Earnings call transcript Q2 2023

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Operator

Good day, and thank you for standing by. Welcome to the Q2 2023 EPR Properties Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Moriarty, conference Communications. Vice like speaker to now Brian today, President would hand over the your I of Corporate go ahead. Please

Brian Moriarty

quarter Okay, for webcast. joining for XXXX second great. and earnings us call Thanks our today

on Zimmerman, Vice Executive Greg Vice Participants and and CFO. Mark CIO; Executive call Silvers, President are Chairman today's CEO; and President and Peterson, Greg

differ XXXX, words the We'll forward-looking statements include vary will forward-looking are start statements from call in Private the of Litigation those Form those continue, the expect, this Securities could of contained and including may filings, XX-Q. believe, the such The company's and call other on those hope, that by actual identified to contemplated that Act reports materially statements. operations the materially intend, be anticipate Discussion of defined XX-K by financial company's such may condition forward-looking as comparable informing in factors by results SEC company's you may, as results from terms. cause or

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

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

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

Greg Silvers

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

as our and adjusted continued by X% results grew line strong revenue prior were a grew driven During consistent X% versus recovery year. the our quarter approximately approximately top share collections. properties in quarter, FFO These and deferral experiential per both the same our

restructuring a master participate also a term stronger -- us we're our and allowing box on The XXXX. lease was us to we step finalizing a our company resolution, our strengthening long rent significantly more portfolio tenant, overall with earnings XX, to provides with pleased agreement we significant earnings for significantly and percentage enhancing in guidance theater have the into recovering component a Regal This in profile. As visibility announced June agreement and provide a office. outlook

Also, Theatres Santikos was as Southern recently announced, by Theaters. acquired

Southern our theater part theatrical fourth of demonstrates renewed acquisition, The theater has action remaining largest repaid the deferred was the exhibition and tenant our base. and strengthens in tenant confidence strengthens we rent.

to validation weeks, has we've theater which primary for distribution studios Over the of power witnessed a become theatrical exhibition Barbie the The and content. Apple exhibition few the to platform movie Amazon demographics. event, last of Oppenheimer of societal as commit the consumer and has and transcended combination

box yet Separately XXXX. is a film currently billion consistent predict occurrence $X of for budget and away XXXX for up to a select expectations This versus generating sound is blue to hard low office year-to-date. outperformance million tracking Through it box is overtime is type office XX% of July $XXX towards XXst, single any for proven over frequent films. be

may that impact and reported office, writers guild the In have meet agreed length movies. viability is business of that path time resolution. studios sign, actor The of Friday, box to to near-term participants be for understand positive to dynamic done been short-term writer a bit they theatrical in has on to Regardless present robust a this necessary of part strikes landscape, as providing a of the and not is it dynamic, months. depending which fluid economic impact the a the any the have this three a the for primary anticipated

of are while being capital portfolio, investments approximately our prudent we've spending, selectively growing capital $XXX to in experiential completed million our allocation. and to-date Shifting

projects over two redevelopment $XXX approximately to already years the development capital. which we for million additional the Additionally, have committed next we've of and necessary experiential

to Now the on over quarter. more I’ll Greg it for Zimmerman details turn

Greg Zimmerman

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

spending spending year $XX.X to commenced quarter, for and in funding XXXX. million, our was of our development projects XXX% spending total built-to-suit the our portfolio first-half investment and bringing the During $XX.X the experiential of investment for included redevelopment experiential continued in the was million, projects

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

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

sale education vacancy at for from the is properties the of held of All end and quarter. the the

data The to XXst Turning continues XX-month the be Trailing a Overall billion. at recent theatres is times times. X strong X.X portfolio office March to ending period. XX-month trailing to cover March for box for coverage. trailing at with $X.X XX-months on most the provided based is XX-months coverage

non-theater For reference, X.X times. XX-month is trailing portfolio XX-month our for June coverage the portion Trailing of office box through $X.X XXth, is billion.

the you bankruptcy update the from I'll to July deferred effective tenants. Regal claims all the completion rent Regal. amounts from its July emergence on of date will Now and on lease documents. and our of the rent ancillary discuss status is Mark master of in conjunction received operating completed relating with case. the bankruptcy which XXst, our We

