Form 8-K EPR PROPERTIES For: Oct 28

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October 28, 2014 4:01 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

Form 8-K

�

CURRENT REPORT

Pursuant to Section�13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2014

�

EPR Properties

(Exact name of registrant as specified in its charter)

�



�	�	�	�	�
Maryland	�	001-13561	�	43-1790877
(State or other jurisdiction of incorporation)	�	(Commission File Number)	�	(I.R.S. Employer Identification No.)

909 Walnut Street, Suite 200

Kansas City, Missouri 64106

(Address of principal executive office)(Zip Code)

(816) 472-1700

(Registrants telephone number, including area code)

�

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item�2.02 Results of Operations and Financial Condition.

On October 28, 2014, EPR Properties (the Company) announced its results of operations and financial condition for the third quarter and nine months ended September 30, 2014. The public announcement was made by means of a press release, the text of which is set forth in Exhibit 99.1 hereto and is hereby incorporated by reference herein.

In addition, on October 28, 2014, the Company made available on its website supplemental operating and financial data for the third quarter and nine months ended September 30, 2014, the text of which is set forth in Exhibit 99.2 hereto and is hereby incorporated by reference herein.

The information set forth in Item�2.02 of this current report on Form 8-K, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed filed for the purposes of or otherwise subject to liabilities under Section�18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Item�9.01 Financial Statements and Exhibits.

�



�	�	�
Exhibit No.	��	Description
Exhibit No.	��	Description
99.1	��	Press Release dated October 28, 2014 issued by EPR Properties announcing its results of operations and financial condition for the third quarter and nine months ended September 30, 2014.
�	�
99.2	��	Supplemental Operating and Financial Data for the third quarter and nine months ended September 30, 2014, made available by EPR Properties on October 28, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

�



�	�	�	�
�	EPR PROPERTIES
�	�	�
�	By:	�	/s/ Mark A. Peterson
�	�	�	Mark A. Peterson
�	�	�	Senior Vice�President,�Treasurer�and�Chief�Financial Officer

Date: October 28, 2014

INDEX TO EXHIBITS

�



�	�	�
Exhibit No.	��	Description
Exhibit No.	��	Description
99.1	��	Press Release dated October 28, 2014 issued by EPR Properties announcing its results of operations and financial condition for the third quarter and nine months ended September 30, 2014.
�	�
99.2	��	Supplemental Operating and Financial Data for the third quarter and nine months ended September 30, 2014, made available by EPR Properties on October 28, 2014.

Exhibit 99.1

EPR PROPERTIES REPORTS THIRD QUARTER RESULTS

Company Reports Record Quarterly Revenue,

Increases Investment Spending Guidance for 2014 and

Introduces Guidance for 2015

Kansas City, MO, October 28, 2014 -- EPR Properties (NYSE: EPR) today announced operating results for the third quarter and nine months ended September 30, 2014.

Three Months Ended September 30, 2014


"	Total revenue was $98.7 million for the third quarter of 2014, representing a 12% increase from $87.8 million for the same quarter in 2013.


"	Net income available to common shareholders was $36.8 million, or $0.68 per diluted common share, for the third quarter of 2014 compared to $37.6 million, or $0.79 per diluted common share, for the same quarter in 2013.


"	Funds From Operations (FFO) for the third quarter of 2014 was $54.0 million, or $1.00 per diluted common share, compared to $47.6 million, or $1.00 per diluted common share, for the same quarter in 2013.


"	FFO as adjusted for the third quarter of 2014 was $58.5 million, or $1.08 per diluted common share, compared to $48.2 million, or $1.01 per diluted common share, for the same quarter in 2013.

Nine Months Ended September 30, 2014


"	Total revenue was $280.4 million for the nine months ended September 30, 2014, representing an 11% increase from $253.7 million for the same period in 2013.


"	Net income available to common shareholders was $109.1 million, or $2.04 per diluted common share, for the nine months ended September 30, 2014 compared to $99.3 million, or $2.10 per diluted common share, for the same period in 2013.


"	FFO for the nine months ended September 30, 2014 was $157.0 million, or $2.94 per diluted common share, compared to $136.1 million, or $2.88 per diluted common share, for the same period in 2013.


"	FFO as adjusted for the nine months ended September 30, 2014 was $160.0 million, or $2.99 per diluted common share, compared to $138.6 million, or $2.93 per diluted common share, for the same period in 2013.

David Brain, President and CEO, commented, During the quarter we delivered record revenue and continued to accelerate the growth in each of our three primary segments: Entertainment, Recreation and Education. Additionally, we bolstered our healthy capital position with a successful equity raise, leaving us with capacity to fund our pipeline and increase our capital spending. As we look ahead, we have identified prospects for growth across our segments and are well positioned to drive shareholder value.

�

A reconciliation of FFO to FFO as adjusted follows (unaudited, dollars in thousands, except per share amounts):

�

Three Months Ended September 30,

�

2014

�

2013

�

Amount

�

FFO/share

�

Amount

�

FFO/share

FFO

53,952

�

1.00

�

47,616

�

1.00

�

Costs associated with loan refinancing or payoff

�

223

�

Transaction costs

369

�

0.01

�

317

�

0.01

�

Provision for loan loss

3,777

�

0.07

�

Deferred income tax expense

363

�

FFO as adjusted

58,461

�

1.08

�

48,156

�

1.01

�

Dividends declared per common share

�

0.855

�

0.790

FFO as adjusted payout ratio

�

Nine Months Ended September 30,

�

2014

�

2013

�

Amount

�

FFO/share

�

Amount

�

FFO/share

FFO

157,002

�

2.94

�

136,114

�

2.88

�

Costs associated with loan refinancing or payoff

�

6,166

�

0.13

�

Transaction costs (benefit)

(2,055

)

�

(0.04

)

�

859

�

0.02

�

Provision for loan loss

3,777

�

0.07

�

Gain on early extinguishment of debt

�

(4,539

)

�

(0.10

)

�

Gain on sale of land

(330

)

�

(0.01

)

�

Deferred income tax expense

1,612

�

0.03

�

FFO as adjusted

160,006

�

2.99

�

138,600

�

2.93

�

Dividends declared per common share

�

2.57

�

2.37

FFO as adjusted payout ratio

�

Portfolio Update

The Company's investment portfolio consisted of the following at September�30, 2014:

The Entertainment segment included investments in 125 megaplex theatre properties, nine entertainment retail centers (which include eight additional megaplex theatre properties and one live performance venue) and six family entertainment centers. The Companys portfolio of owned entertainment properties consisted of 11.7 million square feet and was 99% leased, including megaplex theatres that were 100% leased.


"	The Education segment included investments in 60 public charter school properties, two private school properties and three early education centers. The Companys portfolio of owned education properties consisted of 3.3 million square feet and was 100% leased.


"	The Recreation segment included investments in 14 metropolitan ski areas, four waterparks and eight golf entertainment complexes. The Companys portfolio of owned recreation properties was 100% leased.


"	The Other segment consisted primarily of the land held for development related to the Adelaar casino and resort project in Sullivan County, New York.

The combined owned portfolio consisted of 15.8 million square feet and was 99% leased. As of September�30, 2014, the Company also had invested approximately $189.1 million in property under development.

Investment Update

The Company's investment spending during the three months ended September 30, 2014 totaled $151.9 million (bringing the year-to-date investment spending to $471.6 million), and included investments in each of its four operating segments:


"	Entertainment investment spending totaled $10.3 million, and was related primarily to investments in build-to-suit construction of five megaplex theatres and two family entertainment centers as well as redevelopment of two existing megaplex theatres, each of which is subject to a long-term triple net lease or a long-term mortgage agreement.


"	Education investment spending totaled $75.0 million, and was related to investments in build-to-suit construction of 17 public charter schools, three private schools and 10 early childhood education centers, each of which is subject to a long-term triple net lease or long-term mortgage agreement.


"	Recreation investment spending totaled $65.4 million, and was related to build-to-suit construction of 12 TopGolf golf entertainment facilities and additional improvements at Camelback Mountain Resort, each of which is subject to a long-term triple net lease or long-term mortgage agreement.


"	Other investment spending totaled $1.2 million, and was related to the Adelaar casino and resort project in Sullivan County, New York.

Balance Sheet Update

The Company's balance sheet remains strong with a debt to gross assets ratio (defined as total debt to total assets plus accumulated depreciation) of 39% at September�30, 2014.

On September 19, 2014, the Company increased the size of its unsecured term loan facility from $275.0 million to $285.0 million. At September�30, 2014 the Company had $34.0 million outstanding under its $535.0 million unsecured revolving credit facility leaving $501.0 million of availability.

On September 23, 2014, the Company issued 3,680,000 common shares in a registered public offering. Total net proceeds, after the underwriting discount and offering expenses, were approximately $184.2 million.

Dividend Information

The Company declared regular monthly cash dividends during the third quarter of 2014 totaling $0.855 per common share. This dividend represents an annualized dividend of $3.42, an 8.2% increase over the prior year.

The Company also declared third quarter cash dividends of $0.359375 per share on its 5.75% Series C cumulative convertible preferred shares, $0.5625 per share on its 9.00% Series E cumulative convertible preferred shares and $0.4140625 per share on its 6.625% Series F cumulative redeemable preferred shares.

Guidance Update

The Company is increasing its 2014 guidance for investment spending to a range of $600.0 million to $750.0 million from its prior range of $550.0 million to $600.0 million. The upper end of this range contemplates a recreation resort investment opportunity of approximately $135.0 million which is anticipated to close in the fourth quarter near year-end but this cannot be assured. The Company is also updating its 2014 guidance for FFO as adjusted per diluted share to a range of $4.03 to $4.07 from its prior range of $4.00 to $4.10. This updated guidance implies a range of $1.03 to $1.07 for FFO as adjusted per diluted share for the fourth quarter of 2014.

The Company is also introducing its 2015 guidance for FFO as adjusted per diluted share of a range of $4.30 to $4.40. In addition, the Company is introducing its 2015 investment spending guidance of a range of $500.0 million to $550.0 million. The Company's 2015 guidance assumes that the recreation resort investment opportunity referred to above closes prior to December 31, 2014.

Both the guidance for the remainder of 2014 and for 2015 reflect the Adelaar project at its status quo, pending the outcome of the award of certain casino gaming licenses by the state of New York, expected to be announced in the fourth quarter of 2014.

Quarterly Supplemental

The Company's supplemental information package for the third quarter and nine months ended September 30, 2014 is available on the Company's website at http://eprkc.com/earnings-releases-supplemental.

