x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Maryland
|
|
43-1790877
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
909 Walnut Street, Suite 200
Kansas City, Missouri
|
|
64106
|
(Address of principal executive offices)
|
|
(Zip Code)
|
•
|
Global economic uncertainty and disruptions in financial markets;
|
•
|
Reduction in discretionary spending by consumers;
|
•
|
Adverse changes in our credit ratings;
|
•
|
Fluctuations in interest rates;
|
•
|
Defaults in the performance of lease terms by our tenants;
|
•
|
Defaults by our customers and counterparties on their obligations owed to us;
|
•
|
A borrower's bankruptcy or default;
|
•
|
Our ability to renew maturing leases on terms comparable to prior leases and/or our ability to locate substitute lessees for these properties on economically favorable terms;
|
•
|
Risks of operating in the entertainment industry;
|
•
|
Our ability to compete effectively;
|
•
|
Risks associated with a single tenant representing a substantial portion of our lease revenues;
|
•
|
The ability of our public charter school tenants to comply with their charters and continue to receive funding from local, state and federal governments, the approval by applicable governing authorities of substitute operators to assume control of any failed public charter schools and our ability to negotiate the terms of new leases with such substitute tenants on acceptable terms;
|
•
|
The ability of our build-to-suit tenants to achieve sufficient operating results within expected timeframes and therefore have capacity to pay their agreed upon rent;
|
•
|
The ability of our early childhood education tenant, Children's Learning Adventure, to successfully transition our properties to one or more third party operators;
|
•
|
Risks associated with potential criminal proceedings against one of our waterpark mortgagors and certain related parties, which could negatively impact the likelihood of repayment of the related mortgage loans secured by the waterpark and other collateral;
|
•
|
Risks relating to our tenants' exercise of purchase options or borrowers' exercise of prepayment options related to our education properties;
|
•
|
Risks associated with our dependence on third-party managers to operate certain of our recreation anchored lodging properties;
|
•
|
Risks associated with our level of indebtedness;
|
•
|
Risks associated with use of leverage to acquire properties;
|
•
|
Financing arrangements that require lump-sum payments;
|
•
|
Our ability to raise capital;
|
•
|
Covenants in our debt instruments that limit our ability to take certain actions;
|
•
|
The concentration and lack of diversification of our investment portfolio;
|
•
|
Our continued qualification as a real estate investment trust for U.S. federal income tax purposes and related tax matters;
|
•
|
The ability of our subsidiaries to satisfy their obligations;
|
•
|
Financing arrangements that expose us to funding or purchase risks;
|
•
|
Our reliance on a limited number of employees, the loss of which could harm operations;
|
•
|
Risks associated with the employment of personnel by managers of our recreation anchored lodging properties;
|
•
|
Risks associated with security breaches and other disruptions;
|
•
|
Changes in accounting standards that may adversely affect our financial statements;
|
•
|
Fluctuations in the value of real estate income and investments;
|
•
|
Risks relating to real estate ownership, leasing and development, including local conditions such as an oversupply of space or a reduction in demand for real estate in the area, competition from other available space, whether tenants and users such as customers of our tenants consider a property attractive, changes in real estate taxes and other expenses, changes in market rental rates, the timing and costs associated with property improvements and rentals, changes in taxation or zoning laws or other governmental regulation, whether we are able to pass some or all of any increased operating costs through to tenants or other customers, and how well we manage our properties;
|
•
|
Our ability to secure adequate insurance and risk of potential uninsured losses, including from natural disasters;
|
•
|
Risks involved in joint ventures;
|
•
|
Risks in leasing multi-tenant properties;
|
•
|
A failure to comply with the Americans with Disabilities Act or other laws;
|
•
|
Risks of environmental liability;
|
•
|
Risks associated with the relatively illiquid nature of our real estate investments;
|
•
|
Risks with owning assets in foreign countries;
|
•
|
Risks associated with owning, operating or financing properties for which the tenants', mortgagors' or our operations may be impacted by weather conditions and climate change;
|
•
|
Risks associated with the development, redevelopment and expansion of properties and the acquisition of other real estate related companies;
|
•
|
Our ability to pay dividends in cash or at current rates;
|
•
|
Fluctuations in the market prices for our shares;
|
•
|
Certain limits on changes in control imposed under law and by our Declaration of Trust and Bylaws;
|
•
|
Policy changes obtained without the approval of our shareholders;
|
•
|
Equity issuances that could dilute the value of our shares;
|
•
|
Future offerings of debt or equity securities, which may rank senior to our common shares;
|
•
|
Risks associated with changes in foreign exchange rates; and
|
•
|
Changes in laws and regulations, including tax laws and regulations.
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
Item 1.
|
|
Financial Statements
|
|
|
Item 2.
|
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Item 3.
|
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Item 4.
|
|
Controls and Procedures
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 1.
|
|
Legal Proceedings
|
|
|
Item 1A.
|
|
Risk Factors
|
|
|
Item 2.
|
|
Unregistered Sale of Equity Securities and Use of Proceeds
|
|
|
Item 3.
|
|
Defaults Upon Senior Securities
|
|
|
Item 4.
|
|
Mine Safety Disclosures
|
|
|
Item 5.
|
|
Other Information
|
|
|
Item 6.