Louisville. week in in to one theatres than our Phoenix, report us. operating Phoenix's our the to open a is with are Orange open. turned Based through that Suburban experience to Cinemark with Regal surrendered less were relationships on we County the and theaters keys operating operating theatres after Cinemark and Colombia, able back Maryland, and pleased Chicago, Huston management strong Regal five We're theater agreements theatres and Suburban the operating

the Santikos San fourth Theaters it making With of entity was largest agreement. Southeastern largest owned community eighth theaters, theaters through The acquired holding. circuit combined nation's Theatres by Santikos in highly asset purchase theater XX amenitized operates America. XXth, Southern VSS-Southern the is eight our Antonio July one an foundation, On Santikos theater area foundations. XX premier States, in the North

agreement no change a entered result termination to of lease quarter property lease we an ground which New theater overall Santikos deferred was There we the have on will a longer XXXX. Louisiana, into our third in which in Iberia, its no interest. of million, And in entire a transaction, the anticipation conjunction In with be $XX.X revenue Southern paid as recognized rent in economics termination. the of remaining of as rental the transaction,

of The billion, XX.X% Box was second total $X.X Little the grossed over quarter recovery. of and X QX increase Across increase movie, over over office two was first XXXX. three over was QX a billion, XXXX, $XXX box $XX office for Seven quarters a Man continuation a officer first-half led the million. Verse, the and Guardians Mermaid. $X.X box the Spider grossed films million the the Mario Brothers of Super Spider Galaxy by Volume XX%

XX a unexpected Freedom, along robust all generated at shattering $XXX hit XXXX. July increase gross. the office to in XX% $XXX and and Barbenheimer, July XXXX of grossed office with $X.X off record is approximately which of start by XXst, period to-date. office Sound Barbie over expectations, box performance have titles July million Oppenheimer. the over Both billion, led gross which QX in to defy continued million of box has exceeded same by box Through Fueled stands a the gross XXXX year-to-date

highest million industry. outperform million. on Brothers Tuesday additional and grossed portfolio weekend, second Brothers on continues Tuesday, $XXX of the Monday $XX its Warner quality ever three grossing also Monday days, in million Barbie a To-date, Barbie its each opening for grossed the to has and high and theater $XX Our an Warner million record. $XXX

day second the on its million grossed $XXX and while weekend, over $XX the three the since $XX weekend had weekend opened is This million, to-date. million was of film to opening day ever. grossing on three to weekend, biggest another time the $XX weekend weekend highest the pandemic opened a Barbenheimer fourth $XXX million Oppenheimer and million. a first

a and but the by the come storyteller. hands about reminding of office of Importantly, Barbie good one and phenomenon this hour compelling Toy, reviewed, by Each cultural fueled rated screen. content power movies, bomb. a not demonstrated atom comic in on development and the outperformance box Oppenheimer movie they historically reached two an anywhere or demographics the created everyone from can standalone and together that universally big of broad about good storytelling Mattel be franchises well three and of characters, accurate, R the unique was other, iconic the book

We which opened the Mayhem, are Turtles, optimistic week. of about this the Songbirds the and remainder of rest Ninja of rounding the Flower of out Mutant year Teenage Moon, and Napoleon with Lost year. Aquaman the The Kingdom Killers Mutant Ballad and the Snakes, Games: Hunger

Finally, there is lot strikes. actors coverage and writers screen of of press the a

the tomorrow. been Greg and As to time are meet writers studios first the for scheduled mentioned, in three months it's reported

been of of limited on the into we that, but any Beyond titles information for there's timing either resolution strike, don't now, major XXXX. for have movement

major an our to on update now other Turning groups. customer

see these oriented operators and destinations. good and results peak while value pullback to grow -- across from all to Across our many performance. operators increased in board, ongoing demand seeing are managing some headwinds, post strong, to attendance the segments properties, continue and operating our expenses remain are we revenue an consumer are anticipated drive EBITDARM. We of of post-pandemic Despite continuing

continued revenue over X% assets XXXX. their play up QX, for X% post-pandemic performance portfolio with strong up and Eaton EBITDARM, Our QX,

the water of Our opened strong June. well parks summer of opened end and All Prussia, King our parks located the now in at season. numbers Pennsylvania for with Topgolf theme are

strong Inn water operating both they Michigan the year-over-year, EBITDARM. Our indoor St. results is XXXX a Valcartier operating for Calypso the of X% Attendants in Construction is XX% up operator Frankenmuth, complete increased producing about complete Louis on as City schedule properties. Bavarian opening. waterpark is year at revenue and Museum and in at and of park one summer driving

center scheduled Construction on the in continues. fitness to by Resort and emphasis XXXX. and the Forge Springs is on is as shop is in we're Murrieta, Across our development our seeing offerings, the into and scheduled Murrieta the in continued Pigeon Custard of underway Springs for our post-pandemic of Chocolate fitness end Construction conference Springs new growth Pagosa Resort. Springs expansion Hot with Titanic underway California open natural the membership this early year. of a revenue openings both

the improvements until April. commence where Gravity scheduled Aspen the month. Except end skiing snow this Springs for of kept to is House Construction on NorthStar, open mountain to Steamboat in late heavy season locations for

our sales. QX. portfolio, up season by across Our were ski driven strong resorts Year-over-year pass visits of closed XX% were skier most for

