EPR Properties(US:EPR)2025-10-30 13:31Financial Performance - Total revenue for the three months ended September 30, 2025, was $182.3 million, reflecting a 1.0% increase from $180.5 million in the same period of 2024[132]. - Net income available to common shareholders per diluted share increased by 49.1% to $0.79 for the three months ended September 30, 2025, compared to $0.53 in 2024[132]. - Total revenue for the nine months ended September 30, 2025, reached $535.4 million, reflecting an increase of $14.6 million or 2.8% from $520.8 million in the prior year[144]. - The company recorded a net income of $66,586,000 for the three months ended September 30, 2025, compared to $46,650,000 in 2024, representing a significant increase of 42.7%[194]. - Funds From Operations (FFO) available to common shareholders for the nine months ended September 30, 2025, was $283,830,000, compared to $275,955,000 in 2024, reflecting an increase of approximately 2.5%[182]. - Adjusted Funds From Operations (AFFO) available to common shareholders for the nine months ended September 30, 2025, was $296,850,000, compared to $277,270,000 in 2024, indicating a growth of approximately 7.1%[182]. - For the three months ended September 30, 2025, diluted AFFO available to common shareholders of EPR Properties was $111,946,000, an increase from $103,185,000 in 2024, representing an increase of 8.5%[184]. - The FFO per common share (diluted) for the nine months ended September 30, 2025, was $3.67, compared to $3.60 in 2024, reflecting a growth of 1.9%[184]. Investment and Assets - As of September 30, 2025, total assets were approximately $5.5 billion, with total investments amounting to approximately $6.9 billion[125]. - The Experiential investment segment comprised $6.5 billion, or 94% of total investments, while the Education segment accounted for $0.4 billion, or 6%[125]. - The wholly-owned Experiential real estate portfolio consisted of approximately 18.5 million square feet and was 99% leased or operated as of September 30, 2025[126]. - The Education real estate portfolio was fully leased, comprising approximately 1.1 million square feet as of September 30, 2025[127]. - The total investments as of September 30, 2025, amounted to $6,916,120,000, up from $6,877,912,000 at the end of 2024, indicating an increase of 0.6%[195]. Revenue Breakdown - Minimum rent for the three months ended September 30, 2025, was $138.9 million, up $6.1 million or 4.6% from $132.8 million in 2024, driven by property acquisitions and developments[144]. - Percentage rent increased to $7.0 million for the three months ended September 30, 2025, a rise of $1.1 million or 18.5% compared to $5.9 million in 2024, primarily due to higher contributions from theatre tenants[148]. - Other income decreased to $12.1 million for the three months ended September 30, 2025, down $5.3 million or 30.3% from $17.4 million in 2024, mainly due to the sale of operating theatre properties[149]. Expenses and Costs - Property operating expenses for the three months ended September 30, 2025, were $14.5 million, a decrease of $0.1 million or 0.9% from $14.6 million in 2024[151]. - General and administrative expenses increased to $14.0 million for the three months ended September 30, 2025, up $2.1 million or 17.3% from $11.9 million in 2024, attributed to higher payroll and benefits costs[153]. - The company recorded retirement and severance expenses of $1.1 million related to the expected retirement of the Chief Investment Officer[141]. Debt and Liquidity - Total debt outstanding was $2.8 billion as of September 30, 2025, with 99% being unsecured[161]. - The company had $379.0 million outstanding under its $1.0 billion unsecured revolving credit facility, which bears interest at a floating rate of SOFR plus 1.05%[164]. - The company fully repaid $300 million of senior unsecured notes on April 1, 2025, using borrowings under its $1 billion senior unsecured revolving credit facility[176]. - The company anticipates that cash on hand, cash from operations, and available funds will provide adequate liquidity to meet financial commitments[175]. - The company aims to maintain a conservative capital structure, focusing on a low net debt to adjusted EBITDAre ratio[178]. - The debt to total assets ratio remained stable at 50% for both September 30, 2025, and 2024[194]. Development and Future Investments - Investment spending during the nine months ended September 30, 2025, totaled $140.8 million, down from $214.6 million in the same period of 2024[135]. - The company had 13 development projects with commitments totaling approximately $70.7 million, with $22.1 million expected to be funded in the remainder of 2025[173]. - The company expects to finance future investments through cash on hand, excess cash flow, and proceeds from asset dispositions[177]. Foreign Currency and Hedging - The company is exposed to foreign currency risk on its six Canadian properties, with rents received in Canadian dollars (CAD)[201]. - Six USD-CAD cross-currency swaps were entered into with a total fixed original notional value of $170.0 million CAD and $125.0 million USD, locking in an exchange rate of $1.35 CAD per USD on approximately $15.3 million annual CAD cash flows through December 2026[202]. - Two additional USD-CAD cross-currency swaps were established with a total fixed original notional value of $90.0 million CAD and $66.2 million USD, also locking in an exchange rate of $1.35 CAD per USD on approximately $8.1 million annual CAD cash flows through December 2026[203]. - A USD-CAD cross-currency swap with a notional value of $27.9 million CAD and $20.0 million USD was initiated, locking in an exchange rate of $1.246 CAD per USD on approximately $2.2 million annual CAD cash flows through September 2030[204]. - The company entered into two forward contracts with a fixed notional value of $200.0 million CAD and $142.8 million USD, with an exchange rate of approximately $1.40 CAD per USD, effective December 19, 2024[205]. - Changes in the fair value of foreign currency derivatives designated as net investment hedges are reported in AOCI as part of the cumulative translation adjustment[207].