64,465 | |||||||||||||||||||||||
| Interest expense, gross | $ | 33,483 | $ | 34,251 | $ | 36,841 | $ | 38,869 | $ | 39,854 | $ | 43,341 | |||||||||||||||||||||||
| Recurring principal payments | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Debt service | $ | 33,483 | $ | 34,251 | $ | 36,841 | $ | 38,869 | $ | 39,854 | $ | 43,341 | |||||||||||||||||||||||
| Debt service coverage ratio | 3.7 | 3.5 | Footnote 2 | Footnote 2 | Footnote 2 | Footnote 2 | |||||||||||||||||||||||||||||
(1) See pages 24 through 26 for definitions. | |||||||||||||||||||||||||||||||||||
| (2) Not presented as this ratio for this period is not meaningful given the disruption caused by COVID-19 and the associated accounting for tenant rent deferrals and other lease modifications. | |||||||||||||||||||||||||||||||||||
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| Q1 2022 Supplemental | Page 28 | |||||||
| RECONCILIATION OF INTEREST COVERAGE AMOUNT TO NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||||||||||||||||||||||||||
The interest coverage amount per the table on page 28 is a non-GAAP financial measure and should not be considered an alternative to any GAAP liquidity measures. It is most directly comparable to the GAAP liquidity measure, “Net cash provided by operating activities,” and is not directly comparable to the GAAP liquidity measures, “Net cash used by investing activities” and “Net cash provided by financing activities.” The interest coverage amount can be reconciled to “Net cash provided by operating activities” per the consolidated statements of cash flows as follows: | ||||||||||||||||||||||||||||||||||||||
| 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | |||||||||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 128,087 | $ | 70,501 | $ | 95,624 | $ | 62,494 | $ | 78,306 | $ | 5,795 | ||||||||||||||||||||||||||
| Equity in loss from joint ventures | (106) | (2,059) | (418) | (1,151) | (1,431) | (1,364) | ||||||||||||||||||||||||||||||||
| Distributions from joint ventures | — | — | — | — | (90) | — | ||||||||||||||||||||||||||||||||
| Amortization of deferred financing costs | (2,071) | (2,335) | (2,210) | (1,574) | (1,547) | (1,823) | ||||||||||||||||||||||||||||||||
Amortization of above and below market leases, net and tenant allowances | 87 | 92 | 98 | 99 | 96 | 96 | ||||||||||||||||||||||||||||||||
Changes in assets and liabilities, net: | ||||||||||||||||||||||||||||||||||||||
Amortization of operating lease assets and liabilities | 49 | 172 | 146 | 113 | 120 | 230 | ||||||||||||||||||||||||||||||||
Mortgage notes and related accrued interest receivable | (310) | (557) | (154) | 423 | (280) | 3,297 | ||||||||||||||||||||||||||||||||
| Accounts receivable | (17,424) | (1,177) | (10,692) | (6,265) | (18,687) | 4,422 | ||||||||||||||||||||||||||||||||
| Other assets | 5,861 | (642) | (4,396) | (1,003) | 7,323 | (367) | ||||||||||||||||||||||||||||||||
| Accounts payable and accrued liabilities | (15,132) | 14,164 | (7,230) | 2,716 | (997) | 404 | ||||||||||||||||||||||||||||||||
| Unearned rents and interest | (9,067) | 11,018 | 289 | 3,583 | (18,075) | 9,312 | ||||||||||||||||||||||||||||||||
| Straight-line rental revenue | (595) | (1,974) | (981) | (1,420) | (1,289) | (898) | ||||||||||||||||||||||||||||||||
| Interest expense, gross | 33,483 | 34,251 | 36,841 | 38,869 | 39,854 | 43,341 | ||||||||||||||||||||||||||||||||
| Interest cost capitalized | (200) | (225) | (233) | (514) | (595) | (404) | ||||||||||||||||||||||||||||||||
| Transaction costs | 2,247 | 60 | 2,132 | 662 | 548 | 814 | ||||||||||||||||||||||||||||||||
| Severance expense (cash portion) | — | — | — | — | — | 1,610 | ||||||||||||||||||||||||||||||||
| Interest coverage amount (1) | $ | 124,909 | $ | 121,289 | $ | 108,816 | $ | 97,032 | $ | 83,256 | $ | 64,465 | ||||||||||||||||||||||||||
| Net cash (used) provided by investing activities | $ | (25,035) | $ | 41,339 | $ | (12,711) | $ | 3,128 | $ | (29,894) | $ | 204,883 | ||||||||||||||||||||||||||
| Net cash (used) provided by financing activities | $ | (66,293) | $ | 28,595 | $ | (446,643) | $ | (96,195) | $ | (532,435) | $ | (170,716) | ||||||||||||||||||||||||||
(1) See pages 24 through 26 for definitions. | ||||||||||||||||||||||||||||||||||||||
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| Q1 2022 Supplemental | Page 29 | |||||||
| RECONCILIATION OF EBITDAre AND ADJUSTED EBITDAre | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||||||||||||||||||||||||||
| ADJUSTED EBITDAre (3): | 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 42,192 | $ | 44,557 | $ | 32,117 | $ | 18,552 | $ | 3,380 | $ | (19,977) | ||||||||||||||||||||||||||
| Interest expense, net | 33,260 | 34,005 | 36,584 | 38,312 | 39,194 | 42,838 | ||||||||||||||||||||||||||||||||
