Introduces Earnings and Investment Spending
Guidance for 2025
Announces 3.5% Increase in Monthly
Dividend
EPR Properties (NYSE:EPR) today announced operating results for
the fourth quarter and year ended December 31, 2024 (dollars in
thousands, except per share data):
Three Months Ended December
31,
Year Ended December
31,
2024
2023
2024
2023
Total revenue
$
177,234
$
171,981
$
698,068
$
705,668
Net (loss) income available to common
shareholders
(14,435
)
39,489
121,922
148,901
Net (loss) income available to common
shareholders per diluted common share
(0.19
)
0.52
1.60
1.97
Funds From Operations as adjusted
(FFOAA)(1)
94,309
90,240
373,929
397,194
FFOAA per diluted common share (1)
1.23
1.18
4.87
5.18
Adjusted Funds From Operations
(AFFO)(1)
94,139
88,475
371,409
400,643
AFFO per diluted common share (1)
1.22
1.16
4.84
5.22
Note: Each of the measures above include
deferred rent and interest collections from cash basis customers
that were recognized as revenue of $0.6 million for the three
months ended December 31, 2023 and $0.6 million and $36.4 million
for the years ended December 31, 2024 and 2023, respectively. No
deferred rent and interest was received during the three months
ended December 31, 2024.
(1) A non-GAAP financial measure.
Fourth Quarter Company Headlines
- Executes on Investment Pipeline - During the fourth
quarter of 2024, the Company's investment spending totaled $49.3
million, bringing year-to-date investment spending to $263.9
million. Additionally, the Company has committed approximately
$150.0 million for experiential development and redevelopment
projects, which is expected to be funded over the next two
years.
- Strong Liquidity Position - As of December 31, 2024, the
Company had cash on hand of $22.1 million, $175.0 million
outstanding on its $1.0 billion unsecured revolving credit facility
and only $300.0 million of consolidated debt maturing in 2025.
- Introduces 2025 Guidance - The Company is introducing
FFOAA per diluted common share guidance for 2025 of $4.94 to $5.14,
representing an increase of 3.5% at the midpoint over 2024. The
Company is also introducing investment spending guidance for 2025
of $200.0 million to $300.0 million and disposition proceeds
guidance of $25.0 million to $75.0 million.
- Announces Increase in Monthly Dividend - Based on the
Company's expectation for its financial results for 2025, the
Company is announcing an increase to its monthly dividend of
3.5%.
"We were pleased to have delivered earnings growth for full year
2024, when removing the impact of the deferred rent and interest
collections that boosted the prior year’s results.” stated Company
Chairman and CEO Greg Silvers. “For the year, we deployed more than
$263 million into accretive investments to grow our portfolio of
differentiated experiential real estate. We also continued to make
progress reducing our theatre and education investments and
recycling those disposition proceeds into other experiential
assets. Supported by our strong liquidity position and balance
sheet, we have a solid pipeline of relationship-driven investment
opportunities and maintain our commitment to prudent capital
allocation.”
Investment Update
The Company's investment spending during the three months ended
December 31, 2024 totaled $49.3 million, bringing the total
investment spending for the year ended December 31, 2024 to $263.9
million. Investment spending for the quarter was primarily related
to experiential build-to-suit development and redevelopment
projects.
As of December 31, 2024, the Company has committed approximately
$150.0 million in additional spending for experiential development
and redevelopment projects, which is expected to be funded over the
next two years. The Company will continue to be more selective in
making investments, utilizing cash on hand, excess cash flow,
disposition proceeds and borrowings under our line of credit, until
such time as the Company's cost of capital improves.
Strong Liquidity Position
The Company remains focused on maintaining strong liquidity and
financial flexibility. At December 31, 2024, the Company had $22.1
million of cash on hand, $175.0 million outstanding on its $1.0
billion unsecured revolving credit facility and only $300.0 million
of consolidated debt maturing in 2025.
Capital Recycling and Charges
During the fourth quarter of 2024, the Company continued to make
progress towards its goal of reducing its theatre and education
investments with the intent of recycling proceeds from such
dispositions into other experiential assets.
