EPR - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Year End 2017 EPR Properties Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Brian Moriarty, VP of Corporate Communications. Sir you may begin.

Brian Moriarty

Okay. call joining XXXX for the Private earnings informing that for and fourth call Securities everyone statements you end forward-looking of year I this Litigation to Reform us in XXXX. our today quarter by as Act Thanks defined include the may will start other "will Identified as "continue," "may," terms. be," by such "expect," comparable "believe," "intend," words "hope," "anticipate," or these condition materially forward-looking are financial SEC actual these and that of from statements, XX-Q. reports Company's contemplated Company's operations from vary including form results filings results The may contained cause XX-K such those by discussion materially Company's to and factors could of the on in differ the statements forward-looking

Now President the turn over Silvers. to call Company Greg and CEO,

Greg Silvers

to welcome CFO, the our start With follow at and everyone me fourth like and along website the call. are Hello are Brain. reminding at call you, by Company's available year-end to www.eprkc.com. Mark on that Peterson. I'd everyone slides to EPR quarter the Thank today

Mark Peterson

afternoon. Good

Greg Silvers

And CIO Jerry Earnest.

Jerry Earnest

afternoon. Good

Greg Silvers

As in then to the pass discuss year-end Jerry to always the business headlines and with will detail. call I greater our start

Now started today's on I'll get headlines.

year levels spending. solid revenue, achieving had year a and supports record XXXX investing our productive In First, model. investment we earnings in differentiated

For line in a increase X% we FFO share. a year-over-year as in the year revenue XX% year-over-year increase delivered top along with adjusted per

aligned our experience and primary demonstrates diversified which highlighted $XXX our strategically with million our This further performance which and CNL each by investment high economy. investment total our was $X.X added quality of the thesis segments. Our assets billion spending geographies is investment transaction differentiated of tenants across

represents for announce pleased eighth our common consecutive equates with monthly increase the significant dividend a X%. dividend increase. monthly a year Subsequent Secondly, nearly of in of and increase. the annual end $X.XX an XXXX dividend to This our quarter were we to to dividend

the increase approximately period over has average been during Our X%.

expected payout remains X%, consistent XX% ratio well dividend with an supported yield of and of range. past well represents with a While targeted over years about now it our our within

by impacted tenant. earnings challenged Third,

outlined of Children's Learning approximately release, approximately fully in bankruptcy in decision related As we to filings straight to our revenue following reserve million line was $X press write-off and in Adventure receivables CLA, the made $X CLA. or by million subsidiaries

recapitalization leasing business. While interest overhang World still it CLA, our the for tenant several restructuring to this progress in and so any slow approach our action Four, the we that revenue a serious may related restructuring the locations associated felt are for operators event participating not issue. this expressed successful. restructuring far, and of or of Catskills opens negotiations Resorts conservative XXXX. prudent our to capital have Despite occur, in remove We remove partners any in and and operating CLA should in for with believe take XXXX

with excited that public. are the state machines XXX the ground casino ribbon X, news our packed the resort Catskills from region. and to to of has We lease all-suite officials the and hotel XXX on tower and X,XXX operator rooms. that its The the slot share doors table February opened games patrons cutting around while all World was the has Resorts The on hotel

for this guidance as $X.XX earnings $X.XX revenue X% associated reducing range midpoint remove range approximately from to The Five, continued look recognition the and continues spending per of decision to $X.XX. providing in range are progress XXXX there investment to water our of and guidance. XXXX to future a our hotel, forward share which the developing are park regarding growth. our adjusting at a in In on adjusted construction addition we we we all of CLA, of with updates property. provides FFO earnings $X.XX In to our Catskills

on an reflect we CLA, existing investment million. are progress we However guidance opportunity high of the million guidance. reach to had the to should XXXX of however, guidance $XXX investment there spending $XXX – our the to end Separately, make volatility. remains widening market expected should spending our issued we we Previously

current asset repricing, and in price we $XXX range the $XXX our However, given million. are to our lag stock to widening million

earnings spending, based and upon midpoint additional $XXX cash through flow Our with property of excess guidance can million is funded equity. no be investment of which dispositions issuance

or many reflects markets however, reprice, should our rebound pipelines, investment Our and will assets equity opportunities spending. the grow we additional

growth over in it then allocate prudently disciplined you remain believers our not that and will are rejoin I'll value. and in for With in capital underwriting sake, drive to manner shareholder for Jerry and We a turn growth's that questions.

