Epr Properties 8-K, filed Feb 24, 2021
Epr Properties (EPR)
8-K
2021-02-24
For: 2021-02-24
View Original
Added on
April 05, 2026
About this 8-K
Epr Properties filed this 8-K on February 24, 2021.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
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): February 24, 2021
(Exact name of registrant as specified in its charter)
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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:
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Securities registered pursuant to Section 12(b) of the Act:
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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).
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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 February 24, 2021, the Company announced its results of operations and financial condition for the fourth quarter and year ended December 31, 2020. The public announcement was made by means of a press release, the text of which is set forth in Exhibit 99.1 hereto and is hereby incorporated by reference herein.
In addition, on February 24, 2021, the Company made available on its website an investor slide presentation and supplemental operating and financial data for the fourth quarter and year ended December 31, 2020, the text of which are set forth in Exhibits 99.2 and 99.3 hereto, respectively, and are hereby incorporated by reference herein.
The information set forth in Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1, 99.2 and 99.3, is being “furnished” and shall not be deemed “filed” for the purposes of or otherwise subject to liabilities under Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
| Exhibit No. | Description | |||||||
Press Release dated February 24, 2021 issued by EPR Properties announcing its results of operations and financial condition for the fourth quarter and year ended December 31, 2020. | ||||||||
Investor slide presentation for the fourth quarter and year ended December 31, 2020, made available by EPR Properties on February 24, 2021. | ||||||||
Supplemental Operating and Financial Data for the fourth quarter and year ended December 31, 2020, made available by EPR Properties on February 24, 2021. | ||||||||
| 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: February 24, 2021
Exhibit 99.1
EPR PROPERTIES REPORTS FOURTH QUARTER AND 2020 YEAR-END RESULTS
Kansas City, MO, February 24, 2021 -- EPR Properties (NYSE:EPR) today announced operating results for the fourth quarter and year ended December 31, 2020 (dollars in thousands, except per share data):
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2020 (1) | 2019 (2) | 2020 (1) | 2019 (2) | ||||||||||||||||||||
| Total revenue from continuing operations | $ | 93,412 | $ | 170,346 | $ | 414,661 | $ | 651,969 | |||||||||||||||
| Net (loss) income available to common shareholders | (26,011) | 30,263 | (155,864) | 178,107 | |||||||||||||||||||
| Net (loss) income available to common shareholders per diluted common share | (0.35) | 0.39 | (2.05) | 2.32 | |||||||||||||||||||
| Funds From Operations as adjusted (FFOAA) (a non-GAAP financial measure) | 13,088 | 99,667 | 108,733 | 423,186 | |||||||||||||||||||
| FFOAA per diluted common share (a non-GAAP financial measure) | 0.18 | 1.26 | 1.43 | 5.44 | |||||||||||||||||||
| Adjusted Funds From Operations (AFFO) (a non-GAAP financial measure) | 17,352 | 99,160 | 143,430 | 422,726 | |||||||||||||||||||
| AFFO per diluted common share (a non-GAAP financial measure) | 0.23 | 1.25 | 1.89 | 5.44 | |||||||||||||||||||
(1) The operating results for the three months and year ended December 31, 2020, include $2.4 million and $65.1 million of straight-line and other receivable write-offs, or $0.03 per share and $0.86 per share, respectively, related primarily to customers moved to cash basis for revenue recognition purposes during the year ended December 31, 2020. These write-offs are reflected in all metrics in these columns except that AFFO per diluted share for the three months and year ended December 31, 2020 excludes the impact of the straight-line portion of these write-offs totaling $1.0 million and $38.0 million, respectively.
(2) The operating results of the Company's public charter school portfolio for the three months and year ended December 31, 2019, include $1.2 million and $24.1 million in termination fees, respectively, and are included in all metrics in these columns except for total revenue from continuing operations. The remaining public charter school portfolio was sold during the fourth quarter of 2019.
Fourth Quarter Company Headlines
•Quarterly Collections Continue to Ramp Up - Cash collections from customers continue to improve and were approximately 46% of pre-COVID contractual cash revenue for the fourth quarter. January and February 2021 cash collections increased to approximately 66% and 64% of pre-COVID contractual cash revenue, respectively.
•Significant Capital Recycling - During the fourth quarter, the Company received $224.0 million in net proceeds and recognized a net gain of $49.9 million from property dispositions including the exercise of a tenant purchase option on six private schools and four early childhood education centers.
•Strong Liquidity Position - The Company had cash on hand in excess of $1.0 billion at year-end. Subsequent to year-end, due to stronger collections, proceeds from dispositions and significant liquidity, the Company used a portion of its cash on hand to reduce borrowings under its unsecured revolving credit facility by $500.0 million, resulting in a remaining balance of $90.0 million on this $1.0 billion facility.
•Extension of Covenant Waivers - Waivers of certain covenants related to the Company’s bank credit facilities and private placement notes have been extended through December 31, 2021, subject to certain conditions as previously disclosed, providing additional flexibility to work through issues with customers as needed.
CEO Comments
“We have continued to successfully focus on several key areas in light of the ongoing impact of the pandemic, including improving cash collections, maintaining strong liquidity and remaining in compliance with our debt agreements,” stated Greg Silvers, Company President and CEO. “With 94% of our non-theatre tenants open and operating, we are encouraged by the resilience displayed by many of our tenants and anticipate that theatres will follow a similar pattern when they open more widely and key titles are consistently released. We are also pleased with the capital recycling we completed during the quarter, which allowed us to further enhance our balance sheet and progress in our evolution towards an experientially focused portfolio. While it will take time for a full post-vaccine rebound, we are optimistic as we are seeing stabilization, and believe that we remain solidly positioned with improving cash collections and strong liquidity.”
COVID-19 Response and Update
Collections and Property Openings
Approximately 94% of the Company's non-theatre and 60% of the Company's theatre locations were open for business as of February 23, 2021. Cash collections from tenants and borrowers continued to improve and were 46% of pre-COVID contractual cash revenue for the fourth quarter vs. 29% and 43% in the second and third quarter, respectively. Such cash collections further increased to 66% and 64% in January and February of 2021, respectively. Pre-COVID contractual cash revenue is an operational measure and represents aggregate cash payments for which the Company was entitled under existing contracts prior to the COVID-19 pandemic, excluding percentage rent (rents received over base amounts) and cash payments for subsequently disposed properties, net.
Customers representing approximately 95% of our pre-COVID contractual cash revenue are either paying their pre-COVID-19 contract rent or interest or have a deferral agreement in place. In those deferral agreements, we have granted approximately 5% of permanent rent and interest payment reductions. However, there can be no assurance that additional permanent rent or interest payment reductions or other term modifications will not occur in future periods in light of the continued adverse impact of the pandemic, particularly ongoing uncertainty in the theatre industry.
Theatre Update
Theatre operators are facing several challenges as they diligently try to reopen. As a result of the impact of the COVID-19 pandemic, some of the Company's theatre locations remain closed due to state and local restrictions, including key markets in New York and California. Other theatres are closed by operator choice as movie studios have delayed the release of blockbuster movies in hopes that larger audiences will be available as additional markets open. The delay of these movie releases has had a significant negative impact on current and expected box office performance.
Due to the challenges facing theatres and the continued uncertainty caused by the pandemic during 2020, the Company determined it was appropriate to begin recognizing revenue from AMC and Regal as well as certain other customers on a cash basis. Accordingly, the Company recorded write-offs of accounts receivable of approximately $2.4 million, or $0.03 per share, and $65.1 million, or $0.86 per share, for the three months and year ended December 31, 2020, respectively, related to tenants moved to cash-basis for revenue recognition purposes. The write-offs were recorded primarily as a reduction in rental revenue and consisted of $1.0 million and $38.0 million in straight line rent receivables and $1.4 million and $27.1 million of other receivables for the three months and year ended December 31, 2020, respectively. In addition, contractual and other rent abatements totaled $6.8 million and $13.6 million for the three months and year ended December 31, 2020, respectively.
Below provides an update of classification of customers as of December 31, 2020:
| Classification of Customers | ||||||||||||||
| ($ in millions) | ||||||||||||||
| Annualized Revenue (1) | ||||||||||||||
| No Payment Deferral | $ | 88 | 14 | % | ||||||||||
| Sold Properties | 25 | 4 | % | |||||||||||
| Payments Deferred and Recognized as Revenue During Deferral Period | 231 | 37 | % | |||||||||||
| Payments Deferred But Not Recognized as Revenue During Deferral Period | 30 | 5 | % | |||||||||||
| Cash Basis/Lease Restructurings (2) | 233 | 37 | % | |||||||||||
| New Vacancies | 17 | 3 | % | |||||||||||
| Total | $ | 624 | 100 | % | ||||||||||
| (1) Represents pre-COVID contractual cash revenue plus pre-COVID percentage rent, both of which have been annualized. | ||||||||||||||
| (2) Includes leases for tenants accounted for on a cash basis and/or leases for tenants that have been or are expected to be restructured. This category includes AMC and Regal. | ||||||||||||||
Capital Recycling
On December 29, 2020, pursuant to a tenant purchase option, the Company completed the sale of six private schools and four early childhood education centers for net proceeds of $201.2 million and recognized a gain on sale of $39.7 million. The Company realized an unlevered internal rate of return of 13% over the life of its ownership of these assets.
Additionally, during the quarter ended December 31, 2020, the Company completed the sale of four experiential properties and two land parcels for net proceeds totaling $22.8 million and recognized a combined gain on sale of $10.2 million.
Strong Liquidity Position
The Company remains focused on maintaining strong liquidity and financial flexibility through the pandemic. The Company’s cash provided by operations (which includes interest payments) was $5.8 million during the quarter. The Company has no scheduled debt maturities until 2022 and had over $1.0 billion of cash on hand at year-end. As previously disclosed, during the fourth quarter, the Company amended the agreements governing its bank credit facilities and private placement notes to, among other things, extend the waiver of the Company's obligations to comply with certain covenants through the earlier of December 31, 2021, or when the Company provides notice that it elects to terminate the covenant relief period, subject to certain conditions.
In January 2021, due to stronger collections, proceeds from dispositions and significant liquidity, the Company used $500.0 million of its cash on hand to reduce the balance outstanding on its $1.0 billion unsecured revolving credit facility from $590.0 million to $90.0 million.
Other Charges
As a result of the ongoing impact of the COVID-19 pandemic, the Company reassessed the expected holding period of four theatre properties during the fourth quarter, and determined that the estimated cash flows were not sufficient to recover the carrying value. Accordingly, during the three months ended December 31, 2020, the Company recognized non-cash impairment charges on real estate investments of $22.8 million for these properties. Also during the fourth quarter, the Company recognized credit loss expense totaling $20.3 million that primarily related to fully reserving the outstanding principal balance of $6.1 million and the unfunded commitment to fund $12.9 million related to notes receivable from one borrower, as a result of recent changes in the borrower's financial status due to the COVID-19 pandemic. Additionally, during the fourth quarter, the Company recognized $2.9 million in severance expense.
Portfolio Update
The Company's total investments (a non-GAAP financial measure) were approximately $6.5 billion at December 31, 2020 with Experiential totaling $5.9 billion, or 91%, and Education totaling $0.6 billion, or 9%.
The Company's Experiential portfolio (excluding property under development) consisted of the following property types (owned or financed) at December 31, 2020:
•178 theatre properties;
•55 eat & play properties (including seven theatres located in entertainment districts);
•18 attraction properties;
•13 ski properties;
•six experiential lodging properties;
•one gaming property;
•three cultural properties; and
•seven fitness & wellness properties.
As of December 31, 2020, the Company's owned Experiential portfolio consisted of approximately 19.3 million square feet, which was 93.8% leased and included $57.6 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 December 31, 2020:
•65 early childhood education center properties; and
•10 private school properties.
As of December 31, 2020, the Company's owned Education portfolio consisted of approximately 1.4 million square feet, which was 100% leased and included $3.0 million in undeveloped land inventory.
The combined owned portfolio consisted of 20.7 million square feet and was 94.2% leased.
Investment Update
The Company's investment spending for the three months ended December 31, 2020 totaled $22.8 million (bringing the year-to-date investment spending to $85.1 million), and included spending on Experiential build-to-suit development and redevelopment projects.
Dividend Information
The monthly cash dividend to common shareholders was suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. The Company is restricted from paying dividends on its common shares during the covenant relief period, subject to certain limited exceptions, and there can be no assurances as to the Company's ability to reinstitute cash dividend payments to common shareholders or the timing thereof.
The Board declared its regular quarterly dividends to preferred shareholders of $0.359375 per share on its 5.75% Series C cumulative convertible preferred shares, $0.5625 per share on its 9.00% Series E cumulative convertible preferred shares and $0.359375 per share on its 5.75% Series G cumulative redeemable preferred shares.
Conference Call Information
Management will host a conference call to discuss the Company's financial results on February 25, 2021 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) 587-2930 and when prompted, provide the passcode 5899833.
You may watch a replay of the webcast by visiting the Webcasts page at https://investors.eprkc.com/webcasts.
Quarterly and Year-end Supplemental
The Company's supplemental information package for the fourth quarter and year ended December 31, 2020 is available in the Investor Center on the Company's website located at https://investors.eprkc.com/earnings-supplementals.
