EPR Properties(US:EPR)2023-04-26 16:00Financial Performance - For the three months ended March 31, 2023, total revenue increased by 9% to $171.4 million compared to $157.5 million in the same period of 2022 [137]. - Net income available to common shareholders per diluted share rose by 44% to $0.69 from $0.48 year-over-year [137]. - Funds From Operations As Adjusted (FFOAA) per diluted share increased by 15% to $1.26 compared to $1.10 in the prior year [137]. - Total revenue for the three months ended March 31, 2023, was $171.396 million, an increase of $13.924 million (8.8%) compared to $157.472 million in the same period of 2022 [142]. - Minimum rent increased by $11.577 million (8.9%) to $141.852 million, primarily due to improved collections and property acquisitions [142]. - For the three months ended March 31, 2023, the funds from operations (FFO) available to common shareholders was $95,239,000, compared to $81,824,000 for the same period in 2022, representing a 16.3% increase [172]. - The diluted FFO per common share for the three months ended March 31, 2023, was $1.25, up from $1.09 in the same period of 2022, reflecting a 14.7% increase [173]. - The adjusted funds from operations (AFFO) available to common shareholders for the three months ended March 31, 2023, was $98,734,000, compared to $87,845,000 for the same period in 2022, indicating a 12.3% increase [172]. - The company reported a net income available to common shareholders of $51,624,000 for the three months ended March 31, 2023, compared to $36,159,000 for the same period in 2022, which is a 42.7% increase [172]. Assets and Investments - As of March 31, 2023, total assets were approximately $5.8 billion, with total investments at approximately $6.7 billion, comprising $6.2 billion (92%) in Experiential and $0.5 billion (8%) in Education properties [126]. - The owned Experiential real estate portfolio consisted of approximately 20.0 million square feet, which was 98% leased, including $85.8 million in property under development [127]. - Investment spending for the three months ended March 31, 2023, totaled $66.5 million, significantly up from $24.4 million in the same period of 2022 [140]. - The company had commitments for 15 development projects totaling approximately $200.5 million, with $86.6 million expected to be funded in 2023 [160]. - Total investments increased to $6,736,710 as of March 31, 2023, from $6,686,186 at the end of 2022, marking a growth of approximately 1% [185]. Debt and Financial Obligations - Total outstanding debt was $2.8 billion, with 99% being unsecured [151]. - As of March 31, 2023, the company's debt to total assets ratio was 49%, net debt to adjusted EBITDAre ratio was 5.0x, and net debt to gross assets ratio was 39% [167]. - The company’s net debt to adjusted EBITDAre ratio is a key measure used to evaluate capital structure, with a current ratio of 5.0x [182]. - As of March 31, 2023, the company's net debt increased to $2,744,791, up from $2,517,468 in 2022, reflecting a year-over-year increase of 9% [184]. - The company had no outstanding balance under its $1.0 billion unsecured revolving credit facility as of March 31, 2023 [154]. - The joint ventures related to two lodging properties had a secured mortgage loan with an outstanding balance of $105.0 million, bearing interest at SOFR plus 3.65% [189]. Operational Insights - The economic environment has led to increased cost of capital and reduced investment spending, with future investments expected to be funded primarily from cash from operations [136]. - The company plans to reduce exposure to theatre properties and diversify its experiential property types moving forward [130]. - The company plans to be more selective in investments and acquisitions due to increased cost of capital resulting from a challenging economic environment and a theatre tenant's bankruptcy [166]. - Cash and cash equivalents stood at $96.4 million as of March 31, 2023, with no uninsured deposits [150]. - Net cash provided by operating activities was $121.530 million, a decrease from $128.087 million in the prior year [158]. Interest and Expenses - Interest expense decreased by $1.538 million (4.6%) to $31.722 million compared to $33.260 million in the previous year [146]. - The interest rate cap agreement limits the variable portion of the interest rate on a $25.0 million bond to 2.5325% until September 30, 2026, mitigating interest rate risk [192]. - The company entered into three USD-CAD cross-currency swaps with a total fixed original notional value of $150.0 million CAD and $118.7 million USD to hedge foreign currency risk [193]. Joint Ventures and Equity - Equity in loss from joint ventures increased by $1.879 million, primarily due to losses from two experiential lodging properties acquired in 2022 [149].