Jerry Earnest

of capped Thank for of And investment year $X.X investment year million. time. the a segment, $XXX about The investments a full CNL spending year the was predicted. transaction spending we million you Lifestyle as at second In prior million mentioned, million of $XXX Greg was of exceeding the also spending company. historic entertainment $XXX reflects an quarter in XXXX with $XXX.X spending pace the quarter The office was of investment as XXXX during the with revenues primary spending for the strength XXXX accounted which spending record Greg. versus Fourth previous segments. investment year for for box each the balance our softened billion.

two by record softness about followed box years increasing with XX%. office However, this

this years have that office going year As XX box years. stated on last of content to success performance office not are XX year-over-year content in their that track delivering the successful does resonate. box have year of With driven. results Hollywood we studios the with some where said content very with Even to it increasing is record before have a record

is year Mission box approximate positive revenues low Day theater to February the to Deadpool opened trajectory. are that revenues office strong theatre office movie February largest With a is and year, growth Star which the annual the volatility has year-over-year off XXXX up among XXXX the year and year-to-year Black steady start solid on including Presidents’ and The largest addition choice time, basis. compelling a The performance Wars However, decline during X was in XX% for Panther, World: start period be only basis to believe demonstrates an very a consistent experienced Story, X.X% the Wars success down the others. had box all A War, spin XX-year and the Star weekend the and lineup the on such year which Infinity over follow-up a industry decline Kingdom industry Fallen demonstrating where ever growth off box continues a performance. gross we second of This largest strong average the in through entertainment hit movie, Jurassic for was driver years four-day office in base Impossible the This even one optimistic X%. U.S. dominant over the to still weekend a content office in of will return box of Solo: a with Avengers:

fourth billion in invested four redevelopment summary, the quarter, the acquisition in For XX approximately of expansion retail million, during segment segment, recreation Lifestyle properties the theaters, properties steady of acquisition our and Total ski of year service and the year operators. and investment by at Recreation had $XX.X primarily with billion to increased spending over with fourth $X.X $X.X the the and entertainment entertainment complexes build-to-suit Entertainment the at our development, top prior In growth totaled along the centers development, CNL company billion megaplex with consisting of XXX In centers. the $X.X investments segment, company properties under fourth finished and end XXXX. attraction quarter, golf other the quarter, the Entertainment family in financing in of and facilities. of a year robust properties end

King tenets revenue similar ski to last is our performance Regarding holiday, through year. Martin portfolio, the overall our Luther

ski a our portfolio. significantly year of above average the point season three-year As reference last tenant was for

diverse So in the we're to strength geographically see continued portfolio. very pleased this

the will April ski provide update on in a our We season call. earnings further

Our portfolio properties operators. of across property now is and quite types regions, diverse recreation

$XX.X in under by Our developers water owners properties Resorts properties as XX by Lodge during million areas, entertainment EPR, well first enjoy redevelopment attractions, of quarter the continued acceptance fully complexes, XX for the $X.X all had quarter's approximately the continues with at fourth and attraction with performance. seasonal XX & have operating as a we the TopGolf owned consumer recreation under totaled had on to open build-to-suit of progress last the five completion facility. the of call. our in on XXXX XXXX. strong to Recreation The Construction for the and of four development reserves by attractions well and end as properties. fourth quarter Aquatopia million performed hotel billion of ski Catskills Camelback World and the $XX.X TopGolf investment a rapidly the company's spending At company of spending half been summary, acquisition the and golf portfolio supported of funded noted and and fourth property quarter service properties properties of at operating recreation invested properties park the development, recreational construction end Waterpark, segment with the of existing an in operators. In in the

In properties from quality Adventure million. drivers Property of with quarter the nine reflects quarter, facilities active Learning the in charter education of segment, our spectrum XX education strong were in of support suite and fourth approximately all the operators. investments Education portfolio schools, Children's remain fourth segment private summary, properties at at $X.X under the after investment relationships the programs totaled childhood XXXX. of $XX.X early of six investment across XXX our properties through the high company a facilities education termination XX%. Public facilities. billion spending the the This and and service end During leases. the in development for schools invested Strong of occupancy spending had education development, builder

recycling, options real a total In to XX.X quarter charter fourth approximately pursuant terms million recognized tenant properties and sold gain public on estate purchase of of capital of sale during proceeds school net of three we million. the XX.X for

proceeds mortgage payoffs note XXX and received million. our fees to a facility a $XXX.X of XXX million for XX, $X completed of also the totaled XXXX. prepayment million billion from We expected XXX increasing December ended the mortgage of sale to range million We notes for and receivable two arrangement proceeds net million. million prepayments disposition year million. XXX to range early of We recognized one $X.X education Dispositions $X.X of for on

