EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
Future amortization of in-place leases, net, above-market lease, net, tradenames, net, contract value, net and below-market lease, net at December 31, 2022 is as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| In place leases | | Tradenames (1) | | Contract Value | | Above-market lease | | Below-market lease |
Year: | | | | | | | | | |
2023 | $ | 2,686 | | | $ | 133 | | | $ | 365 | | | $ | 46 | | | $ | (431) | |
2024 | 2,008 | | | 133 | | | 365 | | | 46 | | | (413) | |
2025 | 1,900 | | | 133 | | | 365 | | | 46 | | | (404) | |
2026 | 1,774 | | | 133 | | | 365 | | | 46 | | | (319) | |
2027 | 1,642 | | | 133 | | | 365 | | | 46 | | | (255) | |
Thereafter | 7,759 | | | 2,559 | | | 7,498 | | | 27 | | | (5,919) | |
Total | $ | 17,769 | | | $ | 3,224 | | | $ | 9,323 | | | $ | 257 | | | $ | (7,741) | |
| | | | | | | | | |
Weighted average amortization period (years) | 11.1 | | 25.3 | | 25.5 | | 5.5 | | 29.0 |
| | | | | | | | | |
(1) Excludes $5.4 million in tradenames with indefinite lives. |
Deferred Financing Costs
Deferred financing costs are amortized over the terms of the related debt obligations or mortgage note receivable as applicable. Deferred financing costs of $31.1 million and $36.9 million as of December 31, 2022 and 2021, respectively, are shown as a reduction of debt. The deferred financing costs of $6.4 million and $8.7 million as of December 31, 2022 and 2021, respectively, related to the unsecured revolving credit facility are included in "Other assets" in the accompanying consolidated balance sheets.
Reportable Segments
The Company has two reportable operating segments: Experiential and Education. The Experiential segment includes the following property types: theatres, eat & play (including seven theatres located in entertainment districts), attractions, ski, experiential lodging, gaming, cultural and fitness & wellness. The Education segment includes the following property types: early childhood education centers and private schools. See Note 17 for financial information related to these reportable segments.
Rental Revenue
The Company leases real estate to its tenants under leases classified as operating leases. The Company's leases generally provide for rent escalations throughout the lease terms. Rents that are fixed are recognized on a straight-line basis over the lease term. Base rent escalations that include a variable component are recognized upon the occurrence of the specified event as defined in the Company's lease agreements. Many of the Company's leasing arrangements include options to extend the lease, which are not included in the minimum lease terms unless it is reasonably certain to be exercised. Straight-line rental revenue is subject to an evaluation for collectibility, and the Company records a direct write-off against rental revenue if collectibility of these future rents is not probable. For both years ended December 31, 2022 and 2021, the Company recognized straight-line write-offs of $0.2 million. Straight-line rental revenue, net of write-offs, was $7.0 million and $5.7 million, respectively, for the years ended December 31, 2022 and 2021. For the year ended December 31, 2020, the Company recognized straight-line write-offs totaling $38.0 million, which were comprised of $26.5 million of straight-line accounts receivable and $11.5 million of sub-lessor ground lease straight-line accounts receivable. Straight-line rental revenue, net of write-offs, was a reduction to total rental revenue of $24.5 million for the year ended December 31, 2020.
The Company has agreed to defer rent for a substantial portion of its customers in response to the impact of the COVID-19 pandemic on their operations. On April 10, 2020, the FASB issued a Staff Q&A on Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic. In reliance upon the FASB Staff Q&A, the Company has not treated qualifying deferrals or rent concessions during the years ended December 31, 2021 and 2020 (the periods affected by the COVID-19 pandemic) as lease modifications. While deferments for this and future periods delay rent payments, these deferments generally do not release customers from the obligation to pay the deferred amounts in the future. Deferred rent amounts are reflected in the Company's financial statements as accounts receivable if collection is determined to be probable or recognized when received as
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
variable lease payments if collection is determined to not be probable. Certain agreements with tenants where remaining lease terms are extended, or other changes are made that do not qualify for the treatment in the FASB Staff Q&A, are treated as lease modifications. In these circumstances, upon an executed lease modification, if the tenant is not being recognized on a cash basis, the contractual rent reflected in accounts receivable and straight-line rent receivable will be amortized over the remaining term of the lease against rental revenue. In limited cases, customers may be entitled to the abatement of rent during governmentally imposed prohibitions on business operations which is recognized in the period to which the abatement relates, or the Company may provide rent concessions to tenants. In cases where the Company provides concessions to tenants to which they are not otherwise entitled, those amounts will be recognized in the period in which the concession is granted unless the changes are accounted for as lease modifications.
Most of the Company’s lease contracts are triple-net leases, which require the tenants to make payments directly to third parties for lessor costs (such as property taxes and insurance) associated with the properties. In accordance with Topic 842, the Company does not include these lessee payments to third parties in rental revenue or property operating expenses. In certain situations, the Company pays these lessor costs directly to third parties and the tenants reimburse the Company. In accordance with Topic 842, these payments are presented on a gross basis in rental revenue and property operating expense. During the years ended December 31, 2022, 2021 and 2020, the Company recognized $2.6 million, $3.5 million and $2.2 million, respectively, in tenant reimbursements related to the gross-up of these reimbursed expenses which are included in rental revenue.
Certain of the Company's leases, particularly at its entertainment districts, require the tenants to make payments to the Company for property related expenses such as common area maintenance. The Company has elected to combine these non-lease components with the lease components in rental revenue. For the years ended December 31, 2022, 2021 and 2020, the amounts due for non-lease components included in rental revenue totaled $17.2 million, $15.2 million and $12.9 million, respectively.
In addition, most of the Company's tenants are subject to additional rents (above base rents) if gross revenues of the properties exceed certain thresholds defined in the lease agreements (percentage rents). Percentage rents are recognized at the time when specific triggering events occur as provided by the lease agreement. Rental revenue included percentage rents of $10.5 million, $14.0 million and $8.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Furthermore, due to the impact of the COVID-19 pandemic, certain of the Company's tenants paid a portion of base rent in 2022, 2021 and 2020 based on a percentage of gross revenue. This variable rent totaled $0.4 million, $16.2 million and $5.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
The Company regularly evaluates the collectibility of its receivables on a lease-by-lease basis. The evaluation primarily consists of reviewing past due account balances and considering such factors as the credit quality of the Company's tenants, historical trends of the tenant, current economic conditions and changes in customer payment terms. When the collectibility of lease receivables or future lease payments are no longer probable, the Company records a direct write-off of the receivable to rental revenue and recognizes future rental revenue on a cash basis.
Property Sales
Sales of real estate properties are recognized when a contract exists and the purchaser has obtained control of the property. Gains on sales of properties are recognized in full in a partial sale of nonfinancial assets, to the extent control is not retained. Any noncontrolling interest retained by the seller would, accordingly, be measured at fair value.
The Company evaluates each sale or disposal transaction to determine if it meets the criteria to qualify as discontinued operations. A discontinued operation is a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on the Company's operations and financial results. If the sale or disposal transaction does not meet the criteria, the operations and related gain or loss on sale is included in income from continuing operations.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
Mortgage Notes and Other Notes Receivable
Mortgage notes and other notes receivable, including related accrued interest receivable, consist of loans originated by the Company and the related accrued and unpaid interest income as of the balance sheet date. Mortgage notes and other notes receivable are initially recorded at the amount advanced to the borrower less allowance for credit loss. Interest income is recognized using the effective interest method over the estimated life of the note. Interest income includes both the stated interest and the amortization or accretion of premiums or discounts (if any).
