EPR - Earnings call 4 2023

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Operator

Good day and thank you for standing by. Welcome to the Fourth Quarter 2023 EPR Properties Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brian Moriarty, Senior Vice President, Corporate Communications. Please go ahead.

Brian Moriarty

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

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

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

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

Gregory Silvers

progress achieve delivered and investment the positioned sustainable we Thank XXXX our fourth years. meaningful shareholder quarter joining delivered a to earnings was executed thank you, and total the strong growth, spending, call morning, as growth Brian. us coming return, Good everyone, company of year year-end for earnings you on today's sector-leading and in and webcast. XXXX

a non-theater in level sustained level. we portfolio During of saw a coverage the as by evidenced X.Xx performance our consistent strong year,

of versus coverage even of with important pleased office over from This office in trend food our achieved North consistent line XXXX. and this American that level XX% strength our sustained pre-COVID were to to portfolio, theater data as coverage XXXX along tenants. were reflects an levels also and anticipation levels. pre-COVID portfolio level revenues in XX% X.Xx office box squarely with by the along achieve coverage cap box with we increased that our implemented is theater in approximately beverage we highlight prior revenues growth coverage per is This down previous spending with coverage This see the we translates coverage growth year. efficiencies theater reaching operating which box our would to data increased to pre-COVID the XXXX Additionally, levels. It's of

in office While slate. title film last and year's growth box strikes a very to our continues revenues portfolio delays, well annual the due quality positions will XXXX linear of favorable-looking endure interrupt the us for to

our increased what positive investments source Our strength into spending. we in are reliable highlight year in move year and growth. during investment diversification the non-marketed our momentum while the ended continue as remaining with deployment And delivering we and earnings XXXX, to this will We leverage opportunities. our capital provided ability to disciplined

new existing pipeline property investments investment across with target Our and our relationship-based types customers. both includes

shareholders. common we a announcing in to dividend earnings returns. increase also our to our strong dividend along Considering yield, our with are deliver We X.X% positioned XXXX monthly guidance, are

to real price the experiences While for continue to look for our customers forward demand fundamentals offer. our intact. remains again business to the consistent we historically shareholders estate our XXXX. demonstrated strengthen, on our levels, delivering And have at of and thesis equity and Consumers customers experiential our in discounted have remains

greater the turn business the to Zimmerman detail. in go I'll over call Greg over Now to

Gregory Zimmerman

sell. approximately Greg. we total investments At year-end, our properties billion, XXX to leased, properties with $X.X that XX% excluding were are intend

investment $XXX.X was was of to in our portfolio. quarter, the million, During spending bringing XXXX total experiential spending spending XXX% the for $XXX.X the our investment million.

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

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

portfolio Turning trailing to coverage for the X.Xx. coverage. Overall September continues for be theaters at XX trailing for $X.X period. box The most months at to recent X.Xx, data coverage based strong on provided same period. office with Trailing is XX-month XX-month the is billion a

theater place Regal entire the coverage period. Our in the XX-month reporting was assumes deal that for trailing

non-theater office our theater is our portfolio XX-month trailing $X.X X.Xx coverage box For for was QX Trailing of on X.Xx. a the comparison, portion XX-month billion. coverage of

update you tenants. of status I'll on our Now the operating

remains coverage is theater XXXX well levels, Our XXXX levels. at North office below box American though even

see spending sustained on premium to beverage large-format continue food increases and spending and in We screens.

to well on trends. positioned Our portfolio these is capitalize

previously As diversify overall our we non-theater holdings continuing portfolio are we to refining our increasing our by have and discussed, investments. actively

QX, we million a lease $X.X are with also the on this whom likely exchange a In Pursuant steps for impairment theaters theater another. million fee a a termination for finalized and agreement In chain. percentage with on recapture of a focused reducing both right theater and for agreement, terminated X to a number underperforming of with Xscape We X fronts. In and our restructuring we with related QX theaters. coverage a rent had small deal theaters improving entered restructuring in into we theater to $XX.X QX, quality portfolio. took we we an call, noted of regional our our

percentage the component improve from rent, to enhanced theaters, within theater its own required per a X $X rent we of to remaining million the each theater For reduced funds the spend X year. minimum and exhibitor

Drafthouse other in have operator. QX, San small X X We addition, operated Francisco to Austin. and Alamo In we in one and underperforming Drafthouses corporately market the in Alamo sold owned, by theaters, both now franchisees the

Because each was a because office managed industry. $X.X American and own will industry X QX analysis, independent the XXXX to to Turning Based the billion. billion. billion, Regal gross box of was estimating North are American $X.X $X.X gross to box the provide component we on North office the resolution box we range office box office rent billion XXXX. of we a XXXX in now office from box box and XX% $X has a percentage American of quarter. over our our increase view and analysts North be review office of state theaters, have total estimates XXXX

cautiously released will by studios and writers' optimistic strikes. than anticipated the that are coming titles We the caused more up be of as progresses, delays as production ramp year out the actors'

provide improvement it's early estimates significant XXXX, it confident will a to While XXXX. too we are for over be

gross As released. we tied office is the to titles number the repeatedly, have directly of said box

in importantly, portfolio industry. theater our performance titles Given theaters. the And XXXX, movies continues strong in consumers want high-quality outperform of the see major to clearly to