EPR Properties
Consolidated Statements of (Loss) Income
(Unaudited, dollars in thousands except per share data)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Rental revenue | $ | 84,011 | $ | 154,765 | $ | 372,176 | $ | 593,022 | |||||||||||||||
| Other income | 968 | 8,386 | 9,139 | 25,920 | |||||||||||||||||||
| Mortgage and other financing income | 8,433 | 7,195 | 33,346 | 33,027 | |||||||||||||||||||
| Total revenue | 93,412 | 170,346 | 414,661 | 651,969 | |||||||||||||||||||
| Property operating expense | 16,406 | 16,097 | 58,587 | 60,739 | |||||||||||||||||||
| Other expense | 1,462 | 10,173 | 16,474 | 29,667 | |||||||||||||||||||
| General and administrative expense | 11,142 | 10,831 | 42,596 | 46,371 | |||||||||||||||||||
| Severance expense | 2,868 | 423 | 2,868 | 2,364 | |||||||||||||||||||
| Costs associated with loan refinancing or payoff | 812 | — | 1,632 | 38,269 | |||||||||||||||||||
| Interest expense, net | 42,838 | 34,914 | 157,675 | 142,002 | |||||||||||||||||||
| Transaction costs | 814 | 5,784 | 5,436 | 23,789 | |||||||||||||||||||
| Credit loss expense | 20,312 | — | 30,695 | — | |||||||||||||||||||
| Impairment charges | 22,832 | 2,206 | 85,657 | 2,206 | |||||||||||||||||||
| Depreciation and amortization | 42,014 | 42,398 | 170,333 | 158,834 | |||||||||||||||||||
| (Loss) income before equity in loss from joint ventures, other items and discontinued operations | (68,088) | 47,520 | (157,292) | 147,728 | |||||||||||||||||||
| Equity in loss from joint ventures | (1,364) | (905) | (4,552) | (381) | |||||||||||||||||||
| Impairment charges on joint ventures | — | — | (3,247) | — | |||||||||||||||||||
| Gain on sale of real estate | 49,877 | 3,717 | 50,119 | 4,174 | |||||||||||||||||||
| (Loss) income before income taxes | (19,575) | 50,332 | (114,972) | 151,521 | |||||||||||||||||||
| Income tax (expense) benefit | (402) | 530 | (16,756) | 3,035 | |||||||||||||||||||
| (Loss) income from continuing operations | $ | (19,977) | $ | 50,862 | $ | (131,728) | $ | 154,556 | |||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||
| Income from discontinued operations before other items | — | 4,937 | — | 37,241 | |||||||||||||||||||
| Impairment on public charter school portfolio sale | — | (21,433) | — | (21,433) | |||||||||||||||||||
| Gain on sale of real estate from discontinued operations | — | 1,931 | — | 31,879 | |||||||||||||||||||
| (Loss) income from discontinued operations | — | (14,565) | — | 47,687 | |||||||||||||||||||
| Net (loss) income | (19,977) | 36,297 | (131,728) | 202,243 | |||||||||||||||||||
| Preferred dividend requirements | (6,034) | (6,034) | (24,136) | (24,136) | |||||||||||||||||||
| Net (loss) income available to common shareholders of EPR Properties | $ | (26,011) | $ | 30,263 | $ | (155,864) | $ | 178,107 | |||||||||||||||
| Net (loss) income available to common shareholders of EPR Properties per share: | |||||||||||||||||||||||
| Continuing operations | $ | (0.35) | $ | 0.57 | $ | (2.05) | $ | 1.70 | |||||||||||||||
| Discontinued operations | — | (0.18) | — | 0.62 | |||||||||||||||||||
| Basic | $ | (0.35) | $ | 0.39 | $ | (2.05) | $ | 2.32 | |||||||||||||||
| Continuing operations | $ | (0.35) | $ | 0.57 | $ | (2.05) | $ | 1.70 | |||||||||||||||
| Discontinued operations | — | (0.18) | — | 0.62 | |||||||||||||||||||
| Diluted | $ | (0.35) | $ | 0.39 | $ | (2.05) | $ | 2.32 | |||||||||||||||
| Shares used for computation (in thousands): | |||||||||||||||||||||||
| Basic | 74,615 | 78,456 | 75,994 | 76,746 | |||||||||||||||||||
| Diluted | 74,615 | 78,485 | 75,994 | 76,782 | |||||||||||||||||||
EPR Properties
Condensed Consolidated Balance Sheets
(Unaudited, dollars in thousands)
| December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| Assets | |||||||||||
| Real estate investments, net of accumulated depreciation of $1,062,087 and $989,254 at December 31, 2020 and 2019, respectively | $ | 4,851,302 | $ | 5,197,308 | |||||||
| Land held for development | 23,225 | 28,080 | |||||||||
| Property under development | 57,630 | 36,756 | |||||||||
| Operating lease right-of-use assets | 163,766 | 211,187 | |||||||||
| Mortgage notes and related accrued interest receivable | 365,628 | 357,391 | |||||||||
| Investment in joint ventures | 28,208 | 34,317 | |||||||||
| Cash and cash equivalents | 1,025,577 | 528,763 | |||||||||
| Restricted cash | 2,433 | 2,677 | |||||||||
| Accounts receivable | 116,193 | 86,858 | |||||||||
| Other assets | 70,223 | 94,174 | |||||||||
| Total assets | 6,704,185 | $ | 6,577,511 | ||||||||
| Liabilities and Equity | |||||||||||
| Accounts payable and accrued liabilities | $ | 105,379 | $ | 122,939 | |||||||
| Operating lease liabilities | 202,223 | 235,650 | |||||||||
| Dividends payable | 6,070 | 35,458 | |||||||||
| Unearned rents and interest | 65,485 | 74,829 | |||||||||
| Debt | 3,694,443 | 3,102,830 | |||||||||
| Total liabilities | 4,073,600 | 3,571,706 | |||||||||
| Total equity | $ | 2,630,585 | $ | 3,005,805 | |||||||
| Total liabilities and equity | $ | 6,704,185 | $ | 6,577,511 | |||||||
The historical financial results of the public charter schools sold by the Company in 2019 are reflected in the Company's consolidated statements of income as discontinued operations for the three months and year ended December 31, 2019. The operating results relating to discontinued operations are as follows (unaudited, dollars in thousands):
| Three Months Ended December 31, 2019 | Year Ended December 31, 2019 | ||||||||||||||||||||||
| Rental revenue | $ | 5,231 | $ | 36,289 | |||||||||||||||||||
| Mortgage and other financing income | 1,863 | 14,284 | |||||||||||||||||||||
| Total revenue | 7,094 | 50,573 | |||||||||||||||||||||
| Property operating expense | (11) | 573 | |||||||||||||||||||||
| Costs associated with loan refinancing or payoff | 43 | 181 | |||||||||||||||||||||
| Interest expense, net | (7) | (351) | |||||||||||||||||||||
| Depreciation and amortization | 2,132 | 12,929 | |||||||||||||||||||||
| Income from discontinued operations before other items | 4,937 | 37,241 | |||||||||||||||||||||
| Impairment on public charter school portfolio sale | (21,433) | (21,433) | |||||||||||||||||||||
| Gain on sale of real estate | 1,931 | 31,879 | |||||||||||||||||||||
| (Loss) Income from discontinued operations | $ | (14,565) | $ | 47,687 | |||||||||||||||||||
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 (loss) income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from disposition of real estate and impairment losses on real estate, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. The Company has calculated FFO for all periods presented in accordance with this definition.
In addition to FFO, the Company presents FFOAA and AFFO. FFOAA is presented by adding to FFO costs associated with loan refinancing or payoff, transaction costs, severance expense, preferred share redemption costs, impairment of operating lease right-of-use assets, termination fees associated with tenants' exercises of public charter school buy-out options and credit loss expense and subtracting 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 impact of straight-lined ground sublease expense), and the non-cash portion of mortgage and other financing income.
FFO, FFOAA and AFFO are widely used measures of the operating performance of real estate companies and are provided here as a supplemental measure to GAAP net (loss) income available to common shareholders and earnings per share, and management provides FFO, FFOAA and AFFO herein because it believes this information is useful to investors in this regard. FFO, FFOAA and AFFO are non-GAAP financial measures. FFO, FFOAA and AFFO do not represent cash flows from operations as defined by GAAP and are not indicative that cash flows are adequate to fund all cash needs and are not to be considered alternatives to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO, FFOAA and AFFO the same way so comparisons with other REITs may not be meaningful.
The following table summarizes FFO, FFOAA and AFFO for the three months and year ended December 31, 2020 and 2019 and reconciles such measures to net (loss) income available to common shareholders, the most directly comparable GAAP measure:
EPR Properties
Reconciliation of Non-GAAP Financial Measures
(Unaudited, dollars in thousands except per share data)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
| FFO: | ||||||||||||||||||||||||||
Net (loss) income available to common shareholders of EPR Properties | $ | (26,011) | $ | 30,263 | $ | (155,864) | $ | 178,107 | ||||||||||||||||||
| Gain on sale of real estate | (49,877) | (5,648) | (50,119) | (36,053) | ||||||||||||||||||||||
| Impairment of real estate investments, net (1) | 22,832 | 23,639 | 70,648 | 23,639 | ||||||||||||||||||||||
| Real estate depreciation and amortization | 41,786 | 44,242 | 169,253 | 170,717 | ||||||||||||||||||||||
| Allocated share of joint venture depreciation | 361 | 551 | 1,491 | 2,213 | ||||||||||||||||||||||
| Impairment charges on joint ventures | — | — | 3,247 | — | ||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | 93,047 | $ | 38,656 | $ | 338,623 | ||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | 93,047 | $ | 38,656 | $ | 338,623 | ||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | — | 1,937 | — | 7,754 | ||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | — | 1,939 | — | 7,756 | ||||||||||||||||||||||
| Diluted FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | 96,923 | $ | 38,656 | $ | 354,133 | ||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
| FFOAA: | ||||||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | 93,047 | $ | 38,656 | $ | 338,623 | ||||||||||||||||||
| Costs associated with loan refinancing or payoff | 812 | 43 | 1,632 | 38,450 | ||||||||||||||||||||||
| Transaction costs | 814 | 5,784 | 5,436 | 23,789 | ||||||||||||||||||||||
| Severance expense | 2,868 | 423 | 2,868 | 2,364 | ||||||||||||||||||||||
| Termination fees included in gain on sale | — | 1,217 | — | 24,075 | ||||||||||||||||||||||
| Gain on insurance recovery (included in other income) | (809) | — | (809) | — | ||||||||||||||||||||||
| Impairment of operating lease right-of-use assets (1) | — | — | 15,009 | — | ||||||||||||||||||||||
| Credit loss expense | 20,312 | — | 30,695 | — | ||||||||||||||||||||||
| Deferred income tax (benefit) expense | — | (847) | 15,246 | (4,115) | ||||||||||||||||||||||
| FFOAA available to common shareholders of EPR Properties | $ | 13,088 | $ | 99,667 | $ | 108,733 | $ | 423,186 | ||||||||||||||||||
| FFOAA available to common shareholders of EPR Properties | $ | 13,088 | $ | 99,667 | $ | 108,733 | $ | 423,186 | ||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | — | 1,937 | — | 7,754 | ||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | — | 1,939 | — | 7,756 | ||||||||||||||||||||||
| Diluted FFOAA available to common shareholders of EPR Properties | $ | 13,088 | $ | 103,543 | $ | 108,733 | $ | 438,696 | ||||||||||||||||||
| AFFO: | ||||||||||||||||||||||||||
| FFOAA available to common shareholders of EPR Properties | $ | 13,088 | $ | 99,667 | $ | 108,733 | $ | 423,186 | ||||||||||||||||||
| Non-real estate depreciation and amortization | 228 | 288 | 1,080 | 1,045 | ||||||||||||||||||||||
| Deferred financing fees amortization | 1,823 | 1,621 | 6,606 | 6,192 | ||||||||||||||||||||||
| Share-based compensation expense to management and trustees | 3,437 | 3,349 | 13,819 | 13,180 | ||||||||||||||||||||||
| Amortization of above and below market leases, net and tenant allowances | (96) | (119) | (480) | (343) | ||||||||||||||||||||||
| Maintenance capital expenditures (2) | (247) | (2,276) | (11,377) | (5,453) | ||||||||||||||||||||||
| Straight-lined rental revenue | (898) | (3,516) | 24,550 | (13,552) | ||||||||||||||||||||||
| Straight-lined ground sublease expense | 150 | 237 | 749 | 882 | ||||||||||||||||||||||
| Non-cash portion of mortgage and other financing income | (133) | (91) | (250) | (2,411) | ||||||||||||||||||||||
| AFFO available to common shareholders of EPR Properties | $ | 17,352 | $ | 99,160 | $ | 143,430 | $ | 422,726 | ||||||||||||||||||
| AFFO available to common shareholders of EPR Properties | $ | 17,352 | $ | 99,160 | $ | 143,430 | $ | 422,726 | ||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | — | 1,937 | — | 7,754 | ||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | — | 1,939 | — | 7,756 | ||||||||||||||||||||||
| Diluted AFFO available to common shareholders of EPR Properties | $ | 17,352 | $ | 103,036 | $ | 143,430 | $ | 438,236 | ||||||||||||||||||
| FFO per common share: | ||||||||||||||||||||||||||
| Basic | $ | (0.15) | $ | 1.19 | $ | 0.51 | $ | 4.41 | ||||||||||||||||||
| Diluted | (0.15) | 1.18 | 0.51 | 4.39 | ||||||||||||||||||||||
| FFOAA per common share: | ||||||||||||||||||||||||||
| Basic | $ | 0.18 | $ | 1.27 | $ | 1.43 | $ | 5.51 | ||||||||||||||||||
| Diluted | 0.18 | 1.26 | 1.43 | 5.44 | ||||||||||||||||||||||
| AFFO per common share: | ||||||||||||||||||||||||||
| Basic | $ | 0.23 | $ | 1.26 | $ | 1.89 | $ | 5.51 | ||||||||||||||||||
| Diluted | 0.23 | 1.25 | 1.89 | 5.44 | ||||||||||||||||||||||
| Shares used for computation (in thousands): | ||||||||||||||||||||||||||
| Basic | 74,615 | 78,456 | 75,994 | 76,746 | ||||||||||||||||||||||
| Diluted | 74,615 | 78,485 | 75,994 | 76,782 | ||||||||||||||||||||||
| Weighted average shares outstanding-diluted EPS | 74,615 | 78,485 | 75,994 | 76,782 | ||||||||||||||||||||||
| Effect of dilutive Series C preferred shares | — | 2,184 | — | 2,164 | ||||||||||||||||||||||
| Effect of dilutive Series E preferred shares | — | 1,640 | — | 1,631 | ||||||||||||||||||||||
| Adjusted weighted average shares outstanding-diluted Series C and Series E | 74,615 | 82,309 | 75,994 | 80,577 | ||||||||||||||||||||||
| Other financial information: | ||||||||||||||||||||||||||
| Dividends per common share | $ | — | $ | 1.1250 | $ | 1.5150 | $ | 4.5000 | ||||||||||||||||||
Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income for all periods.
(1) Impairment charges recognized during the year ended December 31, 2020 totaled $85.7 million, which was comprised of $70.7 million of impairments of real estate investments and $15.0 million of impairments of operating lease right-of-use assets.
(2) Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions.
The conversion of the 5.75% Series C cumulative convertible preferred shares and the 9.00% Series E cumulative convertible preferred shares would be dilutive to FFO, FFOAA and AFFO per share for the three months and year ended December 31, 2019. Therefore, the additional common shares that would result from the conversion and the corresponding add-back of the preferred dividends declared on those shares are included in the calculation of diluted FFO, FFOAA and AFFO per share for these periods.
Net Debt
Net Debt represents debt (reported in accordance with GAAP) adjusted to exclude deferred financing costs, net and reduced for cash and cash equivalents. By excluding deferred financing costs, net and reducing debt for cash and cash equivalents on hand, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. The Company believes this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding our financial condition. The Company's method of calculating Net Debt may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Gross Assets
Gross Assets represents total assets (reported in accordance with GAAP) adjusted to exclude accumulated depreciation and reduced for cash and cash equivalents. By excluding accumulated depreciation and reducing cash and cash equivalents, the result provides an estimate of the investment made by the Company. The Company believes that investors commonly use versions of this calculation in a similar manner. The Company's method of calculating Gross Assets may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Net Debt to Gross Assets
Net Debt to Gross Assets is a supplemental measure derived from non-GAAP financial measures that the Company uses to evaluate capital structure and the magnitude of debt to gross assets. The Company believes that investors commonly use versions of this ratio in a similar manner. The Company's method of calculating Net Debt to Gross Assets may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
EBITDAre
NAREIT developed EBITDAre as a relative non-GAAP financial measure of REITs, independent of a company's capital structure, to provide a uniform basis to measure the enterprise value of a company. Pursuant to the definition of EBITDAre by the Board of Governors of NAREIT, the Company calculates EBITDAre as net (loss) income, computed in accordance with GAAP, excluding interest expense (net), income tax (benefit) expense, depreciation and amortization, gains and losses from disposition of real estate, impairment losses on real estate, costs associated with loan refinancing or payoff and adjustments for unconsolidated partnerships, joint ventures and other affiliates.
Management provides EBITDAre herein because it believes this information is useful to investors as a supplemental performance measure as it can help facilitate comparisons of operating performance between periods and with other REITs. The Company's method of calculating EBITDAre may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDAre is not a measure of performance under GAAP, does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. This measure should not be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or cash flows or liquidity as defined by GAAP.
Adjusted 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 expense, transaction costs, impairment losses on operating lease right-of-use assets and prepayment fees. For the three months 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 quarter.
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.