|
|
Exhibits
|
EPR PROPERTIES
Consolidated Balance Sheets
(Dollars in thousands except share data)
|
|||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Rental properties, net of accumulated depreciation of $920,409 and $883,174 at March 31, 2019 and December 31, 2018, respectively
|
$
|
5,072,298
|
|
|
$
|
5,024,057
|
|
Land held for development
|
28,080
|
|
|
34,177
|
|
||
Property under development
|
315,237
|
|
|
287,546
|
|
||
Operating lease right-of-use assets
|
211,299
|
|
|
—
|
|
||
Mortgage notes and related accrued interest receivable
|
527,627
|
|
|
517,467
|
|
||
Investment in direct financing leases, net
|
20,616
|
|
|
20,558
|
|
||
Investment in joint ventures
|
35,188
|
|
|
34,486
|
|
||
Cash and cash equivalents
|
11,116
|
|
|
5,872
|
|
||
Restricted cash
|
11,166
|
|
|
12,635
|
|
||
Accounts receivable
|
111,146
|
|
|
98,369
|
|
||
Other assets
|
87,458
|
|
|
96,223
|
|
||
Total assets
|
$
|
6,431,231
|
|
|
$
|
6,131,390
|
|
Liabilities and Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
117,746
|
|
|
$
|
168,463
|
|
Operating lease liabilities
|
235,612
|
|
|
—
|
|
||
Common dividends payable
|
28,306
|
|
|
26,765
|
|
||
Preferred dividends payable
|
6,034
|
|
|
6,034
|
|
||
Unearned rents and interest
|
85,012
|
|
|
79,051
|
|
||
Debt
|
3,045,742
|
|
|
2,986,054
|
|
||
Total liabilities
|
3,518,452
|
|
|
3,266,367
|
|
||
Equity:
|
|
|
|
||||
Common Shares, $.01 par value; 100,000,000 shares authorized; and 78,601,769 and 77,226,443 shares issued at March 31, 2019 and December 31, 2018, respectively
|
786
|
|
|
772
|
|
||
Preferred Shares, $.01 par value; 25,000,000 shares authorized:
|
|
|
|
||||
5,394,050 Series C convertible shares issued at March 31, 2019 and December 31, 2018; liquidation preference of $134,851,250
|
54
|
|
|
54
|
|
||
3,447,381 Series E convertible shares issued at March 31, 2019 and December 31, 2018; liquidation preference of $86,184,525
|
34
|
|
|
34
|
|
||
6,000,000 Series G shares issued at March 31, 2019 and December 31, 2018; liquidation preference of $150,000,000
|
60
|
|
|
60
|
|
||
Additional paid-in-capital
|
3,597,130
|
|
|
3,504,494
|
|
||
Treasury shares at cost: 3,118,490 and 2,878,587 common shares at March 31, 2019 and December 31, 2018, respectively
|
(146,906
|
)
|
|
(130,728
|
)
|
||
Accumulated other comprehensive income
|
8,397
|
|
|
12,085
|
|
||
Distributions in excess of net income
|
(546,776
|
)
|
|
(521,748
|
)
|
||
Total equity
|
$
|
2,912,779
|
|
|
$
|
2,865,023
|
|
Total liabilities and equity
|
$
|
6,431,231
|
|
|
$
|
6,131,390
|
|
EPR PROPERTIES
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands except per share data)
|
||||||||
|
Three Months Ended March 31,
|
|
||||||
|
2019
|
|
2018
|
|
||||
Rental revenue
|
$
|
150,723
|
|
|
$
|
132,924
|
|
|
Other income
|
344
|
|
|
630
|
|
|
||
Mortgage and other financing income
|
13,475
|
|
|
21,414
|
|
|
||
Total revenue
|
164,542
|
|
|
154,968
|
|
|
||
Property operating expense
|
15,793
|
|
|
7,564
|
|
|
||
General and administrative expense
|
12,130
|
|
|
12,324
|
|
|
||
Costs associated with loan refinancing or payoff
|
—
|
|
|
31,943
|
|
|
||
Interest expense, net
|
33,826
|
|
|
34,337
|
|
|
||
Transaction costs
|
5,123
|
|
|
609
|
|
|
||
Depreciation and amortization
|
39,743
|
|
|
37,684
|
|
|
||
Income before equity in income from joint ventures and other items
|
57,927
|
|
|
30,507
|
|
|
||
Equity in income from joint ventures
|
489
|
|
|
51
|
|
|
||
Gain on sale of real estate
|
6,328
|
|
|
—
|
|
|
||
Income before income taxes
|
64,744
|
|
|
30,558
|
|
|
||
Income tax benefit (expense)
|
605
|
|
|
(1,020
|
)
|
|
||
Net income
|
65,349
|
|
|
29,538
|
|
|
||
Preferred dividend requirements
|
(6,034
|
)
|
|
(6,036
|
)
|
|
||
Net income available to common shareholders of EPR Properties
|
$
|
59,315
|
|
|
$
|
23,502
|
|
|
Per share data attributable to EPR Properties common shareholders:
|
|
|
|
|
||||
Basic earnings per share data:
|
|
|
|
|
||||
Net income available to common shareholders
|
$
|
0.79
|
|
|
$
|
0.32
|
|
|
Diluted earnings per share data:
|
|
|
|
|
||||
Net income available to common shareholders
|
$
|
0.79
|
|
|
$
|
0.32
|
|
|
Shares used for computation (in thousands):
|
|
|
|
|
||||
Basic
|
74,679
|
|
|
74,146
|
|
|
||
Diluted
|
74,725
|
|
|
74,180
|
|
|
EPR PROPERTIES
Consolidated Statements of Comprehensive Income
(Unaudited)
(Dollars in thousands)
|
||||||||
|
|
|
|
|
||||
|
Three Months Ended March 31,
|
|
||||||
|
2019
|
|
2018
|
|
||||
Net income
|
$
|
65,349
|
|
|
$
|
29,538
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
||||
Foreign currency translation adjustment
|
3,810
|
|
|
(5,400
|
)
|
|
||
Change in net unrealized (loss) gain on derivatives
|
(7,498
|
)
|
|
9,398
|
|
|
||
Comprehensive income
|
$
|
61,661
|
|
|
$
|
33,536
|
|
|
EPR PROPERTIES
Consolidated Statements of Changes in Equity
Three Months Ended March 31, 2019 and 2018
(Unaudited)
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
|
EPR Properties Shareholders’ Equity
|
|
|
||||||||||||||||||||||||||||||
|
Common Stock
|
|
Preferred Stock
|
|
Additional
paid-in capital
|
|
Treasury
shares
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Distributions
in excess of
net income
|
|
Total
|
||||||||||||||||||||
|
Shares
|
|
Par
|
|
Shares
|
|
Par
|
|
|
||||||||||||||||||||||||
Balance at December 31, 2017
|
76,858,632
|
|
|
$
|
769
|
|
|
14,848,165
|
|
|
$
|
148
|
|
|
$
|
3,478,986
|
|
|
$
|
(121,591
|
)
|
|
$
|
12,483
|
|
|
$
|
(443,470
|
)
|
|
$
|
2,927,325
|
|
Issuance of nonvested shares, net
|
295,202
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3,971
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,974
|
|
|||||||
Purchase of common shares for vesting
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,116
|
)
|
|
—
|
|
|
—
|
|
|
(7,116
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,791
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,791
|
|
|||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,400
|
)
|
|
—
|
|
|
(5,400
|
)
|
|||||||
Change in unrealized gain on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,398
|
|
|
—
|
|
|
9,398
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,538
|
|
|
29,538
|
|
|||||||
Issuances of common shares
|
6,601
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
382