EPR Properties

Consolidated Statements of Income

(Unaudited, dollars in thousands except per share data)



�	Three Months Ended September 30,							�	Nine Months Ended September 30,
�	2014			�	2013			�	2014			�	2013
Rental revenue	$	74,410		�	$	62,209		�	$	210,759		�	$	182,758
Tenant reimbursements	4,486			�	4,552			�	13,355			�	13,748
Other income	345			�	1,441			�	706			�	1,538
Mortgage and other financing income	19,497			�	19,639			�	55,561			�	55,670
Total revenue	98,738			�	87,841			�	280,381			�	253,714
Property operating expense	5,948			�	6,579			�	17,936			�	19,604
Other expense	248			�	204			�	566			�	508
General and administrative expense	6,719			�	6,764			�	21,260			�	19,468
Costs associated with loan refinancing or payoff				�	223			�				�	6,166
Gain on early extinguishment of debt				�				�				�	(4,539		)
Interest expense, net	20,801			�	20,435			�	61,254			�	60,424
Transaction costs	369			�	317			�	1,321			�	859
Provision for loan loss	3,777			�				�	3,777			�
Depreciation and amortization	17,421			�	13,141			�	48,750			�	39,140
Income before equity in income from joint ventures and other items	43,455			�	40,178			�	125,517			�	112,084
Equity in income from joint ventures	300			�	351			�	878			�	1,168
Gain on sale of land				�				�	330			�
Gain on sale of investment in a direct financing lease				�				�	220			�
Income before income taxes	43,755			�	40,529			�	126,945			�	113,252
Income tax expense	1,047			�				�	3,332			�
Income from continuing operations	$	42,708		�	$	40,529		�	$	123,613		�	$	113,252
Discontinued operations:	�			�	�			�	�			�	�
Income (loss) from discontinued operations	(3		)	�	(195		)	�	8			�	198
Transaction (costs) benefit				�				�	3,376			�
Gain on sale of real estate				�	3,168			�				�	3,733
Net income attributable to EPR Properties	42,705			�	43,502			�	126,997			�	117,183
Preferred dividend requirements	(5,952		)	�	(5,951		)	�	(17,856		)	�	(17,855		)
Net income available to common shareholders of EPR Properties	$	36,753		�	$	37,551		�	$	109,141		�	$	99,328
Per share data attributable to EPR Properties common shareholders:	�			�	�			�	�			�	�
Basic earnings per share data:	�			�	�			�	�			�	�
Income from continuing operations	$	0.68		�	$	0.73		�	$	1.99		�	$	2.03
Income from discontinued operations				�	0.06			�	0.06			�	0.08
Net income available to common shareholders	$	0.68		�	$	0.79		�	$	2.05		�	$	2.11
Diluted earnings per share data:	�			�	�			�	�			�	�
Income from continuing operations	$	0.68		�	$	0.73		�	$	1.98		�	$	2.02
Income from discontinued operations				�	0.06			�	0.06			�	0.08
Net income available to common shareholders	$	0.68		�	$	0.79		�	$	2.04		�	$	2.10
Shares used for computation (in thousands):	�			�	�			�	�			�	�
Basic	53,792			�	47,349			�	53,268			�	47,097
Diluted	54,001			�	47,524			�	53,462			�	47,290

EPR Properties

Reconciliation of Net Income Available to Common Shareholders

to Funds From Operations (FFO) (A)

(Unaudited, dollars in thousands except per share data)



�	Three Months Ended September 30,						�	Nine Months Ended September 30,
�	2014		�	2013			�	2014			�	2013
FFO:	�		�	�			�	�			�	�
Net income available to common shareholders of EPR Properties	$	36,753	�	$	37,551		�	$	109,141		�	$	99,328
Gain on sale of real estate			�	(3,168		)	�				�	(3,733		)
Gain on sale of investment in a direct financing lease			�				�	(220		)	�
Real estate depreciation and amortization	17,145		�	13,069			�	47,919			�	40,036
Allocated share of joint venture depreciation	54		�	164			�	162			�	483
FFO available to common shareholders of EPR Properties	$	53,952	�	$	47,616		�	$	157,002		�	$	136,114
�	�		�	�			�	�			�	�
FFO per common share attributable to EPR Properties:	�		�	�			�	�			�	�
Basic	$	1.00	�	$	1.01		�	$	2.95		�	$	2.89
Diluted	1.00		�	1.00			�	2.94			�	2.88
Shares used for computation (in thousands):	�		�	�			�	�			�	�
Basic	53,792		�	47,349			�	53,268			�	47,097
Diluted	54,001		�	47,524			�	53,462			�	47,290
�	�		�	�			�	�			�	�
Other financial information:	�		�	�			�	�			�	�
Straight-lined rental revenue	$	2,932	�	$	1,350		�	$	5,150		�	$	3,271
Dividends per common share	$	0.86	�	$	0.79		�	$	2.57		�	$	2.37

(A)

The National Association of Real Estate Investment Trusts (NAREIT) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP and management provides FFO herein because it believes this information is useful to investors in this regard. FFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share. Pursuant to the definition of FFO by the Board of Governors of NAREIT, we calculate FFO as net income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from sales or acquisitions of depreciable operating properties and impairment losses of depreciable real estate, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. We have calculated FFO for all periods presented in accordance with this definition. FFO is a non-GAAP financial measure. FFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO the same way so comparisons with other REITs may not be meaningful. In addition to FFO, we present FFO as adjusted. Management believes it is useful to provide it here as a supplemental measure to GAAP net income available to common shareholders and earnings per share. FFO as adjusted is FFO plus provision for loan losses, costs (gain) associated with loan refinancing or payoff, net, preferred share redemption costs and transaction costs (benefit), less gain on early extinguishment of debt, gain (loss) on sale of land and deferred tax benefit (expense). FFO as adjusted is a non-GAAP financial measure. FFO as adjusted does not represent cash flows from operations as defined by GAAP

and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations, cash flows or liquidity as defined by GAAP.

The additional 1.9 million common shares that would result from the conversion of the Company's 5.75% Series C cumulative convertible preferred shares and the additional 1.6 million common shares that would result from the conversion of the Company's 9.00% Series E cumulative convertible preferred shares and the corresponding add-back of the preferred dividends declared on those shares are not included in the calculation of diluted earnings per share and FFO per share for the three and nine months ended September 30, 2014 and 2013 because the effect is not-dilutive.

EPR Properties

Condensed Consolidated Balance Sheets

(Dollars in thousands)



�	�
�	September 30, 2014		�	December 31, 2013
Assets	(unaudited)		�	�
Rental properties, net of accumulated depreciation of $453,284 and $409,643 at September 30, 2014 and December 31, 2013, respectively	$	2,370,198	�	$	2,104,151
Land held for development	204,641		�	201,342
Property under development	189,051		�	89,473
Mortgage notes and related accrued interest receivable	546,265		�	486,337
Investment in a direct financing lease, net	198,551		�	242,212
Investment in joint ventures	5,343		�	5,275
Cash and cash equivalents	8,386		�	7,958
Restricted cash	26,811		�	9,714
Deferred financing costs, net	20,994		�	23,344
Accounts receivable, net	44,469		�	42,538
Other assets	64,522		�	59,932
Total assets	$	3,679,231	�	$	3,272,276
Liabilities and Equity	�		�	�
Accounts payable and accrued liabilities	$	71,511	�	$	72,327
Dividends payable	22,240		�	19,553
Unearned rents and interest	36,551		�	17,046
Debt	1,621,211		�	1,475,336
Total liabilities	1,751,513		�	1,584,262
EPR Properties shareholders equity	1,927,341		�	1,687,637
Noncontrolling interests	377		�	377
Total equity	1,927,718		�	1,688,014
Total liabilities and equity	$	3,679,231	�	$	3,272,276

About EPR Properties

EPR Properties is a specialty real estate investment trust (REIT) that invests in properties in select market segments which require unique industry knowledge, while offering the potential for stable and attractive returns. Our total investments exceed $3.9 billion and our primary investment segments are Entertainment, Recreation and Education. We adhere to rigorous underwriting and investing criteria centered on key industry and property level cash flow standards. We believe our focused niche approach provides a competitive advantage, and the potential for higher growth and better yields. Further information is available at www.eprkc.com.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

With the exception of historical information, certain statements contained or incorporated by reference herein may contain forward-looking statements within the meaning of Section�27A of the Securities Act of 1933, as amended (the Securities Act), and Section�21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), such as those pertaining to our acquisition or disposition of properties, our capital resources, future expenditures for development projects, and our results of operations and financial condition. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the forward-looking statements will occur. You can identify forward-looking statements by use of words such as will be, intend, continue, believe, may, expect, hope, anticipate, goal, forecast, pipeline, anticipates, estimates, offers, plans, would or other similar expressions or other comparable terms or discussions of strategy, plans or intentions contained or incorporated by reference herein. While references to commitments for investment spending are based on present commitments and agreements of the Company, we cannot provide assurance that these transactions will be completed on satisfactory terms. In addition, references to our budgeted amounts and guidance are forward-looking statements.� Forward-looking statements necessarily are dependent on assumptions, data or methods that may be incorrect or imprecise. These forward-looking statements represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. For further discussion of these factors see Item 1A. Risk Factors in our most recent Annual Report on Form 10-K and, to the extent applicable, our Quarterly Reports on Form 10-Q.

�

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date hereof or the date of any document incorporated by reference herein. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date hereof.

EPR Properties

Brian Moriarty, 888-EPR-REIT

www.eprkc.com

Exhibit 99.2



Supplemental Operating and Financial Data
Third Quarter and Nine Months Ended September 30, 2014



EPR Properties
Supplemental Operating and Financial Data
Third Quarter and Nine Months Ended September 30, 2014
�	�	�	�	�	�	�	�	�
Table of Contents
�	�	�	�	�	�	�	�	�
Section	�	�	�	�	�	�	�	Page
�	�	�	�	�	�	�	�	�
Company Profile								4
Investor Information								5
Selected Financial Information								6
Selected Balance Sheet Information								7
Selected Operating Data								8
Funds From Operations and Funds From Operations as Adjusted								9
Adjusted Funds From Operations								10
Capital Structure								11
Summary of Ratios								16
Capital Spending and Disposition Summaries								19
Property Under Development - Investment Spending Estimates								20
Financial and Investment Information by Asset Type and Segment								21
Lease Expirations								27
Top Ten Customers by Revenue from Continuing Operations								28
Summary of Mortgage Notes Receivable								29
Summary of Notes Receivable								30
Definitions-Non-GAAP Financial Measures								31

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

With the exception of historical information, certain statements contained or incorporated by reference herein may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), such as those pertaining to our acquisition or disposition of properties, our capital resources, future expenditures for development projects, and our results of operations and financial condition. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the forward-looking statements will occur. You can identify forward-looking statements by use of words such as will be, intend, continue, believe, may, expect, hope, anticipate, goal, forecast, pipeline, anticipates, estimates, offers, plans, would, or other similar expressions or other comparable terms or discussions of strategy, plans or intentions contained or incorporated by reference herein. In addition, references to our budgeted amounts and guidance are forward-looking statements. Forward-looking statements necessarily are dependent on assumptions, data or methods that may be incorrect or imprecise. These forward-looking statements represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. For further discussion of these factors see Item 1A. Risk Factors in our most recent Annual Report on Form 10-K and, to the extent applicable, our Quarterly Reports on Form 10-Q.

NON-GAAP INFORMATION

This document contains certain non-GAAP measures. These non-GAAP measures, as calculated by the Company, are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these non-GAAP measures are not measurements of financial performance or liquidity under GAAP and should not be considered alternatives to the Company's other financial information determined under GAAP. See pages 31 through 32 for definitions of certain non-GAAP financial measures used in this document.

EPR Properties

Company Profile



The Company

EPR Properties (EPR or the Company) is a self administered and self-managed real estate investment trust. EPR was formed in August 1997 as a Maryland real estate investment trust (REIT), and an initial public offering was completed on November 18, 1997.

Since that time, the Company has grown into a leading specialty real estate investment trust with an investment portfolio that includes Entertainment, Education, Recreation and Other specialty investments.



Company Strategy

EPRs primary business objective is to enhance shareholder value by achieving predictable and increasing Funds from Operations (FFO) and dividends per share. Our prevailing strategy is to focus on long-term investments in a limited number of categories in which we maintain a depth of knowledge and relationships, and which we believe offer sustained performance throughout all economic cycles. We believe our focused niche approach provides a competitive advantage, and the potential for higher growth and better yields.

We also adhere to rigorous underwriting and investing criteria, centered on key industry and property level cash flow criteria. As part of our growth strategy we will consider acquiring, developing or financing additional properties which are consistent with our overall strategy and meet our underwriting and investing criteria. In executing our growth strategy, we will employ moderate leverage. We have historically paid out approximately 80% of our FFO as adjusted in the form of dividends. This allows investors to realize a portion of their returns on a current basis.