In accordance with ASC Topic 326, Measurement of Credit Losses on Financial Instruments, the Company records allowance for credit loss to reflect that all mortgage notes and notes receivable have some inherent risk of loss regardless of credit quality, collateral, or other mitigating factors. While Topic 326 does not require any particular method for determining the reserves, it does specify that it should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, as well as reasonable and supportable forecasts for the term of each mortgage note or note receivable. The Company uses a forward-looking commercial real estate forecasting tool to estimate its current expected credit losses (CECL) for each of its mortgage notes and notes receivable on a loan-by-loan basis. The CECL allowance required by Topic 326 is a valuation account that is deducted from the related mortgage note or note receivable.
Certain of the Company’s mortgage notes and notes receivable include commitments to fund incremental amounts to its borrowers. These future funding commitments are also subject to the CECL model. The allowance related to future funding is recorded as a liability and is included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets.
As permitted under Topic 326, the Company made an accounting policy election to not measure an allowance for credit losses for accrued interest receivables related to its mortgage notes and notes receivable. Accordingly, if accrued interest receivable is deemed to be uncollectible, the Company will record any necessary write-offs as a reversal of interest income. During the year ended December 31, 2022, the Company wrote-off approximately $1.5 million of accrued interest and fees receivable against interest income related to one mortgage note receivable and two notes receivable. During the year ended December 31, 2020, the Company wrote-off approximately $0.3 million of accrued interest against interest income related to one note receivable. No such amounts were written-off for the year ended December 31, 2021. As of December 31, 2022, the Company believes that all outstanding accrued interest is collectible.
In the event the Company has a past due mortgage note or note receivable and the Company determines it is collateral dependent, the Company measures expected credit losses based on the fair value of the collateral. As of December 31, 2022, the Company does not have any mortgage notes or notes receivable with past due principal balances. See Note 6 for further discussion of mortgage notes and notes receivable for which the Company elected to apply the collateral dependent practical expedient.
Mortgage and Other Financing Income
Certain of the Company's borrowers are subject to additional interest based on certain thresholds defined in the mortgage agreements (participating interest). Participating interest income is recognized at the time when specific triggering events occur as provided by the mortgage agreement. There was no participating interest income for the years ended December 31, 2022, 2021 and 2020.
Income Taxes
The Company has elected to be taxed as a REIT pursuant to Section 856(c) of the Internal Revenue Code. A REIT that distributes at least 90% of its taxable income to its shareholders each year and which meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. The Company intends to continue to qualify as a REIT and distribute substantially all of its taxable income to its shareholders.
The Company is subject to income tax in certain instances in both the U.S. and in certain foreign jurisdictions, as more fully described herein. The Company’s income tax expense includes deferred income tax expense or benefit, which represents the change in net deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
measured by the enacted tax rates that will be in effect when these differences reverse. The Company evaluates the realizability of its deferred income tax assets and assesses the need for a valuation allowance for each jurisdiction for which it is subject to income tax. The realization of the deferred tax assets depends upon all positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets.
The Company owns certain real estate assets which are subject to income tax in Canada. At December 31, 2022, the net deferred tax assets related to the Company's Canadian operations totaled $23.0 million resulting from the temporary differences between income for financial reporting purposes and taxable income relating primarily to depreciation, capital improvements and straight-line rents. At December 31, 2022, it is more likely than not the Company will not generate sufficient taxable income to realize the net deferred tax assets related to the Company's Canadian operations as of December 31, 2022 totaling $22.8 million.
The Company has certain taxable REIT subsidiaries (TRSs), as permitted under the Internal Revenue Code, through which it conducts certain business activities and are subject to federal and state income taxes on their net taxable income. The Company uses three such TRS entities exclusively to hold the operational aspect of the traditional REIT lodging structure for four Experiential lodging properties that are facilitated by management agreements with eligible independent contractors. The real estate for these investments are held by the REIT either directly or through an investment in a joint venture and leased to the respective operations entity under a triple-net lease. Management has determined which of the real estate assets meets the requirements to be classified as qualified lodging facilities as required in a traditional REIT lodging structure and recognizes revenue on these structures accordingly for REIT testing purposes.
At December 31, 2022, the net deferred tax assets related to the Company's TRSs totaled $9.8 million resulting from the temporary differences between income for financial reporting purposes and taxable income relate primarily to net operating loss carryovers and pre-opening cost amortization. At December 31, 2022, it is more likely than not that the Company will not generate sufficient taxable income to realize the net deferred tax assets related to the Company's TRSs as of December 31, 2022 totaling $9.8 million.
As of December 31, 2022 and 2021, respectively, the Canadian operations and the Company's TRSs had deferred tax assets included in "Other assets" in the accompanying consolidated balance sheets totaling approximately $36.9 million and $35.9 million, respectively, and deferred tax liabilities included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets totaling approximately $4.1 million and $4.6 million, respectively. At December 31, 2022 and 2021, the Company had valuation allowances offsetting the net deferred tax assets included in the accompanying consolidated balance sheets totaling $32.6 million and $31.3 million, respectively. The Company’s consolidated deferred tax position is summarized as follows (in thousands):
| | | | | | | | | | | |
| 2022 | | 2021 |
Fixed assets | $ | 22,788 | | | $ | 21,687 | |
Net operating losses | 10,093 | | | 10,828 | |
Start-up costs | 2,185 | | | 2,309 | |
Other | 1,826 | | | 1,093 | |
Total deferred tax assets | $ | 36,892 | | | $ | 35,917 | |
| | | |
Capital improvements | $ | (2,718) | | | $ | (2,904) | |
Straight-line receivable | (962) | | | (915) | |
Other | (419) | | | (763) | |
Total deferred tax liabilities | $ | (4,099) | | | $ | (4,582) | |
| | | |
Valuation allowance | (32,624) | | | (31,335) | |
Net deferred tax asset | $ | 169 | | | $ | — | |
Additionally, during the years ended December 31, 2022, 2021 and 2020, the Company recognized current income and withholding tax expense of $1.4 million, $1.6 million and $1.5 million, respectively, primarily related to certain
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
state income taxes and foreign withholding tax. The table below details the current and deferred income tax benefit (expense) for the years ended December 31, 2022, 2021 and 2020 (in thousands):
| | | | | | | | | | | | | | | | | |
| 2022 | | 2021 | | 2020 |
Current TRS income tax | $ | (137) | | | $ | — | | | $ | 7 | |
Current state income tax expense | (226) | | | (505) | | | (503) | |
Current foreign income tax | (1) | | | (4) | | | 3 | |
Current foreign withholding tax | (1,041) | | | (1,088) | | | (1,018) | |
Deferred TRS income tax (expense) benefit | — | | | — | | | (4,448) | |
Deferred foreign withholding tax | — | | | — | | | — | |
Deferred income tax (expense) benefit | 169 | | | — | | | (10,797) | |
Income tax benefit (expense) | $ | (1,236) | | | $ | (1,597) | | | $ | (16,756) | |
The Company's effective tax rate for the years ended December 31, 2022, 2021 and 2020 was 0.8%, 2.1% and 13.5%, respectively. The differences between the income tax expense calculated at the statutory U.S. federal income tax rates and the actual income tax expense recorded is mostly attributable to the dividends paid deduction available for REITs.
Furthermore, the Company qualified as a REIT and distributed the necessary amount of taxable income such that no current U.S. federal income taxes were due for the years ended December 31, 2022, 2021 and 2020. Accordingly, no provision for current U.S. federal income taxes was recorded for any of those years. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain provisions, it will be subject to federal and state income taxes at regular corporate rates (including any applicable alternative minimum tax for years prior to January 1, 2020) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income. Tax years 2019 through 2021 remain generally open to examination for U.S. federal income tax and state tax purposes and from 2017 through 2021 for Canadian income tax purposes.
