EPR - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Q2 2018 EPR Properties Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Counsel. General Evans, Craig begin. may you Sir,

Craig Evans

such Identified today condition Hello, Private as you "may," everyone. vary Properties. are who Counsel filings EPR forward-looking Form contained defined reports "hope," the of joining from Evans, out words earnings as quarter that such call. statements "continue," I’ll "intend," Litigation this "expect," is Company’s factors am cause including filling the call The the by and in may Reform Company’s Craig start Act these by could "anticipate," "believe," us materially terms. for I you Moriarty, these comparable by week. results forward-looking General our in of second forward-looking Company’s or this of differ XX-K on SEC statements, XXXX Securities informing XX-Q. for XXXX. from operations call and statements other Thank those This the for that contemplated for actual discussion is include in Brian financial results may to

call to Now, the Greg over turn company CEO, President Silvers. I’ll and

Greg Silvers

Thank quarter XXXX our you, morning. second And call. Craig. to earnings good Welcome

remind financial along summary. slides today www.eprkc.com. company’s everyone started, available to company’s are CFO, follow the is Before get me on we will who via the review I’ll at website call our that With the Mark Peterson

Mark Peterson

morning. Good

Greg Silvers

greater detail. I'll always, our then discuss with start As in business quarterly the headlines

get started. So let's

revenue quarterly Record headline. first earnings. The and

record results. are continue We of pleased to refrain setting the highlighting

by of our underlying assets of ongoing performance segments. the compared quality strength revenue share FFO our adjusted grew investment This topline the and of by strong previous grew and quarter by as high differentiated each year, supported As XX% our per is portfolio to same XX%.

Our second capital our executing strategy. recycling headline, successfully

and management. One disciplined of fundamental is capital prudent principles our

the price As capital for XXXX raise our additional stock time. which communicated February plan equity any during year-end given need XXXX capital in the our at we our call mitigated to such,

We recent tap recycling we strategy and posture. more to our our positioned have to source, growth substantially either we a with recovery begin price favorable now to stock as delivered on are turn

strong Third box has pace performance. tenant results headline, established recent a year. the reflect office for strong The

delivered our rewarded the credit of year and Six properties attractions following ski assuming our a was the of upgrade with leases. performance strong Our Flags a five of solid announcement

more significant note to We will preference Mark, business earnings we are demonstrate announce increasing our our by we fees, it's on have increase prepayment spoke guidance. earnings but happy topic. that pleased increasing detail for a previously, more they to while that primarily headline, We're important guidance, this the to strength, remains view their very we are and about core to importantly, with with from consumers these Fourth the experiential is term near long-term properties take as continue contribution driven additional healthy. assets.

the our detail. occupied. more properties in second end Now, $X.X services XX% At the I'll discuss business XXX with investments the were and were billion that of quarter,

During bringing $XXX.X million total a $XXX.X million quarter, to the of was year-to-date. spending us investment

$XXX.X were total a us million, dispositions from $XXX bringing year-to-date. million proceeds Our to of

was consecutive three operators at the over consistency of years line and level the we've average company our X.XX, coverage X.X our seen in Additionally, approximate the past rent highlighting with well businesses.

billion provide XXX under entertainment of our three in I'll property service included XX operators. development, investments quarter our portfolio Now, update end, one an At segments. properties with specific on and total $X approximately

by Disposition family principal segment on million the build-to-suit which entertainment spending proceeds XXX a in $X investment rent secured from was in occupancy comprised partial Deck totaled Chicago, in John million centers entertainment was million mortgage was Illinois. prepayment proceeds our segment retail Our and of Observation theaters, primarily Hancock totaled entertainment our Chicago redevelopment of entertainment primarily $X.X at XX% in development coverage and consisting times. $XX.X of X.XX on the and our $XX.X centers. Investment note million, Tower of a megaplex

Turning X% prior last this American through over were versus updates. office weekend. to up year revenues North industry box

impressive box The and by prior War, almost XX% as such quarter successful year office with X. second outperformance growth the Deadpool Avengers, World was Jurassic highly driven over Infinity X, Incredibles titles was and

development, performance, expect and balance to portfolio While this $X.X pleased service are X%. expectation to of At for closer we total our will the the five with that to this end, our billion X% included XX under quarter up year year we outstanding XX continue recreation in to summer's operators. end the properties it's with properties pace torrid and not of continue investments