Following are the key criteria against which our investments are evaluated:

Inflection Opportunity - Renewal or restructuring in an industrys properties

Enduring Value - Real estate devoted to and improving long-lived activities

Excellent Execution - Market-dominant performance that creates value beyond tenant credit

Attractive Economics - Accretive initial returns along with growth in yield

Advantageous Position - Sustainable competitive advantages

EPR Properties

Investor Information



Senior Management
�	�	�
David Brain	�	Greg Silvers
President and Chief Executive Officer	�	Executive Vice President and Chief Operating Officer
�	�	�
Mark Peterson	�	Jerry Earnest
Senior Vice President and Chief Financial Officer	�	Senior Vice President and Chief Investment Officer
�	�	�
Mike Hirons	�	�
Vice President - Strategic Planning	�	�



Company Information
�	�	�
Corporate Headquarters	�	Trading Symbols
909 Walnut Street, Suite 200	�	Common Stock:
Kansas City, MO 64106	�	EPR
888-EPR-REIT	�	Preferred Stock:
www.eprkc.com	�	EPR-PrC
�	�	EPR-PrE
Stock Exchange Listing	�	EPR-PrF
New York Stock Exchange	�	�



Equity Research Coverage
�	�	�
Bank of America Merrill Lynch	Jane Wong	646-855-3378
BMO Capital Markets	Paul Adornato	212-885-4170
Citi Global Markets	Michael Bilerman/Nick Joseph	212-816-4471
FBR Capital Markets & Co.	Daniel Altscher	703-312-1651
Goldman Sachs	Andrew Rosavich	212-902-2796
J.P. Morgan	Anthony Paolone	212-622-6682
Kansas City Capital Associates	Jonathan Braatz	816-932-8019
Keybanc Capital Markets	Jordan Sadler/Craig Mailman	917-368-2280
Ladenburg Thalmann	Daniel Donlan	212-409-2056
RBC Capital Markets	Richard Moore	440-715-2646
Stifel	Simon Yarmak	443-224-1345

EPR Properties is followed by the analysts identified above.� Please note that any opinions, estimates, forecasts or recommendations regarding EPR Properties performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or recommendations of EPR Properties or its management.� EPR Properties does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.



EPR Properties
Selected Financial Information
(Unaudited, dollars and shares in thousands)
�	�		�	�		�	�	�	�
�	Three Months Ended September 30,					�	Nine months ended September 30,
Operating Information:	2014		�	2013		�	2014	�	2013
Revenue (1)	98,738		�	87,841		�	280,381	�	253,714
Net income available to common shareholders of	�		�	�		�	�	�	�
EPR Properties	36,753		�	37,551		�	109,141	�	99,328
Earnings before interest, taxes, depreciation and amortization	�		�	�		�	�	�	�
(EBITDA) - continuing operations (2)	81,677		�	73,977		�	235,521	�	213,275
Earnings before interest, taxes, depreciation and amortization	�		�	�		�	�	�	�
(EBITDA) - discontinued operations (2)	(3	)	�	10		�	3,384	�	1,898
Adjusted EBITDA - continuing operations (2)	85,823		�	74,294		�	240,619	�	214,134
Adjusted EBITDA - discontinued operations (2)	(3	)	�	10		�	8	�	1,898
Interest expense, net (1)	20,801		�	20,435		�	61,254	�	60,424
Recurring principal payments	3,590		�	2,472		�	9,567	�	10,916
Capitalized interest	2,085		�	1,014		�	4,982	�	1,984
Straight-lined rental revenue	2,932		�	1,350		�	5,150	�	3,271
Dividends declared on preferred shares	5,952		�	5,951		�	17,856	�	17,855
Dividends declared on common shares	46,767		�	37,529		�	137,837	�	111,892
General and administrative expense	6,719		�	6,764		�	21,260	�	19,468
�	�		�	�		�	�	�	�
Balance Sheet Information:	September 30,					�	�	�	�
�	2014		�	2013		�	�	�	�
Total assets	3,679,231		�	3,135,273		�	�	�	�
Accumulated depreciation	453,284		�	398,356		�	�	�	�
Total assets before accumulated depreciation (gross assets)	4,132,515		�	3,533,629		�	�	�	�
Unencumbered real estate assets (3)	�		�	�		�	�	�	�
Number	194		�	173		�	�	�	�
Gross book value	2,940,629		�	2,553,269		�	�	�	�
Annualized stabilized NOI	300,312		�	262,944		�	�	�	�
Total debt	1,621,211		�	1,545,973		�	�	�	�
Equity	1,927,718		�	1,493,461		�	�	�	�
Common shares outstanding	57,149		�	47,990		�	�	�	�
Total market capitalization (using EOP closing price)	4,863,798		�	4,231,265		�	�	�	�
Debt/total assets	44	%	�	49	%	�	�	�	�
Debt/total market capitalization	33	%	�	37	%	�	�	�	�
Debt/gross assets	39	%	�	44	%	�	�	�	�
Debt/Adjusted EBITDA - continuing operations (4)	4.72		�	5.20		�	�	�	�
Debt/Adjusted EBITDA - continuing and discontinued operations (4)	4.72		�	5.20		�	�	�	�
�	�		�	�		�	�	�	�
(1) Excludes discontinued operations.	�		�	�		�	�	�	�
(2) See pages 31 through 32 for definitions.	�		�	�		�	�	�	�
(3) Includes unencumbered rental properties, gross, direct financing lease, net and mortgage notes receivable; excludes property under development and undeveloped land.
(4) Adjusted EBITDA is for the quarter annualized. See pages 31 through 32 for definitions.						�	�	�	�

EPR Properties

Selected Balance Sheet Information

(Unaudited, dollars in thousands)

�

3rd Quarter 2014

�

2nd Quarter 2014

�

1st Quarter 2014

�

4th Quarter 2013

�

3rd Quarter 2013

�

2nd Quarter 2013

Assets

�

Rental properties: (1)

�

Entertainment

�

2,287,516

�

2,284,385

�

2,143,392

�

2,152,138

�

2,065,181

�

2,023,640

Education

�

306,153

�

199,580

�

199,580

�

193,372

�

184,728

�

120,468

Recreation

�

219,723

�

218,656

�

159,334

�

158,194

�

70,955

�

70,961

Other

�

10,090

�

10,090

�

10,090

�

10,090

�

14,062

�

43,580

Less: accumulated depreciation

�

(453,284

)

�

(439,242

)

�

(422,463

)

�

(409,643

)

�

(398,356

)

�

(395,191

)

Land held for development

�

204,641

�

203,443

�

202,552

�

201,342

�

200,325

�

199,001

Property under development

�

189,051

�

182,897

�

138,586

�

89,473

�

86,048

�

77,492

Mortgage notes receivable: (2)

�

Entertainment

�

58,220

�

58,220

�

58,220

�

58,220

�

91,309

�

77,464

Education

�

73,709

�

66,013

�

61,027

�

56,505

�

55,412

�

42,647

Recreation

�

409,304

�

379,435

�

366,561

�

366,580

�

364,829

�

359,630

��Other

�

5,032

�

5,021

�

5,032

�

5,032

�

2,521

�

2,521

Investment in a direct financing lease, net

�

198,551

�

198,020

�

242,905

�

242,212

�

240,990

�

239,803

Investment in joint ventures

�

5,343

�

5,853

�

5,586

�

5,275

�

13,683

�

12,962

Cash and cash equivalents

�

8,386

�

13,589

�

20,406

�

7,958

�

24,141

�

20,030

Restricted cash

�

26,811

�

17,566

�

19,568

�

9,714

�

18,110

�

17,030

Accounts receivable, net

�

44,469

�

42,830

�

41,616

�

42,538

�

40,326

�

39,354

Other assets

�

85,516

�

86,496

�

87,121

�

83,276

�

61,009

�

64,893

Total assets

�

3,679,231

�

3,532,852

�

3,339,113

�

3,272,276

�

3,135,273

�

3,016,285

�

Liabilities and Equity

�

Liabilities:

�

Accounts payable and accrued liabilities

�

71,511

�

70,383

�

47,526

�

72,327

�

58,273

�

51,722

Common dividends payable

�

16,288

�

15,239

�

15,232

�

13,601

�

12,636

�

12,418

Preferred dividends payable

�

5,952

�

5,952

�

5,952

�

5,952

�

5,951

�

5,952

Unearned rents and interest

�

36,551

�

29,507

�

27,281

�

17,046

�

18,979

�

16,821

Line of credit

�

34,000

�

79,000

�

68,000

�

24,000

Debt

�

1,587,211

�

1,580,801

�

1,482,608

�

1,475,336

�

1,477,973

�

1,450,735

Total liabilities

�

1,751,513

�

1,780,882

�

1,578,599

�

1,584,262

�

1,641,812

�

1,561,648

Equity:

�

Common stock and additional paid-in- capital

�

2,280,693

�

2,093,922

�

2,090,420

�

2,004,397

�

1,825,790

�

1,784,123

Preferred stock at par value

�

139

�

139

�

139

�

139

�

139

�

139

Treasury stock

�

(66,437

)

�

(66,096

)

�

(65,857

)

�

(62,177

)

�

(62,177

)

�

(62,169

)

Accumulated other comprehensive income

�

13,557

�

14,225

�

15,129

�

17,193

�

17,536

�

20,392

Distributions in excess of net income

�

(300,611

)

�

(290,597

)

�

(279,694

)

�

(271,915

)

�

(288,204

)

�

(288,225

)

EPR Properties shareholders' equity

�

1,927,341

�

1,751,593

�

1,760,137

�

1,687,637

�

1,493,084

�

1,454,260

Noncontrolling interests

�

377

�

377

�

377

�

377

�

377

�

377

Total equity

�

1,927,718

�

1,751,970

�

1,760,514

�

1,688,014

�

1,493,461

�

1,454,637

Total liabilities and equity

�

3,679,231

�

3,532,852

�

3,339,113

�

3,272,276

�

3,135,273

�

3,016,285

�

(1) Includes rental properties held for sale.

(2) Includes related accrued interest receivable.