The Company’s policy is to recognize interest and penalties as general and administrative expense. The Company did not recognize any interest and penalties in 2022, 2021 or 2020. The Company did not have any accrued interest and penalties at December 31, 2022, 2021 and 2020. Additionally, the Company did not have any unrecorded tax benefits as of December 31, 2022, 2021 and 2020.
Concentrations of Risk
AMC, Topgolf USA (Topgolf), Regal and Cinemark represented a significant portion of the Company's total revenue for the years ended December 31, 2022, 2021 and 2020. The Company began recognizing revenue on a cash basis for AMC at the end of the first quarter of 2020 and for Regal at the end of the third quarter of 2020 due to the impact of the COVID-19 pandemic. The Company had higher revenue from Regal during the years ended December 31, 2022 and 2021 due to the payment of rent and the repayment of deferred rent due, both of which were recognized as rental revenue when received. As described above, on September 7, 2022, Cineworld Group, the parent entity of Regal, filed for Chapter 11 bankruptcy protection. As a result of the filing, Regal did not pay its rent or monthly deferral payment for September 2022 but subsequently paid portions of this amount pursuant to an order of the bankruptcy court. The Company has received payment of contractual rent and deferral payments from Regal for October through December 2022. The following is a summary of the Company's total revenue derived from rental or interest payments from AMC, Topgolf, Regal and Cinemark (dollars in thousands):
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year ended December 31, |
| 2022 | | 2021 | | 2020 |
| Total Revenue | % of Company's Total Revenue | | Total Revenue | % of Company's Total Revenue | | Total Revenue | % of Company's Total Revenue |
AMC | $ | 94,476 | | 14.4 | % | | $ | 94,405 | | 17.8 | % | | $ | 29,964 | | 7.2 | % |
Topgolf | 94,177 | | 14.3 | % | | 86,470 | | 16.3 | % | | 80,714 | | 19.5 | % |
Regal | 90,678 | | 13.8 | % | | 44,576 | | 8.4 | % | | 13,056 | | 3.1 | % |
Cinemark | 42,325 | | 6.4 | % | | 42,417 | | 8.0 | % | | 42,065 | | 10.1 | % |
Cash Equivalents
Cash equivalents include bank demand deposits and other short-term investments.
Restricted Cash
Restricted cash represents cash held for tenants' off-season rent reserves and escrow deposits required in connection with property management and debt agreements or held for potential acquisitions and redevelopments.
Share-Based Compensation
Share-based compensation to employees of the Company is granted pursuant to the Company's Annual Incentive Program and Long-Term Incentive Plan and share-based compensation to non-employee Trustees of the Company is granted pursuant to the Company's Trustee compensation program.
Share based compensation expense consists of amortization of nonvested share grants and share options issued to employees, and amortization of share units issued to non-employee Trustees for payment of their annual retainers. Share based compensation is included in "General and administrative expense" in the accompanying consolidated statements of income (loss) and comprehensive income (loss).
Nonvested Shares Issued to Employees
The Company grants nonvested shares to employees pursuant to both the Annual Incentive Program and the Long-Term Incentive Plan. The Company amortizes the expense related to the nonvested shares awarded to employees under the Long-Term Incentive Plan and the premium awarded under the nonvested share alternative of the Annual Incentive Program on a straight-line basis over the future vesting period (three years to four years). Expense recognized related to nonvested shares and included in "General and administrative expense" in the accompanying consolidated statements of income (loss) and comprehensive income (loss) was $7.9 million, $8.8 million and $10.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Expense related to nonvested shares and included in "Severance expense" in the accompanying consolidated statements of income (loss) and comprehensive income (loss) was $1.0 million for the year ended December 31, 2020.
Nonvested Performance Shares Issued to Employees
The Company awards performance shares to the Company's executive officers pursuant to the Long-Term Incentive Plan. The performance shares contain both a market condition and a performance condition. The Company amortizes the expense related to the performance shares over the future vesting period of three years. Expense recognized related to performance shares and included in "General and administrative expense" in the accompanying consolidated statements of income (loss) and comprehensive income (loss) was $6.6 million, $3.9 million and $1.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. Expense related to nonvested performance shares and included in "Severance expense" in the accompanying consolidated statements of income (loss) and comprehensive income (loss) was $261 thousand for the year ended December 31, 2020.
Share Options
Prior to 2022, share options were granted to employees pursuant to the Long-Term Incentive Plan. The fair value of share options granted is estimated at the date of grant using the Black-Scholes option pricing model. Share options granted to employees vest over a period of four years and share option expense for these options is recognized on a straight-line basis over the vesting period. Expense recognized related to share options and included in "General and administrative expense" in the accompanying consolidated statements of income (loss) and comprehensive income
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
(loss) was $14 thousand, $17 thousand and $12 thousand for the years ended December 31, 2022, 2021 and 2020, respectively.
Restricted Share Units Issued to Non-Employee Trustees
The Company issues restricted share units to non-employee Trustees for payment of their annual retainers under the Company's Trustee compensation program. The fair value of the share units granted was based on the share price at the date of grant. The share units vest upon the earlier of the day preceding the next annual meeting of shareholders or a change of control. The settlement date for the shares is selected by the non-employee Trustee, and ranges from one year from the grant date to upon termination of service. This expense is amortized by the Company on a straight-line basis over the year of service by the non-employee Trustees. Total expense recognized related to shares issued to non-employee Trustees and included in "General and administrative expense" in the accompanying consolidated statements of income (loss) and comprehensive income (loss) was $2.2 million for each of the years ended December 31, 2022, 2021 and 2020.
Foreign Currency Translation
The Company accounts for the operations of its Canadian properties in Canadian dollars. The assets and liabilities related to the Company’s Canadian properties and mortgage note are translated into U.S. dollars using the spot rates at the respective balance sheet dates; revenues and expenses are translated at average exchange rates. Resulting translation adjustments are recorded as a separate component of comprehensive income (loss).
Derivative Instruments
The Company uses derivative instruments to reduce exposure to fluctuations in foreign currency exchange rates and variable interest rates.
The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as foreign currency risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. If hedge accounting is not applied, realized and unrealized gains or losses are reported in earnings.
The Company's policy is to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Impact of Recently Issued Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848). The ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. On March 5, 2021, the Financial Conduct Authority (FCA) announced that the USD LIBOR will no longer be published after June 30, 2023. In December 2022, the FASB issued ASU No. 2022-06, Deferral of the Sunset Date of Topic 848. The guidance in ASU 2022-06 deferred the sunset date to December 31, 2024. At December 31, 2022, the Company had four agreements (including debt, mortgage note and lease agreements) that are indexed to LIBOR. The Company has transitioned several existing contracts to a replacement index and continues to make progress
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
transitioning the remaining contracts. These ASUs are not anticipated to have any significant impact on the Company's consolidated financial statements.
In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. The ASU eliminates the accounting guidance for troubled debt restructurings (TDR) by creditors that have adopted the CECL model and enhances disclosure requirements for loan modifications made with borrowers experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, the Company will now determine whether a modification results in a new loan or the continuation of the existing loan. In addition, the amendments require disclosure of current period gross write-offs by year of origination for financing receivables. ASU 2022-02 is effective for fiscal years (and interim periods within those years) beginning after December 15, 2022. The amendments should be applied prospectively, however, for the recognition and measurement of troubled debt restructurings, the entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. The Company expects to adopt the guidance beginning January 1, 2023 and does not expect it will have a material impact on the consolidated financial statements.