the complexes Investment occupancy coverage totaled times. spending on rent segment hot on boutique million and recreational Hotel balance thousands second anchor appealing in by - XXX million natural a quarter, during of $XX.X included San XX another Rocky was in Juan on Waterpark our entertainment and with $XX The approximately is of the banks springs Our was resort being our a spring the have tubs, the and Pagosa the dislodging River thermal that in featuring a million is offer spa attracting in spring XX springs the downtown catering The years Mountains room world. Catskills hot Springs, and attractions. recreation springs XXX% $XX.X Colorado. unique development Colorado, which the spring over X.XX resort golf visitors of the and - to for Kartrite primarily approximately the built-to-suit deepest independent and the been resort terraced spa, the is property in asset. Situated along fed

includes Camelback and assets spa. the has lodging recreational resort Pennsylvania, us skiing Poconos recreational the Mountain anchors as led base which the springs pursue to of additional in Lodge waterpark such with success and Our

park Kartrite Mountains, in also portfolio New the in Casino. new We lodging when anchored the Resorts are World water adjacent to the to York eager another asset XXXX welcome opens our Catskill to

recognition Real with their properties call, last This the seven million affiliates of received pay $XXX prepayment we Estate down unlevered X.X%. by of fees an $XXX XX% on resulting value over of conjunction with our of approximately carrying implied IRR an the million approximately of to in the May of Boeing million, on rate cap our discussed yielding XXXX. X, in of and investment $XX.X pay note sales resorts on the As a Och-Ziff down from reduce

off require Vail six that Additionally $XX.X OZRE transactions of fourth to quarter. for they with of the proceeds OZRE properties. total June million buy These in in of anticipate prepayment we fees value million remaining approximately off [ph] and entered occurs of the announced Resorts note carrying the four net million, our assuming into agreements remaining pay will have pay $XX for an to additional recognizing them ski $XX

be solid Turning year our April, results season we to performance expected underlying and trailing industry recent revenue portfolio mortgage assets, their outstanding our due removed from through have to assets To despite respectively this the ski in OZRE loan approximately the updates, of delivered with the average. visits have [ph] the payoffs. X% and X and clear, up performance the statistics operators versus X%

and during results summer a on the which to of will the allow Our call, provide next for heart attraction season report our assets are of their us will we earnings season. the detailed vast update productive the in majority season

now further Premier Six experiential Six These establish XXXX a quarter so part other our XXX to in estate. owner At total deeper as the that an Premier, closed We portfolio and of our operators. leasehold were were to over purchased total Properties. LLC. by and forward from over transaction capitalized active the included REIT park world's we expand with theme have interest We customer of CNL The with the our of with added attractions Corporation with look regional parks when operations will both company. Entertainment additional we acquisition already growing position under in relationship brings our are in investments properties of operated to on the previously Lifestyle parks largest their the X six education to strategic relationship properties and XXnd coming development, portfolio five us operator. as pleased had transaction Flags service leased our years $X.X parks Flags this of XX leading assets well of one relationship with billion end, real the diversity May we a

the due XX% have a of income of net properties operators. no of a X.XX. to with that Four of to required sole this to a made build-to-suit had schools. and vacate of the schedule to approximately development for properties we of one to under proceeds the our schools or control direct included new payments properties of XX% earnings a was rent midpoint the Subsequent new agreement all $X XX were lease five August intends making the March transaction company be non-cash in CLA to GAAP XXXX, in spending If quarter schools, leases the month our and with public some cap into longer to related towards one payments additional approximately of in new lease develop centers rent cash satisfactory agree only requires four expiring agreement may Imagine school and leased which of of $XX.X million agreed lease consisting July these CLA occupancy private In XX CLA rate on XXXX. from a if we leases. and under Our period was We covering Schools the of adequate CLA extended, our relinquish approximately The total early the million. the still schools and rate case these to charter progress rent to expeditiously million this coverage our of remaining Investment redevelopment month to approximately the million. discretion, lease to CLA sold charter we XXXX. is $XX.X extend proceeds we July five cap the also these prior replaces other net guidance. properties produced lease will payment $X.X believe XX, education $XX were X% properties end, entered for development, the of as not we education of intend financing under CLA. company's and in prior lease is all restructuring. which have primarily of The segment million, totaled childhood open

will their of his CLA off properties. operation listing during detail anticipate charge the parties of continues in CLA's took restructuring continue improvements negotiate specific wrote which the to Mark would permit the in prototype. the CLA that cost regarding comments, the of with quarter third these we properties future. a to As essentially near We to development

alternatives pursuing operators. tenants We other these are also for and including replacement actively properties,

spending investment guidance. our to Moving

our range tightening of to are to [ph] million $XXX range We previous $XXX our from towards million. million of $XXX

from of million year. is $XXX then $XXX I the disposition previous to aforementioned to for you million $XXX million. Oz $XXX transactions, to $XXX by range to of guidance our our are The year-to-date disposition of a proceeds will end conclusion. the to the and primarily their the slightly increase loan pay financials our Including increasing [ph] also will due the that are that, We million in over turn discussion off it With July excess million. Mark the at of rejoin expectation

