EPR Properties Reports First Quarter 2018 Results
Company Reports Record Quarterly Revenue and Increases 2018 Earnings Guidance
EPR Properties (NYSE:EPR) today announced operating results for the first quarter ended March 31, 2018.
Three Months Ended March 31, 2018
- Total revenue was $155.0 million for the first quarter of 2018, representing a 20% increase from
$129.1 million for the same quarter in 2017.
- Net income available to common shareholders was $23.5 million, or $0.32 per diluted common share, for
the first quarter of 2018 compared to $48.0 million, or $0.75 per diluted common share, for the same quarter in 2017.
- Funds From Operations (FFO) (a non-GAAP financial measure) for the first quarter of 2018 was $61.0
million, or $0.82 per diluted common share, compared to $73.9 million, or $1.15 per diluted common share, for the same period in
2017.
- FFO as adjusted (a non-GAAP financial measure) for the first quarter of 2018 was $94.0 million, or
$1.26 per diluted common share, compared to $76.5 million, or $1.19 per diluted common share, for the same quarter in 2017,
representing a 6% increase in per share results.
“In the first quarter, we delivered record revenues and have increased our earnings guidance for the year,” stated Company
President and CEO Greg Silvers. “We are also effectively executing on our strategy of recycling capital to fund our investments. To
that end, subsequent to the end of the quarter, we realized a very attractive yield from the Boyne mortgage repayment due to the
upside consideration we included as part of the deal structure. We remain focused on disciplined capital allocation by recycling
capital within our portfolio to pursue accretive investments.”
A reconciliation of FFO to FFO as adjusted follows (unaudited, dollars in thousands, except per share amounts):
| |
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2018 |
|
2017 |
|
|
|
|
Amount |
|
FFO/share |
|
Amount |
|
FFO/share |
| FFO available to common shareholders |
|
|
|
$ |
61,024 |
|
|
$ |
0.82 |
|
|
$ |
73,894 |
|
|
$ |
1.15 |
|
| Costs associated with loan refinancing or payoff |
|
|
|
31,943 |
|
|
0.43 |
|
|
5 |
|
|
— |
|
| Transaction costs |
|
|
|
609 |
|
|
0.01 |
|
|
57 |
|
|
— |
|
| Termination fee included in gain on sale |
|
|
|
— |
|
|
— |
|
|
1,920 |
|
|
0.03 |
|
| Deferred income tax expense |
|
|
|
428 |
|
|
0.01 |
|
|
634 |
|
|
0.01 |
|
| Impact of Series C and Series E dilution |
|
|
|
— |
|
|
(0.01 |
) |
|
— |
|
|
— |
|
| FFO as adjusted available to common shareholders |
|
|
|
$ |
94,004 |
|
|
$ |
1.26 |
|
|
$ |
76,510 |
|
|
$ |
1.19 |
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends declared per common share |
|
|
|
|
|
$ |
1.08 |
|
|
|
|
$ |
1.02 |
|
| FFO as adjusted available to common shareholders payout ratio |
|
|
|
|
|
86 |
% |
|
|
|
86 |
% |
| |
Portfolio Update
The Company's investment portfolio (excluding property under development) consisted of the following at March 31, 2018:
- The Entertainment segment included investments in 149 megaplex theatre properties, seven
entertainment retail centers (which include seven additional megaplex theatre properties) and 11 family entertainment centers.
The Company’s portfolio of owned entertainment properties consisted of 13.2 million square feet and was 99% leased, including
megaplex theatres that were 100% leased.
- The Recreation segment included investments in 25 ski areas, 20 attractions, 31 golf entertainment
complexes and ten other recreation facilities. The Company’s portfolio of owned recreation properties was 100% leased.
- The Education segment included investments in 65 public charter schools, 67 early education centers
and 14 private schools. The Company’s portfolio of owned education properties consisted of 4.7 million square feet and was 98%
leased.
- The Other segment consisted primarily of the land under ground lease, property under development and
land held for development related to the Resorts World Catskills casino and resort project in Sullivan County, New York.
