EPR - Earnings call transcript Q2 2022

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Operator

Good day, and thank you for standing by. Welcome to the Q2 2022 EPR Properties Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Mr. VP. Executive Evans, Craig Mr. ahead. go please Evans,

Craig Evans

CEO; informing Thank factors you, will for webcast. expect, Peterson, statements materially joining the from by vary as could as, Act the The results differ Securities and in that that and to defined today other Chairman everyone, the included the words company's Mark be, on anticipate CFO. contained of are terms. and Vice may XX-K and those second operations from such start intend, these these statements, quarter thanks, may company's and Litigation continue, Silvers, our by Vice reports results Greg materially in SEC and call Executive the filings for Zimmerman, may, XXXX comparable Executive today's and President us are CIO; XX-Q. this of hope, company's Chris, with XXXX Greg contemplated cause Discussion earnings statements. believe, Participants and call Form actual President by condition I'll call financial forward-looking you forward-looking on forward-looking identified of or include call Private such

to will we evaluating today's of earnings call to this measures measures, SEC in included the and Form GAAP useful the are performance. these under the most A release references supplemental to which Additionally, non-GAAP measures believe certain company's X-K. contain furnished information in are reconciliation directly the comparable

which is all If the website, page on Center you and the of release, supplemental earnings call wish follow available presentation are earnings to along, today's company's www.eprkc.com. Investor

to over Greg the turn I'll Now, Silvers. call

Gregory Silvers

us and thank second and webcast. on today's call XXXX Thank you, quarter Craig. Good everyone, you earnings for morning, joining

as These earnings, strong economy. offer of in build experiences revenues reflect times mega we top that tenants results title. our has the Maverick. title our the our last off Top continued delivered Gun: along the paid call, and momentum, deferrals. delayed maximizing to Patience scheduled meaningful theater Since and essential hit resurgence the pictures the the several anchored theater During in the consistent experience for exhibition consumer they Paramount strong the for by collections quarter, demand in with was for exhibition revenue line growth recognizing handsomely continuing

also theater of the are as from to age by several population, momentum continues if theater relevant demonstrating and set the produced the to We that titles out-of-home is of form a pleased appeal exhibition cohorts results strong to will positive of additional the XXXX look that return genres the forward dominant entertainment. its position its content regains offered. as We remainder and broader

at Additionally, experiential properties above our perform to other many or levels. continue of XXXX

to And are well we yet While be of key high faced believe U.S. lower attributes price attendance any Canada. as positioned at material on we with consumers impact inflation, to and inflationary our locations the see across uniquely and properties. easily properties accessible continue will our have we the points offer

on hand. our leverage of with deep industries into cash our acquired long-term unique in commitment properties, also investments quality economics, our into to We spending, to which we demonstrate fit investments. our to pleased assets ability Turning deployment utilizing experiential are top-performing attractive profile. the our and accelerate several experiential to and investments solid regional pace These our investment relationships

the sheet strength cash and on of flow continued our diversification our generation. balance is growth focus Our and by supported

delivering continues, a dividend sector-leading we're growth our well-covered a As recovery monthly long-term strong growth, and profile. earnings

create not we price. our believe our which we and while this of strategy share is in shareholder delivering identifying currently deliver on to on value, execute investments solid performance, quality meaningful executing returns. is By portfolio should will superior in-place Our continuing reflected strategy,

share. This increased for guidance Finally, recovery we adjusted earnings per and that of our announce power our FFO to reflects tenants. we raising our are pleased as are strong XXXX

to Now our over the talk Greg more portfolio. turn about call to Zimmerman I'll

Gregory Zimmerman

of the XX% total approximately At our with the Thanks, second investments leased. Greg. quarter, XXX end in properties were $X.X service and billion

quarter, the was and of spending projects. $XXX.X our our XXX% build-to-suit experiential and portfolio spending on investment the was acquisitions, development million. included During redevelopment X

the Our XX comprises total XX% the operators XXX experiential and or of investments, and XX% end occupied. properties approximately accounts portfolio with for our at billion $X was of quarter

end comprises portfolio at X the the occupied. properties education Our was of and with operators, XXX% quarter, XX

provide the date, they and for the of of value destinations times uncertainty because gas drive-to in recession, event be and prices, a recession is broadly our proven slowdown. economic resilient meaningful concern around While have or that our to there an value-oriented in expectation and historically, possibility increasing a more not is inflation we impact will seen have case of the compelling families. To proposition from inflation be this

half total I'll QX tenants. on for Now first you operating billion. update office of of Total billion. was year the office the box our $X.X the North $X.X American box status was