Mark Peterson

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

million million slide. $XX.X to Now share or a compared prior dollar million quarter in $XX.X second the the $X.XX $XX year. compared share $X.XX turning the $XXX per Net or first a income to million the to prior or year. two FFO for per in was was

$XX.X prepayment CLA, walk adjusted in in the that I include Also I like prior $XX.X prior million into as the primarily $X.XX as mentioned to would the FFO unlikely of quarter a excluded the year to I this $X.XX share specific four the charge million. reduced assets the the and improvements, million was $X.X through key from development million discuss year, quarter. to XX%. mortgage was versus fee that determined we point increased determination, the to the of these obtained education OZRE million taking we is prepayment quarter CLA agreement from during partial note an variances, Lastly, to $XX.X the on entertained per $XXX.X the out recent cost properties Greg early were Due related and want results FFO each is of to an of to the million $XXX.X that the impairment prototype. upfront that development Upon of that items making the for these continue we to properties. of will value two before share increase by [ph] per appraisals adjusted. charge CLA related the This of the carrying of

litigation million. for Additionally, Cappelli the ongoing Group we $X during quarter the our with settled

While we through against costs the in exceeded the all have strong to the defenses trial settlement always claims, likelihood have very plaintiffs believed costs. would have litigation legal a we continue the

We put distraction to behind us. are pleased this

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

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

that tenant reimbursements revenue and revenue amount resulted in under fact discussed learning investments. the the events rental the $X.X in category, they also year. versus rental for call. a children's the note relatively small This $XX.X due $XXX primarily Please to the from this preparation that dollar of reporting required made related increased also Note began prior that as is million year related to revenue This on XXX,XXX increase within revenue we we prior million. quarter last the standard adoption will quarter, $X.X the our decrease XXXX the combined. during for payments were versus we million the X, represented be lease prior of these Within to new in January agreement where the all year. the Tenant of $X.X by new quarter recognized accounting reimbursements million revenue on million to prior the versus rental

$XX.X Additionally, slightly million Mortgage OZRE approximately million. for down income to were related the an quarter, percentage $XX.X rental other up $X.X of $XX.X year. increase and was discussed from the included repay quarter The I the financing increase in prior prepayment previously. year the and prior primarily $X.X versus resulted million rents revenue versus for million at million the at

million the to included lease Tower primarily the prepayment a the mortgage in master a In These addition, of exercise repayment $X.X $X.X million $XXX note were of during proceeds of the which from we a convert in by a partially arrangement Endeavor John Greg right investment their Chicago mentioned, million we fee. received have Schools first in quarter offset quarter note into of partial observation as mortgage Hancock XXXX. deck during increases the

to costs, quarter versus as On expense versus fees related due multi-tenant properties. on million the for in prior property expenses operating behalf as of the our expense side, expense CLA, higher our $X.X the at estate by million operating taxes year approximately XXX,XXX paid increased real G&A increased education million There $X.X as the $XX to in primarily or compared to the as in year, professional fees. to and the in well no increases due were prior million prior our $XX.X properties payroll quarter prepayment in termination our benefit second to year. well

quarter charter the Tuning tenant adjusted $X.X and will However, Imagine that we million sell completed to quarter Public of net public for will to next to million $XX.X FFO for proceeds four Greg quarter. adjusted. option result recognize pursuant sale subsequent end, leased for Schools FFO mentioned, recognize of third to a a did as from as FFO third fee And subsequent $X.X as million will slide. as a we quarter purchase gain one of in and $XX.X termination of sale million. excluded on end we Also total school the of to Charter the the proceeds net be in

prepayment For and the want FFO growth as was June note, from our if terminations ended XX% remove our numbers, the six I months including FFO share to penalty. up both per adjusted was prepayment X%. total we $X.XX XX% per to Oz year-to-date revenue share all XXth, [ph] was our as also up fees adjusted and

