Table of Contents
Exhibit 99.2
Supplemental Operating and Financial Data
Third Quarter and Nine Months Ended September 30, 2010
Table of Contents
Entertainment Properties Trust
Supplemental Operating and Financial Data
Third Quarter and Nine Months Ended September 30, 2010
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CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS
With the exception of historical information, certain information contained or incorporated by reference herein constitutes forward-looking statements as such term is defined in 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”). The forward-looking statements may refer to our financial condition, results of operations, plans, objectives, acquisition or disposition of properties, future expenditures for development projects, capital resources, future financial performance and business. Forward-looking statements are not guarantees of performance. They involve numerous risks, uncertainties and assumptions. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. In addition, references to our budgeted amounts are forward looking statements. 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 “Risk Factors” in our most recent annual report on Form 10-K and, to the extent applicable, in 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 indicated herein 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. 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.
DEFINITIONS
See pages 30 and 31 for definitions of certain non-GAAP financial measures used in this document.
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Entertainment Properties Trust
Company Profile
The Company
Entertainment Properties Trust (“EPR” or the “Company”) is a self administered and self-managed real estate investment trust. EPR was formed in August 1997 as a Maryland real estate investment trust (“REIT”), and an initial public offering was completed on November 18, 1997. Since that time the Company has grown into one of the pre-eminent owners of entertainment-based real estate.
Company Strategy
EPR’s primary business objective is to enhance shareholder value by achieving predictable and increasing Funds from Operations (“FFO”) and dividends per share through the acquisition, development and financing of high-quality properties which meet our Five Star Investment Strategy. As a part of our growth strategies, we will consider acquiring or developing additional megaplex theatre properties, and acquiring or developing entertainment, entertainment-related, recreational or specialty properties. We will also consider acquiring or developing additional entertainment retail centers. We may also pursue opportunities to provide mortgage financing for these same property types in certain situations. In executing our growth strategies, we will employ moderate leverage. We have historically paid out approximately 75% of our FFO in the form of quarterly dividends. This allows investors to realize a portion of their returns on a current basis.
Five Star Investment Strategy
Our investments are evaluated against the following five criteria:
Inflection Opportunity: A generational renewal or restructuring change in an industry’s properties that creates an opportunity for insightful capital.
Enduring Value: Investment in real estate devoted to and improving upon long-lived activities.
Excellent Execution: Premium locations and investment executions that lead to market-dominant performance and create credit beyond the particular tenant.
Attractive Economics: Accretive initial returns along with growth in yield over the life of our investments in categories of meaningful size.
Advantageous Position: Sustainable competitive advantages based on knowledge, relationships or access to key investment elements.
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Entertainment Properties Trust
Investor Information
Senior Management
| David Brain | Greg Silvers | |
| President and Chief Executive Officer | Vice President and Chief Operating Officer | |
| Mark Peterson | Jerry Earnest | |
| Vice President and Chief Financial Officer | Vice President and Chief Investment Officer | |
| Mike Hirons | ||
| Vice President, Finance | ||
Company Information
| Corporate Headquarters | Trading Symbols | |
| 909 Walnut, Suite 200 | Common Stock: | |
| Kansas City, MO 64106 | EPR | |
| 888-EPR-REIT | Preferred Stock: | |
| www.eprkc.com | EPR-PrB | |
| EPR-PrC | ||
| Stock Exchange Listing | EPR-PrD | |
| New York Stock Exchange | EPR-PrE |
Equity Research Coverage
| J.P. Morgan | Anthony Palone | 212-622-6682 | ||
| RBC Capital Markets | Richard Moore | 440-715-2646 | ||
| Citi Global Markets | Michael Bilerman/Gregory Schweitzer | 212-816-4471 | ||
| Keybanc Capital Markets | Jordan Sadler | 917-368-2280 | ||
| FBR Capital Markets & Co. | Gabe Poggi | 703-469-1141 | ||
| BMO Capital Markets | Paul Adornato | 212-885-4170 | ||
| Kansas City Capital | Johnathan Braatz | 816-932-8019 | ||
| Janney Montgomery Scott | Andrew DiZio | 215-665-6439 |
Entertainment Properties Trust is followed by the analysts identified above. Please note that any opinions, estimates, forecasts or recommendations regarding Entertainment Properties Trust’s performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or recommendations of Entertainment Properties Trust or its management. Entertainment Properties Trust does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.
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Entertainment Properties Trust
Selected Financial Information
(Unaudited, dollars and shares in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating Information | ||||||||||||||||
Revenue from continuing operations | $ | 80,984 | $ | 65,368 | $ | 231,428 | $ | 192,519 | ||||||||
Net income available to common shareholders of Entertainment Properties Trust | 27,457 | (66,843 | ) | 58,017 | (28,912 | ) | ||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) (1) | 66,891 | (9,950 | ) | 182,685 | 97,165 | |||||||||||
Adjusted EBITDA (1) | 66,902 | 55,847 | 191,031 | 163,078 | ||||||||||||
Interest expense, net | 19,274 | 17,595 | 55,504 | 49,046 | ||||||||||||
Recurring principal payments | 6,286 | 6,295 | 20,761 | 18,579 | ||||||||||||
Capitalized interest | 103 | 83 | 278 | 517 | ||||||||||||
Straight-lined rental revenue | 426 | 642 | 1,241 | 1,787 | ||||||||||||
Dividends declared on preferred shares | 7,552 | 7,552 | 22,655 | 22,655 | ||||||||||||
Dividends declared on common shares | 30,248 | 23,748 | 88,345 | 69,193 | ||||||||||||
General and administrative expense | 4,076 | 3,511 | 13,797 | 11,796 | ||||||||||||
| September 30, | ||||||||||||||||
| 2010 | 2009 | |||||||||||||||
Balance Sheet Information | ||||||||||||||||
Total assets | 2,922,251 | 2,553,537 | ||||||||||||||
Total assets before depreciation (gross assets) | 3,208,643 | 2,800,962 | ||||||||||||||
Unencumbered real estate assets (2) | ||||||||||||||||
Number | 103 | 29 | ||||||||||||||
Gross book value | 1,505,916 | 264,951 | ||||||||||||||
Annualized stabilized NOI | 146,236 | 25,976 | ||||||||||||||
Total debt | 1,202,180 | 1,184,139 | ||||||||||||||
Equity | 1,624,450 | 1,297,213 | ||||||||||||||
Common shares outstanding | 46,535 | 36,515 | ||||||||||||||
Total market capitalization (using EOP closing price) | 3,627,826 | 2,846,997 | ||||||||||||||
Debt/total assets | 41 | % | 46 | % | ||||||||||||
Debt/total market capitalization | 33 | % | 42 | % | ||||||||||||
Debt/gross assets | 37 | % | 42 | % | ||||||||||||
Debt/Adjusted EBITDA (3) | 4.49 | 5.30 | ||||||||||||||
| (1) | See pages 30 and 31 for definitions. |
| (2) | Includes unencumbered rental properties, gross, direct financing lease, net and mortgage notes receivable; excludes property under development and undeveloped land. |
| (3) | Adjusted EBITDA is for the quarter annualized. See pages 30 and 31 for definitions. |
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Entertainment Properties Trust
Selected Balance Sheet Information
(Unaudited, dollars in thousands)
| 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | 4th Quarter 2009 | 3rd Quarter 2009 | 2nd Quarter 2009 | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
Rental properties: | ||||||||||||||||||||||||
Megaplex theatres and other retail | 2,085,187 | $ | 2,069,652 | $ | 2,087,909 | $ | 1,883,386 | $ | 1,756,539 | $ | 1,763,964 | |||||||||||||
Other | 221,629 | 221,676 | 229,894 | 229,881 | 217,022 | 216,508 | ||||||||||||||||||
Less: accumulated depreciation | (286,392 | ) | (273,286 | ) | (272,993 | ) | (258,638 | ) | (247,425 | ) | (235,472 | ) | ||||||||||||
Land held for development | 184,457 | 184,457 | 4,457 | 4,457 | 4,457 | 4,457 | ||||||||||||||||||