portfolio outperform theater industry. to Our high-quality continues the

and American the which in month the highest films QX, box XX quarter grossing million demonstrating more Elvis; over boosted Year-to-date, want Gun; billion, Second by Jurassic Nope. Strange grossed box has Hedgehog Thor: Top $XX The data to to and Gun The Thunder; office. theater. Gru; -- American see of time. broad XXXX, North office, ninth highest led office, film $X.XXX was Rise than XX all have Minions: exceeded Three Maverick; of now return points. and blockbusters: children grossing Minions: highest Top million in World in $XXX films by with Top office July films Gun: to and And the $XXX theaters is by Madness; of million X. Doctor Love still Rise North box during since At the Sonic Dominion; Multiverse $XXX At quick X the grossed was young box December a million date, families shows consumers. Gru, of in

biopic year, $XXX million to has results per In during date. recovery. no traditional Elvis, few of $XX performance week to grossed again are each versus of branded muted titles X million. $XXX will a IP, the July, generate to anticipated multiple be and half September which reaching the of is with demonstrates first X and We broadening million encouraged grossed weekend X releases which with the generations only X August to the by

QX on big The Marvel want is all is Forever. However, the screen. releases: consumer Shazam!; Panther: with anchored ages by Wakanda the Black film, Water; major of demonstrate Adam The Dwayne and moviegoers Black to The the good films to that Way returning theater. results of see X still Avatar: Johnson; Universe

past media number a demand have on we we to the reports last issue. As don't as and have theatrical several flowing call our months, numbers in mentioned discussed films content to studios office supply the of issue, release. continue a improve increase will multiple over Box

Villages in water to moved Camelback Indoor Vacances anchored Waterpark and Attractions. properties to and supplemental, Resort now on in Attractions. X we by our are moved wellness. demand recently point to that which reported acquired hot we by Water The Because & natural fitness an Experiential the indoor parks, other hotel Springs out springs Valcartier is key the like to to in the Park driver. moved Turning major Resort Springs, their anchored category best QX the We both update Lodging groups. Pagosa Kartrite customer Indoor I from they would categorizes

our performance QX, saw across continue trends see country growth. all drive-thru, good of the continued to throughout & double-digit Eat value-oriented destinations. In we with year-over-year segments We across portfolio-wide revenue positive Play

are We latest of top the performance particularly pleased with our golf locations.

generally and began summer we performance reopen at or growth saw revenue season, for As levels. the to above XXXX attractions

properties. cultural an at are Resort We as nearly expansion. at are Revenues on attendance performance in pre-pandemic year-over-year revenue fitness the growth result, we remained seeing are in significant our at at and Springs strong. The off-season. ski And attendance begins assets. and the Pagosa QX working levels our revenue Springs a

capital properties after improvements. growth Alyeska lodging close with from in growth demand mentioned, the Season Top in tram across $XX mountain previously It's Glaciers premier named we Alyeska. Resort, the experiential summer Alaska. biking in additional the continues on trails, travel of has portfolio quarter, Alyeska Spa, closed hiking And Four million restaurant several strong Alaska, financing the for the Mount benefiting and of ADR. Revenue award-winning an Resort our Nordic Alyeska. in As strong trails, aerial the Seven our ski undergoing at XX and are

We are pleased with the performance of RV resorts. our

increases Our perform year-over-year well across Education and Attendance improved in with EBITDAre childhood and revenue, portfolio. education. portfolio private in XX% in schools continues the attendance to XX% early

on Turning to a recycling. quick update capital

theaters, close vacant We have sale expect to XXXX or in of for which X X of we executed XXXX. our contracts either

parties. discussing are fifth the with We multiple

and destination sites over water food covering XXX resort ground Glace largest the in a and parks Vacances Valcartier offering sledding, covering in X and internationally XXX hotel. attractions, of million: ice Calypso a lazy pool the announced quarter, we hotel indoor and and in an and and the variety beverage in $XXX Hotel the wave for winter During as is outdoor rivers Waterpark park options. the water with Valcartier X water Waterpark largest Canada of Ontario. well-known Hotel rooms, renowned XXX acres XXX Ottawa, and Valcartier, Villages tubing Canada. X-season slides, de modern X-star includes such and XX Quebec the camp the iconic City, attraction The Quebec; assets Calypso and in acquisition themed resort acres Canada, with

substantial resort, the a attractively second in X%. property development and the also in XXXX To just million. Northgate acquired funded Palms of million quarter, joint for resort Lodging. that RV that The Breaux the Louisiana, Wellness date & with on Resort venture third at XXXX, this Play, we on in our during and XX% exceeds and have As Ski, We're is a Bridge, Cajun and EPR of rate premier gross acquisitions, matures noted our Experiential new RV a between refinancing $XX.X $XX joint projects operator. our and in Health holds million assumed priced debt venture blended Eat RV third-party pipeline. $XXX.X owns investment making over last in we Baton Rouge Lafayette and call, Resorts, Attractions, investment progress