The combined owned portfolio consisted of 21.0 million square feet and was 99% leased. As of March 31, 2018, the Company also
had a total of $249.9 million invested in property under development.
Investment Update
The Company's investment spending for the three months ended March 31, 2018 totaled $108.6 million, and included investments in
each of its primary operating segments:
- Entertainment investment spending during the three months ended March 31, 2018 totaled $25.5 million,
including spending on build-to-suit development and redevelopment of megaplex theatres, entertainment retail centers and family
entertainment centers, as well as a $7.5 million megaplex theatre acquisition.
- Recreation investment spending during the three months ended March 31, 2018 totaled $62.0 million,
including investment spending on build-to-suit development of golf entertainment complexes and attractions, redevelopment of ski
areas, a $7.8 million acquisition of a recreation facility and an investment of $10.3 million in a mortgage note secured by one
other recreation facility.
- Education investment spending during the three months ended March 31, 2018 totaled $21.1 million,
including spending on build-to-suit development and redevelopment of public charter schools, early education centers and private
schools, as well as $8.4 million on two early education center acquisitions.
On February 16, 2018, a borrower exercised its put option to convert its mortgage note agreement, totaling $142.9 million and
secured by 28 education facilities including both early education and private school properties, to a lease agreement. As a result,
the Company recorded the rental property at the carrying value, which approximated fair value, of the mortgage note on the
conversion date and allocated this cost on a relative fair value basis. The properties are leased pursuant to a triple-net master
lease with a 23-year remaining term.
Capital Recycling
On May 7, 2018, Boyne USA, Inc. (Boyne) purchased seven resort and attraction assets from Och-Ziff Real Estate (OZRE). These
properties partially secure the Company’s mortgage note receivable due from OZRE with a carrying value of $249.2 million at March
31, 2018. Following the acquisition by Boyne, OZRE made a partial prepayment to the Company of approximately $175.4 million on this
mortgage note receivable, leaving a carrying value of approximately $73.8 million that is secured by the remaining six ski
properties. In connection with the partial prepayment of this note, the Company will recognize a prepayment fee totaling
approximately $45.0 million during the second quarter of 2018.
Balance Sheet Update
The Company had a net debt to adjusted EBITDA ratio (a non-GAAP financial measure) of 5.80x at March 31, 2018. This ratio was
outside of the Company's targeted range of 4.6x to 5.6x for this measure, however, the Company has reduced its net debt subsequent
to March 31, 2018 in conjunction with the OZRE partial prepayment described above and anticipates additional dispositions over the
remainder of 2018. These dispositions are expected to have the impact of reducing this ratio.
The Company had $24.5 million of unrestricted cash on hand and $570.0 million outstanding under its $1.0 billion unsecured
revolving credit facility at March 31, 2018.
On February 28, 2018, the Company redeemed all of its outstanding 7.75% Senior Notes due July 15, 2020. The notes were redeemed
at a price equal to the principal amount of $250.0 million plus a premium calculated pursuant to the terms of the indenture of
$28.6 million, together with accrued and unpaid interest of $2.3 million. In connection with the redemption, the Company recorded a
non-cash write off of $3.3 million in deferred financing costs. Additionally, the Company prepaid in full a mortgage note payable
totaling $11.7 million with an annual interest rate of 6.19%, which was secured by one theatre property. Subsequent to these
transactions, the Company has no debt maturities until 2022.
Subsequent to March 31, 2018, the Company issued $400.0 million in senior unsecured notes due April 15, 2028. The notes bear
interest at an annual rate of 4.95%. The Company used the net proceeds from the note offering to pay down its unsecured revolving
credit facility.
Dividend Information
The Company declared regular monthly cash dividends during the first quarter of 2018 totaling $1.08 per common share. This
dividend represents an annualized dividend of $4.32 per common share, an increase of almost 6% over the prior year, and would be
the Company's eighth consecutive year with a significant annual dividend increase.