Alyeska Resort ski Ikon visits. should for join the will season, drive Pass increased which skier the coming program

the and occupancy post-pandemic operating see in Bellwether Nashville. revenue, St. we Petersburg, the increases ADR streets highs. on both normalizing of to revenue, weekend, racing Nashville, Music Grand with in Our all Prix Nashville's approximate a host continues the IndyCar famous upward its destinations This Machine Margaritaville downtown EBITDARM Big City in occupancy. will At of while Beachcomber from and trajectory Resorts and Downtown Hotel series is Nashville continue

and increased Revenue portfolio. for RV our park in QX EBITDARM overall year-over-year all

levels. termination continues holding EBITDARM. from March a education at increases well perform the XX% in entered year-over-year to of of lease Columbus, the are into Ohio of sale. as partial for we Attendance Our and termination portfolio XX% steady a portfolio casualty. quarter, private a arising very property revenue is a high with At $XXX,XXX of through lease school XXst in and fee part end settlement the for marketing received a larger the in We across

to Turning capital update quick recycling. a on

Kinder and and quarter, the lease sold net $XXX,XXX. -- we $X.X a the Kinder five a for of recorded locations After million and two $XX.X for million of of we record sold net million. close of quarter, of the terminated which proceeds proceeds another of the for was Care combined $X.X During gain one loss locations care the a

All will these schools. as of be operated

two. to continuing market the are We remaining

plan surrender we you we'll dispositions. but calls. our for net with in began XX quarter, we for proceeds former update days, Florida, early approximately marketing $XX non-theater the generated Also, mid-July, In from sold the to million a after Hialeah, gain we sell. proceeds use the Cinemex interest progress million a and on and publicly $XXX,XXX. Year-to-date, theater a we're the It's of of end of $X pleased we have Regal in future theatres on

spending months investment the of was In million, total XXXX for spending to million. QX, first bringing investment $XX.X $XX.X six our

financing the development projects made experiential Urban Dallas. for to of our Good in first and addition funding the in and concept beverage, wave an combines location of redevelopment continued in in development unique mortgage investment food the It standing the Surf Surf's XXXX, into a In commenced with Surf we and experience. market. entertainment first developed outdoor Good first standalone surfing, U.S. is space,

of a spent we're have lot understanding part Surf Surf's be the time first Good space excited We and to project. of

$XXX in XXXX deployed our million funds maintaining spending million. of We're to for $XXX in investment to a guidance range be

of projects, million fund development without years capital. we $XXX expect the committed two an over the need the is of the that the additional to of included XXXX, of over As We of end million QX, which we the redevelopment experiential next to deployed additional $XXX have raise approximately and remainder in range. amount at guidance million, our anticipate XXXX $XXX approximately we midpoint and that

be for redevelopment to are continue build-to-suit both In X% experiential of opportunities categories, rates in Cap our expansion. range. we quality and seeing high and most acquisition the

have to existing and continue Likewise, hand, from and operations, to our borrowings spending good from on primarily and We a unsecured with cash new revolving exercise investments proceeds, under near-term and discipline, continue cash pipeline concepts. our we funding reducing facility. customers the investment credit disposition

not of the for opportunity. past quarters, have by we several capital we cost recovery As are limited the our of by said

for the a of to I discussion Mark now it turn financials. over

Mark Peterson

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

rent revenue Now due $XXX.X and from effective the for customers, $XXX.X the variances over prior This was moving completed the year, cash to basis as collections versus past Total key increase improved to quarter in well line. by as developments million the the year. million acquisitions increases. scheduled was

payments of Regal this that court was customers, was September $X.X that minimum also an additional million Per deferral additional which total of recognized recognized million those from accounting During revenue. related of additional the revenue from we $X.X of on a cash was million approximately as from basis collected to we quarter. quarter, as XXXX stub $X.X rent received payment order

go on bankruptcy in year, rents impact one Percentage quarter performance XXXX how cash settlement versus to increased million Regal's for the million basis will remainder due prior in we over the XXst. expect July when I the discuss property. deferrals The -- and ski I year improved this of $X.X to at guidance. $X.X primarily

in to the million resolution, share the $XX.X including costs, fees, million higher versus compensation expense G&A non-cash, $XX.X side, the to quarter primarily payroll related year, the professional Regal as for increased On cash expense. based including higher prior as to expense those due well

to the by based charge from to $XX.X due on in for During $X.X the of net quarter, increase an an quarter on we recognized interest the development. short-term year charge is of an properties decreased impairment This third-party compared Regal interest on under surrendered capitalized in to projects related prior and FFO million, increase appraisals. by primarily income eight expense Interest excluded as million, investments adjusted.