growing. the fund engage With maintaining million. value. of feel estate, we're investment and good advantage ideally are $XXX million are progress million of We move guidance projects additional growth investment an Cap to our X% experience broad experiential around to $XX.X announced during should We and about compelling and range to expect opportunities. XXXX. Consumers $XXX to in We're and long-term to activities spending of we real rates operators continue approximately XXXX these experiential our unparalleled positioned balance continue create network on take through as XXXX. our

continued coverage a for Mark quarter's discussion our properties, provide I the with recovery in metrics call. the over performance of we will earnings on to it next now Finally, the of turn financials.

Mark Peterson

our strong our with Thank you, will AFFO expectations. was We prior sheet financial performance year. earnings I our and share strong XXXX discuss the exceeded the per the on $X.XX and for close was quarter, the Today, quarter another guidance. provide had share FFO $X.XX the quarter for as update balance for per that $X.XX quarter prior Greg. to adjusted compared an in $X.XX versus in updated year,

to contributed developments impact had by from certain increase. cash to year was tenants, the dispositions. quarter Now as increases This acquisitions offset increase in was the the moving This revenue the and also versus Total past the Scheduled basis $XXX.X of revenue over in previously rent the to million increase was which $XXX.X completed prior continue property effect year. well received or recognized abatements. partially key of collections due million primarily a be variances. on as the for improved to

report We interest as and pleased are all that deferred collected to continues to be rent very scheduled.

a $X.X books at on During June rent the we and million. of balance accrual borrowers tenants basis quarter, million reduced deferred that XX our $XX.X of leaving receivables, from collected

balance back to collect We expect remaining XXXX. this million over of approximately of half $XX the

from for that $XXX provide over million that the of pandemic. from June Additionally on collected recognized is comments. to little basis interest with their cash when were that interest received. result the included $X.X collections of cash impact basis were million these next collected that the have customers [indiscernible] worked as my the forgave XX, but interest deferred cash I remaining notable received we businesses. remainder the we instead $X.X the repayment the COVID-XX rent very during in million or rent is to more a design rent the the customers is during and worked rent not year June not that which and and we as from our of deferred guidance. will to in deferral for revenue expected later quarter, It the million of books. pandemic, our deferred continue years. due $XXX recognized on through when owed over we of customers At was Revenue be XX, This will X of plans had balance deferred us diligently of approximately customer

seeing deferrals in We that due. of work as their are experienced their addition paying all amounts our customers a now of back recovery current and strong fruits the have are to

primarily of with Moving COVID-XX prior we performance fees interest for $X.X income to other The restrictions, versus investment respectively, the second properties financing decrease Eat theater higher Waterpark that $X.X other $X.X related closed X Play year. of Indoor the write-offs million $X.X accrued the expense to million, Kartrite quarter million on, we had was & from income million operate. one Mortgage to other and well due as XXXX only in due million and receivables as in and and was of Resort mortgage for a portion quarter of due the our to the mostly $X.X which of borrower. was and

This XXXX. had threshold in rents is couple threshold anticipated revenue due year percentage our is on not increase I rents in Additionally, and recognized decrease during rent partially we an percentage calculated. borrower has rents year. $X in is FFO credit $XXX,XXX the million The and totaled excluded adjusted. income to early smaller restructured $X.X mortgage a rent year base expense Percentage million items. was CPI by impact a plan. our its dependent by education for borrower. increase from loss in quarter, higher $XXX,XXX well, higher rents was magnitude same financing percentage primarily as upon from from quarter more Eat tenant's on Play a property. primarily rents for cash less lease, credit which was to have of the we an properties offset our the other from in This versus anticipated & related in basis that prior The than the million when expense based prior I'll the offset was guidance. percentage X of the quarter loss percentage versus ski revised the Note tenant the recognized in on decrease of less This related as The a and collections for the and impacts deferral $X.X to which million discuss issue $X on other

the Louisiana. totaled Finally, to properties equity new addition primarily that income St. are our Resort million the Beach, $X.X compared due ventures year. and from loss the This of -- at income quarter versus Florida Pete Cajun well from increased a to for joint performing Lodging X to prior in $X.X in million revenues Experiential Palms investment in is in RV in

a to to joint higher interest properties, significantly and reserve I'd completed cash this In addition, proceeds the renovations were and fees from joint on rate. in to recent result we million nonrecourse couple other due of quarter, out to lowering point in at the take based the ventures. the debt at and able refinancing We $XX received supplemental. $X.X moment Pete the to Beach after $XXX amount St. a performance as like million a increasing refinance in left these million of a items our the ventures debt the during secured the valuation,

