EPR Properties(US:EPR)2020-05-07 20:18Financial Data and Key Metrics Changes - FFO adjusted for the quarter was $0.97 per share versus $1.36 in the prior year, and AFFO for the quarter was $0.14 per share compared to $1.38 in the prior year [39] - Total revenue from continuing operations for the quarter was up $0.5 million from the prior year due to revenue associated with new net investments in experiential real estate [41] - The company reported a net debt to gross assets ratio of 38% and a net debt to adjusted EBITDA ratio of 5.1x at quarter end [45] Business Line Data and Key Metrics Changes - The experiential portfolio comprises 285 properties, is 98.3% occupied, and accounts for nearly $6 billion of total investments [18] - The education portfolio comprises 86 properties, is 100% occupied at the end of the quarter [19] - Rent collections were approximately 15% of contractual base rent and mortgage payments in April due to property closures [11] Market Data and Key Metrics Changes - The company anticipates most theaters will reopen around July 1st, subject to state and local government actions [20] - Over 50% of attractions and cultural operators are expected to be open by July [30] - The company expects a gradual ramp-up of rent and mortgage payments through Q3 and Q4, with repayment of deferred amounts commencing in 2021 [36] Company Strategy and Development Direction - The company has suspended its monthly cash dividend to common shareholders and share repurchase program to fortify its balance sheet [10][14] - The management remains committed to reasonable leverage levels and a strong balance sheet despite the pandemic's impact [15] - The company believes in the long-term macro trend of experiential properties and anticipates strong demand post-pandemic [17] Management Comments on Operating Environment and Future Outlook - Management expressed that the current situation is unprecedented, but they believe the company will emerge strong post-pandemic [9][15] - There is an expectation that social distancing will remain the norm, impacting capacity limits in theaters [16] - Management is actively working with tenants to evaluate deferral requests and structure repayment plans [12][35] Other Important Information - The company has $1.2 billion of unrestricted cash on hand at quarter end, providing multiple years of available cash even if current rent collection levels persist [47] - The company plans to recognize revenue for tenants receiving rent deferrals based on the probability of collection [50][51] - The company is in discussions with lenders for temporary suspension or modification of financial covenants due to the pandemic's impact [61] Q&A Session Summary Question: What percentage of tenants received government support? - Management indicated that most tenants are larger and exceed the 500-employee limit, making them ineligible for programs like PPP [65] Question: Can you elaborate on the covenant discussions? - Management is seeking waivers for leverage covenants and expects discussions with lenders to proceed smoothly [70][71] Question: What are the expectations for smaller tenants facing disruptions? - Management conducted a review of top tenants and believes the numbers reflect their best estimates, although some smaller tenants may face challenges [77] Question: Will preferred dividends be paid? - Management anticipates paying preferred dividends and has sufficient liquidity to do so [80] Question: How does the company view the potential for repurposing theaters? - Management believes theaters can be repurposed due to their size and location, with historical examples of successful transformations [66]