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

as continue to demand value-oriented pressure our many all fixed results destinations. consumer ongoing good of at insurance locations, coverage see segments some continue same X.Xx, non-theater and labor, in operators. the We our our of for remains and taxes, Increases across seeing including reported our QX are EBITDARM some drive we to pullback In Nonetheless, call. healthy highs. on attendance in costs, post-COVID to we from

assets of more in Play strong and are EBITDARM in their revenue scheduled XXXX. continue refresh & Topgolf our performance XXXX over a of up portfolio with up self-funded and venues XXXX completed XXXX. X X Eat Our X% for over X%

in well very increases performed cultural attendance. with significant revenue Our XXXX in increased and portfolio and

offerings, XXXX was of up our attendance For attractions XXXX. in over many

was the weather Resort on in through Nordic primarily in our portfolio, very the and are already on performance Hot expected hot will XX successful Room Pagosa recently the public the in best summer. very continue and of at new and Springs XXXX, the accolades. is with Pagosa natural than acres. Diego pleased partner XX flat Springs and opened resorts the in Resort essentially at other Murrieta with November Angeles retreats Alyeska, to Hot 'XX February of in boasts across Our Conde it the At as challenging with Murrieta over renovations mid-XXXX. Midway Resort we Springs ski Spa. buildings amenities through the midway the in wellness Resort and and XXXX. December Nast Springs expansion continues operated early one is Springs, ranked by rooms all receiving water Springs at Alaska. spring our year-over-year along and world and of season, the ski completion springs San for come online progress features, revenue Los historic Further between numerous the pools Alyeska conditions Traveler reflecting

In our to experiential portfolio, lodging XXXX revenue and XXXX. increased year-over-year EBITDARM from

to Nashville, in proximate an downtown Hotel increases destinations, of significant all all Nashville's had excellent Margaritaville metrics. in Our famous XXXX, with

increases pressure on Our Beachcomber occupancy EBITDARM. and revenue, there RevPAR Bellwether Petersburg in some and was and had St. but resorts year-over-year in

redevelopment Camp Margaritaville we revenue growth from year-over-year gains. At our Bridge, Pigeon are RV revenue program. Warrens, saw Our Forge Louisiana Breaux also as returns showed completed and solid Jellystone strong we positive Resorts seeing in

Kozy Jellystone a Finally, redevelopment we season. underway the be for Rest, to in with most acquisition, time completed substantial summer our scheduled at recent are

well, revenue, perform Our year-over-year education to portfolio in through EBITDARM, X% in XX% with in enrollment. the and increases QX portfolio across of continues X%

indicated portfolio but we our reset last first January to in As a year, X, rent calculated subject to is quarter. retroactive KinderCare the

sell receiving to We also back additional in KinderCare XXXX. location anticipate X

quick a recycling. update to Turning on capital

in former back to and the second location During fourth our our Of now KinderCare of of sold signed I Regals X agreement intent quarter, and and to for Drafthouse million, theaters totaled loss of franchise million. Subsequent sale the Net of the have proceeds Regal of The and sale sale vacant under we either those, proceeds or properties on purchase the vacant a the end $XX.X sold in the that a theaters, the were X agreement. X, we net in addition have to a of earlier, XXXX mentioned another with Alamo and purchase $XX.X operator $X.X sell. X. of remaining took Disposition XXXX. transactions X signed letter we all quarter, former we to we KinderCare vacant is fifth recognized sold the quarter signed a for sale million. for the our

sale close QX. After we of AMC private which Branson, a million. a Beyond have and signed for approximately rate in net sale equity firm in $XX a to gain theater on we X of income of sold and cap in we of investments. gain both rate agreement, quarter, cap the Forge, million $XX at combined a a experiential our and The is the Missouri Regal theaters, proceeds the under vacant terminated value Pigeon Tennessee purchase demonstrate on our remaining Xscape in-place a X% the vacant Museums theater, vacant Titanic former and and

to Finally, million. $XX issuing in guidance range we XXXX the $XX are of disposition million

$XX.X XXXX QX, convertible we was for million, Companies our totaled funding the and in of award-winning spending of of New In to QX, convert future financing the The and sale-leaseback additional to option Mirbeau million $XX has Rhinebeck, million also mortgage $XXX.X Spa and million. finance includes financing the in for & of to Inn $XXX.X collection structure. resorts During mortgage Massachusetts. on Mirbeau traditional the all commitments investment York closed EPR Skaneateles Plymouth, a deal projects.