Reconciliations of debt, total assets and net (loss) income (all reported in accordance with GAAP) to Net Debt, Gross Assets, Net Debt to Gross Assets, EBITDAre and Adjusted EBITDAre (each of which is a non-GAAP financial measure), as applicable, are included in the following tables (unaudited, in thousands):
| December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| Net Debt: | |||||||||||
| Debt | $ | 3,694,443 | $ | 3,102,830 | |||||||
| Deferred financing costs, net | 35,552 | 37,165 | |||||||||
| Cash and cash equivalents | (1,025,577) | (528,763) | |||||||||
| Net Debt | $ | 2,704,418 | $ | 2,611,232 | |||||||
| Gross Assets: | |||||||||||
| Total Assets | $ | 6,704,185 | $ | 6,577,511 | |||||||
| Accumulated depreciation | 1,062,087 | 989,254 | |||||||||
| Cash and cash equivalents | (1,025,577) | (528,763) | |||||||||
| Gross Assets | $ | 6,740,695 | $ | 7,038,002 | |||||||
| Net Debt to Gross Assets | 40 | % | 37 | % | |||||||
| Three Months Ended December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| EBITDAre and Adjusted EBITDAre: | |||||||||||
| Net (loss) income | $ | (19,977) | $ | 36,297 | |||||||
| Interest expense, net | 42,838 | 34,907 | |||||||||
| Income tax expense (benefit) | 402 | (530) | |||||||||
| Depreciation and amortization | 42,014 | 44,530 | |||||||||
| Gain on sale of real estate | (49,877) | (5,648) | |||||||||
| Impairment of real estate investments, net | 22,832 | 23,639 | |||||||||
| Costs associated with loan refinancing or payoff | 812 | 43 | |||||||||
| Allocated share of joint venture depreciation | 361 | 551 | |||||||||
| Allocated share of joint venture interest expense | 872 | 735 | |||||||||
| EBITDAre | $ | 40,277 | $ | 134,524 | |||||||
| Gain on insurance recovery (1) | (809) | — | |||||||||
| Severance expense | 2,868 | 423 | |||||||||
| Transaction costs | 814 | 5,784 | |||||||||
| Credit loss expense | 20,312 | — | |||||||||
| Accounts receivable write-offs from prior periods (2) | 4,301 | — | |||||||||
| Straight-line receivable write-offs from prior periods (2) | 870 | — | |||||||||
| Adjusted EBITDAre | $ | 68,633 | $ | 140,731 | |||||||
| Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income and comprehensive (loss) income. | |||||||||||
| (1) Included in other income in the accompanying consolidated statements of income. Other income includes the following: | |||||||||||
| Three Months Ended December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| Income from settlement of foreign currency swap contracts | $ | 110 | $ | 252 | |||||||
| Gain on insurance recovery | 809 | — | |||||||||
| Operating income from operated properties | 45 | 7,996 | |||||||||
| Miscellaneous income | 4 | 138 | |||||||||
| Other income | $ | 968 | $ | 8,386 | |||||||
| (2) Included in rental revenue from continuing operations in the accompanying consolidated statements of (loss) income and comprehensive (loss) income. Rental revenue includes the following: | |||||||||||
| Three Months Ended December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| Minimum rent | $ | 79,342 | $ | 139,529 | |||||||
| Accounts receivable write-offs from prior periods | (4,301) | — | |||||||||
| Tenant reimbursements | 4,831 | 5,790 | |||||||||
| Percentage rent | 3,040 | 6,428 | |||||||||
| Straight-line rental revenue | 1,768 | 2,926 | |||||||||
| Straight-line receivable write-offs from prior periods | (870) | — | |||||||||
| Other rental revenue | 201 | 92 | |||||||||
| Rental revenue | $ | 84,011 | $ | 154.765 | |||||||
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. The Company's 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):
| December 31, 2020 | December 31, 2019 | ||||||||||
| Total Investments: | |||||||||||
| Real estate investments, net of accumulated depreciation | $ | 4,851,302 | $ | 5,197,308 | |||||||
| Add back accumulated depreciation on real estate investments | 1,062,087 | 989,254 | |||||||||
| Land held for development | 23,225 | 28,080 | |||||||||
| Property under development | 57,630 | 36,756 | |||||||||
| Mortgage notes and related accrued interest receivable | 365,628 | 357,391 | |||||||||
| Investment in joint ventures | 28,208 | 34,317 | |||||||||
| Intangible assets, gross (1) | 57,962 | 57,385 | |||||||||
| Notes receivable and related accrued interest receivable, net (1) | 7,300 | 14,026 | |||||||||
| Total investments | $ | 6,453,342 | $ | 6,714,517 | |||||||
| Total investments | $ | 6,453,342 | $ | 6,714,517 | |||||||
| Operating lease right-of-use assets | 163,766 | 211,187 | |||||||||
| Cash and cash equivalents | 1,025,577 | 528,763 | |||||||||
| Restricted cash | 2,433 | 2,677 | |||||||||
| Accounts receivable | 116,193 | 86,858 | |||||||||
| Less: accumulated depreciation on real estate investments | (1,062,087) | (989,254) | |||||||||
| Less: accumulated amortization on intangible assets | (16,330) | (12,693) | |||||||||
| Prepaid expenses and other current assets | 21,291 | 35,456 | |||||||||
| Total assets | $ | 6,704,185 | $ | 6,577,511 | |||||||
| (1) Included in other assets in the accompanying consolidated balance sheet. Other assets include the following: | |||||||||||
| December 31, 2020 | December 31, 2019 | ||||||||||
| Intangible assets, gross | $ | 57,962 | $ | 57,385 | |||||||
| Less: accumulated amortization on intangible assets | (16,330) | (12,693) | |||||||||
| Notes receivable and related accrued interest receivable, net | 7,300 | 14,026 | |||||||||
| Prepaid expenses and other current assets | 21,291 | 35,456 | |||||||||
| Total other assets | $ | 70,223 | $ | 94,174 | |||||||
About EPR Properties
EPR Properties is a leading experiential net lease real estate investment trust (REIT), specializing in select enduring experiential properties in the real estate industry. We focus on real estate venues which create value by facilitating out of home leisure and recreation experiences where consumers choose to spend their discretionary time and money. We have nearly $6.5 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 Annual Report on Form 10-K 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 capital resources and liquidity, our expected cash flows and liquidity, continuing waivers of financial covenants related to our bank credit facilities and private placement notes, the performance of our customers, including AMC and Regal, 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 other applicable covenants under its debt agreements, which could materially impact actual performance. Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the forward-looking statements will occur. You can identify forward-looking statements by use of words such as “will be,” “intend,” “continue,” “believe,” “may,” “expect,” “hope,” “anticipate,” “goal,” “forecast,” “pipeline,” “estimates,” “offers,” “plans,” “would” or other similar expressions or other comparable terms or discussions of strategy, plans or intentions contained or incorporated by reference herein. 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
Fourth Quarter and Year End 2020 Earnings Call February 25, 2021
2 The financial results in this document reflect preliminary, unaudited results, which are not final until the Company’s Annual Report on Form 10-K is filed. With the exception of historical information, certain statements contained or incorporated by reference herein may contain forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such as those pertaining to the uncertain financial impact of COVID-19, our capital resources and liquidity, our expected cash flows and liquidity, continuing waivers of financial covenants related to our bank credit facilities and private placement notes, the performance of our customers, including AMC and Regal, 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 other applicable covenants under its debt agreements, which could materially impact actual performance. Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the forward- looking statements will occur. You can identify forward-looking statements by use of words such as “will be,” “intend,” “continue,” “believe,” “may,” “expect,” “hope,” “anticipate,” “goal,” “forecast,” “pipeline,” “estimates,” “offers,” “plans,” “would” or other similar expressions or other comparable terms or discussions of strategy, plans or intentions contained or incorporated by reference herein. 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 3 This information is as of the date indicated and, to our knowledge, was timely and accurate when presented. We are under no obligation to update or remove outdated information other than as required by applicable law or regulation.
4 PORTFOLIO UPDATE
5 PORTFOLIO OVERVIEW Education Portfolio 75 Properties; 12 Operators Occupancy at 100% * See investor supplemental for the applicable period for definitions and calculations of this Non-GAAP measure Experiential Portfolio 281 Properties; 43 Operators Occupancy at 93.8% $5.9B Total Investments 3 Properties under Development Total Portfolio Snapshot ~$6.5B Total Investments* Occupancy at 94.2% 356 Properties Q4 Investment Spending $22.8M Create Memorable Experiences in Safe Environments
6 2021 Reopening – 60% of theatres are open as of Feb 22 • With vaccine rollout, major releases will accelerate in the back half of 2021 Demonstrated Demand – as evidenced by international box office, consumers return to the theater when perceived as safe and there is new content • China: over Lunar New Year, Detective Chinatown 3 outpaced Avengers: Endgame for highest grossing opening weekend Importance of Theatre Release to Studios – studios are committed to the exhibition economic model • Studios are pushing major titles to ensure theatrical releases • Not releasing to PVOD as theatrical exhibition is preferred distribution PORTFOLIO REOPENING Theatres
7 PORTFOLIO REOPENING Reopening – 94% of non-theatre properties are open Other Experiential and Education
8 ASSET MANAGEMENT Capital Recycling Total disposition proceeds were $224M • Sold 6 private schools and 4 early childhood education centers for $201M with an unlevered IRR of 13% • Sold 4 experiential properties and 2 land parcels for $23M Took possession of all 7 transitional AMC properties and 1 Goodrich property • 1 sold for industrial use • In active negotiations to sell 5 (anticipate various uses) • Partnering with experienced operator to operate 2 locations Collections and Deferral Agreements Cash collections continue to improve with reopenings • Q4 collections were 46% of pre-COVID contractual cash revenue compared to Q3 at 43% and Q2 at 29% • January collections were 66%; February collections are currently 64% Deferral agreements • Have addressed 95% of pre-COVID contractual cash revenue; granted approx. 5% of permanent rent and interest reductions
9 FINANCIAL REVIEW
1 0 (In millions except per-share data) * See investor supplementals for the applicable periods for definitions and calculations of these non-GAAP measures FINANCIAL HIGHLIGHTS Financial Performance* Quarter ended December 31, 2020(1) 2019(2) $ Change % Change Total Revenue (Continuing Ops) $93.4 $170.3 ($76.9) (45%) Net (Loss) Income – Common (26.0) 30.3 (56.3) (186%) FFO as adj. – Common* 13.1 99.7 (86.6) (87%) AFFO – Common* 17.4 99.2 (81.8) (82%) Net Income/share – Common (0.35) 0.39 (0.74) (190%) FFO/share - Common, as adj.* 0.18 1.26 (1.08) (86%) AFFO/share - Common* 0.23 1.25 (1.02) (82%) (1) The operating results for the three months ended December 31, 2020, include $2.4 million of straight-line and other receivable write- offs, or $0.03 per share, related primarily to customers moved to a cash basis of accounting for revenue recognition purposes at the end of the fourth quarter. These write-offs are reflected in all metrics in these columns except that AFFO – Common and AFFO/share - Common for the three months ended December 31, 2020 excludes the impact of the straight-line portion of these write-offs of $1.0 million. (2) The operating results of the Company's public charter school portfolio for the three months ended December 31, 2019, include $1.2 million in termination fees, and are included in all metrics in this column except for total revenue from continuing operations. The remaining public charter school portfolio was sold during the fourth quarter of 2019.
1 1* See Supplemental Operating and Financial Data for the applicable periods for definitions and calculations of these non-GAAP measures. FINANCIAL HIGHLIGHTS For the quarter ended December 31, 2020 $ Per Share FFOAA* before placing two theatre tenants on cash basis $15.5 $0.21 Impact of cash basis entries: Rental revenue write-off (1.4) (0.02) Straight-line rent receivable write-off (1.0) (0.01) Total impact of write-offs (2.4) (0.03) FFOAA* after cash basis entries (as reported) $13.1 $0.18 Other items impacting Q4 excluded from FFOAA: Gain on sale of real estate $49.9 Insurance recovery .8 Impairment charges related to four theatre properties (22.8) Credit loss expense primarily related to one borrower (20.3) Severance expense (2.9) (In millions except per-share data)
1 2* See investor supplementals for the applicable periods for definitions and calculations of these non-GAAP measures FINANCIAL HIGHLIGHTS Financial Performance* Year ended December 31, 2020(1) 2019(2) $ Change % Change Total Revenue (Continuing Ops) $414.7 $652.0 ($237.3) (36%) Net (Loss) Income – Common (155.9) 178.1 (334.0) (188%) FFO as adj. – Common* 108.7 423.2 (314.5) (74%) AFFO – Common* 143.4 422.7 (279.3) (66%) Net Income/share – Common (2.05) 2.32 (4.37) (188%) FFO/share - Common, as adj.* 1.43 5.44 (4.01) (74%) AFFO/share - Common* 1.89 5.44 (3.55) (65%) (1) The operating results for the year ended December 31, 2020, include $65.1 million of straight-line and other receivable write-offs, or $0.86 per share, related primarily to customers moved to a cash basis of accounting for revenue recognition purposes during the year ended December 31, 2020. These write-offs are reflected in all metrics in these columns except that AFFO – Common and AFFO/share - Common for the year ended December 31, 2020 excludes the impact of the straight-line portion of these write-offs of $38.0 million. (2) The operating results of the Company's public charter school portfolio for the year ended December 31, 2019, including $24.1 million in termination fees, are included in all metrics in this column except for total revenue from continuing operations. The remaining public charter school portfolio was sold during the fourth quarter of 2019. (In millions except per-share data)
1 3 DEFERRAL INFORMATION n/a (3) (1) Represents pre-COVID contractual cash revenue which includes cash rent (including tenant reimbursements) and interest plus pre-COVID percentage rent, both of which have been annualized. (2) Includes leases for tenants accounted for on a cash basis and/or leases for tenants that have been or are expected to be restructured. This category includes AMC and Regal. Annualized Revenue1 No Payment Deferral $ 88 14% Sold Properties 25 4% Payments Deferred and Recognized as Revenue During Deferral Period 231 37% Payments Deferred But Not Recognized as Revenue During Deferral Period 30 5% Cash Basis/Lease Restructurings2 233 37% New Vacancies 17 3% Total $ 624 100% Classification of Customers and Deferral Information ($ in millions)
1 4 Net Debt to Gross Assets was 40% at 12/31/20 • $3.7B total debt; $3.1B fixed rate or fixed through int. rate swaps at wtd. avg. = 4.6% • Weighted average debt maturity ~5 years; No scheduled debt maturities until revolver matures in 2022 • During Q4, further amended Bank Credit Facilities and Private Placement Notes to extend certain covenant waivers through December 2021 Liquidity Position • ~$1.0B unrestricted cash on hand at 12/31/20 • Positive operating cash flow in Q4; operating cash flow expected to increase substantially in 2021 • $590M drawn on $1B revolver; after 12/31/20 additional $500M paid down, balance now $90M • Paid down private placement notes by $23.8M after 12/31/20; balance now $316.2M CAPITAL MARKETS UPDATE
1 5 FINANCIAL HIGHLIGHTS Q1 2021 Annualized Pre-COVID Contractual Cash Revenue with % rents $ 156 $ 624 Pre-COVID percentage rents (4) (15) Pre-COVID Contractual Cash Revenue 152 609 Permanent rent cuts (5) (24) Net dispositions (sales less new investments) (6) (19) New vacancies (4) (17) Temporary change in rents (3) (10) Rent bumps/other, net 2 6 Contractual Cash Revenue1 $ 136 $ 545 Reconciliation of Pre-COVID Contractual Cash Revenue to Contractual Cash Revenue ($ in millions) (1) Amount represents contractual cash revenue consisting of cash rent (which includes tenants reimbursements) and interest. Contractual cash revenue is an operational measure and is before the impact of any temporary abatements or deferrals and excludes percentage rent (rent over base amounts), non-cash revenue and TRS revenue.
1 6 EXPECTED REVENUE RECOGNITION AND COLLECTIONS Q1 2021 Range in $ % of Contractual Cash Revenue1 Revenue recognition $98M - $105M 72% - 77% Collections $87M - $93M 64% - 68% (1) Contractual cash revenue consists of cash rent (including tenant reimbursements) and interest. Contractual cash revenue is an operational measure and is before the impact of any temporary abatements or deferrals and excludes percentage rent (rent over base amounts), non-cash revenue and TRS revenue.