The Company also declared first quarter cash dividends of $0.359375 per share on its 5.75% Series C cumulative convertible
preferred shares, $0.5625 per share on its 9.00% Series E cumulative convertible preferred shares and $0.359375 per share on its
5.75% Series G cumulative redeemable preferred shares.
2018 Guidance
The Company is increasing its 2018 guidance for FFO as adjusted per diluted share to a range of $5.75 to $5.90 from a range of
$5.23 to $5.38. In addition, the Company is confirming its 2018 investment spending guidance of a range of $400.0 million to $700.0
million and its 2018 disposition proceeds guidance of a range of $350.0 million to $450.0 million.
FFO as adjusted guidance for 2018 is based on FFO per diluted share of $5.17 to $5.27 adjusted for estimated costs associated
with loan refinancing or payoff, transaction costs, termination fees related to public charter schools and deferred income tax
expense. FFO per diluted share is based on a net income per diluted share range of $3.44 to $3.59 less estimated gain on sale of
real estate of a range of $0.24 to $0.29 and the impact of Series C and Series E dilution of $0.08, plus estimated real estate
depreciation of $2.05 per diluted share (in accordance with the NAREIT definition of FFO).
Quarterly Supplemental
The Company's supplemental information package for the first quarter ended March 31, 2018 is available on the Company's website
at http://investors.eprkc.com/earnings-supplementals.
| |
|
EPR Properties
Consolidated Statements of Income
(Unaudited, dollars in thousands except per share data)
|
| |
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2018 |
|
2017 |
| Rental revenue |
|
|
|
$ |
128,933 |
|
|
$ |
107,037 |
|
| Tenant reimbursements |
|
|
|
3,991 |
|
|
3,749 |
|
| Other income |
|
|
|
630 |
|
|
692 |
|
| Mortgage and other financing income |
|
|
|
21,414 |
|
|
17,634 |
|
| Total revenue |
|
|
|
154,968 |
|
|
129,112 |
|
| Property operating expense |
|
|
|
7,564 |
|
|
6,350 |
|
| General and administrative expense |
|
|
|
12,324 |
|
|
11,057 |
|
| Costs associated with loan refinancing or payoff |
|
|
|
31,943 |
|
|
5 |
|
| Interest expense, net |
|
|
|
34,337 |
|
|
30,692 |
|
| Transaction costs |
|
|
|
609 |
|
|
57 |
|
| Depreciation and amortization |
|
|
|
37,684 |
|
|
28,077 |
|
| Income before equity in income from joint ventures and other items |
|
|
|
30,507 |
|
|
52,874 |
|
| Equity in income (loss) from joint ventures |
|
|
|
51 |
|
|
(8 |
) |
| Gain on sale of real estate |
|
|
|
— |
|
|
2,004 |
|
| Income before income taxes |
|
|
|
30,558 |
|
|
54,870 |
|
| Income tax expense |
|
|
|
(1,020 |
) |
|
(954 |
) |
| Net income |
|
|
|
29,538 |
|
|
53,916 |
|
| Preferred dividend requirements |
|
|
|
(6,036 |
) |
|
(5,952 |
) |
| Net income available to common shareholders of EPR Properties |
|
|
|
$ |
23,502 |
|
|
$ |
47,964 |
|
| Per share data attributable to EPR Properties common shareholders: |
|
|
|
|
|
|
| Basic earnings per share data: |
|
|
|
|
|
|
| Net income available to common shareholders |
|
|
|
$ |
0.32 |
|
|
$ |
0.75 |
|
| Diluted earnings per share data: |
|
|
|
|
|
|
| Net income available to common shareholders |
|
|
|
$ |
0.32 |
|
|
$ |
0.75 |
|
| Shares used for computation (in thousands): |
|
|
|
|
|
|
| Basic |
|
|
|
74,146 |
|
|
64,033 |
|
| Diluted |
|
|
|
74,180 |
|
|
64,102 |
|
| |
| |
|
EPR Properties
Condensed Consolidated Balance Sheets
(Unaudited, dollars in thousands)
|
| |
|
|
|
|
March 31, 2018 |
|
December 31, 2017 |
| Assets |
|
|
|
|
|
|
| Rental properties, net of accumulated depreciation of $776,404 and $741,334 at March
31, 2018 and December 31, 2017, respectively |
|
|
|
$ |
4,815,137 |
|
|
$ |
4,604,231 |
| Land held for development |
|
|
|
33,693 |
|
|
33,692 |
| Property under development |
|
|
|
249,931 |
|
|
257,629 |
| Mortgage notes and related accrued interest receivable |
|
|
|
819,837 |
|
|
970,749 |
| Investment in direct financing leases, net |
|
|
|
58,101 |
|
|
57,903 |