was of purchase to case As of sales Schools. options, guidance as charter schools previous schools well charter the the with Imagine the public as consists public sale by dispositions of pursuant operated tenant our

and/or In the the addition disposition private of continued segments Entertainment take Recreation strength anticipates basis opportunistic market. to to our in on increased advantage guidance of

opportunities, in compelling market of $XXX a We to $XXX light XXXX in mentioned, a for investments. guidance in pricing disciplined shareholder strong for spending pipeline are With volatility, Greg value financials I'll of turn and million. for Mark range investment that, the discussion the our rejoin current the remain with to our you underwriting questions. to but and our to we order As of I'll of adjusting million maintained a over create call

Mark Peterson

supplemental Thank investor the website. from you Jerry. call that everyone can remind quarterly to be our downloaded like on I the

Now share FFO in the quarter slide, compared $XX.X turning or prior to compared in million first share, for or million, income to $XX.X prior the per year. year. was $XX fourth per net $X.XX was million to the $XX.X the million $X.XX

FFO versus $XX.X in year, per the the for prior to per quarter the million prior year. a the was Lastly, $X.XX for in $X.XX share as $XX.X versus adjusted quarter share increased million

unfavorable or had These total of the fourth both rent and impacted $X.XX CLA. Note straight quarter. million the about for against million in the accounts adjustments mentioned, to receivable, quarter related as prior ended of adjusted $X recorded million per and FFO reduced $X revenue Gerry by periods nine to million, was of XX, the by we from months noncash that line fully write-off XXXX CLA. revenue rental reserving related Greg receivables for $X.X September of share $XX As

straight prior So rent the reversed year. adjustments million another the as receivables from income, quarter of $X.X that line $XX a this million well as

adjusted. to I come discuss through Before FFO FFO walk adjustments as briefly the key to to two variances I want to

a First, I'll completed preferred our shares plus recorded of five quarter, and and six redemption in eighth $X.X my all issuance our in we previously F charge representing redemption fourth as deferred at dividends and Series million of new costs. announced of later approximate accrued totaling discuss original issuance comments. for $XXX.X the the par we million

charter gain public of pursuant completed net purchase $XX.X quarter we schools and tenet $XX.X three Second, of recognized to million. the for million sale options on fees sale terminations the including during proceeds a

quarter the the prior variances year. for Now, let key me line walk versus item through the

the to compared year revenue $XXX.X total Our XX% prior increased of million.

and last rents for was to million investments quarter million to related a recreation and the that the $XX.X included from Within real $X.X was quarter million increase versus the in prior the connection and Mortgage those the schools prior was The Och-Ziff purchased and increase due resulted This in $X were CLA, versus tenant. period private versus from quarter revenue income adjusted. with with properties $XXX in several in XXXX, of restructuring This straight-line recovery Estate the of This in the for the the public approximately the leases million I receivable partially revenue Real FFO The two of due percentage in properties, related estate year. option $X with last versus to favorable mortgage million increase decrease income charter as quarter additional And recognized year. primarily rental prior extending to new payoffs the assets and by rents of $X.X rents excluded by in recovery million million. It $XX.X by million XXXX increased previously. activities direct transaction. related public gains current year. Note of was percentage financing school Other mortgage no was last was funding schools million offset decreased million quarter net lending sale CNL certain for due lease earned note related our to to revenue year. an quarter, to increase for versus theaters. offset $X.X prior reversal including XXXX increase XXXX insurance of $X.X Imagine, rent to year million $XX.X CNL transactions of by a a purchase partially $XX.X $XXX,XXX discussed in the the financing are other fee rent related in a primarily the rental $XXX.X fourth prior note transaction. revenue noncash charter including a quarter. category, again receivables the to for million including insurance the in including Percentage

prepayment notes fees charter recognized XXXX. the prepayment to approximately public we anticipated related Additionally, two that of $X.X receivable to the of $XXX,XXX mortgage of related we school quarter receivable, which during $XXX,XXX would a had mortgage previously note in million occur

bad the to versus at and I related was million increase compared property costs Transaction properties. with side, $X in fees. the in incentive from in increased mentioned expense year previously. expense year. to $XX.X other partially associated compensation, expenses payroll $X in remaining C&L year, due in million to by primarily annual of debt a prior increases $X decreased higher million million operating primarily expense for decrease due the benefit the professional costs our On as decrease offset increase a the to $XXX,XXX The and other to by prior transaction. the quarter, costs prior million this decreased expense due to $X.X CLA to related expenses non-recoverable G&A