CLOSING COMMENTS 1 7
EPR Properties 909 Walnut Street, Suite 200 Kansas City, MO 64106 www.eprkc.com 816-472-1700 info@eprkc.com
Exhibit 99.3
| Supplemental Operating and Financial Data | ||
| Fourth Quarter and Year Ended December 31, 2020 | ||
| 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 | ||||||||||||||||||||||||||
| Lease Expirations | ||||||||||||||||||||||||||
| Top Ten Customers by Total Revenue | ||||||||||||||||||||||||||
| Definitions-Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| Appendix-Reconciliation of Certain Non-GAAP Financial Measures | ||||||||||||||||||||||||||
 | ||||||||
| Q4 2020 Supplemental | Page 2 | |||||||
| CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS | ||||||||||||||
The financial results in this document reflect preliminary, unaudited results, which are not final until the Company’s Annual Report on Form 10-K is filed. With the exception of historical information, certain statements contained or incorporated by reference herein may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such as those pertaining to the uncertain financial impact of COVID-19, our capital resources and liquidity, our expected cash flows and liquidity, continuing waivers of financial covenants related to our bank credit facilities and private placement notes, the performance of our customers, including AMC and Regal, 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 other applicable covenants under its debt agreements, which could materially impact actual performance. Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the forward-looking statements will occur. You can identify forward-looking statements by use of words such as “will be,” “intend,” “continue,” “believe,” “may,” “expect,” “hope,” “anticipate,” “goal,” “forecast,” “pipeline,” “estimates,” “offers,” “plans,” “would” or other similar expressions or other comparable terms or discussions of strategy, plans or intentions contained or incorporated by reference herein. 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 22 through 24 for definitions of certain non-GAAP financial measures used in this document and the reconciliations of certain non-GAAP measures on pages 9 and 10 and in the Appendix on pages 25 through 29.
| ||||||||
| Q4 2020 Supplemental | Page 3 | |||||||
| COMPANY PROFILE | ||||||||||||||
| THE COMPANY | COMPANY STRATEGY | |||||||
| EPR Properties ("EPR" or the "Company") is a self-administered and self-managed real estate investment trust. EPR was formed in August 1997 as a Maryland real estate investment trust ("REIT"), and an initial public offering was completed on November 18, 1997. | EPR's primary business objective is to enhance shareholder value by achieving predictable growth in Funds from Operations As Adjusted ("FFOAA") and dividends per share. | |||||||
| Since that time, the Company has been a leading Experiential net lease REIT, specializing in select enduring experiential properties. We are focused on growing our Experiential portfolio with properties that offer a variety of enduring, congregate entertainment, recreation and leisure activities. Separately, our Education portfolio is a legacy investment that provides additional geographic and operator diversity. | Our strategic growth is focused on acquiring or developing experiential real estate venues which create value by facilitating out of home congregate entertainment, recreation and leisure experiences where consumers choose to spend their discretionary time and money. These are properties which make up the social infrastructure of society. | |||||||
| This focus is consistent with our depth of knowledge across each of our property types, creating a competitive advantage that allows us to more quickly identify key market trends. We deliberately apply information and our ingenuity to target properties that represent logical extensions within each of our existing property types or potential future investments. | ||||||||
 | ||||||||
| 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 | ||||||||||||||||||||
 |  |  |  | |||||||||||||||||
| ||||||||
| Q4 2020 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 | ||||||||
| Senior Vice President and Chief Accounting Officer | ||||||||
| COMPANY INFORMATION | ||||||||
| CORPORATE HEADQUARTERS | TRADING SYMBOLS | |||||||
| 909 Walnut Street, Suite 200 | Common Stock: | |||||||
| Kansas City, MO 64106 | EPR | |||||||
| 888-EPR-REIT | Preferred Stock: | |||||||
| www.eprkc.com | EPR-PrC | |||||||
| EPR-PrE | ||||||||
| STOCK EXCHANGE LISTING | EPR-PrG | |||||||
| New York Stock Exchange | ||||||||
| EQUITY RESEARCH COVERAGE | ||||||||
| Bank of America Merrill Lynch | Jeffrey Spector/Joshua Dennerlein | 646-855-1363 | ||||||
| Citi Global Markets | Michael Bilerman/Nick Joseph | 212-816-4471 | ||||||
| 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 | ||||||
| SunTrust Robinson Humphrey | Ki Bin Kim | 212-303-4124 | ||||||
EPR Properties is followed by the analysts identified above. Please note that any opinions, estimates, forecasts or recommendations regarding EPR Properties’ performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or recommendations of EPR Properties or its management. EPR Properties does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.
| ||||||||
| Q4 2020 Supplemental | Page 5 | |||||||
| SELECTED FINANCIAL INFORMATION | |||||||||||||||||||||||
| (UNAUDITED, DOLLARS AND SHARES IN THOUSANDS) | |||||||||||||||||||||||
| THREE MONTHS ENDED DECEMBER 31, | YEAR ENDED DECEMBER 31, | ||||||||||||||||||||||
| Operating Information: | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
| Revenue (1) | $ | 93,412 | $ | 170,346 | $ | 414,661 | $ | 651,969 | |||||||||||||||
| Net (loss) income available to common shareholders of EPR Properties | (26,011) | 30,263 | (155,864) | 178,107 | |||||||||||||||||||
| EBITDAre (2) | 40,277 | 134,524 | 243,019 | 544,227 | |||||||||||||||||||
| Adjusted EBITDAre (2) | 68,633 | 140,731 | 347,381 | 567,721 | |||||||||||||||||||
| Interest expense, net (1) | 42,838 | 34,914 | 157,675 | 142,002 | |||||||||||||||||||
| Capitalized interest | 404 | 273 | 1,233 | 5,326 | |||||||||||||||||||
| Straight-lined rental revenue | 898 | 3,516 | (24,550) | 13,552 | |||||||||||||||||||
| Dividends declared on preferred shares | 6,034 | 6,034 | 24,136 | 24,136 | |||||||||||||||||||
| Dividends declared on common shares | — | 88,269 | 119,058 | 346,216 | |||||||||||||||||||
| General and administrative expense | 11,142 | 10,831 | 42,596 | 46,371 | |||||||||||||||||||
| DECEMBER 31, | |||||||||||||||||||||||
| Balance Sheet Information: | 2020 | 2019 | |||||||||||||||||||||
| Total assets | $ | 6,704,185 | $ | 6,577,511 | |||||||||||||||||||
| Accumulated depreciation | 1,062,087 | 989,254 | |||||||||||||||||||||
| Cash and cash equivalents | 1,025,577 | 528,763 | |||||||||||||||||||||
| Total assets before accumulated depreciation less cash and cash equivalents (gross assets) | 6,740,695 | 7,038,002 | |||||||||||||||||||||
| Debt | 3,694,443 | 3,102,830 | |||||||||||||||||||||
| Deferred financing costs, net | 35,552 | 37,165 | |||||||||||||||||||||
| Net debt (2) | 2,704,418 | 2,611,232 | |||||||||||||||||||||
| Equity | 2,630,585 | 3,005,805 | |||||||||||||||||||||
| Common shares outstanding | 74,603 | 78,463 | |||||||||||||||||||||
| Total market capitalization (using EOP closing price) | 5,500,044 | 8,524,889 | |||||||||||||||||||||
| Net debt/gross assets | 40 | % | 37 | % | |||||||||||||||||||
| Net debt/Adjusted EBITDAre (3) | Footnote 6 | 4.6 | |||||||||||||||||||||
| Adjusted net debt/Annualized adjusted EBITDAre (2)(4)(5) | Footnote 6 | 4.8 | |||||||||||||||||||||
| (1) Excludes discontinued operations. | |||||||||||||||||||||||
| (2) See pages 22 through 24 for definitions. See calculation as applicable on page 28. | |||||||||||||||||||||||
| (3) Adjusted EBITDAre in this calculation is for the quarter multiplied times four. See pages 22 through 24 for definitions. See calculation on page 28. | |||||||||||||||||||||||
| (4) Adjusted net debt is net debt less 40% times property under development. See pages 22 through 24 for definitions. | |||||||||||||||||||||||
| (5) Annualized adjusted EBITDAre is adjusted EBITDAre for the quarter further adjusted for in-service and disposed projects, percentage rent and participating interest and other non-recurring items which is then multiplied times four. These calculations can be found on page 28 under the reconciliation of Adjusted EBITDAre and Annualized Adjusted EBITDAre. See pages 22 through 24 for definitions. | |||||||||||||||||||||||
| (6) Not presented as this ratio is not meaningful given the continuing disruption caused by the COVID-19 pandemic and the associated accounting for tenant rent deferrals and other lease modifications. | |||||||||||||||||||||||
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| Q4 2020 Supplemental | Page 6 | |||||||
| SELECTED BALANCE SHEET INFORMATION | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||||||||||||||||||||||||||
| ASSETS | 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3ND QUARTER 2019 | ||||||||||||||||||||||||||||||||
| Real estate investments | $ | 5,913,389 | $ | 6,139,858 | $ | 6,144,830 | $ | 6,208,685 | $ | 6,186,562 | $ | 6,558,790 | ||||||||||||||||||||||||||
| Less: accumulated depreciation | (1,062,087) | (1,072,201) | (1,034,771) | (1,023,993) | (989,254) | (989,480) | ||||||||||||||||||||||||||||||||
| Land held for development | 23,225 | 25,846 | 26,244 | 28,080 | 28,080 | 28,080 | ||||||||||||||||||||||||||||||||
| Property under development | 57,630 | 44,103 | 39,039 | 30,063 | 36,756 | 31,825 | ||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 163,766 | 185,459 | 189,058 | 207,605 | 211,187 | 219,459 | ||||||||||||||||||||||||||||||||
| Mortgage notes and related accrued interest receivable | 365,628 | 362,011 | 357,668 | 356,666 | 357,391 | 413,695 | ||||||||||||||||||||||||||||||||
| Investment in direct financing leases, net | — | — | — | — | — | 20,727 | ||||||||||||||||||||||||||||||||
| Investment in joint ventures | 28,208 | 29,571 | 28,925 | 33,897 | 34,317 | 35,222 | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 1,025,577 | 985,372 | 1,006,981 | 1,225,122 | 528,763 | 115,839 | ||||||||||||||||||||||||||||||||
| Restricted cash | 2,433 | 2,424 | 2,615 | 4,583 | 2,677 | 5,929 | ||||||||||||||||||||||||||||||||
| Accounts receivable | 116,193 | 129,714 | 134,774 | 72,537 | 86,858 | 99,190 | ||||||||||||||||||||||||||||||||
| Other assets | 70,223 | 75,053 | 107,615 | 112,095 | 94,174 | 94,014 | ||||||||||||||||||||||||||||||||
| Total assets | $ | 6,704,185 | $ | 6,907,210 | $ | 7,002,978 | $ | 7,255,340 | $ | 6,577,511 | $ | 6,633,290 | ||||||||||||||||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 105,379 | $ | 95,429 | $ | 96,454 | $ | 112,167 | $ | 122,939 | $ | 121,351 | ||||||||||||||||||||||||||
Operating lease liabilities | 202,223 | 225,379 | 229,030 | 232,343 | 235,650 | 244,358 | ||||||||||||||||||||||||||||||||
Common dividends payable | 36 | 29 | 19 | 30,063 | 29,424 | 29,340 | ||||||||||||||||||||||||||||||||
Preferred dividends payable | 6,034 | 6,034 | 6,034 | 6,034 | 6,034 | 6,034 | ||||||||||||||||||||||||||||||||
Unearned rents and interest | 65,485 | 75,415 | 81,096 | 84,190 | 74,829 | 89,797 | ||||||||||||||||||||||||||||||||
Line of credit | 590,000 | 750,000 | 750,000 | 750,000 | — | — | ||||||||||||||||||||||||||||||||
Deferred financing costs, net | (35,552) | (35,140) | (35,907) | (35,933) | (37,165) | (38,384) | ||||||||||||||||||||||||||||||||
Other debt | 3,139,995 | 3,139,995 | 3,139,995 | 3,139,995 | 3,139,995 | 3,139,995 | ||||||||||||||||||||||||||||||||
| Total liabilities | 4,073,600 | 4,257,141 | 4,266,721 | 4,318,859 | 3,571,706 | 3,592,491 | ||||||||||||||||||||||||||||||||
| Equity: | ||||||||||||||||||||||||||||||||||||||
Common stock and additional paid-in-capital | 3,858,451 | 3,853,581 | 3,849,803 | 3,845,911 | 3,835,674 | 3,815,278 | ||||||||||||||||||||||||||||||||
Preferred stock at par value | 148 | 148 | 148 | 148 | 148 | 148 | ||||||||||||||||||||||||||||||||
Treasury stock | (261,238) | (260,594) | (260,351) | (154,357) | (147,435) | (147,435) | ||||||||||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | 216 | (2,106) | (4,331) | (5,289) | 7,275 | 4,659 | ||||||||||||||||||||||||||||||||
Distributions in excess of net income | (966,992) | (940,960) | (849,012) | (749,932) | (689,857) | (631,851) | ||||||||||||||||||||||||||||||||
| Total equity | 2,630,585 | 2,650,069 | 2,736,257 | 2,936,481 | 3,005,805 | 3,040,799 | ||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 6,704,185 | $ | 6,907,210 | $ | 7,002,978 | $ | 7,255,340 | $ | 6,577,511 | $ | 6,633,290 | ||||||||||||||||||||||||||
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| Q4 2020 Supplemental | Page 7 | |||||||
| SELECTED OPERATING DATA | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||||||||||||||||||||||||||
| 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | |||||||||||||||||||||||||||||||||
| Rental revenue | $ | 84,011 | $ | 55,591 | $ | 97,531 | $ | 135,043 | $ | 154,765 | $ | 150,962 | ||||||||||||||||||||||||||
| Other income | 968 | 182 | 416 | 7,573 | 8,386 | 11,464 | ||||||||||||||||||||||||||||||||
| Mortgage and other financing income | 8,433 | 8,104 | 8,413 | 8,396 | 7,195 | 6,930 | ||||||||||||||||||||||||||||||||
| Total revenue | 93,412 | 63,877 | 106,360 | 151,012 | 170,346 | 169,356 | ||||||||||||||||||||||||||||||||
| Property operating expense | 16,406 | 13,759 | 15,329 | 13,093 | 16,097 | 14,494 | ||||||||||||||||||||||||||||||||
| Other expense | 1,462 | 2,680 | 2,798 | 9,534 | 10,173 | 11,403 | ||||||||||||||||||||||||||||||||
| General and administrative expense | 11,142 | 10,034 | 10,432 | 10,988 | 10,831 | 11,600 | ||||||||||||||||||||||||||||||||
Severance expense | 2,868 | — | — | — | 423 | 1,521 | ||||||||||||||||||||||||||||||||
Costs associated with loan refinancing or payoff | 812 | — | 820 | — | — | 38,269 | ||||||||||||||||||||||||||||||||
| Interest expense, net | 42,838 | 41,744 | 38,340 | 34,753 | 34,914 | 36,667 | ||||||||||||||||||||||||||||||||
| Transaction costs | 814 | 2,776 | 771 | 1,075 | 5,784 | 5,959 | ||||||||||||||||||||||||||||||||
| Credit loss expense | 20,312 | 5,707 | 3,484 | 1,192 | — | — | ||||||||||||||||||||||||||||||||
| Impairment charges | 22,832 | 11,561 | 51,264 | — | 2,206 | — | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 42,014 | 42,059 | 42,450 | 43,810 | 42,398 | 41,644 | ||||||||||||||||||||||||||||||||
| (Loss) income before equity in loss from joint ventures, other items and discontinued operations | (68,088) | (66,443) | (59,328) | 36,567 | 47,520 | 7,799 | ||||||||||||||||||||||||||||||||
| Equity in loss from joint ventures | (1,364) | (1,044) | (1,724) | (420) | (905) | (435) | ||||||||||||||||||||||||||||||||
| Impairment charges on joint ventures | — | — | (3,247) | — | — | — | ||||||||||||||||||||||||||||||||
| Gain on sale of real estate | 49,877 | — | 22 | 220 | 3,717 | 845 | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | (402) | (18,417) | 1,312 | 751 | 530 | 600 | ||||||||||||||||||||||||||||||||
| (Loss) income from continuing operations | (19,977) | (85,904) | (62,965) | 37,118 | 50,862 | 8,809 | ||||||||||||||||||||||||||||||||
| Discontinued operations: | ||||||||||||||||||||||||||||||||||||||
Income from discontinued operations before other items | — | — | — | — | 4,937 | 11,736 | ||||||||||||||||||||||||||||||||
Impairment on public charter school portfolio sale | — | — | — | — | (21,433) | — | ||||||||||||||||||||||||||||||||
| Gain on sale of real estate from discontinued operations | — | — | — | — | 1,931 | 13,458 | ||||||||||||||||||||||||||||||||
(Loss) income from discontinued operations | — | — | — | — | (14,565) | 25,194 | ||||||||||||||||||||||||||||||||
| Net (loss) income | (19,977) | (85,904) | (62,965) | 37,118 | 36,297 | 34,003 | ||||||||||||||||||||||||||||||||
| Preferred dividend requirements | (6,034) | (6,034) | (6,034) | (6,034) | (6,034) | (6,034) | ||||||||||||||||||||||||||||||||