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
382
|
|
|||||||
Conversion of Series E Convertible Preferred shares to common shares
|
800
|
|
|
—
|
|
|
(1,734
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Dividends to common shareholders ($1.08 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80,263
|
)
|
|
(80,263
|
)
|
|||||||
Dividends to Series C preferred shareholders ($0.359375 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,940
|
)
|
|
(1,940
|
)
|
|||||||
Dividends to Series E preferred shareholders ($0.5625 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,939
|
)
|
|
(1,939
|
)
|
|||||||
Dividends to Series G preferred shareholders ($0.359375 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,156
|
)
|
|
(2,156
|
)
|
|||||||
Balance at March 31, 2018
|
77,161,235
|
|
|
$
|
772
|
|
|
14,846,431
|
|
|
$
|
148
|
|
|
$
|
3,487,130
|
|
|
$
|
(128,707
|
)
|
|
$
|
16,481
|
|
|
$
|
(500,230
|
)
|
|
$
|
2,875,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at December 31, 2018
|
77,226,443
|
|
|
$
|
772
|
|
|
14,841,431
|
|
|
$
|
148
|
|
|
$
|
3,504,494
|
|
|
$
|
(130,728
|
)
|
|
$
|
12,085
|
|
|
$
|
(521,748
|
)
|
|
$
|
2,865,023
|
|
Restricted share units issued to Trustees
|
1,156
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of nonvested shares, net
|
197,755
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
4,831
|
|
|
(403
|
)
|
|
—
|
|
|
—
|
|
|
4,430
|
|
|||||||
Purchase of common shares for vesting
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,499
|
)
|
|
—
|
|
|
—
|
|
|
(9,499
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,280
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,280
|
|
|||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,810
|
|
|
—
|
|
|
3,810
|
|
|||||||
Change in unrealized loss on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,498
|
)
|
|
—
|
|
|
(7,498
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,349
|
|
|
65,349
|
|
|||||||
Issuances of common shares
|
1,064,600
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
78,982
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,993
|
|
|||||||
Stock option exercises, net
|
111,815
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
5,543
|
|
|
(6,276
|
)
|
|
—
|
|
|
—
|
|
|
(732
|
)
|
|||||||
Dividends to common shareholders ($1.125 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84,343
|
)
|
|
(84,343
|
)
|
|||||||
Dividends to Series C preferred shareholders ($0.359375 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,939
|
)
|
|
(1,939
|
)
|
|||||||
Dividends to Series E preferred shareholders ($0.5625 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,939
|
)
|
|
(1,939
|
)
|
|||||||
Dividends to Series G preferred shareholders ($0.359375 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,156
|
)
|
|
(2,156
|
)
|
|||||||
Balance at March 31, 2019
|
78,601,769
|
|
|
$
|
786
|
|
|
14,841,431
|
|
|
$
|
148
|
|
|
$
|
3,597,130
|
|
|
$
|
(146,906
|
)
|
|
$
|
8,397
|
|
|
$
|
(546,776
|
)
|
|
$
|
2,912,779
|
|
EPR PROPERTIES
Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
|
|||||||
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
65,349
|
|
|
$
|
29,538
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Gain on sale of real estate
|
(6,328
|
)
|
|
—
|
|
||
Deferred income tax (benefit) expense
|
(609
|
)
|
|
428
|
|
||
Costs associated with loan refinancing or payoff
|
—
|
|
|
31,943
|
|
||
Equity in income from joint ventures
|
(489
|
)
|
|
(51
|
)
|
||
Distributions from joint ventures
|
112
|
|
|
116
|
|
||
Depreciation and amortization
|
39,743
|
|
|
37,684
|
|
||
Amortization of deferred financing costs
|
1,502
|
|
|
1,398
|
|
||
Amortization of above/below market leases and tenant allowances, net
|
(59
|
)
|
|
(417
|
)
|
||
Share-based compensation expense to management and Trustees
|
3,280
|
|
|
3,791
|
|
||
Decrease in operating lease assets and liabilities
|
445
|
|
|
—
|
|
||
(Increase) decrease in mortgage notes accrued interest receivable
|
(135
|
)
|
|
845
|
|
||
Decrease in accounts receivable
|
14,669
|
|
|
3,597
|
|
||
Increase in direct financing leases receivable
|
(58
|
)
|
|
(198
|
)
|
||
Increase in other assets
|
(5,673
|
)
|
|
(3,826
|
)
|
||
Increase (decrease) in accounts payable and accrued liabilities
|
4,684
|
|
|
(9,118
|
)
|
||
Increase in unearned rents and interest
|
5,951
|
|
|
13,234
|
|
||
Net cash provided by operating activities
|
122,384
|
|
|
108,964
|
|
||
Investing activities:
|
|
|
|
||||
Acquisition of and investments in rental properties and other assets
|
(93,322
|
)
|
|
(38,869
|
)
|
||
Proceeds from sale of real estate
|
37,810
|
|
|
—
|
|
||
Investment in unconsolidated joint ventures
|
(325
|
)
|
|
—
|
|
||
Investment in mortgage notes receivable
|
(10,998
|
)
|
|
(16,223
|
)
|
||
Proceeds from mortgage notes receivable paydowns
|
973
|
|
|
11,555
|
|
||
Investment in promissory notes receivable
|
(61
|
)
|
|
(7,677
|
)
|
||
Additions to properties under development
|
(61,910
|
)
|
|
(55,702
|
)
|
||
Net cash used by investing activities
|
(127,833
|
)
|
|
(106,916
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from debt facilities and senior unsecured notes
|
100,000
|
|
|
380,000
|
|
||
Principal payments on debt
|
(66,150
|
)
|
|
(281,684
|
)
|
||
Deferred financing fees paid
|
(40
|
)
|
|
(38
|
)
|
||
Costs associated with loan refinancing or payoff (cash portion)
|
—
|
|
|
(28,650
|
)
|
||
Net proceeds from issuance of common shares
|
74,323
|
|
|
303
|
|
||
Impact of stock option exercises, net
|
(732
|
)
|
|
—
|
|
||
Purchase of common shares for treasury for vesting
|
(9,499
|
)
|
|
(7,116
|
)
|
||
Dividends paid to shareholders
|
(88,748
|
)
|
|
(83,613
|
)
|
||
Net cash provided (used) by financing activities
|
9,154
|
|
|
(20,798
|
)
|
||
Effect of exchange rate changes on cash
|
70
|
|
|
(82
|
)
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
3,775
|
|
|
(18,832
|
)
|
||
Cash and cash equivalents and restricted cash at beginning of the period
|
18,507
|
|
|
58,986
|
|
||
Cash and cash equivalents and restricted cash at end of the period
|
$
|
22,282
|
|
|
$
|
40,154
|
|
Supplemental information continued on next page.
|
|
|
|
EPR PROPERTIES
Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
Continued from previous page.
