Epr Properties · NYSE:EPR
Epr Properties — Investor Presentation (June 2017)
48 slides from Epr Properties's investor presentation, June 2017
Slide 1: Investing in Life's Enduring Experiences
INVESTING IN LIFE’S ENDURING EXPERIENCES INVESTOR PRESENTATION – JUNE 2017 AMC THEATRE – COLUMBIA, MD BASIS INDEPENDENT SCHOOL – BROOKLYN, NY TOPGOLF – PHOENIX, AZ DATA IN THIS PRESENTATION IS AS OF 3/31/17 UNLESS OTHERWISE NOTED
Slide 2: Disclaimer
DISCLAIMER Statements made in this presentation may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements relate to, without limitation,
Slide 3: Company Overview
COMPANY OV haw EPR Properties
Slide 4: EPR Properties
EPR PROPERTIES EPR IS A TRIPLE NET LEASE REIT, SPECIALIZING IN SELECT, NON-COMMODITY REAL ESTATE SEGMENTS THAT ARE HIGHLY ENDURING COMPANY SNAPSHOT* NYSE: EPR, FOUNDED: 1997 LONG-TERM OUTPERFORMANCE** LIFETIME TOTAL SHAREHOLDER RETURN $8.4B TOTAL MARKET CAP $5.7B EQUITY, $2.7B DEBT $6.2B+ TOTAL INVE
Slide 5: Investment Thesis and Core Strategies
INVESTMENT THESIS AND CORE STRATEGIES INVESTMENT THESIS CORE STRATEGIES DIFFERENTIATED INVESTMENTS LONG TERM STRONG RELATIONSHIP-BASED GROWTH PIPELINE KNOWLEDGE DRIVEN WELL CAPITALIZED BALANCE SHEET FEWER CATEGORIES GREATER DEPTH UNDERLYING INVESTMENT SEGMENT STRENGTH TRIPLE NET STRUCTURE CONSISTENT
Slide 6: Human Capital
HUMAN CAPITAL OUR ORGANIZATIONAL DESIGN REFLECTS OUR SEGMENT FOCUS Builds centers of knowledge in each Creates competitive advantage to of our primary segments identify key market trends EXECUTIVE MANAGEMENT CHIEF INVESTMENT OFFICER ENTERTAINMENT RECREATION EDUCATION GROUP GROUP GROUP 6
Slide 7: Millennials Experience
EXPERIENCE EVOLUTION ARTS, ENTERTAINMENT AND RECREATION INDUSTRY MILLENNIALS CONTRIBUTION TO US GDP Total Industry Output (IN TRILLIONS) $1.4 As a percent of Total US GDP Output 4.1% 75.4M $1.2 4.0% 3.9% people aged 18-34 3.8% $1.0 3.7% LARGEST 3.6% population segment $0.8 3.5% 2010 2011 2012 2013 2
Slide 8: Portfolio
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Slide 9: Portfolio Detail 3/31/17
PORTFOLIO DETAIL 3/31/17 PROPERTY TYPE PROPERTIES NOI* % of TOTALS % LEASED (IN MILLIONS) MEGAPLEX THEATRES** 142 209.8 41.7% 100.0% ENTERTAINMENT RETAIL CENTERS (ERCS) 8 42.7 8.5% 96.2% FAMILY ENTERTAINMENT CENTERS (FECS) 8 9.2 1.8% 100.0% TOTAL ENTERTAINMENT 158 261.7 52.0% 99.3% GOLF ENTERTAINMEN
Slide 10: CNL Lifestyle Properties Transaction Overview
CNL LIFESTYLE PROPERTIES TRANSACTION EPR acquired from CNL Properties (CNL) the Northstar California Ski Resort and attractions portfolio, and provided OVERVIEW debt financing to funds affiliated with Och-Ziff Real Estate (OZRE) for the remainder of CNL’s ski portfolio. TIMING Closed on April 6, 201
Slide 11: CNL Lifestyle Properties Transaction
CNL LIFESTYLE PROPERTIES TRANSACTION NORTHSTAR CALIFORNIA • Leading regional destination mountain resort and retail village, with a proven operator, Vail Resorts • 5-year average rent coverage of ~1.6x* • Year round resort with extensive co-investments MOUNTAIN RESORT RETAIL VILLAGE ATTRACTIONS PORT
Slide 12: CNL Transaction Impact
CNL TRANSACTION IMPACT * ** TOTAL INVESTMENTS PRO FORMA TOTAL INVESTMENTS Education Education Other Other 3% 22% 25% 3% $5.5B+ $6.2B+ Recreation Recreation 23% Entertainment 32% Entertainment 49% 43% RECREATION PORTFOLIO RECREATION PORTFOLIO (as of 3/31/17) (Pro forma after CNL Transaction) Property