Property under development | 7,671 | 7,779 | 9,162 | 8,272 | 16,118 | 18,390 | ||||||||||||||||||
Mortgage notes receivable (1) | ||||||||||||||||||||||||
Waterpark | 168,545 | 168,545 | 165,452 | 163,298 | 163,298 | 162,613 | ||||||||||||||||||
Concord | — | — | 133,119 | 133,119 | 133,119 | 133,119 | ||||||||||||||||||
Toronto Dundas Square Project | — | — | — | 90,882 | 86,878 | 108,914 | ||||||||||||||||||
Metropolitan ski areas | 136,410 | 136,410 | 136,409 | 135,581 | 134,774 | 133,986 | ||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||
Investment in a direct financing lease, net | 225,187 | 216,419 | 215,196 | 169,850 | 168,884 | 167,945 | ||||||||||||||||||
Investment in joint ventures | 19,334 | 19,423 | 4,356 | 4,080 | 2,435 | 2,457 | ||||||||||||||||||
Cash and cash equivalents | 14,860 | 20,144 | 21,029 | 23,138 | 11,196 | 16,202 | ||||||||||||||||||
Restricted cash | 21,253 | 16,351 | 10,770 | 12,857 | 15,902 | 14,551 | ||||||||||||||||||
Accounts receivable, net | 36,364 | 33,483 | 34,834 | 30,727 | 29,147 | 26,239 | ||||||||||||||||||
Notes receivable (1) | 5,152 | 5,159 | 7,247 | 7,898 | 12,395 | 43,124 | ||||||||||||||||||
Other assets and intangible assets, net | 82,594 | 84,442 | 75,664 | 41,944 | 48,798 | 64,580 | ||||||||||||||||||
Total Assets | $ | 2,922,251 | $ | 2,910,654 | $ | 2,862,505 | $ | 2,680,732 | $ | 2,553,537 | $ | 2,641,577 | ||||||||||||
| Liabilities and Equity | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Accounts payable and accrued liabilities | 44,673 | 37,190 | $ | 48,375 | $ | 28,411 | $ | 28,608 | $ | 27,122 | ||||||||||||||
Common dividends payable | 30,248 | 30,222 | 27,875 | 27,880 | 23,748 | 22,732 | ||||||||||||||||||
Preferred dividends payable | 7,552 | 7,552 | 7,552 | 7,552 | 7,552 | 7,552 | ||||||||||||||||||
Unearned rents and interest | 13,148 | 9,206 | 5,087 | 7,509 | 12,277 | 12,836 | ||||||||||||||||||
Line of credit | 150,000 | 153,500 | 107,000 | 35,000 | 73,000 | 116,000 | ||||||||||||||||||
Long-term debt | 1,052,180 | 1,055,067 | 1,201,623 | 1,106,423 | 1,111,139 | 1,109,356 | ||||||||||||||||||
Total Liabilities | 1,297,801 | 1,292,737 | 1,397,512 | 1,212,775 | 1,256,324 | 1,295,598 | ||||||||||||||||||
Equity: | ||||||||||||||||||||||||
Common stock and additional paid in capital | 1,783,852 | 1,781,104 | 1,637,040 | 1,633,554 | 1,440,437 | 1,389,520 | ||||||||||||||||||
Preferred stock at par value | 167 | 167 | 167 | 167 | 167 | 167 | ||||||||||||||||||
Treasury stock | (39,069 | ) | (36,812 | ) | (36,804 | ) | (29,968 | ) | (27,698 | ) | (27,698 | ) | ||||||||||||
Loans to shareholders | (281 | ) | (281 | ) | (281 | ) | (1,925 | ) | (1,925 | ) | (1,925 | ) | ||||||||||||
Accumulated other comprehensive income | 29,988 | 21,188 | 24,027 | 18,961 | 16,985 | 9,951 | ||||||||||||||||||
Distributions in excess of net income | (178,255 | ) | (175,463 | ) | (153,278 | ) | (147,927 | ) | (126,760 | ) | (36,170 | ) | ||||||||||||
Entertainment Properties Trust shareholders’ equity | 1,596,402 | 1,589,903 | 1,470,871 | 1,472,862 | 1,301,206 | 1,333,845 | ||||||||||||||||||
Noncontrolling interests | 28,048 | 28,014 | (5,878 | ) | (4,905 | ) | (3,993 | ) | 12,134 | |||||||||||||||
Total Equity | 1,624,450 | 1,617,917 | 1,464,993 | 1,467,957 | 1,297,213 | 1,345,979 | ||||||||||||||||||
Total Liabilities and equity | $ | 2,922,251 | $ | 2,910,654 | $ | 2,862,505 | $ | 2,680,732 | $ | 2,553,537 | $ | 2,641,577 | ||||||||||||
| (1) | Includes related accrued interest receivable and is net of loan loss reserves. |
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Entertainment Properties Trust
Selected Operating Data
(Unaudited, dollars in thousands)
| 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | 4th Quarter 2009 | 3rd Quarter 2009 | 2nd Quarter 2009 | |||||||||||||||||||
Rental revenue and tenant reimbursements: | ||||||||||||||||||||||||
Theatres | $ | 49,888 | $ | 46,443 | $ | 44,629 | $ | 40,734 | $ | 40,064 | $ | 39,449 | ||||||||||||
Other retail | 13,755 | 13,927 | 10,973 | 9,165 | 9,003 | 8,171 | ||||||||||||||||||
Vineyards and wineries | 3,491 | 3,818 | 4,138 | 4,194 | 3,899 | 3,837 | ||||||||||||||||||
Metropolitan ski areas | 315 | 315 | 315 | 312 | 311 | 310 | ||||||||||||||||||
Mortgage and other financing income: | ||||||||||||||||||||||||
Public charter schools (1) | 6,604 | 6,567 | 6,208 | 5,203 | 5,293 | 5,031 | ||||||||||||||||||
Metropolitan ski areas | 3,398 | 3,398 | 3,358 | 3,338 | 3,318 | 3,298 | ||||||||||||||||||
Waterpark | 2,940 | 2,902 | 2,850 | 2,824 | 2,794 | 1,497 | ||||||||||||||||||
Concord | — | — | — | — | — | — | ||||||||||||||||||
Toronto Dundas Square Project | — | — | — | — | — | — | ||||||||||||||||||
Other | 358 | 146 | 176 | 242 | 245 | 1,398 | ||||||||||||||||||
Other income | 235 | 45 | 236 | 581 | 441 | 728 | ||||||||||||||||||
Total revenue | $ | 80,984 | $ | 77,561 | $ | 72,883 | $ | 66,593 | $ | 65,368 | $ | 63,719 | ||||||||||||
Property operating expense | 9,622 | 8,985 | 7,128 | 6,382 | 5,423 | 4,675 | ||||||||||||||||||
Other expense | 384 | 143 | 337 | 437 | 587 | 854 | ||||||||||||||||||
General and administrative expense | 4,076 | 4,633 | 5,089 | 3,373 | 3,511 | 4,239 | ||||||||||||||||||
Interest expense, net | 19,274 | 18,726 | 17,504 | 16,702 | 17,595 | 15,739 | ||||||||||||||||||
Costs associated with loan refinancing | — | 15,247 | — | — | — | 117 | ||||||||||||||||||
Depreciation and amortization | 13,464 | 13,004 | 11,697 | 10,515 | 10,868 | 10,180 | ||||||||||||||||||
Transaction costs | 11 | 111 | 7,524 | 3,165 | 40 | 37 | ||||||||||||||||||
Provision for loan losses | — | — | 700 | 5,197 | 65,757 | — | ||||||||||||||||||
Impairment charges | — | — | — | 6,357 | — | — | ||||||||||||||||||
Equity in income from joint ventures | 706 | 423 | 233 | 222 | 229 | 225 | ||||||||||||||||||
Gain on acquisition | — | — | 8,468 | — | — | — | ||||||||||||||||||
Income (loss) from continuing operations | 34,859 | 17,135 | $ | 31,605 | $ | 14,687 | $ | (38,184 | ) | $ | 28,103 | |||||||||||||
Loss from discontinued operations | (14 | ) | (1,453 | ) | (2,514 | ) | (1,321 | ) | (37,178 | ) | (2,107 | ) | ||||||||||||
Gain (loss) on sale of real estate from discontinued operations | 198 | (934 | ) | — | — | — | — | |||||||||||||||||
Net income (loss) | 35,043 | 14,748 | 29,091 | 13,366 | (75,362 | ) | 25,996 | |||||||||||||||||
Net loss (income) attributable to noncontrolling interests | (34 | ) | 840 | 984 | 899 | 16,071 | 1,708 | |||||||||||||||||
Preferred dividend requirements | (7,552 | ) | (7,552 | ) | (7,552 | ) | (7,550 | ) | (7,552 | ) | (7,552 | ) | ||||||||||||
Net income (loss) available to common shareholders of Entertainment Properties Trust | 27,457 | 8,036 | $ | 22,523 | $ | 6,715 | $ | (66,843 | ) | $ | 20,152 | |||||||||||||
| (1) | Represents income from owned assets under a direct financing lease and one note receivable. |
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Entertainment Propertiest Trust
Funds From Operations
(Unaudited, dollars in thousands except per share information)
| 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | 4th Quarter 2009 | 3rd Quarter 2009 | 2nd Quarter 2009 | |||||||||||||||||||
Funds From Operations (“FFO”) (1): | ||||||||||||||||||||||||
Net income (loss) available to common shareholders of Entertainment Properties Trust | $ | 27,457 | $ | 8,036 | $ | 22,523 | $ | 6,715 | $ | (66,843 | ) | $ | 20,152 | |||||||||||
Loss (gain) on sale of real estate | (198 | ) | 934 | — | — | — | — | |||||||||||||||||
Real estate depreciation and amortization | 13,334 | 13,527 | 12,273 | 11,143 | 11,728 | 11,642 | ||||||||||||||||||
Allocated share of joint venture depreciation | 81 | 67 | 65 | 66 | 66 | 66 | ||||||||||||||||||
Noncontrolling interest | — | (872 | ) | (1,033 | ) | (956 | ) | (16,118 | ) | (1,746 | ) | |||||||||||||
FFO available to common shareholders of Entertainment Properties Trust | $ | 40,674 | $ | 21,692 | $ | 33,828 | $ | 16,968 | $ | (71,167 | ) | $ | 30,114 | |||||||||||
FFO per common share attributable to Entertainment Properties Trust: | ||||||||||||||||||||||||
Basic | $ | 0.87 | $ | 0.48 | $ | 0.79 | $ | 0.43 | $ | (2.01 | ) | $ | 0.86 | |||||||||||
Diluted | 0.87 | 0.48 | 0.78 | 0.43 | (2.01 | ) | 0.86 | |||||||||||||||||
Shares used for computation (in thousands): | ||||||||||||||||||||||||
Basic | 46,511 | 44,869 | 42,850 | 39,641 | 35,445 | 34,970 | ||||||||||||||||||
Diluted | 46,809 | 45,214 | 43,141 | 39,901 | 35,445 | 34,992 | ||||||||||||||||||
| (1) | See pages 30 and 31 for definitions. |
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Entertainment Properties Trust
Adjusted Funds From Operations
(Unaudited, dollars in thousands except per share information)