XX% share X% turning $XXX slide, FFO results the million revenue our the also next our a record versus year and a increased million, full increased to to total was year new $XXX prior record versus in for year the adjusted EPR. as Now per prior to

Turning ratios. to I slide, review credit of next the company's some the will key

debt service X.X fixed ratios continue coverage times, coverage X.X times coverage at and you As times. coverage X.X our to with be at charge see interest strong can at

was Our net that CLA EBITDA at in debt zoro quarter calculation. Note to is X.XX for this end. adjusted adjusted EBITDA ratio times

quarter for and by our over monthly mentioned, common and in as ratio the As payout for XXXX year. our XX% was FFO we the X% adjusted increased dividend XX% Greg

covered XXXX strong monthly another of well increase is announced represents and consecutive our increase. previously dividend for X%, almost annualized a significant common with eight year Our share

with $XX.X on which rate Now for quarter markets I'll through quarter-end, of or outstanding million at billion. on liquidity swaps billion interest is the fixed X.X%. $XXX fixed-rate end cash had of We held $X a turn At XX% our and of approximately includes million total capital to line $X been this credit. blended of XXXX had update. that debt we exchange. next unrestricted for debt hand, of a has debt Slide outstanding And we had million either coupon debt $XX.X

Turning to slide. the next

You note to that year-end. in as of our senior mortgage the can we our profile XXXX XXXX. $XX.X payable of redemption Note due full earlier subsequent see in and prepaid notes maturity debt million year-end, due the inaugural in completed we today, X.XX%

are terms we maturities interest debt FFO in from we that a for in and amount will the paydowns, have managed laddering be such quarter that first adjusted. plus maturity principal and outstanding fact rising XXXX as of the the denture For $XX.X no million with thereafter. these have of environment, premium excluded expensed XXXX of million. $XXX $XX.X after our the maturities manageable The pleased rate we of debt And the a until as million

quarter next a the during company at for preferred series million the a as to basis XXX versus F G Turning the at of record announced, coupon slide, represented we issuance X.XX%. previously low XXX series points shares million were preferred quarter. of XX.X shares of issued the during redeemed This savings

equity. quarter, Additionally, net way shares share we and direct be common continues our approximately to for issued effective proceeds million. DSPP of a low-cost purchase very The plan plan during to XXX,XXX under raise $XX.X common the

As balance in process XXXX. getting for see, liquidity you position can and our position great sheet and keeps stronger

a for of the cap investment our million for $XXX range our range and for capital Turning the $X.XX more of we million for to as equity a consistent an slide, investments not allows million as markets reducing raise or and see a due a related expect end our we of a raise guidance The from million. to see we with are dispositions our for in of primarily range XXXX guidance to to earnings from and investment $X.XX decreasing and new schools increase are to all spending should our the of and Should only we of from Greg disposition other while per activities of public XXXX the guidance time FFO cost raising given $XXX CLA. capital our to this cap for flexibility midpoint related in million guidance increasing the range lower a adjusted, of FFO $X.XX as to to Until to receivable plan, expected proceeds million a we $XXX received rates million earnings which share to $XXX would next we XXXX. $XXX prudent in spending change of XXXX investment leverage. the that spending mentioned, Accordingly, range mortgage guidance to removing our of relates million, guidance rates, lower our fees range to of we repayment rise, becoming to charter such $XXX our investment $XXX expected decreasing with adjusted is improve to we million accordingly. $X.XX improvement capital. are to for us $XXX in to the The having our midpoint achieve prepayment note and both capital $X quarter

guidance fees of interest, second year. prepayment while Note is charter historically first of rents the the with timing As schools of and lower are year a termination expected it in the far unchanged fees are these for provide our per as quarter amounts XXXX associated half the on also thought for in to than XXXX guidance earnings that for to to public back occur year and to half not half the same of of expected until purchase XX we $X.XX. the properties both of and not percentage will for we detailed share supplemental. is FFO XXXX. generally be to although Accordingly, the adjusted for $X.XX guidance quarterly range will helpful Guidance as Page first XXXX provide the the we guidance, of expect

remarks. turn I’ll that Greg with to his Now back closing it over for

Greg Silvers

segments I want reiterate opportunities our fundamentals segments and Mark. you, and Thank our of within growing. the the are to strong solid that are

the pricing as take and understand view will, we prices confident However, we we flow those have a realign identify forward the years, that are become have expectations that, assets are seriously. been capital Having we we capital cost more will this questions. right are and the in for investors perspective. are our with with acquisitive. business to capital we we that assets up results that With that that rear again, We mirror team very produce will we But right fundamentally of responsibility allocators. well those the as for And I'll are value. our time, asset also with it strong over tenants in that over open many looking sellers that also assets time and conviction at cash assets, the

Operator

And from Instructions] [Operator comes Paolone Anthony first JP of you. from Morgan. question line our the Thank

Anthony Paolone

and thanks good Alright afternoon.

