EXHIBIT 99
ENTERTAINMENT PROPERTIES REPORTS RECORD SECOND QUARTER RESULTS
AND INCREASES 2006 GUIDANCE
Kansas City, MO, July 31, 2006 -- Entertainment Properties Trust (NYSE:EPR),
today announced operating results for the second quarter ended June 30, 2006.
The Company reported record quarterly revenues, net income and funds from
operations (FFO).
Total revenue increased 26% to $51.2 million for the second quarter compared to
$40.8 million for the same quarter in 2005. Net income available to common
shareholders increased 24% to $17.9 million from $14.4 million for the same
quarter last year. Net income on a diluted per common share basis increased 18%
to $0.67 per share from $0.57 per share in the same quarter last year.
Funds from operations (FFO) for the second quarter increased 20% to $25.5
million from $21.2 million compared to the same quarter last year. FFO per
diluted common share increased 16% to $0.96 per share from $0.83 per share for
the same quarter last year.
For the six months ended June 30, 2006, total revenue increased 23% to $97.0
million compared to $78.7 million for the same period in 2005. Net income
available to common shareholders increased 22% to $33.7 million from $27.6
million for the same period last year. Net income on a diluted per common share
basis increased 17% to $1.28 from $1.09 a year ago. FFO for the six months ended
June 30, 2006 increased 19% to $48.7 million from $40.9 million a year ago. FFO
per diluted common share increased 15% to $1.85 per share from $1.61 per share
for the same period last year.
The Company's operating results were impacted by three significant,
non-recurring items that occurred in the second quarter ended June 30, 2006.
These three items netted together to increase net income and FFO by
approximately $900,000 or $0.03 cents per diluted common share. First, the
Company recorded as rental revenue a lease termination fee of $4.0 million
received from its ground lease tenant in Hialeah, Florida. The property was
subsequently leased to an unrelated tenant. Second, the Company recorded $1.4
million in share based compensation in connection with an executive's
retirement. In exchange for a consulting and non-compete agreement with a term
of five years, the executive's share based awards will continue to vest per
their original vesting schedules. Third, the Company also recorded additional
expense of $1.7 million related to all unvested restricted share awards from
prior years issued under the Company's annual bonus plan. Previously, such
awards were expensed over their related vesting periods.
DIVIDEND INFORMATION
On June 14, 2006, the Company declared a regular quarterly dividend of $0.6875
per common share, which was paid on July 14, 2006 to common shareholders of
record on June 30, 2006. The second quarter cash dividend represents an
annualized dividend amount of $2.75 per common share and represents a 10%
increase compared to the second quarter last year. The Company also declared and
paid a second quarter cash dividend of $0.59375 per share on the 9.5% Series A
Preferred Shares and a cash dividend of $0.484375 per share on the 7.75% Series
B Preferred Shares issued in January 2005.
CAPITAL MARKETS
On May 22, 2006, the Company obtained non-recourse mortgage loans totaling $31.0
million. These mortgages are secured by theatre properties located in Hurst,
Texas and Mesa, Arizona. The mortgage loans bear interest at 6.3715%, mature on
June 1, 2016 and require monthly principal and interest payments totaling $207
thousand with a final principal payment at maturity totaling $24.4 million.
On June 6, 2006, the Company increased the size of its unsecured revolving
credit facility from $200 million to $235 million.
INVESTMENT ACTIVITY
During the three months ended June 30, 2006, the Company completed development
of a megaplex theatre property in Garner, North Carolina. The White Oak Village
Cinema 14 is operated by Consolidated Theatres and was completed for a total
development cost (including land and building) of approximately $8.2 million.
The Company purchased the land in 2005 for $1.3 million. This theatre is leased
under a long-term triple-net lease.
The Company's theatre development program remains strong. As of June 30, 2006,
the Company had six theatre development projects under construction for which it
has agreed to either finance the development costs or purchase the theatre upon
completion. These theatres are expected to have a total of 97 screens and their
development costs (including land) are expected to be approximately $92.0
million.
For the six months ended June 30, 2006, the Company's investments totaled $79.1
million. Management now expects capital expenditures to be approximately $140
million for 2006.
EARNINGS GUIDANCE
Management is raising its previously announced 2006 FFO guidance to a range of
$3.70 - $3.76 per diluted common share from the previous range of $3.65 - $3.75
per diluted common share. This increase in guidance reflects the Company's
performance to date, including the additional $.03 cents per diluted common
share from the three significant, non-recurring items in the second quarter
discussed above, and management's expectation for the timing of additional real
estate investments and financing activity over the remainder of 2006.