3. Real Estate Investments
The following table summarizes the carrying amounts of real estate investments as of December 31, 2022 and 2021 (in thousands):
| | | | | | | | | | | |
| 2022 | | 2021 |
Buildings and improvements | $ | 4,637,801 | | | $ | 4,523,052 | |
Furniture, fixtures & equipment | 115,677 | | | 108,907 | |
Land | 1,236,358 | | | 1,222,149 | |
Leasehold interests | 26,940 | | | 26,717 | |
| 6,016,776 | | | 5,880,825 | |
Accumulated depreciation | (1,302,640) | | | (1,167,734) | |
Total | $ | 4,714,136 | | | $ | 4,713,091 | |
Depreciation expense on real estate investments was $158.8 million, $158.3 million and $162.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Acquisitions and Development
During the year ended December 31, 2022, the Company completed asset acquisitions of two fitness and wellness properties for approximately $63.5 million, asset acquisitions of two attraction properties located in Canada for approximately $142.8 million and the acquisition of interests in joint ventures related to two experiential lodging properties for approximately $62.1 million. See Note 7 for further details on these joint ventures.
Additionally, during the year ended December 31, 2022, the Company had investment spending on build-to-suit development and redevelopment for experiential properties totaling $38.4 million.
During the year ended December 31, 2021, the Company completed asset acquisitions of real estate investments and lease related intangibles, as further discussed in Note 2, for experiential properties totaling $48.9 million, that consisted of two eat and play properties.
Additionally, during the year ended December 31, 2021, the Company had investment spending on build-to-suit development and redevelopment for experiential properties totaling $40.2 million.
Dispositions
During the year ended December 31, 2022, the Company completed the sale of three vacant theatre properties and a land parcel for net proceeds of $11.0 million and recognized a combined gain on sale of $0.7 million.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
During the year ended December 31, 2021, the Company completed the sale of four theatre properties, two ski properties, one eat & play property and four land parcels for net proceeds totaling $96.1 million and recognized a combined gain on sale of $17.9 million.
4. Impairment Charges
The Company reviews its properties for changes in circumstances that indicate that the carrying value of a property may not be recoverable based on an estimate of undiscounted future cash flows. During the year ended December 31, 2022, the Company reassessed the holding period of five early education properties subject to lease terminations, a vacant property that received an offer to purchase and two of the Regal theatre properties subject to a motion to reject leases. One of these properties has an operating ground lease arrangement with right-of-use asset. The Company determined that the estimated cash flows were not sufficient to recover the carrying values. During the year ended December 31, 2022, the Company determined the estimated fair value of the real estate investments and right-of-use assets of these properties using independent appraisals and the purchase offer. The Company reduced the carrying value of the real estate investments, net to $38.4 million and the operating lease right-of-use asset to $7.0 million. The Company recognized impairment charges of $25.3 million on real estate investments and a $2.0 million impairment on the right-of-use asset, which is the amount that the carrying value of the assets exceeded the estimated fair value.
During the year ended December 31, 2022, the Company also recognized $0.6 million in other-than-temporary impairments related to its equity investments in joint ventures in two theatre projects located in China. See Note 7 for further details on these impairments.
During the year ended December 31, 2021, the Company received various offers to sell two of its vacant properties. As a result, the Company reassessed the expected holding periods of such properties, and determined that the estimated cash flows were not sufficient to recover the carrying values of these properties. The Company estimated the fair value of these properties by taking into account these purchase offers. The Company reduced the carrying value of the real estate investments, net to $7.0 million. The Company recognized impairment charges of $2.7 million on the real estate investments, which is the amount that the carrying value of the assets exceeded the estimated fair value.
During the year ended December 31, 2020, as a result of the COVID-19 pandemic, the Company experienced vacancies at some of its properties and at others the Company has negotiated lease modifications that included rent reductions. As part of this process, the Company reassessed the expected holding periods and expected future cash flows of such properties, and determined that the estimated cash flows were not sufficient to recover the carrying values of nine properties. Two of these nine properties have operating ground lease arrangements with right-of-use assets. During the year ended December 31, 2020, the Company determined the estimated fair value of the real estate investments and right-of-use assets of these properties using independent appraisals and various purchase offers. The Company reduced the carrying value of the real estate investments, net to $39.5 million and the operating lease right-of-use assets to $13.0 million. The Company recognized impairment charges of $70.7 million on the real estate investments and $15.0 million on the right-of-use assets, which are the amounts that the carrying value of the assets exceeded the estimated fair value.
During the year ended December 31, 2020, the Company also recognized $3.2 million in other-than-temporary impairments related to its equity investments in joint ventures in three theatre projects located in China. See Note 7 for further details on these impairments.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
5. Accounts Receivable
The following table summarizes the carrying amounts of accounts receivable as of December 31, 2022 and 2021 (in thousands):
| | | | | | | | | | | |
| 2022 | | 2021 |
Receivable from tenants | $ | 7,595 | | | $ | 37,417 | |
Receivable from non-tenants | 1,006 | | | 2,237 | |
| | | |
| | | |
| | | |
Straight-line rent receivable | 44,986 | | | 38,419 | |
| | | |
| | | |
Total | $ | 53,587 | | | $ | 78,073 | |
As of December 31, 2022 and 2021, receivables from tenants included payments of approximately $2.1 million and $27.3 million, respectively, that were deferred due to the COVID-19 pandemic and determined to be collectible. Additionally, the Company has amounts due from tenants that were not booked as receivables as the full amounts were not deemed probable of collection as a result of COVID-19 pandemic. While deferments for this and future periods delay rent payments, these deferments do not release tenants from the obligation to pay the deferred amounts in the future.
During the year ended December 31, 2022 and 2021, the Company collected $17.7 million and $7.0 million, respectively, in deferred rent and interest from cash basis tenants and from tenants for which the deferred payments were not previously recognized as revenue. In addition, during the year ended December 31, 2022 and 2021, the Company collected $24.2 million and $63.8 million, respectively, of deferred rent and interest from accrual basis tenants and borrowers that reduced related accounts and interest receivable. The repayment terms for these deferments vary by tenant.