ventures debt increased investment includes a Page our we unconsolidated to earnings which due ventures, carrying First, summary on in added of values, terms. joint joint our XX, and

us presenting is managed by we cash a contractual joint had better we customers' that versus have our to than This were to using cash by allows ventures properties adjusted from annualized revenue. allocation portfolio for impacted and use due include the pandemic. revenue quarter, contractual COVID-XX sense Second, and recovery method of made this detail impact our begun EBITDAre to when the

most districts impacted & our by CAM on change including at expense supplemental, showing picking Greg property Note entertainment this no which by for up the due versus of to it see properties previously contractual this revenue, shown allocation of Play with offset. reimbursements will XX expenses certain Eat cash the that the percentage is the operating You discussed. Page change included that the reclassification

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

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

was and net to X.Xx EBITDAre gross was XX. our adjusted basis Our assets book debt a at on debt net June to XX%

Lastly, for the our common quarter dividend well very continues of to ratio covered XX%. an AFFO with payout be second

fixed that swaps balance debt is which of coupon debt our markets capital of move rate approximately let's debt end, to and X.X%. fixed-rate billion, activities. At a $X.X had been has or Now either sheet through blended we consolidated of all with quarter interest

weighted years to of with cash billion no on in on debt maturities maturity average flow had XXXX. at million quarter $XXX cash after scheduled no over expect our is revolver. hand end generate drawn payment dividends consolidated of Additionally, We million $XXX over and operating $X debt we XXXX. Furthermore, almost of until X balance our

can you investment As very balance opportunities. well is see, our fund sheet to our positioned

We are range pleased increasing $X.XX for per guidance a a to as range of to share to XXXX adjusted be $X.XX $X.XX. from FFO $X.XX to of

$XXX our to million. guidance of investment We disposition million $XX million $X are to spending and proceeds $XXX confirming of on

the midpoint quarter would XXXX concluding, additional give collections due $X.XX properties. $X.XX is with I increase of are at dependent to increases, we to earlier. The including items, during $X.XX is $X.XX from fourth second with at favorable the expect for in guidance. $X.XX partially certain and improved quarter adjusted primarily to FFO continue CPI some customers from rent an guidance offset consistent details of percentage in mentioned expected be like I on revenue This the thresholds rent managed Also, expectations to our to basis percentage of to reduction as cash Before that as quarter weighted deferral to levels. in midpoint, third quarter, by the per second guidance to customers regarding of other performance of a $X.XX due our increase share be

and to any continuing represent additional amounts future could collections. guidance fourth exclude or each booked received Page $X.XX can details of cash-basis and over about to of $X Guidance of million X our collections much the XXXX as XX of uncertainty We for are approximately last quarters. extent supplemental. share our deferrals rent per of months earnings Such revenue, given found we be as the from third on customers the in as of the

Lastly, I'd like for to XXXX. plan comment on our capital

access to be in flow additional scheduled position of capital, to in this $XXX expected hand spending. continue debt for how low We cash in at of credit, and million XXXX This operating over market enviable investment billion million drawn on of on leverage level no on the quarter be end, dividend nothing turbulent our line after can cash opportunistic $X depending of and maturities we payments our means over XXXX. as $XXX we when with

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

Gregory Silvers

you've In Thank today, as strengthen. portfolio continues to heard you, our closing, Mark.

investments that, open and this shareholder ramping will value. combination is are positioned Operator? We earnings questions. this With why Our create don't for outperformance fund up and I drive our to unique to balance believe it sheet well growth. continue

Operator

[Operator Instructions].

first of comes Anthony Our JPMorgan. from question Paolone

Anthony Paolone

more out seeing wondering flow was My an talk attractive now, up most X% types you X% pipeline, you a deal talked to first particularly or you how different relates seeing flexes to based of I what about down is you're on about there. question you're about, that if and the yield I that products. think, bit the where right and investment could

Gregory Silvers

would across Greg say I'll jump But board. Sure. pretty in this let on I the after. it's much And Tony,

opportunities. good seeing we're think I

can if I tell think agrees. he Greg me

pipeline our ever as is think it's I as been. deal robust

longer think closed lawyers because I it acquisition. you companies. this is some or people, you've it's title just people, inspections get this redevelopment would of a other where think whether tell development, from to that's and -- deals I is see I flexes parties, or versus an whether taking is third heard

the think seeing. excited But I everyone like only breadth else. with want we're So we're to I something about to that. think not you of the what Greg, struggling But debt they're add but staffing maybe