|
|||||||
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Reconciliation of cash and cash equivalents and restricted cash:
|
|
|
|
||||
Cash and cash equivalents at beginning of the period
|
$
|
5,872
|
|
|
$
|
41,917
|
|
Restricted cash at beginning of the period
|
12,635
|
|
|
17,069
|
|
||
Cash and cash equivalents and restricted cash at beginning of the period
|
$
|
18,507
|
|
|
$
|
58,986
|
|
|
|
|
|
||||
Cash and cash equivalents at end of the period
|
$
|
11,116
|
|
|
$
|
24,514
|
|
Restricted cash at end of the period
|
11,166
|
|
|
15,640
|
|
||
Cash and cash equivalents and restricted cash at end of the period
|
$
|
22,282
|
|
|
$
|
40,154
|
|
|
|
|
|
||||
Supplemental schedule of non-cash activity:
|
|
|
|
||||
Transfer of property under development to rental properties
|
$
|
7,330
|
|
|
$
|
55,377
|
|
Issuance of nonvested shares and restricted share units at fair value, including nonvested shares issued for payment of bonuses
|
$
|
14,682
|
|
|
$
|
16,809
|
|
Conversion or reclassification of mortgage notes receivable to rental properties
|
$
|
—
|
|
|
$
|
155,185
|
|
Operating lease right-of-use assets
|
$
|
214,576
|
|
|
$
|
—
|
|
Operating lease liabilities
|
$
|
238,614
|
|
|
$
|
—
|
|
Sub-lessor straight-line rent receivable
|
$
|
24,454
|
|
|
$
|
—
|
|
Acquisition of real estate in exchange for assumption of debt at fair value
|
$
|
14,000
|
|
|
$
|
—
|
|
Assumption of debt
|
$
|
18,585
|
|
|
$
|
—
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
28,676
|
|
|
$
|
41,948
|
|
Cash paid during the period for income taxes
|
$
|
695
|
|
|
$
|
290
|
|
Interest cost capitalized
|
$
|
3,137
|
|
|
$
|
2,244
|
|
Decrease in accrued capital expenditures
|
$
|
(6,406
|
)
|
|
$
|
(4,278
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Buildings and improvements
|
$
|
4,667,681
|
|
|
$
|
4,593,159
|
|
Furniture, fixtures & equipment
|
99,613
|
|
|
97,463
|
|
||
Land
|
1,199,372
|
|
|
1,190,568
|
|
||
Leasehold interests
|
26,041
|
|
|
26,041
|
|
||
|
5,992,707
|
|
|
5,907,231
|
|
||
Accumulated depreciation
|
(920,409
|
)
|
|
(883,174
|
)
|
||
Total
|
$
|
5,072,298
|
|
|
$
|
5,024,057
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Receivable from tenants
|
$
|
6,779
|
|
|
$
|
12,158
|
|
Receivable from non-tenants
|
5,995
|
|
|
1,379
|
|
||
Receivable from Sullivan County Infrastructure Revenue Bonds
|
—
|
|
|
11,500
|
|
||
Straight-line rent receivable
(1)
|
98,372
|
|
|
73,332
|
|
||
Total
|
$
|
111,146
|
|
|
$
|
98,369
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Total minimum lease payments receivable
|
$
|
35,791
|
|
|
$
|
36,352
|
|
Estimated unguaranteed residual value of leased assets
|
16,509
|
|
|
16,509
|
|
||
Less deferred income
(1)
|
(31,684
|
)
|
|
(32,303
|
)
|
||
Investment in direct financing leases, net
|
$
|
20,616
|
|
|
$
|
20,558
|
|
|
|
|
|
|
Amount
|
||
Year:
|
|
||
2019
|
$
|
1,704
|
|
2020
|
2,333
|
|
|
2021
|
2,403
|
|
|
2022
|
2,475
|
|
|
2023
|
2,550
|
|
|
Thereafter
|
24,326
|
|
|
Total
|
$
|
35,791
|
|
Effect of Derivative Instruments on the Consolidated Statements of Changes in Equity and Income for the Three Months Ended March 31, 2019 and 2018
(Dollars in thousands)
|
||||||||
|
Three Months Ended March 31,
|
|
||||||
Description
|
2019
|
|
2018
|
|
||||
Cash Flow Hedges
|
|
|
|
|
||||
Interest Rate Swaps
|
|
|
|
|
||||
Amount of (Loss) Gain Recognized in AOCI on Derivative
|
$
|
(2,439
|
)
|
|
$
|
4,778
|
|
|
Amount of Income (Expense) Reclassified from AOCI into Earnings (1)
|
775
|
|
|
(13
|
)
|
|
||
Cross-Currency Swaps
|
|
|
|
|
||||
Amount of (Loss) Gain Recognized in AOCI on Derivative
|
(311
|
)
|
|
615
|
|
|
||
Amount of Income Reclassified from AOCI into Earnings (2)
|
134
|
|
|
554
|
|
|
||
|
|
|
|
|
||||
Net Investment Hedges
|
|
|
|
|
||||
Cross-Currency Swaps
|
|
|
|
|
||||
Amount of Loss Recognized in AOCI on Derivative
|
(3,839
|
)
|
|
—
|
|
|
||
Amount of Income Recognized in Earnings (2) (3)
|
138
|
|
|
—
|
|
|
||
Currency Forward Agreements
|
|
|
|
|
||||
Amount of Gain Recognized in AOCI on Derivative
|
—
|
|
|
4,546
|
|
|
||
Amount of Expense Reclassified from AOCI into Earnings (2)
|
—
|
|
|
—
|
|
|
||
|
|
|
|
|
||||
Total
|
|
|
|
|
||||
Amount of (Loss) Gain Recognized in AOCI on Derivatives
|
$
|
(6,589
|
)
|
|
$
|
9,939
|
|
|
Amount of Income Reclassified from AOCI into Earnings
|
909
|
|
|
541
|
|
|
||
Amount of Income Recognized in Earnings
|
138
|
|
|
—
|
|
|
||
|
|
|
|
|
||||
Interest expense, net in accompanying consolidated statements of income
|
33,826
|
|
|
34,337
|
|
|
||
Other income in accompanying consolidated statements of income
|
344
|
|
|
630
|
|
|
(1)
|
Included in "Interest expense, net" in the accompanying consolidated statements of income for the
three months ended March 31, 2019 and 2018
.
|
(2)
|
Included in "Other income" in the accompanying consolidated statements of income for the
three months ended March 31, 2019 and 2018
.
|
(3)
|
Amounts represent derivative gains excluded from the effectiveness testing.