| Net (loss) income available to common shareholders of EPR Properties | $ | (26,011) | $ | (91,938) | $ | (68,999) | $ | 31,084 | $ | 30,263 | $ | 27,969 | ||||||||||||||||||||||||||
| ||||||||
| Q4 2020 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): | 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | ||||||||||||||||||||||||||||||||
| Net (loss) income available to common shareholders of EPR Properties | $ | (26,011) | $ | (91,938) | $ | (68,999) | $ | 31,084 | $ | 30,263 | $ | 27,969 | ||||||||||||||||||||||||||
| Gain on sale of real estate | (49,877) | — | (22) | (220) | (5,648) | (14,303) | ||||||||||||||||||||||||||||||||
| Impairment of real estate investments, net (2) | 22,832 | 11,561 | 36,255 | — | 23,639 | — | ||||||||||||||||||||||||||||||||
| Real estate depreciation and amortization | 41,786 | 41,791 | 42,151 | 43,525 | 44,242 | 44,863 | ||||||||||||||||||||||||||||||||
| Allocated share of joint venture depreciation | 361 | 369 | 378 | 383 | 551 | 553 | ||||||||||||||||||||||||||||||||
| Impairment charges on joint ventures | — | — | 3,247 | — | — | — | ||||||||||||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | (38,217) | $ | 13,010 | $ | 74,772 | $ | 93,047 | $ | 59,082 | ||||||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | (38,217) | $ | 13,010 | $ | 74,772 | $ | 93,047 | $ | 59,082 | ||||||||||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | — | — | — | 1,939 | 1,937 | — | ||||||||||||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | — | — | — | 1,939 | 1,939 | — | ||||||||||||||||||||||||||||||||
| Diluted FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | (38,217) | $ | 13,010 | $ | 78,650 | $ | 96,923 | $ | 59,082 | ||||||||||||||||||||||||||
| FUNDS FROM OPERATIONS AS ADJUSTED ("FFOAA") (1): | ||||||||||||||||||||||||||||||||||||||
| FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | (38,217) | $ | 13,010 | $ | 74,772 | $ | 93,047 | $ | 59,082 | ||||||||||||||||||||||||||
| Costs associated with loan refinancing or payoff | 812 | — | 820 | — | 43 | 38,407 | ||||||||||||||||||||||||||||||||
| Transaction costs | 814 | 2,776 | 771 | 1,075 | 5,784 | 5,959 | ||||||||||||||||||||||||||||||||
| Severance expense | 2,868 | — | — | — | 423 | 1,521 | ||||||||||||||||||||||||||||||||
| Termination fee included in gain on sale | — | — | — | — | 1,217 | 11,324 | ||||||||||||||||||||||||||||||||
| Gain on insurance recovery (included in other income) | (809) | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Impairment of operating lease right-of-use assets (2) | — | — | 15,009 | — | — | — | ||||||||||||||||||||||||||||||||
| Credit loss expense | 20,312 | 5,707 | 3,484 | 1,192 | — | — | ||||||||||||||||||||||||||||||||
| Deferred income tax expense (benefit) | — | 18,035 | (1,676) | (1,113) | (847) | (984) | ||||||||||||||||||||||||||||||||
| FFO as adjusted available to common shareholders of EPR Properties | $ | 13,088 | $ | (11,699) | $ | 31,418 | $ | 75,926 | $ | 99,667 | $ | 115,309 | ||||||||||||||||||||||||||
| FFO as adjusted available to common shareholders of EPR Properties | $ | 13,088 | $ | (11,699) | $ | 31,418 | $ | 75,926 | $ | 99,667 | $ | 115,309 | ||||||||||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | — | — | — | 1,939 | 1,937 | 1,939 | ||||||||||||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | — | — | — | 1,939 | 1,939 | 1,939 | ||||||||||||||||||||||||||||||||
| Diluted FFO as adjusted available to common shareholders of EPR Properties | $ | 13,088 | $ | (11,699) | $ | 31,418 | $ | 79,804 | $ | 103,543 | $ | 119,187 | ||||||||||||||||||||||||||
| FFO per common share: | ||||||||||||||||||||||||||||||||||||||
| Basic | $ | (0.15) | $ | (0.51) | $ | 0.17 | $ | 0.95 | $ | 1.19 | $ | 0.76 | ||||||||||||||||||||||||||
| Diluted | (0.15) | (0.51) | 0.17 | 0.95 | 1.18 | 0.76 | ||||||||||||||||||||||||||||||||
| FFO as adjusted per common share: | ||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.18 | $ | (0.16) | $ | 0.41 | $ | 0.97 | $ | 1.27 | $ | 1.49 | ||||||||||||||||||||||||||
| Diluted | 0.18 | (0.16) | 0.41 | 0.97 | 1.26 | 1.46 | ||||||||||||||||||||||||||||||||
| Shares used for computation (in thousands): | ||||||||||||||||||||||||||||||||||||||
| Basic | 74,615 | 74,613 | 76,310 | 78,467 | 78,456 | 77,632 | ||||||||||||||||||||||||||||||||
| Diluted | 74,615 | 74,613 | 76,310 | 78,476 | 78,485 | 77,664 | ||||||||||||||||||||||||||||||||
| Effect of dilutive Series C preferred shares | — | — | — | 2,232 | 2,184 | 2,170 | ||||||||||||||||||||||||||||||||
| Effect of dilutive Series E preferred shares | — | — | — | 1,664 | 1,640 | 1,634 | ||||||||||||||||||||||||||||||||
| Adjusted weighted-average shares outstanding-diluted Series C and Series E | 74,615 | 74,613 | 76,310 | 82,372 | 82,309 | 81,468 | ||||||||||||||||||||||||||||||||
| (1) See pages 22 through 24 for definitions. | ||||||||||||||||||||||||||||||||||||||
| (2) Impairment charges recognized during the three months ended June 30, 2020 totaled $51.3 million, which was comprised of $36.3 million of impairments of real estate investments and $15.0 million of impairments of operating lease right-of-use assets. | ||||||||||||||||||||||||||||||||||||||
| Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income. | ||||||||||||||||||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 9 | |||||||
| ADJUSTED FUNDS FROM OPERATIONS | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION) | ||||||||||||||||||||||||||||||||||||||
| ADJUSTED FUNDS FROM OPERATIONS ("AFFO") (1): | 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | ||||||||||||||||||||||||||||||||
FFO available to common shareholders of EPR Properties | $ | (10,909) | $ | (38,217) | $ | 13,010 | $ | 74,772 | $ | 93,047 | $ | 59,082 | ||||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||||
Costs associated with loan refinancing or payoff | 812 | — | 820 | — | 43 | 38,407 | ||||||||||||||||||||||||||||||||
| Transaction costs | 814 | 2,776 | 771 | 1,075 | 5,784 | 5,959 | ||||||||||||||||||||||||||||||||
| Impairment of operating lease right-of-use assets (2) | — | — | 15,009 | — | — | — | ||||||||||||||||||||||||||||||||
| Credit loss expense | 20,312 | 5,707 | 3,484 | 1,192 | — | — | ||||||||||||||||||||||||||||||||
| Severance expense | 2,868 | — | — | — | 423 | 1,521 | ||||||||||||||||||||||||||||||||
Termination fees included in gain on sale | — | — | — | — | 1,217 | 11,324 | ||||||||||||||||||||||||||||||||
| Gain on insurance recovery (included in other income) | (809) | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Deferred income tax expense (benefit) | — | 18,035 | (1,676) | (1,113) | (847) | (984) | ||||||||||||||||||||||||||||||||
| Non-real estate depreciation and amortization | 228 | 268 | 299 | 285 | 288 | 271 | ||||||||||||||||||||||||||||||||
| Deferred financing fees amortization | 1,823 | 1,498 | 1,651 | 1,634 | 1,621 | 1,552 | ||||||||||||||||||||||||||||||||
Share-based compensation expense to management and trustees | 3,437 | 3,410 | 3,463 | 3,509 | 3,349 | 3,372 | ||||||||||||||||||||||||||||||||
| Amortization of above/below market leases, net and tenant allowances | (96) | (124) | (108) | (152) | (119) | (107) | ||||||||||||||||||||||||||||||||
| Maintenance capital expenditures (3) | (247) | (8,911) | (1,291) | (928) | (2,276) | (2,370) | ||||||||||||||||||||||||||||||||
| Straight-lined rental revenue | (898) | 17,969 | (2,229) | 9,708 | (3,516) | (4,399) | ||||||||||||||||||||||||||||||||
| Straight-lined ground sublease expense | 150 | 216 | 207 | 176 | 237 | 256 | ||||||||||||||||||||||||||||||||
Non-cash portion of mortgage and other financing income | (133) | 71 | (97) | (91) | (91) | (237) | ||||||||||||||||||||||||||||||||
| AFFO available to common shareholders of EPR Properties | $ | 17,352 | $ | 2,698 | $ | 33,313 | $ | 90,067 | $ | 99,160 | $ | 113,647 | ||||||||||||||||||||||||||
| AFFO available to common shareholders of EPR Properties | $ | 17,352 | $ | 2,698 | $ | 33,313 | $ | 90,067 | $ | 99,160 | $ | 113,647 | ||||||||||||||||||||||||||
| Add: Preferred dividends for Series C preferred shares | — | — | — | 1,939 | 1,937 | 1,939 | ||||||||||||||||||||||||||||||||
| Add: Preferred dividends for Series E preferred shares | — | — | — | 1,939 | 1,939 | 1,939 | ||||||||||||||||||||||||||||||||
| Diluted AFFO available to common shareholders of EPR Properties | $ | 17,352 | $ | 2,698 | $ | 33,313 | $ | 93,945 | $ | 103,036 | $ | 117,525 | ||||||||||||||||||||||||||
Weighted average diluted shares outstanding (in thousands) | 74,615 | 74,613 | 76,310 | 78,476 | 78,485 | 77,664 | ||||||||||||||||||||||||||||||||
| Effect of dilutive Series C preferred shares | — | — | — | 2,232 | 2,184 | 2,170 | ||||||||||||||||||||||||||||||||
| Effect of dilutive Series E preferred shares | — | — | — | 1,664 | 1,640 | 1,634 | ||||||||||||||||||||||||||||||||
| Adjusted weighted-average shares outstanding-diluted | 74,615 | 74,613 | 76,310 | 82,372 | 82,309 | 81,468 | ||||||||||||||||||||||||||||||||
| AFFO per diluted common share | $ | 0.23 | $ | 0.04 | $ | 0.44 | $ | 1.14 | $ | 1.25 | $ | 1.44 | ||||||||||||||||||||||||||
| Dividends declared per common share | $ | — | $ | — | $ | 0.3825 | $ | 1.1325 | $ | 1.1250 | $ | 1.1250 | ||||||||||||||||||||||||||
| AFFO payout ratio (4) | — | % | — | % | 87 | % | 99 | % | 90 | % | 78 | % | ||||||||||||||||||||||||||
| (1) See pages 22 through 24 for definitions. | ||||||||||||||||||||||||||||||||||||||
| (2) Impairment charges recognized during the three months ended June 30, 2020 totaled $51.3 million, which was comprised of $36.3 million of impairments of real estate investments and $15.0 million of impairments of operating lease right-of-use assets. | ||||||||||||||||||||||||||||||||||||||
| (3) Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions. | ||||||||||||||||||||||||||||||||||||||
| (4) AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share. The monthly cash dividend to common shareholders was suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. | ||||||||||||||||||||||||||||||||||||||
| Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income. | ||||||||||||||||||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 10 | |||||||
| CAPITAL STRUCTURE AS OF DECEMBER 31, 2020 | |||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||||||||||||||
| CONSOLIDATED DEBT | |||||||||||||||||||||||||||||||||||
| PRINCIPAL PAYMENTS DUE ON DEBT: | |||||||||||||||||||||||||||||||||||
| BONDS/TERM LOAN/OTHER (1) (2) | UNSECURED CREDIT FACILITY (3) | UNSECURED SENIOR NOTES | TOTAL | WEIGHTED AVG INTEREST RATE | |||||||||||||||||||||||||||||||
| YEAR | |||||||||||||||||||||||||||||||||||
| 2021 | $ | — | $ | — | $ | — | $ | — | —% | ||||||||||||||||||||||||||
| 2022 | — | 590,000 | — | 590,000 | 2.13% | ||||||||||||||||||||||||||||||
| 2023 | 400,000 | — | 275,000 | 675,000 | 4.76% | ||||||||||||||||||||||||||||||
| 2024 | — | — | 148,000 | 148,000 | 5.60% | ||||||||||||||||||||||||||||||
| 2025 | — | — | 300,000 | 300,000 | 4.50% | ||||||||||||||||||||||||||||||
| 2026 | — | — | 642,000 | 642,000 | 5.07% | ||||||||||||||||||||||||||||||
| 2027 | — | — | 450,000 | 450,000 | 4.50% | ||||||||||||||||||||||||||||||
| 2028 | — | — | 400,000 | 400,000 | 4.95% | ||||||||||||||||||||||||||||||
| 2029 | — | — | 500,000 | 500,000 | 3.75% | ||||||||||||||||||||||||||||||
| 2030 | — | — | — | — | —% | ||||||||||||||||||||||||||||||
| 2031 | — | — | — | — | —% | ||||||||||||||||||||||||||||||
| Thereafter | 24,995 | — | — | 24,995 | 1.39% | ||||||||||||||||||||||||||||||
| Less: deferred financing costs, net | — | — | — | (35,552) | —% | ||||||||||||||||||||||||||||||
| $ | 424,995 | $ | 590,000 | $ | 2,715,000 | $ | 3,694,443 | 4.24% | |||||||||||||||||||||||||||
| BALANCE | WEIGHTED AVG INTEREST RATE | WEIGHTED AVG MATURITY | |||||||||||||||||||||||||||||||||
| Fixed rate unsecured debt (1) | $ | 3,115,000 | 4.66 | % | 5.54 | ||||||||||||||||||||||||||||||
| Fixed rate secured debt (2) | 24,995 | 1.39 | % | 26.58 | |||||||||||||||||||||||||||||||
| Variable rate unsecured debt | 590,000 | 2.13 | % | 1.16 | |||||||||||||||||||||||||||||||
| Less: deferred financing costs, net | (35,552) | — | % | — | |||||||||||||||||||||||||||||||
| Total | $ | 3,694,443 | 4.24 | % | 4.99 | ||||||||||||||||||||||||||||||
| (1) Includes $400 million of term loan that has been fixed through interest rate swaps through February 7, 2022. | |||||||||||||||||||||||||||||||||||
| (2) Includes $25 million of secured bonds that have been fixed through interest rate swaps through September 30, 2024. | |||||||||||||||||||||||||||||||||||
| (3) Unsecured Revolving Credit Facility Summary: | |||||||||||||||||||||||||||||||||||
| BALANCE | RATE | ||||||||||||||||||||||||||||||||||
| COMMITMENT | AT 12/31/2020 | MATURITY | AT 12/31/2020 | ||||||||||||||||||||||||||||||||
| $1,000,000 | $590,000 | February 27, 2022 | 2.125% | ||||||||||||||||||||||||||||||||
Note: This facility has a seven-month extension available at the Company's option (solely with respect to the unsecured revolving credit portion of the facility) and includes an accordion feature pursuant to which the maximum borrowing amount under the combined unsecured revolving credit and term loan facility can be increased from $1.4 billion to $2.4 billion, in each case, subject to certain terms and conditions. Rate at December 31, 2020 excludes the facility fee of 0.375%. | |||||||||||||||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 11 | |||||||
| CAPITAL STRUCTURE AS OF DECEMBER 31, 2020 AND 2019 | ||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||
| CONSOLIDATED DEBT (continued) | ||||||||||||||
| SUMMARY OF DEBT: | December 31, 2020 | December 31, 2019 | ||||||||||||
| Unsecured revolving variable rate credit facility, LIBOR + 1.625% at December 31, 2020, due February 27, 2022 (1)(2)(3) | $ | 590,000 | $ | — | ||||||||||
| Unsecured term loan payable, LIBOR + 2.00% at December 31, 2020 with $350,000 fixed at 4.40% and $50,000 fixed at 4.60%, due February 27, 2023 (1)(2) | 400,000 | 400,000 | ||||||||||||
| Senior unsecured notes payable, 5.25%, due July 15, 2023 | 275,000 | 275,000 | ||||||||||||
| Senior unsecured notes payable, 5.60% at December 31, 2020, due August 22, 2024 (1) | 148,000 | 148,000 | ||||||||||||
| Senior unsecured notes payable, 4.50%, due April 1, 2025 | 300,000 | 300,000 | ||||||||||||
| Senior unsecured notes payable, 5.81% at December 31, 2020, due August 22, 2026 (1) | 192,000 | 192,000 | ||||||||||||
| 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 | ||||||||||||
| 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 | (35,552) | (37,165) | ||||||||||||
| Total debt | $ | 3,694,443 | $ | 3,102,830 | ||||||||||
(1) During the year ended December 31, 2020, the Company amended its Consolidated Credit Agreement and its Note Purchase Agreement. The amendments modified certain provisions and waived certain covenants of the revolving credit and term loan facilities and the private placement notes through December 31, 2021 (subject to certain conditions) in light of the continuing financial and operational impacts of the COVID-19 pandemic on the Company and its tenants and borrowers. The Company can elect to terminate the Covenant Relief Period early, subject to certain conditions. The Company pays higher interest costs during the Covenant Relief Period but interest rates return to pre-waiver levels after the Covenant Relief Period, with the revolving credit and term loan facilities continuing to be subject to the Company's unsecured ratings. The amendments to the Consolidated Credit Agreement and Note Purchase Agreement also impose additional restrictions on the Company during the Covenant Relief Period, including limitations on certain investments, incurrences of indebtedness, capital expenditures, payment of dividends or other distributions, and share repurchases, in each case subject to certain exceptions. Subsequent to December 31, 2020, the Company paid down $500.0 million on its revolving credit facility and paid down approximately $23.8 million on its private placement notes in accordance with the Third Amendment to its Private Placement Note Purchase Agreement.