$X.X quarter from Lastly the was FFOs in million adjusted ventures prior $X.X versus the million joint year. for

expense at to higher of these prior from interest resulting non-recurring experiential last received year as Petersburg, [Technical Florida, Difficulty] our refinancing the as year. primarily properties properties decrease was due government lodging in St. in well incentive the

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

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

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

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

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

is $XXX.X million due consolidated million We $XXX on drawn billion XXXX. in maturities nearly With at $X Additionally, cash hand XXXX under scheduled had five-years. only no no our our average on end in and debt quarter maturity of debt weighted and revolver. balance

versus midpoint us, behind FFOs XXXX to representing we at increase share The of X% of to of Regal pleased guidance the $X.XX adjusted approximately -- provide resolution $X.XX, are an XXXX. per

As and we on flow, credit and inflationary limit fund current with decided our capital environment, disposition primarily spending we our cost cash previously, have given under unsecured hand operating to borrowings consciously our have well investment as investments cash revolving these as the proceeds near-term of and discussed and facility.

guidance for raise confirming better not we spending ski the Disposition amounts. to discussed the XXXX our of XXXX investment $XXX performance we proceeds to Accordingly, and is increased do at anticipate due primarily these $XXX million to million we additional million to percentage I range fund guidance $XX are need property to $XX rent previously. guidance by million have midpoint, million and the for of $X.X capital

as call the new lease years, XXXX. is quarter. rent relates prior in is rent percentage Regal note to discussed of expected expected to which is fourth heavily and lease, recent the none percentage XXXX based recognized year in is be that Master Also Note in to on our for that weighted the

Additionally, by due payroll to those due Regal the related primarily fees, midpoint, the extent, to a higher resolution we to are $X.X costs, incentive raising guidance lesser and higher G&A expense to including professional million at compensation.

to be amounts recognized thought amounts expectations deferral also to in as revenue I as helpful these it'd for collections our other our as in guidance, well certain our XXXX. and expectations XXXX for be and summarize for included

to slide, that fee the for an XXXX on collections, Regal approximately tenant see termination cash million basis properties the September we for Regal for can X and the to Greg of $XX.X X, XXXX you from deferral a the to rent, stub in period master total prepetition described. expect related September lease education recognize As lease

to from Santikos, million related as the rent revenue with remaining connection to $XX.X bankruptcy sale recognized due the the entire those Most as Regal’s Southern theatres $XX.X to amounts second-half collection to resolution. well primarily as of the quarter, million XXXX expected in is be third of of the deferred estimated of for in the

on our received shown amounts may While unsecured Regal an that with not slide related be the rejection additional claim. treated damages are to as

expect such will amounts We any nominal. be

by and receivable a attraction who’s the XXXX on amounts $X.X timing is these to the for to be With Regal's $XX.X held agreed on year repayment next Regal, remaining the basis earnings to is is deferred deferral two this amount cash threshold, the of rent not fourth reduced an excluding $XX.X repayment and of tenant on expected bankruptcy as million be books, amount cash resolution in approximately million, to in paying one advance and basis approximately thus the Southern, in according are schedules based full the tenants our related relates tenants to relates are amount to The expected recognized achieved not through shown XXXX. million quarter that to nominal slide. be upon to which

want was XXst. that accrual moved time. was at tenant July remind basis I everyone Finally, master given lease that This to Regal's on effective to

As also details of expect anticipated the property intend previous guidance operating break will to time, we can for surrendered by we in theaters expense. sell what on theatres of XX that supplemental. remainder surrendered will our XXXX, over the included in Guidance XX of that have midpoint this in reflected be will our we carrying discussed five the on even call, and the over be which page the costs Furthermore, guidance. included is is found operate Regal we

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

Greg Silvers

Thank Mark. you,

very the with As favorable our which top with we that high balance opening means minimal sheets the Regal risk. acquisition, I cinema have in have are tenets stated three of now my combined quality to outcome, four delivered pleased comments, Santikos a

Given dividend the of value with EPR that expansion. a our these multiple well-covered an we continue attractive portfolio continued non-cinema to for for offers the opportunity very and believe entertainment, preference out-of-home credit, for consumer demonstrated and a improvements investors success in

up With don't it that, I why Theresa? for questions. open

Operator

you. Thank

session. the Instructions] conduct BofA. question-and-answer question from Joshua now of Dennerlein comes first will Our We [Operator

is Your open. line

Joshua Dennerlein

Yes. Hey, morning. everyone. Good

Greg Silvers

Good morning, Josh.

Joshua Dennerlein

movies, would any around box to within if just point just the the I'm risk writer market ask wanted accessibility about XXXX strike. the I curious start trying office the impact during there's the restrictions to and strikes to At strike? to portfolio released? to what or certain the strike your being

Greg Silvers

it has generally going begins with been done it we could if have they right product the Josh, if balance they're actors is see, Again, to be by product move potential movements one reshoots. two, for minute for to ‘XX, seen know that the either any the I last be limited what kind promotionally studios yet. now or a supported there title it's we really is of if but we've -- mean,

in really the purview it's the So of studios.