|
Assets and Liabilities Measured at Fair Value on a Recurring Basis at
March 31, 2019 and December 31, 2018
(Dollars in thousands)
|
|||||||||||||||
Description
|
Quoted Prices in
Active Markets
for Identical
Assets (Level I)
|
|
Significant
Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
|
Assets Balance at
end of period
|
||||||||
March 31, 2019
|
|
|
|
|
|
|
|
||||||||
Cross-Currency Swaps*
|
$
|
—
|
|
|
$
|
1,993
|
|
|
$
|
—
|
|
|
$
|
1,993
|
|
Interest Rate Swap Agreements*
|
$
|
—
|
|
|
$
|
1,130
|
|
|
$
|
—
|
|
|
$
|
1,130
|
|
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Cross-Currency Swaps*
|
$
|
—
|
|
|
$
|
6,278
|
|
|
$
|
—
|
|
|
$
|
6,278
|
|
Interest Rate Swap Agreements*
|
$
|
—
|
|
|
$
|
4,344
|
|
|
$
|
—
|
|
|
$
|
4,344
|
|
|
Three Months Ended March 31, 2019
|
|
|||||||||
|
Income
(numerator)
|
|
Shares
(denominator)
|
|
Per Share
Amount
|
|
|||||
Basic EPS:
|
|
|
|
|
|
|
|||||
Net income
|
$
|
65,349
|
|
|
|
|
|
|
|||
Less: preferred dividend requirements
|
(6,034
|
)
|
|
|
|
|
|
||||
Net income available to common shareholders
|
$
|
59,315
|
|
|
74,679
|
|
|
$
|
0.79
|
|
|
Diluted EPS:
|
|
|
|
|
|
|
|||||
Net income available to common shareholders
|
$
|
59,315
|
|
|
74,679
|
|
|
|
|
||
Effect of dilutive securities:
|
|
|
|
|
|
|
|||||
Share options
|
—
|
|
|
46
|
|
|
|
|
|||
Net income available to common shareholders
|
$
|
59,315
|
|
|
74,725
|
|
|
$
|
0.79
|
|
|
|
Three Months Ended March 31, 2018
|
|
|||||||||
|
Income
(numerator) |
|
Shares
(denominator) |
|
Per Share
Amount |
|
|||||
Basic EPS:
|
|
|
|
|
|
|
|||||
Net income
|
$
|
29,538
|
|
|
|
|
|
|
|||
Less: preferred dividend requirements
|
(6,036
|
)
|
|
|
|
|
|
||||
Net income available to common shareholders
|
$
|
23,502
|
|
|
74,146
|
|
|
$
|
0.32
|
|
|
Diluted EPS:
|
|
|
|
|
|
|
|||||
Net income available to common shareholders
|
$
|
23,502
|
|
|
74,146
|
|
|
|
|
||
Effect of dilutive securities:
|
|
|
|
|
|
|
|||||
Share options
|
—
|
|
|
34
|
|
|
|
|
|||
Net income available to common shareholders
|
$
|
23,502
|
|
|
74,180
|
|
|
$
|
0.32
|
|
|
|
Number of
options
|
|
Option price
per share
|
|
Weighted avg.
exercise price
|
||||||||||||
Outstanding at December 31, 2018
|
234,875
|
|
|
$
|
19.02
|
|
|
—
|
|
|
$
|
76.63
|
|
|
$
|
51.98
|
|
Exercised
|
(111,815
|
)
|
|
19.02
|
|
|
—
|
|
|
61.79
|
|
|
49.58
|
|
|||
Granted
|
1,941
|
|
|
73.84
|
|
|
—
|
|
|
73.84
|
|
|
73.84
|
|
|||
Outstanding at March 31, 2019
|
125,001
|
|
|
$
|
19.02
|
|
|
—
|
|
|
$
|
76.63
|
|
|
$
|
54.47
|
|
Exercise price range
|
|
Options
outstanding
|
|
Weighted avg.
life remaining
|
|
Weighted avg.
exercise price
|
|
Aggregate intrinsic
value (in thousands)
|
||||||
$ 19.02 - 19.99
|
|
3,699
|
|
|
0.1
|
|
|
|
|
|
||||
20.00 - 29.99
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
30.00 - 39.99
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
40.00 - 49.99
|
|
33,020
|
|
|
2.8
|
|
|
|
|
|
||||
50.00 - 59.99
|
|
32,326
|
|
|
5.2
|
|
|
|
|
|
||||
60.00 - 69.99
|
|
51,800
|
|
|
5.9
|
|
|
|
|
|
||||
70.00 - 76.63
|
|
4,156
|
|
|
8.8
|
|
|
|
|
|
||||
|
|
125,001
|
|
|
4.8
|
|
|
$
|
54.47
|
|
|
$
|
2,804
|
|
Exercise price range
|
|
Options
outstanding
|
|
Weighted avg.
life remaining
|
|
Weighted avg.
exercise price
|
|
Aggregate intrinsic
value (in thousands)
|
||||||
$ 19.02 - 19.99
|
|
3,699
|
|
|
0.1
|
|
|
|
|
|
||||
20.00 - 29.99
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
30.00 - 39.99
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
40.00 - 49.99
|
|
33,020
|
|
|
2.8
|
|
|
|
|
|
||||
50.00 - 59.99
|
|
29,450
|
|
|
4.9
|
|
|
|
|
|
||||
60.00 - 69.99
|
|
51,800
|
|
|
5.9
|
|
|
|
|
|
||||
70.00 - 76.63
|
|
1,108
|
|
|
7.9
|
|
|
|
|
|
||||
|
|
119,077
|
|
|
4.6
|
|
|
$
|
53.89
|
|
|
$
|
2,740
|
|
|
Number of
shares
|
|
Weighted avg.
grant date
fair value
|
|
Weighted avg.
life remaining
|
|||
Outstanding at December 31, 2018
|
655,056
|
|
|
$
|
64.16
|
|
|
|
Granted
|
197,755
|
|
|
73.84
|
|
|
|
|
Vested
|
(337,910
|
)
|
|
64.61
|
|
|
|
|
Forfeited
|
(6,902
|
)
|
|
66.35
|
|
|
|
|
Outstanding at March 31, 2019
|
507,999
|
|
|
$
|
67.61
|
|
|
1.60
|
|
Number of
shares
|
|
Weighted avg.
grant date
fair value
|
|
Weighted avg.
