EPR - Earnings call transcript Q2 2024

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Operator

Good day and thank you for standing by. Welcome to the Q2 2024 EPR Properties Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Brian Moriarty, Senior Vice President of Corporate Communications. Please go ahead.

Brian Moriarty

All right. you. Thank us second joining call XXXX for webcast. and today for quarter our earnings Thanks call other may, such Private will words call Silvers, Mark Litigation may are be, as Greg today's this the comparable on Participants expect, Greg of you informing Act intend, Vice the President CFO. I'll forward-looking that and call Vice by Zimmerman, Chairman President in statements CIO; believe, Executive and Peterson, hope, as or and start anticipate, Executive CEO; XXXX, terms. include continue, defined Securities identified by and 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, directly 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

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

demonstrate progress and For the -- REIT. the building in -- the and momentum that quarter, In leading sorry in momentum building building we are that, experiential continued pleased results to and deliver demonstrate diversified about guys. progress solid continued

we over-delivering theaters, broader industry making from the & it's aligned like triple-net our our with expectations post-COVID resiliency, the closed maintaining normalization titles across expense both in illustrate year. provide Deadpool of recapture will to coverage is continues customer rent screen demand the the Greg demand seeing leased managed their of are industry, show industries time-tested meeting Experiential and mortgage Office managed its market to our numbers some previously forward look share sustained and big high the and the Our Lodging. more working details highs the portfolios. In with to pressures We we're our operating surprising properties, the consumer in remainder way Wolverine, Twisters in or Box these by whether with a anticipated for momentum. additional to areas. Box Office greatly film broad

while AMC several the announced week, their to majority maturities transactions mitigates debt reduce potential this as the position. last debt extend very view net as XXXX overall risk. Additionally, positive XXXX, event near-term it of We that also refinancing to a XXXX substantially their providing and debt maturity their

compelling While experiential to creative, theater remind our often remains acquiring estate our We is growth focused of remain experiential theaters. properties. committed important vital it's to a business, in real that of part everyone outside award-winning exhibition and

for the Our proven to karting such springs recent We climbing we that identify and benefit consumer in continue have investments. grow, natural and activities investments resorts, to growth exemplifies remain our capture hot concepts spas, gyms spending consistently will our and that experiential on enduring shareholders. ability of indoor confident

XXXX a seeing second interest level, macro the reductions. expectation moderation a of we As and and about into of feel potential. At optimistic half the of we very we're move into inflation our XXXX, rate

financial We flexibility. positioned strong and are very well significant also liquidity with

offer we improved, historically our strong remains while a Additionally, well-covered multiple dividend. low, and

our forward to as our are risks strong rewarding historically and plan AMC continue we such see a returns multiple are expansion. with the We perceived we total to delivered. we've mitigated, look we execute investors shareholder will As confident refinancing that

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

Gregory Zimmerman

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

XXX% was million, $XX.X During in the experiential portfolio. our the spending spending quarter, investment was of our

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

education we comprises the properties quarter, XXX% the operators. portfolio end X sell, And at to excluding the intend with of leased. XX Our was properties

same to a coverage recent remains data with The for Box last provided X.Xx, at Overall is X.Xx, theaters period. Turning unchanged portfolio Trailing strong coverage. Office trailing $X.X is for most at period. XX-month from billion XX-month on based March coverage the quarter.

the trailing X.Xx. Our period. place Regal theater in our the for portfolio portion that Trailing of XX-month deal was coverage the non-theater coverage reporting entire XX-month is assumes for

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

Office coverage though levels theater levels. below XXXX XXXX is remains even Our Box at North well American

Box to of QX American Office state for first was billion half for the the the year. and Turning Box $X.X billion Office $X.X of North industry. the and