and Traveler, assets received Mirbeau's from Forbes Conde national unique numerous Wine Nast U.S. have awards Spectator,

and operator, Movement reputation second our on and and we the News is with once again our Report. expand Mirbeau because is source the We closed Dal climbing real Movement of more partnership overall $X.X industry. In Dower also excellent. quarter, ability knowledge Francisco. of be This thrilled their estate a brand. the award-winning partnership a our with Companies XX & of San Pos Mirbeau couldn't in quality miles and third Climbing World as Belmont, they our in to south deals families California, and Gym this demonstrates unparalleled the deep gym million acquisition

quarter, our at in the creates $X.X we Finally, which million, City long-term Karting X%, the funded subsequent for closing. commitment this The area. exceeded rates one location, compelling a total Kansas to with million end the $XX Andretti value. greater on build-to-suit Cap closed sixth is of financing

investment and Mirbeau, quality experiential exercise We're a continued As million, funded and made I while partnership spending XXXX, of we and XXXX of total added award-winning in A the mentioned, XXXX investment investments our discipline was spending. In extremely resort our Springs We new the the RV developed to developed portfolio. Cajun rebranded in with completed expansion Springs XXXX, transactions in growing in with and for of renovation properties the these through will XXXX. populated Bridge. our our to hot Jellystone Palms We successfully Breaux we second our added we with unique X of Prussia, Warrens growth. RV of continue and and King substantially densely the gyms. We our natural Park Resort our a new for Murrieta springs climbing Hot Pennsylvania Topgolf Margaritaville, opened pleased $XXX.X in experiential investment number entirely be Resort. to

heading and is strong. cadence renovation our Alyeska continued reinvestment We in our in Resort of Alaska. The into XXXX investments

have funded, expansion. be to and categories, deployed driven years. approximately in underwriting partners. $XXX to closed for spending of build-to-suit to guidance approximately committed $XXX guidance are our range most of amount hard development the $XXX pipeline the but of XXXX to are be will in of and anticipate million deployed not for XXXX our leveraging performance experiential at Through range. In We for a million $XXX redevelopment investments issuing our that and midpoint and network team, have be funds million. X high-quality opportunities in both yet by XXXX, over tenants million of our work included always, acquisition our experiential see year-end, next As and deployed the is We're projects of we and and continue $XXX redevelopment investment that we unmatched million that

concepts. and We have pipeline with a robust and existing customers new

fund continue on our borrowing dispositions unsecured discussion now primarily it the revolving a capital, our ability our over facility. I we credit operations, those to under cash to Given with of hand, investments proceeds from and to from maintain of cash discipline for from Mark and cost turn will financials.

Mark Peterson

$X.XX per per Greg. guidance. We fourth the collected and balance you, close tenants which approximately $XX million a $X.XX resulting quarter believe basis in the FFOs versus remaining in share. I'm collections with approximately been to prior share million tenants, has XXXX as were amount deferred to depending quarter year, strong we $XX.X exceeding from sheet, prior versus have related results only that prior of income that balance of introducing $X.XX that payment another we our the with $X.X I addition included paying success. report fact since and threshold. We an in to an for our of adjusted versus accrued had challenging on $XXX the closely year-end, Note We the $X.XX managing back rents financial amounts the work of develop compared with over $X.XX pandemic, for provide the out-of-period speaks schedule EBITDA the strength million update our year concludes sheet one a of and will pleased of million all of current year, and to help an through validates of based of million XXXX, deferral per to in in our with in of Thank AFFO pandemic. the in year. businesses upon with decrease performance and Today, prior with time. that to to their rents, deferred been cash year, discuss approach $X.X the $X.X off-balance that customers tenants' The X longer-term paid relates plans have balance agreed-upon with million work other in them on and share our each businesses the position

prior million in XXXX discussed, than versus current recognized prior The by $XXX year. variances reduction $X.X restructuring well key took were related the revenue in decreased year. $X.X the prior the the spending just of the deferral $XXX.X Total August. in the I Regal to revenue that collections offset more that during out-of-period the termination line quarter million the to Within and as rental as moving that of net fee mentioned Greg the by quarter in years revenue, reduction million and million place investment in revenue impact a fourth rental Now by item. was for total versus positive lease

on when Waterpark including percentage theaters. notes the Resort year. XXXX. I to of time beginning to increased be financing relate will in June versus percentage operating rents I for mortgage our $X Recall for in the due Regal other increase increased discuss additional year, are in guidance. The X and midyear due mortgage master X the at for in Kartrite expected quarter was properties million more million and other XXXX the Indoor to XXXX. rents acquired operating properties, rents revenue recognized have during consolidated income percentage other first under primarily to lease theaters income attraction Both & $X.X that Additionally, prior in to expense our primarily the and the million $X.X of investments

for compared and offsetting and sales due income other other parties XXXX $X.X leased early increase in the primarily million in of additional other of theaters to X the behalf prior to Regal, the income previously fourth However, income. The the to surrendered was August. year been expense participation quarter third EPR's increase on have included since by which by operated

in well as versus the million the million year, On share-based increased expense quarter million G&A the an compared as interest in side, on compensation primarily under for increase projects quarter prior year net due by the short-term to $XX.X including an decreased on payroll $XX.X due expense to the costs, for income interest professional increase to higher increase noncash an and $X.X capitalized in fees. Interest investments development. to expense prior in

was prior Now in $X.XX an per the results. increase shifting full X%. of about year year, to an was the in $X.XX to adjusted compared share versus $X.XX And $X.XX prior FFO about of AFFO increase XX%. as year, per share