First, the Company completed the sale of two vacant theatre
properties and one vacant early childhood education center for net
proceeds totaling $9.3 million, and recognized a net gain on sale
of $0.1 million for the quarter. For the year ended December 31,
2024, disposition proceeds totaled $74.4 million, and the Company
recognized a net gain on sale of $16.1 million.
Second, the Company entered into contracts to sell two theatre
properties leased by a smaller theatre operator and two operating
theatres. The Company currently anticipates that the sales of all
four properties will close in the first half of 2025, but there can
be no assurance regarding the ultimate timing of such sales or that
such sales will be consummated. The Company recognized non-cash
impairment charges of $40.0 million related to these properties
during the quarter; however, the Company intends to redeploy the
proceeds from these sales into other experiential assets that will
be accretive to earnings while also reducing the volatility in
reported earnings associated with operating properties.
In addition, the Company made the decision during the fourth
quarter of 2024 to exit its unconsolidated equity investment in an
operating RV property located in Breaux Bridge, Louisiana and
entered into good faith negotiations with its joint venture
partners and the non-recourse debt provider to identify a path
forward to remove the experiential lodging property from the
Company's portfolio. The RV property underperformed expectations
and would have required ongoing capital infusion to service the
non-recourse debt and property operations. The Company finalized
its exit from this investment on February 4, 2025. Accordingly,
during the fourth quarter, upon the Company’s determination that
the investment was not recoverable, the Company recognized a $16.1
million impairment charge to fully write-off its carrying value in
the investment. The Company also received $1.0 million in exchange
for the sale of its remaining subordinated mortgage note receivable
on the property. Accordingly, during the fourth quarter of 2024,
the Company recognized $10.3 million as provision for credit
loss.
The Company continues to have interests in two remaining
unconsolidated joint ventures that hold two operating RV properties
with a total carrying value of $14.0 million at December 31,
2024.
Portfolio Update
The Company's total assets were $5.6 billion (after accumulated
depreciation of approximately $1.6 billion) and total investments
(a non-GAAP financial measure) were $6.9 billion at December 31,
2024, with Experiential investments totaling $6.4 billion, or 93%,
and Education investments totaling $0.5 billion, or 7%.
The Company's Experiential portfolio (excluding property under
development, undeveloped land inventory and the three joint venture
properties noted below) consisted of the following property types
(owned or financed) at December 31, 2024:
- 157 theatre properties;
- 58 eat & play properties (including seven theatres located
in entertainment districts);
- 24 attraction properties;
- 11 ski properties;
- four experiential lodging properties;
- 22 fitness & wellness properties;
- one gaming property; and
- one cultural property.
The Company has excluded three experiential lodging properties
held in joint ventures from the property count above. One was
transferred to the Company's joint venture partner as discussed
above. As the Company has previously disclosed, the remaining two
properties sustained significant hurricane damage and the Company
continues to work in good faith with its joint venture partners,
the non-recourse debt provider and insurance companies to identify
a path forward, which is expected to result in the eventual removal
of the properties from the Company's portfolio, although there can
be no assurances as to the outcome of those discussions. Included
in the property count are two experiential lodging properties held
in unconsolidated joint ventures in which the Company continues to
have interests.
As of December 31, 2024, the Company's wholly-owned Experiential
portfolio consisted of approximately 18.8 million square feet,
which includes 0.3 million square feet of vacant properties the
Company intends to sell. The wholly-owned Experiential portfolio,
excluding the vacant properties the Company intends to sell, was
99% leased or operated and included a total of $112.3 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, 2024:
- 59 early childhood education center properties; and
- nine private school properties.
As of December 31, 2024, the Company's wholly-owned Education
portfolio consisted of approximately 1.2 million square feet, which
includes 13 thousand square feet for a vacant property the Company
intends to sell. The wholly-owned Education portfolio, excluding
the vacant property the Company intends to sell, was 100%
leased.
The combined wholly-owned portfolio consisted of 19.7 million
square feet and was 99% leased or operated excluding the 0.3
million square feet of vacant properties the Company intends to
sell.