| 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | 4th Quarter 2009 | 3rd Quarter 2009 | 2nd Quarter 2009 | |||||||||||||||||||
Adjusted Funds from Operations (“AFFO”) (1): | ||||||||||||||||||||||||
FFO available to common shareholders of Entertainment Properties Trust | $ | 40,674 | $ | 21,692 | $ | 33,828 | $ | 16,968 | $ | (71,167 | ) | $ | 30,114 | |||||||||||
Adjustments: | ||||||||||||||||||||||||
Non-cash impairment charges and provision for loan losses | — | — | 700 | 11,554 | 101,558 | — | ||||||||||||||||||
Transaction costs | 11 | 111 | 7,524 | 3,165 | 40 | 37 | ||||||||||||||||||
Non-real estate depreciation and amortization | 130 | 97 | 130 | 190 | 196 | 191 | ||||||||||||||||||
Deferred financing fees amortization | 1,122 | 1,390 | 1,236 | 1,111 | 1,103 | 693 | ||||||||||||||||||
Costs associated with loan refinancing | — | 15,620 | — | — | — | 117 | ||||||||||||||||||
Share-based compensation expense to management and trustees | 1,187 | 1,172 | 1,163 | 1,069 | 1,083 | 1,078 | ||||||||||||||||||
Maintenance capital expenditures (2) | (2,872 | ) | (163 | ) | (288 | ) | (108 | ) | (304 | ) | (526 | ) | ||||||||||||
Straight-lined rental revenue | (426 | ) | (469 | ) | (346 | ) | (696 | ) | (642 | ) | (584 | ) | ||||||||||||
Non-cash portion of mortgage and other financing income | (1,201 | ) | (1,257 | ) | (2,006 | ) | (1,855 | ) | (1,807 | ) | (1,791 | ) | ||||||||||||
Amortization of above market leases, net | 74 | 39 | 21 | — | — | — | ||||||||||||||||||
Gain on acquisition | — | — | (8,468 | ) | — | — | — | |||||||||||||||||
AFFO available to common shareholders of Entertainment Properties Trust | $ | 38,699 | $ | 38,232 | $ | 33,494 | $ | 31,398 | $ | 30,060 | $ | 29,329 | ||||||||||||
Weighted average shares outstanding-diluted FFO | 46,809 | 45,214 | 43,141 | 39,901 | 35,445 | 34,992 | ||||||||||||||||||
Other common stock equivalents excluded due to loss | — | — | — | — | 230 | — | ||||||||||||||||||
Weighted average shares outstanding-diluted AFFO | 46,809 | 45,214 | 43,141 | 39,901 | 35,675 | 34,992 | ||||||||||||||||||
AFFO per diluted common share | $ | 0.83 | $ | 0.85 | $ | 0.78 | $ | 0.79 | $ | 0.84 | $ | 0.84 | ||||||||||||
Dividends declared per common share | $ | 0.65 | $ | 0.65 | $ | 0.65 | $ | 0.65 | $ | 0.65 | $ | 0.65 | ||||||||||||
AFFO payout ratio (3) | 78 | % | 76 | % | 83 | % | 82 | % | 77 | % | 77 | % | ||||||||||||
| (1) | See pages 30 and 31 for definitions. |
| (2) | Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions. |
| (3) | AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share. |
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Entertainment Properties Trust
Capital Structure at September 30, 2010
(Unaudited, dollars in thousands)
Consolidated Debt
Principal Payments Due on Long-Term Debt:
| Mortgages (1) | Term Loans/Bond/Capital Lease | Credit | Senior | Weighted Avg | ||||||||||||||||||||||||||||
Year | Amortization | Maturities | Amortization | Maturities | Facility (2) | Notes | Total | Interest Rate | ||||||||||||||||||||||||
2010 | $ | 5,803 | $ | — | $ | 681 | $ | — | $ | — | $ | — | $ | 6,484 | 6.05 | % | ||||||||||||||||
2011 | 24,039 | — | 2,808 | 9,216 | — | — | 36,063 | 5.40 | % | |||||||||||||||||||||||
2012 | 24,935 | 65,293 | 2,970 | — | — | — | 93,198 | 6.46 | % | |||||||||||||||||||||||
2013 | 17,695 | 98,484 | 3,162 | — | 150,000 | — | 269,341 | 4.44 | % | |||||||||||||||||||||||
2014 | 12,298 | 138,492 | 3,354 | — | — | — | 154,144 | 6.29 | % | |||||||||||||||||||||||
2015 | 10,968 | 90,813 | 3,555 | — | — | — | 105,336 | 5.72 | % | |||||||||||||||||||||||
2016 | 7,076 | 96,144 | 3,765 | — | — | — | 106,985 | 6.04 | % | |||||||||||||||||||||||
2017 | 3,655 | 82,299 | 3,982 | 3,619 | — | — | 93,555 | 5.86 | % | |||||||||||||||||||||||
2018 | 920 | 12,462 | 955 | 58,102 | — | — | 72,439 | 5.34 | % | |||||||||||||||||||||||
2019 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
2020 | — | — | — | — | — | 250,000 | 250,000 | 7.75 | % | |||||||||||||||||||||||
Thereafter | — | 4,000 | — | 10,635 | — | — | 14,635 | 1.70 | % | |||||||||||||||||||||||
| $ | 107,389 | $ | 587,987 | $ | 25,232 | $ | 81,572 | $ | 150,000 | $ | 250,000 | $ | 1,202,180 | 5.94 | % | |||||||||||||||||
| Balance | Weighted Avg Interest Rate | Weighted Avg Maturity (yrs) | ||||||||||
Fixed Rate Secured Debt | $ | 788,134 | 5.97 | % | 4.6 | |||||||
Fixed Rate Unsecured Debt | 250,000 | 7.75 | % | 9.8 | ||||||||
Variable Rate Secured Debt | 14,046 | 0.76 | % | 22.2 | ||||||||
Variable Rate Unsecured Debt | 150,000 | 3.30 | % | 3.2 | ||||||||
Total | $ | 1,202,180 | 5.94 | % | 5.7 | |||||||
Note: $83.5 million of variable rate debt outstanding at September 30, 2010 has been converted to a fixed rate by interest rate swap agreements and is reflected above as fixed rate secured debt.
| (1) | Scheduled amortization and maturities represent only consolidated debt obligations. |
| (2) | Credit Facility Summary: |
| Rate | ||||||||||||
Commitment | Balance | Maturity | at 9/30/2010 | |||||||||
$320,000 | $ | 150,000 | December 1, 2013 | 3.30 | % | |||||||
Note: The facility includes an accordion feature in which the facility can be increased to up to $420 million subject to certain conditions, including lender consent.
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Entertainment Propertiest Trust
Capital Structure at September 30, 2010
(Unaudited, dollars in thousands)
Consolidated Debt (continued)
Summary of Long-Term Debt:
| September 30, 2010 | December 31, 2009 | |||||||
Mortgage note payable, paid in full on June 21, 2010 | $ | — | $ | 56,250 | ||||
Mortgage note payable, extinguished in Cappelli settlement on on June 18, 2010 | — | 113,333 | ||||||
Secured revolving variable rate credit facility, paid in full on June 30, 2010 | — | 35,000 | ||||||
Term loan payable, paid in full on June 30, 2010 | — | 117,600 | ||||||
Capital lease obligation, due December 31, 2011 | 9,216 | — | ||||||
Mortgage notes payable, 6.57%-6.73%, due October 1, 2012 | 44,817 | 45,808 | ||||||
Mortgage note payable, 6.63%, due November 1, 2012 | 25,057 | 25,608 | ||||||
Mortgage notes payable, 4.26%-9.01%, due February 10, 2013 | 114,613 | 119,373 | ||||||
Unsecured revolving variable rate credit facility, LIBOR + 3.00%, due December 1, 2013 | 150,000 | — | ||||||
Mortgage note payable, 6.84%, due March 1, 2014 | 100,836 | 102,008 | ||||||
Mortgage note payable, 5.58%, due April 1, 2014 | 59,829 | 60,671 | ||||||
Mortgage note payable, 5.56%, due June 5, 2015 | 33,331 | 33,763 | ||||||
Mortgage notes payable, 5.77%, due November 6, 2015 | 71,468 | 72,779 | ||||||
Mortgage notes payable, 5.84%, due March 6, 2016 | 40,189 | 40,898 | ||||||
Mortgage notes payable, 6.37%, due June 30, 2016 | 28,673 | 29,132 | ||||||
Mortgage notes payable, 6.10%, due October 1, 2016 | 25,770 | 26,187 | ||||||
Mortgage notes payable, 6.02%, due October 6, 2016 | 19,428 | 19,746 | ||||||
Mortgage note payable, 6.06%, due March 1, 2017 | 10,821 | 10,991 | ||||||
Mortgage note payable, 6.07%, due April 6, 2017 | 11,136 | 11,310 | ||||||
Mortgage notes payable, 5.73%-5.95%, due May 1, 2017 | 51,606 | 52,438 | ||||||
Mortgage notes payable, 5.86%, due August 1, 2017 | 26,412 | 26,826 | ||||||
Term loans payable, $83,542 at September 30, 2010 fixed through interest rate swaps at 5.11%-5.78%, $3,411 at September 30, 2010 at variable rates of LIBOR + 1.75%-2.00%, due December 1, 2017-June 5, 2018 | 86,953 | 93,597 | ||||||
Mortgage note payable, 6.19%, due February 1, 2018 | 16,299 | 16,667 | ||||||
Mortgage note payable, 7.37%, due July 15, 2018 | 11,091 | 11,803 | ||||||
Senior unsecured notes payable, 7.75%, due July 15, 2020 | 250,000 | — | ||||||
Bond payable, variable rate, due October 1, 2037 | 10,635 | 10,635 | ||||||
Mortgage note payable, 5.50% | 4,000 | 4,000 | ||||||
Mortgage note payable, 5.00%, extinguished in Cappelli settlement on June 18, 2010 | — | 5,000 | ||||||
Total | $ | 1,202,180 | $ | 1,141,423 | ||||
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Entertainment Properties Trust
Capital Structure
Senior Notes
Senior Debt Ratings as of September 30, 2010
Moody’s | Baa3 | |
Fitch | BBB- | |
Standard and Poor’s | BB+ |
Summary of Covenants
The Company’s outstanding bonds have a fixed interest rate at 7.75%. Interest on the senior notes is paid semiannually. The notes contain various covenants, including: (i) a limitation on incurrence of any debt which would cause the Company’s debt to adjusted total assets ratio to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause the Company’s secured debt to adjusted total assets ratio to exceed 40%; (iii) a limitation on incurrence of any debt which would cause the Company’s debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of the Company’s outstanding unsecured debt.