I activity? question understand just First is investment its the midpoint of that midpoint, to suggest that zero sure net make that is the at your guidance,

Mark Peterson

Yes that would be correct.

Anthony Paolone

the new related Okay. then guidance the think investments? credit to And prior midpoint about of that much is the how you versus midpoint, on when

Mark Peterson

can one with main course, by termination going bonds, all at CLA is and the CLA for lower our midpoint the of dispositions higher number obviously, and if And a that's Couple the reduced You reconcile impact was redemption remaining that was through of of we the interest had fees. cost redemption it about difference all, the $X.XX in things related. of impact, consider about then, and on number which reduction. really other having CLA, $X.XX the the in kind the you $X.XX but got spending about down

Anthony Paolone

stores many here? you landslides, starting the question second like under Can operating on is my maybe versus just looks it that like CLA. maybe do give then you versus construction back are as step to set a And and us point sense what's own Okay. how some

Greg Silvers

we under parcels. stores I some think stopped then have operating, that we we XX two we two have have stage of are that Yes land construction

Anthony Paolone

total the this? Okay XX. in all of basis so And XX, what’s

Greg Silvers

discussed million. we think about I $XXX About,

Mark Peterson

parcels some Of properties go. land have to we and

Anthony Paolone

was the just just XXXX, to did cash you course it of… XXXX through of in throughout or then any accrual And get terms all understand, Okay.

Greg Silvers

did we that taxes. and some kind of pay cash Yes property receive went to

the that watched kind the this straight-line was the as million as quarter, regular said, $XX it straight-line XX while $XX million $X.X the rent. $XX we really really as get and being then income an prior million of we That's goes. million of I total Like charge we property related And year, offset the other did to of taxes. prior, was to breaks consider far and where million was recognized had $X.X $X.X rents, recognized. down. $X.X year the in that I million that said So million, cash this million we $X.X like some to I took kind

Anthony Paolone

the – be would all like how much been? on sites XX that yield would it have cash So why and what was expected

Mark Peterson

an Tony, stores because what the with been growing but of $X.X have in creating we when been an bankruptcy in it contributor. that to on we was discussion and geared investors We, think felt would a it kind had have expectation $XX I and the came, our above with expectation as this about down were would million we million about that performing, of that candidly, numbers back there. of so, overhang kind said, Mark had actually it

off time for write made we the from so to XXXX, it then with it decks that and the that was opportunity. it So clear consultation decision accountants really becomes in upside our

Anthony Paolone

in cash guidance zero now and the is right in. there Okay zero coming sure, is there then

Greg Silvers

correct. That’s

Anthony Paolone

quick through last And whether overall the major the you give segments conditions question. ski like, a and EBITDA run us separately Can credit. it's then just coverage at or credit theaters just

Greg Silvers

we it's that X/X range which would I within we're our – like say right consistent Entertainment – [ph] with for is what we that about. a is overall, cover, at segment picture talk been above

probably So Jerry our ski of higher. kind our mentioned, as Recreation, was portfolio

And in kind right education a X.X of to talk so X.X our we closer our and that it about. was was

that right range. So the company entire overall, was X.X in at

Anthony Paolone

Thank Great. Okay. you.

Greg Silvers

you, Thank Tony.

Operator

comes And our next RBC Capital O'Carroll question from Markets. Mike from

line open. now Your is

Mike O'Carroll

Yes. Thanks.

about is The should the tenant think CLA, regards So in today? with we now. to bankruptcy situation how

stores, signed XX were to in locked stores originally process able the the October? parcels, that you're are kind So including lease land of the you up terminate you and bankruptcy not and get in

Greg Silvers

they with we recap the to Again, and are correct. are working company. capital That's that several sources

are alternatives operators. We other exploring with also other

trying we this. to of So solution – the are we’re expedite

and kind We’re think stores, stores that had, the we feel I think said, we've pushing And from in the we Like good can. have I to of and there in been talking opportunity our was there interest rather extent to get we productive that, be will bankruptcy more it We these have hopefully, will all and solution to that a about – various that contribute. and remove an in XXXX it and prudent court just is and XXXX. this that felt than resolved it have it that by what's parties, become the the an there what's risk we out performing that conservative upside to that performance.