Dividend Information
The Company's Board of Trustees declared its monthly cash
dividend to common shareholders of $0.295 per share payable April
15, 2025 to shareholders of record as of March 31, 2025. This
dividend represents an annualized dividend of $3.54 per common
share, an increase of 3.5% over the prior years annualized dividend
(based upon the monthly dividend at the end of the prior year).
Additionally, the Company declared its regular quarterly
dividends to preferred shareholders of $0.359375 per share on both
the Company's 5.75% Series C cumulative convertible preferred
shares and Series G cumulative redeemable preferred shares and
$0.5625 per share on its 9.00% Series E cumulative convertible
preferred shares, payable April 15, 2025 to shareholders of record
as of March 31, 2025.
2025 Guidance (Dollars in millions,
except per share data):
Net income available to common
shareholders per diluted common share
$
2.84
to
$
3.04
FFOAA per diluted common share
$
4.94
to
$
5.14
Investment spending
$
200.0
to
$
300.0
Disposition proceeds
$
25.0
to
$
75.0
The Company is introducing its 2025 earnings guidance for FFOAA
per diluted common share of $4.94 to $5.14, representing an
increase of 3.5% at the midpoint over 2024. The 2025 guidance for
FFOAA per diluted common share is based on an FFO per diluted
common share range of $4.95 to $5.15 adjusted for transaction
costs, provision (benefit) for credit losses, net, and deferred
income tax benefit. FFO per diluted common share for 2025 is based
on a net income available to common shareholders per diluted common
share range of $2.84 to $3.04 plus estimated real estate
depreciation and amortization of $2.17 and allocated share of joint
venture depreciation of $0.05, less estimated gain on sale of real
estate of $0.05 and the impact of Series C and Series E dilution of
$0.06 (in accordance with the NAREIT definition of FFO).
Additional earnings guidance detail can be found on page 24 in
the Company's supplemental information package available in the
Investor Center of the Company's website located at
https://investors.eprkc.com/earnings-supplementals.
Conference Call Information
Management will host a conference call to discuss the Company's
financial results on February 27, 2025 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.
It is recommended that you join 10 minutes prior to the start of
the event (although you may register and join the webcast at any
time during the call).
You may watch a replay of the webcast by visiting the Webcasts
page at https://investors.eprkc.com/webcasts.
Quarterly Supplemental
The Company's supplemental information package for the fourth
quarter and year ended December 31, 2024 is available in the
Investor Center on the Company's website located at
https://investors.eprkc.com/earnings-supplementals.
EPR Properties
Consolidated Statements of
Income (Loss)
(Unaudited, dollars in
thousands except per share data)
Three Months Ended December
31,
Year Ended December
31,
2024
2023
2024
2023
Rental revenue
$
149,116
$
148,738
$
585,167
$
616,139
Other income
13,197
12,068
57,071
45,947
Mortgage and other financing income
14,921
11,175
55,830
43,582
Total revenue
177,234
171,981
698,068
705,668
Property operating expense
15,188
14,759
59,146
57,478
Other expense
13,437
13,539
56,877
44,774
General and administrative expense
12,233
13,765
50,096
56,442
Retirement and severance expense
—
—
1,836
547
Transaction costs
423
401
798
1,554
Provision (benefit) for credit losses,
net
9,876
1,285
12,247
878
Impairment charges
39,952
2,694
51,764
67,366
Depreciation and amortization
40,995
40,692
165,733
168,033
Total operating expenses
132,104
87,135
398,497
397,072
Gain (loss) on sale of real estate
112
(3,612
)
16,101
(2,197
)
Income from operations
45,242
81,234
315,672
306,399
Costs associated with loan refinancing or
payoff
—
—
337
—
Interest expense, net