(2) The unsecured revolving credit facility and unsecured term loan have a LIBOR floor of 0.50% during the Covenant Relief Period and a LIBOR floor of zero thereafter.
(3) The unsecured revolving credit facility is subject to a facility fee of 0.375% during the Covenant Relief Period and returns to pre-waiver levels after the Covenant Relief Period subject to changes in the Company's unsecured debt ratings.
| ||||||||
| Q4 2020 Supplemental | Page 12 | |||||||
| CAPITAL STRUCTURE | |||||||||||||||||||||||
| SENIOR NOTES | |||||||||||||||||||||||
| SENIOR DEBT RATINGS AS OF DECEMBER 31, 2020 | |||||||||||||||||||||||
| Moody's | Baa3 (negative) | ||||||||||||||||||||||
| Fitch | BB+ (negative) | ||||||||||||||||||||||
| Standard and Poor's | BB+ (negative) | ||||||||||||||||||||||
| SUMMARY OF COVENANTS | |||||||||||||||||||||||
| The Company has outstanding public senior unsecured notes with fixed interest rates of 3.75%, 4.50%, 4.75%, 4.95% and 5.25%. 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 3.75%, 4.50%, 4.75%, 4.95% and 5.25% 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 December 31, 2020 and September 30, 2020 are: | |||||||||||||||||||||||
| Actual | Actual | ||||||||||||||||||||||
| NOTE COVENANTS | Required | 4th Quarter 2020 (1) | 3rd Quarter 2020 (1) | ||||||||||||||||||||
| Limitation on incurrence of total debt (Total Debt/Total Assets) | ≤ 60% | 48% | 49% | ||||||||||||||||||||
| 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 | 2.1x | 2.7x | ||||||||||||||||||||
| Maintenance of total unencumbered assets (Unencumbered Assets/Unsecured Debt) | ≥ 150% of unsecured debt | 197% | 193% | ||||||||||||||||||||
| (1) See page 14 for details of calculations. | |||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 13 | |||||||
| CAPITAL STRUCTURE | ||||||||||||||||||||||||||||||||
| SENIOR NOTES | ||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||||||||||||||||||||
| COVENANT CALCULATIONS | ||||||||||||||||||||||||||||||||
| TOTAL ASSETS: | December 31, 2020 | TOTAL DEBT: | December 31, 2020 | |||||||||||||||||||||||||||||
| Total Assets per balance sheet | $ | 6,704,185 | Secured debt obligations | $ | 24,995 | |||||||||||||||||||||||||||
| Add: accumulated depreciation | 1,062,087 | Unsecured debt obligations: | ||||||||||||||||||||||||||||||
| Less: intangible assets, net | (41,632) | Unsecured debt | 3,705,000 | |||||||||||||||||||||||||||||
| Total Assets | $ | 7,724,640 | Outstanding letters of credit | — | ||||||||||||||||||||||||||||
| Guarantees | — | |||||||||||||||||||||||||||||||
| TOTAL UNENCUMBERED ASSETS: | December 31, 2020 | Derivatives at fair market value, net, if liability | 13,994 | |||||||||||||||||||||||||||||
| Unencumbered real estate assets, gross | $ | 6,214,647 | Total unsecured debt obligations: | 3,718,994 | ||||||||||||||||||||||||||||
| Cash and cash equivalents | 1,025,577 | Total Debt | $ | 3,743,989 | ||||||||||||||||||||||||||||
| Land held for development | 23,225 | |||||||||||||||||||||||||||||||
| Property under development | 57,630 | |||||||||||||||||||||||||||||||
| Total Unencumbered Assets | $ | 7,321,079 | ||||||||||||||||||||||||||||||
| CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE: | 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | TRAILING TWELVE MONTHS | |||||||||||||||||||||||||||
| Adjusted EBITDAre | $ | 68,633 | $ | 70,930 | $ | 77,191 | $ | 130,627 | $ | 347,381 | ||||||||||||||||||||||
| Accounts receivable write-offs from prior periods (1) | — | (1,800) | (15,751) | (283) | (17,834) | |||||||||||||||||||||||||||
| Less: straight-line rental revenue, net, included in adjusted EBITDAre | (1,768) | (1,958) | (2,229) | (2,824) | (8,779) | |||||||||||||||||||||||||||
| CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE | $ | 66,865 | $ | 67,172 | $ | 59,211 | $ | 127,520 | $ | 320,768 | ||||||||||||||||||||||
| ANNUAL DEBT SERVICE: | ||||||||||||||||||||||||||||||||
| Interest expense, gross | $ | 43,341 | $ | 42,312 | $ | 39,281 | $ | 36,794 | $ | 161,728 | ||||||||||||||||||||||
| Less: deferred financing fees amortization | (1,823) | (1,498) | (1,651) | (1,634) | (6,606) | |||||||||||||||||||||||||||
| ANNUAL DEBT SERVICE | $ | 41,518 | $ | 40,814 | $ | 37,630 | $ | 35,160 | $ | 155,122 | ||||||||||||||||||||||
| DEBT SERVICE COVERAGE | 1.6 | 1.6 | 1.6 | 3.6 | 2.1 | |||||||||||||||||||||||||||
| (1) For purposes of the bond calculation of Consolidated Income Available for Debt Service, the accounts receivable write-offs that were recognized in the third and fourth quarters of 2020 were reclassified to the quarter such amounts were recognized originally as revenue. | ||||||||||||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 14 | |||||||
| CAPITAL STRUCTURE AS OF DECEMBER 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS EXCEPT SHARE INFORMATION) | ||||||||||||||||||||||||||||||||||||||||||||
| EQUITY | ||||||||||||||||||||||||||||||||||||||||||||
| SECURITY | SHARES OUTSTANDING | PRICE PER SHARE AT DECEMBER 31, 2020 | LIQUIDIATION PREFERENCE | DIVIDEND RATE | CONVERTIBLE | CONVERSION RATIO AT DECEMBER 31, 2020 | CONVERSION PRICE AT DECEMBER 31, 2020 | |||||||||||||||||||||||||||||||||||||
| Common shares | 74,602,789 | $32.50 | N/A | (1) | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||
| Series C | 5,394,050 | $23.00 | $134,851 | 5.750% | Y | 0.4137 | $60.43 | |||||||||||||||||||||||||||||||||||||
| Series E | 3,447,381 | $31.68 | $86,185 | 9.000% | Y | 0.4826 | $51.80 | |||||||||||||||||||||||||||||||||||||
| Series G | 6,000,000 | $23.40 | $150,000 | 5.750% | N | N/A | N/A | |||||||||||||||||||||||||||||||||||||
| (1) The monthly cash dividend to common shareholders was suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. | ||||||||||||||||||||||||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 15 | |||||||
| SUMMARY OF RATIOS | |||||||||||||||||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||||||||||||||||
| 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | ||||||||||||||||||||||||||||||
| Net debt to gross assets | 40% | 42% | 41% | 38% | 37% | 40% | |||||||||||||||||||||||||||||
| Net debt/Adjusted EBITDAre ratio (1)(2) | Footnote 9 | Footnote 9 | Footnote 9 | 5.1 | 4.6 | 5.2 | |||||||||||||||||||||||||||||
| Adjusted net debt/Annualized adjusted EBITDAre (3)(4) | Footnote 9 | Footnote 9 | Footnote 9 | 4.9 | 4.8 | 5.2 | |||||||||||||||||||||||||||||
| Interest coverage ratio (5) | Footnote 9 | Footnote 9 | Footnote 9 | 3.6 | 3.8 | 3.8 | |||||||||||||||||||||||||||||
| Fixed charge coverage ratio (5) | Footnote 9 | Footnote 9 | Footnote 9 | 3.1 | 3.3 | 3.3 | |||||||||||||||||||||||||||||
| Debt service coverage ratio (5) | Footnote 9 | Footnote 9 | Footnote 9 | 3.6 | 3.8 | 3.8 | |||||||||||||||||||||||||||||
| FFO payout ratio (6) | —% | —% | 225% | 119% | 95% | 148% | |||||||||||||||||||||||||||||
| FFO as adjusted payout ratio (7) | —% | —% | 93% | 117% | 89% | 77% | |||||||||||||||||||||||||||||
| AFFO payout ratio (8) | —% | —% | 87% | 99% | 90% | 78% | |||||||||||||||||||||||||||||
| (1) See pages 22 through 24 for definitions. | |||||||||||||||||||||||||||||||||||
| (2) Adjusted EBITDAre is for the quarter multiplied times four. See calculation on page 28. | |||||||||||||||||||||||||||||||||||
| (3) Adjusted net debt is net debt less 40% times property under development. See pages 22 through 24 for definitions. | |||||||||||||||||||||||||||||||||||
| (4) Annualized adjusted EBITDAre is Adjusted EBITDAre for the quarter further adjusted for in-service and disposed projects, percentage rent and participating interest and other non-recurring items which is then multiplied times four. These calculations can be found on page 28 under the reconciliation of Adjusted EBITDAre and Annualized Adjusted EBITDAre. See pages 22 through 24 for definitions. | |||||||||||||||||||||||||||||||||||
| (5) See page 26 for detailed calculation. | |||||||||||||||||||||||||||||||||||
| (6) FFO payout ratio is calculated by dividing dividends declared per common share by FFO per diluted common share. The monthly cash dividend to common shareholders was suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. | |||||||||||||||||||||||||||||||||||
| (7) FFO as adjusted payout ratio is calculated by dividing dividends declared per common share by FFO as adjusted per diluted common share. The monthly cash dividend to common shareholders was suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. | |||||||||||||||||||||||||||||||||||
| (8) AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share. The monthly cash dividend to common shareholders was suspended following the common share dividend paid on May 15, 2020 to shareholders of record as of April 30, 2020. | |||||||||||||||||||||||||||||||||||
| (9) Not presented as ratio is not meaningful given the continuing disruption caused by the COVID-19 pandemic and the associated accounting for tenant rent deferrals and other lease modifications. | |||||||||||||||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 16 | |||||||
| SUMMARY OF MORTGAGE NOTES RECEIVABLE | |||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||
| CARRYING AMOUNT AS OF (2) | |||||||||||||||||||||||
| DESCRIPTION | INTEREST RATE | PAYOFF DATE/MATURITY DATE | OUTSTANDING PRINCIPAL AMOUNT OF MORTGAGE | December 31, 2020 | December 31, 2019 (1) | ||||||||||||||||||
Attraction property Powells Point, North Carolina | 7.75% | 6/30/2025 | $ | 28,007 | $ | 27,045 | $ | 27,423 | |||||||||||||||
| Fitness & wellness property Omaha, Nebraska | 7.85% | 1/3/2027 | 10,905 | 11,225 | 10,977 | ||||||||||||||||||
Fitness & wellness property Merriam, Kansas | 7.55% | 7/31/2029 | 9,095 | 9,355 | 5,985 | ||||||||||||||||||
Ski property Girdwood, Alaska | 8.24% | 12/31/2029 | 40,869 | 40,680 | 37,000 | ||||||||||||||||||
| Fitness & wellness property Omaha, Nebraska | 7.85% | 6/30/2030 | 8,410 | 8,630 | 5,803 | ||||||||||||||||||
Experiential lodging property Nashville, Tennessee | 7.01% | 9/30/2031 | 71,223 | 67,235 | 70,396 | ||||||||||||||||||
Eat & play property Austin, Texas | 11.31% | 6/1/2033 | 11,361 | 11,929 | 11,582 | ||||||||||||||||||
| Ski property West Dover and Wilmington, Vermont | 11.78% | 12/1/2034 | 51,050 | 51,031 | 51,050 | ||||||||||||||||||
Four ski properties Ohio and Pennsylvania | 10.91% | 12/1/2034 | 37,562 | 37,413 | 37,562 | ||||||||||||||||||
Ski property Chesterland, Ohio | 11.38% | 12/1/2034 | 4,550 | 4,396 | 4,550 | ||||||||||||||||||
Ski property Hunter, New York | 8.57% | 1/5/2036 | 21,000 | 21,000 | 21,000 | ||||||||||||||||||
| Eat & play property Midvale, Utah | 10.25% | 5/31/2036 | 17,505 | 18,289 | 17,505 | ||||||||||||||||||
| Eat & play property West Chester, Ohio | 9.75% | 8/1/2036 | 18,068 | 18,830 | 18,068 | ||||||||||||||||||
| Private school property Mableton, Georgia | 9.02% | 4/30/2037 | 5,088 | 5,278 | 5,048 | ||||||||||||||||||
| Fitness & wellness property Fort Collins, Colorado | 7.85% | 1/31/2038 | 10,292 | 10,408 | 10,360 | ||||||||||||||||||
| Early childhood education center Lake Mary, Florida | 7.87% | 5/9/2039 | 4,200 | 4,348 | 4,258 | ||||||||||||||||||
Eat & play property Eugene, Oregon | 8.13% | 6/17/2039 | 14,700 | 14,799 | 14,800 | ||||||||||||||||||
| Early childhood education center Lithia, Florida | 8.25% | 10/31/2039 | 3,959 | 3,737 | 4,024 | ||||||||||||||||||
Total | $ | 367,844 | $ | 365,628 | $ | 357,391 | |||||||||||||||||
(1) Balances as of December 31, 2019 are prior to the adoption of ASC Topic 326.