EPR Properties
Selected Operating Data
(Unaudited, dollars in thousands)
�	�			�	�			�	�			�	�			�	�			�	�
�	3rd Quarter 2014			�	2nd Quarter 2014			�	1st Quarter 2014			�	4th Quarter 2013			�	3rd Quarter 2013			�	2nd Quarter 2013
Rental revenue and tenant reimbursements:				�	�			�	�			�	�			�	�			�	�
Entertainment	$	65,102		�	$	63,783		�	$	61,410		�	$	61,373		�	$	59,352		�	$	58,974
Education	7,490			�	5,519			�	5,478			�	5,198			�	4,422			�	3,152
Recreation	6,069			�	4,612			�	3,846			�	3,751			�	2,682			�	1,782
Other	235			�	285			�	285			�	283			�	305			�	704
Mortgage and other financing income:				�	�			�	�			�	�			�	�			�	�
Entertainment	1,789			�	1,768			�	1,723			�	1,761			�	2,258			�	2,223
Education (1)	7,561			�	7,440			�	8,778			�	8,666			�	8,507			�	8,145
Recreation	10,050			�	8,096			�	8,066			�	8,081			�	8,807			�	7,789
Other	97			�	97			�	97			�	94			�	67			�	79
Other income	345			�	187			�	174			�	145			�	1,441			�	125
Total revenue	$	98,738		�	$	91,787		�	$	89,857		�	$	89,352		�	$	87,841		�	$	82,973
�				�	�			�	�			�	�			�	�			�	�
Property operating expense	5,948			�	5,539			�	6,449			�	6,413			�	6,579			�	5,990
Other expense	248			�	219			�	98			�	150			�	204			�	208
General and administrative expense	6,719			�	7,079			�	7,462			�	6,146			�	6,764			�	6,051
Costs associated with loan refinancing or payoff				�				�				�				�	223			�	5,943
Interest expense, net	20,801			�	20,555			�	19,899			�	20,632			�	20,435			�	20,000
Transaction costs	369			�	756			�	196			�	1,096			�	317			�	224
Provision for loan loss	3,777			�				�				�				�				�
Depreciation and amortization	17,421			�	16,002			�	15,327			�	14,807			�	13,141			�	13,176
Income before equity in income in joint ventures and other items	43,455			�	41,637			�	40,426			�	40,108			�	40,178			�	31,381
Equity in income from joint ventures	300			�	267			�	311			�	230			�	351			�	466
Gain on sale or acquisiton, net				�				�	330			�	3,017			�				�
Gain on previously held equity interest				�				�				�	4,853			�				�
Gain on sale of investment in a direct financing lease				�	220			�				�				�				�
Income tax benefit (expense)	(1,047		)	�	(1,360		)	�	(925		)	�	14,176			�				�
Income from continuing operations	42,708			�	40,764			�	40,142			�	62,384			�	40,529			�	31,847
Discontinued operations:				�	�			�	�			�	�			�	�			�	�
Income (loss) from discontinued operations	(3		)	�	(4		)	�	15			�	135			�	(195		)	�	629
Transaction (costs) benefit				�				�	3,376			�
Gain on sale of real estate				�				�				�	523			�	3,168			�
Net income attributable to EPR Properties	42,705			�	40,760			�	43,533			�	63,042			�	43,502			�	32,476
Preferred dividend requirements	(5,952		)	�	(5,952		)	�	(5,952		)	�	(5,951		)	�	(5,951		)	�	(5,952		)
Net income available to common shareholders of EPR Properties	$	36,753		�	$	34,808		�	$	37,581		�	$	57,091		�	$	37,551		�	$	26,524
�	�			�	�			�	�			�	�			�	�			�	�
(1) Represents income from owned assets under a direct financing lease, nine mortgage notes receivable and one note receivable.

EPR Properties

Funds From Operations and Funds From Operations as Adjusted

(Unaudited, dollars in thousands except per share information)

�

3rd Quarter 2014

�

2nd Quarter 2014

�

1st Quarter 2014

�

4th Quarter 2013

�

3rd Quarter 2013

�

2nd Quarter 2013

�

Funds From Operations ("FFO") (1):

�

Net income available to common shareholders of EPR Properties

�

36,753

�

34,808

�

37,581

�

57,091

�

37,551

�

26,524

�

Gain on sale of real estate

�

(3,540

)

�

(3,168

)

�

Gain on previously held equity interest

�

(4,853

)

�

Gain on sale of investment in a direct financing lease

�

(220

)

�

Real estate depreciation and amortization

�

17,145

�

15,725

�

15,049

�

14,528

�

13,069

�

13,498

�

Allocated share of joint venture depreciation

�

164

�

162

�

FFO available to common shareholders of EPR Properties

�

53,952

�

50,366

�

52,684

�

63,290

�

47,616

�

40,184

�

FFO available to common shareholders of EPR Properties

�

53,952

�

50,366

�

52,684

�

63,290

�

47,616

�

40,184

�

Add: Preferred dividends for Series C preferred shares

�

1,941

�

Diluted FFO available to common shareholders

�

53,952

�

50,366

�

52,684

�

65,231

�

47,616

�

40,184

�

Funds From Operations as adjusted (1):

�

FFO available to common shareholders of EPR Properties

�

53,952

�

50,366

�

52,684

�

63,290

�

47,616

�

40,184

�

Costs associated with loan refinancing or payoff

�

223

�

5,943

�

Transaction costs (benefit)

�

369

�

756

�

(3,180

)

�

1,096

�

317

�

224

�

Provision for loan loss

�

3,777

�

Gain on sale of land

�

(330

)

�

Deferred income tax expense (benefit)

�

363

�

842

�

407

�

(14,787

)

�

FFO as adjusted available to common shareholders of EPR Properties

�

58,461

�

51,964

�

49,581

�

49,599

�

48,156

�

46,351

�

FFO per common share attributable to EPR Properties:

�

Basic

�

1.00

�

0.94

�

1.00

�

1.25

�

1.01

�

0.85

�

Diluted

�

1.00

�

0.94

�

1.00

�

1.23

�

1.00

�

0.85

�

FFO as adjusted per common share attributable to EPR Properties:

�

Basic

�

1.09

�

0.97

�

0.94

�

0.98

�

1.02

�

0.98

�

Diluted

�

1.08

�

0.97

�

0.94

�

0.97

�

1.01

�

0.98

�

Shares used for computation (in thousands):

�

Basic

�

53,792

�

53,458

�

52,541

�

50,792

�

47,349

�

47,081

�

Diluted

�

54,001

�

53,654

�

52,719

�

52,933

�

47,524

�

47,294

�

Weighted average shares outstanding-diluted EPS

�

54,001

�

53,654

�

52,719

�

50,959

�

47,524

�

47,294

�

Effect of dilutive Series C preferred shares

�

1,974

�

Adjusted weighted-average shares outstanding-diluted

�

54,001

�

53,654

�

52,719

�

52,933

�

47,524

�

47,294

�

(1) See pages 31 through 32 for definitions.

�

EPR Properties

Adjusted Funds From Operations

(Unaudited, dollars in thousands except per share information)

�

3rd Quarter 2014

�

2nd Quarter 2014

�

1st Quarter 2014

�

4th Quarter 2013

�

3rd Quarter 2013

�

2nd Quarter 2013

Adjusted Funds from Operations ("AFFO") (1):

�

FFO available to common shareholders of EPR Properties

�

53,952

�

50,366

�

52,684

�

63,290

�

47,616

�

40,184

Adjustments:

�

Amortization of above market leases, net

�

Transaction costs (benefit)

�

369

�

756

�

(3,180

)

�

1,096

�

317

�

224

Non-real estate depreciation and amortization

�

276

�

276

�

278

�

278

�

277

�

277

Deferred financing fees amortization

�

1,082

�

1,061

�

1,015

�

1,044

�

1,010

�

988

Costs associated with loan refinancing or payoff

�

223

�

5,943

Share-based compensation expense to management and trustees

�

2,313

�

2,343

�

2,328

�

1,690

�

1,659

�

1,618

Maintenance capital expenditures (2)

�

(1,572

)

�

(3,026

)

�

(1,154

)

�

(2,627

)

�

(619

)

�

(279

)

Straight-lined rental revenue

�

(2,932

)

�

(1,107

)

�

(1,111

)

�

(1,575

)

�

(1,350

)

�

(707

)

Non-cash portion of mortgage and other financing income

�

(1,585

)

�

(1,239

)

�

(1,286

)

�

(1,288

)

�

(1,329

)

�

(1,393

)

Provision for loan loss

�

3,777

�

Gain on sale of land

�

(330

)

�

Deferred income tax expense (benefit)

�

363

�

842

�

407

�

(14,787

)

�

AFFO available to common shareholders of EPR Properties

�

56,091

�

50,320

�

49,699

�

47,169

�

47,804

�

46,855

�

Weighted average diluted shares outstanding (in thousands)

�

54,001

�

53,654

�

52,719

�

50,959

�

47,524

�

47,294

�

AFFO per diluted common share

�

1.04

�

0.94

�

0.94

�

0.93

�

1.01

�

0.99

�

Dividends declared per common share

�

0.855

�

0.855

�

0.855

�

0.790

�

0.790

�

0.790

�

AFFO payout ratio (3)

�

(1) See pages 31 through 32 for definitions.

(2) Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions.

(3) AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share.

EPR Properties

Capital Structure at September 30, 2014

(Unaudited, dollars in thousands)

�

Consolidated Debt

�

Principal Payments Due on Debt:

�

Mortgages

�

Unsecured Credit Facility (2)

�

Unsecured Senior Notes

�

Year

�

Amortization

�

Maturities

�

Bonds/Term Loan/Other (1)

�

Total

�

Weighted Avg Interest Rate

2014

�

3,687

�

3,687

�

5.57%

2015

�

14,584

�

95,497

�

110,081

�

5.67%

2016

�

11,754

�

96,144

�

1,850

�

109,748

�

5.92%

2017

�

7,118

�

158,201

�

34,000

�

199,319

�

4.32%

2018

�

919

�

12,462

�

285,000

�

298,381

�

2.57%

2019

�

2020

�

250,000

�

250,000

�

7.75%

2021

�

2022

�

350,000

�

350,000

�

5.75%

2023

�

275,000

�

275,000

�

5.25%

2024

�

Thereafter

�

24,995

�

24,995

�

0.10%

�

38,062

�

362,304

�

311,845

�

34,000

�

875,000

�

1,621,211

�

5.13%

�

Balance

�

Weighted Avg Interest Rate

�

Weighted Avg Maturity

�

Fixed rate secured debt

�

400,366

�

5.45

�

2.07

�

Fixed rate unsecured debt (1)

�

1,116,850

�

5.37

�

6.75

�

Variable rate secured debt

�

24,995

�

0.10

�

23.00

�

Variable rate unsecured debt

�

79,000

�

1.67

�

1.36

�

��Total

�

1,621,211

�

5.13

�

5.68

�

(1) Includes $240 million of term loan that has been fixed through interest rate swaps through July 5, 2017.

�

(2) Unsecured Credit Facility Summary:

�

Balance

�

Rate

�

Commitment

�

at 9/30/2014

�

Maturity

�

at 9/30/2014

�

535,000

�

34,000

�

July 23, 2017

�

1.55%

�

Note: This facility has a one year extension available at the Company's option and includes an accordion feature in which the facility can be increased to up to $600 million, in each case, subject to certain terms and conditions.

�



EPR Properties
Capital Structure at September 30, 2014 and December 31, 2013
(Unaudited, dollars in thousands)
�	�	�		�	�
Consolidated Debt (continued)
�	�	�		�	�
Summary of Debt:	�	�		�	�
�	�	September�30, 2014		�	December�31, 2013
�	�	�		�	�
Mortgage note payable, 5.56%, due June 5, 2015	�	$	30,695	�	$	31,235
Mortgage note payable, 5.39%, due November 1, 2015	�	5,040		�	5,274
Mortgage notes payable, 5.77%, due November 6, 2015	�	63,413		�	65,070
Mortgage notes payable, 5.84%, due March 6, 2016	�	35,825		�	36,724
Note payable, 2.50%, due April 21, 2016	�	1,850		�
Mortgage notes payable, 6.37%, due June 30, 2016	�	25,813		�	26,406
Mortgage notes payable, 6.10%, due October 1, 2016	�	23,185		�	23,719
Mortgage notes payable, 6.02%, due October 6, 2016	�	17,460		�	17,866
Mortgage note payable, 6.06%, due March 1, 2017	�	9,768		�	9,986
Mortgage note payable, 6.07%, due April 6, 2017	�	10,062		�	10,284
Mortgage notes payable, 5.73%-5.95%, due May 1, 2017	�	32,918		�	33,660
Mortgage note payable, 4.00%, due July 6, 2017	�	98,133		�
Mortgage note payable, 5.29%, due July 8, 2017	�	3,641		�	3,746
Unsecured revolving variable rate credit facility, LIBOR + 1.40%, due July 23, 2017	�	34,000		�
Mortgage notes payable, 5.86% due August 1, 2017	�	23,862		�	24,387
Mortgage note payable, 6.19%, due February 1, 2018	�	14,013		�	14,486
Mortgage note payable, 7.37%, due July 15, 2018	�	6,538		�	7,498
Unsecured term loan payable, LIBOR + 1.60%, fixed through interest rate swaps at 2.51% through January 5, 2016 and 2.38% from January 5, 2016 to July 5, 2017, due July 23, 2018	�	285,000		�	265,000
Senior unsecured notes payable, 7.75%, due July 15, 2020	�	250,000		�	250,000
Senior unsecured notes payable, 5.75%, due August 15, 2022	�	350,000		�	350,000
Senior unsecured notes payable, 5.25%, due July 15, 2023	�	275,000		�	275,000
Bonds payable, variable rate, due October 1, 2037	�	24,995		�	24,995
Total	�	$	1,621,211	�	$	1,475,336
�	�	�		�	�
�



EPR Properties
Capital Structure
Senior Notes
�	�	�	�	�	�	�	�
�	�	�	�	�	�	�	�
Senior Debt Ratings as of September 30, 2014
�	�	�	�	�	�	�	�
Moody's	�	Baa2 (stable)	�	�	�	�	�
Fitch	�	BBB- (stable)	�	�	�	�	�
Standard and Poor's	�	BBB- (stable)	�	�	�	�	�
�	�	�	�	�	�	�	�
							�
Summary of Covenants
�	�	�	�	�	�	�	�
The Company's outstanding senior unsecured notes have fixed interest rates of 5.25%, 5.75% and 7.75%. Interest on the senior unsecured notes is paid semiannually. The senior unsecured notes contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the Company's debt to adjusted total assets ratio to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause the Companys secured debt to adjusted total assets ratio to exceed 40%; (iii) a limitation on incurrence of any debt which would cause the Companys debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of the Companys outstanding unsecured debt.							�
�	�	�	�	�	�	�	�
The following is a summary of the key financial covenants for the Company's 5.25%, 5.75% and 7.75% senior unsecured notes, as defined and calculated per the terms of the notes. These calculations, which are not based on U.S. generally accepted accounting principles, or GAAP, measurements, are presented to investors to show the Company's ability to incur additional debt under the terms of the senior unsecured notes only and are not measures of the Company's liquidity or performance.��The actual amounts as of September 30, 2014 and June 30, 2014 are:							�
�	�	�	�	Actual	�	Actual	�
Note Covenants	�	Required	�	3rd Quarter 2014 (1)	�	2nd Quarter 2014	�
Limitation on incurrence of total debt (Total Debt/Total Assets)	�	d 60%	�	40%	�	43%	�
Limitation on incurrence of secured debt (Secured Debt/Total Assets)	�	d 40%	�	10%	�	11%	�
Debt service coverage (Consolidated Income Available for Debt Service/Annual Debt Service)	�	e 1.5 x	�	3.8x	�	3.7x	�
Maintenance of total unencumbered assets (Unencumbered Assets/Unsecured Debt)	�	e 150% of unsecured debt	�	275%	�	254%	�
�	�	�	�	�	�	�	�
(1) See page 14 for detailed calculations.	�	�	�	�	�	�	�
�	�	�	�	�	�	�	�

EPR Properties

Capital Structure

Senior Notes

(Unaudited, dollars in thousands)

�

Covenant Calculations

�

Total Assets:

�

September�30, 2014

�

Total Debt:

�

September�30, 2014

Total Assets

�

3,679,231

�

Secured debt obligations

�

425,361

Add: accumulated depreciation

�

453,284

�

Unsecured debt obligations:

�

Less: intangible assets

�

(8,915

)

�

Unsecured debt

�

1,195,850

Total Assets

�

4,123,600

�

Outstanding letters of credit

�

Guarantees

�

20,430

�

Derivatives at fair market value, net, if liability

�

Total Unencumbered Assets:

�

September�30, 2014

�

Total unsecured debt obligations:

�

1,216,280

Unencumbered real estate assets, gross

�

2,940,629

�

Total Debt

�

1,641,641

Cash and cash equivalents

�

8,386

�

Land held for development

�

204,641

�

Property under development

�

189,051

�

Total Unencumbered Assets

�

3,342,707

�

Consolidated Income Available for Debt Service:

�

3rd Quarter 2014

�

2nd Quarter 2014

�

1st Quarter 2014

�

4th Quarter 2013

�

Trailing Twelve Months

Adjusted EBITDA

�

85,823

�

78,950

�

75,848

�

76,643

�

317,264

Add: Adjusted EBITDA of discontinued operations

�

)

�

)

�

135

�

143

Less: straight-line rental revenue

�

(2,932

)

�

(1,107

)

�

(1,111

)

�

(1,575

)

�

(6,725

)

Consolidated Income Available for Debt Service

�

82,888

�

77,839

�

74,752

�

75,203

�

310,682

�

Annual Debt Service:

�

Interest expense, gross

�

22,898

�

22,174

�

21,190

�

21,416

�

87,678

Less: deferred financing fees amortization

�

(1,082

)

�

(1,061

)

�

(1,015

)

�

(1,044

)

�

(4,202

)

Annual Debt Service

�

21,816

�

21,113

�

20,175

�

20,372

�

83,476

�

Debt Service Coverage

�

3.8

�

3.7

�

3.7

�

3.7

�

3.7

�

EPR Properties

Capital Structure at September 30, 2014

(Unaudited, dollars in thousands except share information)

�

Equity

�

Security

�

Shares Issued and Outstanding

�

Price per share at September 30, 2014

�

Liquidation Preference

�

Dividend Rate

�

Convertible

�

Common shares

�

57,149,499

�

50.68

�

��N/A

�

(1)

�

N/A

Series C

�

5,400,000

�

22.03

�

135,000

�

5.750%

�

Series E

�

3,450,000

�

30.50

�

86,250

�

9.000%

�

Series F

�

5,000,000

�

24.97

�

125,000

�

6.625%

�

Calculation of Total Market Capitalization:

�

Common shares outstanding at September 30, 2014 multiplied by closing price at September 30, 2014

�

2,896,337

�

Aggregate liquidation value of Series C preferred shares (2)

�

135,000

�

Aggregate liquidation value of Series E preferred shares (2)

�

86,250

�

Aggregate liquidation value of Series F preferred shares (2)

�

125,000

�

Total debt at September 30, 2014

�

1,621,211

�

Total consolidated market capitalization

�

4,863,798

�

(1) Total monthly dividends declared in the third quarter of 2014 were $0.855 per share.

(2) Excludes accrued unpaid dividends at September 30, 2014



EPR Properties
Summary of Ratios
(Unaudited)
�	�	�	�	�	�	�	�	�	�	�	�
�	3rd Quarter 2014	�	2nd Quarter 2014	�	1st Quarter 2014	�	4th Quarter 2013	�	3rd Quarter 2013	�	2nd Quarter 2013
�		�	�	�	�	�	�	�	�	�	�
Debt to total assets (book value)	44%	�	47%	�	44%	�	45%	�	49%	�	49%
�		�	�	�	�	�	�	�	�	�	�
Debt to total market capitalization	33%	�	33%	�	32%	�	34%	�	37%	�	35%
�		�	�	�	�	�	�	�	�	�	�
Debt to gross assets	39%	�	42%	�	39%	�	40%	�	44%	�	43%
�		�	�	�	�	�	�	�	�	�	�
Debt/Adjusted EBITDA - continuing operations (1)	4.72	�	5.26	�	4.89	�	4.81	�	5.20	�	5.21
�		�	�	�	�	�	�	�	�	�	�
Debt/Adjusted EBITDA - continuing and discontinued operations (1)	4.72	�	5.26	�	4.89	�	4.80	�	5.20	�	5.13
�		�	�	�	�	�	�	�	�	�	�
Secured debt to secured assets	68%	�	69%	�	66%	�	67%	�	63%	�	65%
�		�	�	�	�	�	�	�	�	�	�
Unencumbered real estate assets to total real estate assets (2)	82%	�	82%	�	84%	�	84%	�	83%	�	83%
�		�	�	�	�	�	�	�	�	�	�
Interest coverage ratio (3)	3.7	�	3.6	�	3.6	�	3.6	�	3.5	�	3.6
�		�	�	�	�	�	�	�	�	�	�
Fixed charge coverage ratio (3)	2.9	�	2.8	�	2.8	�	2.8	�	2.7	�	2.8
�		�	�	�	�	�	�	�	�	�	�
Debt service coverage ratio (3)	3.2	�	3.1	�	3.2	�	3.2	�	3.1	�	3.0
�		�	�	�	�	�	�	�	�	�	�
FFO payout ratio (4)	86%	�	91%	�	86%	�	64%	�	79%	�	93%
�		�	�	�	�	�	�	�	�	�	�
FFO as adjusted payout ratio (5)	79%	�	88%	�	91%	�	81%	�	78%	�	81%
�		�	�	�	�	�	�	�	�	�	�
AFFO payout ratio (6)	82%	�	91%	�	91%	�	85%	�	78%	�	80%
�	�	�	�	�	�	�	�	�	�	�	�
(1) Adjusted EBITDA is for the quarter annualized. See pages 31 through 32 for definitions.
(2) Total real estate assets includes rental properties, gross, direct financing lease, net and mortgage notes receivable; excludes property under development and land held for development.
(3) See page 17 for detailed calculation.
(4) FFO payout ratio is calculated by dividing dividends declared per common share by FFO per diluted common share.
(5) FFO as adjusted payout ratio is calculated by dividing dividends declared per common share by FFO as adjusted per diluted common share.
(6) AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share.

EPR Properties

Calculation of Interest, Fixed Charge and Debt Service Coverage Ratios

(Unaudited, dollars in thousands)

�

3rd Quarter 2014

�

2nd Quarter 2014

�

1st Quarter 2014

�

4th Quarter 2013

�

3rd Quarter 2013

�

2nd Quarter 2013

Interest Coverage Ratio (1):

�

Net income

42,705

�

40,760

�

43,533

�

63,042

�

43,502

�

32,476

Provision for loan losses

3,777

�

Transaction costs (benefit)

369

�

756

�

(3,180

)

�

1,096

�

317

�

224

Interest expense, gross

22,898

�

22,174

�

21,190

�

21,416

�

21,460

�

20,632

Depreciation and amortization

17,421

�

16,002

�

15,327

�

14,807

�

13,346

�

13,776

Share-based compensation expense

�

to management and trustees

2,313

�

2,343

�

2,328

�

1,690

�

1,659

�

1,618

Costs associated with loan refinancing

�

or payoff

�

223

�

5,943

Interest cost capitalized

(2,085

)

�

(1,610

)

�

(1,287

)

�

(779

)

�

(1,014

)

�

(626

)

Straight-line rental revenue

(2,932

)

�

(1,107

)

�

(1,111

)

�

(1,575

)

�

(1,350

)

�

(707

)

Gain on sale of real estate

�

(330

)

�

(3,540

)

�

(3,168

)

�

Gain on sale of investment in a direct financing lease

�

(220

)

�

Gain on previously held equity interest

�

(4,853

)

�

Deferred income tax expense (benefit)

363

�

842

�

407

�

(14,787

)

�

Interest coverage amount

84,829

�

79,940

�

76,877

�

76,517

�

74,975

�

73,336

�

Interest expense, net

20,801

�

20,555

�

19,899

�

20,632

�

20,435

�

19,972

Interest income

�

Interest cost capitalized

2,085

�

1,610

�

1,287

�

779

�

1,014

�

626

Interest expense, gross

22,898

�

22,174

�

21,190

�

21,416

�

21,460

�

20,632

�

Interest coverage ratio

3.7

�

3.6

�

3.6

�

3.6

�

3.5

�

3.6

�

Fixed Charge Coverage Ratio (1):

�

Interest coverage amount

84,829

�

79,940

�

76,877

�

76,517

�

74,975

73,336

�

Interest expense, gross

22,898

�

22,174

�

21,190

�

21,416

�

21,460

�

20,632

Preferred share dividends

5,952

�

5,952

�

5,952

�

5,951

�

5,951

�

5,952

Fixed charges

28,850

�

28,126

�

27,142

�

27,367

�

27,411

�

26,584

�

Fixed charge coverage ratio

2.9

�

2.8

�

2.8

�

2.8

�

2.7

�

2.8

�

Debt Service Coverage Ratio (1):

�

Interest coverage amount

84,829

�

79,940

�

76,877

�

76,517

�

74,975

73,336

�

Interest expense, gross

22,898

�

22,174

�

21,190

�

21,416

�

21,460

�

20,632

Recurring principal payments

3,590

�

3,249

�

2,728

�

2,637

�

2,472

�

4,141

Debt service

26,488

�

25,423

�

23,918

�

24,053

�

23,932

�

24,773

�

Debt service coverage ratio

3.2

�

3.1

�

3.2

�

3.2

�

3.1

�

3.0

�

(1) See pages 31 through 32 for definitions. Amounts above include the impact of discontinued operations, which is separately classified in the income statement.