Gregory Zimmerman

I Tony, said. with Yes. would agree what Greg

a a and absolutely, times, a is the I in strength debt think virtually when expecting obviously, not, all And of have the seeing any project, we're markets dislocation our And looking yield. exposure. higher verticals. said us in of the we're development helping deals discussion all bit. We're many virtually as verticals across looking at and we've we're theater to multiple increase that

Anthony Paolone

got the can this the in getting you changes And uncapped you And remind structures to you're also, any then days? that Okay, leases these at contractual in me it. of have CPI portfolio point? sort if any bump

Gregory Silvers

there's -- We used those somewhere have caps to we're -- X%. uncapped on live those X.XX% we're really -- don't call no caps pushing in it, doubt -- where to the

also we're your push the X.X% those, put can to try idea of of mindful pushing to pressure tenants. X%. I to Now great those exposure we're CPI mean on uncapped

pushing tenant that. you had more the So we who's maybe aspect that. boundaries But the we've not back add. uncapped to are have Greg, not a But pushing on on of

Gregory Zimmerman

No, a every is that's lease Tenants discussion. issue. And certainly, I that understand right. think certainly inflation an is

increasing So the as said, uncapped. Greg but caps, better we're not getting

Operator

question Joseph shall next from of Nicholas Our come Citi.

Nicholas Joseph

in contract. the second today, occupied theaters bounced What's of offices X X quarter? bit market theaters box under the has back vacant especially for about a broader the talked You the the if

Gregory Silvers

I still this. I'll and think -- jump let Greg in again,

our or of you're non-occupied to sell what a think use. are think seeing good for there don't lot is people is for theaters. I of theaters. I a non-occupied Most underperforming alternative market there's trying

We haven't seen the of lot yet. market a in that

some better see as what theaters industry we've and would XXXX maybe to But candidly, lot change have be continue good in I this we we're But call you'll readjust through start this as -- hands. seeing consistently, a that year, okay. going work market is everybody improve, you that sees not on color Greg, we said think in think there movement to and will to I that.

Gregory Zimmerman

a theater. teaser for lower occasionally, would few what between, far we'll a get they're consider and Yes, I But I quality Nick. completely agree. mean, we

Nicholas Joseph

the that rest the really Play loss seeing on helpful. just that's & versus And Thanks, then Eat you're was write-off, what your unique tenant performance of credit portfolio? about across the

Gregory Silvers

is Again, leadership one to we idiosyncratic of operation issue and of that what not shake is And mainly that turmoil that Play -- that we asset of change This unique it was to leadership, Grubhub was a really that anything we're like a was a shut else it a had. kind had we space was this had have the effectively, large And degree, then & Eat seeing. we only of a kind kind a down. the kind business real up.

So area, and more we to, Nick. we haven't invested that in don't plan

Operator

Our Thomas shall Capital next of Todd question Markets. come KeyBanc from

Todd Thomas

as tenants, there adjusted around the detail rate couple the are a helpful impacted should the out-of-period Mark, But the to guidance. or related a Just and in FFO to anything additional XQ, from that quarter? the the of moving think nonrecurring cash a lot $X.XX any XQ for from outlook. basis of run collections, outside question quarter you, questions items adjustments we about that around

Mark Peterson

I the rents line the we have increase excluded that The no, item. really so new And mortgage in helping. that think impact back should like write-off mean at the and Kartrite show really. expect plus performance decrease levels. on don't debt really to also better particularly offsetting any had that's that We've which continue $X.XX. the investments is that percentage schedule, the at bad the is due largely, and to to but credit move loss. -- financing mentioned. and managed historical properties, theaters, not on both income unconsolidated I the we guidance our issue I that But threshold We the we JVs, in

Todd Thomas

helpful. Okay, that's

in in financing that place? $X.XX mortgage the revenue those $X.XX, And income. so Is other then $X.XX take rental that's where will and adjustments and

Mark Peterson

it's rent, of Yes. you're is and most right, yes, a rent. total it's It's and -- higher but $X.XX not in it's it than quite $X.XX, little

Todd Thomas

fairly investments, terms pipeline come the guess, it and Got And lot here. it, more healthy a seeing is okay. then to I of sounds you're like in market product

half realize 'XX year but of you're and bit. forecast the as ahead, I up guidance, that 'XX level not a is to think see look expect you spending into here little the you continue back we As providing Would to in ramp investment spend ahead? of

Gregory Silvers

Again, what Todd, give correctly. you going We're I I said said now. to earlier. stick with not will guidance it

be very market We people, it is like side there's as on a the don't robust. coming their us pipeline Our right And with lot constraints or really of the capital moved equity. potentially that said, they deals cost Greg think away are think from now debt of I in whether back. had

So I take some of our about, seeing good positioned has And advantage this. we're think, as us kind sheet balance of to Mark of opportunities. talked

