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TheStreet Open House

Entertainment Properties Trust Reports Third Quarter Results

Stocks in this article: EPR

Dividend Information

On September 14, 2012, the Company declared a regular quarterly cash dividend of $0.75 per common share, which was paid on October 15, 2012 to common shareholders of record on September 30, 2012. This dividend represents an annualized dividend of $3.00 per common share, an increase of 7% over the prior year. The Company also declared and paid second quarter cash dividends of $0.3594 per share on its 5.75% Series C cumulative convertible preferred shares, $0.4609 per share on its 7.375% Series D cumulative redeemable preferred shares and $0.5625 per share on its 9.00% Series E cumulative convertible preferred shares.

Guidance Update

The Company is increasing its guidance for FFO as adjusted per share to $3.64 to $3.69 from $3.57 to $3.67. In addition, the Company now expects 2012 investment spending to total $275 million to $300 million.

The Company is introducing its 2013 guidance for FFO per diluted share of $3.77 to $3.92. The Company is also introducing 2013 investment spending guidance of $275 million to $325 million, approximately one-third of which is expected to relate to carry-over spending on theatre and public charter school build-to-suit projects initiated in 2012.

Quarterly Supplemental

The Company's supplemental information package for the third quarter and nine months ended September 30, 2012 is available on the Company's website at www.eprkc.com.

       

ENTERTAINMENT PROPERTIES TRUST

Consolidated Statements of Income

(Unaudited, dollars in thousands except per share data)

 
Three Months Ended September 30, Nine Months Ended September 30,
2012     2011 2012     2011
Rental revenue $ 61,049 $ 56,849 $ 178,543   $ 168,255
Tenant reimbursements 4,608 4,419 13,794 13,596
Other income 203 165 336 320
Mortgage and other financing income 16,976   14,541   46,952   41,803  
Total revenue 82,836 75,974 239,625 223,974
Property operating expense 5,939 5,955 17,358 18,724
Other expense 526 597 1,442 1,754
General and administrative expense 5,486 4,555 17,774 15,127
Costs associated with loan refinancing or payoff 477 477 5,339
Interest expense, net 19,994 17,911 56,594 53,943
Transaction costs 184 145 373 1,494
Impairment charges 3,086 11,281 24,298
Depreciation and amortization 13,276   11,861   38,349   35,316  

Income before equity in income fromjoint ventures and discontinuedoperations

33,868 34,950 95,977 67,979
Equity in income from joint ventures 342   676   666   2,231  
Income from continuing operations $ 34,210 $ 35,626 $ 96,643 $ 70,210
Discontinued operations:
Income (loss) from discontinued operations (35 ) (79 ) (332 ) 538
Impairment charges (4,648 ) (11,758 )
Gain on sale or acquisition of real estate   16   720   18,309  
Net income 34,175 35,563 92,383 77,299
Add: Net income attributable to noncontrolling interests (24 ) (11 ) (61 ) (13 )

Net income attributable toEntertainment Properties Trust

34,151 35,552 92,322 77,286
Preferred dividend requirements (6,002 ) (7,034 ) (18,005 ) (22,138 )
Series B preferred share redemption costs   (2,769 )   (2,769 )

Net income available to commonshareholders of EntertainmentProperties Trust

$ 28,149   $ 25,749   $ 74,317   $ 52,379  
Per share data attributable to Entertainment Properties Trust common shareholders:
Basic earnings per share data:
Income from continuing operations $ 0.60 $ 0.55 $ 1.68 $ 0.97
Income (loss) from discontinued operations     (0.09 ) 0.15  
Net income available to common shareholders $ 0.60   $ 0.55   $ 1.59   $ 1.12  
Diluted earnings per share data:
Income from continuing operations $ 0.60 $ 0.55 $ 1.67 $ 0.97
Income (loss) from discontinued operations     (0.09 ) 0.15  
Net income available to common shareholders $ 0.60   $ 0.55   $ 1.58   $ 1.12  
Shares used for computation (in thousands):
Basic 46,840 46,680 46,781 46,611
Diluted 47,090 46,918 47,035 46,874
 
       

ENTERTAINMENT PROPERTIES TRUST

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,
2012     2011 2012     2011

Net income available to common shareholders ofEntertainment Properties Trust

$ 28,149 $ 25,749 $ 74,317 $ 52,379
Gain on sale or acquisition of real estate (16 ) (720 ) (18,309 )
Real estate depreciation and amortization 13,013 11,765 37,844 37,237
Allocated share of joint venture depreciation 146 113 432 334
Impairment charges 3,086     15,929     36,056  

FFO available to common shareholdersof Entertainment Properties Trust

$ 44,394   $ 37,611   $ 127,802     $ 107,697  

FFO per common share attributable toEntertainment Properties Trust:

Basic $ 0.95 $ 0.81 $ 2.73 $ 2.31
Diluted 0.94 0.80 2.72 2.30
Shares used for computation (in thousands):
Basic 46,840 46,680 46,781 46,611
Diluted 47,090 46,918 47,035 46,874
Other financial information:
Straight-lined rental revenue $ 2,042 $ 92 $ 3,705 $ 668
Dividends per common share $ 0.75 $ 0.70 $ 2.25 $ 2.10
 

(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 charges for loan losses, costs (gain) associated with loan refinancing or payoff, net, preferred share redemption costs and transaction costs, less gain on acquisitions. 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, 2012 because the effect is anti-dilutive.

   

ENTERTAINMENT PROPERTIES TRUST

Condensed Consolidated Balance Sheets

(Dollars in thousands)

 
September 30, 2012     December 31, 2011
Assets (unaudited)

Rental properties, net of accumulated depreciation of $369,854 and  $335,116 at September 30, 2012 and December 31, 2011, respectively

$ 1,892,190 $ 1,819,176
Rental properties held for sale, net 3,895 4,696
Land held for development 191,442 184,457
Property under development 30,486 22,761
Mortgage notes and related accrued interest receivable, net 411,755 325,097
Investment in a direct financing lease, net 232,855 233,619
Investment in joint ventures 11,399 25,053
Cash and cash equivalents 25,007 14,625
Restricted cash 26,138 19,312
Intangible assets, net 3,667 4,485
Deferred financing costs, net 20,674 18,527
Accounts receivable, net 35,704 35,005
Notes and related accrued interest receivable, net 4,947 5,015
Other assets 25,213   22,167
Total assets $ 2,915,372   $ 2,733,995
Liabilities and Equity
Accounts payable and accrued liabilities $ 54,086 $ 36,036
Dividends payable 41,133 38,711
Unearned rents and interest 14,181 6,850
Long-term debt 1,339,118   1,154,295
Total liabilities 1,448,518 1,235,892
Entertainment Properties Trust shareholders’ equity 1,466,524 1,470,049
Noncontrolling interests 330   28,054
Equity 1,466,854   1,498,103
Total liabilities and equity $ 2,915,372   $ 2,733,995
 

About Entertainment Properties Trust

Entertainment Properties Trust 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 $3.1 billion and our primary investment segments are Entertainment, Education and Recreation. 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 or from Brian Moriarty at 888-EPR-REIT.

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. 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,” “expects,” “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.



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