life remaining
|
|||
Outstanding at December 31, 2018
|
23,571
|
|
|
$
|
61.25
|
|
|
|
Granted
|
1,156
|
|
|
69.11
|
|
|
|
|
Vested
|
—
|
|
|
—
|
|
|
|
|
Outstanding at March 31, 2019
|
24,727
|
|
|
$
|
61.62
|
|
|
0.17
|
Operating Data:
|
|
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||
|
|
Entertainment
|
Recreation
|
Education
|
Other
|
Corporate/Unallocated
|
Consolidated
|
||||||||||||
Rental revenue
|
|
$
|
80,513
|
|
$
|
40,529
|
|
$
|
26,707
|
|
$
|
2,974
|
|
$
|
—
|
|
$
|
150,723
|
|
Other income
|
|
10
|
|
61
|
|
—
|
|
—
|
|
273
|
|
344
|
|
||||||
Mortgage and other financing income
|
|
56
|
|
9,312
|
|
4,107
|
|
—
|
|
—
|
|
13,475
|
|
||||||
Total revenue
|
|
80,579
|
|
49,902
|
|
30,814
|
|
2,974
|
|
273
|
|
164,542
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Property operating expense
|
|
10,625
|
|
2,734
|
|
1,112
|
|
1,089
|
|
233
|
|
15,793
|
|
||||||
Total investment expenses
|
|
10,625
|
|
2,734
|
|
1,112
|
|
1,089
|
|
233
|
|
15,793
|
|
||||||
Net operating income - before unallocated items
|
|
69,954
|
|
47,168
|
|
29,702
|
|
1,885
|
|
40
|
|
148,749
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Reconciliation to Consolidated Statements of Income:
|
|
|
|
|
|||||||||||||||
General and administrative expense
|
|
|
|
|
(12,130
|
)
|
|||||||||||||
Interest expense, net
|
|
|
|
|
|
|
(33,826
|
)
|
|||||||||||
Transaction costs
|
|
|
|
|
|
|
(5,123
|
)
|
|||||||||||
Depreciation and amortization
|
|
|
|
(39,743
|
)
|
||||||||||||||
Equity in income from joint ventures
|
|
|
|
|
489
|
|
|||||||||||||
Gain on sale of real estate
|
|
|
|
6,328
|
|
||||||||||||||
Income tax benefit
|
|
|
|
605
|
|
||||||||||||||
Net income
|
|
|
|
65,349
|
|
||||||||||||||
Preferred dividend requirements
|
|
|
|
(6,034
|
)
|
||||||||||||||
Net income available to common shareholders of EPR Properties
|
$
|
59,315
|
|
Operating Data:
|
|
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended March 31, 2018
|
|||||||||||||||||
|
|
Entertainment
|
Recreation
|
Education
|
Other
|
Corporate/Unallocated
|
Consolidated
|
||||||||||||
Rental revenue
|
|
$
|
74,848
|
|
$
|
33,432
|
|
$
|
22,385
|
|
$
|
2,259
|
|
$
|
—
|
|
$
|
132,924
|
|
Other income
|
|
—
|
|
62
|
|
—
|
|
—
|
|
568
|
|
630
|
|
||||||
Mortgage and other financing income
|
|
802
|
|
13,705
|
|
6,907
|
|
—
|
|
—
|
|
21,414
|
|
||||||
Total revenue
|
|
75,650
|
|
47,199
|
|
29,292
|
|
2,259
|
|
568
|
|
154,968
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Property operating expense
|
|
6,229
|
|
33
|
|
829
|
|
314
|
|
159
|
|
7,564
|
|
||||||
Total investment expenses
|
|
6,229
|
|
33
|
|
829
|
|
314
|
|
159
|
|
7,564
|
|
||||||
Net operating income - before unallocated items
|
|
69,421
|
|
47,166
|
|
28,463
|
|
1,945
|
|
409
|
|
147,404
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Reconciliation to Consolidated Statements of Income:
|
|
|
|
|
|||||||||||||||
General and administrative expense
|
|
|
|
|
(12,324
|
)
|
|||||||||||||
Costs associated with loan refinancing or payoff
|
|
|
|
(31,943
|
)
|
||||||||||||||
Interest expense, net
|
|
|
|
|
|
|
(34,337
|
)
|
|||||||||||
Transaction costs
|
|
|
|
|
|
|
(609
|
)
|
|||||||||||
Depreciation and amortization
|
|
|
|
|
(37,684
|
)
|
|||||||||||||
Equity in income from joint ventures
|
|
|
|
51
|
|
||||||||||||||
Income tax expense
|
|
|
|
|
|
|
(1,020
|
)
|
|||||||||||
Net income
|
|
|
|
29,538
|
|
||||||||||||||
Preferred dividend requirements
|
|
|
(6,036
|
)
|
|||||||||||||||
Net income available to common shareholders of EPR Properties
|
$
|
23,502
|
|
|
|
March 31, 2019
|
|
December 31, 2018
(2)
|
||||||||||||
|
|
Operating leases
|
|
Sub-lessor operating ground leases
|
|
|
|
Operating leases
|
||||||||
|
|
Amount
(1)
|
|
Amount
(1)
|
|
Total
|
|
Amount
(1)
|
||||||||
Year:
|
|
|
|
|
|
|
|
|
||||||||
2019
|
|
$
|
398,100
|
|
|
$
|
16,712
|
|
|
$
|
414,812
|
|
|
$
|
520,139
|
|
2020
|
|
515,418
|
|
|
22,620
|
|
|
538,038
|
|
|
503,344
|
|
||||
2021
|
|
504,422
|
|
|
22,936
|
|
|
527,358
|
|
|
492,165
|
|
||||
2022
|
|
489,968
|
|
|
22,327
|
|
|
512,295
|
|
|
477,671
|
|
||||
2023
|
|
461,749
|
|
|
21,631
|
|
|
483,380
|
|
|
449,686
|
|
||||
Thereafter
|
|
4,092,159
|
|
|
239,519
|
|
|
4,331,678
|
|
|
3,953,717
|
|
||||
Total
|
|
$
|
6,461,816
|
|
|
$
|
345,745
|
|
|
$
|
6,807,561
|
|
|
$
|
6,396,722
|
|
|
|
March 31, 2019
|
|
December 31, 2018
(3)
|
||||||||||||
|
|
Ground Leases
(1)
|
|
Office lease
(2)
|
|
Ground Leases
|
|
Office lease
(2)
|
||||||||
Year:
|
|
|
|
|
|
|
|
|
||||||||
2019
|
|
$
|
17,125
|
|
|
$
|
642
|
|
|
$
|
22,867
|
|
|
$
|
856
|
|
2020
|
|
23,236
|
|
|
856
|
|
|
23,236
|
|
|
856
|
|
||||
2021
|
|
23,600
|
|
|
884
|
|
|
23,600
|
|
|
884
|
|
||||
2022
|
|
22,998
|
|
|
967
|
|
|
22,996
|
|
|
967
|
|
||||
2023
|
|
22,304
|
|
|
967
|
|
|
22,303
|
|
|
967
|
|
||||
Thereafter
|
|
257,454
|
|
|
2,658
|
|
|
257,446
|
|
|
2,658
|
|
||||
Total lease payments
|
|
$
|
366,717
|
|
|
$
|
6,974
|
|
|
$
|
372,448
|
|
|
$
|
7,188
|
|
Less: imputed interest
|
|
136,962
|
|
|
1,117
|
|
|
|
|
|
||||||
Present value of lease liabilities
|
|
$
|
229,755
|
|
|
$
|
5,857
|
|
|
|
|
|
|
|
|
|
As of
|
||
|
|
Classification
|
|
March 31, 2019
|
||
Assets:
|
|
|
|
|
||
Operating ground lease assets
|
|
Operating lease right-of-use assets
|
|
$
|
205,626
|
|
Office lease asset
|
|
Operating lease right-of-use assets
|
|
5,673
|
|
|
Sub-lessor straight-line rent receivable
|
|
Accounts receivable
|
|
24,638
|
|
|
Total leased assets
|
|
|
|
$
|
235,937
|
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
||
Operating ground lease liabilities
|
|
Operating lease liabilities
|
|
$
|
229,755
|
|
Office lease liability
|
|
Operating lease liabilities
|
|
5,857
|
|
|
Total lease liabilities
|
|
|
|
$
|
235,612
|
|
|
|
|
|
|
||
|
|
Classification
|
|
Three Months Ended March 31, 2019
|
||
Lease Cost
|
|
|
|
|
||
Operating ground lease cost
|
|
Property operating expense
|
|
$
|
5,938
|
|
Operating office lease cost
|
|
General and administrative expense
|
|
230
|
|
|
|
|
|
|
|
||
Sublease income
|
|
Rental revenue
|
|
$
|
(5,723
|
)
|
Net lease cost
|
|
|
|
$
|
445
|
|
•
|
Our Entertainment segment included investments in
157
megaplex theatre properties,
seven
entertainment retail centers (which include seven additional megaplex theatre properties) and
11
family entertainment centers.