Mike O'Carroll

elect have the when cancel the going will bankruptcy And or if to Now is in tenant that? affirm to they're leases?

Greg Silvers

That's correct.

to an will present Our March. so they Again, that. be first case is begin payments that need to schedule hearing opportunity us there in on scheduled for making the

to kind of they properties move. want how Michael. back. they want is know decide they If and ongoing will don't payments we what give that to start It's if or again, quickly So us an our make discussion,

Mike O'Carroll

the are existing right now And profitable? properties

Greg Silvers

us, for yes. Again,

Now for properties. that’s all of the that I’m not CLAs saying

Mike O'Carroll

rental schools you can't received guess, if the those many where that that coming interest the rates the of elected that to you that's you And kind out? I you where kind and look were – How up. to right at of have have operators then different now, in locked but say terminate the ones say, Okay. elected can

Greg Silvers

trying to these kind probably There again, and interest. operate on negotiate for look different Yes. negotiating actively is these to I to Again, at idea several of in I be tell with operators. could a numbers, would give Generally, it operators in what regional we're best good while us don't groups. we is that think you it's want generally segments, call our our is and would in multiple not

Mike O'Carroll

Thanks. Okay, great. Fair enough.

Greg Silvers

you, Thank Michael.

Operator

Joseph Nick Citi. of next the Our line question from comes from

line Your open. is now

Nick Joseph

lessons or Thanks. allocators. can Greg, forward? What tenant in that terms take of of learned CLA the the I underwriting mentioned are from forward capital going you kind investments

Greg Silvers

Sure.

to question, think I we fair need And and a some that. mistakes own it's we Nick. made

for us, and other at on capital space. tenant think away were And us. our from credit that appreciating already exposure I we've they more to I making like and in have where These relative we between tenants the kind looked we a think level I changes tenant exposure are not – are in we this spaces where said, this to homogeneous our at be already of what early other I to not commitments decisions than property in spaces our kind nature underwriting have made issues. detailed space. the look to there it can of where the you of changes of operators. what It's and are assure each theater we we've that is ed. address made lot saw that, to there different And

Nick Joseph

mentioned you And Thanks. the a lag on pricing.

cap interest back a movement you long If to rates? in typically take how adjust to it look does historically, rates

Greg Silvers

rates businesses up benefited want And when these and the – to even takes while of will I sellers My historically, months. again, their going you somewhere guess tenants higher it’s think, that they nine nine that seen their not to grow to – if easily. it’s a is, are other will a were to go generally will dips we direction. be Yet that raises, little business. give And they well, in businesses interest six they period. went and six will and all and the neighborhood their it in as as we’ve month Again, back long doing it

Nick Joseph

but you in studio on video Thanks. terms do and seen How M&A lot content a demand production we’ve And – are M&A. of media think does impact and that premium just proposed going of companies forward? finally,

Greg Silvers

is I Disney think a where that were I much They pretty that no at there being just pretty now, video couple dead longer were it's things – this was it's – think, I are is because of said, demand interesting. hope discussed. a conference premium and saying we issue that much

reared hasn't really content head. is its it on, it true. doesn't Now that are that other people The it but keeping mean aspect –

will for but about ourselves directors, do a I mentioned greater audience introducing concept think the this at writers of for we're of of we diverse where female new Jerry that was simply embraced just doing the what Panther. idea, a not product Wonder new the to new saw, dawn that – we public of we how and one think, we're kind we by I greater that start broadening And Woman, are genre of Black of audience people, whether for a and and Panther, diversity Black age a conference and a product, open to is the we're very believe what that seeing were we're truly see that's film product. as more I we excited

are So creativity market. come the kind of seeing that we’re about to the very we excited

Nick Joseph

Thanks.

Greg Silvers

Thank you, Nick.

Operator

Our next question KeyBanc comes of from from the Craig line Mailman Capital.

Your line is now open.