Slide 13: Focused Growth Total Investments
FOCUSED GROWTH TOTAL INVESTMENTS* (IN MILLIONS) OTHER $6,208 179 RECREATION $5,501 $5,307 EDUCATION 178 179 1,937 $4,606 ENTERTAINMENT 1,148 1,231 203 $4,040 $3,562 207 944 $3,120 $3,211 212 696 1,388 1,388 $2,969 1,303 $2,844 267 550 $2,717 395 335 728 1,006 421 $2,271 342 382 318 337 538 280 312 2
Slide 14: Property Map
PROPERTY MAP* GEOGRAPHICALLY DIVERSE PORTFOLIO *As of March 31, 2017, adjusted for CNL Transaction which closed subsequent to quarter end. 14
Slide 15: Distinctive Combination of Lease Characteristics
DISTINCTIVE COMBINATION OF LEASE CHARACTERISTICS CROSS DEFAULT/ DURATION 11+ YEARS CREDIT SUPPORT UNIQUE COMBINATION STRONG RENT ESCALATORS COVERAGE GENERALLY 2% OR 10% PARTICIPATING RENT/ INTEREST EVERY FIVE YEARS 15
Slide 16: Continuing Trend of Reduced Concentration
CONTINUING TREND OF REDUCED CONCENTRATION Top 5= 70% 64% 5% 60% 7% Percent of Total Revenue 5% Top 5= 50% 7% 5% 6% 46% 9% 8% 6% Premier Parks 8% 8% 4% 9% 40% 9% 8% 7% Peak Resorts 8% 7% 9% 9% Topgolf 10% 9% 6% 30% 8% 7% 4% Cinemark 6% 8% 20% Regal 34% 29% 25% Rave 23% 20% 23% 10% 20% Imagine 0% AMC
Slide 17: Entertainment $2.7B+
ENTERTAINMENT UPDATES 2017 BOX OFFICE REVENUE YTD UP 1% VS. LAST YEAR’S RECORD-BREAKING RESULTS* MEGAPLEX THEATRES THREE PRIMARY STRATEGIES – REDEVELOPMENT, BUILD-TO-SUIT AND ACQUISITION EPR PORTFOLIO ENTERTAINMENT RETAIL CENTERS 158 $2.7B+ PROPERTIES INVESTED IN SERVICE 6 ** 22 *** PROPERTIES OPERA
Slide 18: Megaplex Theatres
MEGAPLEX THEATRES LONG HISTORY OF STEADY GROWTH 150 MEGAPLEX THEATRES* 3 UNDER DEVELOPMENT** *Includes theatres in ERCs **Properties not yet in service Source: BoxOfficeMojo FUTURE LOOKS BRIGHT MILLENNIALS ACCOUNT FOR 50% MILLENNIALS JUST BECAME THE LARGEST POPULATION SEGMENT AND WILL CONTINUE TO GR
Slide 19: Megaplex Theatres: Transforming the Customer Experience
MEGAPLEX THEATRES TRANSFORMING THE CUSTOMER EXPERIENCE +40% AVERAGE INCREASES IN TOTAL REVENUE * NEW LUXURY SEATING NEW FOOD AND BEVERAGE CONCEPTS 60% Seat Reduction Replaced with Lo unges and In-T hea tr e Dining A lco ho l and Luxury Seating E xp anded Menus Res taura n ts Enhanced Customer Experi
Slide 20: Entertainment Retail Centers
ENTERTAINMENT RETAIL CENTERS ( E R C s) ONE STOP SHOPPING, DINING AND FUN 8 ENTERTAINMENT RETAIL CENTERS Theatre or live performance venue provides anchor 20
Slide 21: Family Entertainment Centers
FAMILY ENTERTAINMENT CENTERS ( F EC s) ONE LOCATION. A VARIETY OF ENTERTAINMENT OPTIONS. 8 FAMILY ENTERTAINMENT CENTERS Upscale venues work well for corporate and consumer events. 3 UNDER DEVELOPMENT* *Properties not yet in service 21
Slide 22: Recreation Highlights
RECREATION HIGHLIGHTS RECREATION UPDATES GOLF ENTERTAINMENT COMPLEXES TOPGOLF MAINTAINED SUPERIOR PERFORMANCE SKI SEASON REVENUE AND VISITATION ANTICIPATED TO BE UP AT LEAST 15%* SKI AREAS EPR PORTFOLIO** 76 $1.9B+ ATTRACTIONS PROPERTIES INVESTED IN SERVICE 7 *** 18 PROPERTIES OPERATORS UNDER DEVELO
Slide 23: Golf Entertainment Complexes
GOLF ENTERTAINMENT COMPLEXES GOLF ENTERTAINMENT COMPLEXES REVOLUTIONIZE RECREATIONAL ACTIVITY 25 GOLF ENTERTAINMENT COMPLEXES Topgolf’s 2016 attendance grew over 30%** 5 UNDER DEVELOPMENT* *Properties not yet in service **Source: Topgolf 23
Slide 24: Ski Areas