| Income tax expense | 318 | 397 | 395 | 398 | 407 | 402 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 40,044 | 40,294 | 42,612 | 40,538 | 40,326 | 42,014 | ||||||||||||||||||||||||||||||||
| Gain on sale of real estate | — | (16,382) | (787) | (511) | (201) | (49,877) | ||||||||||||||||||||||||||||||||
| Impairment of real estate investments, net | 4,351 | — | 2,711 | — | — | 22,832 | ||||||||||||||||||||||||||||||||
| Costs associated with loan refinancing or payoff | — | 20,469 | 4,741 | — | 241 | 812 | ||||||||||||||||||||||||||||||||
| Allocated share of joint venture depreciation | 1,487 | 1,561 | 966 | 459 | 354 | 361 | ||||||||||||||||||||||||||||||||
| Allocated share of joint venture interest expense | 1,121 | 1,145 | 981 | 846 | 789 | 872 | ||||||||||||||||||||||||||||||||
| EBITDAre | $ | 122,773 | $ | 126,046 | $ | 120,320 | $ | 98,594 | $ | 84,490 | $ | 40,277 | ||||||||||||||||||||||||||
| Gain on insurance recovery (1) | (552) | (1,151) | — | — | (30) | (809) | ||||||||||||||||||||||||||||||||
| Severance expense | — | — | — | — | — | 2,868 | ||||||||||||||||||||||||||||||||
| Transaction costs | 2,247 | 60 | 2,132 | 662 | 548 | 814 | ||||||||||||||||||||||||||||||||
| Credit loss (benefit) expense | (306) | (2,295) | (14,096) | (2,819) | (2,762) | 20,312 | ||||||||||||||||||||||||||||||||
| Accounts receivable write-offs from prior periods (2) | — | — | — | — | — | 4,301 | ||||||||||||||||||||||||||||||||
| Straight-line receivable write-offs from prior periods (2) | — | — | — | — | — | 870 | ||||||||||||||||||||||||||||||||
| Adjusted EBITDAre | $ | 124,162 | $ | 122,660 | $ | 108,356 | $ | 96,437 | $ | 82,246 | $ | 68,633 | ||||||||||||||||||||||||||
| Adjusted EBITDAre (annualized) (4) | $ | 496,648 | $ | 490,640 | Footnote 5 | Footnote 5 | Footnote 5 | Footnote 5 | ||||||||||||||||||||||||||||||
| See footnotes on following page. | ||||||||||||||||||||||||||||||||||||||
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| Q1 2022 Supplemental | Page 30 | |||||||
| (1) Included in other income in the consolidated statements of income (loss) in the Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on Form 10-Q. Reconciliation is as follows: | ||||||||||||||||||||||||||||||||||||||
| 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | |||||||||||||||||||||||||||||||||
| Income (loss) from settlement of foreign currency swap contracts | $ | 45 | 41 | 39 | (28) | 52 | 110 | |||||||||||||||||||||||||||||||
| Gain on insurance recovery | 552 | 1,151 | — | — | 30 | 809 | ||||||||||||||||||||||||||||||||
| Operating income from operated properties | 8,648 | 7,815 | 7,860 | 848 | 295 | 45 | ||||||||||||||||||||||||||||||||
| Fee income | — | — | 187 | — | — | — | ||||||||||||||||||||||||||||||||
| Miscellaneous income | 60 | 7 | 5 | 213 | 301 | 4 | ||||||||||||||||||||||||||||||||
| Other income | $ | 9,305 | $ | 9,014 | $ | 8,091 | $ | 1,033 | $ | 678 | $ | 968 | ||||||||||||||||||||||||||
| (2) Included in rental revenue from continuing operations in the consolidated statements of income (loss) in the Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on Form 10-Q. Reconciliation is as follows: | ||||||||||||||||||||||||||||||||||||||
| 1ST QUARTER 2022 | 4TH QUARTER 2021 | 3RD QUARTER 2021 | 2ND QUARTER 2021 | 1ST QUARTER 2021 | 4TH QUARTER 2020 | |||||||||||||||||||||||||||||||||
| Minimum rent | $ | 130,275 | $ | 123,463 | $ | 114,375 | $ | 107,100 | $ | 94,190 | $ | 79,342 | ||||||||||||||||||||||||||
| Accounts receivable write-offs from prior periods | — | — | — | — | — | (4,301) | ||||||||||||||||||||||||||||||||
| Tenant reimbursements | 5,001 | 4,712 | 4,187 | 5,000 | 4,822 | 4,831 | ||||||||||||||||||||||||||||||||
| Percentage rent | 3,443 | 6,851 | 3,149 | 2,016 | 2,030 | 3,040 | ||||||||||||||||||||||||||||||||
| Straight-line rental revenue | 595 | 1,974 | 981 | 1,420 | 1,289 | 1,768 | ||||||||||||||||||||||||||||||||
| Straight-line write-offs from prior periods | — | — | — | — | — | (870) | ||||||||||||||||||||||||||||||||
| Other rental revenue | 289 | 345 | 348 | 347 | 283 | 201 | ||||||||||||||||||||||||||||||||
| Rental revenue | $ | 139,603 | $ | 137,345 | $ | 123,040 | $ | 115,883 | $ | 102,614 | $ | 84,011 | ||||||||||||||||||||||||||
(3) See pages 24 through 26 for definitions. | ||||||||||||||||||||||||||||||||||||||
| (4) Adjusted EBITDAre for the quarter is multiplied by four to calculate an annualized amount. | ||||||||||||||||||||||||||||||||||||||
| (5) Not presented as this metric is not meaningful given the disruption caused by COVID-19 and the associated accounting for tenant rent deferrals and other lease modifications. | ||||||||||||||||||||||||||||||||||||||
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| Q1 2022 Supplemental | Page 31 | |||||||