So I where that think books. projects on like are there's already redevelopment And we carry we're XXXX and positioned. have the development as announced, to we going into

But year. all year we can rhythm of that do significant of with next into right start I amount back next what saw the begin getting say what of now and we're for is stay we're you carryover. of So kind where pre-pandemic to like we positioned where we kind a we projects, tuned and

Todd Thomas

you. And helpful. That's just for Okay. last question, Greg,

the some your consumers portfolio seeing going be potential impact? that And was in where you company's to the there performance to ahead that in greatest to of properties see inflation any are to you've categories segments would you're at sensitivity prepared changes the yet expect material any or traffic? some where think if to moderation performance see moving Are I or you related facing. remarks, commented there

Gregory Silvers

I think I'll as this Greg on let well. comment

demand pricing Experiential properties because would or a mine probably the the we're -- starts be you're first we on in daily are where ADRs our see of Lodging almost of think power those basis in got see coal you've you would some I kind starting canary the and as to would seeing. erode to --

it of think I seen but in see some it start that. haven't yet, would to we We

to over, the season. move I candidly, of the is almost some think in a properties, season Attractions

our looking So be is seeing impact thing portfolio. ski my move But seeing properties into monitor if guess of across next winter the kind we're out the for it there. we'll as of any we we is there. The and all months kind of

I'm is in of movies what I've we've on in but & still check concessions are at spending some some saying of previous all or the going, but think goes and Eat down. beverage seen the but to I people -- on our same, recessions seen F&B food and as going previous the the recessions, not much what not the Play size like still reductions,

be those monitoring, are the definitely areas So that we'll Todd.

Operator

Our Stevenson shall question Montgomery. Rob of come next from Janney

Robert Stevenson

how straight the half spending development in the where be much second acquisitions? earnings the to Greg, likely for redevelopment One of impact immediate or versus an investment is is

Gregory Silvers

which think of but we're really good identify Greg, right of I would reward to got and amount a substantial is indicates, of Again, for let the nice drive think and really, going the but kind looking Mark projects, as growth earnings the to say combination at able redevelopment maybe... we in there development Greg, we've a But kind there. Well I'll being I risk. of highest be both.

Gregory Zimmerman

I have think that's put, add. well anything don't to I Yes, Craig.

Robert Stevenson

to back earnings where 'XX. Okay. Because an versus of don't until earn-in out I'm much want whatever they back how for in it, is year half just trying you earnings revenue impact really to for call the producing more half the the of 'XX-oriented then, than and figure 'XX impact is the much start

to figure. trying just So

Mark Peterson

not Let me respect year tell that acquisitions, of as the build-to-suit interest, into really, year fourth kind would you're comes such so next to will, you having not the conservative I next it having this much whole the when back as put this in half, lot impact it to further we've of capitalized more particularly With just you Obviously, comment. how quarter, you're we've online. earnings a year. that laid you been impact year,

acquisitions. the been timing about we So thought as of conservative fairly we've

Robert Stevenson

a then mean just credit And or for a couple the straight Eat & an a is that path a is of write-off? loss, other point? asset a Or Okay. it Mark. Play I you, just there? write-off is of things to Or this at anything there control or recovery

Mark Peterson

Well, we were to they it if we going us to written we amounts. thought off. owe continue But probably wouldn't it, the recover frankly, have

to respect And to loss, $X.X it. that recover we So probably and out I getting credit to to just with although booking the going the respect at the write-off, a the it and think collateral it will we'll continue with of that, appraised million, matter value that's pursue not then number.

Robert Stevenson

lastly me. then And for Okay.

through guidance, back the deferred months that was you you that any guidance the collected don't in the hear all that upside? year, that's you there haven't first did the the correctly I rent so in for -- of the X of On have half

Mark Peterson

No.

do the count in not in much guidance. $X.XX The is QX, The to $X.XXX guidance. because And year in receive, again, forward the first with that's of -- and extent the associated guide be it, in that, our our months risk per once as X number, is more not which quarter we so could there's $X.XX we as QX, that. we to the

Robert Stevenson

essentially $X have Okay. anything how then much in that material? million? Or And you collected that is million X/X Was that month? of about $X July? the Is a

Mark Peterson

we're Again, point. not we're talk that, to going on not and about forward at guidance giving a quarter this probably

Operator

of of Dennerlein Bank Our comes from next America. question Joshua

Joshua Dennerlein

portfolio on Education stepping fits your thoughts guess, strategy that the in how kind going into latest back forward? your thinking your mentioned, of Curious that? maybe are guess how opening remarks. I you about to strategically, you I

