EPR Properties(US:EPR)2025-10-30 13:30Financial Data and Key Metrics Changes - FFO as adjusted per share increased by 5.4% to $1.37 compared to $1.30 in the prior year [22] - AFFO for the quarter was $1.39 per share, up 7.8% from $1.29 in the prior year [22] - Total revenue for the quarter was $182.3 million, an increase from $180.5 million in the prior year [23] - G&A expense increased to $14 million from $11.9 million in the prior year, primarily due to higher estimated incentive pay [24] Business Line Data and Key Metrics Changes - The experiential portfolio comprises 275 properties, accounting for 94% of total investments, and was 99% leased or operated [12] - Investment spending for the quarter was $54.5 million, entirely in experiential assets [17] - Percentage rents for the quarter were $7 million, up from $5.9 million in the prior year, primarily due to higher percentage rent from theater tenants [23] Market Data and Key Metrics Changes - Q3 box office revenue was $2.4 billion, down from $2.7 billion in Q3 2024 [12] - North American box office for calendar year 2025 is estimated between $9 billion and $9.2 billion, a 6% increase at the midpoint from 2024 [13] - EBITDARm across the attractions portfolio increased, driven by strong performance in Canadian assets [14] Company Strategy and Development Direction - The company is focused on a disciplined deployment strategy to expand its portfolio of experiential properties [6] - A Strategic Capital Recycling program is in place, targeting non-core theater dispositions and reinvestment in growth sectors [7] - The company is bullish on the fitness and wellness space, with plans to increase investment spending in this area [19] Management's Comments on Operating Environment and Future Outlook - Management anticipates a robust fourth quarter and expects 2025 to set a new post-COVID high [7] - The company has successfully navigated various economic cycles, emphasizing the resilience of experiential entertainment [8] - Management expressed confidence in capturing larger opportunities in 2026, supported by a strong balance sheet [11] Other Important Information - The company is increasing its 2025 disposition guidance to a range of $150 million to $160 million [21] - The company plans to finalize a new ATM equity program in Q4 to provide additional capital-raising options [28] Q&A Session Summary Question: Can you elaborate on the credit losses being reserved? - Management indicated a $6 million mortgage note was fully reserved due to macroeconomic conditions, with plans to control and sell related assets if necessary [35][36] Question: What are the larger investment opportunities anticipated for 2026? - Management noted they are comfortable with a potential $500 million investment spending without needing additional strategic capital recycling, indicating strong cash flow generation [40][41] Question: Can you provide details on the mortgage financing investment with Altea Active? - The investment is structured as a long-term mortgage, primarily for growth capital, and is expected to foster a long-term partnership [48] Question: Is there increased competition for deals in the acquisition landscape? - Management acknowledged competition exists but noted their unique asset class helps buffer against it, with stable cap rates observed [52][54] Question: What is the strategy for issuing equity through the ATM program? - The company plans to issue equity opportunistically based on market conditions, aiming to lower leverage while not being dependent on equity for growth [61][62]