EPR Properties
Reconciliation of Interest Coverage Amount to Net Cash Provided by Operating Activities
(Unaudited, dollars in thousands)
�	�	�			�	�			�	�			�	�			�	�			�	�
The interest coverage amount per the table on the previous page is a non-GAAP financial measure and should not be considered an alternative to any GAAP liquidity measures. It is most directly comparable to the GAAP liquidity measure, Net cash provided by operating activities, and is not directly comparable to the GAAP liquidity measures, Net cash used in investing activities and Net cash provided by financing activities. The interest coverage amount can be reconciled to Net cash provided by operating activities per the consolidated statements of cash flows as follows:
�	�	3rd Quarter 2014			�	2nd Quarter 2014			�	1st Quarter 2014			�	4th Quarter 2013			�	3rd Quarter 2013			�	2nd Quarter 2013
�	�				�	�			�	�			�	�			�	�			�	�
Net cash provided by operating activities	�	$	53,854		�	$	72,824		�	$	41,530		�	$	75,745		�	$	45,649		�	$	72,554
�	�				�	�			�	�			�	�			�	�			�	�
Equity in income from joint ventures	�	300			�	267			�	311			�	230			�	351			�	466
Distributions from joint ventures	�	(810		)	�				�				�	(355		)	�	(216		)	�	(191		)
Amortization of deferred financing costs	�	(1,082		)	�	(1,061		)	�	(1,015		)	�	(1,044		)	�	(1,010		)	�	(988		)
Amortization of above market leases, net	�	(48		)	�	(48		)	�	(48		)	�	(48		)	�				�
Increase (decrease) in mortgage notes and related accrued interest receivable	�	2,087			�	129			�	107			�	(783		)	�	2,868			�	(1,664		)
Increase (decrease) in restricted cash	�	(1,181		)	�	(754		)	�	3,425			�	135			�	(565		)	�	(10,234		)
Increase (decrease) in accounts receivable, net	�	2,052			�	883			�	(543		)	�	2,540			�	1,539			�	1,480
Increase in direct financing lease receivable	�	529			�	988			�	694			�	1,222			�	1,186			�	1,240
Increase (decrease) in other assets	�	(979		)	�	1,353			�	2,039			�	(1,172		)	�	(2,842		)	�	1,810
Decrease (increase) in accounts payable and accrued liabilities	�	8,101			�	(14,688		)	�	18,151			�	(17,159		)	�	9,066			�	(8,493		)
Decrease (increase) in unearned rents and interest	�	3,393			�	(1,008		)	�	(3,793		)	�	(2,952		)	�	(464		)	�	(2,167		)
Straight-line rental revenue	�	(2,932		)	�	(1,107		)	�	(1,111		)	�	(1,575		)	�	(1,350		)	�	(707		)
Interest expense, gross	�	22,898			�	22,174			�	21,190			�	21,416			�	21,460			�	20,632
Interest cost capitalized	�	(2,085		)	�	(1,610		)	�	(1,287		)	�	(779		)	�	(1,014		)	�	(626		)
Transaction costs (benefit)	�	369			�	756			�	(3,180		)	�	1,096			�	317			�	224
Deferred income tax expense	�	363			�	842			�	407			�				�				�
�	�	�			�	�			�	�			�	�			�	�			�	�
Interest coverage amount (1)	�	$	84,829		�	$	79,940		�	$	76,877		�	$	76,517		�	$	74,975		�	$	73,336
�	�	�			�	�			�	�			�	�			�	�			�	�
(1) See pages 31 through 32 for definitions. Amounts above include the impact of discontinued operations, which is separately classified in the income statement.



EPR Properties
Capital Spending and Disposition Summaries
(Unaudited, dollars in thousands)
�	�	�	�	�	�	�		�
2014 Capital Spending:	�	�	�	�	�	�		�
Description	�	Location	�	Operating Segment	�	Capital Spending Three Months Ended September 30, 2014		Capital Spending Nine Months Ended September 30, 2014
Development of megaplex theatres	�	various	�	Entertainment	�	$	6,430	$	19,371
Acquisition of megaplex theatres	�	various	�	Entertainment	�			126,960
Development of other entertainment and retail projects	�	various	�	Entertainment	�	3,412		3,997
Investment in note receivable secured by partnership interest in theatre operations	�	China	�	Entertainment	�	430		1,916
Investment in note receivable	�	Kenner, LA	�	Entertainment	�			1,750
Investment in mortgage notes receivable for public charter schools	�	various	�	Education	�	7,630		17,100
Acquisition and development of early childhood education centers	�	various	�	Education	�	14,612		38,232
Development of public charter school properties	�	various	�	Education	�	33,175		70,379
Acquisition and development of private schools	�	various	�	Education	�	19,545		51,198
Improvements at ski resorts	�	various	�	Recreation	�	710		1,549
Development of TopGolf golf entertainment facilities	�	various	�	Recreation	�	36,732		95,191
Acquisition and development of Camelback Mountain Resort	�	Tannersville, PA	�	Recreation	�	23,452		36,114
Additions to mortgage note receivable for development of Schlitterbahn waterparks	�	various	�	Recreation	�	4,548		4,548
Investment in casino and resort project	�	Sullivan County, NY	�	Other	�	1,198		3,298
Total investment spending	�	�	�	�	�	$	151,874	$	471,603
Other capital acquisitions, net	�	various	�	�	�	1,415		5,060
Total capital spending	�	�	�	�	�	$	153,289	$	476,663
�	�	�	�	�	�	�		�
2014 Dispositions:	�	�	�	�	�	�		�
Description	�	Location	�	Date of Disposition	�	Net Sales Proceeds		�
Sale of land adjacent to a public charter school investment	�	Queen Creek, AZ	�	January and August 2014	�	$	1,269	�
Sale of four public charter school properties	�	various	�	April 2014	�	46,092		�
Sale of land held for development	�	Savannah, GA	�	May 2014	�	2,378		�

EPR Properties

Property Under Development - Investment Spending Estimates at September 30, 2014 (1)

(Unaudited, dollars in thousands)

�

September�30, 2014

�

Owned Build-to-Suit Spending Estimates

�

Property Under Development

�

# of Projects

�

4th Quarter 2014

1st Quarter 2015

2nd Quarter 2015

3rd Quarter 2015

�

Remainder 2015-2016

�

Total Expected Cost (2)

% Leased

Entertainment

7,911

�

7,425

6,725

5,725

5,125

�

400

�

33,311

100%

Education

102,889

�

28,990

27,497

26,671

25,377

�

21,773

�

233,197

100%

Recreation

61,064

�

49,520

39,014

11,941

�

161,539

100%

Total Build-to-Suit

171,864

�

85,935

73,236

44,337

30,502

�

22,173

�

428,047

�

Non Build-to-Suit Development

17,187

�

Total Property Under Development

189,051

�

September�30, 2014

�

Owned Build-to-Suit In-Service Estimates

�

# of Projects

�

4th Quarter 2014

1st Quarter 2015

2nd Quarter 2015

3rd Quarter 2015

�

Remainder 2015-2016

�

Total In-Service (2)

�

Entertainment

�

7,356

14,978

�

10,977

�

33,311

�

Education

�

93,606

4,410

37,052

�

98,129

�

233,197

�

Recreation

�

18,264

53,117

90,158

�

161,539

�

Total Build-to-Suit

�

111,870

57,527

97,514

52,030

�

109,106

�

428,047

�

September�30, 2014

�

Mortgage Build-to-Suit Spending Estimates

�

Mortgage Notes Receivable

�

# of Projects

�

4th Quarter 2014

1st Quarter 2015

2nd Quarter 2015

3rd Quarter 2015

�

Remainder 2015-2016

�

Total Expected Cost (2)

�

Entertainment

�

Education

31,418

�

2,570

3,840

425

�

38,253

�

Recreation (3)

37,871

�

30,000

13,077

�

110,948

�

Total Build-to-Suit Mortgage Notes

69,289

�

32,570

33,840

13,502

�

149,201

�

Non Build-to-Suit Mortgage Notes

476,976

�

Total Mortgage Notes Receivable

546,265

�

(1) This schedule includes only those properties for which the Company has closed on a contract (lease or mortgage) and commenced construction as of September 30, 2014.

(2) "Total Expected Cost" and "Total In-Service" each reflect the total capital costs expected to be funded by the Company through completion (including capitalized interest or accrued interest as applicable).

(3) Certain of these mortgage agreements contain provisions that allow for a conversion to a lease structure.

Note: This schedule includes future estimates for which the Company can give no assurance as to timing or amounts. Development projects have risks. See Item 1A - "Risk Factors" in the Company's most recent Annual Report on Form 10-K and, to the extent applicable, the Company's Quarterly Reports on Form 10-Q.

EPR Properties

Financial Information by Asset Type

For the Three Months Ended September 30, 2014

(Unaudited, dollars in thousands)

�

Entertainment

Education

Recreation

Other

Subtotal

Corporate/Unallocated

Consolidated

Rental revenue

�

60,616

7,490

6,069

235

74,410

Tenant reimbursements

�

4,486

Other income

�

191

196

149

345

Mortgage and other financing income

�

1,789

7,561

10,050

19,497

Total revenue

�

66,896

15,051

16,119

523

98,589

149

98,738

�

Property operating expense

�

5,759

189

5,948

Other expense

�

248

Total investment expenses

�

5,759

437

6,196

General and administrative expense

�

6,719

Transaction costs

�

369

Provision for loan loss

�

3,777

EBITDA - continuing operations

�

61,137

15,051

16,119

92,393

(10,716

)

81,677

�

100

�

Add: transaction costs

�

369

Add: provision for loan loss

�

3,777

Adjusted EBITDA - continuing operations

�

85,823

�

Reconciliation to Consolidated Statements of Income:

�

Interest expense, net

�

(20,801

)

(20,801

)

Transaction costs

�

(369

)

(369

)

Provision for loan loss

�

(3,777

)

(3,777

)

Depreciation and amortization

�

(17,421

)

(17,421

)

Equity in income from joint ventures

�

300

Income tax expense

�

(1,047

)

(1,047

)

Discontinued operations:

�

Loss from discontinued operations

�

)

Net income attributable to EPR Properties

�

42,705

Preferred dividend requirements

�

(5,952

)

(5,952

)

Net income available to common shareholders of EPR Properties

�

36,753

EPR Properties

Financial Information by Asset Type

For the Nine Months Ended September 30, 2014

(Unaudited, dollars in thousands)