Craig Mailman

mashed Hey, guys. couple here dead CLA, a number the are I horse released? beat but to those on one, assets questions, guess, Not of

Greg Silvers

that some are some are There's They cross cross are. that part defaulted. of mashed They've defaulted. release

Craig Mailman

they So many defaulted could versus the how mashed released? cross versus reject

Greg Silvers

Again, our I not Again, they an bankruptcy believe we assets their – I our strategy. business have given the without that this getting we’re model don't a think would ongoing tell I difficulty. productivity of they've assets. into would you that think

Craig Mailman

in versus these of in they weren't the you very anything guess, process troubles guidance just then paying fact the very, guys this of given I we for quarter know thought cash guidance, conservative just that guys but I was that the Okay. much XXXX. gave talked them? they're know rent blanking the you what putting Kind And of call for just about on last in, when being

Greg Silvers

It’s a Craig. question fair

making ours our of of productivity do. they stores conservative the toward a a what I were of they were, talking looking kind providers at. what progress of at was we capital and that idea and the issues to felt we number what with were looking some and with But were with think, the affiliated they they assurances recap them met look of that when that you were their to again, relative a that and

in dialogue like felt with them. the take needed was that taking so were So process to We we we action. long just

their in nine we a effort about At we protect to process notices our as that right felt our that moving. those like the meeting talked then termination they numbers, believe to thing that they bankruptcy, get to you That are accountants, do interest, pay to that of with of from was our numbers. assets time, reaction, the confidence process. trajectory filed, paid. we take so, would of your them to We we properties again, it an at you a actively still And back. bankruptcy. accelerate to changes which like and should that of created would on properties where get took After into this the those when at had felt trying point, be able are And we – filing this we kind they felt

And to these felt and we need approach we take decisions. make like this so, accounting

Jerry Earnest

quarter believe and to and logical said, to Yes, I think we the believe we that the just like this. the reserve now term. us forward filed needed near delay going most combined And the upside But think another just – then then Greg of is delay, two to to add let I that, in bankruptcy restructuring things outcome. hopefully, we they those conclusion there's

Craig Mailman

predominantly maybe me, the all all $XXX and how impact $XXX going reduction, up Mark, the but bump from no didn't in just guidance? from CLA, have know hit midpoint of its on guys wasn't was activity of from development have most I of then just you you potential as reconcile million acquisition to to were said that don't all you of go at much that XXXX. dispositions know you million I And

Mark Peterson

that from other then negative $X.XX which about acquisitions, was and plan. dispositions really to less negative the up positive $X.XX updates from the Remember, $X.XX got –$X.XX is bond redemption. refinancing it from the redemption, a And CLA, more from I’ve

is there So an offset.

Greg Silvers

And there this in-process not is million still, development, of we again, came with contributing necessarily XXXX. in that's into you as $XXX know, year

in are positive acquisitions for a for those not mean, they well, positive, be that those will So like – be us may XXXX, those XXXX, I immediately contribute.

Craig Mailman

to has Okay. of the guys kind have of raise income talked capital that's oriented room Or to need you wanted guys reconcile curious because to decision going? there I'm And guys tax then curious is allocators, just you investors about on to if them, the put on you the capital was here, your can were that. to to dividend, to I income going of door that the dividend. stock it it you moved not reward raise continue kind out where just for mean, the keep decision, was cheapest you you had it the tremendously, growth. being you that of The the message to capital, source did out

Mark Peterson

That’s Well, the the still is at which ratio, based payout midpoint, really what exactly… is XX%. we ultimately

Greg Silvers

So I maintain of we that mean, XX%, XX%. kind

So there. it kind right of was

Mark Peterson

dividend its significant and will flow cover. So excess cash

was think the we it So move. right

Craig Mailman

Right. you – why to the somewhat your payout raise versus have just to sort didn’t keep capital? you be reinvest ratio what getting not of dividend, and do able that's room needs a But at I'm that capital being can arbitrary

Greg Silvers

Again, combination. not I room, tremendous. We but little a think it was had probably a

Craig Mailman

that is more that Or how much there? to harvest And charter then you to dispositions, just recycle in capital in opportunistic? Or schools all of – is have that last one. gains? The increase want

Mark Peterson

we've that at that opportunistic other rather of schools charter equity knew for levels. the through kind we these capital. got of that the than and better us, is opportunities opportunities think side primarily it's recycle raising the We No, are

Craig Mailman

guys cap here your six down month the difficult clearly into lag, what's to you to more And pricing environment, are but nine expectations higher, the there? willing just are going rates conviction what’s You're bringing a maybe and get move actually you product Or talking is upward hope done? you amount you I thinking maybe as and forward going cap you of limit stuff? friendly, think it in rate to kind are worth be sell take the the that’s about

Greg Silvers

are of in active if you moves these of kind we we people. forecasting wouldn't we tell be – were with that would I Again, discussions kind

have a we So good idea.

– are that sales these assets we we or we near achieve think think can at think I worth.

this We’re so I in have said shape there we There, perform assets not ongoing. which for, desire not for is a are any we – discussions, is – these like sale. and higher

specular haven't these specular because are not but not – because closed, – in they're So they there's sense the they're known. they're

Craig Mailman

Great. Thank you.