$XXX by X Ride The over Boys: first grossed the to of and impact by down the the and June's Inside $XXX in strikes worldwide. July's and X to the due solid to year. America date forecast. the delivering Office challenging. $X.X actors on opening Spider-Man: XX% writers exceeded No Gun: of which this release highest Out million outgrossing the and from kickoff North only of the actors' less Deadpool dramatically as $XXX & we of estimate writers' the XX-month over million movie impact animated $X.X results for XXXX. become Office Office approximately predicting Monday gross for in grossing million months schedule X Through opening date, ever XX, Tuesday second XXXX results Box its period added our same and XXXX. and lease performances around outperformed the Regal grossed strikes down the million. Despite Me expectations or from the Deadpool both is additional serves uptick opening trailing original July R-rated X and eagerly period an June, domestic for be the year, Box in anticipated this weekend million Wolverine Barbie an June million since since gross Box but half led XXXX grossing made ending Bad biggest Top billion Maverick Office were outpacing Out movie $XXX Way the than on ever, period and December will earning Home Despicable Inside in $XXX and encouraging billion, Box week, to $XX was weekend substantially weekend, Die, highest strong for a the The estimates, X% extremely

side, our we percentage the not from up guidance. plus Regal in adjusted rent to be we percentage outperformance shortfall the have On tenants, so by rents made expect other

directly said a and of XX already number Beetlejuice Deadpool As $XXX II, than between currently major Folie to grossed King. we X, gross $XXX Joker: tied gross films Mufasa: million titles & To have over of date, Wicked, in Venom have million X, releases released. underway. Lion XX in the increase X, is repeatedly, and another Box to an million, grossed year projected is include second Gladiator $XX $XXX have Wolverine, Office more million Moana in Titles the the Deux, half The and XXXX,

the growth. when will results the to show the on and go end a returned The big demonstrate strikes of good strong on and there is screen. we see from writers the cadence they them finally see, Box have that reached that have And actors' negative Office content to impact consumers of June and importantly, movies more July to

and between propel for the quality second We year XXXX the to Box will Office billion are in $X.X for $X.X of that Box optimistic into in slate Based July, billion. and half trajectory are increasing we results calendar upward and June the and XXXX quantity from guidance XXXX our in the the on and of continue billion billion between to an $X Office. $X.X year and

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

results to destinations. to drive our across see good value-oriented continue We

Fair down City Eat July revenue but were & the EBITDARM Flags and operating continue Andretti and construction near credit to the Oklahoma plans and parks any that, of our to Schaumburg, finalizing in in of at and and entitlements and is slightly well. believe Our longer expect City, concluded quarter-over-quarter term, Play profile do for their merger not Kansas operations X. changes and Cedar strengthens assets the Illinois. Six this We to Karting under continue perform term company. in as

early open XXXX. season. this will Springs confident outstanding scheduled expansion the ski the Our the construction spring draw for extensive a attractions We're on a exceeded expansion growth season. The Pagosa the at for are it's conclusions to for at performance strong this summer about continues asset. Percentage too our but season, Springs expectations tenant with now opening Resort in drive rent from following ski

well. During the & the RV continue Both Margaritaville to complete Alyeska Lodge Alaska Margaritaville in our our will off-peak summer and Resort Forge lobby perform Resort Camp Hotel renovations. Nashville Pigeon in in season,

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

our Turning operating properties. to

and transition joint the impacting lodging As operating the pressures lost pressures are of some as venture Cinemark Phoenix. properties, bankruptcy in continue theaters our many we with recapture ADR, we part to as operating are seeing in EBITDARM. we cost expense Also, to face in to attempt the market negatively share in industry, softness and Regal and

location on During million. completion the third build-to-suit land and for $XX project. providing of acquisition $X We commitment for new of million, Andretti of in QX, million and our $XXX.X closed total Karting million a investment spending City, a the Oklahoma year-to-date $XX.X is was for build-to-suit

years. Kansas greater build-to-suit area in providing we of in development financing $XX of experiential previously range. In over to opportunities included Schaumburg, in City to will remainder that million. investment most and not high-quality for guidance the range build-to-suit are a expansion. Illinois. We're Andretti closed As of amount and million $XXX approximately committed Karting of for for deployed approximately have yet XXXX spending and to are XXXX both quarter-end, be guidance million $XXX to $XXX for Through is our redevelopment experiential be which in redevelopment at categories, have We the our anticipate projects we the but million of million see announced, midpoint acquisition deployed and maintaining this X locations XXXX, next the be deployed continue funded funds we $XXX

and with capital, to The from discipline sold maintain Given investments a on reaching dispositions proceeds cash we proceeds gain and were our with cost and $X.X $XX.X we that borrowing vacant from the cash million. under unsecured X of X million, those former theaters, hand, continue Regals QX, primarily our operations, facility. In a fund revolving availability approximately to term. from net Cinemark credit end our of will of combined was

million. the $X.X Regal the For theaters, proceeds year, after of Subsequent another sold we taking disposition for conclusion former of X bankruptcy $XX.X end of Less year theater Regal million. possession the have the X than of them. vacant and sold Regal to the months we the XX totaled first of quarter, X