(2) Amounts include accrued interest.
| ||||||||
| Q4 2020 Supplemental | Page 17 | |||||||
| INVESTMENT SPENDING AND DISPOSITION SUMMARIES | |||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||
| INVESTMENT SPENDING THREE MONTHS ENDED DECEMBER 31, 2020 | |||||||||||||||||||||||
| INVESTMENT TYPE | TOTAL INVESTMENT SPENDING | NEW DEVELOPMENT | RE-DEVELOPMENT | ASSET ACQUISITION | MORTGAGE NOTES OR NOTES RECEIVABLE | INVESTMENT IN JOINT VENTURES | |||||||||||||||||
| Theatres | $ | 4,203 | $ | 2,245 | $ | 1,847 | $ | 111 | $ | — | $ | — | |||||||||||
| Eat & Play | 4,690 | 4,937 | (247) | — | — | — | |||||||||||||||||
| Attractions | 14 | — | 14 | — | — | — | |||||||||||||||||
| Ski | 1,999 | — | — | — | 1,999 | — | |||||||||||||||||
| Experiential Lodging | 3,441 | 2,926 | 515 | — | — | — | |||||||||||||||||
| Cultural | 6,137 | — | 3 | — | 6,134 | — | |||||||||||||||||
| Fitness & Wellness | 2,281 | — | — | — | 2,281 | — | |||||||||||||||||
| Total Experiential | 22,765 | 10,108 | 2,132 | 111 | 10,414 | — | |||||||||||||||||
| Total Investment Spending | $ | 22,765 | $ | 10,108 | $ | 2,132 | $ | 111 | $ | 10,414 | $ | — | |||||||||||
| INVESTMENT SPENDING YEAR ENDED DECEMBER 31, 2020 | |||||||||||||||||||||||
| INVESTMENT TYPE | TOTAL INVESTMENT SPENDING | NEW DEVELOPMENT | RE-DEVELOPMENT | ASSET ACQUISITION | MORTGAGE NOTES OR NOTES RECEIVABLE | INVESTMENT IN JOINT VENTURES | |||||||||||||||||
| Theatres | $ | 33,162 | $ | 5,760 | $ | 5,183 | $ | 22,219 | $ | — | $ | — | |||||||||||
| Eat & Play | 19,679 | 18,852 | 827 | — | — | — | |||||||||||||||||
| Attractions | 669 | — | 669 | — | — | — | |||||||||||||||||
| Ski | 2,088 | — | — | — | 2,088 | — | |||||||||||||||||
| Experiential Lodging | 17,114 | 13,775 | 1,649 | — | — | 1,690 | |||||||||||||||||
| Cultural | 6,293 | — | 159 | — | 6,134 | — | |||||||||||||||||
| Fitness & Wellness | 6,049 | — | — | — | 6,049 | — | |||||||||||||||||
| Total Experiential | 85,054 | 38,387 | 8,487 | 22,219 | 14,271 | 1,690 | |||||||||||||||||
| Early Childhood Education Centers | 3 | — | — | — | 3 | — | |||||||||||||||||
| Total Education | 3 | — | — | — | 3 | — | |||||||||||||||||
| Total Investment Spending | $ | 85,057 | $ | 38,387 | $ | 8,487 | $ | 22,219 | $ | 14,274 | $ | 1,690 | |||||||||||
| 2020 DISPOSITIONS | |||||||||||||||||||||||
| THREE MONTHS ENDED DECEMBER 31, 2020 | YEAR ENDED DECEMBER 31, 2020 | ||||||||||||||||||||||
| INVESTMENT TYPE | TOTAL DISPOSITIONS | NET PROCEEDS FROM SALE OF REAL ESTATE | NET PROCEEDS FROM PAYDOWN OF MORTGAGE NOTES | TOTAL DISPOSITIONS | NET PROCEEDS FROM SALE OF REAL ESTATE | NET PROCEEDS FROM PAYDOWN OF MORTGAGE NOTES | |||||||||||||||||
| Theatres | $ | 21,183 | $ | 21,183 | $ | — | $ | 21,183 | $ | 21,183 | $ | — | |||||||||||
| Eat & Play | 1,563 | 1,563 | — | 1,563 | 1,563 | — | |||||||||||||||||
| Total Experiential | 22,746 | 22,746 | — | 22,746 | 22,746 | — | |||||||||||||||||
| Early Childhood Education Centers | 15,449 | 15,449 | — | 19,288 | 19,288 | — | |||||||||||||||||
| Private Charter Schools | 185,709 | 185,709 | — | 185,709 | 185,709 | — | |||||||||||||||||
| Total Education | 201,158 | 201,158 | — | 204,997 | 204,997 | — | |||||||||||||||||
| Total Dispositions | $ | 223,904 | $ | 223,904 | $ | — | $ | 227,743 | $ | 227,743 | $ | — | |||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 18 | |||||||
| PROPERTY UNDER DEVELOPMENT - INVESTMENT SPENDING ESTIMATES AT DECEMBER 31, 2020 (1) | |||||||||||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||||||||||||||||||||||||||
| DECEMBER 31, 2020 | OWNED BUILD-TO-SUIT SPENDING ESTIMATES | ||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY UNDER DEVELOPMENT | # OF PROJECTS | 1ST QUARTER 2021 | 2ND QUARTER 2021 | 3RD QUARTER 2021 | 4TH QUARTER 2021 | THEREAFTER | TOTAL EXPECTED COSTS (2) | % LEASED | |||||||||||||||||||||||||||||||||||||||
| Total Build-to-Suit (3) | $ | 42,553 | 9 | $ | 7,528 | $ | 8,575 | $ | 7,750 | $ | 4,050 | $ | 100 | $ | 70,556 | 100 | % | ||||||||||||||||||||||||||||||
Non Build-to-Suit Development | 15,077 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Property Under Development | $ | 57,630 | |||||||||||||||||||||||||||||||||||||||||||||
| DECEMBER 31, 2020 | OWNED BUILD-TO-SUIT IN-SERVICE ESTIMATES | ||||||||||||||||||||||||||||||||||||||||||||||
| # OF PROJECTS | 1ST QUARTER 2021 | 2ND QUARTER 2021 | 3RD QUARTER 2021 | 4TH QUARTER 2021 | THEREAFTER | TOTAL IN-SERVICE (2) | ACTUAL IN-SERVICE 4TH QUARTER 2020 | ||||||||||||||||||||||||||||||||||||||||
| Total Build-to-Suit | 9 | $ | 7,108 | $ | 23,451 | $ | 13,260 | $ | 25,049 | $ | 1,688 | $ | 70,556 | $ | 400 | ||||||||||||||||||||||||||||||||
| DECEMBER 31, 2020 | MORTGAGE BUILD-TO-SUIT SPENDING ESTIMATES | ||||||||||||||||||||||||||||||||||||||||||||||
| MORTGAGE NOTES RECEIVABLE | # OF PROJECTS | 1ST QUARTER 2021 | 2ND QUARTER 2021 | 3RD QUARTER 2021 | 4TH QUARTER 2021 | THEREAFTER | TOTAL EXPECTED COSTS (2) | ||||||||||||||||||||||||||||||||||||||||
Total Build-to-Suit Mortgage Notes | $ | 58,666 | 3 | $ | 4,550 | $ | 4,025 | $ | — | $ | — | $ | 10,320 | $ | 77,561 | ||||||||||||||||||||||||||||||||
Non Build-to-Suit Mortgage Notes | 306,962 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Mortgage Notes Receivable | $ | 365,628 | |||||||||||||||||||||||||||||||||||||||||||||
| (1) This schedule includes only those properties for which the Company has commenced construction as of December 31, 2020. | |||||||||||||||||||||||||||||||||||||||||||||||
| (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 two unconsolidated real estate joint ventures that own recreation anchored lodging properties in St. Petersburg, Florida. The Company's spending estimates for this are estimated at $15.6 million for 2021. | |||||||||||||||||||||||||||||||||||||||||||||||
| 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. | |||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 19 | |||||||
| LEASE EXPIRATIONS | |||||||||||||||||||||||
| AS OF DECEMBER 31, 2020 | |||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||
| YEAR | TOTAL NUMBER OF PROPERTIES | RENTAL REVENUE FOR THE YEAR ENDED DECEMBER 31, 2020 (1)(2) | % OF TOTAL REVENUE (2) | ||||||||||||||||||||
| 2021 | — | $ | — | — | % | ||||||||||||||||||
| 2022 | 2 | 1,814 | — | % | |||||||||||||||||||
| 2023 | 2 | 953 | — | % | |||||||||||||||||||
| 2024 | 6 | 6,294 | 2 | % | |||||||||||||||||||
| 2025 | 2 | 2,673 | 1 | % | |||||||||||||||||||
| 2026 | 7 | 3,595 | 1 | % | |||||||||||||||||||
| 2027 | 11 | 18,660 | 5 | % | |||||||||||||||||||
| 2028 | 11 | 9,912 | 2 | % | |||||||||||||||||||
| 2029 | 12 | 10,401 | 3 | % | |||||||||||||||||||
| 2030 | 22 | 22,405 | 5 | % | |||||||||||||||||||
| 2031 | 13 | 6,702 | 2 | % | |||||||||||||||||||
| 2032 | 19 | 11,988 | 3 | % | |||||||||||||||||||
| 2033 | 9 | 8,343 | 2 | % | |||||||||||||||||||
| 2034 | 41 | 28,130 | 7 | % | |||||||||||||||||||
| 2035 | 33 | 58,482 | 14 | % | |||||||||||||||||||
| 2036 | 22 | 21,634 | 5 | % | |||||||||||||||||||
| 2037 | 32 | 38,372 | 9 | % | |||||||||||||||||||
| 2038 | 35 | 26,223 | 6 | % | |||||||||||||||||||
| 2039 | 4 | 6,739 | 2 | % | |||||||||||||||||||
| 2040 | 2 | 1,923 | — | % | |||||||||||||||||||
| Thereafter | 35 | 25,630 | 6 | % | |||||||||||||||||||
| 320 | $ | 310,873 | 75 | % | |||||||||||||||||||
| 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 year ended December 31, 2020 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 year ended December 31, 2020 in accordance with Accounting Standards Update (ASU) No. 2016-02 Leases (Topic 842). | |||||||||||||||||||||||
| (2) Includes the write-offs of straight line rent receivables of $38.0 million and receivables from tenants of $27.1 million against rental revenue during the year ended December 31, 2020. | |||||||||||||||||||||||
| ||||||||
| Q4 2020 Supplemental | Page 20 | |||||||
| TOP TEN CUSTOMERS BY PERCENTAGE OF TOTAL REVENUE | |||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | |||||||||||||||||||||||
| PERCENTAGE OF TOTAL REVENUE | PERCENTAGE OF TOTAL REVENUE | ||||||||||||||||||||||
| FOR THE THREE MONTHS ENDED | FOR THE YEAR ENDED | ||||||||||||||||||||||
| CUSTOMERS | DECEMBER 31, 2020 | DECEMBER 31, 2020 | |||||||||||||||||||||
| 1. | Topgolf | 21.8% | 19.5% | ||||||||||||||||||||
| 2. | Cinemark | 11.3% | 10.1% | ||||||||||||||||||||
| 3. | AMC Theatres (1) | 4.0% | 7.2% | ||||||||||||||||||||
| 4. | Vail Resorts | 7.4% | 6.6% | ||||||||||||||||||||
| 5. | Basis Independent Schools | 7.3% | 5.6% | ||||||||||||||||||||
| 6. | Camelback Resort | 6.2% | 5.1% | ||||||||||||||||||||
| 7. | Six Flags | 4.3% | 3.9% | ||||||||||||||||||||
| 8. | Endeavor Schools | 4.0% | 3.6% | ||||||||||||||||||||
| 9. | Regal Cinemas (2) | 0.9% | 3.1% | ||||||||||||||||||||
| 10. | Empire Resorts | 2.8% | 2.6% | ||||||||||||||||||||
| Total | 70.0% | 67.3% | |||||||||||||||||||||
(1) During the year ended December 31, 2020, the Company wrote-off $9.2 million of straight-line receivables to straight-line rental revenue classified in rental revenue in the consolidated statements of (loss) income related to leases with AMC. The Company began recognizing revenue on a cash basis for AMC at the end of the first quarter of 2020 and cash payments have been reduced due to the impact of the COVID-19 pandemic.
(2) During the year ended December 31, 2020, the Company wrote-off $22.5 million of straight-line receivables to straight-line rental revenue and $23.5 million of receivables from tenants to minimum rent, both of which are classified in rental revenue in the consolidated statements of (loss) income and related to leases with Regal. The Company began recognizing revenue on a cash basis for Regal at the end of the third quarter of 2020 and cash payments have been reduced due to the impact of the COVID-19 pandemic.
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| Q4 2020 Supplemental | Page 21 | |||||||
| 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 (loss) income, computed in accordance with GAAP, excluding interest expense (net), income tax (benefit) expense, depreciation and amortization, gains and losses from disposition of real estate, impairment losses on real estate, costs associated with loan refinancing or payoff and adjustments for unconsolidated partnerships, joint ventures and other affiliates. Management provides EBITDAre herein because it believes this information is useful to investors as a supplemental performance measure as it can help facilitate comparisons of operating performance between periods and with other REITs. The Company's method of calculating EBITDAre may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDAre is not a measure of performance under GAAP, does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. This measure should not be considered an alternative to net (loss) 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 AND ANNUALIZED 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 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. Annualized Adjusted EBITDAre is Adjusted EBITDAre for the quarter further adjusted for in-service and disposed projects, percentage rent and participating interest and other non-recurring items including removing any impact from operating properties, which is then multiplied by four to get an annual amount. Additionally, for the three months and 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 and Annualized Adjusted EBITDAre may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. Adjusted EBITDAre and Annualized Adjusted EBITDAre are not measures of performance under GAAP, do not represent cash generated from operations as defined by GAAP and are not indicative of cash available to fund all cash needs, including distributions. These measures should not be considered as an alternative to net (loss) 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 AND ADJUSTED 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. Adjusted net debt is net debt less 40% times property under development to remove the estimated portion of property under development that has been financed with debt but has not yet produced earnings. The Company's method of calculating Net Debt and Adjusted Net Debt may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
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| Q4 2020 Supplemental | Page 22 | |||||||
NET DEBT TO ADJUSTED EBITDAre RATIO AND ADJUSTED NET DEBT TO ANNUALIZED ADJUSTED EBITDAre RATIO
Net Debt to Adjusted EBITDAre ratio and Adjusted Net Debt to Annualized Adjusted EBITDAre 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 both ratios may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
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 (loss) income available to common shareholders and earnings per share. Pursuant to the definition of FFO by the Board of Governors of NAREIT, the Company calculates FFO as net (loss) income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from disposition of real estate and impairment losses on real estate, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. The Company has calculated FFO for all periods presented in accordance with this definition. In addition, the Company presents FFO as adjusted. Management believes it is useful to provide FFO as adjusted as a supplemental measure to GAAP net (loss) income 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, termination fees associated with tenants' exercises of public charter school buy-out options and credit loss expense, and by subtracting gain on insurance recovery and deferred income tax (benefit) expense. FFO and FFO as adjusted are non-GAAP financial measures. FFO and FFO as adjusted do not represent cash flows from operations as defined by GAAP and are not indicative that cash flows are adequate to fund all cash needs and are not to be considered an alternative to net (loss) income or any other GAAP measure as a measurement of the results of the Company's operations, cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO 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 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 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 (loss) income 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 (loss) income 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.
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| Q4 2020 Supplemental | Page 23 | |||||||
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 (loss) income impairment charges, credit loss 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 calculated 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.