As shown deferral share, per customers XXXX income and from on both $X.XX the from out-of-period XXXX cash results basis next $X.XX benefited collections recognized respectively. of slide, and about in

million. by also of lease adjusted from exclude years, recognized collections termination nearly in still fees per when you and the these Excluding share grew nearly FFOs X% XXXX, X% totaling both $X.X all

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

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

X.Xx debt for Our the EBITDAre was to net adjusted quarter.

gross Additionally, basis year-end. XX% a our debt at on book was to net assets

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

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

average $XXX.X drawn of with our maturity continued given capital on which our of in line and in difficult consolidated addition, our due backdrop billion markets. us position at balance In an quarter-end hand on million XXXX, debt we the weighted over of years anticipate million puts no had X off enviable $XX.X revolver, cash using credit. We the is only paying $X which

to is that which as full be percentage many our as of operating fact X, the well the by We $X.XX. are to FFO as we for of our the share. given X properties, in first pleased quarter RV heavily share parks, last are for results our weighted past, to off-season $X.XX guidance the the divided quarters XXXX timing by of year first $X.XX rents, be of year announcing the than lower adjusted Note all as that about to the per expected of including quarter expect XXXX of the per the

to limit As discussed capital, consciously have of near-term previously, current we our have cost decided investment our given we spending.

our raise to providing XXXX do $XXX as fund are capital additional not million And to $XXX in of We to spending million. the we anticipate these need investment guidance amounts. XXXX,

guidance million, of and rent master up, offset million. $XX the and expense is $X related that the rents well $XX of had of charge certain this grant theaters be adjusted midpoint expected stock also decrease from a percentage that reflect charge not prior of decrease is percentage rent versus that decrease have costs G&A to increase to reflects as and breakpoint legal excluded -- guidance This and, for in executive causing XXXX prior a a of property expected for Regal the the sold share due an million million percentage $X in expected increases year was The from million primarily providing does G&A that XXXX to February the Note in lease This is reflects are be midpoint to interest noncash year. We about go interest to an guidance to $X.XX about include by the This XXXX. The rents does QX for cultural as related per million subject and XXXX. rents for $XX with associated base retirement. million. as substantially to in from $XX of recognized not in to guidance G&A is percentage increase million, disposition primarily properties in the proceeds and the amortization rents settlement our to to and lesser FFO participating Regal degree, percentage of $XX $XX in participating also to will AFFO. $X.XX noncash bankruptcy

properties is a slide, income next guidance giving other range provided for the operating On and for other expense. our by consolidated

JVs, are expected to contribution our share which, of addition, providing from an both in equity loss can our of GAAP, The of JVs as guidance for as In of on operating per well guidance course, JVs and as our we details both JVs operating midpoint is found XXXX. from FFO XX adjusted the for after Guidance as adjusted. as as be our increase our properties versus Page consolidated supplemental. FFO well implies operating depreciation,

XXXX or the On $X.X be anticipated for expected of share at per illustrate helpful million to out-of-period XXXX guidance. share. as collections would for million and per deferral midpoint the XXXX $X.XX of growth $X.XX thought remove I or from in impact you share FFO slide, the amount impact the the of basis $XX.X per cash of When next on adjusted it

X.Xx. $X.X capital to grow XXXX I I the need of targeted without is termination share schedule, in access of at our debt-to-EBITDA XXXX just the recognized the fees to impact This consistent X% by mentioned XXXX earnings are on the -- quarter see could can over collections Xx markets of expected to while is you X% FFO grow with lease is about growth growth what to The also as last expected to maintaining expected million. grow and per excluding adjusted when our said X.X%. range deferral As from when we without

as are of XXXX payable increase expected with XX. our dividend pleased the X.X% of on record dividend, to monthly based beginning we March announce in Finally, XX a shareholders April performance, to

of midpoint with payout ratio XXXX about an guidance. the We to at dividend of be expect AFFO XX% per well share covered our

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

Gregory Silvers

the coverage has pre-pandemic of over the strengthening quality reflects you, Mark. report including amounts related in collect to Today's Thank to to The pandemic. of our deferred portfolio, with all rents, us million returning levels. allowed continued theater $XXX our accrued portfolio

guidance to even grow ability environment. Additionally, our to in our a demonstrates continue capital-constrained

adviser acknowledge General Evans, Finally, Secretary. retirement Craig Counsel but all has Craig in years, our numerous of trusted and EPR are to for I member his His mention, want and and to appreciated, the have the retirement. best of team. to take executive are he respected much efforts a worked accomplishments I too as together him and and served we a the minute wish his many

it open Victor, let's Now up you questions. for are there?