X remaining the signed We former and vacant in place purchase for of have agreements Regal sale theaters. X

X vacant remaining theater. those have QX, theaters, Beyond we and AMC theater a is vacant we purchase and Xscape in sale signed terminated which a X former Regal under agreement, vacant

pleased are million Based pleased overall our $XX cadence vacant for and the particularly XXXX with on are our $XX dispositions pace to with theaters. of we that guidance progress, Regal disposition selling former updating We million. the to

market made consultation Day and with theater. I and of are capital close was the asset by with former discussion have theaters performance. to to not sense and to assets, performance of operating came the and review of constantly required consultation, standards us we expenditures After X Mark sell financials. now closure our operating this economic Cinemark. to and maintenance careful for over to We did already it to for based of concluded a theater-level underway share. deferred the in X to the evaluation the jointly the better Labor Finally, The managed close and marketing significant grow on level anticipate meet theater. decision expenditure recapture and make turn it Cinemark, We the Regal and ours we decision that around Cinemark's

Mark Peterson

year. the XXXX Thank million prior prior there that sheet, Today performance as our update share update discuss no $X.X for Note on included decrease customers. per quarter the $X.XX AFFO share second $X.XX prior in an will $X.XX And resulting was on deferral out-of-period provide in of our I compared the a versus was $X.XX adjusted $X.XX cash-basis quarter in share were prior year. year, versus and guidance. FFO Greg. close for the the our you, the for in for per per income financial year. an nearly to the balance collections quarter, in were from with quarter,

net Now investment well year. as year. the more the revenue decreased mentioned, just quarter moving in of variances. out-of-period prior impact $XXX.X for revenue, of that as year lease that reduction the offset versus collections I $XXX.X master million million in revenue restructuring of was the QX, percentage were Total deferral revenue, versus million was rent spending $X.X rental a place rental the in the be key positive Regal expected The theaters that of month the million reduction Within August the for Regal by XXXX. Within to prior quarter $X.X $X past the related million in the in for took rental July in year. to total is versus to year. over prior lease revenue the by than percentage rents recognized under the Recall last

excluded this August, months rent million revenue, including the operating over AFFO. The accrued but other X the other in basis Wellness to primarily in other that to in back additional will year the increased bit versus and elevated and sequentially by parties previously been August mortgage year. financing asset, that is in the QX. X notes Per of on down X a but have within rent. $X.X FFO March terms operating as rent determining included leased to consolidated in & Waterpark surrendered other properties, theaters. the Thus, past to Additionally, income of go increase due Indoor prior relate our of for the which theaters primarily Both in placed is Hotel a and expected due rent straight-lined adjusted rent Kartrite investments service March. last for into QX, from is Fitness additional and since compared to operated represents due the is in & in being expense the million straight-lined lease, and increase first was Note which rental income other Regal, behalf cash remain to to to future by then for mortgage primarily by $X.X the lease income The third expense quarter, XXXX. of property was early was straight-lined EPR's

compensation million Regal On the in change. payroll costs, fees, franchise $XX versus due a due $XX.X expense to well for including to those the lower a state noncash side, expense related resolution, G&A to decrease as to decreased and as lower taxes million prior year professional quarter in primarily including share-based expense the legislative the

and discussed. to as for decrease is capitalized sell to quarter recognized year, we net under increased property X of to by adjusted. compared income Interest theater charges the we $X.X projects prior short-term This interest million that interest in impairment charge million During FFO primarily excluded expense decrease $XX.X in the operating due related investments a intend quarter, on on that from a development. Greg to