6. Investment in Mortgage Notes and Notes Receivable
The Company measures expected credit losses on its mortgage notes and notes receivable on an individual basis over the related contractual term as its financial instruments do not have similar risk characteristics. The Company uses a forward-looking commercial real estate loss forecasting tool to estimate its expected credit losses. The loss forecasting tool is comprised of a probability of default model and a loss given default model that utilizes the Company’s loan specific inputs as well as selected forward looking macroeconomic variables and mean loss rates. Based on certain inputs, such as origination year, balance, interest rate as well as collateral value and borrower operating income, the model produces life of loan expected losses on a loan-by-loan basis. As of December 31, 2022, the Company did not anticipate any prepayments therefore the contractual term of its mortgage notes was used for the calculation of the expected credit losses. The Company updates the model inputs at each reporting period to reflect, if applicable, any newly originated loans, changes to loan specific information on existing loans and current macroeconomic conditions.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
Investment in mortgage notes, including related accrued interest receivable, at December 31, 2022 and 2021 consists of the following (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year of Origination | Interest Rate | Maturity Date | Periodic Payment Terms | Outstanding principal amount of mortgage | Carrying amount as of December 31, | Unfunded commitments |
Description | 2022 | 2021 | December 31, 2022 |
Attraction property Powells Point, North Carolina | 2019 | 7.75 | % | 6/30/2025 | Interest only | $ | 29,378 | | $ | 29,227 | | $ | 28,243 | | $ | — | |
Fitness & wellness property Omaha, Nebraska | 2017 | 7.85 | % | 1/3/2027 | Interest only | 10,905 | | 10,898 | | 10,940 | | — | |
Fitness & wellness property Merriam, Kansas | 2019 | 7.55 | % | 7/31/2029 | Interest only | 9,090 | | 9,195 | | 9,159 | | — | |
Fitness & wellness property Omaha, Nebraska | 2016 | 11.24 | % | 6/30/2030 | Interest only | 10,539 | | 10,531 | | 10,615 | | 379 | |
Experiential lodging property Nashville, Tennessee | 2019 | 6.99 | % | 9/30/2031 | Interest only | 70,000 | | 70,576 | | 70,896 | | — | |
Ski property Girdwood, Alaska | 2019 | 8.72 | % | 7/31/2032 | Interest only | 72,777 | | 72,366 | | 45,877 | | 9,223 | |
Fitness & wellness properties Colorado and California | 2022 | 7.15 | % | 1/10/2033 | Interest only | 56,751 | | 56,911 | | — | | 7,799 | |
Eat & play property Austin, Texas | 2012 | 11.31 | % | 6/1/2033 | Principal & Interest-fully amortizing | 10,253 | | 10,253 | | 10,874 | | — | |
Experiential lodging property Breaux Bridge, LA | 2022 | 7.25 | % | 3/8/2034 | Interest only | 11,305 | | 11,373 | | — | | — | |
Ski property West Dover and Wilmington, Vermont | 2007 | 12.14 | % | 12/1/2034 | Interest only | 51,050 | | 51,049 | | 51,047 | | — | |
Four ski properties Ohio and Pennsylvania | 2007 | 11.24 | % | 12/1/2034 | Interest only | 37,562 | | 37,529 | | 37,519 | | — | |
Ski property Chesterland, Ohio | 2012 | 11.72 | % | 12/1/2034 | Interest only | 4,550 | | 4,532 | | 4,516 | | — | |
Ski property Hunter, New York | 2016 | 8.88 | % | 1/5/2036 | Interest only | 21,000 | | 21,000 | | 21,000 | | — | |
Eat & play property Midvale, Utah | 2015 | 10.25 | % | 5/31/2036 | Interest only | 17,505 | | 17,505 | | 17,639 | | — | |
Eat & play property West Chester, Ohio | 2015 | 9.75 | % | 8/1/2036 | Interest only | 18,068 | | 18,066 | | 18,198 | | — | |
Fitness & wellness property Fort Collins, Colorado | 2018 | 7.85 | % | 1/31/2038 | Interest only | 10,292 | | 10,089 | | 10,277 | | — | |
Early childhood education center Lake Mary, Florida | 2019 | 8.10 | % | 5/9/2039 | Interest only | 4,200 | | 4,360 | | 4,329 | | — | |
Eat & play property Eugene, Oregon | 2019 | 8.13 | % | 6/17/2039 | Interest only | 14,700 | | 7,780 | | 14,996 | | — | |
Early childhood education center Lithia, Florida | 2017 | 8.75 | % | 10/31/2039 | Interest only | 3,959 | | 4,028 | | 4,034 | | — | |
Experiential lodging property Frankenmuth, Michigan | 2022 | 8.25 | % | 10/14/2042 | Interest only | — | | — | | — | | 68,000 | |
| | | | | $ | 463,884 | | $ | 457,268 | | $ | 370,159 | | $ | 85,401 | |
Investment in notes receivable, including related accrued interest receivable, was $2.9 million and $7.3 million at December 31, 2022 and 2021, respectively, and is included in "Other assets" in the accompanying consolidated balance sheets.
During the year ended December 31, 2022, the Company recorded an allowance for credit loss of $6.8 million related to one of its mortgage notes receivable secured by an eat & play investment and $3.1 million related to two notes receivable. Although foreclosure was not deemed probable and the principal balance of the mortgage note and notes receivable were not past due at December 31, 2022, based on delays in interest payments and the borrowers' declining financial condition, the Company determined that the borrowers are experiencing financial difficulty. The
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
repayments are expected to be provided substantially through the sale or operation of the collateral, therefore, the Company, in each case, elected to apply the collateral dependent practical expedient. Expected credit losses are based on the fair value of the underlying collateral at the reporting date. The mortgage note is secured by the real estate assets of the borrower and the notes receivable are secured by the equipment and personal property of the borrowers. The collateral was appraised during the year ended December 31, 2022, which resulted in credit loss expense of $6.8 million for the mortgage note, $1.2 million for one of the notes receivable and $1.9 million for the other note receivable, representing a full reserve for the $1.9 million note receivable. Income from these borrowers is recognized on a cash basis. During the year ended December 31, 2022, the Company wrote-off $1.5 million in accrued interest receivables and fees to "Mortgage and other financing income" in the accompanying consolidated statements of income related to the mortgage note and notes receivables.
During the year ended December 31, 2020, the Company entered into an amended and restated loan and security agreement with one of its notes receivable borrowers in response to the impacts of the COVID-19 pandemic. Although the borrower was not in default, nor had the borrower declared bankruptcy, the Company determined that these modifications resulted in a troubled debt restructuring. At December 31, 2022, this note receivable was considered collateral dependent and expected credit losses are based on the fair value of the underlying collateral at the reporting date. The note is secured by the working capital and non-real estate assets of the borrower. The Company assessed the fair value of the collateral as of December 31, 2022 and the note remains fully reserved with an allowance for credit loss totaling $8.4 million, which represents the outstanding principal balance of the note as of December 31, 2022. Income for this borrower is recognized on a cash basis. During the year ended December 31, 2022, the Company received principal payments totaling $0.3 million and $1.2 million in cash basis interest payments on this note receivable.
At December 31, 2022, the Company's investment in this note receivable was a variable interest investment and the underlying entity is a VIE. The Company is not the primary beneficiary of this VIE because the Company does not individually have the power to direct the activities that are most significant to the entity and accordingly, this investment is not consolidated. The Company's maximum exposure to loss associated with this VIE is limited to the Company's outstanding note receivable in the amount of $8.4 million, which is fully reserved in the allowance for credit losses at December 31, 2022.