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

our - times. of and all continue ratio you EBITDA at improving coverage X.X termination times, at service to debt debt quarter and to debt coverage with at each end coverage X.X interest coverage be that charge X.X prepayment adjusted ratios net times was can Note As and exclude at X.X our fixed strong these times, see fees. ratios

to gross on XX% basis. a debt basis XX% slightly net Our a on and under was market assets book

end approximately had rate update. debt debt either million through we Now, and hand. million unrestricted and quarter billion or next blended of We has rate At $X.X on let’s liquidity a on is that debt credit outstanding of billion quarter $X fixed drawn which line fixed of of $X XX slide the been $X with turn for our coupon of our markets X.X%. swaps capital billion had total interest to at cash

years derivatives in the XX-year replaced in the earnings and As net a a rising cross will Canada. expiring our have $XX.X with agreements Canadian debt notional million average notional previously against with comprehensive value maturities a of were notes which $XXX we of This gain interest These .in with two of unsecured debt two quarter million a end, to combined X.XX%, the our sale - liquidation in million foreign hedge we significant now issued line serve of announced, million maturity XXXX properties until the great a given of of rates. coupon position value into in of We our seven which amount income settlement. as of other and $XXX proceeds upon of and of settled total the senior be investment April through cash payment of new credit. we at $XXX received over Subsequent XXXX. of June were used currency recorded reclassified weighted or the to swaps is properties potential and connection no currency to a be Canadian accumulated with reduce

Turning slide. to next

XXXX range of share are XXX. XXX to as to that guidance a pleased to range per to we from announce increasing XXX FFO We for of XXX adjusted are our a

range million increasing to our beginning $XXX out new year. to $XXX been has $XXX the guidance our Greg raise to does million. from proceeds laid very plan over that narrowing $XXX to $XXX fund the range for new $XXX on supplemental. million capital proceeds for the of million our are remainder a of year Guidance working $XXX well we range disposition investments disposition at guidance not range as use primarily the $XXX million mentioned, page spending and of to to a million XX the to XX to a need from of that million any our our anticipate of to Note of of a XXXX As million such detailed investment

midpoint the roadmap a again Turning slide, be per might helpful share midpoint. current I to to adjusted previous next guidance it thought FFO provide the from as to of

in higher the prepayment of - midpoint the the school fees increase of that see related net our coupled prepayment $$X.XX our of anticipated cents to had earlier. impact of you the and XXX, prepayment million in totaling fees of balance remaining to termination in approximately with $X.XX termination guidance of in School closed to additional OZRE of $X.XX. as $X.X increase in its million million and and which the prepayment primarily I already associated due with guidance timing is remaining then the on we the as as with termination to million OZRE pays fourth Public off to had the that As with approximately discussed. of with our move us $XX third that quarter, can added primarily payment, terminations offset fees Starting quarter $X.X Charter one partially per fee $XX base million sale per share by additional up a increase a the $XX.X CLA midpoint related fees expectations. as of the receive occur primary mentioned by previous far all dispositions has percentage penny share, changes net the expense. to a in loan we approximately G&A These expect slight Greg the are August as rents note We termination Please exception

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

Greg Silvers

Thank you, Mark.

by Imagine assured we were we their and quarter, the this the being reduction learning fronts of is day. recycling performance adventure locations XX restructuring us the July progress morning, made. As discussed plan, did our overall not this of on capital results, the children's we executed strong further complete our disappointed Notwithstanding their portfolio. have our multiple that They including

allow of However, cooperation restructuring end, that some month and requires additional landlords any the a time. creditors. agreement one many announced To CLAs we to today

encouraged rent. require any payment required development progress, on to agreed demonstrated Furthermore, EPR work our by performance future attractive to they believe that will we translate it assure However, we continue agreement of are to share the release our in I parcels other allow we partners, invest underlying and business. of their continued as the such optionality and price will a and opportunities you working extension success with resolution. of capital our we of are recovery as to well groups and for our operating upon the given can the Furthermore, grow

it open let's for Now, questions. Brian? up

Operator

line first Thank you. [Operator line Sir, Nick Joseph Instructions] And open. comes from question Citi. the now from our is of your

Nick Joseph

of on We've box for you Thanks. X% office MoviePass growth, I estimates industry. to can the office receipts? all appreciate accounts risk on MoviePass color box in the theater the struggles review about meaningful seen U.S. and the [ph] some

Greg Silvers

of I and rely the operators, AMC announcements is again, operators what proprietary as plans, now and seen Nick, our can have the from announced almost haven't kind their discussions theater kind own before it are both all yet discussed of we've they Cinemark and of plans. introducing the Well, upon

of So that it. kind result hasn't not as the and to to that demonstrated a suffering indicated they’ve of box office date date, they're

Nick Joseph

CLA took? would impairment sounds specific Then assets just off the as no if to that what to CLA, the the is it based on like Thanks. is you new think the to improvements cost there be do properties release tenants you resolution, there

