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EPR Properties Q4 FFO Beats Estimates, Revenues Up Y/Y

EPR PropertiesEPR reported fourth-quarter 20Array5 funds from operations ("FFO") per share of $Array.Array8, surpassing the Zacks Consensus Estimate by 2 cents. The fourth-quarter FFO per share also came ahead of the year-ago quarter tally of $Array.Array0.

Rental revenue was $90.6 million, up Array9.3% year over year. However, the figure missed the Zacks Consensus Estimate of $92 million.

For full-year 20Array5, the company reported FFO per share of $4.03, lower than the prior-year tally of $4.04. However, rental revenues for the year came in at $330.9 million, up Array5.4% year over year.

Quarter in Detail

EPR Properties' combined owned portfolio comprised Array8.3 million square feet and was 99% leased. Its portfolio of owned entertainment properties spanned ArrayArray.8 million square feet and was 98% leased, including fully leased megaplex theatres. The company's owned education properties portfolio consisted of 4.2 million square feet and was Array00% leased, while its portfolio of owned recreation properties was entirely leased.

The company had a total of around $378.9 million invested in properties under development as of Dec 3Array, 20Array5.

During the quarter, investment spending amounted to $Array22.5 million, taking 20Array5 investment spending to $632.0 million. For the quarter, this included $23.2 million in Entertainment, $53.Array million in Education, $43.0 million in Recreation and $3.2 million in Other business.

Balance Sheet

As of Dec 3Array, 20Array5, EPR Properties had cash and cash equivalents of $4.3 million as against $3.3 million at the prior-year end. Moreover, as of the same date, the company had $Array96 million outstanding under its $650-million unsecured revolving credit facility. It had a debt to gross assets ratio of 42% as of Dec 3Array, 20Array5.

Notably, in Jan 20Array6, the company raised net proceeds of $Array25.0 million from the issuance of 2.25 million common shares in a registered public offering. The company used the proceeds to lower outstanding balance on its unsecured revolving credit facility.

20Array6 Outlook

EPR Properties has confirmed its 20Array6 adjusted FFO per share outlook and expects it in a range of $4.70-$4.80. It has also confirmed its 20Array6 investment spending guidance within $600-$650 million. The Zacks Consensus Estimate for 20Array6 FFO per share is presently pegged at $4.78.

In Conclusion

We expect this specialty REIT, which targets investment in properties across three primary market segments - Entertainment, Recreation and Education - to grow on the back of strong portfolio performance. Amid modest supply, we expect the company to gain substantially from its investments and pipelines, and leverage the repeatable growth platform, going forward. Yet, an anticipated increase in interest rate remains a matter of concern.

EPR Properties currently has a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like Regency Centers Corporation REG , Rouse Properties, Inc. RSE and Taubman Centers, Inc. TCO . All these stocks hold a Zacks Rank #2 (Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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