The following is a summary of the key financial covenants for our $250.0 million senior unsecured notes, as defined and calculated per the terms of our notes. These calculations, which are not based on U.S. generally accepted accounting principles, or GAAP, measurements, are presented to investors to show our ability to incur additional debt under the terms of our notes only and are not measures of our liquidity or performance. The actual amounts as of September 30 and June 30, 2010 are:
Note Covenants | Required | Actual 3rd Quarter 2010 (1) | Actual 2nd Quarter 2010 | |||||||
Limitation on incurrence of total debt (Total Debt/Total Assets) | £60% | 38 | % | 38 | % | |||||
Limitation on incurrence of secured debt (Secured Debt/Total Assets) | £40% | 25 | % | 26 | % | |||||
Debt service coverage (Consolidated Income Available for Debt Service/Annual Debt Service) | ³1.5x | 3.6x | 3.3x | |||||||
Maintenance of total unencumbered assets (Unencumbered Assets/Unsecured Debt) | ³150% of unsecured debt | 421 | % | 422 | % | |||||
| (1) | See page 14 for detailed calculations |
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Entertainment Properties Trust
Capital Structure
Senior Notes
(Unaudited, dollars in thousands)
Covenant Calculations
| September 30, 2010 | ||||
Total Assets: | ||||
Total Assets | $ | 2,922,251 | ||
Add: accumulated depreciation | 286,392 | |||
Less: intangible assets | (35,642 | ) | ||
Total Assets | $ | 3,173,001 | ||
| September 30, 2010 | ||||
Total Unencumbered Assets: | ||||
Unencumbered real estate assets, gross | $ | 1,505,916 | ||
Cash and cash equivalents | 14,860 | |||
Land held for development | 184,457 | |||
Property under development | 7,671 | |||
Total Unencumbered Assets | $ | 1,712,904 | ||
| September 30, 2010 | ||||
Total Debt: | ||||
Secured debt obligations | $ | 802,180 | ||
Unsecured debt obligations: | ||||
Unsecured debt | 400,000 | |||
Outstanding letters of credit | 1,781 | |||
Derivatives at fair market value, net | 5,293 | |||
Total unsecured debt obligations: | 407,074 | |||
Total Debt | $ | 1,209,254 | ||
| 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | 4th Quarter 2009 | Trailing Twelve Months | ||||||||||||||||
Consolidated income available for debt service: | ||||||||||||||||||||
Adjusted EBITDA | $ | 66,902 | $ | 63,800 | $ | 60,329 | $ | 56,401 | $ | 247,432 | ||||||||||
Add (subtract): EBITDA of discontinued operations | (13 | ) | 1,022 | (93 | ) | 1,239 | $ | 2,155 | ||||||||||||
Less: straight-line rental revenue | (426 | ) | (469 | ) | (346 | ) | (696 | ) | (1,937 | ) | ||||||||||
Consolidated income available for debt service | $ | 66,463 | $ | 64,353 | $ | 59,890 | $ | 56,944 | $ | 247,650 | ||||||||||
| Annual Debt Service: | ||||||||||||||||||||
Interest expense, gross | $ | 19,380 | $ | 18,826 | $ | 17,612 | $ | 16,804 | $ | 72,622 | ||||||||||
Interest expense from discontinued operations | — | 1,482 | 1,715 | 1,740 | 4,937 | |||||||||||||||
Less: deferred financing fees amortization | (1,122 | ) | (1,390 | ) | (1,236 | ) | (1,111 | ) | (4,859 | ) | ||||||||||
Annual Debt Service | $ | 18,258 | $ | 18,918 | $ | 18,091 | $ | 17,433 | $ | 72,700 | ||||||||||
Debt Service Coverage | 3.6 | 3.4 | 3.3 | 3.3 | 3.4 | |||||||||||||||
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Entertainment Properties Trust
Capital Structure at September 30, 2010
(Unaudited, dollars in thousands except share information)
Equity
Security | Shares Issued and Outstanding | Price per share at September 30, 2010 | Liquidation Preference | Dividend Rate | Convertible | |||||||||||||||
Common shares | 46,535,341 | $ | 43.18 | N/A | (1 | ) | N/A | |||||||||||||
Series B | 3,200,000 | $ | 24.90 | $ | 80,000 | 7.750 | % | N | ||||||||||||
Series C | 5,400,000 | $ | 18.80 | $ | 135,000 | 5.750 | % | Y | ||||||||||||
Series D | 4,600,000 | $ | 24.08 | $ | 115,000 | 7.375 | % | N | ||||||||||||
Series E | 3,450,000 | $ | 27.67 | $ | 86,250 | 9.000 | % | Y | ||||||||||||
Calculation of Total Market Capitalization:
Common shares outstanding at September 30, 2010 multiplied by closing price at September 30, 2010 | $ | 2,009,396 | ||
Aggregate liquidation value of Series B preferred shares | 80,000 | |||
Aggregate liquidation value of Series C preferred shares | 135,000 | |||
Aggregate liquidation value of Series D preferred shares | 115,000 | |||
Aggregate liquidation value of Series E preferred shares | 86,250 | |||
Total long-term debt at September 30, 2010 | 1,202,180 | |||
Total consolidated market capitalization | $ | 3,627,826 | ||
| (1) | Quarterly dividend declared in the third quarter of 2010 was $0.65 per share. |
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Entertainment Properties Trust
Summary of Ratios
(Unaudited)
| 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | 4th Quarter 2009 | 3rd Quarter 2009 | 2nd Quarter 2009 | |||||||||||||||||||
Debt to total assets (book value) | 41 | % | 42 | % | 46 | % | 43 | % | 46 | % | 46 | % | ||||||||||||
Debt to total market capitalization | 33 | % | 36 | % | 38 | % | 37 | % | 42 | % | 52 | % | ||||||||||||
Debt to gross assets | 37 | % | 38 | % | 42 | % | 39 | % | 42 | % | 43 | % | ||||||||||||
Debt to Adjusted EBITDA (1) | 4.49 | 4.74 | 5.52 | 5.06 | 5.30 | 5.68 | ||||||||||||||||||
Secured debt to secured assets (2) | 60 | % | 61 | % | 52 | % | 47 | % | 49 | % | 51 | % | ||||||||||||
Unencumbered real estate assets to total real estate assets (3) | 53 | % | 53 | % | 17 | % | 17 | % | 12 | % | 12 | % | ||||||||||||
Interest coverage ratio (4) | 3.5 | 3.2 | 3.2 | 3.1 | 3.0 | 3.2 | ||||||||||||||||||
Fixed charge coverage ratio (4) | 2.5 | 2.4 | 2.3 | 2.2 | 2.1 | 2.2 | ||||||||||||||||||
Debt service coverage ratio (4) | 2.7 | 2.4 | 2.4 | 2.3 | 2.3 | 2.3 | ||||||||||||||||||
FFO payout ratio (5) | 75 | % | 135 | % | 83 | % | 151 | % | -32 | % | 76 | % | ||||||||||||
AFFO payout ratio (6) | 78 | % | 76 | % | 83 | % | 82 | % | 77 | % | 77 | % | ||||||||||||
| (1) | Adjusted EBITDA is for the quarter annualized. See pages 30 and 31 for definitions. |
| (2) | Prior to June 30, 2010, includes previous secured revolving line of credit borrowing base assets. |
| (3) | Total real estate assets includes rental properties, gross, direct financing lease, net and mortgage notes receivable; excludes property under development and land held for development. |
| (4) | See page 17 for detailed calculation. |
| (5) | FFO payout ratio is calculated by dividing dividends declared per common share by FFO per diluted common share. |
| (6) | AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share. |
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Calculation of Interest, Fixed Charge and Debt Service Coverage Ratios
(Unaudited, dollars in thousands)
| 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | 4th Quarter 2009 | 3rd Quarter 2009 | 2nd Quarter 2009 | |||||||||||||||||||
| Interest Coverage Ratio (1): | ||||||||||||||||||||||||
Net income (loss) | $ | 35,043 | $ | 14,748 | $ | 29,091 | $ | 13,366 | $ | (75,362 | ) | $ | 25,996 | |||||||||||
Impairment charges | — | — | — | 6,357 | 35,801 | — | ||||||||||||||||||
Provision for loan losses | — | — | 700 | 5,197 | 65,757 | — | ||||||||||||||||||
Transaction costs | 11 | 111 | 7,524 | 3,165 | 40 | 37 | ||||||||||||||||||
Interest expense, gross | 19,380 | 20,308 | 19,327 | 18,544 | 19,441 | 17,696 | ||||||||||||||||||
Depreciation and amortization | 13,458 | 13,632 | 12,403 | 11,336 | 11,921 | 11,834 | ||||||||||||||||||
Share-based compensation expense to management and trustees | 1,187 | 1,172 | 1,163 | 1,069 | 1,083 | 1,078 | ||||||||||||||||||
Costs associated with loan refinancing | — | 15,620 | — | — | — | 117 | ||||||||||||||||||
Interest cost capitalized | (103 | ) | (92 | ) | (83 | ) | (83 | ) | (83 | ) | (208 | ) | ||||||||||||
Straight-line rental revenue | (426 | ) | (469 | ) | (346 | ) | (696 | ) | (642 | ) | (584 | ) | ||||||||||||
Loss (gain) on sale of real estate from discontinued operations | (198 | ) | 934 | — | — | — | — | |||||||||||||||||
Gain on acquisition | — | — | (8,468 | ) | — | — | — | |||||||||||||||||
Interest coverage amount | $ | 68,352 | $ | 65,964 | $ | 61,311 | $ | 58,255 | $ | 57,956 | $ | 55,966 | ||||||||||||
Interest expense, net | $ | 19,276 | $ | 20,207 | $ | 19,219 | $ | 18,441 | $ | 19,355 | $ | 17,482 | ||||||||||||
