EPR Properties(US:EPR)2024-10-31 13:28Financial Performance - Total revenue for the three months ended September 30, 2024, was $180.5 million, a decrease of 5% compared to $189.4 million in 2023[152]. - For the three months ended September 30, 2024, total rental revenue decreased by $15.3 million to $148.7 million compared to $163.9 million in the same period of 2023[164]. - For the nine months ended September 30, 2024, total revenue decreased by $12.9 million to $520.8 million compared to $533.7 million in the same period of 2023[164]. - Net income available to common shareholders for the three months ended September 30, 2024, was $40.618 million, a decrease from $50.228 million in the same period of 2023, representing a decline of 19.4%[206]. - FFO available to common shareholders for the nine months ended September 30, 2024, was $275.955 million, down from $305.919 million in 2023, reflecting a decrease of 9.8%[206]. - AFFO available to common shareholders for the three months ended September 30, 2024, was $99.309 million, compared to $113.333 million in 2023, indicating a decline of 12.4%[208]. - Diluted FFO per common share for the three months ended September 30, 2024, was $1.31, down from $1.47 in the same period of 2023, a decrease of 10.9%[208]. - Adjusted EBITDAre for the quarter ended September 30, 2024, was $142,647, down 6.5% from $153,216 in the same quarter of 2023[220]. Investment and Asset Management - As of September 30, 2024, total assets were approximately $5.7 billion, with total investments at approximately $6.9 billion[144]. - The Experiential investments comprised $6.4 billion, or 93% of total investments, while Education investments accounted for $0.5 billion, or 7%[144]. - The owned Experiential real estate portfolio consisted of approximately 19.5 million square feet, with a leasing rate of 99%[146]. - The company plans to be more selective in future investments and acquisitions until economic conditions improve[150]. - The company had commitments for 13 development projects totaling approximately $144.1 million, with $31.1 million expected to be funded in the remainder of 2024[194]. - Total investments increased to $6,936,089 as of September 30, 2024, compared to $6,813,175 at the end of 2023, marking a growth of 1.8%[223]. Debt and Financing - As of September 30, 2024, the company had total outstanding debt of $2.9 billion, with 99% being unsecured[182]. - The company had $2.5 billion in unsecured senior notes with interest rates ranging from 3.60% to 4.95%, and various covenants including a debt to adjusted total assets ratio limit of 60%[183]. - The outstanding balance under the unsecured revolving credit facility was $169.0 million out of a total availability of $1.0 billion as of September 30, 2024[185]. - The company entered into an Amended Credit Agreement on September 19, 2024, which extended the maturity date of the revolving credit facility to October 2, 2028, and reduced the interest rate on outstanding loans[186]. - The company plans to fund investments primarily from cash on hand, excess cash flow, and borrowing availability under the unsecured revolving credit facility due to elevated capital costs[201]. - The company reported a non-cash write-off of deferred financing costs totaling $0.3 million related to the Amended Credit Agreement[188]. - The company maintains a conservative capital structure, focusing on a net debt to adjusted EBITDAre ratio to ensure financial stability[202]. - As of September 30, 2024, net debt amounted to $2,838,264, an increase from $2,668,276 in the previous year, reflecting a 6.4% rise[220]. - The debt to total assets ratio increased to 50% from 49% year-over-year, indicating a higher leverage position[220]. Impairments and Gains - The company recognized a net gain on the sale of properties totaling $16.0 million from net proceeds of $65.1 million during the nine months ended September 30, 2024[157]. - Impairment charges recognized for the nine months ended September 30, 2024, totaled $11.8 million due to reassessment of a theatre property[158]. - The company recognized $12.1 million in other-than-temporary impairment charges on joint ventures due to hurricane damage to two experiential lodging properties in St. Pete Beach, Florida[159]. - The company reported a net loss on the sale of real estate of $3.4 million for the three months ended September 30, 2024[176]. - Impairment charges on joint ventures for the three months ended September 30, 2024, amounted to $12.130 million, with no charges reported in the same period of 2023[206]. Cash Flow and Operating Activities - For the nine months ended September 30, 2024, net cash provided by operating activities was $300.2 million, compared to $370.1 million for the same period in 2023[193]. - Cash and cash equivalents were $35.3 million at September 30, 2024, with no uninsured deposits reported[181]. Rental and Lease Agreements - The company renewed ten lease agreements on approximately 295 thousand square feet, experiencing a decrease of approximately 0.5% in rental rates[168]. - The increase in percentage rent for the three and nine months ended September 30, 2024 was primarily due to higher percentage rent recognized from theatre and cultural property tenants[169]. - As of September 30, 2024, the Education portfolio was 100% leased, consisting of approximately 1.3 million square feet[147]. Currency and Foreign Exposure - The company is exposed to foreign currency risk on its six Canadian properties, with rents received in CAD, and has implemented hedging strategies to mitigate this risk[228]. - The company entered into six USD-CAD cross-currency swaps effective October 1, 2024, locking in an exchange rate of $1.35 CAD per USD on approximately $15.3 million annual CAD denominated cash flows[233].