EPR Properties(US:EPR)2020-11-05 19:02Financial Data and Key Metrics Changes - FFO as adjusted for the quarter was a loss of $0.16 per share compared to $1.46 in the prior year, and AFFO for the quarter was $0.04 per share compared to $1.44 in the prior year [34] - Total revenue from continuing operations for the quarter was down $55.3 million versus $169.4 million in the prior year [36] - Cash collections improved with tenants paying approximately 41% for the third quarter versus 24% for the second quarter [27][50] Business Line Data and Key Metrics Changes - The experiential portfolio comprises 284 properties with 44 operators and is 96.4% occupied, accounting for nearly $6 billion of total investments [16] - The education portfolio comprises 85 properties with 15 operators and was 100% occupied at the end of the quarter [17] - Approximately 93% of non-theatre operators are open, with performance generally exceeding operators' expectations despite the pandemic [23] Market Data and Key Metrics Changes - 63% of theatres were open as of November 3, with openings continuing under state and local government restrictions [17] - Cash collections for October were 43%, negatively impacted by Regal's decision to close most theatres [27] - The current 2020 major film slate includes titles like "The Croods" and "Wonder Woman 1984," with expectations for a strong 2021 film slate [19][20] Company Strategy and Development Direction - The company aims to acquire experiential properties that generate consistent cash flows, focusing on returning to growth post-pandemic [11] - The strategy includes ensuring strong liquidity and stabilizing tenant businesses, particularly in the theatre sector [9][10] - The company extended debt covenant waivers to the end of 2021 to provide additional flexibility during the pandemic [14][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the theatre exhibition industry will return as a dominant out-of-home entertainment experience [13] - The company anticipates that cash collections will exceed third-quarter collections in the fourth quarter [27] - Management noted that the lack of product and reopening restrictions have significantly impacted current and projected box office performance [28] Other Important Information - The company moved Regal and one attraction tenant to cash basis accounting due to the uncertainty of collecting receivables [34] - The company expects permanent rent reductions to total approximately 5% to 7% of annualized pre-COVID contractual cash rent [30] - The unsecured debt rating was downgraded by Moody's to Baa3, with subsequent downgrades by S&P and Fitch to BB+ [47] Q&A Session Summary Question: Can you provide numbers behind tenant performance and rent coverage? - Management indicated that many tenants are approaching 80% to 90% of pre-COVID numbers, with some outperforming [55] Question: What breaks the stalemate between releasing movies and theatres opening? - Management noted that the opening of major markets like New York City and LA is crucial, along with the availability of a vaccine [56][57] Question: Any updates on cash flow positive position in Q4? - Management expects to be close to breakeven with cash collections around 45% of pre-COVID contractual cash revenue [60] Question: Has there been a formal agreement with Regal? - Management confirmed a deferral agreement is in place with Regal, but no restructuring has been announced [62] Question: What percentage of theatres is now on a cash basis? - Approximately 35% of the theatres' ABR is on a cash basis, primarily involving AMC and Regal [90] Question: When will deferred amounts start flowing through? - Management expects repayments to begin in 2021, with some extending beyond that [93]