Gregory Silvers

mentioned as a doesn't Sure, Josh. competitors. of doing are a we kind a Those kind as talked and look And at -- Greg as source about, lot and well, we've It we've of into as talked lease fit Mark it could it's asset. It's We we we don't be capital. could comments. said, -- before, are assets of need by of strategy. capital performing talked long-term in that about his about owned our we don't net that

next like our we fact recycling it's go So and But necessarily performing assets to for kind as needs, our this us that, we're see returns through But now. those an an we relative recycle given need achieve to can it is better capital we see we that we think opportunity opportunity. the of long right to, don't of and that or recovery. any year again, as that capital move don't by we cost we if into sell capital now

Joshua Dennerlein

that else for guidance far the year? there $X.X anything debt And the as million. the in bad rest bad great. Okay, then expense, as Is of debt

Mark Peterson

we the amount debts, for That's of bad a what budget a certain not because my guidance we within certainly that's you noticed Well, our fit in this of year. budget and year. reconciliation for

really it for debt. do affect So some reserves didn't us budget because bad we

Joshua Dennerlein

reserves? is your budget? in Or everything utilize little that Did there more a Okay. bit

Mark Peterson

We have than more reserves that.

Operator

Carroll Our Michael from of shall come Markets. next Capital question RBC

Michael Carroll

remarks studios studios schedule I release second 'XX? the know starting a in you this mean in schedules highlighted recover. of reinvest the to theatrical outlook to light to help the prepared the little see improve 'XX, more Are there? you I looks into year. that into if Greg, your content content need what's half to those produce office look you the further box to

Gregory Silvers

we've the seen Yes. studios I mean some start. of

their look you of number at taking has up films. they're Warner, If said Warner

belief not during starting films, highlighted, blockbuster candidly to as kind the films, there's the that films. across to as more kind about, to audiences of pandemic. the groups, time. that. kind to to the Greg starting talk respond people It's there's of opportunities didn't the making we're see filler little see we're which still But of other kind see we $XX studios get a of about. really and that going age come as budget bit lot of million different talked and it's million films, that multiple fill it's and So And just take made a $XX of recognize back Again,

-- we're So it's far. seen so encouraged what we've by

Michael Carroll

development rates I yields seeing that -- are to Okay. you know transaction starting that guess, yields tick And being higher. you're impacted? the values. I to is related acquisition tick impacting, highlighted How Are interest see then you that also higher? how

Gregory Silvers

think is. Yes, I it

seeing across it board. we're the I think

demanded absence always active size or for of board, the of we be the think cost bidders. But higher development or across debt in our the yield deals, redevelopment. groups I have probably for I a that of think private the major driver is think certain I debt to

year comment like of tenants then to of times in quarter, going operators yes, And staying seen who've and lot with the I okay, And holding of don't. accordingly, I'll that and the a beginning rates were Greg we've movement, ask thinking that, and what's really idea kind probably that the really and out the are they year the we are last is higher interesting, go to costs is think so capitulated kind at many higher. of this saying, they started of

maybe to business, comfortable of the and with year think that on kind it color have first are kind of if half of is of you grow the where fight that. the people this But the like continuing doing I more cost just trend. So getting that. people to want more you Greg, And now it's

Gregory Zimmerman

coming talking Yes, conversations I been rates cap price think and it's us. with of starting to been about have the X compressed have months discovery, people back and starting and that to

verticals. expansion yes, think seeing in these we're all I So across rate cap general, of

Mark Peterson

beginning you prepared If X%. have X% we thing the would comments, said to around year, X%. probably listen the -- to We're of saying

of So tells what kind we're that you seeing.

Michael Carroll

Okay.

XX higher, So you're increase seeing points cap for acquisitions? roughly rates and developments basis you're broadly

Gregory Silvers

Yes, probably.

good think that's everything on, a implies a little is deal each mark. probably I of fair is a a dependent but precision that -- that -- level that's

Michael Carroll

second half $X as we It What into provide second trends these this you're of for an me, the quarter. lodging of some you the generated in then the about update should really that I you Mark, you move just and expect properties looks can TRS? the highlighted the that operating last would seeing XXXX? year good within what, trends Okay. know segment. in of And kind like the assets we on million -- into

Mark Peterson

you're this pickup, FFO million when equity FFO from about JV. at the that is looking our at look if quarter, $X.X depreciation has Well, you at

I now well. will say doing trend-wise, So that we're very

high our third quarter marks, are season for and the the JV. Second prime

to that QX we're, at If QX. we it, seeing. lower if and -- about look $XX we general, pleased higher in in got million QX very JVs earnings in So carrying we're see you're QX, going value. and earnings you But of with the

somewhere Our upper the range. X% FFO X% equity. mid- to kind probably That for of on in implies return the to year double-digit

very So doing Petersburg they've about doing in -- if RV they're think We're doing ever as the our is JVs as you addition. well parks are sorry, St. the the well. getting ADRs been. properties, are And high --

