Epr Properties 8-K, filed Jul 13, 2021
Epr Properties (EPR)
8-K
2021-07-13
For: 2021-07-13
View Original
Added on
April 05, 2026
About this 8-K
Epr Properties filed this 8-K on July 13, 2021.
Items reported
- Item 2.02: Financial results
- Item 8.01: Other events
- 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): July 13, 2021
(Exact name of registrant as specified in its charter)
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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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Item 2.02. Results of Operations and Financial Condition.
On July 13, 2021, EPR Properties (the "Company") issued a press release announcing resumption of its monthly cash dividend to its common shareholders following termination of the Covenant Relief Period as described below under Item 8.01 and providing an update on property openings and cash collections. The Company's press release is attached as Exhibit 99.1 hereto and is incorporated by reference in this Item 2.02.
The information set forth in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, 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 8.01. Other Events.
As previously disclosed, the Company entered into a series of amendments to its credit agreement (the "Credit Agreement") governing its $1.0 billion senior unsecured revolving credit facility (the "Revolving Credit Facility") and senior unsecured term loan facility (the "Term Loan Facility") and its note purchase agreement (the "Note Purchase Agreement") governing the terms of its outstanding 4.35% Series A Notes due 2024 and its 4.56% Series B Notes due 2026 (collectively, the "Private Placement Bonds") to modify certain provisions of these agreements in light of the financial and operational impacts of the COVID-19 pandemic on the Company and its tenants and borrowers. The amendments to the Credit Agreement and the Note Purchase Agreement increased the applicable interest rate spreads and facility fee for the Revolving Credit Facility, increased the applicable interest rate spreads for the Term Loan Facility and increased the interest rates of the Private Placement Bonds during the "Covenant Relief Period" (as such term is defined in the Credit Agreement and Note Purchase Agreement). The amendments to the Credit Agreement and the Note Purchase Agreement also provided relief from compliance with certain financial covenants and imposed certain 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 stock repurchases, and maintenance of a minimum liquidity amount, in each case subject to certain exceptions.
Under the Credit Agreement and Note Purchase Agreement, the Covenant Relief Period was scheduled to end on the earlier of (i) December 31, 2021, in the case of the Credit Agreement, and October 1, 2021 (subject to extension to January 1, 2022), in the case of the Note Purchase Agreement, and (ii) the date on which the Company provided notice electing to terminate the Covenant Relief Period, together with evidence that the Company would have been in compliance with the financial covenants under the Credit Agreement and Note Purchase Agreement at the end of the most recently ended fiscal quarter even if the Covenant Relief Period had not been in effect for such fiscal quarter.
On July 12, 2021, the Company provided notice under the Credit Agreement and Note Purchase Agreement of the Company's election to terminate the Covenant Relief Period early, together with the evidence described above of the Company's compliance with the applicable financial covenants for the quarter ended June 30, 2021. As a result, effective July 13, 2021, the increased interest rates under the Credit Agreement and Note Purchase Agreement described above returned to the previous levels under these agreements resulting in a reduction of approximately 100 basis points on the Revolving Credit Facility and Term Loan Facility and approximately 125 basis points on the Private Placement Bonds, in each case based on the Company's current credit ratings. In addition, the relief from compliance with certain financial covenants and certain additional restrictions imposed on the Company during the Covenant Relief Period under these agreements described above terminated effective July 13, 2021.
Following termination of the Covenant Relief Period, the Company resumed its monthly cash dividends to its common shareholders and its Board of Trustees declared a cash dividend of $0.25 per common share payable on August 16, 2021 to shareholders of record on July 30, 2021.