SKI AREAS LEADING REGIONAL SKI AND RESORT DESTINATIONS 26 SKI AREAS* GEOGRAPHIC SNOWMAKING FOUR SEASON *As of March 31, 2017, adjusted for DIVERSITY CAPABILITIES APPEAL CNL Transaction which closed subsequent to quarter end. 24
Slide 25: Attractions
ATTRACTIONS PROVEN AND DURABLE RECREATION ACTIVITY 20 ATTRACTIONS* Demonstrating a consistent track record of attendance and revenue, the attractions industry is an enduring component of 2 UNDER DEVELOPMENT** the American lifestyle. *As of March 31, 2017, adjusted for CNL Transaction which closed su
Slide 26: Other Recreation
OTHER RECREATION ACTIVE EXPERIENCES CONSISTENT WITH CONSUMER TRENDS. 5 OTHER RECREATION PROPERTIES Increased focus on fitness and wellness, along with participation in new generation activities. 26
Slide 27: Education $1.3B+
EDUCATION EDUCATION FACILITIES UPDATES CONTINUE TO SEE ATTRACTIVE OPPORTUNITIES FOR INVESTMENTS ACROSS OUR EDUCATION PUBLIC CHARTER SCHOOLS FACILITIES PLATFORM PUBLIC CHARTER SCHOOLS EPR PORTFOLIO EDUCATION INVESTMENT SPENDING 133 $1.3B+ PRIVATE SCHOOLS PROPERTIES INVESTED IN SERVICE 18 * 57 PROPERT
Slide 28: Public Charter Schools
PUBLIC CHARTER SCHOOLS * DRIVEN BY PARENTAL DEMAND FOR CHOICE; OVER 20 YEARS OLD AND GROWING STRONG 67 PUBLIC CHARTER SCHOOLS Started in 1992 2 UNDER DEVELOPMENT** Currently adopted in 42 states and D.C. 3.1M students growing at ~12% CAGR 6,900 schools growing at ~7% CAGR Waiting list of over 1M stu
Slide 29: Private Schools
PRIVATE SCHOOLS LIMITED QUALITY PRIVATE OPTIONS FUEL DEMAND 13 PRIVATE SCHOOLS In select markets, quality public and private school options are limited Non-sectarian private schools in the >$15K tuition level have seen double-digit growth since 2008 Proven operators are capitalizing on the opportuni
Slide 30: Private Schools
PRIVATE SCHOOLS PROVIDING AN ALTERNATIVE TO MEET THE DEMAND FOR QUALITY PRIVATE EDUCATION 30
Slide 31: Early Childhood Education
EARLY CHILDHOOD EDUCATION DEMAND FOR EDUCATION BEYOND DAYCARE 53 EARLY CHILDHOOD EDUCATION CENTERS Large number of dual income families Increasing per capita disposable income/stabilizing 16 UNDER DEVELOPMENT* unemployment rate Desire for quality education instead of daycare According to the U.S. Ce
Slide 32: Early Childhood Education
EARLYEARLY CHILDHOOD EDUCATION CHILDHOOD REDEFINED EDUCATION EARLY CHILDHOOD EDUCATION REDEFINED Teaching kids through simulation of real world environments, utilizing technology as part of the curriculum and providing opportunities to learn through play 32
Slide 33: Adelaar Summary
ADELAAR SUMMARY • EPR is the land lessor on the casino parcel and two adjoining parcels. o Empire Resorts expected to invest ~$800M in Montreign Resort Casino o Empire Resorts will now also fund improvements to both the golf course and retail village o EPR is expected to invest ~$155M for developmen
Slide 34: Adelaar Update
ADELAAR UPDATE Steady progress towards planned opening of Montreign Resort Casino on or before March 31, 2018 Casino will be rebranded a Resort Worlds Property, an internationally- recognized hospitality and casino brand Development continues on the hotel waterpark site with projected opening in ear
Slide 35: Financial Review
FINANCIAL haw EPR Properties
Slide 36: Capital Structure and Financial Highlights