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

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

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

common ratio very XX. well quarter covered second dividend basis Additionally, an our And payout gross our on for to June a XX%. of continues the AFFO was net with book debt XX% to assets at be

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

billion credit. which just only $X quarter-end using weighted with balance positions had forward. of maturity cash In drawn we going We line hand $XXX.X us million no our which well is maturing our XXXX, million and consolidated average addition, our under revolver, off paying in on X on years, debt $XX.X anticipate at of

guidance $XXX investment to million. XXXX $XXX and $X.XX, FFO spending adjusted We per to of our $X.XX are million of guidance share as confirming

our to million to guidance updating $XX are to of $XX $XX a million range million. disposition a of from We range proceeds million $XX

Additionally, participating we million guidance million. are interest $XX and confirming of our percentage $XX rent to

to decrease general the benefit our range a range from lowering million. $XX million tax $XX fees guidance $XX million are is We franchise of change and million legislative This that costs, to state well to due expense. to professional recent and reduced administrative as a payroll and anticipated of as lower $XX

on guidance in have we are the properties those ventures. slide, next detailed wholly-owned the operating held we On joint and providing our

revising the from to our for million and confirming income million in to are a to Labor million to other a for guidance of revenue of due primarily operating $XX Day. million, around range $XX $XX guidance $XX decision theaters range is million close of to We $XX other $XX X of our million. reduction The expense other to a

do reduction our a we properties. expense expect cost increased in other However, due other not operating to at

and million from to $X to and we of loss a $X X to million $X FFO Lastly, to range JVs $X of equity range from revising the $X million $XX JVs million $X of a a to million, from range a AA are our million. million to from range of

Greg to normalization mostly this with be consistent pressures, due broader lodging our XX supplemental. found the industry. insurance-related, is mentioned, can of experiential on As details reduction Page Guidance some expense and demand

illustrate slide, that share in for of collections the on FFO collected anticipated million last $X.X at guidance, you XXXX wanted $X.XX next share, out-of-period growth the $X.XX On and per to quarter, have the of the $XX.X we when and remove deferral of I midpoint adjusted or per XXXX million the XXXX amount impact for share. cash-basis of per or as impact

still from on see the schedule, per FFO can by grow to you XXXX share adjusted to without X.X%. As as XXXX is deferral expected collections

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

Gregory Silvers

Mark. you, Thank

experiential demand remains our today, continues our As consumer we've solid, and business discussed to properties. support

year. We allows the continue again to our many look view once as open as the encouraged to we're as the progression mentioned, Greg half the refinancing as forward forward lack continue us we've on multiple. outstanding AMC catalysts offers, to gotten that, that let's this of propel deliver it Curin? content was platform equity reasonable these our and experiential capitalize by the for it to We strikes caused theatrical of up well that to for past to further first to us that opportunities As more a impacted shareholders. With results the and questions. developments

Operator

question first comes from of Our Instructions] of Dennerlein [Operator Bank Joshua America.

Farrell Granath

on compared This in and are one, first just it well I may set as is rates competition in what and Farrell going how you market seeing investment today you're you going your you're to currently forward, what of behalf seeing how the is be forward? Josh. the seeing that pipeline, to ask, wanted cap as Granath seeing

Gregory Silvers

not I'll add they're this. said, the to million world, color Greg our tremendous experiential kind as in let large think I to still And million to undertaking. Yes. growth, by is seeing competition. I which some In a kind range. of amount of we've acquisitions But recent degree, in indicated are while Andrettis our about And thoughtful that a operators our $XX area, their we're of still being think growing, $XXX

we've we've in some the As opened said, Topgolfs last recent year.

So to they and of continue be to that. we grow, continue supportive But Greg?