Item 9.01. Financial Statements and Exhibits.
| Exhibit No. | Description | ||||
| Press Release, dated July 13, 2021, issued by EPR Properties. | |||||
| 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: July 13, 2021
EPR Properties Announces Resumption of Monthly Cash Dividend to Common Shareholders Following Early Termination of the Covenant Relief Period
–Provides Update on Property Openings and Cash Collections
Kansas City, MO. July 13, 2021 -- EPR Properties (NYSE: EPR) today announced that it is resuming payment of a monthly cash dividend of $0.25 per common share to its common shareholders, following its decision to terminate the covenant relief period early under certain of its credit facilities. In addition, the Company is providing key business updates on property openings and cash collection levels for the second quarter ended June 30, 2021.
“We are pleased that we continue to show meaningful progress in our property openings and cash collections, which allowed us to be in compliance with our pre-waiver debt covenants for the second quarter,” stated Greg Silvers, President and CEO of EPR Properties. “This performance and positive outlook gave us the confidence to terminate the covenant relief period early under certain of our credit facilities. Exiting this relief period marks an important step in EPR’s ongoing recovery, and allows us to resume certain investment activity and payment of dividends. As a result, we are resuming the payment of our monthly cash dividend to common shareholders, and are doing so at a prudent level which should allow us to grow the dividends over time alongside earnings growth.”
Dividend
The Company announced today that its Board of Trustees declared a monthly cash dividend to common shareholders. The dividend of $0.25 per common share is payable on August 16, 2021 to shareholders of record on July 30, 2021, and represents an annualized dividend of $3.00 per share.
Early Termination of Covenant Relief Period
On July 12, 2021, the Company provided notice of its election to terminate the covenant relief period early and submitted compliance certificates for the quarter ended June 30, 2021 for its Consolidated Credit Agreement that governs its $1.0 billion revolving credit facility (zero balance outstanding at June 30, 2021) and $400.0 million term loan, and its Note Purchase Agreement that governs its $316.2 million of outstanding private placement notes. The certificates provided that the Company was in compliance with all of its financial and other covenants, and would have been even if the covenant relief period had not been in effect during the second quarter.
The Company’s election to terminate the covenant relief period early means that, effective July 13, 2021, the interest rates on the above debt return to the previous levels defined in the agreements resulting in a reduction of approximately 100 basis points on the revolving credit facility and term loan, and 125 basis points on the private placement notes – in each case based on current credit ratings. By terminating the covenant relief period, the Company was also released from certain restrictions under these credit facilities, including restrictions on investments, capital expenditures, incurrences of indebtedness, payment of dividends or other distributions and stock repurchases, and maintenance of a minimum liquidity amount.
Business Update
The Company is also providing a business update on property openings and cash collection levels for the second quarter ended June 30, 2021.
Property Openings
As of June 30, 2021, approximately 99% of the Company’s theatre and 98% of the Company’s non-theatre locations were open, excluding normal seasonal closings. Certain assets remain closed in Canada pursuant to local restrictions.
Cash Collections
For the second quarter of 2021 the Company collected approximately 82% of contractual cash revenue. This cash collection level is in excess of the high end of the previously announced guidance for the second quarter of 75%-80% and continues the favorable trajectory of cash collections the Company is experiencing. Contractual cash revenue is an operational measure and represents aggregate cash payments for which the Company is entitled under existing contracts, excluding the impact of any temporary abatements or deferrals, percentage rent (rents received over base amounts), non-cash revenue and revenue from taxable REIT subsidiaries.
In addition to the collections above, collections of deferred rent and interest during the second quarter from accrual basis tenants totaled $16.3 million, bringing the total for such collections to $45.9 million for the six months ended June 30, 2021.
Second Quarter Earnings Conference Call
As previously announced, the Company will release its second quarter 2021 results after the market close on Tuesday, July 27, 2021. Management will host a conference call to discuss the Company’s results on Wednesday, July 28, 2021 at 8:30 EST.
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 Quarterly Report on Form 10-Q is filed. With the exception of historical information, certain statements contained or incorporated by reference herein may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such as those pertaining to the uncertain financial impact of the COVID-19 pandemic, our capital resources and liquidity, our expected dividend payments, our expected cash flows and liquidity, 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 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