Greg Silvers

to who Yeah, it's operator is. it's we're you upon I think - know - the going depend

of share agreement ability think you I of know architectural gain demonstrate didn't other level is, mean get range to the when operators to that is fees a these the that So discuss financials of things dependent important from upon to one are that. and on whether those part wanted that our store you we know get potential this cost to type at they we the new that of look haven't you I - the of that things Nick as - very I we stores. performance one with hit did But lot

we with that agreement, environment. improved they operate can latest position to that can this properties those think somebody in our current So so market meaningfully see we've their

Nick Joseph

the to just for is lease maybe something continue August rent in or extended know, as result current? this month-to-month you and in as then that finally lease CLA August could resolution be should And to long the a a

Greg Silvers

allows these encourages to each we a Well, that beyond is point. great to we're made sufficiently longer at the we us is either to again, one we've a get continue intervals, or if that see that What time. progress said put process pressure that it's not period. and at of comfortable that meaningful stop with extending to determine to want and continue think being progress We us

Nick Joseph

Thanks.

Greg Silvers

Thank you, Nick.

Operator

our Capital comes the your line Craig of line next And question now from open. Markets. Mailman is from KeyBanc Sir,

Craig Mailman

Good morning, guys.

Greg Silvers

Craig. morning, Good

Craig Mailman

here? investment Or surpass know end front. high of of improved of take trend commentary cost still to follow to have the that of high capital not ability and towards toward maybe view and guess you to the that kind case the you anymore gives on said kind spending you is guys could a your going the a of midpoint. of kind more to cautious we end. see kind you the I are kind the dispositions previously about optimism your us sense now give just of I up - your of trend you know, on Just you could

Greg Silvers

both, little a of it's Craig. think I

footing think just I again, of our we've on this kind price. regained

to takes little it up. ramp So a while

investments. that You right we're investments know, issue has if spigot find which The to business. turning opportunities of you [ph] on businesses well. we equity the underlying will But we changed approaching doing I we that and more the the our think tell are posture grow can

this of opportunities. kind - think But of So days. XX recovered recently you prices last that's the know we we just - our are conducive creating in

is offensive can with that we in bit - is posture this blossom. can it people a So opportunity the are more our starting company you to you feel and

Craig Mailman

helpful. That's

of spread As this, I expectations to we just were look at surrounding any meaningful your kind there mean, changes were? guidance what

Mark Peterson

if but mean clearly potentially capital. our now, dispositions it's there think coming I Not additional you are with deploy our wasn't, we we going line in, know, in expectations. forward But

Greg Silvers

Yeah. investments, our raising we're funding capital changed spreads. where are not to hasn't do so [dispositions our investments, that Remember, really

Craig Mailman

have if perspective. to helpful. What's on guys tenants then And cushing CLA That's [ph] on just you extra of the not - were prospective the of if at month the timing renew August CLA, another pipeline know guys you you now be how much and maybe backfilled that end at or for on of kind it Kind less is of of point? month. guys much how of time can by see any you year demand end this

Greg Silvers

want It new. Yeah, it to I like said, if wanting think upon and and they discussions. start an I we've I a mean, depends rebrand had is existing take or maintain to over these someone really position and the enrollment existing

we've X going on X multiple know, somewhere operators. between with and discussions you got multiple So discussions

It's feel the terms are disruptive, variety of there finding cash both options. of solution families. for a that best in is the we just least and So the flows affected

Craig Mailman

halted. guided missed that sorry are two kind another you tenants process just you the then on of I or you the am of looking there in dream [ph] developer? network development, are you just Are sell to backfill looking for the And I Okay. this, to if guys kind

Greg Silvers

you We're as those. got of I the can weeks. those of mean, back, couple we see going to in all just check last

to far to we're to those develop with something, those this those going alternatives, explore of as whether options, operator, working sale willing come agreement of all its as a you Craig. we're has all different recently know explore that's a that all - and just So of together more

Craig Mailman

recoup of down this a opportunity kind to And the good do like that quarter? you took you feel write there's guys some of

Greg Silvers

to this an on them making an it's so want position to early understand very more to was serious right were now pressure would and - opportunity do we utilize it. exactly with these make us We the about what others but felt our for to progress. Again, knowing it's increase without opportunity CLA that

productive use. into a - will of history properties we've our We had putting

operator, or recovery start we'll an that's they get going be good exhaust we the if looking early [ph] are to that can. these could a and to So - sites entertainment best whether that's opportunities ad with all at we're with whether that -

Craig Mailman

And of that are It then to design just last ed they one, putting what kind improvements kind carry facility? early of in seems specialized of kind cost. or high for of a kind

Greg Silvers

properties how like know that know carry there. different I said you four you gamut playground you exact and use of from and even can design in pad someone the equipment, things things various you're terms the from is Again, their going pad. of across geotech that the There

just properties. there's across four So a lot

Craig Mailman

Great. guys. Thanks,

Operator

question from line next Mings James. Raymond the Our of from Collin comes

Your now open. line is

Collin Mings

Hey. Good morning, guys.

