EPR Properties(US:EPR)2026-02-26 14:40Investments and Portfolio - As of December 31, 2025, total investments were approximately $7.0 billion, with Experiential investments comprising $6.6 billion (94%) and Education investments $0.4 billion (6%) of the total [25]. - The wholly-owned Experiential real estate portfolio consisted of approximately 19.0 million square feet, was 99% leased or operated, and included $54.9 million in property under development [28]. - The Education segment consisted of approximately 1.1 million square feet, which was 100% leased, focusing on private schools and early childhood education centers [53]. - The company is focused on diversifying its asset base by property type, geographic location, and customer, targeting experiential business operators [68]. - The company is exploring redevelopment opportunities for existing properties to enhance earnings potential and leverage excess land [66]. Revenue and Financial Performance - Total North American box office revenues for 2025 increased by approximately 1% compared to 2024, indicating a rebound in the theatre industry [29]. - Approximately $97.4 million (13.6%) of total revenue was generated from American Multi-Cinema, Inc. (AMC) and $82.8 million (11.5%) from Regal Entertainment Group for the year ended December 31, 2025 [35]. - The investment in Topgolf contributed approximately $102.3 million (14.2%) to total revenue for the year ended December 31, 2025 [38]. - The company aims to enhance shareholder value by achieving predictable and increasing Funds From Operations As Adjusted (FFOAA) and Adjusted Funds From Operations (AFFO) [55]. Strategic Growth and Development - The company intends to reduce investments in theatres and diversify into other experiential property types, limiting new investments in theatres [34]. - The strategic growth focuses on acquiring or developing a diversified portfolio of experiential real estate venues that facilitate out-of-home leisure and recreation experiences [56]. - The company expects to continue pursuing opportunities in experiential lodging, fitness & wellness, gaming, and cultural investments, reflecting a commitment to diversifying its portfolio [46][48][52]. - The company plans to continue developing and redeveloping properties aligned with growth strategies, emphasizing the importance of signed leases before commencing projects [63]. Capital Structure and Liquidity - The company maintains a conservative capital structure, aiming for a net debt to adjusted EBITDAre ratio that supports financial stability [70]. - As of December 31, 2025, the company had a $1.0 billion unsecured revolving credit facility with no outstanding balance, indicating strong liquidity [307]. - The company relies primarily on an unsecured debt structure to increase access to capital and efficiently match financing needs [71]. Debt Management and Hedging - As of December 31, 2025, the total fixed rate debt amounts to $2,954.6 million with an average interest rate of 4.38% [311]. - The company has entered into an interest rate swap agreement with a notional amount of $25.0 million, capping the variable interest rate at 2.5325% until September 30, 2026 [314]. - The company has six USD-CAD cross-currency swaps effective October 1, 2024, with a total 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 [316]. - Two additional USD-CAD cross-currency swaps effective December 1, 2024, have a total 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 [317]. - A fair value hedge cross-currency swap effective September 25, 2025, has a notional value of $27.9 million CAD and $20.0 million USD, locking in an exchange rate of $1.246 CAD per USD on approximately $2.2 million annual CAD cash flows through September 2030 [318]. - The company has entered into two forward contracts effective December 19, 2024, with a total notional value of $200.0 million CAD and $142.8 million USD, with an exchange rate of approximately $1.40 CAD per USD [319]. - A separate forward contract effective December 19, 2024, has a notional value of $90.0 million CAD and $64.3 million USD, also at an exchange rate of approximately $1.40 CAD per USD [320]. - The fair value of the company's debt as of December 31, 2025, is estimated by discounting future cash flows using current market rates [313]. - The company is exposed to foreign currency risk due to its Canadian properties, with rents received in CAD, and has implemented hedging strategies to mitigate this risk [315]. - Changes in the fair value of foreign currency derivatives designated as net investment hedges are reported in AOCI, with amounts reclassified into earnings upon sale or liquidation of the hedged net investment [321]. Human Capital Management - The company is committed to human capital management, with 54 full-time associates as of December 31, 2025, focusing on attracting and retaining top talent [78]. Dividends - The company expects to continue paying monthly dividends to common shareholders and quarterly dividends to preferred shareholders, with Series C and G preferred shares having a dividend rate of 5.75% and Series E at 9.00% [75].