Operator

[Operator Instructions] Dennerlein of will question from the first Bank America. line Joshua Our of from come

Joshua Dennerlein

where in what's stabilize thinking us kind whether remind is assets? all like the operating just a I'm bucket about those assets longer-term or XXXX JV JV? you the of the like and on you out? for like how And assets assuming in not are they guide are operating guys Could your basis,

Mark Peterson

Yes.

buckets. So got in of a you operating couple properties

properties got You've X operating that's other operating the are in consolidated and the Kartrite got other and and hotel theaters. expense, that you waterpark income and

income other that's expense. So and other

side, On hotels in the of X sets which parks, RV X -- or are we've Petersburg. investment X the JVs X which -- the properties, of X are is properties X X other in and St. the JV got of --

an they it's about in that. -- versus As the because asking on actual up prior the far you're year. the guidance have also JVs, we increase $XXX,XXX results of that's expense I for And 'XX as interest in embedded more about, about million $X.X for think what

more Petersburg So that's coming of from also capitalization. an perspective, rate things kind in was an expiring is that it's really capped like the have cap X.X%. of million. Part like properties, But off at $X.X interest interest in up operating expense that St. of SOFR increase June we

we've to that's in that, go the up. But expect investments So -- do beyond JVs. put recent we going

spent upwards takes XXXX. a to And improved million of think it lease, I in performance. result in ultimately bit we time unlike for somewhere a that $XX of

we're conservative an investments thinking larger see were or to our longer you'll move we impact little cautious, if have you even that 'XX, are bit in would So think And fruit. it that going guidance. term, XXXX immediate a bear I But an increase. into in confident

So think recency to given endpoint XXXX to question, the we little answer fruit. final and of at your they're kind those takes the a of our it their in don't bear time guidance investment for

Joshua Dennerlein

just the kind those on the through in you don't good XXXX about versus guess, line. How they JV stabilize flow the operating assets from, that Okay. That's maybe guide maybe then can thinking where I out? color. are of like And are they where

Mark Peterson

sure. Yes,

you the was net Last expense. some that and of was other at guidance income kind for $X.X from other that FX If look amount income. year, and but about income million, some of miscellaneous

operating you of just kind it the all it's So with Regal sort transitioning put together about breakeven, theaters, from and then of Kartrite. the

guidance, expense produce at And we the about theaters. were to look million. is the other will other -- And from theaters expect income. $X we our next and of those $X if XXXX. start in of it's income X you that about year, million For from transition midpoint in Obviously, that the

to little lower in out, bit back we're getting than theaters. for frankly, put bit Regal of 'XX, move in -- a a theaters got Cinemark income. That's to the And theaters we those transition. we the bit into operator little the the we chart just for for transition to start that, Phoenix, takes X As those we're of time being on conservative operating produce back will frankly, that a little -- those that the

that full that go that chart the on on the of have didn't below little we did So theaters where say Regal back Regal. I we do transition took will we deals. that chart kind percentage we the baked number when through back that's in the what we out rent from put did from a side, implied the percentage have that to rent

a color. I up something go to move and bit the increase from percentage 'XX. 'XX to as line, you kind in $X.X profits -- expect both the increase to see anywhere operating office billion, you that do little 'XX, in you in the those box rents if -- for quite of office So line should gives $X.X billion-ish to for those should a scheduled box like as billion and expected $X is

So ought to those growth be in on good. pretty 'XX

Operator

will the line question of come from Markets. next our And from KeyBanc Todd Thomas Capital

Todd Thomas

and First the just theater I question, follow up sort to of wanted commentary. Mark, the guidance on

for looking clarity. little a Just

percentage that box What's behind $X.X for term office percentage to to the a running billion, projections calendar the noted office in to outlined strikes. near year You box but million due contribution billion assumption? a million little is the guess, which the $X box the 'XX, July the to think just also rents that the from how through talk I can shakes $XX Regal lease little in And lease out XX? the for you rent the you runs about Regal $XX office specifically bit,

Gregory Silvers

I'll This jump Mark, before. Todd. in, And is Greg, Sure.

what say for lease the we going the would year. that billion, lease year we office -- think the think box for is, is to I $X.X be

the you will So consistent go think otherwise, office that, have our we again, year. when remember, with numbers the we you be contribution. Again, August and full XX we broken July then to think those Mark do -- X chart look kind what Regal the as giving are that's kind an we box kind indicated both lease if you it if lease supplied on follow of on -- view we that's at so of and our what of out, year, year that

contribution, will the of that add. a in as think will are those be by still but strike, what Mark impacted indicated comments, it his clearly nice So again, it