ENTERTAINMENT PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
2006 2005 2006 2005
------- ------- ------- -------
Rental revenue $44,480 $36,138 $83,610 $70,288
Tenant reimbursements 3,526 3,091 6,976 6,070
Other income 819 1,073 2,282 1,887
Mortgage financing interest 2,355 472 4,179 472
------- ------- ------- -------
Total revenue 51,180 40,774 97,047 78,717
Property operating expense 4,802 3,749 9,573 7,613
Other operating expense 969 516 2,007 1,163
General and administrative expense 5,295 2,304 7,777 4,037
Costs associated with loan refinancing -- -- 673 --
Interest expense, net 11,706 10,239 22,945 19,761
Depreciation and amortization 7,805 6,832 15,301 13,370
------- ------- ------- -------
Income before gain on sale of land and
income from joint ventures 20,603 17,134 38,771 32,773
Gain on sale of land -- -- 345 --
Equity in income from joint ventures 192 188 376 362
------- ------- ------- -------
Net income $20,795 $17,322 $39,492 $33,135
Preferred dividend requirements (2,916) (2,916) (5,831) (5,522)
------- ------- ------- -------
Net income available to
common shareholders $17,879 $14,406 $33,661 $27,613
======= ======= ======= =======
Net income per common share:
Basic $ 0.68 $ 0.58 $ 1.30 $ 1.11
======= ======= ======= =======
Diluted $ 0.67 $ 0.57 $ 1.28 $ 1.09
======= ======= ======= =======
Dividends per common share $0.6875 $0.6250 $1.3750 $1.2500
======= ======= ======= =======
ENTERTAINMENT PROPERTIES TRUST
RECONCILIATION OF NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
TO FUNDS FROM OPERATIONS (A)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
2006 2005 2006 2005
------- ------- ------- -------
Net income available to common shareholders $17,879 $14,406 $33,661 $27,613
Add: Real estate depreciation and amortization 7,602 6,751 14,898 13,212
Add: Allocated share of joint venture depreciation 61 61 121 120
------- ------- ------- -------
FFO available to common shareholders 25,542 21,218 48,680 40,945
======= ======= ======= =======
FFO per common share:
Basic $ 0.97 $ 0.85 $ 1.87 $ 1.64
Diluted 0.96 0.83 1.85 1.61
Shares used for computation (in thousands):
Basic 26,285 24,984 25,989 24,949
Diluted 26,666 25,475 26,380 25,429
Other financial information:
Straight-lined rental revenue $ 661 $ 533 $ 1,153 $ 1,045
(A) The National Association of Real Estate Investment Trusts (NAREIT)
developed FFO as a relative non-GAAP financial measure of performance and
liquidity of an equity REIT in order to recognize that income-producing
real estate historically has not depreciated on the basis determined under
GAAP. FFO is a widely used measure of the operating performance of real
estate companies and is provided here as a supplemental measure to
Generally Accepted Accounting Principles (GAAP) net income available to
common shareholders and earnings per share. FFO, as defined under the
revised 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
the Company's operations or the Company's cash flows or liquidity as
defined by GAAP.
ENTERTAINMENT PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
AS OF AS OF
JUNE 30, 2006 DECEMBER 31, 2005
------------- -----------------
(UNAUDITED)
ASSETS
Rental properties, net $1,328,685 $1,283,988
Property under development 27,701 19,770
Mortgage note and related accrued interest receivable 65,740 44,067
Investment in joint ventures 2,240 2,297
Cash and cash equivalents 7,477 6,546
Restricted cash 4,690 13,124
Intangible assets, net 10,299 10,461
Deferred financing costs, net 11,388 10,896
Other assets 29,973 23,016
---------- ----------
Total assets $1,488,193 $1,414,165
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Common dividends payable $ 18,190 $ 15,770
Preferred dividends payable 2,916 2,916
Unearned rents 1,188 1,304
Accounts payable and accrued liabilities 8,043 7,928
Long-term debt 733,265 714,591
---------- ----------
Total liabilities 763,602 742,509
Minority interest 5,035 5,235
Shareholders' equity 719,556 666,421
---------- ----------
Total liabilities and shareholders' equity $1,488,193 $1,414,165
========== ==========
ABOUT ENTERTAINMENT PROPERTIES TRUST
Entertainment Properties Trust is a real estate investment trust (REIT) and is
the largest owner of entertainment real estate in North America, owning megaplex
movie theatre properties, entertainment retail centers and other specialty
properties in metropolitan markets in the U.S. and Canada. Since November of
1997, EPR has acquired more than $1.4 billion of properties. The Company's
common shares of beneficial interest trade on the New York Stock Exchange under
the ticker symbol EPR. Entertainment Properties Trust Company contact: Jon Weis,
30 Pershing Road, Suite 201, Kansas City, Missouri 64108; 888/EPR-REIT; fax:
816/472-5794. The Company website is at www.eprkc.com.
Safe Harbor Statement: This press release includes forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995, identified by
such words as "will be," "intend," "continue," "believe," "may," "expect,"
"hope," "anticipate," "goal", "forecast" or other comparable terms. The
Company's actual financial condition, results of operations, funds from
operations, or business may vary materially from those contemplated by such
forward-looking statements and involve various risks and uncertainties. A
discussion of the risks and uncertainties that could cause actual results to
differ materially from those forward-looking statements is contained in the
Company's SEC filings, including the Company's annual report on Form 10-K for
the year ended December 31, 2005. Investors are cautioned not to place undue
reliance on any forward-looking statements.