�

Entertainment

Education

Recreation

Other

Subtotal

Corporate/Unallocated

Consolidated

Rental revenue

�

176,940

18,486

14,528

805

210,759

Tenant reimbursements

�

13,355

Other income (loss)

�

)

284

277

429

706

Mortgage and other financing income

�

5,279

23,779

26,212

291

55,561

Total revenue

�

195,567

42,265

40,740

1,380

279,952

429

280,381

�

Property operating expense

�

17,413

523

17,936

Other expense

�

566

Total investment expenses

�

17,413

1,089

18,502

General and administrative expense

�

21,260

Transaction costs

�

1,321

Provision for loan loss

�

3,777

EBITDA - continuing operations

�

178,154

42,265

40,740

291

261,450

(25,929

)

235,521

�

100

�

Add: transaction costs

�

1,321

Add: provision for loan loss

�

3,777

Adjusted EBITDA - continuing operations

�

240,619

�

Reconciliation to Consolidated Statements of Income:

�

Interest expense, net

�

(61,254

)

(61,254

)

Transaction costs

�

(1,321

)

(1,321

)

Provision for loan loss

�

(3,777

)

(3,777

)

Depreciation and amortization

�

(48,750

)

(48,750

)

Equity in income from joint ventures

�

878

Gain on sale of land

�

330

Gain on sale of investment in a direct financing lease

�

220

Income tax expense

�

(3,332

)

(3,332

)

Discontinued operations:

�

Income from discontinued operations

�

Transaction (costs) benefit

�

3,376

Net income attributable to EPR Properties

�

126,997

Preferred dividend requirements

�

(17,856

)

(17,856

)

Net income available to common shareholders of EPR Properties

�

109,141



EPR Properties
Financial Information by Asset Type
For the Three Months Ended September 30, 2013
(Unaudited, dollars in thousands)
�	�	�			�			�			�			�			�			�
�	�	Entertainment			Education			Recreation			Other			Subtotal			Corporate/Unallocated			Consolidated
Rental revenue	�	$	54,800		$	4,422		$	2,682		$	305		$	62,209		$			$	62,209
Tenant reimbursements	�	4,552												4,552						4,552
Other income	�	29									1,373			1,402			39			1,441
Mortgage and other financing income	�	2,258			8,507			8,807			67			19,639						19,639
Total revenue	�	61,639			12,929			11,489			1,745			87,802			39			87,841
�	�	�			�			�			�			�			�			�
Property operating expense	�	6,365									214			6,579						6,579
Other expense	�										204			204						204
Total investment expenses	�	6,365									418			6,783						6,783
General and administrative expense	�																6,764			6,764
Transaction costs	�																317			317
EBITDA - continuing operations	�	$	55,274		$	12,929		$	11,489		$	1,327		$	81,019		$	(7,042	)	$	73,977
�	�	68		%	16		%	14		%	2		%	100		%	�			�
�	�	�			�			�			�			�			�			�
Add: transaction costs	�	�			�			�			�			�			317			317
Adjusted EBITDA - continuing operations					�			�			�			�			�			74,294
�	�	�			�			�			�			�			�			�
Reconciliation to Consolidated Statements of Income:								�			�			�			�			�
Costs associated with loan refinancing or payoff					�			�			�			�			(223		)	(223		)
Interest expense, net	�	�			�			�			�			�			(20,435		)	(20,435		)
Transaction costs	�	�			�			�			�			�			(317		)	(317		)
Depreciation and amortization	�	�			�			�			�			�			(13,141		)	(13,141		)
Equity in income from joint ventures					�			�			�			�			351			351
Discontinued operations:	�	�			�			�			�			�			�			�
Loss from discontinued operations					�			�			�			�			(195		)	(195		)
Gain on sale of real estate					�			�			�			�			3,168			3,168
Net income attributable to EPR Properties					�			�			�			�			�			43,502
Preferred dividend requirements	�	�			�			�			�			�			(5,951		)	(5,951		)
Net income available to common shareholders of EPR Properties											�			�			�			$	37,551

EPR Properties

Financial Information by Asset Type

For the Nine Months Ended September 30, 2013

(Unaudited, dollars in thousands)

�

Entertainment

Education

Recreation

Other

Subtotal

Corporate/Unallocated

Consolidated

Rental revenue

�

164,305

10,732

6,373

1,348

182,758

Tenant reimbursements

�

13,748

Other income

�

1,451

1,528

1,538

Mortgage and other financing income

�

6,685

24,609

24,151

225

55,670

Total revenue

�

184,815

35,341

30,524

3,024

253,704

253,714

�

Property operating expense

�

19,341

263

19,604

Other expense

�

508

Total investment expenses

�

19,341

771

20,112

General and administrative expense

�

19,468

Transaction costs

�

859

EBITDA - continuing operations

�

165,474

35,341

30,524

2,253

233,592

(20,317

)

213,275

�

100

�

Add: transaction costs

�

859

Adjusted EBITDA - continuing operations

�

214,134

�

Reconciliation to Consolidated Statements of Income:

�

Costs associated with loan refinancing or payoff

�

(6,166

)

(6,166

)

Gain on early extinguishment of debt

�

4,539

Interest expense, net

�

(60,424

)

(60,424

)

Transaction costs

�

(859

)

(859

)

Depreciation and amortization

�

(39,140

)

(39,140

)

Equity in income from joint ventures

�

1,168

Discontinued operations:

�

Income from discontinued operations

�

198

Gain on sale of real estate

�

3,733

Net income attributable to EPR Properties

�

117,183

Preferred dividend requirements

�

(17,855

)

(17,855

)

Net income available to common shareholders of EPR Properties

�

99,328

EPR Properties

Financial Information by Segment - Discontinued Operations

(Unaudited, dollars in thousands)

�

For the Three Months Ended September 30, 2014

�

For the Nine Months Ended September 30, 2014

�

Entertainment (1)

Other (2)

Consolidated

�

Entertainment (1)

Other (2)

Consolidated

Rental revenue

�

Total revenue

�

Property operating expense

�

Other expense (benefit)

�

(18

)

(18

)

Total investment expenses

�

(18

)

Transaction costs (benefit)

�

(3,376

)

(3,376

)

EBITDA - discontinued operations

�

)

�

3,366

3,384

�

Add: transaction costs (benefit)

�

(3,376

)

Adjusted EBITDA - discontinued operations

�

)

�

Reconciliation to Consolidated Statements of Income:

�

Transaction costs (benefit)

�

3,376

Income (loss) from discontinued operations

�

)

�

3,384

�

For the Three Months Ended September 30, 2013

�

For the Nine Months Ended September 30, 2013

�

Entertainment (1)

Other (2)

Consolidated

�

Entertainment (1)

Other (2)

Consolidated

Rental revenue

�

163

�

109

1,514

1,623

Tenant reimbursements

�

554

Total revenue

�

163

�

663

1,514

2,177

�

Property operating expense (benefit)

�

(30

)

Other expense

�

241

Total investment expenses

�

153

�

211

279

EBITDA and Adjusted EBITDA- discontinued operations

�

(66

)

�

595

1,303

1,898

Reconciliation to Consolidated Statements of Income:

�

Interest income, net

�

Depreciation and amortization

�

(205

)

�

(1,728

)

Gain on sale of real estate, net

�

3,168

�

3,733

Income from discontinued operations

�

2,973

�

3,931

(1) For each of the three and nine months ended September 30, 2014 and 2013, consists of certain operations that primarily related to the settlement of escrow reserves and post closing adjustments associated with the sale of Toronto Dundas Square. Additionally, for the nine months ended September 30, 2014, transaction costs (benefit) consists of a reversal of a liability that was established with the March 4, 2010 acquisition of Toronto Dundas Square. This liability was reversed as the related payment is not expected to occur.

(2) For the nine months ended September 30, 2014, consists of a tax refund received on a vineyard and winery property sold in 2013. For the three and nine months ended September 30, 2013, consists of the operations of five vineyard and winery properties that were sold during 2013.



EPR Properties
Investment Information by Asset Type
As of September 30, 2014 and December 31, 2013
(Unaudited, dollars in thousands)
�	�	�			�			�			�			�
�	�	As of September 30, 2014
�	�	Entertainment			Education			Recreation			Other			Consolidated
Rental properties, net of accumulated depreciation		$	1,856,085		$	297,155		$	209,705		$	7,253		$	2,370,198
Add back accumulated depreciation on rental properties		431,431			8,998			10,018			2,837			453,284
Land held for development		4,457									200,184			204,641
Property under development		21,941			106,046			61,064						189,051
Mortgage notes and related accrued interest receivable, net		58,220			73,709			409,304			5,032			546,265
Investment in a direct financing lease, net					198,551									198,551
Investment in joint ventures		5,343												5,343
Intangible assets, gross (1)		21,014												21,014
Notes receivable and related accrued interest receivable, net (1)		3,792												3,792
�	Total investments (2)	$	2,402,283		$	684,459		$	690,091		$	215,306		$	3,992,139
�	% of total investments	60		%	17		%	17		%	6		%	100		%
�	�	�			�			�			�			�
�	�	As of December 31, 2013
�	�	Entertainment			Education			Recreation			Other			Consolidated
Rental properties, net of accumulated depreciation		$	1,755,433		$	188,387		$	152,694		$	7,637		$	2,104,151
Add back accumulated depreciation on rental properties		396,705			4,985			5,500			2,453			409,643
Land held for development		4,457									196,885			201,342
Property under development		23,686			40,821			24,966						89,473
Mortgage notes and related accrued interest receivable, net		58,220			56,505			366,580			5,032			486,337
Investment in a direct financing lease, net					242,212									242,212
Investment in joint ventures		5,275												5,275
Intangible assets, gross (1)		18,444												18,444
Notes receivable and related accrued interest receivable, net (1)					4,992									4,992
�	Total investments (2)	$	2,262,220		$	537,902		$	549,740		$	212,007		$	3,561,869
�	% of total investments	64		%	15		%	15		%	6		%	100		%
�
(1) Included in other assets in the consolidated balance sheets as of September 30, 2014 and December 31, 2013 in the Company's Quarterly Report on Form 10-Q. Reconciliation is as follows:
�	�	�			�			�			�			�
�	�	9/30/2014			12/31/2013			�			�			�
Intangible assets, gross		$	21,014		$	18,444		�			�			�
Less: accumulated amortization on intangible assets		(12,099		)	(11,633		)	�			�			�
Notes receivable and related accrued interest receivable, net		3,792			4,992			�			�			�
Prepaid expenses and other current assets		51,815			48,129			�			�			�
Total other assets		$	64,522		$	59,932		�			�			�
�
(2) See pages 31 and 32 for definitions.

EPR Properties

Lease Expirations

As of September 30, 2014

(Unaudited, dollars in thousands)

�

Megaplex Theatres

�

Public Charter Schools and Early Education Centers

�

Year

�

Total Number of Properties

�

Rental Revenue for the Trailing Twelve Months Ended September 30, 2014 (1)

�

% of Total Revenue

�

Total Number of Properties

�

Financing Income/Rental Revenue for the Trailing Twelve Months Ended September 30, 2014

�

% of Total Revenue

�

2014

�

2015

�

9,716

�

2016

�

9,344

�

2017

�

7,373

�

1,071

�

2018

�

27,497

�

2019

�

16,577

�

2020

�

9,182

�

2021

�

7,541

�

2022

�

22,268

�

2023

�

10,571

�

2024

�

27,613

�

2025

�

11,097

�

2026

�

5,667

�

2027

�

(2)

8,530

�

2028

�

5,628

�

2029

�

(3)

14,125

�

2030

�

2031

�

7,552

�

(5)

7,502

�

2032

�

(4)

2,039

�

(6)

16,293

�

2033

�

4,423

�

(7)

16,032

�

Thereafter

�

874

�

6,179

�

133

�

207,617

�

47,077

�

Note: This schedule relates to consolidated megaplex theatres, public charter schools and early education centers only, which together represent approximately 69% of total revenue for the trailing twelve months ended September 30, 2014. This schedule excludes properties under construction.