33,472
30,337
130,810
124,858
Equity in loss from joint ventures
3,425
4,701
8,809
6,768
Impairment charges on joint ventures
16,087
—
28,217
—
(Loss) income before income taxes
(7,742
)
46,196
147,499
174,773
Income tax expense
653
667
1,433
1,727
Net (loss) income
$
(8,395
)
$
45,529
$
146,066
$
173,046
Preferred dividend requirements
6,040
6,040
24,144
24,145
Net (loss) income available to common
shareholders of EPR Properties
$
(14,435
)
$
39,489
$
121,922
$
148,901
Net (loss) income available to common
shareholders of EPR Properties per share:
Basic
$
(0.19
)
$
0.52
$
1.61
$
1.98
Diluted
$
(0.19
)
$
0.52
$
1.60
$
1.97
Shares used for computation (in
thousands):
Basic
75,733
75,330
75,636
75,260
Diluted
76,156
75,883
75,999
75,715
EPR Properties
Condensed Consolidated Balance
Sheets
(Unaudited, dollars in
thousands)
December 31, 2024
December 31, 2023
Assets
Real estate investments, net of
accumulated depreciation of $1,562,645 and $1,435,683 at December
31, 2024 and December 31, 2023, respectively
$
4,435,358
$
4,537,359
Land held for development
20,168
20,168
Property under development
112,263
131,265
Operating lease right-of-use assets
173,364
186,628
Mortgage notes and related accrued
interest receivable, net of allowance for credit losses of $17,111
and $3,656 at December 31, 2024 and 2023, respectively
665,796
569,768
Investment in joint ventures
14,019
49,754
Cash and cash equivalents
22,062
78,079
Restricted cash
13,637
2,902
Accounts receivable
84,589
63,655
Other assets
75,251
61,307
Total assets
$
5,616,507
$
5,700,885
Liabilities and Equity
Accounts payable and accrued
liabilities
$
107,976
$
94,927
Operating lease liabilities
212,400
226,961
Dividends payable
31,863
31,307
Unearned rents and interest
80,565
77,440
Debt
2,860,458
2,816,095
Total liabilities
3,293,262
3,246,730
Total equity
$
2,323,245
$
2,454,155
Total liabilities and equity
$
5,616,507
$
5,700,885
Non-GAAP Financial Measures
Funds From Operations (FFO), Funds From Operations As
Adjusted (FFOAA) and Adjusted Funds From Operations (AFFO)
The National Association of Real Estate Investment Trusts
(NAREIT) developed FFO as a relative non-GAAP financial measure of
performance of an equity REIT in order to recognize that
income-producing real estate historically has not depreciated on
the basis determined under GAAP. Pursuant to the definition of FFO
by the Board of Governors of NAREIT, the Company calculates FFO as
net income available to common shareholders, computed in accordance
with GAAP, excluding gains and losses from disposition of real
estate and impairment losses on real estate, plus real estate
related depreciation and amortization, and after adjustments for
unconsolidated partnerships, joint ventures and other affiliates.
Adjustments for unconsolidated partnerships, joint ventures and
other affiliates are calculated to reflect FFO on the same basis.
The Company has calculated FFO for all periods presented in
accordance with this definition.
In addition to FFO, the Company presents FFOAA and AFFO. FFOAA
is presented by adding to FFO retirement and severance expense,
transaction costs, provision (benefit) for credit losses, net,
costs associated with loan refinancing or payoff, preferred share
redemption costs and impairment of operating lease right-of-use
assets and subtracting sale participation income, 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 and share-based
compensation expense to management and Trustees; and subtracting
amortization of above and below market leases, net and tenant
allowances, maintenance capital expenditures (including second
generation tenant improvements and leasing commissions),
straight-lined rental revenue (removing the impact of
straight-lined ground sublease expense), the non-cash portion of
mortgage and other financing income and the allocated share of
joint venture non-cash items.