| Investment in joint ventures |
|
|
|
5,538 |
|
|
5,602 |
| Cash and cash equivalents |
|
|
|
24,514 |
|
|
41,917 |
| Restricted cash |
|
|
|
15,640 |
|
|
17,069 |
| Accounts receivable, net |
|
|
|
88,750 |
|
|
93,693 |
| Other assets |
|
|
|
127,725 |
|
|
109,008 |
| Total assets |
|
|
|
$ |
6,238,866 |
|
|
$ |
6,191,493 |
| Liabilities and Equity |
|
|
|
|
|
|
| Accounts payable and accrued liabilities |
|
|
|
$ |
117,583 |
|
|
$ |
136,929 |
| Dividends payable |
|
|
|
32,791 |
|
|
30,185 |
| Unearned rents and interest |
|
|
|
81,461 |
|
|
68,227 |
| Debt |
|
|
|
3,131,437 |
|
|
3,028,827 |
| Total liabilities |
|
|
|
3,363,272 |
|
|
3,264,168 |
| Total equity |
|
|
|
$ |
2,875,594 |
|
|
$ |
2,927,325 |
| Total liabilities and equity |
|
|
|
$ |
6,238,866 |
|
|
$ |
6,191,493 |
| |
| |
|
EPR Properties
Reconciliation of Non-GAAP Financial Measures
(Unaudited, dollars in thousands except per share data)
|
| |
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2018 |
|
2017 |
| FFO: (A) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income available to common shareholders of EPR Properties |
|
|
|
$ |
23,502 |
|
|
$ |
47,964 |
|
| Gain on sale of real estate |
|
|
|
— |
|
|
(2,004 |
) |
| Real estate depreciation and amortization |
|
|
|
37,464 |
|
|
27,880 |
|
| Allocated share of joint venture depreciation |
|
|
|
58 |
|
|
54 |
|
| FFO available to common shareholders of EPR Properties |
|
|
|
$ |
61,024 |
|
|
$ |
73,894 |
|
|
|
|
|
|
|
|
| FFO available to common shareholders of EPR Properties |
|
|
|
$ |
61,024 |
|
|
$ |
73,894 |
|
| Add: Preferred dividends for Series C preferred shares |
|
|
|
— |
|
|
1,941 |
|
| Diluted FFO available to common shareholders of EPR Properties |
|
|
|
$ |
61,024 |
|
|
$ |
75,835 |
|
|
|
|
|
|
|
|
| FFO per common share: |
|
|
|
|
|
|
| Basic |
|
|
|
$ |
0.82 |
|
|
$ |
1.15 |
|
| Diluted |
|
|
|
0.82 |
|
|
1.15 |
|
| Shares used for computation (in thousands): |
|
|
|
|
|
|
| Basic |
|
|
|
74,146 |
|
|
64,033 |
|
| Diluted |
|
|
|
74,180 |
|
|
64,102 |
|
|
|
|
|
|
|
|
| Weighted average shares outstanding-diluted EPS |
|
|
|
74,180 |
|
|
64,102 |
|
| Effect of dilutive Series C preferred shares |
|
|
|
— |
|
|
2,053 |
|
| Adjusted weighted average shares outstanding-diluted |
|
|
|
74,180 |
|
|
66,155 |
|
|
|
|
|
|
|
|
| Other financial information: |
|
|
|
|
|
|
| Straight-lined rental revenue |
|
|
|
$ |
1,874 |
|
|
$ |
5,051 |
|
| Dividends per common share |
|
|
|
$ |
1.08 |
|
|
$ |
1.02 |
|
| |
| |
|
(A)
|
|
NAREIT developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in
order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP and
management provides FFO herein because it believes this information is useful to investors in this regard. FFO is a widely
used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net
income available to common shareholders and earnings per share. Pursuant to the definition of FFO by the Board of Governors
of NAREIT, the Company calculates FFO as net income available to common shareholders, computed in accordance with GAAP,
excluding gains and losses from sales of depreciable operating properties and impairment losses of depreciable 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 FFO as adjusted. Management believes it is useful to provide FFO as adjusted as a
supplemental measure to GAAP net income available to common shareholders and earnings per share. FFO as adjusted is FFO plus
costs (gain) associated with loan refinancing or payoff, transaction costs, retirement severance expense, preferred share
redemption costs, termination fees associated with tenants' exercises of education properties buy-out options, impairment of
direct financing lease (allowance for lease loss portion) and provision for loan losses, and by subtracting gain on early
extinguishment of debt, gain (loss) on sale of land, gain on insurance recovery and deferred tax benefit (expense). FFO and
FFO as adjusted are non-GAAP financial measures. FFO and FFO as adjusted do not represent cash flows from operations as