Gregory Zimmerman

answer also that a Xs. change don't the seeing to cap solid in of we're lot near in see rate rates over term. And And the the are question, cap Yes. the I

other thing finding The I deals very good people probably find. the other respect just in marketplace would at add competition don't we're with to that is

in the water again, Upstate to quarter, don't So that acquire we able competition York. in that. New for park know much I And was first there were a

we're our our of and to the of experience able on that are those the quality portfolio. So based find kind deals

Farrell Granath

area especially most? the tenant also, Or of Are on many, the there that the are impacted seeing that end, base? through lower flow higher bigger consumer, maybe I is pressures. thinking your And facing about being Great. to is an picture, you guess, kind

Gregory Silvers

seeing low at coverage there's Yes. what we're a delayed, is would about And anecdotally and hearing say, probably still Like think being very we're said, of I more consumer the not end I I that. the quarter talked we as pressure.

been Greg? dissipate a solid are are Our continued way their so has seen it's through generally those pressure, of to results. cost we're And dealing wages, insurance starting what of middle-class offerings. and far, properties solid But kind work is seeing with little or the kind system whether bit. we've everyone

Gregory Zimmerman

proposition we see you And Deadpool think the can have not Also, to & is our weekend, portfolio, Wolverine tickets. look at are going you I people theater. theater most if the this value-oriented shy from about

Greg. yet. really with agree not would I that We're seeing yes, So

Operator

next Our Smedes of question Citi. from comes Rose

Bennett Rose

in a wanted half they improvement the just And about I to fiscal really the function a that strength, so Box your gives bit the sort of last Office. kind of to including year, their just to shortfall? I be thinking back tenants short. that the correctly. And Regal about Regal of make see I would guess year, more I incremental percentage wouldn't falling little I'm seeing up where get ask other seeing want rents the that's the just will what are you Like I guess incremental able guess, offset shortfall? confidence if that of you're you

Gregory Silvers

thanks. Smedes,

remember, the for from July year XX. I think, X runs Regal August lease to

in they're as So of again, the recovery are July. and -- strikes. saw getting that kind right what the the in we of of We strikes do was impact and the this Greg year mentioned, heart of June some we

a meaning see the we of half of it's in the lease up of that. But for year. couple we you we, months the as of we So of the are year second out where about of you first think to the can year. kind year, if the the the industry, did pick what at truly look got estimates And I balance the this is really theater relative in half strength solid

strikes reflects get of so and the the And ability the think that I back. impact from that kind to

our ski Mark's as seeing places. other various we in strengths far we how think in As percentage we some it, Greg's and I about had we it industry. in rent talked in and up, didn't to about other We're comments, make again, we're anticipate that talked going comments already

our did feel guidance. recover therefore, we our confident not ability to of So and, that change

Bennett Rose

some confident quarter rents -- talked strength guess in Okay. lag, kind places, other across shortfalls consumer and we're various guess, their still you'll weakening, -- I I in just won't side? exposure. likely weakness, RV the as that you're on feel exposure, see think seeing about including St. areas I wondering when so quarter like having clearly board. you some percentage but yet, a And of JVs percentage structure, Petersburg I'm part know I And just in last see that say not where you those or the you is the the rent of you any you're of seeing

Gregory Silvers

Again, is I saying -- -- like just said, $XXX ski the get but what we is above consumer estimates we're were had saying weakening, that what paid tenant clearly million. you're was that our just we had I a opening a in that. And theater

So strength we're seeing some while be there still areas. may some weakening, some in

Mark Peterson

in I rents don't think those get JVs, those. we percentage from

So and impact parks. St. doesn't the RV percentage rents, the that Petersburg the

Gregory Silvers

net lease. It would our in be

Mark Peterson

of -- We couple the in X of that weakness we've Florida, as well JV off we some taken impact But Lodging particularly there somewhat where pressures, in in those scripts industry did that coming guidance it bit. our highs, why times we're have acknowledge there like the impacting in is ADR our a of seeing not and expense that's is does hotels. a kind insurance, of reason none the particularly insurance, fact things that And of COVID no, some part Experiential percentage rents. down of and

Bennett Rose

your continue due to to there maybe going contracts would theater, close keep required sounds up that to now to is it that invest last ask avoided? forward just operating of question. like Or you I operators mean a Okay. theater you lack a I I CapEx guess, to investment, wanted in order are standards? something be When in your to -- one

Gregory Silvers

operating Yes. theaters Remember, had those on that back. we taken were

CapEx have done some Regal Greg, result, -- should not. So that but like time during direct probably again, in lack part of did bankruptcy they and being a maintenance that of was of not things period of

taken So maintenance in have our operating Smedes, of do upkeep. But for lease were, ordinary of normal X these back. and properties kind provisions which the of kind require we