So know right we now. don't

had I can Everything one to that to standing as be think, talked would aware there fruitful only we of resolution some about, the quickly will is we've of else beginning to that, is what path. call we're that discussions have title. Hopefully, kind We've and we bigger no move move as now right impact. little prove very and of. this

if don't I you have… know Greg, But

Greg Zimmerman

No, I covered think you've it, Greg.

Joshua Dennerlein

for I the And that. in the of if any there your guides, rent is for half percentage back included for sorry this, XXXX guidance missed Thanks range year?

Greg Silvers

as Yes, said yes. Oh, has kind that the as yes, of back And $XX going to said, rents weighted fourth is quarter. been I yes percentage the for year rent million. historically the it to half year, percentage heavily of we for for be are the

quarter. in remainder in So be third the about of six of XX% month the and quarter wasn’t we the the in recognized -- expect what fourth to first it

related definitely rents on half. those question, None year to there's percentage based Regal, we back yes, rents your next and depending the in that year to lease hit that expect So box that was percentage office. if on

Joshua Dennerlein

to get Appreciate it. at. was that trying Yes, I was -- Perfect. what Okay.

Greg Silvers

Thanks, Josh.

Greg Zimmerman

Thanks, Josh.

Operator

Difficulty] [Technical Capital Thomas comes Markets. with you. Thank Todd from question KeyBanc

open. Your line your Thomas, open. is Mr. is line

Todd Thomas

hi. Yes,

Sorry about that.

so rent revenue XXXX. first around earnings really and payments the Just in the appreciate collections quarter the question, other third through deferred detail in and the slide

of, $XX gets that rate of the see relatively year? all quarter with us clean we the million as Is decrease the beginning a it just way XQ run $X.XX, in a XXXX? XQ, versus XQ or the expect in in incremental run us to fourth in you're non-recurring that it'll that be think this to in about rate quarter after pretty So right you so terms leave just to think clear, the fourth clean to items, anticipating about

Greg Silvers

about We deferral only out far period to as expect the quarter. impact stuff kind fourth impact as Correct. of to $XXX,XXX and these

think percentage quarter and but seasonal weighted rents, businesses some forth give a heavily the we run I remember to so quarter. you clean fourth will rate, have and fourth

adjustments it just to it and taking forth. a is do, clean like stub as recognized but And payments in small deferrals other times than I there's number very for to only a far QX. expected number so as be rather So said, and

Todd Thomas

Got it.

then sounds carry the you can and theater Okay, about you those discuss theater existing timing interest should other costs, I'm comment curious, how coming a the sales? little sort on from operators. of, bit we more just is think can there It like if offline? and potential

Greg Zimmerman

Todd. Sure, Greg. It's

So historically, use, the sold four for use. we've years, non-theater theater of last theaters, for six XX those were X.X over

be et goalpost. kind mindful because you their wanted We theaters were and of to market that closing to we needed employees, that So of notified they wait the the gives cetera. these, to Regal hadn't individual

at about we only we end labor So year. about year four run but the something closed difficult XX, in last a to able or toward before. selling over were real for cadence soft the would transactions, idea of We're years, sort we've being rate estate year of interest expect the we I'd already but last timing three out might year the start marketing this really had some started to so see you next and marketing approaching look into of saw get the those. X.X we'll And days, again, be of of week, this if eight. I the given hard say

Todd Thomas

Okay. that a that delays a consideration? that And here, the I'm ongoing all strikes and to a track they at here, the And do you're release now quickly does negotiations that Are on discussions or how some resolution but extended the really right extent is a Greg, back schedule are get re-ramp separately extent production strikes, then the to here. impacted resolution. all. the bit the are Any there curious, if that by at little the on sense not you I mean, having, strikes are get there is there? just further

Greg Silvers

I'll first So, Actually, and say strike. from second Todd, let the I then I'll the there's zero answer would answer the part. part is impact take Greg the

buy just Oppenheimer, that willing are exhibition. unbelievable And mentioned I the Greg before, record of remarks, success just fact of which that's as continued the his recovery in said amplified Santikos and clearly to seeing Southern obviously that As the Barbie was people shattering. shows by theatrical

we actually from So, for these of quite a have theatrical interest bit theaters. of some exhibitors

Greg Zimmerman

Greg's probably short-term think bound in optimism And more there's issue. rather I in Yes. if and would to space. these by I studio's a more encouraged it's I theatrical I'll all are the commitment than think this is say the they're how it back. less right think now occurred the industry echo people seeing comments. actually, as I you mean, most but think don't about, have periodically, I theater

aspects just, up turning most and voice really promotional about not is it. or or of into ramping As ’XX minor post-production kind far now on half of ’XX in through latter probably it reshoots everything the over first-half ’XX production new small of and of, there's as is and so

I it that if have we'd believe right now, think rather impact minimal really on sooner we ‘XX. we solved would later, So than

Todd Thomas

Okay, you. great. Thank

Greg Silvers

Thanks, Todd.