Greg Silvers

Good Collin. morning,

Collin Mings

investment Colorado that Just acquisitions came you on more acquisition expand broadly prepared about. And the just back can up how on remarks just versus how to look of at you on touch ramp the pipeline June the see as and investment some spending?’ you front, then development regarding opportunities,

Mark Peterson

Sure.

in the our than that's to understand looking that in four substantial We've we Kartrite people underlying more our months trying and it's and as and were given the who we at recreational and property. the the so we've It I recreational durability we're think approached triple the by lease, I this what the partner to how element got know, that recreational been in Collin, six presence would with came at with we fashion feel is the in deal hospitality for that. we've lodging. in see what opportunity activity call deal you been - a quality positioned of probably with we've what hospitality. recreational the that net well Camelback That announced supportive together, done hospitality an

a structure with So us, excellence. history it got of longstanding for it's operating worked

So portfolio. within feel naturally it our fits we recreational

the our the portfolio. would be again, We of that as that a slowed we kind continue acquisitions down with to year the far As that to of things much. our be add turned haven't could we business look been to those and our one But opportunities. we kind acquisition of that performance. beating opportunities at always within lot will ones capital, kind those it's continue But back so just to of are kind ones of that we been drum as Those the build-to-suit meaningful to we has for of look will immediately. year's kind of quality this those

see will hard. pounding to year of with slow it by end start drum, rumble you'll pretty think that I the a be the hopefully

Collin Mings

Okay. rising touch That's just just helpful. can construction rising that especially underwriting to just the projects, construction impacting that some impacts kind indicated sense more all are fit maybe how convert. that? the how then the in that into of not make you turning you But theaters maybe I of your kind redevelopment theater And for and the conversion, cost know, does may threshold past how productive on of to costs just

Mark Peterson

becomes kind in becomes you're - return of sense on it [indiscernible] an analysis That a capital. the that invested

mid market of it So it's each the down is operators we've the sit are think ROIC our and is candidly and that. we availability or respect mover much Difficulty] dampened, the or those. still it fourth or what and our on there it and it a construction also cost, moving with operator. with the the closer instead benefits and analysis on into one with date, operators labor really first the of mid different impacting market the increased profile to rising we have in as XX working But a fourth ROIC’s they're kind has - especially second still - doubt to look detailed whether mover we're of the discussion no starts ability you we Difficulty] contributes in of of the conjunction a to you to enjoying seems at which teens with that of get [Technical to deliver more monetization. getting kind that and the what point discussed of those goes costs to to a kind to [Technical third and have Collin, know be in To has But kind positions XXs very mover of you those are are

It's an it of theaters, it an productive the you metric of issue that in still productivity. of It's date attendance to is really, and the recoup can overall issue format. hasn't relative the - not issue high On cost. kind productivity really been

Collin Mings

turn I'll color. the it Appreciate Great. over.

Mark Peterson

Thank you.

Operator

from comes SunTrust. Kim line Ki the from Bin question next Our

Ki Bin Kim

morning, guys. Good Hi.

Greg Silvers

Hey, Ki Bin.

Ki Bin Kim

an [ph] I point about million? to it too on $XX.X impairment charge don't X.X. pretty guys much, at LA want impairment the wise [ph] but big down you and mean, honestly took to just wrote that's Difficulty] So I of percentage believe charge. a [Technical

the does about assets? buildout existing be you So a what think [indiscernible] you on the do imply make us that making XX or is twice does of the assets the about it. name to very and properties specialized have to rate could that recovery And basically that just what the those game

Greg Silvers

- I of this Again, Ki do Bin, projects has these of of January construction stopped in we - to it XXXX. think remember with more

them the the now much some as to said, more [Technical that's got approach I specialization are process. months, an less XX a wanted impact recovery know of are and to So been in kind this know, we those. elements what and here usability that the sit we at very, But things specific it of of of issue about think the and candidly when so that about what look very exposed cost They've these I the Difficulty] take up in like you very you are it's [Technical as to get you to don't this tied conservative it's is to for unique there of this. starts as start product Difficulty] that to much

Mark Peterson

he as properties land. and continue you're those sell Greg development finish you to or value come you're development more you want the it not, going land could optionality whether said, writing could not becomes in if down then to Yeah, as him basically and someone have likely else than have

Ki Bin Kim

XX CLA? point. what what Good sense. can the remind the makes That And with you of And you.. carrying us that is assets you value have Yeah.