Mark Peterson

guidance, the is Regal, million. chart rents we have percentage $X.X our the what about and Yes, from for in

Todd Thomas

Okay. helpful. Got That's it.

for I sure... sort wanted $X.X XXXX $X is assumption the billion for billion and Regal $X.X to of here. make So to lease billion just the

Gregory Silvers

correct. that's yes, year, Lease

Todd Thomas

discussed you additional in there the it. in in percentage And $XX term? Should XXXX then during that with the expecting theater lease you're took place million Got is expect lease rent that Xscape the we restructurings million restructuring that Xscape portfolio guide? from within $XX to near the quarter. And a

Gregory Silvers

If planned know we improve don't back that a look theater. and selling we'll don't but take have theaters still can and Todd, team know create the at I them other or contribution think save a we we I create can definitely and the opportunity. and that and his overall don't portfolio Greg. this think is we that -- I it. restructuring, take taking Greg by -- an if overall for meaningful we -- stronger capital there's -- any

is sell either long-term or a that theater but... use the I as plan use to think theater different probably for

Gregory Zimmerman

let clarify. Yes, me

rent like there both that X is theaters then the to investments into theater a about theaters. and Todd. mentioned of So percentage to our operator And refurbish we're is those component park, our also Mark that said continue, RV percentage I enhanced going going to on the X rent the we

come So we would refurbishments. a after if hope that that, be rent, those would percentage would there

Todd Thomas

mentioned think Okay. line, Mark, Got I the have somewhat. I which you in 'XX you X.XX%, come million, it. That's August on last what But plan with $XXX think is said maturity, helpful. And that consistent debt in of retire the quarter. just then, terms to costs you that

Just the that's if plan still a has evolved curious bit. if process or thought your

Mark Peterson

plan. So, it's still the

the hand. for year, at look our of kind flows we cash on with cash you start If

excess excess $XXX have cash of We in million. flow

have with then given up only plan. maintenance placement off we our fund still on $XXX CapEx dispositions. that and about and We end CapEx pay private line current million -- can our And drawn

So -- still I said line as the said, quarter, draw. markets. access But as it yes, off not to modest have I is and as last plan, the capital to said pay a the you and

pay markets capital line. right look the we at should can longer-term the plan financing. there, off our Now it now is But be to

Operator

JPMorgan. Paolone from question Anthony from will next come Our line of the

Anthony Paolone

on looking generally you're stuff, of, coverage levels outside just out Can might theater you talk watchlist to lowest the assets? where your non-theater be the are just say, what as the or 'XX

Gregory Silvers

shaking of our Again, -- that range again, and to idea in when billion a the $X.X diminished. -- don't -- X.Xx, X.Xx was an Again, last can't theater reflected that's we I about anything talked it Greg we coverage points is head, I that. But that really, very up. the jumping quarter, an box you it's know we on But office. in. have on watchlist I'll let Greg's his hear think, jump so

low I $X.X between watermark seen $X coverage talk our So we are Tony, think we've of thoughts if theater billion the billion. relatively, somewhere and

our and talked -- of clearly And increased in our the with pressure, improving that space. coverages high some non-theater face So expense in sector. as remained earlier, about have in that is even are things we've

now. So I we're we right don't think really worries we that any -- credit see addressing don't have

Gregory Zimmerman

repeating, said would and coverage. the very underperforming theater what also, which Tony, on I theaters, side market my keep script in poor call had as I kind And we pruning thoughtful about by we're or small definition, of,

So our the is because we've of I healthier portfolio overall, think taken. steps

Anthony Paolone

Okay.

you operating think the but a about you should restructuring, that percentage assets seems in because you I'm down understand theater theater I like so it be organic we KinderCare -- just you're portfolio, might what did going sort the just number term if of the forward. if like how getting mean like? organic Because mean, like think put growth the you 'XX back. contractual about to rents, think and the trying did about just I fee, it look aside and got sounds to the growth then, So --

Gregory Silvers

I of we've mean, to cash not in year, we're the 'XX, lease which fact X% because -- have lease we AMC of that generally, AMC restructure, a because 'XX, our by think, is that we'll -- bump I kind in lining. year they're that basis, next Sure. in of we're straight next said be X.X% for somewhere impacted

a bump basis, generally... more into is 'XX. run as to But a So that will of be on kind get X.X% meaningful X% rate we that

Mark Peterson

Yes.