Operator

Thank you.

Eric with Our next Mr. Wolfe line question comes your is from Citi. Wolf, open.

Eric Wolfe

for my thanks taking questions. Hey,

just Regal of operating all from if So of you that is confirm some not $XX whatsoever? providing of out, your comment XXXX And your of presentation year and you that percentage say next the know, sort then any the that of extra this all rent that the million in or the contribution sort put with Regal think office Regal included in is were XXXX let's to box of percentage incremental to doesn't $X.X billion about year. being include the restructuring guidance? any number, line I in just rent that's income But sort about, I extra that understand agreement to

Greg Silvers

in year. the of that And So and hit theater and operating we of lease we're And to in into Phoenix. at none profitability, $X said really million. this percentage then percentage of Regal some be next as as we the rents are our breakeven guidance third driven to because as in go theater, to year our then transitions budgeting or profitable. amount it guidance, including I rents sort be second next those operating And ’XX there both a Cinemark we year. quarter the profit while will are of think sort expect presentation, about definitely as tune could though, and far And is year

year. this in year that's of none next and should hit So

Eric Wolfe

Okay. All right.

presentation numbers? agreement So if Could of so be there how I'll variability before. incremental the some that outlined in about operating percentage from know, would But, around a in I'm box -- be $XX I curious, $X.X assume much guess, I'm would come if about you rents around that. Thanks. assuming it. like just out that, yes, was actually it's variability level be could that office? you there right, those your presentation million talking number and put box you I curious you or I mean, that million to there's million? mean certain much how $XX $X.X the box think Just restructuring $XX million billion office that income office, a

Greg Silvers

put number you for around that's million… we think $X.X million $X.X a ‘XX box for Regal. was The I stub payments and mentioned number that of our the in Yes, $XX million presentation deferral at office

Greg Zimmerman

the And $X the million. $X two, he's million combining and

Greg Silvers

million. $X the Oh,

gotcha. Okay,

number as one first think basically all, trailing at So set the XXXX. that XX-months, of I think we benefits I of

Eric Wolfe

Yes, again the… I mean,

Greg Silvers

their be rent -- as The upon, based current variability. percentage really is market was far as We share. Regal maintaining should

years, if it So was had share. so historically, again, market no there up or down? you over go that -- could they've look But

move traffic's to some going other Now that could there so they've to places. theaters, be closed

So would the in the be new theaters we could they're a bit guys is didn't the is again, say theaters. these variability up in on to mean, anything. now good to little going that. now of thing getting -- we see budget I them and these operating They hands their I for operate. are

it's it, if with their on. office we're up box So to they've with numbers. think or four I so got shape there. But -- get I to five of them, kind worked good come think in months those But delivers the I hands we

Greg Zimmerman

Regal a our together of kind showed schedule variability. that that put We presentation in

in million, office, box million $X.X the of $X.X billion rents was And percentage at was of $X if of for So operating $X.X example, million. theaters. and it profitability sort

to that our showed the on can Regal box office. we vary that on variability presentation of kind You based see in chart

Now operating said, could performance of as there's office. indicator of is performance but rents versus and primary box that other box theater individual percentage profit the things for office, Greg impact both the the theaters

Eric Wolfe

that's That Thank very it. Got helpful. you.

Operator

for Thank you question. your

question comes Milligan with James. from RJ next Raymond Our

is open. Your line

RJ Milligan

Hey, good morning guys.

it I'm of lease was stab at different projections adjust questions. on going I this it's writer to Josh I'm for multiple show office how box I take for before guess, projections the seven, year billion curious $X.X you think you question, analysts But internal -- the think And So median, projection the your strike. own asked guys slide the and XXXX the of for and and a $X say, box for but I those of I'm in if maybe you to for at down? estimate get seen billion $X.X on relook billion How need ‘XX, the for those before what's long to $X.X billion. ’XX to estimates we mean, and that sort and need office does ‘XX or curious ’XX projections your giving strike take going to movement any you've last with just numbers. for the sort long

Greg Silvers

Yes.

right about year. I July of I runs the $X.X I'll part the think is that to next second take now, that is billion from first think, kind of really XXst again,

of see think lot this because half the good, that's last first-half year. we feels of -- as about if of moved, the number a long titles you year first-half and of As don't next pretty that

on year, to meaning risk this is is of both. the trajectory that second-half out, balances that it $X.X we risk and thought billion, we it that I it just that balancing feel thing, billion going billion prolonged, say is, $X the if that to think is of was if would the be meaning that is probably if $X.X next at RJ, I have but billion good So the we to $X.X still

currently I that And because to-date any said, that any that. moved. meaningful at of overcome going not what's such one making we've expectation outperformance If had changes, we're had aware that's we've we're you we've look on, of, film as really

move. of if they're this numbers, of this probably really So kind we be But anything, people their year's a year, number holding lot it up now. but would haven't seen people right moving

Greg, But have you do any?