Greg Silvers

Sorry, you finish.

Ki Bin Kim

possible, there's point? case base range And assets but for guess, XX outcomes are ratio I wide of the think know recovery that to at you a the if know, this I you had what’s you

Mark Peterson

as around in writ was somewhere original would Difficulty] XX% said [ph] we I was talked XX% the was million. the base we've thought is a $XXX number what about that And about that case of say number. $XX to million [Technical we and

Ki Bin Kim

the XX And if older slide footnotes in think months little rent a Do it's rent verticals? thanks. is a look deck, last coverage the The status you three I on - I show I question. have just updated you from with any the little data customer bit think the trailing at the XXXX. Okay, coverage for

Greg Silvers

bit it becomes really It's gets little schools. - - really crazy of a because it's

if of on that's if some you entertainment I behind. stuff, for if ours our one look like look of at quarter the and most think, you seasonal you

the you So with behind. seeing you're its trailing distorted would from it of you're - have we But know you - a productivity. don't XX like if the be it would if seasonal yet one middle quarter season and the it in distort right

So we seasonality try to that that of of the annualize - it. reflect kind

Ki Bin Kim

Thanks. Okay.

Greg Silvers

Thank you. down? that or [Technical Difficulty] has when them slowed you previously expected

Greg Silvers

mean, I they're the tracking fashion we that I No think still anticipated. had in

So thesis. nothing's underlying changed from our

Unidentified Analyst

said the the In press worked those if get properties. vacate would Okay. you that that August end release CLA agreement doesn't had out by of

courts or have the to go does you assets to that get if to transition occur, would Now do expect an those back? orderly you

Greg Silvers

we a enforce can't hope orderly right to have you you have something would predict - have an you even if contractual if that's again Well, may go that. We process. for

way in the mean, hopefully That's that I an agreement we the be way. it the orderly reason fashion. So drafted would

Unidentified Analyst

a start bit have deploying delay capital. just do is completing those know in How a question long that a types more does of deals longer remained to complete and Okay. that? capital said you acquisitions getting mean your versus you're take then on of cost comfortable and you last And improvement it's I or bit track I on versus more switch it actually just like to the you a little little investments? can when flipping there

Greg Silvers

going [ph] open that, they longer is because a takes delayed if it we've we've and little want imagine theaters may can where kind if projects feel in back talked you opportunistic us. self kind I more our of they we'll suit to said, to you specific more beginning certain reinserted of not get Well, to and build line as bit and know, fact am see the side about of entertainment positive Acquisitions up. some and readily that the of we're about that a And takes I and those we just discussions. to need little

Unidentified Analyst

you Thank great. Okay,

Greg Silvers

Thank you

Operator

And our line question the of comes from next Hargreaves David from Stifel.

open. now is line Your

David Hargreaves

project in Hi, of Catskills on success performance you're the Catskills. curious on is thank the what in if the I the casino opened your commitment casino? how of development early the there was you And With that's from of you. level seeing and the had to partners your respect the the thoughts any dependent

Greg Silvers

kind we again of the official David, sorry, in there May. Again, opening had just grand

positively. think I the numbers trended up have

is kind not Cartwright do of family [ph] different product, the is would However, more - necessarily we slightly those think product it's different. it's We competing. much target in think a but which as oriented kind of a complimentary, it's market

operator marketing And awareness the to for of it's to independent that so, kind the separate the start that are is the campaign while project, Waterpark they well to fact, overall an apart in going to casino we're their and always opportunity casino. something create create from and the a to own not happy for showcase dependent do region, And upon. property,

David Hargreaves

That's due to open by April?

Greg Silvers

timeframe, yes. April March, Yeah,

David Hargreaves

at back right, part... - And the guys been size all, you development haven't there's most the scaled for

Greg Silvers

No.

David Hargreaves

as... much Pretty

Greg Silvers

didn’t... we No,

David Hargreaves

Oh, great.