X case it bump actually years the can like vary first it AMC, XXXX. said, be you every it's in it's then, As whether in and on of meaningful our Greg it And depending hits. would pretty said,

in 'XX. kind 'XX than higher we of So internal see more growth should

Operator

from Smedes from of question the line Our next Rose Citi. comes

Bennett Rose

sounds relationship. just little do you kind you going about about expect a And convert on ask a traditional mentioned I just wanted It your could to of to Mirbeau that yields Is of in, you're bit sort option? investment? that talk like that? it more the that you you getting the mortgage would a Spa into can And leaseback. you sale

Gregory Zimmerman

rates forward it would decision There take a goes of it Yes, option. at Smedes. we -- that over relates our the get also to is commitment Sure, some And time are future performance a the our out. the deals. to with then that to in But cap We on deals last have rate. script, on X% of we were early individual or operations. as I into cap them get don't most couple X% above as make year of said fund triggers the

Bennett Rose

I by could on the leverage in it your you Okay. maybe moved is guidance. sequentially. side? where what leverage goal be the then just you And repeat looks And to was wondering up the year-end expect that just like

Mark Peterson

into Xx Sure. plan, at that, within our Leverage going is be with of to X.Xx. even squarely our the in And plan end 'XX. we'll lower perhaps that

lot of next So extent, maintained the A that out And I we've some kind to even, of kind for free financed and our by cash being is funding disposition. X.Xx. Xx year. laid to flows always cash of flow

that's So we why acquisitions remain still and invest and can in so forth. leverage low, could new

Operator

question Our comes from Michael of from next Carroll the line RBC.

Michael Carroll

highlighted else Is assets? rid prepared your is you mean, on that drove Xscape there in smaller the think, Greg, I those guess, I why just I of transitions. there? those reason that Alamo those remarks of of wanted to were been in I underperformance generally touch Or the kind you've the and generally, Drafthouse towns. the something underperforming? getting theaters theaters that theaters

Gregory Zimmerman

Christi. market one bad, Michael, necessarily I I Xscape, in would in every smaller we in that pressure terminated then have actually think actually particular, the we think same were on but more it's the small The Texas. a market in -- in to sometimes Laredo with Cincinnati. again, couple smaller don't a attached were was markets They dying Drafthouses, one Alamo mall of say, And things. that and theaters is them. And Corpus

that percentage zone have on a growth we in there. deal of a a for opportunity theaters -- is competitive just other one rent and, they're So frankly, didn't highly lot [indiscernible]. see we And the

I at we answers the decisions. of look also We that couple those years over the So the combination at can cadence look everything. performance hope think and when the of performance we we next a question. It's be what make

Gregory Silvers

add I and think chime a in. of couple Greg things can to that, I'll

First you of look the credit. all, at underlying

Alamo franchisees. were X As Greg mentioned, the Drafthouses

corporate X the So that other credits. are we kept

saw So again, next to what -- Xscape. at the we that fundamental is

that's of to belief firm continue screens, commit premium to and offerings these need to or expanded IMAX, in of terms have thing. that sort a improving We capital of theaters operators the whether recliners

we per some that the have of When to smaller kept to a Xscape, for access those theater these million got don't commitment capital. we for And did operators $X them improve theaters.

the be how all of to they things, it's at able and we lease. And just but as they put doing over life are going are not them so them to keep to perform And be, now, the to to in as are those think they they do competitive of going when look the need you well Michael. money

Michael Carroll

how Okay. kind And then do theater? that mentioning? that commitment, mean mean, they of that is $X million I per just you upgrades those significant significant can I were

Gregory Silvers

a full things, Yes. for think about it's I kind I you definitely mean, they of seats mean about renovation if upgrade, $XXX,XXX. yes, and a can.

you this So get improvements capital. significant can with

Michael Carroll

portfolio, have something you or smaller are where concerned theater there remaining fit might then Okay. town-type I where within And do that to how theaters potentially with? market your mean, transition many that kind of you're

Gregory Silvers

and Greg kind out. of think his of, talks, as pruning he team job great a those I are doing

Gregory Zimmerman

nothing said the well. perform there's I very and and reiterate, a markets. Michael, footprint a theater I'll again, good ago And markets If been small has it's upgraded, minute with wrong small

at since lot So taken we about in look years. tend are disposed I And to of say would good feel past We've where XX we COVID. X.X steps everything. We've pretty now. we theaters of a the

Michael Carroll

then higher revenue other between those. other expense Mark, just that can other expenses And get ranges Great. we that the income your or does than lines. same revenues can other we or -- with target? one other range Or guidance on me. it million both I guidance last and to and $X trend your million? within is lower guess, assume differently there's And related Obviously, $X Okay. can and then for the something that big

Mark Peterson

$X you're talking net target, the million So right? about

Michael Carroll

Correct.