Gregory Zimmerman

Regal some to found other Yes. the to I say expensive during improve be experience in bankruptcy, upgraded it maintenance was Smedes, to because, is competing was up. just also theaters we going the the keep area. just had CapEx. try very the wasn't CapEx It to trade thing would And it substantially

look So it. again, Cinemark the one they really portfolio what us they of the a we came And is value at joint about conclusion and things about think. tell to we

Operator

Your next question from comes Fargo. from John Kilichowski Wells

William John Kilichowski

AMC before creditor thoughts circle like the a If bit And road? the pushing the inevitable just execution there. out complicated, of breathing we X you things to some the out on this the positive, could PIK like XX% But those it's issues them back bit XX% now, groups. opening 'XX. a maybe they about of X-K the at I'm the little of think about on did 'XX bit you curious some your time to some talk down It with sounded refinancings looking a lengthy. X-K that execution a little giving very just and overall, putting I'm this. cash, seeing what more. I'm of curious, I'm if or just about is structure remarks, could talked detailing maturities you

Gregory Silvers

capital it's continue I to I giving ability deploy. mean mean I them think anybody would say, raise that to they've to had the breathing John, time.

equity over to I period they've to immediacy their balance debt in gives to continue able leveraged. maturity debt. years, was that a, to their raise may further 'XX is and think too obligations. done calendar, the few be would and to meet the the them concern of and strength hitting that get It to And it think, execute and allow with past of to sheet a get us today able their still voiced them. They to that. 'XX film was eliminate, But of time as ability talked the be we've relationship seem to say debt the again, we about most about a as continuing our them pay to down often also doesn't I

is would of I But to think again, have accurate. breathing So your maybe you Greg room guys Mark, further or that? to characterization anything add

Mark Peterson

lease, about Greg alleviating think to themselves set now it forward. going they've through from and Office what We And our we the have feel that best make an feel got the of have situation good the as I improving we've master shape our up properties. happens. period Box collateral said, our And good of risk in good about no matter about perspective, bankruptcy. we kind

William John Kilichowski

Got seen then have we a potential I market. just generally, to approach change guess willingness the Fed cut? transaction as it. seller And over more you maybe jumping

Gregory Silvers

I about there's the that is. think doubt think are no thinking I that people -- of definitely impact we've what

people, have I much As people time this they us is it reminding a at of But as aware Fed off industry price not painfully a where entered would as is impact an we XX-year and most probably think. keep the attention of in XX-basis -- pay say as may to yield of, we are cut more. of everybody we

drives growing like And tenants challenging. is seeing projects. what does business. them people are really now with, said, eliminates as marginal projects what simply have think go I that projects, I strong it forward But I They're of, this think we're the are think these is their Greg? those commitment kind more to, marginal I

Gregory Zimmerman

being X And I we, cost we to still agree market given our execute this Andretti Greg, in the year shows of able are with capital. agree. were obviously, completely people I that deals fact as are are cautious, Yes, that people And the growing.

Operator

from Carroll Michael comes question RBC. of next Our

Michael Carroll

drop other lodging. income TRS kind I think the not I'm provide in in in prepared -- I'm you believe what on your of expense if business. touch this. drop line sure I your the think, that Mark, items? I that driving -- I But earnings for other those expenses wanted I And this you something to can at pressure experience to details some remarks, sorry mentioned what's on missed about relates drove quarter. and

Mark Peterson

sure. Yes,

were quarter the what we and theaters the the those periods Office theaters for have you you expenses, So obviously prior was the other months and year. for have look X operating Kartrite, of operated running there in consolidated both year-to-date, financials, quarter versus income both X lower you about other results and X think operating the for at prior the the and so and year, lower Box if through versus if

to the impact had other than from lower On of Office theaters operating strikes. took were the Box the we X those due -- Regal, expected back