CAPITAL STRUCTURE AND FINANCIAL HIGHLIGHTS CAPITAL STRUCTURE 3/31/17 CAPITAL STRUCTURE PRO FORMA* (IN MILLIONS) (IN MILLIONS) Common Equity, Common Secured $4,769 Secured Equity, Debt, $180 2% Debt, $180 $5,421 62% 2% 64% Unsecured 31% Unsecured 30% Debt, Debt, $2,496 $2,437 5% 4% Preferred Preferre
Slide 37: Well Laddered Debt Maturity Profile
WELL LADDERED DEBT MATURITY PROFILE* $500 $450 $400 $350 $350 $300 $300 $275 $250 $192 $200 $140 $150 $148 $100 $12 $25 $0 Secured Debt Unsecured Term Loan Unsecured Senior Notes Unsecured Credit Facility Private Placement *Data in millions as of 3/31/17; excludes amortization 37
Slide 38: Operating Performance History
OPERATING PERFORMANCE HISTORY CONSISTENTLY STRONG OPERATING METRICS FFOAA TOTAL REVENUE $350 $600 $300 $500 $250 $400 $200 $300 $150 $100 $200 $50 $100 $0 $0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 FFOAA PER SHARE NET INCOME TO COMMON SHAREHOLDERS $250 $6.00 $5.00 $200 $4.00 $150 $3.00 $10
Slide 39: Annual Dividends
ANNUAL DIVIDENDS ATTRACTIVE & GROWING ANNUAL DIVIDENDS Dividend Yield of 5.6%* *As of 5/1/17 ** Projected 39
Slide 40: Financial Performance
FINANCIAL PERFORMANCE YEAR ENDED 12-31, 2015 2016 $ CHANGE % CHANGE Total Revenue $421.0 $493.2 $72.2 17% Net Income - Common 170.7 201.2 30.5 18% FFO – Common* 235.2 304.6 69.4 30% FFO as adj. - Common* 260.3 308.0 47.7 18% Net Income/share – Common 2.93 3.17 0.24 8% FFO/share - Common* 4.03 4.77 0
Slide 41: Key Ratios
KEY RATIOS QUARTER ENDED 3-31 KEY RATIOS* 2017 Pro Forma** 2017 2016 Fixed charge coverage 3.2x 2.8x 3.3x Debt service coverage 3.5x 3.1x 3.7x Interest coverage 3.7x 3.3x 4.0x Net debt to Adjusted EBITDA 5.3x 5.9x 4.8x FFO as adjusted payout 81% 86% 81% INVESTMENT GRADE CREDIT RATINGS S&P MOODY’S FI
Slide 42: 2017 Guidance
2017 GUIDANCE FFO AS ADJUSTED PER SHARE $5.05 - $5.20 INVESTMENT SPENDING $1.30B - $1.35B DISPOSITIONS $150M - $300M 42
Slide 43: Appendix
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Slide 44: Megaplex Theatres
MEGAPLEX THEATRES * DRIVEN BY STRONG VALUE, THEATRES CONTINUE TO BE THE DOMINANT CHOICE IN ADMISSIONS-BASED ENTERTAINMENT ADMISSIONS-BASED ATTENDANCE RELATIVE VALUE 2015 ATTENDANCE (IN MILLIONS) 2015 Average Ticket Price for a Family of Four (US$) Sources: NATO, Sports Leagues, International Theme P
Slide 45: Public Charter Schools
PUBLIC CHARTER SCHOOLS CURRENT FAMILY PROFILE SCHOOL PROFILE TARGET STATES Parents who want an Strong organizational leadership ARIZONA alternative to traditional and governance public schools COLORADO Favorable market analysis of FLORIDA Highly engaged enrollment and waiting list CALIFORNIA High po
Slide 46: Private Schools
PRIVATE SCHOOLS FAMILY PROFILE OPERATOR PROFILE HIGH POTENTIAL Mid to high affluence Nonsectarian schools MARKETS Strong academic Branded school group with NEW YORK orientation history of success SAN FRANCISCO BAY AREA High parental education Academically rigorous at LOS ANGELES achievement moderate
Slide 47: Early Childhood Education
EARLYEARLY CHILDHOOD EDUCATION CHILDHOOD REDEFINED EDUCATION FAMILY PROFILE OPERATOR PROFILE MARKET PROFILE Dual income Academic Focus Suburban areas of major MSA’s High income Multi-site operations Target segment growth Well-educated parents Superior real estate execution Underserved trade areas Ch
Slide 48: EPR Properties Contact
Val EPR Properties” Return on Insight EPR Properties 909 Walnut Street, Suite 200 Kansas City, MO 64106 www.eprkc.com (888) EPR REIT info@eprkc.com