Greg Silvers

as still that's discussed. No Yeah. we previously

David Hargreaves

Thank this So week, impressive. [ph] very at you. past

Greg Silvers

you. Thank outstanding Greater Camelback opportunity project. a have the is We beautiful Thank a their It It's actually York the is deliver think beautiful, truly New be ability gets an if to area. quality it you. it will a operators experience. well-received customer by and proven anyone

David Hargreaves

much. very Thanks

Operator

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

Your line open. now is

John Massocca

are kind through kind there the XXX,XXX less million back flowing additional to in expecting? adjustment lease Is fees in from you by is of the that entertainment top of quickly, offsetting $XX offset $X.XX the you prepayment is anything going fees know, from guidance in what that line guidance So prepayments? term or

Mark Peterson

Then totals payments. Hancock $XX.X, its got XXX,XXX John extra they'll purchase an There's got you had us, expect million the turned be pay million. what from you there. So $XX.X we that we've $XX if penalties from million, got additional reconciliation look to that so prepayment we [indiscernible] - it set out there, $XX at you've got [ph] the Vail So got you've that

the convertibles a XXX,XXX at adds comes - if are then up $X.XX of that how those going of get to offset to midpoint. number the the from lower you that $X.XX. And the by termination from. dilution that's fees by impact divide incremental the We and million. And shares, by $XX.X of there's So where that that's about down course, that you

John Massocca

So what's or the the are $X.XX impact $X.XX, I negative either those convertible remember? can’t from

Mark Peterson

that your changing income guidance amount additional an we're the and convertibles you're dilution it's and goes It's $X.XX income as the as the once up for from up by, so in have incremental goes penny. you impact

John Massocca

from convertible positive, penny a from $X.XX probably from penny is from the So the penny what a of you the... a half losing the

Mark Peterson

Education.

John Massocca

Education kind of and the rest… what's

Mark Peterson

then additional and Oh the the $X.XX we $XX fact million from the income paydown. sorry, is loss that [ph] [ph] that anticipated hadn't

John Massocca

make sense. education the That went small, but sold what was early was for And in [ph] that the Okay. along center it then quarter Connecticut fairly you [ph]

Greg Silvers

million, Caeli $X.X was it was [ph]. It Wallingford

Mark Peterson

wanted property we the to that when we out the like Again, didn't be was we sold involved made a Yeah. felt that as well. them, project to we operator a and it so decision without just want - get we

John Massocca

you that Okay. sold? That was a CLA development

Greg Silvers

[indiscernible] no, No,

John Massocca

of [indiscernible] the Kind

Greg Silvers

but not. was reaction, no it that [indiscernible]

John Massocca

probably the I know but still how understand. Kansas midseason, Texas the you kind update is the on that given [ph] can are Parks are it's then [ph] confident rides no, of No, performing, specifically bit [ph] struggling cover properties a closed I any assume ones. mortgage the have the Schlitterbahn And little I Texas you would payments?

Greg Silvers

nothing's I Again, that but was but on changed is a Texas that weather it helping hot no that Hopefully, doubt In experiencing think never is there's very you contributor. are that correct, struggling, Kansas our sense, us. is major belief.

thesis intact. And Texas so supporting remains our that of

John Massocca

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

Greg Silvers

Thanks.

Operator

line And Instructions] our of Citi. the from question Nick from next comes [Operator Joseph

now is open. line Your

Unidentified Analyst

lifted variety [ph] of Nick. different of of with you of springs here [ph] expansion Billman was [indiscernible] one your subsegment, a Michael funny terms these It's Greg, options. entertainment slides expanding just have the and which of you across sort out in It's spa because recreation. Hey. hot possibilities and the know, natural in

assume a there's So I of… lot

Greg Silvers

think recreational of part it. was do lodging I

right. go, You

Unidentified Analyst

- they Yeah, I didn't spa. didn't know say

know, spa comfortable at things a where other on about a capital So know, there stock the lot now look have deploying here, like really I talked to capital on from to those that high list? feeling more segments on of your subsegments. you you'd you in list you you with low sort what And stuff using of pages embark to ranks what know, think at either do you perspective. guess you cost But was whole is of if one How your further new were is versus existing of about you versus this them. capital that's of

Greg Silvers

we be [ph] the to on. that's say where I that, Again, spigot products. in year, get going if probably us for to segments easiest we'll existing it's for if turn more would we existing the Michael of and offensive back the - will think I balance that be

for see subsegments opportunities of the next we have of opportunity into of And a so the any guess discussion more the probably introduction of year. you an year. to have about - balance meaningful go year those shareholder new develops would sort have we'll won't and lot is my as We a

So for of I look product. part year traditional the the for more remaining would of our

Unidentified Analyst

you. Thank Okay.

Greg Silvers

you. Thank

Operator

I to CEO like any and to back questions. further would no showing Silvers, President turn currently Craig I'm And now for remarks. closing

Greg Silvers

of the we Hopefully, the want forward early joining Well, opposed end enjoyed just change guys. for next look continue as Thanks, I thank Bye-bye. us to everybody Thank morning. quarter. for us has and everyone this you. start to this the to day

Operator

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

EPR Properties (EPR) 31 Jul 182018 Q2 Earnings call transcript