Our portfolio of owned entertainment properties consisted of
13.7 million
square feet and was
99%
leased, including megaplex theatres that were
100%
leased.
|
•
|
Our Recreation segment included investments in
12
ski areas,
20
attractions,
34
golf entertainment complexes and
13
other recreation facilities. Our portfolio of owned recreation properties was
100%
leased.
|
•
|
Our Education segment included investments in
56
public charter school properties,
69
early education centers and
15
private schools. Our portfolio of owned education properties consisted of
4.6 million
square feet and was
98%
leased.
|
•
|
Our Other segment consisted primarily of land under ground lease, property under development and land held for development related to the Resorts World Catskills project in Sullivan County, New York.
|
|
Three Months Ended March 31,
|
|
|
||||||
|
2019
|
2018
|
Increase
|
|
|||||
Total revenue (1)
|
$
|
164.5
|
|
$
|
155.0
|
|
6
|
%
|
|
Net income available to common shareholders per diluted share (2)
|
0.79
|
|
0.32
|
|
147
|
%
|
|
||
FFOAA per diluted share (3)
|
1.36
|
|
1.26
|
|
8
|
%
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||
Operating Segment
|
|
Total Investment Spending
|
|
New Development
|
|
Re-development
|
|
Asset Acquisition
|
|
Mortgage Notes or Notes Receivable
|
|
Investment in Joint Ventures
|
||||||||||||
Entertainment
|
|
$
|
117,895
|
|
|
$
|
5,606
|
|
|
$
|
18,979
|
|
|
$
|
93,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Recreation
|
|
44,187
|
|
|
42,611
|
|
|
410
|
|
|
—
|
|
|
61
|
|
|
1,105
|
|
||||||
Education
|
|
12,319
|
|
|
7,845
|
|
|
—
|
|
|
—
|
|
|
4,474
|
|
|
—
|
|
||||||
Other
|
|
193
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total Investment Spending
|
|
$
|
174,594
|
|
|
$
|
56,255
|
|
|
$
|
19,389
|
|
|
$
|
93,310
|
|
|
$
|
4,535
|
|
|
$
|
1,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended March 31, 2018
|
||||||||||||||||||||||||
Operating Segment
|
|
Total Investment Spending
|
|
New Development
|
|
Re-development
|
|
Asset Acquisition
|
|
Mortgage Notes or Notes Receivable
|
|
Investment in Joint Ventures
|
||||||||||||
Entertainment
|
|
$
|
25,505
|
|
|
$
|
10,147
|
|
|
$
|
7,863
|
|
|
$
|
7,495
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Recreation
|
|
61,977
|
|
|
43,061
|
|
|
20
|
|
|
7,812
|
|
|
11,084
|
|
|
—
|
|
||||||
Education
|
|
21,129
|
|
|
9,397
|
|
|
—
|
|
|
8,416
|
|
|
3,316
|
|
|
—
|
|
||||||
Other
|
|
29
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total Investment Spending
|
|
$
|
108,640
|
|
|
$
|
62,634
|
|
|
$
|
7,883
|
|
|
$
|
23,723
|
|
|
$
|
14,400
|
|
|
$
|
—
|
|
|
|
Three Months Ended March 31,
|
|
Increase
|
||||||||
|
|
2019
|
|
2018
|
|
|
||||||
Minimum rent
(1)
|
|
$
|
140,727
|
|
|
$
|
125,712
|
|
|
$
|
15,015
|
|
Percentage rent
|
|
1,355
|
|
|
1,259
|
|
|
96
|
|
|||
Straight-line rent
|
|
2,414
|
|
|
1,874
|
|
|
540
|
|
|||
Tenant reimbursements
(2)
|
|
6,134
|
|
|
3,991
|
|
|
2,143
|
|
|||
Other rental revenue
|
|
93
|
|
|
88
|
|
|
5
|
|
|||
Total Rental Revenue
|
|
$
|
150,723
|
|
|
$
|
132,924
|
|
|
$
|
17,799
|
|
•
|
Common shares outstanding of 75,483,279 multiplied by the last reported sales price of our common shares on the NYSE of $76.90 per share, or $5.8 billion;
|
•
|
Aggregate liquidation value of our Series C cumulative convertible preferred shares of $134.9 million;
|
•
|
Aggregate liquidation value of our Series E cumulative convertible preferred shares of $86.2 million;
|
•
|
Aggregate liquidation value of our Series G redeemable preferred shares of $150.0 million; and
|
•
|
Net debt of
$3.1 billion
.