Mark Peterson

Yes.

operating are these properties. mean, I yes, So

So a in. is there could certainly that operate range they

belt. in bit conservative a XXXX For given are sort example, were they of we under And -- full of projecting operating that that and XXXX part the for shut down for the think getting theaters. been operators these year fact that is we've now in a their fairly

can achievable, a that fair, income why million we're think We vary. of expense, part but range. yes, another of other vary. And there Kartrite So that there's is and hopeful which to is course, that, and that's the upside $X is can

Gregory Silvers

seasonality the the in kind there. movement. think are that other you or generally look Kartrite, comment, and on seasons busy of the of and their be to Mark some to out of I'll Because whether lay I thing -- to it that kind it's will similarly just that would divide -- is an number. and Mark's not by I theaters expect ask annual X that but there second this, be will -- give -- -- fourth it's And so tried quarter. theaters

theater So is not in generally second as quarter. nearly business the strong the quarter the speaking, first as

through for that on whole So quarter-to-quarter but it a be important, what's the to numbers flow will seeing those there be year, will basis. seasonality

Mark Peterson

remainder also Greg said the forth, of with in off-season my properties, about don't what by well prepared we for guidance, first and that said quarterly percentage rents it And much kind so annual to but X but the operating the than number particularly quarter RV to Yes. give as below $X.XX. And midpoint that, is the by as theaters, in in our will for the just to divided the be lower guidance parks just add part of is I comments year. the it's QX

in to terms So seasonality, that understand if it's will, of results. you important projecting quarterly

Operator

question Truist. from comes Kim next Ki Bin Our line from of

Ki Bin Kim

Just to makes you're thinking about, you comment provide theater a Can be a that made will seeing you your bigger just much of that? going year. you're think outcomes a you you back and what that like believe XXXX range projections, that

Gregory Silvers

a when using the it's banks line we the who to for are on at again, titles. variety come some Bin, And Ki I major of theater we're industry -- estimates, really some And about including the of our pundits, of here. again, think, to Again, I have probably number And when as that $XX of the 'XX to really about $X billion $X said, -- out the at in there it's fully $X.X billion, say least there's Greg we analyst think, billion titles. no billion number. it's doesn't analysts

that and production studios need -- the theater you ramps acknowledgment writers' an exhibition from that I they seeing, back by the the as and strike, up actors' with the again an when almost on mean, re- flow So -- all I that. combine all acknowledgment money and are we're generated business. all kind the cash to they of kind think, Netflix, movie, exhibition other their from losing than they've committed theater that's the of the streamers almost -- businesses, need and

beginning now, of getting That's good our we're numbers. not just into pretty now kind right that's it really right so very strong. And 'XX, And titles visibility into much looks and industry-wide. again,

You in $X see some above to is $XX billion, billion but the of range billion. generally, I $XX think everyone

to So at a a pretty at billion, what that's midpoint compared strong we're this $X.X year seeing year.

Gregory Zimmerman

Yes, and theater trailing coverage was $X.X billion months. X.Xx XX at

be in shape. So good we'll

Mark Peterson

forth we so that have at this numbers, some we or at you strike. but billion $X.X been year the probably put if would which out, put chart for look To the

those that if higher chart the that we're $X year at as just what think be kind about than another And of $X.X we delayed. it... (sic) theaters suggests So rent billion of guiding the the million this as office, [ million you if percentage year performance the a box given will up well, operating follows think could profits The of $X.X go course, ]. which to

Ki Bin Kim

rent some theaters. question. case? my read restructurings the base Is next are you -- other mind the chart on still that Yes, that still is There from

So if there some movement I in wasn't this... sure are

Gregory Silvers

theaters. operating in That's just Regal the

the So under. case we're we it's that still think operating base

that operating true our are that's earlier, off this we our of year. a coming case ramping-up is that time that, we said And percentage number be will a there. holding but theaters to rent really Mark little period think As

Ki Bin Kim

Okay.

On 'XX, just that you remind AMC what amount? that's is? the ramp can us in bump coming The

Gregory Silvers

a X.X% It's bump.

$XX Roughly, let's have I on again, but you Mark, So their refine I million. it's this, -- a that? think It's actual number. do have rent don't X.X%. we'll roughly

Mark Peterson

every -- X so every years. Yes,

Gregory Silvers

on X.X% million. Yes, $XX

that and July occurs -- or August, -- August. July in So

Ki Bin Kim

of purchase you're going can does one just if X that PSA, sales AMC you remaining be... assigning color provide LOIs in? mean executed that or rent on just Regals the and what to you you're Okay. have more. And X increase this X a the get under And for just and lease just would NOI the agreements The high level, some

Gregory Zimmerman

Yes.

So Regals lease. a and for enter the into them. not vacant are vacant. going to We're we vacant AMCs, They're selling

we've And how X.X to -- a the think X assign. sold and and XX over So of there's I year, the it years, that other used be long we are this cadence past will are depends selling theaters, get probably a to no as being on that's lot about takes. Of roughly entitlements, not. year. have the of whether need XX% lease reused XX% people A process it what

market move as and agnostic. I many and highest on. just -- we're price the take and So said times, We

Operator

the call showing not to queue. I'm back any And Silvers any questions the over remarks. for Greg in to I'd turn closing further like

Gregory Silvers

we time appreciate talk everyone's Well, and Have you attention. appreciate really in and the coming to to year. everyone, forward thanks, a Look And it. great day.

Operator

conference. Thank the you program. your This for conclude participation in today's does

You disconnect. great may a now have day. Everyone,

EPR Properties (EPR) 29 Feb 242023 Q4 Earnings call transcript