The following summarizes the activity within the allowance for credit losses related to mortgage notes, unfunded commitments and notes receivable for the years ended December 31, 2022 and 2021 (in thousands):
| | | | | | | | | | | | | | | | | |
| Mortgage notes receivable | Unfunded commitments - mortgage notes receivable | Notes receivable | Unfunded commitments - notes receivable | Total |
Allowance for credit losses at December 31, 2020 | $ | 7,000 | | $ | 138 | | $ | 12,854 | | $ | 12,866 | | $ | 32,858 | |
Credit loss benefit | (4,876) | | (62) | | (4,168) | | (12,866) | | (21,972) | |
Charge-offs | — | | — | | — | | — | | — | |
Recoveries | — | | — | | — | | — | | — | |
Allowance for credit losses at December 31, 2021 | $ | 2,124 | | $ | 76 | | $ | 8,686 | | $ | — | | $ | 10,886 | |
Credit loss expense | 6,875 | | 675 | | 3,266 | | — | | 10,816 | |
Charge-offs | — | | — | | — | | — | | — | |
Recoveries | — | | — | | — | | — | | — | |
Allowance for credit losses at December 31, 2022 | $ | 8,999 | | $ | 751 | | $ | 11,952 | | $ | — | | $ | 21,702 | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
7. Unconsolidated Real Estate Joint Ventures
The following table summarizes our investment in unconsolidated joint ventures as of December 31, 2022 and 2021 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Investment as of December 31, | | Income (Loss) for the Year Ended December 31, |
Property Type | | Location | | Ownership Interest | | 2022 | 2021 | | 2022 | 2021 |
Experiential lodging | | St. Pete Beach, FL | | 65 | % | (1) | $ | 18,712 | | $ | 25,894 | | | $ | 292 | | $ | (4,112) | |
Experiential lodging | | Warrens, WI | | 95 | % | (2) | 10,865 | | 10,068 | | | (1,050) | | (943) | |
Experiential lodging | | Breaux Bridge, LA | | 85 | % | (3) | 17,080 | | — | | | (719) | | — | |
Experiential lodging | | Harrisville, PA | | 62 | % | (4) | 6,307 | | — | | | (134) | | — | |
Theatres | | China | | various | (5) | — | | 708 | | | (61) | | (4) | |
| | | | | | $ | 52,964 | | $ | 36,670 | | | $ | (1,672) | | $ | (5,059) | |
(1) The Company has equity investments in two unconsolidated real estate joint ventures related to two experiential lodging properties located in St. Petersburg Beach, Florida. The Company's investments in these joint ventures were considered to be variable interest investments, however, the underlying entities are not VIEs. There are two separate joint ventures, one that holds the investment in the real estate of the experiential lodging properties and the other that holds lodging operations, which are facilitated by a management agreement with an eligible independent contractor. The Company's investment in the operating entity is held in a taxable REIT subsidiary (TRS). The Company accounts for its investment in these joint ventures under the equity method of accounting because control over major decisions is shared. On May 18, 2022, the joint venture that holds the real estate refinanced its secured mortgage loan, the new terms of which are described below. In connection with this refinancing, during the year ended December 31, 2022, the Company received $6.7 million in distributions. In addition, the Company received $0.8 million in distributions from operations during the year ended December 31, 2022. No distributions were received during the year ended December 31, 2021. The Company's accounting policy is to classify the distributions on its consolidated statement of cash flows using the nature of the distribution approach based on facts and circumstances surrounding the distributions.
The joint venture that holds the real property has a secured mortgage loan of $105.0 million at December 31, 2022. The maturity date of this mortgage loan is May 18, 2025. The note can be extended for two additional one-year periods from the original maturity date upon the satisfaction of certain conditions. The mortgage loan bears interest at SOFR plus 3.65%, with monthly interest payments required. The joint venture has an interest rate cap agreement to limit the variable portion of the interest rate (SOFR) on this note to 3.5% from May 19, 2022 to June 1, 2024.
(2) The Company has equity investments in two unconsolidated real estate joint ventures related to an experiential lodging property located in Warrens, Wisconsin. The Company's investments in these joint ventures were considered to be variable interest investments, however, the underlying entities are not VIEs. There are two separate joint ventures, one that holds the investment in the real estate of the experiential lodging property and the other that holds lodging operations, which are facilitated by a management agreement. The Company's investment in the operating entity is held in a TRS. The Company accounts for its investment in these joint ventures under the equity method of accounting because control over major decisions is shared.
The joint venture that holds the real property has a secured mortgage loan of $16.3 million at December 31, 2022 that provides for additional draws of approximately $8.3 million to fund renovations. The maturity date of this mortgage loan is September 15, 2031. The loan bears interest at an annual fixed rate of 4.00% with monthly interest payments required. Additionally, the Company has guaranteed the completion of the renovations in the amount of approximately $14.2 million, with $8.8 million remaining to fund at December 31, 2022.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
(3) The Company has equity investments in two unconsolidated real estate joint ventures related to an experiential lodging property located in Breaux Bridge, Louisiana. The Company's investments in these joint ventures were considered to be variable interest investments, however, the underlying entities are not VIEs. There are two separate joint ventures, one that holds the investment in the real estate of the experiential lodging property and the other holds the lodging operations, which are facilitated by a management agreement. The Company's investment in the operating entity is held in a TRS. The Company accounts for its investment in these joint ventures under the equity method of accounting because control over major decisions is shared.
The joint venture that holds the real estate property has a secured senior mortgage loan of $38.5 million at December 31, 2022. The maturity date of this mortgage loan is March 8, 2034. The mortgage loan bears interest at an annual fixed rate of 3.85% through April 7, 2025 and increases to 4.25% from April 8, 2025 through maturity. Monthly interest payments are required. Additionally, the Company provided a subordinated loan to the joint venture for $11.3 million with a maturity date of March 8, 2034. The mortgage loan bears interest at an annual fixed rate of 7.25% through the sixth anniversary and increases to SOFR plus 7.20% with a cap of 8.00%, through maturity.
(4) The Company has a 92% equity investment in two unconsolidated real estate joint ventures related to an experiential lodging property located in Harrisville, Pennsylvania. There are two separate joint ventures, that through subsequent joint ventures (described below), hold the investments in the real estate of the experiential lodging property and the lodging operations, which are facilitated by a management agreement. The Company's investment in the operating entity is held in a TRS. The Company's investments in these two unconsolidated real estate joint ventures were considered to be variable interest investments and the Company's investment in the joint venture that holds the lodging operations is a VIE. The Company is not the primary beneficiary of the VIE because the Company does not individually have the power to direct the activities that are most important to the joint venture and accordingly this investment in the joint venture that holds the lodging operations is not consolidated. Additionally, the Company's maximum exposure to loss at December 31, 2022, other than the guarantee described below, is its investment in the joint venture that holds the lodging operations of $0.2 million. The Company accounts for its investment in both of these joint ventures under the equity method of accounting.
The Company's investments in the two unconsolidated real estate joint ventures (representing 92% of each joint venture's equity) have a 67% equity interest in two separate consolidated joint ventures, one that holds the investments in the real estate of the experiential lodging property and the other that holds lodging operations, which are facilitated by a management agreement. The consolidated joint venture that holds the real estate property has a secured senior mortgage loan commitment of up to $22.5 million at December 31, 2022 in order to fund renovations, with $0.5 million outstanding at December 31, 2022. The maturity date of this mortgage loan is November 1, 2029. The mortgage loan bears interest at an annual fixed rate of 6.38% with monthly interest payments required. The Company has guaranteed $10.0 million in principal on the secured mortgage loan, and, upon completion of construction and achieving a specified debt service coverage ratio, the principal guarantee will be reduced to $5.0 million. The guarantee will be removed completely upon achievement of specified debt service coverage for three consecutive calculation periods. Additionally, the Company has guaranteed the completion of the renovations in the amount of approximately $13.9 million, with $13.6 million remaining to fund at December 31, 2022.
(5) The Company has equity investments in unconsolidated joint ventures for three theatre projects located in China, with ownership interests ranging from 30% to 49%. During the year ended December 31, 2022, the Company recognized $0.6 million in other-than-temporary impairment charges related to these equity investments. The Company determined that these investments had no fair value based primarily on discounted cash flow projections. The Company received distributions of $90 thousand from its investment in these joint ventures for the year ended December 31, 2021. No distributions were received during the year ended December 31, 2022.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
8. Debt
Debt at December 31, 2022 and 2021 consists of the following (in thousands):
| | | | | | | | | | | | | |
| | 2022 | | 2021 | |
| Senior unsecured notes payable, 4.35%, due August 22, 2024 (1) | 136,637 | | | 136,637 | | |
| Senior unsecured notes payable, 4.50%, due April 1, 2025 (2) | 300,000 | | | 300,000 | | |
| | | | | |
| Unsecured revolving variable rate credit facility, LIBOR + 1.20%, due October 6, 2025 (3) | — | | | — | | |
| Senior unsecured notes payable, 4.56%, due August 22, 2026 (1) | 179,597 | | | 179,597 | | |
| Senior unsecured notes payable, 4.75%, due December 15, 2026 (2) | 450,000 | | | 450,000 | | |
| Senior unsecured notes payable, 4.50%, due June 1, 2027 (2) | 450,000 | | | 450,000 | | |
| Senior unsecured notes payable, 4.95%, due April 15, 2028 (2) | 400,000 | | | 400,000 | | |
| Senior unsecured notes payable, 3.75%, due August 15, 2029 (2) | 500,000 | | | 500,000 | | |
| Senior unsecured notes payable, 3.60%, due November 15, 2031 (2) (4) | 400,000 | | | 400,000 | | |
| Bonds payable, variable rate, fixed at 2.53% through September 30, 2026, due August 1, 2047 (5) | 24,995 | | | 24,995 | | |
| Less: deferred financing costs, net | (31,118) | | | (36,864) | | |
| Total | $ | 2,810,111 | | | $ | 2,804,365 | | |
(1) The amended Note Purchase Agreement, which governs the private placement notes, contains certain financial and other covenants that generally conform to the Company's unsecured revolving credit facility.