Interest income | 1 | 9 | 25 | 20 | 3 | 6 | ||||||||||||||||||
Interest cost capitalized | 103 | 92 | 83 | 83 | 83 | 208 | ||||||||||||||||||
Interest expense, gross | $ | 19,380 | $ | 20,308 | $ | 19,327 | $ | 18,544 | $ | 19,441 | $ | 17,696 | ||||||||||||
Interest coverage ratio | 3.5 | 3.2 | 3.2 | 3.1 | 3.0 | 3.2 | ||||||||||||||||||
| Fixed Charge Coverage Ratio (1): | ||||||||||||||||||||||||
Interest coverage amount | $ | 68,352 | $ | 65,964 | $ | 61,311 | $ | 58,255 | $ | 57,956 | $ | 55,966 | ||||||||||||
Interest expense, gross | 19,380 | 20,308 | 19,327 | 18,544 | 19,441 | 17,696 | ||||||||||||||||||
Preferred share dividends | 7,552 | 7,552 | 7,552 | 7,550 | 7,552 | 7,552 | ||||||||||||||||||
Fixed charges | $ | 26,932 | $ | 27,860 | $ | 26,879 | $ | 26,094 | $ | 26,993 | $ | 25,248 | ||||||||||||
Fixed charge coverage ratio | 2.5 | 2.4 | 2.3 | 2.2 | 2.1 | 2.2 | ||||||||||||||||||
| Debt Service Coverage Ratio (1): | ||||||||||||||||||||||||
Interest coverage amount | $ | 68,352 | $ | 65,964 | $ | 61,311 | $ | 58,255 | $ | 57,956 | $ | 55,966 | ||||||||||||
Interest expense, gross | 19,380 | 20,308 | 19,327 | 18,544 | 19,441 | 17,696 | ||||||||||||||||||
Recurring principal payments | 6,286 | 7,722 | 6,753 | 6,595 | 6,295 | 6,160 | ||||||||||||||||||
Debt service | $ | 25,666 | $ | 28,030 | $ | 26,080 | $ | 25,139 | $ | 25,736 | $ | 23,856 | ||||||||||||
Debt service coverage ratio | 2.7 | 2.4 | 2.4 | 2.3 | 2.3 | 2.3 | ||||||||||||||||||
| (1) | See pages 30 and 31 for definitions. Amounts above include the impact of discontinued operations, which is separately classified in the income statement. |
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Entertainment Properties Trust
Reconciliation of Interest Coverage Amount to Net Cash Provided by Operating Activities
(Unaudited, dollars in thousands)
The interest coverage amount per the table on the previous page is a non-GAAP financial measure and should not be considered an alternative to any GAAP liquidity measures. It is most directly comparable to the GAAP liquidity measure, “Net cash provided by operating activities,” and is not directly comparable to the GAAP liquidity measures, “Net cash used in investing activities” and “Net cash provided by financing activities.” The interest coverage amount can be reconciled to “Net cash provided by operating activities” per the consolidated statements of cash flows as follows:
| 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | 4th Quarter 2009 | 3rd Quarter 2009 | 2nd Quarter 2009 | |||||||||||||||||||
Net cash provided by operating activities | 52,497 | $ | 41,151 | $ | 33,492 | $ | 35,951 | $ | 35,849 | $ | 41,696 | |||||||||||||
Equity in income from joint ventures | 706 | 423 | 233 | 222 | 229 | 225 | ||||||||||||||||||
Distributions from joint ventures | (796 | ) | (586 | ) | (269 | ) | (243 | ) | (250 | ) | (250 | ) | ||||||||||||
Amortization of deferred financing costs | (1,122 | ) | (1,390 | ) | (1,236 | ) | (1,111 | ) | (1,103 | ) | (693 | ) | ||||||||||||
Amortization of above market leases, net | (74 | ) | (39 | ) | (21 | ) | — | — | — | |||||||||||||||
Increase (decrease) in mortgage notes accrued interest receivable | — | (2,154 | ) | 2,982 | 808 | 272 | 647 | |||||||||||||||||
Increase (decrease) in restricted cash | 675 | (2,789 | ) | (304 | ) | 1,463 | 818 | (1,125 | ) | |||||||||||||||
Increase (decrease) in accounts receivable, net | 1,592 | 1,142 | 2,246 | 1,394 | 989 | (4,084 | ) | |||||||||||||||||
Increase (decrease) in notes and accrued interest receivable | (8 | ) | (69 | ) | 49 | 5 | 21 | (272 | ) | |||||||||||||||
Increase in direct financing lease receivable | 1,167 | 1,223 | 1,114 | 967 | 939 | 942 | ||||||||||||||||||
Increase (decrease) in other assets | 1,095 | (517 | ) | 3,536 | (1,090 | ) | (248 | ) | 2,286 | |||||||||||||||
Decrease (increase) in accounts payable and accrued liabilities | (6,386 | ) | (1,576 | ) | (6,660 | ) | (1,073 | ) | 939 | (701 | ) | |||||||||||||
Decrease (increase) in unearned rents | 145 | 1,623 | (273 | ) | 32 | 745 | 353 | |||||||||||||||||
Straight-line rental revenue | (426 | ) | (469 | ) | (346 | ) | (696 | ) | (642 | ) | (584 | ) | ||||||||||||
Interest expense, gross | 19,380 | 20,308 | 19,327 | 18,544 | 19,441 | 17,697 | ||||||||||||||||||
Interest cost capitalized | (103 | ) | (92 | ) | (83 | ) | (83 | ) | (83 | ) | (208 | ) | ||||||||||||
Costs associated with loan refinancing (cash portion) | — | 9,662 | — | — | — | — | ||||||||||||||||||
Transaction costs | 11 | 111 | 7,524 | 3,165 | 40 | 37 | ||||||||||||||||||
Interest coverage amount (1) | $ | 68,353 | $ | 65,962 | $ | 61,311 | $ | 58,255 | $ | 57,956 | $ | 55,966 | ||||||||||||
| (1) | See pages 30 and 31 for definitions. Amounts above include the impact of discontinued operations, which is separately classified in the income statement. |
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Entertainment Properties Trust
Capital Spending and Disposition Summaries
(Unaudited, dollars in thousands)
2010 Capital Spending:
Description | Location | Capital Spending Three Months Ended September 30, 2010 | Capital Spending Nine Months Ended September 30, 2010 | |||||||||
Acquisition of Toronto Dundas Square | Toronto, Ontario | $ | — | $ | 111,593 | |||||||
Investment in direct financing lease related to public charter schools | various | 7,601 | 51,833 | |||||||||
Acquisition of 12 theatre portfolio | various | — | 124,436 | |||||||||
Additions to Toronto Dundas Square mortgage note receivable | Toronto, Ontario | — | 591 | |||||||||
Additions to mortgage note receivable for development of Schlitterbahn Vacation Village | Kansas City, KS | — | 5,247 | |||||||||
Development of additional gross leasable area | Ontario, Canada | 443 | 1,723 | |||||||||
Development of entertainment retail center | Suffolk, VA | 1,008 | 2,108 | |||||||||
Development of custom crush facility | Sonoma County, CA | — | 163 | |||||||||
Investment in unconsolidated joint ventures | various | 466 | 15,647 | |||||||||
Cash paid related to Cappelli settlement | various | — | 4,586 | |||||||||
Capitalized building improvements and tenant improvements | various | 81 | 1,634 | |||||||||
Total investment spending | $ | 9,599 | $ | 319,561 | ||||||||
Other capital acquisitions | various | 2,769 | 3,434 | |||||||||
Total capital spending | $ | 12,368 | $ | 322,995 | ||||||||
2010 Dispositions:
| ||||||||||||
Description | Location | Date of Disposition | Cash Received | |||||||||
Havens vineyard and winery | Yountville, CA | June 2010 | $ | 6,301 | ||||||||
Land parcel and building | Arroyo Grande, CA | July 2010 | $ | 1,155 | ||||||||
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Entertainment Properties Trust
Financial Information by Asset Type
For the Three Months Ended September 30, 2010
(Unaudited, dollars in thousands)
| Theatres | Retail | Public Charter Schools | Vineyards and Wineries | Metropolitan Ski Areas | Waterpark/ Concord Development | Subtotal | Unallocated | Consolidated | ||||||||||||||||||||||||||||
Rental revenue | $ | 47,338 | $ | 9,816 | — | $ | 3,491 | $ | 315 | $ | — | $ | 60,960 | $ | — | $ | 60,960 | |||||||||||||||||||
Tenant reimbursements | 2,550 | 3,939 | — | — | — | — | 6,489 | — | 6,489 | |||||||||||||||||||||||||||
Other income | 25 | — | — | — | — | 210 | 235 | — | 235 | |||||||||||||||||||||||||||
Mortgage and other financing income | 80 | 6 | 6,604 | 239 | 3,398 | 2,940 | 13,267 | 33 | 13,300 | |||||||||||||||||||||||||||
Total revenue | 49,993 | 13,761 | 6,604 | 3,730 | 3,713 | 3,150 | 80,951 | 33 | 80,984 | |||||||||||||||||||||||||||
Property operating expense | 2,881 | 5,254 | — | 1,336 | — | 151 | 9,622 | — | 9,622 | |||||||||||||||||||||||||||
Other expense | — | — | — | 106 | — | 267 | 373 | 11 | 384 | |||||||||||||||||||||||||||
Total investment expenses | 2,881 | 5,254 | — | 1,442 | — | 418 | 9,995 | 11 | 10,006 | |||||||||||||||||||||||||||
General and administrative expense | — | — | — | — | — | — | — | 4,076 | 4,076 | |||||||||||||||||||||||||||
Transaction costs | — | — | — | — | — | — | — | 11 | 11 | |||||||||||||||||||||||||||
EBITDA | $ | 47,112 | $ | 8,507 | $ | 6,604 | $ | 2,288 | $ | 3,713 | $ | 2,732 | $ | 70,956 | $ | (4,065 | ) | $ | 66,891 | |||||||||||||||||