Greg Zimmerman

RJ, No, think, whatever moved movie have might and… by Oppenheimer I than that more the I mean, is offset I point of agree. critical has been the outperformance Barbie

Greg Silvers

Freedom. Sound of

Greg Zimmerman

Sound of freedom. Thank you.

yes. Sorry,

RJ Milligan

year your you… is Barbenheimer, lease But Got would not it. renewal. When for duo be -- not in the

Greg Zimmerman

of be. Greg some [Multiple in second period. highest in week, will as, you weekend we're it And the mean, now, Speakers] Barbenheimer right I noted, the Yes, Yes. ever. last we're know,

still there's industry to in million going still those films two or million a out have a strong to benefiting -- this between anytime August, $XXX $XXX talk approaching really probably again, weekend where you even August. two -- you is those and when if we're So have weekend you're we're this somebody of over in the

Mark Peterson

Plus Teenage Ninja Mutant Turtles.

Greg Zimmerman

Yes.

XX $XXX we're weekend. I easily August. film million mean, great probably to in would So be above going top is, have any This

RJ Milligan

I That's I helpful. on to -- on deferral was want that other clarity, the and collections. the think Thanks. it revenue Todd commented

in to very that's I you're this, at about deferral bridging and see, ‘XX XXXX, I'm million expected least you. to a stub of ‘XX. I according payments Thank then lower helpful. Mark, $XX rent. And thinking going Regal $XX.X guidance XXXX million the it's to that So and versus a But, think, about of reduction think sort there's,

to am And is rents? add that's look I missing? operating What of million to ’XX? going what else we you be $XX about that's coming back the profit percentage then ‘XX need out as then into and So the theater

Mark Peterson

Yes.

a take have maybe I that overstated. bit me that Regal a might think because the differently, part little been Let of

the take as you $X.XX this most about have mentioned, million non-recurring, $X.XX we year, which worth if that's to So is $XX.X you of guidance gets $X.XX. you

stub up don't of As seven once expect income so we full had the just last with ’XX, had both think you those will regal, rid end in you months you of five months far forth, same get because deferrals, which the and it, did for all payments really periods. if as in in be we I about we ‘XX that

seven have you So months.

$X.X That's you that take you a XX% worth to million take million about around old and it those rent what year-over-year. the be months, is of that So was about used if the month was base cut. because rent $XX seven

to to a put that going February, out let's So $XX take in tracking. that's then base that, have rent at give And to add down as and call but look it the million guidance percentage that we $X.X million. what you what rents, we be you seems said, we'll

And other $X.X operating the of property million, profits $XX theater that's another million way. going

box again, million. as So those about Regal it's for is back we're worth actually going putting which accrual $X.X basis accounting, we noise to about also up Regal next out you year, once Regal, then And office, all deferrals and up subject is mentioned, another million. actually on $X.X

So a kind million Regal. for increase $X.X of

So again, the the $X.XX $X.X at here you take for impact. $X.XX, add the Regal $X.XX in subtract about

forth. kind a of of before in point. next and growth you from and sort a puts other But and You're that and at any so kind sitting takes G all starting year $X.XX-ish the gives this of year &A

RJ Milligan

you. helpful. me very That’s it That’s guys. Thank from

Mark Peterson

Thanks, RJ.

Operator

you. Thank

Our Carroll Michael from with next question Markets. RBC comes Capital

open. is Your line

Michael Carroll

I guess Silvers, June on to us days -- the writer strike, not put if to the into belabor no strike call was post believe I middle you Greg XX Yes, writer's mid-August. I to that minimal but guess June to of that end XX be call that the that resolved highlighted would impact. that in thanks. there'll

resolved, mean, not and on I we these that through mid-August when is this thinking delays? if could about should be this of some we movie start having So, an get is in impact

Greg Silvers

think in thought really we're consistent And we that. believe said think with I what still later mean, -- was XXXX. I that I Yes. I still we it's that it's

moving. into that or if move titles good are, August to or and we're I ‘XX, when ‘XX. to see titles they there's that. is the of could into moving ‘XX to just They will titles start as we remember, derisk discussions move in from we think see And of the as want on they're they that and don't timeframe ‘XX. are feel and if can we move progress outperformance some if feel in September studios they And if kind Now But track.

so But Greg, I Michael. holds, I think consistent with logic don't if you that think. still know that’s what But

Michael Carroll

to restructuring How have Okay. it, That's much have sounds so but Regal not I of operating going do your the going then way Regal mean, is, these not leases we of too, -- that about, some obviously, be you percentage movement? good. a of And by that's that like you're should percentage rents rents, those impacted could theaters, theaters, lot impact think you that that's the impacted. be outside that to

Greg Silvers

very It's minimal.