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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| Q4 2020 Supplemental | Page 24 | |||||||
| Appendix to Supplemental Operating and Financial Data | ||||||||||||||||||||||||||
| Reconciliation of Certain Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| Fourth Quarter and Year Ended December 31, 2020 | ||||||||||||||||||||||||||
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| Q4 2020 Supplemental | Page 25 | |||||||
| CALCULATION OF INTEREST, FIXED CHARGE AND DEBT SERVICE COVERAGE RATIOS | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||||||||||||||||||||||||||
| INTEREST COVERAGE RATIO (1): | 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | ||||||||||||||||||||||||||||||||
| Net (loss) income | $ | (19,977) | $ | (85,904) | $ | (62,965) | $ | 37,118 | $ | 36,297 | $ | 34,003 | ||||||||||||||||||||||||||
| Impairment charges | 22,832 | 11,561 | 51,264 | — | 23,639 | — | ||||||||||||||||||||||||||||||||
| Impairment charges on joint ventures | — | — | 3,247 | — | — | — | ||||||||||||||||||||||||||||||||
| Transaction costs | 814 | 2,776 | 771 | 1,075 | 5,784 | 5,959 | ||||||||||||||||||||||||||||||||
| Credit loss expense | 20,312 | 5,707 | 3,484 | 1,192 | — | — | ||||||||||||||||||||||||||||||||
| Interest expense, gross | 43,341 | 42,312 | 39,281 | 36,794 | 36,442 | 37,575 | ||||||||||||||||||||||||||||||||
| Severance expense | 2,868 | — | — | — | 423 | 1,521 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 42,014 | 42,059 | 42,450 | 43,810 | 44,530 | 45,134 | ||||||||||||||||||||||||||||||||
| Share-based compensation expense | ||||||||||||||||||||||||||||||||||||||
| to management and trustees | 3,437 | 3,410 | 3,463 | 3,509 | 3,348 | 3,372 | ||||||||||||||||||||||||||||||||
| Costs associated with loan refinancing or payoff | 812 | — | 820 | — | 43 | 38,407 | ||||||||||||||||||||||||||||||||
| Interest cost capitalized | (404) | (325) | (242) | (262) | (273) | (386) | ||||||||||||||||||||||||||||||||
| Straight-line rental revenue | (898) | 17,969 | (2,229) | 9,708 | (3,516) | (4,399) | ||||||||||||||||||||||||||||||||
Gain on sale of real estate | (49,877) | — | (22) | (220) | (5,648) | (14,303) | ||||||||||||||||||||||||||||||||
Gain on insurance recovery | (809) | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Prepayment fees | — | — | — | — | — | (1,760) | ||||||||||||||||||||||||||||||||
| Deferred income tax expense (benefit) | — | 18,035 | (1,676) | (1,113) | (847) | (984) | ||||||||||||||||||||||||||||||||
| Interest coverage amount | $ | 64,465 | $ | 57,600 | $ | 77,646 | $ | 131,611 | $ | 140,222 | $ | 144,139 | ||||||||||||||||||||||||||
| Interest expense, net | $ | 42,838 | $ | 41,744 | $ | 38,340 | $ | 34,753 | $ | 34,907 | $ | 36,640 | ||||||||||||||||||||||||||
| Interest income | 99 | 243 | 699 | 1,779 | 1,262 | 549 | ||||||||||||||||||||||||||||||||
| Interest cost capitalized | 404 | 325 | 242 | 262 | 273 | 386 | ||||||||||||||||||||||||||||||||
| Interest expense, gross | $ | 43,341 | $ | 42,312 | $ | 39,281 | $ | 36,794 | $ | 36,442 | $ | 37,575 | ||||||||||||||||||||||||||
| Interest coverage ratio | Footnote 2 | Footnote 2 | Footnote 2 | 3.6 | 3.8 | 3.8 | ||||||||||||||||||||||||||||||||
| FIXED CHARGE COVERAGE RATIO (1): | ||||||||||||||||||||||||||||||||||||||
| Interest coverage amount | $ | 64,465 | $ | 57,600 | $ | 77,646 | $ | 131,611 | $ | 140,222 | $ | 144,139 | ||||||||||||||||||||||||||
| Interest expense, gross | $ | 43,341 | $ | 42,312 | $ | 39,281 | $ | 36,794 | $ | 36,442 | $ | 37,575 | ||||||||||||||||||||||||||
| Preferred share dividends | 6,034 | 6,034 | 6,034 | 6,034 | 6,034 | 6,034 | ||||||||||||||||||||||||||||||||
| Fixed charges | $ | 49,375 | $ | 48,346 | $ | 45,315 | $ | 42,828 | $ | 42,476 | $ | 43,609 | ||||||||||||||||||||||||||
| Fixed charge coverage ratio | Footnote 2 | Footnote 2 | Footnote 2 | 3.1 | 3.3 | 3.3 | ||||||||||||||||||||||||||||||||
| DEBT SERVICE COVERAGE RATIO (1): | ||||||||||||||||||||||||||||||||||||||
| Interest coverage amount | $ | 64,465 | $ | 57,600 | $ | 77,646 | $ | 131,611 | $ | 140,222 | $ | 144,139 | ||||||||||||||||||||||||||
| Interest expense, gross | $ | 43,341 | $ | 42,312 | $ | 39,281 | $ | 36,794 | $ | 36,442 | $ | 37,575 | ||||||||||||||||||||||||||
| Recurring principal payments | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Debt service | $ | 43,341 | $ | 42,312 | $ | 39,281 | $ | 36,794 | $ | 36,442 | $ | 37,575 | ||||||||||||||||||||||||||
| Debt service coverage ratio | Footnote 2 | Footnote 2 | Footnote 2 | 3.6 | 3.8 | 3.8 | ||||||||||||||||||||||||||||||||
| (1) See pages 22 through 24 for definitions. | ||||||||||||||||||||||||||||||||||||||
| (2) Not presented as this ratio is not meaningful given the continuing disruption caused by the COVID-19 pandemic and the associated accounting for tenant rent deferrals and other lease modifications. | ||||||||||||||||||||||||||||||||||||||
| Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income. | ||||||||||||||||||||||||||||||||||||||
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| Q4 2020 Supplemental | Page 26 | |||||||
| 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 26 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: | ||||||||||||||||||||||||||||||||||||||
| 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | |||||||||||||||||||||||||||||||||
| Net cash provided (used) by operating activities | $ | 5,795 | $ | 2,065 | $ | (31,631) | $ | 89,044 | $ | 102,268 | $ | 127,506 | ||||||||||||||||||||||||||
| Equity in loss from joint ventures | (1,364) | (1,044) | (1,724) | (420) | (905) | (435) | ||||||||||||||||||||||||||||||||
| Amortization of deferred financing costs | (1,823) | (1,498) | (1,651) | (1,634) | (1,621) | (1,552) | ||||||||||||||||||||||||||||||||
Amortization of above and below market leases, net and tenant allowances | 96 | 124 | 108 | 152 | 119 | 107 | ||||||||||||||||||||||||||||||||
Changes in assets and liabilities, net: | ||||||||||||||||||||||||||||||||||||||
Amortization of operating lease assets and liabilities | 230 | (14) | (287) | (273) | (161) | (1,323) | ||||||||||||||||||||||||||||||||
Mortgage notes and related accrued interest receivable | 3,297 | 1,154 | 2,613 | 512 | (8) | (1,155) | ||||||||||||||||||||||||||||||||
| Accounts receivable | 4,422 | (5,053) | 62,163 | (14,149) | 14,320 | (500) | ||||||||||||||||||||||||||||||||
| Direct financing lease receivable | — | — | — | — | 17 | 52 | ||||||||||||||||||||||||||||||||
| Other assets | (367) | (2,208) | 819 | 4,454 | (1,888) | (2,245) | ||||||||||||||||||||||||||||||||
| Accounts payable and accrued liabilities | 404 | (4,348) | 6,555 | 13,517 | (21,851) | (5,639) | ||||||||||||||||||||||||||||||||
| Unearned rents and interest | 9,312 | 5,690 | 3,100 | (6,907) | 11,132 | (8,769) | ||||||||||||||||||||||||||||||||
| Straight-line rental revenue | (898) | 17,969 | (2,229) | 9,708 | (3,516) | (4,399) | ||||||||||||||||||||||||||||||||
| Interest expense, gross | 43,341 | 42,312 | 39,281 | 36,794 | 36,442 | 37,575 | ||||||||||||||||||||||||||||||||
| Interest cost capitalized | (404) | (325) | (242) | (262) | (273) | (386) | ||||||||||||||||||||||||||||||||
| Transaction costs | 814 | 2,776 | 771 | 1,075 | 5,784 | 5,959 | ||||||||||||||||||||||||||||||||
| Severance expense (cash portion) | 1,610 | — | — | — | 363 | 1,103 | ||||||||||||||||||||||||||||||||
| Prepayment fees | — | — | — | — | — | (1,760) | ||||||||||||||||||||||||||||||||
| Interest coverage amount (1) | $ | 64,465 | $ | 57,600 | $ | 77,646 | $ | 131,611 | $ | 140,222 | $ | 144,139 | ||||||||||||||||||||||||||
| Net cash provided (used) by investing activities | $ | 204,883 | $ | (17,919) | $ | (13,219) | $ | (39,759) | $ | 381,255 | $ | 176,446 | ||||||||||||||||||||||||||
| Net cash (used) provided by financing activities | $ | (170,716) | $ | (5,994) | $ | (175,358) | $ | 649,237 | $ | (73,886) | $ | (194,098) | ||||||||||||||||||||||||||
| (1) See pages 22 through 24 for definitions. | ||||||||||||||||||||||||||||||||||||||
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| Q4 2020 Supplemental | Page 27 | |||||||
| RECONCILIATION OF EBITDAre, ADJUSTED EBITDAre, ANNUALIZED ADJUSTED EBITDAre AND ANNUALIZED ADJUSTED REVENUE | ||||||||||||||||||||||||||||||||||||||
| (UNAUDITED, DOLLARS IN THOUSANDS) | ||||||||||||||||||||||||||||||||||||||
| ADJUSTED EBITDAre (4): | 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | ||||||||||||||||||||||||||||||||
| Net (loss) income | $ | (19,977) | $ | (85,904) | $ | (62,965) | $ | 37,118 | $ | 36,297 | $ | 34,003 | ||||||||||||||||||||||||||
| Interest expense, net | 42,838 | 41,744 | 38,340 | 34,753 | 34,907 | 36,640 | ||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 402 | 18,417 | (1,312) | (751) | (530) | (600) | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 42,014 | 42,059 | 42,450 | 43,810 | 44,530 | 45,134 | ||||||||||||||||||||||||||||||||
| Gain on sale of real estate | (49,877) | — | (22) | (220) | (5,648) | (14,303) | ||||||||||||||||||||||||||||||||
| Impairment of real estate investments, net (3) | 22,832 | 11,561 | 36,255 | — | 23,639 | — | ||||||||||||||||||||||||||||||||
| Costs associated with loan refinancing or payoff | 812 | — | 820 | — | 43 | 38,407 | ||||||||||||||||||||||||||||||||
| Allocated share of joint venture depreciation | 361 | 369 | 378 | 383 | 551 | 553 | ||||||||||||||||||||||||||||||||
| Allocated share of joint venture interest expense | 872 | 741 | 736 | 735 | 735 | 739 | ||||||||||||||||||||||||||||||||
| Impairment charges on joint ventures | — | — | 3,247 | — | — | — | ||||||||||||||||||||||||||||||||
| EBITDAre | $ | 40,277 | $ | 28,987 | $ | 57,927 | $ | 115,828 | $ | 134,524 | $ | 140,573 | ||||||||||||||||||||||||||
| Gain on insurance recovery (1) | (809) | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Severance expense | 2,868 | — | — | — | 423 | 1,521 | ||||||||||||||||||||||||||||||||
| Transaction costs | 814 | 2,776 | 771 | 1,075 | 5,784 | 5,959 | ||||||||||||||||||||||||||||||||
Credit loss expense | 20,312 | 5,707 | 3,484 | 1,192 | — | — | ||||||||||||||||||||||||||||||||
| Accounts receivable write-offs from prior periods (2) | 4,301 | 13,533 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Straight-line receivable write-offs from prior periods (2) | 870 | 19,927 | — | 12,532 | — | — | ||||||||||||||||||||||||||||||||
| Impairment of operating lease right-of-use assets (3) | — | — | 15,009 | — | — | — | ||||||||||||||||||||||||||||||||
Prepayment fees | — | — | — | — | — | (1,760) | ||||||||||||||||||||||||||||||||
| Adjusted EBITDAre (for the quarter) | $ | 68,633 | $ | 70,930 | $ | 77,191 | $ | 130,627 | $ | 140,731 | $ | 146,293 | ||||||||||||||||||||||||||
| Adjusted EBITDAre (5) | Footnote 10 | Footnote 10 | Footnote 10 | $ | 522,508 | $ | 562,924 | $ | 585,172 | |||||||||||||||||||||||||||||
| ANNUALIZED ADJUSTED EBITDAre (4): | ||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDAre (for the quarter) | Footnote 10 | Footnote 10 | Footnote 10 | $ | 130,627 | $ | 140,731 | $ | 146,293 | |||||||||||||||||||||||||||||
| Corporate/unallocated and other NOI | (145) | 403 | (2,173) | |||||||||||||||||||||||||||||||||||
| In-service and disposition adjustments (6) | 1,351 | (4,580) | 528 | |||||||||||||||||||||||||||||||||||
| Percentage rent/participation adjustments (7) | 979 | (2,947) | 206 | |||||||||||||||||||||||||||||||||||
| Non-recurring adjustments (8) | 3,999 | 1,170 | 213 | |||||||||||||||||||||||||||||||||||
| Annualized Adjusted EBITDAre (for the quarter) | $ | 136,811 | $ | 134,777 | $ | 145,067 | ||||||||||||||||||||||||||||||||
| Annualized Adjusted EBITDAre (9) | $ | 547,244 | $ | 539,108 | $ | 580,268 | ||||||||||||||||||||||||||||||||
| See footnotes on following page. | ||||||||||||||||||||||||||||||||||||||
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| Q4 2020 Supplemental | Page 28 | |||||||
| (1) Included in other income in the consolidated statements of (loss) income in the Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on Form 10-Q. Reconciliation is as follows: | ||||||||||||||||||||||||||||||||||||||
| 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | |||||||||||||||||||||||||||||||||
| Income from settlement of foreign currency swap contracts | $ | 110 | $ | 154 | $ | 408 | $ | 368 | $ | 252 | $ | 274 | ||||||||||||||||||||||||||
| Gain on insurance recovery | 809 | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Operating income from operated properties | 45 | 16 | 8 | 7,201 | 7,996 | 11,188 | ||||||||||||||||||||||||||||||||
| Miscellaneous income | 4 | 12 | — | 4 | 138 | 2 | ||||||||||||||||||||||||||||||||
| Other income | $ | 968 | $ | 182 | $ | 416 | $ | 7,573 | $ | 8,386 | $ | 11,464 | ||||||||||||||||||||||||||
| (2) Included in rental revenue from continuing operations in the consolidated statements of (loss) income in the Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on Form 10-Q. Reconciliation is as follows: | ||||||||||||||||||||||||||||||||||||||
| 4TH QUARTER 2020 | 3RD QUARTER 2020 | 2ND QUARTER 2020 | 1ST QUARTER 2020 | 4TH QUARTER 2019 | 3RD QUARTER 2019 | |||||||||||||||||||||||||||||||||
| Minimum rent | $ | 79,342 | $ | 83,230 | $ | 89,589 | $ | 138,219 | $ | 139,529 | $ | 139,844 | ||||||||||||||||||||||||||
| Accounts receivable write-offs from prior periods | (4,301) | (13,533) | — | — | — | — | ||||||||||||||||||||||||||||||||
| Tenant reimbursements | 4,831 | 2,413 | 4,169 | 3,698 | 5,790 | 5,129 | ||||||||||||||||||||||||||||||||
| Percentage rent | 3,040 | 1,303 | 1,454 | 2,757 | 6,428 | 3,032 | ||||||||||||||||||||||||||||||||
| Straight-line rental revenue | 1,768 | 1,958 | 2,229 | 2,824 | 2,926 | 2,866 | ||||||||||||||||||||||||||||||||
| Straight-line write-offs from prior periods | (870) | (19,927) | — | (12,532) | — | — | ||||||||||||||||||||||||||||||||
| Other rental revenue | 201 | 147 | 90 | 77 | 92 | 91 | ||||||||||||||||||||||||||||||||
| Rental revenue | $ | 84,011 | $ | 55,591 | $ | 97,531 | $ | 135,043 | $ | 154,765 | $ | 150,962 | ||||||||||||||||||||||||||
| (3) Impairment charges recognized during the three months ended June 30, 2020 totaled $51.3 million, which was comprised of $36.3 million of impairments of real estate investments and $15.0 million of impairments of operating lease right-of-use assets. | ||||||||||||||||||||||||||||||||||||||
| (4) See pages 22 through 24 for definitions. | ||||||||||||||||||||||||||||||||||||||
| (5) Adjusted EBITDAre for the quarter is multiplied by four to calculate an annual amount. | ||||||||||||||||||||||||||||||||||||||
| (6) Adjustments for properties commencing or terminating GAAP net operating income during the quarter and adjustments to revenue from mortgage notes receivable to be consistent with end of quarter balance, for continuing properties only. | ||||||||||||||||||||||||||||||||||||||
| (7) To adjust percentage rents and participating interest income from the actual latest quarterly amount to the trailing twelve month amount divided by four. | ||||||||||||||||||||||||||||||||||||||
| (8) Non-recurring adjustments relate to properties under operating agreements with third parties, as applicable, and COVID-19 related adjustments. | ||||||||||||||||||||||||||||||||||||||
| (9) Annualized Adjusted EBITDAre for the quarter is multiplied by four to calculate an annual amount. | ||||||||||||||||||||||||||||||||||||||
| (10) Not presented as this metric is not meaningful given the continuing disruption caused by the COVID-19 pandemic and the associated accounting for tenant rent deferrals and other lease modifications. | ||||||||||||||||||||||||||||||||||||||
| Amounts above include the impact of discontinued operations, which are separately classified in the consolidated statements of (loss) income. | ||||||||||||||||||||||||||||||||||||||
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| Q4 2020 Supplemental | Page 29 | |||||||