| 67 | % | 12 | % | 9 | % | 3 | % | 5 | % | 4 | % | 100 | % | |||||||||||||||||||||||
 | ||||||||||||||||||||||||||||||||||||
| 79% | ||||||||||||||||||||||||||||||||||||
Add: transaction costs | 11 | 11 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 66,902 | ||||||||||||||||||||||||||||||||||
Reconciliation to Consolidated Statements of Income: | ||||||||||||||||||||||||||||||||||||
Transaction costs | (11 | ) | (11 | ) | ||||||||||||||||||||||||||||||||
Interest expense, net | (19,274 | ) | (19,274 | ) | ||||||||||||||||||||||||||||||||
Depreciation and amortization | (13,464 | ) | (13,464 | ) | ||||||||||||||||||||||||||||||||
Equity in income from joint ventures | 706 | 706 | ||||||||||||||||||||||||||||||||||
Loss from discontinued operations | (14 | ) | (14 | ) | ||||||||||||||||||||||||||||||||
Gain on sale of real estate | 198 | 198 | ||||||||||||||||||||||||||||||||||
Net income | 35,043 | |||||||||||||||||||||||||||||||||||
Noncontrolling interests | (34 | ) | (34 | ) | ||||||||||||||||||||||||||||||||
Preferred dividend requirements | (7,552 | ) | (7,552 | ) | ||||||||||||||||||||||||||||||||
Net income available to common shareholders | $ | 27,457 | ||||||||||||||||||||||||||||||||||
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Entertainment Properties Trust
Financial Information by Asset Type
For the Nine Months Ended September 30, 2010
(Unaudited, dollars in thousands)
| Theatres | Retail | Public Charter Schools | Vineyards and Wineries | Metropolitan Ski Areas | Waterpark/ Concord Development | Subtotal | Unallocated | Consolidated | ||||||||||||||||||||||||||||
Rental revenue | $ | 134,150 | $ | 27,463 | $ | — | $ | 11,447 | $ | 945 | $ | — | $ | 174,005 | $ | — | $ | 174,005 | ||||||||||||||||||
Tenant reimbursements | 6,811 | 11,191 | — | — | — | — | 18,002 | — | 18,002 | |||||||||||||||||||||||||||
Other income | 76 | 194 | — | 35 | — | 211 | 516 | — | 516 | |||||||||||||||||||||||||||
Mortgage and other financing income | 221 | 101 | 19,378 | 281 | 10,155 | 8,643 | 38,779 | 126 | 38,905 | |||||||||||||||||||||||||||
Total revenue | 141,258 | 38,949 | 19,378 | 11,763 | 11,100 | 8,854 | 231,302 | 126 | 231,428 | |||||||||||||||||||||||||||
Property operating expense | 8,235 | 14,459 | — | 2,891 | — | 151 | 25,736 | — | 25,736 | |||||||||||||||||||||||||||
Other expense | — | 217 | — | 341 | — | 267 | 825 | 39 | 864 | |||||||||||||||||||||||||||
Total investment expenses | 8,235 | 14,676 | — | 3,232 | — | 418 | 26,561 | 39 | 26,600 | |||||||||||||||||||||||||||
General and administrative expense | — | — | — | — | — | — | — | 13,797 | 13,797 | |||||||||||||||||||||||||||
Transaction costs | — | — | — | — | — | — | — | 7,646 | 7,646 | |||||||||||||||||||||||||||
Provision for loan losses | — | — | — | — | — | — | — | 700 | 700 | |||||||||||||||||||||||||||
EBITDA | $ | 133,023 | $ | 24,273 | $ | 19,378 | $ | 8,531 | $ | 11,100 | $ | 8,436 | $ | 204,741 | $ | (22,056 | ) | $ | 182,685 | |||||||||||||||||
| 65 | % | 12 | % | 10 | % | 4 | % | 5 | % | 4 | % | 100 | % | |||||||||||||||||||||||
| | ||||||||||||||||||||||||||||||||||||
| 77% | ||||||||||||||||||||||||||||||||||||
Add: transaction costs | 7,646 | 7,646 | ||||||||||||||||||||||||||||||||||
Add: provision for loan losses | 700 | 700 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 191,031 | ||||||||||||||||||||||||||||||||||
Reconciliation to Consolidated Statements of Income: | ||||||||||||||||||||||||||||||||||||
Transaction costs | (7,646 | ) | (7,646 | ) | ||||||||||||||||||||||||||||||||
Provision for loan losses | (700 | ) | (700 | ) | ||||||||||||||||||||||||||||||||
Interest expense, net | (55,504 | ) | (55,504 | ) | ||||||||||||||||||||||||||||||||
Costs associated with loan refinancing | (15,247 | ) | (15,247 | ) | ||||||||||||||||||||||||||||||||
Depreciation and amortization | (38,165 | ) | (38,165 | ) | ||||||||||||||||||||||||||||||||
Equity in income from joint ventures | 1,362 | 1,362 | ||||||||||||||||||||||||||||||||||
Gain on acquisition | 8,468 | 8,468 | ||||||||||||||||||||||||||||||||||
Loss from discontinued operations | (3,982 | ) | (3,982 | ) | ||||||||||||||||||||||||||||||||
Loss on sale of real estate | (736 | ) | (736 | ) | ||||||||||||||||||||||||||||||||
Net income | 78,881 | |||||||||||||||||||||||||||||||||||
Noncontrolling interests | 1,791 | 1,791 | ||||||||||||||||||||||||||||||||||
Preferred dividend requirements | (22,655 | ) | (22,655 | ) | ||||||||||||||||||||||||||||||||
Net income available to common shareholders | $ | 58,017 | ||||||||||||||||||||||||||||||||||
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Entertainment Properties Trust
Financial Information by Asset Type
For the Three Months Ended September 30, 2009
(Unaudited, dollars in thousands)
| Theatres | Retail | Public Charter Schools | Vineyards and Wineries | Metropolitan Ski Areas | Waterpark/ Concord Development | Subtotal | Unallocated | Consolidated | ||||||||||||||||||||||||||||
Rental revenue | $ | 38,483 | $ | 6,517 | $ | — | $ | 3,899 | $ | 311 | $ | — | $ | 49,210 | $ | — | $ | 49,210 | ||||||||||||||||||
Tenant reimbursements | 1,581 | 2,486 | — | — | — | — | 4,067 | — | 4,067 | |||||||||||||||||||||||||||
Other income | 23 | 323 | — | — | — | — | 346 | 95 | 441 | |||||||||||||||||||||||||||
Mortgage and other financing income | 63 | 57 | 5,293 | 46 | 3,318 | 2,794 | 11,571 | 79 | 11,650 | |||||||||||||||||||||||||||
Total revenue | 40,150 | 9,383 | 5,293 | 3,945 | 3,629 | 2,794 | 65,194 | 174 | 65,368 | |||||||||||||||||||||||||||
Property operating expense | 2,017 | 3,252 | — | 154 | — | — | 5,423 | — | 5,423 | |||||||||||||||||||||||||||
Other expense | — | 390 | — | 197 | — | — | 587 | — | 587 | |||||||||||||||||||||||||||
Total investment expenses | 2,017 | 3,642 | — | 351 | — | — | 6,010 | — | 6,010 | |||||||||||||||||||||||||||
General and administrative expense | — | — | — | — | — | — | — | 3,511 | 3,511 | |||||||||||||||||||||||||||
Transaction costs | — | — | — | — | — | — | — | 40 | 40 | |||||||||||||||||||||||||||
Provision for loan losses | — | — | — | — | — | — | — | 65,757 | 65,757 | |||||||||||||||||||||||||||
EBITDA | $ | 38,133 | $ | 5,741 | $ | 5,293 | $ | 3,594 | $ | 3,629 | $ | 2,794 | $ | 59,184 | $ | (69,134 | ) | $ | (9,950 | ) | ||||||||||||||||
| 64 | % | 10 | % | 9 | % | 6 | % | 6 | % | 5 | % | 100 | % | |||||||||||||||||||||||
| | ||||||||||||||||||||||||||||||||||||
| 74% | ||||||||||||||||||||||||||||||||||||
Add: provision for loan losses | 65,757 | 65,757 | ||||||||||||||||||||||||||||||||||
Add: transaction costs | 40 | 40 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 55,847 | ||||||||||||||||||||||||||||||||||
Reconciliation to Consolidated Statements of Income: | ||||||||||||||||||||||||||||||||||||
Transaction costs | (40 | ) | (40 | ) | ||||||||||||||||||||||||||||||||
Interest expense, net | (17,595 | ) | (17,595 | ) | ||||||||||||||||||||||||||||||||
Provision for loan losses | (65,757 | ) | (65,757 | ) | ||||||||||||||||||||||||||||||||
Depreciation and amortization | (10,868 | ) | (10,868 | ) | ||||||||||||||||||||||||||||||||
Equity in income from joint ventures | 229 | 229 | ||||||||||||||||||||||||||||||||||
Loss from discontinued operations | (37,178 | ) | (37,178 | ) | ||||||||||||||||||||||||||||||||
Net income | (75,362 | ) | ||||||||||||||||||||||||||||||||||
Noncontrolling interests | 16,071 | 16,071 | ||||||||||||||||||||||||||||||||||
Preferred dividend requirements | (7,552 | ) | (7,552 | ) | ||||||||||||||||||||||||||||||||
Net income available to common shareholders | $ | (66,843 | ) | |||||||||||||||||||||||||||||||||
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Entertainment Properties Trust
Financial Information by Asset Type
For the Nine Months Ended September 30, 2009
(Unaudited, dollars in thousands)
| Theatres | Retail | Public Charter Schools | Vineyards and Wineries | Metropolitan Ski Areas | Waterpark/ Concord Development | Subtotal | Unallocated | Consolidated | ||||||||||||||||||||||||||||
Rental revenue | $ | 114,092 | $ | 18,783 | $ | — | $ | 11,531 | $ | 933 | $ | — | $ | 145,339 | $ | — | $ | 145,339 | ||||||||||||||||||
Tenant reimbursements | 4,708 | 6,770 | — | — | — | — | 11,478 | — | 11,478 | |||||||||||||||||||||||||||
Other income | 70 | 1,339 | — | 26 | — | — | 1,435 | 875 | 2,310 | |||||||||||||||||||||||||||