defined by GAAP and are not indicative that cash flows are adequate to fund all cash needs and are not to be considered an
alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations, cash flows
or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO or FFO as adjusted the same way so
comparisons of each of these non-GAAP measures with other REITs may not be meaningful.
|
| |
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 FFOAA per share for the three months ended March 31, 2018. Therefore, the additional 2.1
million and 1.6 million 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 FFOAA per share for the three months ended March 31,
2018. The effect of the conversion of the 5.75% Series C convertible preferred shares and the 9.00% Series E cumulative convertible
preferred shares do not result in more dilution to per share results and are therefore not included in the calculation of diluted
FFO per share data for the three months ended March 31, 2018.
The conversion of 5.75% Series C cumulative convertible preferred shares would be dilutive to FFO and FFOAA per share for the
three months ended March 31, 2017. Therefore, the additional 2.1 million 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 and
diluted FFOAA per share for the three months ended March 31, 2017. The effect of the conversion of our 9.0% Series E cumulative
convertible preferred shares and the additional 1.6 million common shares that would result from the conversion do not result
in more dilution to per share results and are therefore not included in the calculation of diluted FFO and FFOAA per share data for
the three months ended March 31, 2017.
Net Debt to Adjusted EBITDA Ratio
Net Debt to Adjusted EBITDA Ratio is a supplemental measure derived from non-GAAP financial measures the Company uses to
evaluate its capital structure and the magnitude of its debt against its operating performance. The Company believes that investors
commonly use versions of 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 Net Debt to Adjusted
EBITDA Ratio may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Reconciliations of debt and net income (both reported in accordance with GAAP) to Net Debt, EBITDAre, Adjusted EBITDA, and Net Debt
to Adjusted EBITDA Ratio (each of which is a non-GAAP financial measure) are included in the following tables (unaudited, in
thousands):
| |
|
|
|
|
March 31, |
|
|
|
|
2018 |
|
2017 |
| Net Debt: (B) |
|
|
|
|
|
|
| Debt |
|
|
|
$ |
3,131,437 |
|
|
$ |
2,616,382 |
|
| Deferred financing costs, net |
|
|
|
28,558 |
|
|
28,231 |
|
| Cash and cash equivalents |
|
|
|
(24,514 |
) |
|
(14,446 |
) |
| Net Debt |
|
|
|
$ |
3,135,481 |
|
|
$ |
2,630,167 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2018 |
|
2017 |
| EBITDAre and Adjusted EBITDA: |
|
|
|
|
|
|
| Net income |
|
|
|
$ |
29,538 |
|
|
$ |
53,916 |
|
| Interest expense, net |
|
|
|
34,337 |
|
|
30,692 |
|
| Income tax expense |
|
|
|
1,020 |
|
|
954 |
|
| Depreciation and amortization |
|
|
|
37,684 |
|
|
28,077 |
|
| Gain on sale of real estate |
|
|
|
— |
|
|
(2,004 |
) |
| Costs associated with loan refinancing or payoff |
|
|
|
31,943 |
|
|
5 |
|
| Equity in (income) loss from joint ventures |
|
|
|
(51 |
) |
|
8 |
|
| EBITDAre (for the quarter) (C) |
|
|
|
$ |
134,471 |
|
|
$ |
111,648 |
|
|
|
|
|
|
|
|
| Transaction costs |
|
|
|
609 |
|
|
57 |
|
| Adjusted EBITDA (for the quarter) |
|
|
|
$ |
135,080 |
|
|
$ |
111,705 |
|
|
|
|
|
|
|
|
| Adjusted EBITDA (1) (D) |
|
|
|
$ |
540,320 |
|
|
$ |
446,820 |
|
|
|
|
|
|
|
|
| Net Debt/Adjusted EBITDA Ratio |
|
|
|
5.80 |
|
|
5.89 |
|
| |
| (1) Adjusted EBITDA for the quarter is multiplied by four to calculate
an annual amount. |
| |
|
|
|
|
(B)
|
|
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.
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(C)
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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 expense (benefit), depreciation and amortization, gains