During the year ended December 31, 2020, the Company amended the Note Purchase Agreement. The amendments modified certain provisions and waived the Company's obligations to comply with certain covenants under these debt agreements during the Covenant Relief Period in light of the uncertainty related to impacts of the COVID-19 pandemic on the Company and its tenants and borrowers. The amendments provided for certain additional provisions and restrictions and an immediate 0.65% waiver premium to be paid on the private placement notes during the Covenant Relief Period. In addition, as a result of downgrades of the Company's unsecured debt rating to BB+ by both Fitch and S&P Global Ratings, the spreads on the private placement notes increased by an additional 0.60%. As a result, the interest rates for the private placement notes during the Covenant Relief Period were 5.60% and 5.81% for the Series A notes due 2024 and the Series B notes due 2026, respectively.
On July 12, 2021, the Company provided notice of its election to terminate the Covenant Relief Period early and was released from the additional provisions and restrictions. Also, as a result of this election, the interest rates for the private placement notes returned to 4.35% and 4.56% for the Series A notes and the Series B notes, respectively. Additionally, during the year ended December 31, 2021, the Company paid down principal of approximately $23.8 million million on its private placement notes resulting from the sale of assets in accordance with the amendments.
On January 14, 2022, the Company amended the Note Purchase Agreement to, among other things: (i) amend certain financial and other covenants and provisions in the existing Note Purchase Agreement to conform generally to the changes beneficial to the Company in the corresponding covenants and provisions contained in the Company's Third Amended, Restated and Consolidated Credit Agreement, dated October 6, 2021, and (ii) amend certain financial and other covenants and provisions in the existing Note Purchase Agreement to reflect the prior termination of the Covenant Relief Period and removal of related provisions.
(2) These notes contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the ratio of the Company’s debt to adjusted total assets to exceed 60%; (ii) a limitation on incurrence of any secured debt that would cause the ratio of the Company’s secured debt to adjusted total assets to exceed 40%; (iii) a limitation on incurrence of any debt that would cause the Company’s debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of the Company's total unencumbered assets such that they are not less than 150% of the Company’s outstanding unsecured debt.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
(3) At December 31, 2022, the Company had no balance outstanding under its $1.0 billion unsecured revolving credit facility. The facility bears interest at a floating rate of LIBOR plus 1.20% (with a LIBOR floor of zero), which was 5.584% at December 31, 2022, and a facility fee of 0.25%. Interest is payable monthly.
The facility contains financial covenants or restrictions that limit the Company's level of consolidated debt, secured debt, investment levels outside certain categories and dividend distribution and require the Company to maintain a minimum consolidated tangible net worth and meet certain coverage levels for fixed charges and debt service.
During the year ended December 31, 2020, the Company amended the Second Consolidated Credit Agreement, which governed its unsecured revolving credit facility and its unsecured term loan facility, to modify certain provisions and waive its obligations to comply with certain covenants under these agreements. During the Covenant Relief Period, the Company's obligation to comply with certain covenants under these agreements was waived in light of the uncertainty related to impacts of the COVID-19 pandemic on the Company and its tenants and borrowers. The Company paid higher interest costs until the termination of the Covenant Relief Period and the interest rates on the revolving credit and term loan facilities both during and after the Covenant Relief Period were dependent on the Company's unsecured debt ratings.
The amendments to the Second Consolidated Credit Agreement also imposed additional restrictions on the Company during the Covenant Relief Period, including limitations on making investments, incurring indebtedness, making capital expenditures, paying dividends or making other distributions, repurchasing the Company's shares, voluntarily prepaying certain indebtedness, encumbering certain assets and maintaining a minimum liquidity amount, in each case subject to certain exceptions. The Company had the right under certain circumstances to terminate the Covenant Relief Period earlier, which it exercised on July 12, 2021 as discussed below.
On July 12, 2021, the Company provided notice of its election to terminate the Covenant Relief Period early and was released from the additional restrictions described above. Also, as a result of this election, effective July 13, 2021, the interest rates for the revolving credit and term loan facilities, based on the Company's unsecured debt ratings, returned to LIBOR plus 1.20% and LIBOR plus 1.35%, respectively (both with a LIBOR floor of zero), and the facility fee on the revolving credit facility was reduced to 0.25%.
During the year ended December 31, 2021, the Company received an investment grade rating from S&P Global Ratings on its unsecured debt, adding to its current investment grade rating from Moody's Investors Services. The Company previously caused certain of its key subsidiaries to guarantee its obligations under its existing bank credit facility, private placement notes and senior unsecured bonds due to a decrease in the Company's credit ratings resulting from the impact of the COVID-19 pandemic. As a result of the Company obtaining an investment grade rating on its long-term unsecured debt from both S&P and Moody's, the Company's subsidiary guarantors were released from their guarantees under these debt agreements in accordance with the terms of such agreements. Additionally, during October of 2021, Moody's revised its outlook on the Company's investment grade rating on its unsecured debt from negative to stable.
On October 6, 2021, the Company entered into a Third Amended, Restated and Consolidated Credit Agreement, governing a new amended and restated senior unsecured revolving credit facility. The new facility, which will mature on October 6, 2025, replaced the Company’s then existing $1.0 billion senior unsecured revolving credit facility and $400.0 million senior unsecured term loan facility under the Second Consolidated Credit Agreement. The new facility provides for an initial maximum principal amount of borrowing availability of $1.0 billion with an “accordion” feature under which the Company may increase the total maximum principal amount available by $1.0 billion, to a total of $2.0 billion, subject to lender consent. The new facility has the same pricing terms based on credit ratings and financial covenants as the prior facility (with improved valuation of certain asset types), as well as customary covenants and events of default. The Company has two options to extend the maturity date of the new credit facility by an additional six months each (for a total of 12 months), subject to paying additional fees and the absence of any default.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
In connection with the amendment, the Company paid $7.5 million in fees to existing lenders that were capitalized in deferred financing costs and amortized as part of the effective yield. These fees related to the unsecured revolving credit facility and are included in "Other assets" in the accompanying balance sheet as of December 31, 2022 and 2021.
(4) On October 27, 2021, the Company issued $400.0 million in aggregate principal amount of senior notes due November 15, 2031 pursuant to an underwritten public offering. The notes bear interest at an annual rate of 3.60%. Interest is payable on May 15 and November 15 of each year beginning on May 15, 2022 until the stated maturity date. The notes were issued at 99.174% of their face value and are unsecured. Net proceeds from the note offering were used for the redemption of the Company's senior notes due in 2023 discussed above.