Mortgage and other financing income | 1,650 | 153 | 15,328 | 475 | 9,896 | 5,654 | 33,156 | 236 | 33,392 | |||||||||||||||||||||||||||
Total revenue | 120,520 | 27,045 | 15,328 | 12,032 | 10,829 | 5,654 | 191,408 | 1,111 | 192,519 | |||||||||||||||||||||||||||
Property operating expense | 5,750 | 9,634 | 202 | — | — | 15,586 | — | 15,586 | ||||||||||||||||||||||||||||
Other expense | — | 1,426 | — | 633 | — | — | 2,059 | — | 2,059 | |||||||||||||||||||||||||||
Total investment expenses | 5,750 | 11,060 | — | 835 | — | — | 17,645 | — | 17,645 | |||||||||||||||||||||||||||
General and administrative expense | — | — | — | — | — | — | — | 11,796 | 11,796 | |||||||||||||||||||||||||||
Transaction costs | — | — | — | — | — | — | — | 156 | 156 | |||||||||||||||||||||||||||
Provision for loan losses | — | — | — | — | — | — | — | 65,757 | 65,757 | |||||||||||||||||||||||||||
EBITDA | $ | 114,770 | $ | 15,985 | $ | 15,328 | $ | 11,197 | $ | 10,829 | $ | 5,654 | $ | 173,763 | $ | (76,598 | ) | $ | 97,165 | |||||||||||||||||
| 66 | % | 9 | % | 9 | % | 7 | % | 6 | % | 3 | % | 100 | % | |||||||||||||||||||||||
| | ||||||||||||||||||||||||||||||||||||
| 75% | ||||||||||||||||||||||||||||||||||||
Add: provision for loan losses | 65,757 | 65,757 | ||||||||||||||||||||||||||||||||||
Add: transaction costs | 156 | 156 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 163,078 | ||||||||||||||||||||||||||||||||||
Reconciliation to Consolidated Statements of Income: | ||||||||||||||||||||||||||||||||||||
Transaction costs | (156 | ) | (156 | ) | ||||||||||||||||||||||||||||||||
Provision for loan losses | (65,757 | ) | (65,757 | ) | ||||||||||||||||||||||||||||||||
Interest expense, net | (49,046 | ) | (49,046 | ) | ||||||||||||||||||||||||||||||||
Costs associated with loan refinancing | (117 | ) | (117 | ) | ||||||||||||||||||||||||||||||||
Depreciation and amortization | (31,596 | ) | (31,596 | ) | ||||||||||||||||||||||||||||||||
Equity in income from joint ventures | 673 | 673 | ||||||||||||||||||||||||||||||||||
Loss from discontinued operations | (42,350 | ) | (42,350 | ) | ||||||||||||||||||||||||||||||||
Net income | (25,271 | ) | ||||||||||||||||||||||||||||||||||
Noncontrolling interests | 19,014 | 19,014 | ||||||||||||||||||||||||||||||||||
Preferred dividend requirements | (22,655 | ) | (22,655 | ) | ||||||||||||||||||||||||||||||||
Net income available to common shareholders | $ | (28,912 | ) | |||||||||||||||||||||||||||||||||
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Investment Information by Asset Type
As of September 30, 2010 and December 31, 2009
(Unaudited, dollars in thousands)
| As of September 30, 2010 | ||||||||||||||||||||||||
| Retail/ Theatres | Public Charter Schools | Vineyards and Wineries | Metropolitan Ski Areas | Waterpark/ Concord Development | Consolidated | |||||||||||||||||||
Rental properties, net of accumulated depreciation | $ | 1,815,051 | $ | — | $ | 193,784 | $ | 11,589 | $ | — | $ | 2,020,424 | ||||||||||||
Add back accumulated depreciation on rental properties | 270,136 | — | 14,838 | 1,418 | — | 286,392 | ||||||||||||||||||
Land held for development | 4,457 | — | — | — | 180,000 | 184,457 | ||||||||||||||||||
Property under development | 7,671 | — | — | — | — | 7,671 | ||||||||||||||||||
Mortgage notes and related accrued interest receivable, net | — | — | — | 136,410 | 168,545 | 304,955 | ||||||||||||||||||
Investment in a direct financing lease, net | — | 225,187 | — | — | — | 225,187 | ||||||||||||||||||
Investment in joint ventures | 19,334 | — | — | — | — | 19,334 | ||||||||||||||||||
Intangible assets, net of accumulated amortization | 35,642 | — | — | — | — | 35,642 | ||||||||||||||||||
Add back accumulated amortization on intangible assets | 9,939 | — | — | — | — | 9,939 | ||||||||||||||||||
Notes receivable and related accrued interest receivable, net | 165 | 3,751 | 1,236 | — | — | 5,152 | ||||||||||||||||||
Total investments (1) | $ | 2,162,395 | $ | 228,938 | $ | 209,858 | $ | 149,417 | $ | 348,545 | $ | 3,099,153 | ||||||||||||
% of total investments | 70 | % | 7 | % | 7 | % | 5 | % | 11 | % | 100 | % | ||||||||||||
| As of December 31, 2009 | ||||||||||||||||||||||||
| Retail/ Theatres | Public Charter Schools | Vineyards and Wineries | Metropolitan Ski Areas | Waterpark/ Concord Development | Consolidated | |||||||||||||||||||
Rental properties, net of accumulated depreciation | $ | 1,636,580 | $ | — | $ | 206,229 | $ | 11,820 | $ | — | $ | 1,854,629 | ||||||||||||
Add back accumulated depreciation on rental properties | 246,806 | — | 10,645 | 1,187 | — | 258,638 | ||||||||||||||||||
Land held for development | 4,457 | — | — | — | — | 4,457 | ||||||||||||||||||
Property under development | 8,272 | — | — | — | — | 8,272 | ||||||||||||||||||
Mortgage notes and related accrued interest receivable, net | 90,882 | — | — | 135,581 | 296,417 | 522,880 | ||||||||||||||||||
Investment in a direct financing lease, net | — | 169,850 | — | — | — | 169,850 | ||||||||||||||||||
Investment in joint ventures | 4,080 | — | — | — | — | 4,080 | ||||||||||||||||||
Intangible assets, net of accumulated amortization | 6,727 | — | — | — | — | 6,727 | ||||||||||||||||||
Add back accumulated amortization on intangible assets | 6,887 | — | — | — | — | 6,887 | ||||||||||||||||||
Notes receivable and related accrued interest receivable, net | 2,854 | 3,750 | 1,294 | — | — | 7,898 | ||||||||||||||||||
Total investments (1) | $ | 2,007,545 | $ | 173,600 | $ | 218,168 | $ | 148,588 | $ | 296,417 | $ | 2,844,318 | ||||||||||||
% of total investments | 71 | % | 6 | % | 8 | % | 5 | % | 10 | % | 100 | % | ||||||||||||
| (1) | See pages 30 and 31 for definitions. |
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Entertainment Properties Trust
Lease Expirations Excluding Non-Theatre Retail
As of September 30, 2010
(Unaudited, dollars in thousands)
| Megaplex Theatres | Public Charter Schools | Vineyards and Wineries | ||||||||||||||||||||||||||||||||||
Year | Total Number of Leases Expiring | Revenue for the Trailing Twelve Months Ended September 30, 2010 (1) | % of Total Rental Revenue | Total Number of Leases Expiring | Financing Income for the Trailing Twelve Months Ended September 30, 2010 | % of Total Mortgage and other financing income | Total Number of Leases Expiring | Rental Revenue for the Twelve Months Ended September 30, 2010 | % of Total Rental Revenue | |||||||||||||||||||||||||||
2010 | 4 | $ | 11,556 | 5 | % | — | $ | — | — | — | $ | — | — | |||||||||||||||||||||||
2011 | 4 | 9,641 | 4 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2012 | 3 | 7,276 | 3 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2013 | 4 | 14,321 | 6 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
2016 | 2 | 3,913 | 2 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2017 | 3 | 4,718 | 2 | % | — | — | — | 1 | 2,297 | 1 | % | |||||||||||||||||||||||||
2018 | 17 | 17,937 | 7 | % | — | — | — | 5 | 10,463 | 4 | % | |||||||||||||||||||||||||
2019 | 7 | 22,297 | 9 | % | — | — | — | 1 | 1,265 | 1 | % | |||||||||||||||||||||||||
2020 | 7 | 8,168 | 3 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2021 | 3 | 7,117 | 3 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2022 | 9 | 16,129 | 6 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2023 | 2 | 2,331 | 1 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2024 | 8 | 14,390 | 6 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2025 | 7 | 14,317 | 6 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2026 | 5 | 7,121 | 3 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2027 | 3 | 3,939 | 1 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2028 | 2 | 5,397 | 2 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
2029 | 15 | 11,125 | 5 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||
Thereafter | — | — | — | 27 | 24,207 | 48 | % | — | — | — | ||||||||||||||||||||||||||
| 105 | $ | 181,693 | 74 | % | 27 | $ | 24,207 | 48 | % | 7 | $ | 14,025 | 6 | % | ||||||||||||||||||||||
Note:This schedule relates to consolidated assets only and excludes non-theatre retail. One owned ski property is excluded from this schedule and the remaining ski property investments are held in mortgage notes receivable which are included on page 27.