Operator

Janney. from Rob question from [Operator comes next Instructions] Stevenson And our

Your line open. is now

Rob Stevenson

that Thanks. The Topgolf that Good of the end said afternoon, the have you we are guys. of batch guys with under agreement under that that them? you construction, currently Topgolf is

Greg Silvers

the two we do Yes, one of be of two in that more we the agreement or to started discussions them kind that agreement end our and that. are with those of had fact, and end beyond agreement reached that our agreed would there's of the and beyond

– identifying So things of that, just kind to we in had sites because helped added them help we of them value where and equation. of kind the

Rob Stevenson

that top the any outside with been are there XX top And of wind have instead next of you up being of on Okay. could see that couple the quarterly guys years? you over kind sort a doing more XX your tenant of investments of

Greg Silvers

think doing than We're anybody that anything. at. kind don't now more I probably of diversity looking right we're

our seeing a we're in think number of operators. recreation I greater concepts,

let's at, at one opposed So XX we're each I do think kind person one as five $XX looking to get to with to $XX there's I of million. don't XXX think million – explosive – of concept

Rob Stevenson

other other CLA Okay. And their payments than on note? any not tenants of current then now

Greg Silvers

materiality nothing all. No, at of

Rob Stevenson

that size people list, to of then watch And in you on last so? or moving your anybody year about Okay. of terms any worried

Greg Silvers

No. they they’re again, ski what just that I revenues kept are said reserves. is recreation funded the seasonal mean, for we relatively season fully – or flat their

shape. like feel we in So we're good

year, I Our year. theaters said, large a are, be like think will tenants this we strong

pretty So a of we're about we're feeling backdrop the where this from credit good conversation against at perspective CLA.

Rob Stevenson

appreciate Okay. Thanks, it. guys. I

Operator

line Massocca Thalmann. next question comes John from Ladenburg from And the of our

now Your open. line is

John Massocca

everyone. evening, Good

guidance, assets vacate for cost CLA into of the what Is would just and that kind CLA kind did made of So of assets question carry your if quick the any here. there be?

Greg Silvers

there is into guidance. Again, right baked that not now

additional an on we us in able get – you protect people. assurance into taxes on be be think we the and into will associated – will that hands them absolute or degree properties that So got of Again, of back other money that some to could court with get get our things be that's of nature. and could some bankruptcy the that from there catastrophic, that and

John Massocca

about of talk your a of be new in you how the kind and going perspective – it's offset kind dispositions? are opportunistic midpoint recreation from guidance, to guys getting you all then And capital on acquisitions dispositions, your in Okay. a recycling what

Greg Silvers

would fair clear points that on cash on a standpoint better. that and we GAAP could initial a think, I it be probably XXX looking yield, mean, for I be it's basis an yield,

John Massocca

on Okay. want volatility of you leverage getting – the just at run back situation of there leverage of has range of the the process staying kind you're the just in company given range end to there? prior kind review the bottom change equity your all maybe And and any market. towards then given of thought Is the lowering maybe kind to target at your or CLA, it leverage comfortable

Greg Silvers

let actually but part think jump look I’ll leverage you Mark on our then free Mark? as We're cash of this. at if as lowering and leverage, this dispositions flow lowering actually – look at plan. that part I But because between you of in will of result its kind

Mark Peterson

No.

low this by us next spending, operated The we enter Xs that's kind the at zero way. of year right. think the kind point, I We X.X at historically and leverage with CLA million of X.X, and $XXX at of flow cash delevering investment then it's on of those it, a of top dispositions, Greg the put million target if but you said, as year year, numbers. $XXX take

We good. zero. at of CLA no good think the broad still we is range So changes. year our with think We is where end

going I we've high leverage credit low to think next metrics always continue had. year, that the we're

John Massocca

kind like into the just But no get of. – there is maybe kind of is if mid-Xs this it down

Greg Silvers

Not at this that. don't see We time.

John Massocca

very Okay. Thank That’s it for me. much. you

Operator

call back any showing I'm to like questions. would Silvers further no the for remarks. further Greg turn And now to I

Greg Silvers

talking thanks quarter you year. for and We the this first on operator. our time Thank everyone Again, forward to year you, later to look earnings throughout attention. and call your

Bye-bye. lot. a thanks So

Operator

great Ladies This and concludes Everyone day. conference. you participating gentlemen, may all today's you today's have in and for thank program a disconnect.

EPR Properties (EPR) 28 Feb 182017 Q4 Earnings call transcript