�

(1) Consists of rental revenue and tenant reimbursements.

(2) Eleven of these theatre properties are leased under a master lease.

(3) All of these theatre properties are leased under a master lease.

(4) All of these threatre properties are leased under a master lease.

(5) Four of these public charter school properties are leased under a master lease to Imagine.

(6) Six of these public charter school properties are leased under a master lease to Imagine.

(7) Thirteen of these public charter school properties are leased under a master lease to Imagine.

EPR Properties

Top Ten Customers by Revenue from Continuing Operations

(Unaudited, dollars in thousands)

�

Total Revenue For The

�

Total Revenue For The

�

Three Months Ended

�

Percentage of

�

Nine Months Ended

�

Percentage of

�

Customers

Asset Type

September�30, 2014

�

Total Revenue

�

September�30, 2014

�

Total Revenue

�

American Multi-Cinema, Inc.

Entertainment

21,905

�

22%

�

65,460

�

23%

Regal Cinemas, Inc.

Entertainment

10,122

�

10%

�

26,076

�

Cinemark USA, Inc.

Entertainment

8,050

�

24,444

�

Imagine Schools, Inc.

Education

5,963

�

19,204

�

SVVI, LLC

Recreation

4,801

�

11,411

�

Peak Resorts, Inc.

Recreation

4,701

�

14,071

�

Carmike Cinemas, Inc.

Entertainment

4,549

�

13,239

�

Top Golf USA

Recreation

3,713

�

7,570

�

Southern Theatres, LLC

Entertainment

3,047

�

9,099

�

10.

Landmark Cinemas

Entertainment

1,924

�

5,744

�

Total

�

68,775

�

70%

�

196,318

�

70%



EPR Properties
Summary of Mortgage Notes Receivable
(Unaudited, dollars in thousands)
�	�	�		�	�
Summary of Mortgage Notes Receivable
�	�	�		�	�
�	�	September�30, 2014		�	December�31, 2013
Mortgage note, 9.00%, due March 16, 2015	�	$	1,140	�	$
Mortgage note, 10.00%, due April 1, 2016	�	42,907		�	42,907
Mortgage note and related accrued interest receivable, 5.50%, due November 1, 2016	�	2,511		�	2,511
Mortgage note and related accrued interest receivable, 10.00%, due November 1, 2017	�	2,521		�	2,521
Mortgage notes and related accrued interest receivable, 7.00% and 10.00%, due May 1, 2019	�	189,417		�	183,465
Mortgage note and related accrued interest receivable, 10.00%, due November 1, 2020	�	37,871		�	1,112
Mortgage note, 10.27%, due March 10, 2027	�	10,972		�	10,972
Mortgage notes, 10.93%, due April 3, 2027	�	63,500		�	63,500
Mortgage note, 9.98%, due October 30, 2027	�	47,029		�	47,029
Mortgage note and related accrued interest receivable, 10.65%, due June 28, 2032	�	36,032		�	36,032
Mortgage note and related accrued interest receivable, 9.50%, due September 1, 2032	�	19,760		�	19,659
Mortgage note and related accrued interest receivable, 10.25%, due October 31, 2032	�	22,188		�	22,188
Mortgage note, 10.20%, due December 19, 2032	�	4,550		�	4,509
Mortgage note and related accrued interest receivable, 9.00%, due December 31, 2032	�	5,629		�	5,717
Mortgage note and related accrued interest receivable, 9.50%, due January 31, 2033	�	11,249		�	6,872
Mortgage notes and related accrued interest receivable, 9.50%, due April 30, 2033	�	27,821		�	20,802
Mortgage note and related accrued interest receivable, 10.25%, due June 30, 2033	�	3,467		�	3,455
Mortgage note, 11.31%, due July 1, 2033	�	13,058		�	13,086
Mortgage note, 7.00% during construction, 8.50% upon completion, due June 30, 2034	�	4,643		�
Total mortgage notes and related accrued interest receivable	�	$	546,265	�	$	486,337
�	�	�		�	�
Payments Due on Mortgage Notes Receivable
�	�	�		�	�
�	�	As of September 30, 2014		�	�
Year:	�	�		�	�
2014	�	$	963	�	�
2015	�	2,507		�	�
2016	�	46,839		�	�
2017	�	1,755		�	�
2018	�	837		�	�
Thereafter	�	493,364		�	�
Total	�	$	546,265	�	�
�	�	�		�	�



EPR Properties
�Summary of Notes Receivable
(Unaudited, dollars in thousands)
�	�	�			�	�
Summary of Notes Receivable (1)
�	�	�			�	�
�	�	September�30, 2014			�	December�31, 2013
Note and related accrued interest receivable, 10.00%,	�	�			�	�
paid in full June 13, 2014	�	$			�	$	1,300
Note and related accrued interest receivable, 9.00%,	�	�			�	�
due October 31, 2014	�	1,777			�
Note and related accrued interest receivable, 9.23%,	�	�			�	�
due August 31, 2015 (2)	�	3,777			�	3,692
Note and related accrued interest receivable, 12.50%,	�	�			�	�
due March 1, 2024	�	2,016			�
Total notes and related accrued interest receivable	�	$	7,570		�	$	4,992
Less: Loan loss reserve	�	(3,777		)	�
Total notes and related accrued interest receivable, net	�	$	3,793		�	$	4,992
�	�	�			�	�
(1) Included in other assets in the consolidated balance sheets as of September 30, 2014 and December 31, 2013 in the Company's Quarterly Report on Form 10-Q.
�
(2) Note receivable is impaired as of September 30, 2014 and is shown below as past due. In accordance with the Company's accounting policy, interest income is being recognized on a cash basis.
�
Payments due on Notes Receivable
�	�	�			�	�
�	�	As of September 30, 2014			�	�
Year:	�	�			�	�
Past Due (100% Reserved)	�	$	3,777		�	�
2014	�	1,877			�	�
2015	�				�	�
2016	�				�	�
2017	�				�	�
2018	�				�	�
Thereafter	�	1,916			�	�
Total	�	$	7,570		�	�

EPR Properties

Definitions-Non-GAAP Financial Measures

EBITDA AND ADJUSTED EBITDA

EBITDA is a widely used financial measure in many industries, including the REIT industry, and is presented to assist investors and analysts in analyzing the performance of the Company. Management uses EBITDA in its analysis of the business and operations of the Company and believes it is useful to investors because it excludes various items included in net income that are not indicative of operating performance, such as gains (or losses) from sales of property and depreciation and amortization and is used in computing various financial ratios as a measure of operational performance. The Company computes EBITDA - continuing operations as the sum of net income plus costs (gain) associated with loan refinancing or payoff, net, interest expense (net), depreciation and amortization, less gain on sale or acquisition of real estate, gain on early extinguishment of debt, equity in income from joint ventures, gain on previously held equity interest, income tax expense or benefit and discontinued operations. EBITDA - discontinued operations is computed in the same manner but only as it relates to discontinued operations. Adjusted EBITDA - continuing operations is presented to also add back the effect of non-cash impairment charges, the provision for loan losses and transaction costs (benefit). Adjusted EBITDA - discontinued operations is computed in the same manner but only as it relates to discontinued operations.

The Companys method of calculating EBITDA and Adjusted EBITDA may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDA and Adjusted EBITDA do not represent cash generated from operations as defined by U.S. generally accepted accounting principles (GAAP) and are not indicative of cash available to fund all cash needs, including distributions. These measures should not be considered as an alternative to net income for the purpose of evaluating the Companys performance or to cash flows as a measure of liquidity.

FUNDS FROM OPERATIONS (FFO) AND FFO AS ADJUSTED

The National Association of Real Estate Investment Trusts (NAREIT) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP and management provides FFO herein because it believes this information is useful to investors in this regard. FFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share. Pursuant to the definition of FFO by the Board of Governors of NAREIT, we calculate FFO as net income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from sales or acquisitions of depreciable operating properties and impairment losses of depreciable real estate, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. We have calculated FFO for all periods presented in accordance with this definition. In addition, we present FFO as adjusted by adding to FFO costs (gains) associated with loan refinancing or payoff, net, transaction costs (benefit), provision for loan losses and preferred share redemption costs and by subtracting gain on early extinguishment of debt, gain (loss) on sale of land and deferred income tax benefit (expense). FFO and FFO as adjusted are a non-GAAP financial measures. FFO and FFO as adjusted do not represent cash flows from operations as defined by GAAP and are not indicative that cash flows are adequate to fund all cash needs and are not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO and FFO as adjusted the same way so comparisons with other REITs may not be meaningful.

ADJUSTED FUNDS FROM OPERATIONS (AFFO)

In addition to FFO, we present AFFO by adding to FFO provision for loan losses, transaction costs (benefit), non-real estate depreciation and amortization, deferred financing fees amortization, costs (gain) associated with loan refinancing or payoff, net, share-based compensation expense to management and trustees, amortization of above market leases, net and preferred share redemption costs; and subtracting maintenance capital expenditures (including second generation tenant improvements and leasing commissions), straight-lined rental revenue, the non-cash portion of mortgage and other financing income and gain on early extinguishment of debt, gain (loss) on sale of land and

deferred income tax benefit (expense). AFFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share and management provides AFFO herein because it believes this information is useful to investors in this regard. AFFO is a non-GAAP financial measure. AFFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate AFFO the same way so comparisons with other REITs may not be meaningful.

INTEREST COVERAGE RATIO

The interest coverage ratio is calculated as the interest coverage amount divided by interest expense, gross. We calculate the interest coverage amount by adding to net income impairment charges, provision for loan losses, transaction costs (benefit), interest expense, gross (including interest expense in discontinued operations), depreciation and amortization, share-based compensation expense to management and trustees and costs (gain) associated with loan refinancing or payoff, net; subtracting interest cost capitalized, straight-line rental revenue, gain on early extinguishment of debt, gain (loss) on sale or acquisition of real estate from continuing and discontinued operations, gain on previously held equity interest and deferred income tax benefit (expense). We calculated interest expense, gross, by adding to interest expense, net, interest income and interest cost capitalized. We consider the interest coverage ratio to be an appropriate supplemental measure of a companys ability to meet its interest expense obligations and management believes it is useful to investors in this regard. Our calculation of the interest coverage ratio may be different from the calculation used by other companies, and therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.

FIXED CHARGE COVERAGE RATIO

The fixed charge coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that preferred share dividends are also added to the denominator. We consider the fixed charge coverage ratio to be an appropriate supplemental measure of a companys ability to make its interest and preferred share dividend payments and management believes it is useful to investors in this regard. Our calculation of the fixed charge coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.

DEBT SERVICE COVERAGE RATIO

The debt service coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that recurring principal payments are also added to the denominator. We consider the debt service coverage ratio to be an appropriate supplemental measure of a companys ability to make its debt service payments and management believes it is useful to investors in this regard. Our calculation of the debt service coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.

TOTAL INVESTMENTS

Total investments is a non-GAAP financial measure defined as the sum of the carrying values of rental properties (before accumulated depreciation), rental properties held for sale (before accumulated depreciation), land held for development, property under development, mortgage notes receivable (including related accrued interest receivable), investment in a direct financing lease, net, investment in joint ventures, intangible assets, gross (included in other assets) and notes receivable and related accrued interest receivable, net (included in other assets). Total investments is a useful measure for management and investors as it illustrates across which asset categories the Company's funds have been invested.

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Form 8-K EPR PROPERTIES For: Oct 28

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