| (1) | Consists of rental revenue and tenant reimbursements. |
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Entertainment Properties Trust
Top Ten Customers by Revenue
(Unaudited, dollars in thousands)
Customers | Asset Type | Total Revenue For The Three Months Ended September 30, 2010 | Percentage of Total Revenue | Total Revenue For The Nine Months Ended September 30, 2010 | Percentage of Total Revenue | |||||||||||||||
| 1. | American Multi-Cinema, Inc. | Retail/Theatres | $ | 28,577 | 35 | % | $ | 84,190 | 36 | % | ||||||||||
| 2. | Rave Cinemas/Rave Review Cinemas | Retail/Theatres | 7,199 | 9 | % | 21,734 | 9 | % | ||||||||||||
| 3. | Imagine Schools, Inc. | Public Charter Schools | 6,517 | 8 | % | 19,119 | 8 | % | ||||||||||||
| 4. | Regal Cinemas, Inc. | Retail/Theatres | 5,456 | 7 | % | 15,021 | 6 | % | ||||||||||||
| 5. | Cinemark USA, Inc. | Retail/Theatres | 4,022 | 5 | % | 6,349 | 3 | % | ||||||||||||
| 6. | Peak Resorts, Inc. | Metropolitan Ski Areas | 3,713 | 4 | % | 11,099 | 5 | % | ||||||||||||
| 7. | Ascentia Wine Estates, LLC | Vineyards and Wineries | 3,011 | 4 | % | 8,481 | 4 | % | ||||||||||||
| 8. | SVVI, LLC | Waterparks | 2,940 | 4 | % | 8,692 | 4 | % | ||||||||||||
| 9. | Southern Theatres, LLC | Retail/Theatres | 2,774 | 3 | % | 8,373 | 4 | % | ||||||||||||
| 10. | Muvico Entertainment, LLC | Retail/Theatres | 955 | 1 | % | 2,833 | 1 | % | ||||||||||||
Total | $ | 65,164 | 80 | % | $ | 185,891 | 80 | % | ||||||||||||
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Entertainment Properties Trust
Mortgage Notes Receivable
(Unaudited, dollars in thousands)
Summary of Mortgage Notes Receivable
| September 30, 2010 | December 31, 2009 | |||||||
Mortgage note and related accrued interest receivable, 15.00%, extinguished on March 4, 2010 | $ | — | $ | 126,658 | ||||
Mortgage note and related accrued interest receivable, 11.00%, extinguished in Cappelli settlement on June 18, 2010 | — | 133,119 | ||||||
Mortgage note and related accrued interest receivable, 10.00%, due April 1, 2012 | 33,677 | 32,848 | ||||||
Mortgage notes and related accrued interest receivable, 7.00%, due May 1, 2019 | 168,545 | 163,298 | ||||||
Mortgage note, 9.67%, due March 10, 2027 | 8,000 | 8,000 | ||||||
Mortgage notes, 10.30%, due April 3, 2027 | 62,500 | 62,500 | ||||||
Mortgage note, 9.40%, due October 30, 2027 | 32,233 | 32,233 | ||||||
Total mortgage notes and related accrued interest receivable | $ | 304,955 | $ | 558,656 | ||||
Less: loan loss reserves | — | (35,776 | ) | |||||
Total mortgage notes and related accrued interest receivable, net | $ | 304,955 | $ | 522,880 | ||||
Payments Due on Mortgage Notes Receivable
| As of September 30, 2010 | ||||
Year: | ||||
2010 | $ | — | ||
2011 | — | |||
2012 | 33,677 | |||
2013 | — | |||
2014 | — | |||
Thereafter | 271,278 | |||
Total | $ | 304,955 | ||
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Entertainment Properties Trust
Notes Receivable
(Unaudited, dollars in thousands)
Summary of Notes Receivable
| September 30, 2010 | December 31, 2009 | |||||||
Note and related accrued interest receivable, 10.00%, extinguished in Cappelli settlement on June 18, 2010 | $ | — | $ | 10,000 | ||||
Note and related accrued interest receivable, 10.00%, extinguished in Cappelli settlement on June 18, 2010 | — | 10,000 | ||||||
Note and related accrued interest receivable, 15.00%, due on demand (1) | 3,000 | 3,000 | ||||||
Revolving credit facility and related accrued interest receivable, 6.00%, due December 31, 2017 (1) | 1,358 | 1,416 | ||||||
Note and related accrued interest receivable, 9.23%, due August 31, 2012 | 3,751 | 3,751 | ||||||
Note and related accrued interest receivable, 12.00%, due April 1, 2013 (1) | 5,074 | 5,074 | ||||||
Note and related accrued interest receivable, 10.00%, extinguished in Cappelli settlement on June 18, 2010 | — | 10,000 | ||||||
Other | 165 | 854 | ||||||
Total notes and related accrued interest receivable | $ | 13,348 | $ | 44,095 | ||||
Less: Loan loss reserves | (8,196 | ) | (36,197 | ) | ||||
Total notes and related accrued interest receivable, net | $ | 5,152 | $ | 7,898 | ||||
| (1) | Note receivable is impaired as of September 30, 2010. In accordance with the Company’s accounting policy, interest income is being recognized on a cash basis. |
Payments Due on Notes Receivable
| As of September 30, 2010 | ||||
Year: | ||||
Past due | $ | 3,000 | ||
2010 | — | |||
2011 | — | |||
2012 | 3,751 | |||
2013 | 5,074 | |||
2014 | — | |||
Thereafter | 1,523 | |||
Total | $ | 13,348 | ||
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Entertainment Properties Trust
Summary of Unconsolidated Joint Ventures
As of and for the Nine Months Ended September 30, 2010
(Unaudited, dollars in thousands)
Atlantic EPR-I
EPR investment interest: 24.8%
Income recognized for the nine months ended September 30, 2010: $1,281
Distributions received for the nine months ended September 30, 2010: $1,348
Unaudited condensed financial information for Atlantic-EPR I is as follows as of and for the nine months ended September 30, 2010 and 2009:
| 2010 | 2009 | |||||||
Rental properties, net | $ | 26,829 | $ | 27,474 | ||||
Cash | 1 | 141 | ||||||
Long-term debt (paid in full, May 2010) | — | 15,109 | ||||||
Partners’ equity | 26,980 | 12,412 | ||||||
Rental revenue | 3,368 | 3,324 | ||||||
Net income | 1,483 | 1,825 | ||||||
Atlantic EPR-II
EPR investment interest: 23.7%
Income recognized for the nine months ended September 30, 2010: $261
Distributions received for the nine months ended September 30, 2010: $290
Unaudited condensed financial information for Atlantic-EPR II is as follows as of and for the nine months ended September 30, 2010 and 2009:
| 2010 | 2009 | |||||||
Rental properties, net | $ | 21,152 | $ | 21,613 | ||||
Cash | 131 | 157 | ||||||
Long-term debt (due September 2013) | 12,689 | 13,035 | ||||||
Note payable to Entertainment Properties Trust | 117 | 117 | ||||||
Partners’ equity | 8,230 | 8,351 | ||||||
Rental revenue | 2,167 | 2,154 | ||||||
Net income | 1,023 | 1,013 | ||||||
Ningbo PIC and Shanghai SFG-EPR Cinema
EPR investment interest: 30.0% and 49.0%, respectively
EPR investment: $1,608
Loss recognized for the nine months ended September 30, 2010: $180
Distributions received for the nine months ended September 30, 2010: $0
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Entertainment Properties Trust
Definitions-Non-GAAP Financial Measures
EBITDA AND ADJUSTED EBITDA
EBITDA is a widely used financial measure in many industries, including the REIT industry, and is presented to assist investors and analysts in analyzing the performance of the Company. Management utilizes EBITDA in its analysis of the business and operations of the Company and believes it is useful to investors because it excludes various items included in net income that are not indicative of operating performance, such as gains (or losses) from sales of property and depreciation and amortization and is used in computing various financial ratios as a measure of operational performance. The Company computes EBITDA as the sum of net income plus interest expense (net), depreciation and amortization, gain or loss on sale of or acquisition of real estate, noncontrolling interests, equity in income from joint ventures and discontinued operations. Adjusted EBITDA is presented to add back the effect of non-cash impairment charges, costs associated with loan refinancing, the provision for loan losses and transaction costs. The Company’s method of calculating EBITDA and Adjusted EBITDA may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDA and Adjusted EBITDA do not represent cash generated from operations as defined by U.S. generally accepted accounting principles (“GAAP”) and are not indicative of cash available to fund all cash needs, including distributions. These measures should not be considered as an alternative to net income for the purpose of evaluating the Company’s performance or to cash flows as a measure of liquidity.
FUNDS FROM OPERATIONS (“FFO”)
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 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. FFO, as defined under the NAREIT definition and presented by us, is net income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from sales of depreciable operating properties, 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. FFO is a non-GAAP financial measure. FFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net 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 the same way so comparisons with other REITs may not be meaningful.
ADJUSTED FUNDS FROM OPERATIONS (“AFFO”)
In addition to FFO, we present AFFO by adding to FFO non-cash impairment charges, provision for loan losses, transaction costs, non-real estate depreciation and amortization, deferred financing fees amortization, costs associated with loan refinancing, share-based compensation expense to management and trustees and amortization of above market leases, net; and subtracting maintenance capital expenditures (including second generation tenant improvements and leasing commissions), straight-lined rental revenue, the non-cash portion of mortgage and other financing income and gain on acquisition. AFFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share and management provides AFFO herein because it believes this information is useful to investors in this regard. AFFO is a non-GAAP financial measure. AFFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net 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 AFFO the same way so comparisons with other REITs may not be meaningful.
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Table of Contents
Entertainment Properties Trust
Definitions-Non-GAAP Financial Measures
INTEREST COVERAGE RATIO
The interest coverage ratio is calculated as the interest coverage amount divided by interest expense, gross. We calculate the interest coverage amount by adding to net income impairment charges, provision for loan losses, transaction costs, interest expense, gross (including interest expense in discontinued operations), depreciation and amortization, share-based compensation expense to management and trustee and costs associated with loan refinancing; subtracting interest cost capitalized, straight-line revenue, and gain on acquisition. We calculated interest expense, gross, by adding to interest expense, net, interest income and interest cost capitalized. We consider the interest coverage ratio to be an appropriate supplemental measure of a company’s ability to meet its interest expense obligations and management believes it is useful to investors in this regard. Our calculation of the interest coverage ratio may be different from the calculation used by other companies, and therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.
FIXED CHARGE COVERAGE RATIO
The fixed charge coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that preferred share dividends are also added to the denominator. We consider the fixed charge coverage ratio to be an appropriate supplemental measure of a company’s ability to make its interest and preferred share dividend payments and management believes it is useful to investors in this regard. Our calculation of the fixed charge coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.
DEBT SERVICE COVERAGE RATIO
The debt service coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that recurring principal payments are also added to the denominator. We consider the debt service coverage ratio to be an appropriate supplemental measure of a company’s ability to make its debt service payments and management believes it is useful to investors in this regard. Our calculation of the debt service coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.
TOTAL INVESTMENTS
Total investments is a non-GAAP financial measure defined as the sum of the carrying values of rental properties (before accumulated depreciation), land held for development, property under development, mortgage notes receivable (including related accrued interest receivable), investment in joint ventures, intangible assets (before accumulated amortization) and notes receivable. Total investments is a useful measure for management and investors as it illustrates across which asset categories the Company’s funds have been invested.
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