FFO, FFOAA and AFFO are widely used measures of the operating
performance of real estate companies and are provided here as
supplemental measures to GAAP net income 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 including per
share amounts for FFO and FFOAA, for the three months and years
ended December 31, 2024 and 2023 and reconciles such measures to
net income available to common shareholders, the most directly
comparable GAAP measure:
EPR Properties
Reconciliation of Non-GAAP
Financial Measures
(Unaudited, dollars in
thousands except per share data)
Three Months Ended December
31,
Year Ended December
31,
2024
2023
2024
2023
FFO:
Net (loss) income available to common
shareholders of EPR Properties
$
(14,435
)
$
39,489
$
121,922
$
148,901
(Gain) loss on sale of real estate
(112
)
3,612
(16,101
)
2,197
Impairment of real estate investments
39,952
2,694
51,764
67,366
Real estate depreciation and
amortization
40,838
40,501
165,029
167,219
Allocated share of joint venture
depreciation
1,965
2,344
9,419
8,876
Impairment charges on joint ventures
16,087
—
28,217
—
FFO available to common shareholders of
EPR Properties
$
84,295
$
88,640
$
360,250
$
394,559
FFO available to common shareholders of
EPR Properties
$
84,295
$
88,640
$
360,250
$
394,559
Add: Preferred dividends for Series C
preferred shares
1,938
1,938
7,752
7,752
Add: Preferred dividends for Series E
preferred shares
1,938
1,938
7,752
7,752
Diluted FFO available to common
shareholders of EPR Properties
$
88,171
$
92,516
$
375,754
$
410,063
FFOAA:
FFO available to common shareholders of
EPR Properties
$
84,295
$
88,640
$
360,250
$
394,559
Retirement and severance expense
—
—
1,836
547
Transaction costs
423
401
798
1,554
Provision (benefit) for credit losses,
net
9,876
1,285
12,247
878
Costs associated with loan refinancing or
payoff
—
—
337
—
Deferred income tax benefit
(285
)
(86
)
(1,539
)
(344
)
FFOAA available to common shareholders of
EPR Properties
$
94,309
$
90,240
$
373,929
$
397,194
FFOAA available to common shareholders of
EPR Properties
$
94,309
$
90,240
$
373,929
$
397,194
Add: Preferred dividends for Series C
preferred shares
1,938
1,938
7,752
7,752
Add: Preferred dividends for Series E
preferred shares
1,938
1,938
7,752
7,752
Diluted FFOAA available to common
shareholders of EPR Properties
$
98,185
$
94,116
$
389,433
$
412,698
AFFO:
FFOAA available to common shareholders of
EPR Properties
$
94,309
$
90,240
$
373,929
$
397,194
Non-real estate depreciation and
amortization
157
191
704
814
Deferred financing fees amortization
2,187
2,188
8,844
8,637
Share-based compensation expense to
management and trustees
3,572
4,359
14,066
17,512
Amortization of above and below market
leases, net and tenant allowances
(81
)
(79
)
(333
)
(535
)
Maintenance capital expenditures (1)
(1,862
)
(5,015
)
(7,299
)
(12,399
)
Straight-lined rental revenue
(3,992
)
(2,930
)
(17,327
)
(10,591
)
Straight-lined ground sublease expense
20
56
97
1,099
Non-cash portion of mortgage and other
financing income
(171
)
(535
)
(1,984
)
(1,088
)
Allocated share of joint venture non-cash
items
—
—
712
—
AFFO available to common shareholders of
EPR Properties
$
94,139
$
88,475
$
371,409
$
400,643
AFFO available to common shareholders of
EPR Properties
$
94,139
$
88,475
$
371,409
$
400,643
Add: Preferred dividends for Series C
preferred shares
1,938
1,938
7,752
7,752
Add: Preferred dividends for Series E
preferred shares
1,938
1,938
7,752
7,752
Diluted AFFO available to common
shareholders of EPR Properties
$
98,015
$
92,351
$
386,913
$
416,147
FFO per common share:
Basic
$
1.11
$
1.18
$
4.76
$
5.24
Diluted
1.10
1.16
4.70
5.15
FFOAA per common share:
Basic
$
1.25
$
1.20
$
4.94
$
5.28
Diluted
1.23
1.18
4.87
5.18
AFFO per common share:
Basic
$
1.24
$
1.17
$
4.91
$
5.32
Diluted
1.22
1.16
4.84
5.22
Shares used for computation (in
thousands):
Basic
75,733
75,330
75,636
75,260
Diluted
76,156
75,883
75,999
75,715
Weighted average shares
outstanding-diluted EPS
76,156
75,883
75,999
75,715
Effect of dilutive Series C preferred
shares
2,327
2,293
2,314
2,283
Effect of dilutive Series E preferred
shares
1,665
1,663
1,664
1,663
Adjusted weighted average shares
outstanding-diluted Series C and Series E
80,148
79,839
79,977
79,661
Other financial information:
Dividends per common share
$
0.855
$
0.825
$
3.400
$
3.300
(1) 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 years ended December 31, 2024 and 2023.