Greg Silvers

Yes.

Greg Zimmerman

Our related. percentage non-theater is rent, for example, this year

Michael Carroll

I theaters? be mean, high you to what back I market, the XX out your little Is Okay, sale, investment there to assets assets. forming going talked higher starting know then assets, you of great. theater market interest for type the held could potentially where there and about quality there? bit a is value like but a about sell to end the the some for

Greg Silvers

use. XX always. it's non-theatre on, that. use. just and theaters. though it's there's a as that year, this take if think theater always will This sold think sold the probably that we'll about I best about, these a previous at that rate And you -- But on low-single-digit that I And of as we going talked highest on based a -- what rents, some be Greg cap even to reported we Greg was achieved look

have our use, truly higher team and bid we're So theater about now it's just and is it's determine but see to team I put as best starting in as better think operators always it what non-theater trying these Greg highest and versus use juxtaposition the bids. to and can use It's okay, to and starting asset of, theater and a we use. properties, come competing and his management the does nice

Greg Zimmerman

Southern about talking theaters Yes. theaters And there. And green we're see think that to as Santikos for was is exhibition recovering the theatrical to the selling flow, shoots business some willing you're cash nicely. Michael, shows extent to I that fact again, the buy starting

Michael Carroll

you. great. Thank Okay,

Operator

Thank you.

JMP question comes Securities. next Yadav Our from Jyoti from

Your line is open.

Mitch Germain

curious was covered. what here, potentially I the of other Mitch vacant of, bit a you're topics doing you Greg, lot core you here, dispositions considering been or and but think even this the have on Regal? with of and about I that assets, top maybe the Kinder about little some It's a were there said Regal guys. in kind dispositions. environment know, think Hey, some Care of I'm I curious non-core

Greg Silvers

Again, like things. those always know, said, consider you we'll I

I just tenant think we resolving changed we about had think and fourth and with a hands. this lot our getting largest going had Regal on

quarter, So on. over we've lot the going had a

sheet at our the at that we're right was forward, out I of of kind a few theater look better look on the of of three -- some come you those been talking if but as now, a But talking our things, think all overhang first-half we debt the tenants kind kind managing parent about. the now, we things remove we're about of got to year. as we've go that we've -- of dispositions that of largest to Regal balance for you quite Mitch, EBITDA. said, four to as look a And sub-X going they're we're at to I going we're start

they're sub-X. have we're going balance, And come out to a now little Santikos that their the proformas structure. presented to at look in that no actually may entire debt you they about in if talking But their

portfolio. spent getting And think these have theater we are and rising a his office. and I tenants that a fantastic So team and Mark things lot overall, Greg getting theater that and team into a box we time position have into his recovering of

those So right. in I focus getting think that was our things

well. got very have whether balancing Greg all it's which of our now about Greg many we’ve we operating performing opportunities. kind as out And create times, move additional we'll of forward relied as things we start education, opportunity capital, to of those to is has some an And good talked

market And see intent see into some we're and and And starting as back comes stated other we of to our theater a lower We're and capital continued as have to assets these to more exhibition. belief opportunities. going that flow more exposure.

but recovery. terms very the recognize opportunity. but I their -- have in the it'll not improvements only not made now the we're think about to our that relative the market And have been to to exhibition to of for quality world, tenants in terms the relative encouraged ability So capital, create the of we that the that raise only of

But Greg?

Greg Zimmerman

that's think right. I

Mitch Germain

for from I Regal allocated I'm puts curious ’XX? recur that, guys takes how to doesn't know, ‘XX to that, know Great, last you ‘XX. heading some one me. was in kind of into and the G&A much over you ‘XX went of

Mark Peterson

a actually Yes, went of a of into it's dollars probably lot and work kind million around couple that was that. of prolonged

down come So we G&A next to year. do expect

Q - Mitch Germain

Thank you.

Greg Silvers

Thank you, Mitch.

Operator

Thank you. time. I'm showing no further this questions at

closing to So would remarks. conference turn the for Silvers to back I Greg now like

Greg Silvers

in Thank questions, you we and be you look to if talking to you, forward you the Theresa, for always, thank months. have as all joining out. to any coming us. And Again, sure reach

So thanks, great everyone, and day. Bye-bye. have a

Operator

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

may disconnect. You now

EPR Properties (EPR) 3 Aug 232023 Q2 Earnings call transcript