Regal. it regain maybe operators expected. part line area expense, Kartrite, line. and spending an third theaters as I items. think market as new pressures the kind on not revenue had of manage we offset cost share we in was Kartrite is other by and at then continue but pressure insurance a And of and as And of So a -- in bit thing those They've expense much to they think couple got the then post to on of a utilities that

half lower Office think a and Box that move all, kind the year-to-date we at expect year of in The just news revenue year have the look if theater guidance performed the theaters. So better I going in the the in a reduction bit significantly expense to we're X We're because you Box Office into down we of good back of as operating of shutting sort all theaters rises. of of pressures. the though, still for fact as the

but the a X down, still down overall, theater. revenue lot is shutting due to So that

you're elevated and management theater and the expense of mentioned, the expenses I not because expenses. just reduction just the there transition some of of On some Kartrite the side, what of seeing

on relates million JV. the guidance respect that's on the Kartrite, that. The in the consolidated. with net relates our So Experiential Lodging about comment but to it to $X to We're down -- that's unconsolidated also

remarks, then insurance, my lot in of Experiential And the the RV Petersburg ADR hotels in the parks. expense of little And I in the Florida, a water said sorry, Petersburg particularly, bit up and -- and Experiential the the on the there there's St. on RV in that's industry-wide has softness Lodging hotels. and again, our across relating a hotels RV parks. Lodging kind industry-wide in are gone St. pressures to, been insurance like side, So the

So outlook that's for and the really the the the kind impact of quarter for the of the consolidated in year and both sort the JVs.

Michael Carroll

thought positioned kind performing? that And theaters? there concern those operating shift they you the or the buckets? what how bucket. of the they assets within how I need mean guess within shut any any to then And to of those about market? theater are kind know you're going mean are I to of strategies that I Okay. down. other in decided specific I is in X

Gregory Silvers

and Greg, -- this is think Michael. I

those looking constantly at now, don't that. clearly, Right we're think think I we things.

market. by market it's think I

kind -- in you more other do the Again, of at modern. talked about, newer, it at what, the look theaters, compete? to You if to look other much make several as Greg you investment have of they're

job -- it there's to not get real I offers more a or is So we doesn't estate makes that money. mean that and though drive value. if mean we consider play our there's

of idea, a we made when -- property kind as what relative at look sense will estate that to that Angeles So constantly down best is. it's be the the And pursue the it solution. we to we in Los option shut real evaluating

Gregory Zimmerman

just Yes, because to how recovering Box it Box weigh the add it not as perform obviously, I other others path, Michael, before mean thing see that will the but Office have a would the we be will into is, the with made it Deadpool, recovery decision the Office we this. interesting I changed see didn't would strong.

Michael Carroll

year? Office guess, what for performance in what know then me next I XXXX, Office also, your year? that better it just one that have seen drove performance is half can then drove that months? you it early Great. you you're specifically on what of the you've guidance increased year. touch the Box the think of increase? So over for on just the past expecting Okay. if any for What kind back the you last Or can do Was read-throughs I of Box And this few expectation the you is increase? And

Gregory Zimmerman

shaping Yes. We guidance calendar don't I the say up any for is yet. very nicely. have would XXXX

Box range. And we clearly hope it's think billion $X proposition, this general will the exceed solidly year's I that it a Office. on in So would

both. So out Me, talk to probably it's if have Deadpool, Michael. With Out the million; X, and outperformance million; mean at that of of of look year, toward handful $XXX to Inside One, $XXX the $XXX nowhere, I past this you year, million; kind it's we'll end about titles. the Despicable of Twisters, respect more the of complete $XXX million.

So I projected there of year. number mentioned, titles these all for outperformed of dramatically. $XXX-million the And a the as end are then

movie marquee, even return returning seeing maybe whatever. to are comfortable more they movies The a reason we're cadence because that are And to people there saw a the there -- or the more point the theaters. solid go, fact people if it theaters, guidance. again, and think of will When increase it on the the is the have weren't sold So in planning back they in was very to is out, comes the they on with other one releases. I

Operator

Rob Stevenson next Janney Scott. The Montgomery comes from of question

Robert Stevenson

X? have and solid theaters, left one Greg or to or the trade seen in Greg, income-producing operators, you last any marketplace of with quarter term leased the major the over

Gregory Silvers

have -- Again, market people of it's open and there starting are reported return things we least as up see rare, that think still start the at discussions. I some the is that been have to visibility but that. to And