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 those 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
by cash and cash equivalents. By excluding accumulated depreciation
and reducing cash and cash equivalents, the result provides an
estimate of the investment made by the Company. The Company
believes that investors commonly use versions of this calculation
in a similar manner. The Company's method of calculating Gross
Assets may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs.
Net Debt to Gross Assets Ratio
Net Debt to Gross Assets Ratio is a supplemental measure derived
from non-GAAP financial measures that the Company uses to evaluate
capital structure and the magnitude of debt to gross assets. The
Company believes that investors commonly use versions of this ratio
in a similar manner. The Company's method of calculating the Net
Debt to Gross Assets Ratio may be different from methods used by
other REITs and, accordingly, may not be comparable to such other
REITs.
EBITDAre
NAREIT developed EBITDAre as a relative non-GAAP financial
measure of REITs, independent of a company's capital structure, to
provide a uniform basis to measure the enterprise value of a
company. Pursuant to the definition of EBITDAre by the Board of
Governors of NAREIT, the Company calculates EBITDAre as net income,
computed in accordance with GAAP, excluding interest expense (net),
income tax (benefit) expense, depreciation and amortization, gains
and losses from dispositions 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 because 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 because 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 sale
participation income, gain on insurance recovery, retirement and
severance expense, transaction costs, provision (benefit) for
credit losses, net, impairment losses on operating lease
right-of-use assets and prepayment fees.
The Company's method of calculating Adjusted EBITDAre may be
different from methods used by other REITs and, accordingly, may
not be comparable to such other REITs. Adjusted EBITDAre is not a
measure of performance under GAAP, does not represent cash
generated from operations as defined by GAAP and is not indicative
of cash available to fund all cash needs, including distributions.
This measure should not be considered as an alternative to net
income or any other GAAP measure as a measurement of the results of
the Company's operations or cash flows or liquidity as defined by
GAAP.
Net Debt to Adjusted EBITDAre Ratio
Net Debt to Adjusted EBITDAre Ratio is a supplemental measure
derived from non-GAAP financial measures that the Company uses to
evaluate our capital structure and the magnitude of our debt
against our operating performance. The Company believes that
investors commonly use versions of this ratio in a similar manner.
In addition, financial institutions use versions of this ratio in
connection with debt agreements to set pricing and covenant
limitations. The Company's method of calculating the Net Debt to
Adjusted EBITDAre Ratio may be different from methods used by other
REITs and, accordingly, may not be comparable to such other
REITs.
Reconciliations of debt, total assets and net income (all
reported in accordance with GAAP) to Net Debt, Gross Assets, Net
Debt to Gross Assets Ratio, EBITDAre, Adjusted EBITDAre and Net
Debt to Adjusted EBITDAre Ratio (each of which is a non-GAAP
financial measure), as applicable, are included in the following
tables (unaudited, in thousands except ratios):
December 31,
2024
2023
Net
Debt:
Debt
$
2,860,458
$
2,816,095
Deferred financing costs, net
19,134
25,134
Cash and cash equivalents
(22,062
)
(78,079
)
Net Debt
$
2,857,530
$
2,763,150
Gross
Assets:
Total Assets
$
5,616,507
$
5,700,885
Accumulated depreciation
1,562,645
1,435,683
Cash and cash equivalents
(22,062
)
(78,079
)
Gross Assets
$
7,157,090
$
7,058,489
Debt to Total Assets Ratio
51
%
49
%
Net Debt to Gross Assets Ratio
40
%
39
%
Three Months Ended December
31,
2024
2023
EBITDAre and
Adjusted EBITDAre:
Net (loss) income
$
(8,395
)
$
45,529
Interest expense, net
33,472
30,337
Income tax expense
653
667
Depreciation and amortization
40,995
40,692
(Gain) loss on sale of real estate
(112
)
3,612
Impairment of real estate investments
39,952
2,694
Allocated share of joint venture
depreciation
1,965
2,344
Allocated share of joint venture interest
expense
589
1,879
Impairment charges on joint ventures
16,087
—
EBITDAre
$
125,206
$
127,754
Transaction costs
423
401
Provision (benefit) for credit losses,
net
9,876
1,285
Adjusted EBITDAre
$
135,505
$
129,440
Adjusted EBITDAre (annualized) (1)
$
542,020
$
517,760
Net Debt/Adjusted EBITDAre Ratio
5.3
5.3
(1) Adjusted EBITDA for the quarter is
multiplied by four to calculate an annualized amount but does not
include the annualization of investments put in service, acquired
or disposed of during the quarter, as well as the potential
earnings on property under development, the annualization of
percentage rent and participating interest and adjustments for
other items. See detailed calculation and reconciliation of
Annualized Adjusted EBITDAre and Net Debt/Annualized EBITDAre ratio
that includes these adjustments in the Company's Supplemental
Operating and Financial Data for the quarter and year ended
December 31, 2024.