So basis. a levered it, nice but returns really we're good performance, on to some getting seasonality some that

Michael Carroll

plan remind you us plan them can the going those to And net a sell on the them you keeping structure? long-term are do are tenant, eventually triple what a in them Do put -- Okay. Or properties? to for in TRS? you

Gregory Silvers

of redeveloped the issue almost kind of we've we've is part think improved. and every so I these one materially of

we at about and XX% XX%, that lease, going value said, of be will part is do mid-level -- out kind as achieving where We net will see as think looking -- again, that of going it's to land Mark relative a going to think especially a where to we're of to upside. portfolio our to capture nice be have on exposed is we huge some choosing we're to able this never structure environment an a over this. that But of portion yield. inflationary feature, to in going But be returns really

Gregory Zimmerman

hotels, and RV improved or the substantially And of Greg, in to dollars. with are we've X say development improving I middle echo them the of would the parks all just X

Operator

Ladenburg of Thalmann. Massocca John from is question Next

John Massocca

as be collection Just I remarkably all? the a look kind then weighted XXXX, quick schedule does at XQ and guess And evenly question on collection. to pretty the expected cash that between we deferral XQ? of Is into change

Mark Peterson

Yes.

of QX, deferred type -- should terms So similar mentioned collections. levels rent I be think and QX in I rent

what implies total QX. $XX for the for close that of year, and the in something when So 'XX QX you million happened in to add

As going you QX, 'XX, some to the start because -- started in in move in larger tenants of paying paying 'XX. annualize to that's

So based that to of go It's $XX up closer 'XX, on that, is per million. to is EBITDAre. 'XX number schedule. tenant just going one Part in

predict. difficult little it's So a bit to

but EBITDAre rest the are scheduled. an So prediction there's there,

million years. it X that mid-XXs -- in should in $XX in down as go million So to it's $XX next at $XX roughly number 'XX, to starts come high 'XX million 'XX then for stay of But it 'XX, to and kind and close the 'XX. you

if be keep we'll onetime increase in that mind big the Now that time, have to and won't a it future. in we accrual go earnings in anytime during

or we upfront, to of once of kind forth. get could with take basis. going always accrual on we we've depends so would we timing it a So there's at the it all were associated these risk ever discount And and say, if hey, said, to more deferrals. as If

what So they those bit caveat in those but to are mean the earnings. the future I'll numbers, just a of terms

John Massocca

or the then clear it's back And year, rent rent, helpful. this obviously CPI in think from for outlook? not moderate in impact I pretty we're XXXX, year how the half exact numbers. of for of and remainder we the guidance. see percentage very at speaking, terms looking your the in I if that that That's mean, percentage does of But all Broadly do

Mark Peterson

with a properties, CPI Yes. X tenants, the as this. Most with percentage dependent. bump of Really, by tenants up goes outside goes few The X X rents these just rent aren't we of X up. that threshold have our are property one impacted

of So particular it the case unusual these percent particularly with with by impact. CPI running we it an one, where this case the in was higher, CPI. higher had X X did tenants or goes which have up And

Now a $XXX,XXX rent to we only booked tenant. this the X mostly percentage due during quarter,

to current tenant. beyond to impact CPI respect So the it's have huge extent going not with to to a were increase that levels

It CPI, planned, tenant it The we It's it capped. but on larger also not affected, bump. than like it a kind is dependent was CPI, with X-year few was other just that not CPI. runs a is I a capped. is of but That properties said, had

So they -- really X had we the uncapped one.

X The capped. was higher other than but is expected,

short, which and impact long expect on levels percentage $X a million is forward -- I further going the CPI don't going midpoint rents result this tremendous I as at of from So don't up. a year,

John Massocca

Okay. the that percentage dollar to of year. guess I some -- then the just any CPI from of adjustments? And some rent because this related or performance for calculation maybe these related weaker-than-expected just operating the tenants percentage sorry, for outlook of Was

Mark Peterson

a issue. really primarily was it say I'll Yes. threshold

They had levels. tenant we quarter sort -- were of this the X on 'XX below. we budgeted think slightly based I

a bit issue. was So But think threshold of there the volume was the driver. issue a primary I

Operator

conference. closing the conference Q&A will the conclude I now like would portion This Greg for of Thank turn to the Silvers remarks. back to you.

Gregory Silvers

everyone. next you, quarter. talking forward attention. you Thank to a Thanks. great and time Have Look We appreciate day. your to

Operator

conference today's for Thank participating. concludes call. all This you

now pleasant have and disconnect, may day. a You

EPR Properties (EPR) 2 Aug 222022 Q2 Earnings call transcript