I points of think recent there are at did deal rating. are reaffirmed helping debt couple they people, deal where data a credit and of kind that debt a Cinemark's X% their

balance that. you're as the into recovery move next to So hopefully, we year a And of robust, But where a of further and especially thawing Greg? you'll start little see more the thawing of that. see year to the is I think think starting I bit through of this

Gregory Zimmerman

but that transaction, I I actual we've they're thawing. No, can't I seen an agree, agree. certainly say

Robert Stevenson

line. Mark, done on you know of And coming said million debt the the to in going due be that Okay. a few I then, $XXX weeks is

due or would you the If you and -- uncertainty? the April current be unsecured environment had in today, market you in in $XXX the debt that today the where pricing where do that's to are million coming

Mark Peterson

latest The little got are over was [ low. ] Yes. XXX spreads I far us, spread. the for good is a And I the think quote news as as

right a do us [ under would put it So now. X.XX% ] XX-year to

the million, credit. to take lines. the the on a We drawn nothing line bank, cash have we mentioned, intend with I As in of out that $XXX

grow As go move XXXX term on have we'll to be, market little to lower down, start when we look next to to $XXX treasuries need the to it'd spread and we maturity so [ a million people's as I XXXX. start like what's year Hopefully, over move as come little we said, we're issue XXX debt credit. to that now. right and But and of at that investments, line our into out -- in a the ] maybe hopes,

Robert Stevenson

Okay. right to AFFO. you address And How ratio have is In to it near REIT-compliance? something and dividend last the prepared talked guys for to the keep XX% guys one at payout that much cushion $X.XXX here the per now about then have Or you to the in month remarks, to is going not the that of term? keeping me. raise have Board do

Mark Peterson

respect I good in at income mean we relative taxable always with dividend. We're to shape look to that. our

I we're I taxable do to as AFFO forward, we comfortably of the move ratio. of our keep per keeping cadence going that share think range on that income. in we with And payout think can

don't I same I kind at we per AFFO increase in and percentage. of So dividend think share, keep think with grow there's commensurate but pressure, the that will

Operator

Our next Markets. Upal KeyBanc Capital Rana question of comes from

Upal Rana

the what's vacant Most largely of targeting? dispositions be next complete, the of bucket you dispositions that may

Gregory Silvers

is we'll we've said, maintained lower long us, that we've And market term likewise, that at as want say, always for and not look and I education to to the would theaters. exposure strategic we that. returns,

leased operating our X are say recycle. those would have stream, I to we're education, and buckets, looking theaters, those and that income if an So meaning

Upal Rana

restructuring, year? hit Great. escalator assuming And kind takes AMC's table appreciate of AMC then slated I comments your off now but to any the I'm on this the risk with next

Gregory Silvers

Yes, risk anyway. we was didn't any to think there it

maturity those or feel wall who yes, of issue. mean, were that I bankruptcy no with what that. we So was has there forcing hitting, about confident risk that does is a I think risk strength our people that, worried very of yes, removed to this that the portfolio But

Upal Rana

who's other any then or read-through ongoing space I with that the there's Will industry. get Okay. I space? just the Great. consolidation theaters? uses? theater kind that And theaters vacant of if see on want plans buying And of to updated into are the wondering, was what across redeveloped kind the

Gregory Zimmerman

is this think of I don't Yes. a can Greg. -- don't I read-through. think take much you

that's that operator we redevelopment already local So smaller estate, and industrial marketing and being of had be just it's of highest location the multifamily, the does put a office market the real a piece the is an the are some others past use we sold depend COVID, what solely as retail, theaters, they We've tend a space, out since We to the theater. them sees so over can way for the theaters. them. opportunity market -- plays. It theater of and best them as We decides on for used theaters. market and really the never used because and X/X they XX buy equipment. About

Operator

you. This Thank Chairman Greg to concludes it I and the session. turn would CEO. question-and-answer Silvers, over to like now

Gregory Silvers

talking your time near forward look you Thank to Thanks, to and We future. in everyone. appreciate and attention the you, everyone.

Operator

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

now may You disconnect.

EPR Properties (EPR) 1 Aug 242024 Q2 Earnings call transcript