|
|
Three Months Ended March 31,
|
|
||||||
|
2019
|
|
2018
|
|
||||
FFO:
|
|
|
|
|
||||
Net income available to common shareholders of EPR Properties
|
$
|
59,315
|
|
|
$
|
23,502
|
|
|
Gain on sale of real estate
|
(6,328
|
)
|
|
—
|
|
|
||
Real estate depreciation and amortization
|
39,514
|
|
|
37,464
|
|
|
||
Allocated share of joint venture depreciation
|
555
|
|
|
58
|
|
|
||
FFO available to common shareholders of EPR Properties
|
$
|
93,056
|
|
|
$
|
61,024
|
|
|
|
|
|
|
|
||||
FFO available to common shareholders of EPR Properties
|
$
|
93,056
|
|
|
$
|
61,024
|
|
|
Add: Preferred dividends for Series C preferred shares
|
1,939
|
|
|
—
|
|
|
||
Add: Preferred dividends for Series E preferred shares
|
1,939
|
|
|
—
|
|
|
||
Diluted FFO available to common shareholders of EPR Properties
|
$
|
96,934
|
|
|
$
|
61,024
|
|
|
FFOAA:
|
|
|
|
|
||||
FFO available to common shareholders of EPR Properties
|
$
|
93,056
|
|
|
$
|
61,024
|
|
|
Costs associated with loan refinancing or payoff
|
—
|
|
|
31,943
|
|
|
||
Transaction costs
|
5,123
|
|
|
609
|
|
|
||
Termination fee included in gain on sale
|
5,001
|
|
|
—
|
|
|
||
Deferred income tax (benefit) expense
|
(609
|
)
|
|
428
|
|
|
||
FFOAA available to common shareholders of EPR Properties
|
$
|
102,571
|
|
|
$
|
94,004
|
|
|
FFOAA available to common shareholders of EPR Properties
|
$
|
102,571
|
|
|
$
|
94,004
|
|
|
Add: Preferred dividends for Series C preferred shares
|
1,939
|
|
|
1,940
|
|
|
||
Add: Preferred dividends for Series E preferred shares
|
1,939
|
|
|
1,939
|
|
|
||
Diluted FFOAA available to common shareholders of EPR Properties
|
$
|
106,449
|
|
|
$
|
97,883
|
|
|
AFFO:
|
|
|
|
|
||||
FFOAA available to common shareholders of EPR Properties
|
$
|
102,571
|
|
|
$
|
94,004
|
|
|
Non-real estate depreciation and amortization
|
229
|
|
|
220
|
|
|
||
Deferred financing fees amortization
|
1,502
|
|
|
1,398
|
|
|
||
Share-based compensation expense to management and Trustees
|
3,280
|
|
|
3,791
|
|
|
||
Amortization of above and below market leases, net and tenant allowances
|
(59
|
)
|
|
(417
|
)
|
|
||
Maintenance capital expenditures (1)
|
(297
|
)
|
|
(698
|
)
|
|
||
Straight-lined rental revenue
|
(2,414
|
)
|
|
(1,874
|
)
|
|
||
Non-cash portion of mortgage and other financing income
|
(1,014
|
)
|
|
(656
|
)
|
|
||
AFFO available to common shareholders of EPR Properties
|
$
|
103,798
|
|
|
$
|
95,768
|
|
|
|
|
|
|
|
||||
FFO per common share:
|
|
|
|
|
||||
Basic
|
$
|
1.25
|
|
|
$
|
0.82
|
|
|
Diluted
|
1.23
|
|
|
0.82
|
|
|
||
FFOAA per common share:
|
|
|
|
|
||||
Basic
|
$
|
1.37
|
|
|
$
|
1.27
|
|
|
Diluted
|
1.36
|
|
|
1.26
|
|
|
||
Shares used for computation (in thousands):
|
|
|
|
|
||||
Basic
|
74,679
|
|
|
74,146
|
|
|
||
Diluted
|
74,725
|
|
|
74,180
|
|
|
||
|
|
|
|
|
||||
Weighted average shares outstanding-diluted EPS
|
74,725
|
|
|
74,180
|
|
|
||
Effect of dilutive Series C preferred shares
|
2,145
|
|
|
2,098
|
|
|
||
Adjusted weighted average shares outstanding-diluted Series C
|
76,870
|
|
|
76,278
|
|
|
||
Effect of dilutive Series E preferred shares
|
1,622
|
|
|
1,598
|
|
|
||
Adjusted weighted average shares outstanding-diluted Series C and Series E
|
78,492
|
|
|
77,876
|
|
|
||
|
|
|
|
|
||||
Other financial information:
|
|
|
|
|
||||
Dividends per common share
|
$
|
1.125
|
|
|
$
|
1.080
|
|
|
(1)
|
Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions.
|
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net Debt:
|
|
|
|
||||
Debt
|
$
|
3,045,742
|
|
|
$
|
3,131,437
|
|
Deferred financing costs, net
|
32,838
|
|
|
28,558
|
|
||
Cash and cash equivalents
|
(11,116
|
)
|
|
(24,514
|
)
|
||
Net Debt
|
$
|
3,067,464
|
|
|
$
|
3,135,481
|
|
|
|
|
|
||||
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
EBITDAre and Adjusted EBITDA:
|
|
|
|
||||
Net income
|
$
|
65,349
|
|
|
$
|
29,538
|
|
Interest expense, net
|
33,826
|
|
|
34,337
|
|
||
Income tax (benefit) expense
|
(605
|
)
|
|
1,020
|
|
||
Depreciation and amortization
|
39,743
|
|
|
37,684
|
|
||
Gain on sale of real estate
|
(6,328
|
)
|
|
—
|
|
||
Costs associated with loan refinancing or payoff
|
—
|
|
|
31,943
|
|
||
Equity in income from joint ventures
|
(489
|
)
|
|
(51
|
)
|
||
EBITDAre (for the quarter)
|
$
|
131,496
|
|
|
$
|
134,471
|
|
|
|
|
|
||||
Transaction costs
|
5,123
|
|
|
609
|
|
||
Prepayment fees
|
(900
|
)
|
|
—
|
|
||
Adjusted EBITDA (for the quarter)
|
$
|
135,719
|
|
|
$
|
135,080
|
|
|
|
|
|
||||
Adjusted EBITDA (1)
|
$
|
542,876
|
|
|
$
|
540,320
|
|
|
|
|
|
||||
Net Debt/Adjusted EBITDA Ratio
|
5.7
|
|
|
5.8
|
|
||
|
|
|
|
Period
|
|
Total Number of Shares Purchased
|
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
January 1 through January 31, 2019 common stock
|
|
153,654
|
|
(1)
|
|
$
|
65.63
|
|
|
—
|
|
|
$
|
—
|
|
February 1 through February 28, 2019 common stock
|
|
889
|
|
(1)
|
|
73.74
|
|
|
—
|
|
|
—
|
|
||
March 1 through March 31, 2019 common stock
|
|
4,663
|
|
(2)
|
|
76.47
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
159,206
|
|
|
|
$
|
65.99
|
|
|
—
|
|
|
$
|
—
|
|
|
|
EPR Properties
|
||
|
|
|
|
|
Dated:
|
April 30, 2019
|
By
|
|
/s/ Gregory K. Silvers
|
|
|
|
|
Gregory K. Silvers, President and Chief Executive
Officer (Principal Executive Officer)
|
|
|
|
|
|
Dated:
|
April 30, 2019
|
By
|
|
/s/ Tonya L. Mater
|
|
|
|
|
Tonya L. Mater, Vice President and Chief Accounting Officer (Principal Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of EPR Properties;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
Date:
|
April 30, 2019
|
/s/ Gregory K. Silvers
|
|
|
Gregory K. Silvers
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of EPR Properties;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
Date:
|
April 30, 2019
|
/s/ Mark A. Peterson
|
|
|
Mark A. Peterson
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
|
|
|
/s/ Gregory K. Silvers
|
|
Gregory K. Silvers
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
|
|
|
/s/ Mark A. Peterson
|
|
Mark A. Peterson
Executive Vice President, Chief Financial Officer
and Treasurer (Principal Financial
Officer)
|