and losses from sales of depreciable operating properties, impairment losses of depreciable real estate, costs (gain)
associated with loan refinancing or payoff and adjustments for unconsolidated partnerships, joint ventures and other
affiliates.
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Management provides EBITDAre herein because it believes this information is useful to
investors as a supplemental performance measure as it can help facilitate comparisons of operating performance between periods
and with other REITs. EBITDAre does not represent cash flow from operations as defined by GAAP and is not indicative that cash
flows are adequate to fund all cash needs and is not to be considered an alternative to net income 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. |
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(D)
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Management uses Adjusted EBITDA in its analysis of the performance of the business and operations of
the Company. Management believes Adjusted EBITDA is useful to investors because it excludes various items that management
believes are not indicative of operating performance, and that it is an informative measure to use in computing various
financial ratios to evaluate the Company. The Company defines Adjusted EBITDA as EBITDAre (defined above) excluding gain on
insurance recovery, retirement severance expense, the provision for loan losses and transaction costs, and which is then
multiplied by four to get an annual amount.
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The Company's method of calculating Adjusted EBITDA may be different from methods
used by other REITs and, accordingly, may not be comparable to such other REITs. Adjusted EBITDA 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 for the purpose of evaluating the Company's performance or to cash flows as a measure of liquidity. |
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About EPR Properties
EPR Properties is a specialty real estate investment trust (REIT) that invests in properties in select market segments which
require unique industry knowledge, while offering the potential for stable and attractive returns. Our total investments exceed
$6.8 billion and our primary investment segments are Entertainment, Recreation and Education. We adhere to rigorous underwriting
and investing criteria centered on key industry and property level cash flow standards. We believe our focused niche approach
provides a competitive advantage, and the potential for higher growth and better yields.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
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
acquisition or disposition of properties, our capital resources, future expenditures for development projects, expected dividend
payments, and our results of operations and financial condition. Forward-looking statements involve numerous risks and
uncertainties and you should not rely on them as predictions of actual events. There is no assurance the events or
circumstances reflected in the forward-looking statements will occur. You can identify forward-looking statements by use of
words such as “will be,” “intend,” “continue,” “believe,” “may,” “expect,” “hope,” “anticipate,” “goal,” “forecast,” “pipeline,”
“estimates,” “offers,” “plans,” “would” or other similar expressions or other comparable terms or discussions of strategy, plans or
intentions contained or incorporated by reference herein. While references to commitments for investment spending are based
on present commitments and agreements of the Company, we cannot provide assurance that these transactions will be completed on
satisfactory terms. In addition, references to our budgeted amounts and guidance are forward-looking statements.
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
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