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 and related accrued
interest receivable, net, investment in joint ventures, intangible
assets, gross (before accumulated amortization and included in
other assets) and notes receivable and related accrued interest
receivable, net (included in other assets). Total investments is a
useful measure for management and investors as it illustrates
across which asset categories the Company's funds have been
invested. Our method of calculating total investments may be
different from methods used by other REITs and, accordingly, may
not be comparable to such other REITs. A reconciliation of total
assets (computed in accordance with GAAP) to total investments is
included in the following table (unaudited, in thousands):
December 31, 2024
December 31, 2023
Total assets
$
5,616,507
$
5,700,885
Operating lease right-of-use assets
(173,364
)
(186,628
)
Cash and cash equivalents
(22,062
)
(78,079
)
Restricted cash
(13,637
)
(2,902
)
Accounts receivable
(84,589
)
(63,655
)
Add: accumulated depreciation on real
estate investments
1,562,645
1,435,683
Add: accumulated amortization on
intangible assets (1)
31,876
30,589
Prepaid expenses and other current assets
(1)
(39,464
)
(22,718
)
Total investments
$
6,877,912
$
6,813,175
Total Investments:
Real estate investments, net of
accumulated depreciation
$
4,435,358
$
4,537,359
Add back accumulated depreciation on real
estate investments
1,562,645
1,435,683
Land held for development
20,168
20,168
Property under development
112,263
131,265
Mortgage notes and related accrued
interest receivable, net
665,796
569,768
Investment in joint ventures
14,019
49,754
Intangible assets, gross (1)
64,317
65,299
Notes receivable and related accrued
interest receivable, net (1)
3,346
3,879
Total investments
$
6,877,912
$
6,813,175
(1) Included in other assets in the
accompanying consolidated balance sheet. Other assets include the
following:
December 31, 2024
December 31, 2023
Intangible assets, gross
$
64,317
$
65,299
Less: accumulated amortization on
intangible assets
(31,876
)
(30,589
)
Notes receivable and related accrued
interest receivable, net
3,346
3,879
Prepaid expenses and other current
assets
39,464
22,718
Total other assets
$
75,251
$
61,307
About EPR Properties
EPR Properties (NYSE:EPR) is the leading diversified
experiential net lease real estate investment trust (REIT),
specializing in select enduring experiential properties in the real
estate industry. We focus on real estate venues that create value
by facilitating out of home leisure and recreation experiences
where consumers choose to spend their discretionary time and money.
We have total assets of approximately $5.6 billion (after
accumulated depreciation of approximately $1.6 billion) 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 our guidance, our capital resources and liquidity,
our pursuit of growth opportunities, the timing of transaction
closings and investment spending, our ongoing negotiations to exit
from certain joint ventures or the ultimate terms of any such exit,
our expected cash flows, the performance of our customers, our
expected cash collections and our results of operations and
financial condition. The forward-looking statements presented
herein are based on the Company's current expectations.
Forward-looking statements involve numerous risks and
uncertainties, and you should not rely on them as predictions of
actual events. There is no assurance that 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250226436432/en/
EPR Properties Brian Moriarty, 816-472-1700 www.eprkc.com
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