(5) The bonds have a variable interest rate that was approximately 4.43% on a weighted average basis. During the year ended December 31, 2022, the Company amended and restated its interest rate swap agreement on variable rate secured bonds with a notional amount of $25.0 million. This amendment changed the index rate from LIBOR to SOFR and extended the swap termination date by two years to September 30, 2026. The fixed rate of 1.3925% indexed to LIBOR was modified to 2.5325% indexed to SOFR. See Note 9 for further details.
Certain of the Company’s debt agreements contain customary restrictive covenants related to financial and operating performance and certain cross-default provisions. The Company was in compliance with all financial covenants under the Company's debt instruments at December 31, 2022.
Principal payments due on long-term debt obligations subsequent to December 31, 2022 (without consideration of any extensions) are as follows (in thousands):
| | | | | |
| Amount |
Year: | |
2023 | $ | — | |
2024 | 136,637 | |
2025 | 300,000 | |
2026 | 629,597 | |
2027 | 450,000 | |
Thereafter | 1,324,995 | |
Less: deferred financing costs, net | (31,118) | |
Total | $ | 2,810,111 | |
The Company capitalizes a portion of interest costs as a component of property under development. The following is a summary of interest expense, net, for the years ended December 31, 2022, 2021 and 2020 (in thousands):
| | | | | | | | | | | | | | | | | |
| 2022 | | 2021 | | 2020 |
Interest on loans | $ | 123,070 | | | $ | 138,805 | | | $ | 152,058 | |
| | | | | |
Amortization of deferred financing costs | 8,360 | | | 7,666 | | | 6,606 | |
| | | | | |
Credit facility and letter of credit fees | 2,682 | | | 3,344 | | | 3,064 | |
Interest cost capitalized | (1,286) | | | (1,567) | | | (1,233) | |
Interest income | (1,651) | | | (153) | | | (2,820) | |
| | | | | |
Interest expense, net | $ | 131,175 | | | $ | 148,095 | | | $ | 157,675 | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
9. Derivative Instruments
All derivatives are recognized at fair value in the consolidated balance sheets within the line items "Other assets" and "Accounts payable and accrued liabilities" as applicable. The Company has elected not to offset its derivative position for purposes of balance sheet presentation and disclosure. The Company had derivative assets of $11.4 million at December 31, 2022 and no derivative assets at December 31, 2021. The Company had derivative liabilities of $4.9 million at December 31, 2021 and no derivative liabilities at December 31, 2022. The Company has not posted or received collateral with its derivative counterparties as of December 31, 2022 and 2021. See Note 10 for disclosures relating to the fair value of the derivative instruments.
Risk Management Objective of Using Derivatives
The Company is exposed to certain risk arising from both its business operations and economic conditions including the effect of changes in foreign currency exchange rates on foreign currency transactions and interest rates on its SOFR based borrowings. The Company manages this risk by following established risk management policies and procedures including the use of derivatives. The Company’s objective in using derivatives is to add stability to reported earnings and to manage its exposure to foreign exchange and interest rate movements or other identified risks. To accomplish this objective, the Company primarily uses interest rate swaps, cross-currency swaps and foreign currency forwards.
Cash Flow Hedges of Interest Rate Risk
The Company uses interest rate swaps as its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt or payment of variable-rate amounts from a counterparty which results in the Company recording net interest expense that is fixed over the life of the agreements without exchange of the underlying notional amount.
During the year ended December 31, 2021, the Company terminated four of its interest rate swap agreements in connection with the payoff of the related unsecured term loan facility. These interest rate swaps had a combined notional amount of $400.0 million at termination and $3.2 million was reclassified into earnings as expense during the year ended December 31, 2021, as the forecasted future transactions were no longer probable.
During the year ended December 31, 2022, the Company amended and restated its interest rate swap agreement on its variable rate secured bonds with a notional amount of $25.0 million. This amendment changed the index rate from LIBOR to SOFR and extended the termination date by two years to September 30, 2026. The fixed rate of 1.3925% indexed to LIBOR was modified to 2.5325% indexed to SOFR. The Company used a strategy commonly referred to as blend and extend which allows the asset position of the terminated interest rate swap agreement of approximately $1.4 million to be effectively blended into the new interest rate swap agreement. At December 31, 2022, the Company had only this interest rate swap agreement designated as a cash flow hedge of interest rate risk. The interest rate swap agreement outstanding as of December 31, 2022 is summarized below:
| | | | | | | | | | | | | | | | | | | | |
Fixed rate | | Notional Amount (in millions) | | Index | | Maturity |
2.5325% | | $ | 25.0 | | | USD SOFR | | September 30, 2026 |
The change in the fair value of interest rate derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (AOCI) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction.
Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of December 31, 2022, the Company estimates that during the twelve months ending December 31, 2023, $1.0 million of gains will be reclassified from AOCI to interest expense.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
Cash Flow Hedges of Foreign Exchange Risk
The Company is exposed to foreign currency exchange risk against its functional currency, USD, on CAD denominated cash flow from its six Canadian properties. The Company uses cross-currency swaps to mitigate its exposure to fluctuations in the USD-CAD exchange rate on cash inflows associated with these properties which should hedge a significant portion of the Company's expected CAD denominated cash flows. As of December 31, 2022, the Company had the following cross-currency swaps:
| | | | | | | | | | | | | | | | | | | | |
Fixed rate | | Notional Amount (in millions, CAD) | | Annual Cash Flow (in millions, CAD) | | Maturity |
$1.26 CAD per USD | | $ | 150.0 | | | $ | 10.8 | | | October 1, 2024 |
$1.28 CAD per USD | | 200.0 | | | 4.5 | | | October 1, 2024 |
$1.30 CAD per USD | | 90.0 | | | 8.1 | | | December 1, 2024 |
| | $ | 440.0 | | | $ | 23.4 | | | |
The change in the fair value of foreign currency derivatives designated and that qualify as cash flow hedges of foreign exchange risk is recorded in AOCI and reclassified into earnings in the period that the hedged forecasted transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. As of December 31, 2022, the Company estimates that during the twelve months ending December 31, 2023, $0.9 million of gains will be reclassified from AOCI to other income.
Net Investment Hedges
The Company is exposed to fluctuations in the USD-CAD exchange rate on its net investments in Canada. As such, the Company uses currency forward agreements to manage its exposure to changes in foreign exchange rates on certain of its foreign net investments. As of December 31, 2022, the Company had the following foreign currency forwards designated as net investment hedges:
| | | | | | | | | | | | | | |
Fixed rate | | Notional Amount (in millions, CAD) | | Maturity |
$1.28 CAD per USD | | $ | 200.0 | | | October 1, 2024 |
$1.30 CAD per USD | | 90.0 | | | December 2, 2024 |
Total | | $ | 290.0 | | | |
The Company previously also used CAD to USD cross-currency swaps that were designated as net investment hedges. The cross-currency swaps included a monthly settlement feature to lock in an exchange rate of CAD to USD. On April 29, 2022, the Company terminated its CAD to USD cross-currency swaps in conjunction with entering into new agreements. The Company paid $3.8 million in connection with the settlement of the CAD to USD cross-currency swap agreements, which continues to be reported in AOCI until the net investment is sold or liquidated.
For qualifying foreign currency derivatives designated as net investment hedges, the change in the fair value of the derivatives are reported in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company's accounting policy election. The earnings recognition of excluded components are presented in other income.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
Below is a summary of the effect of derivative instruments on the consolidated statements of changes in equity and income for the years ended December 31, 2022, 2021 and 2020:
Effect of Derivative Instruments on the Consolidated Statements of Changes in Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2021 and 2020
(Dollars in thousands)
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
Description | 2022 | | 2021 | | 2020 |
Cash Flow Hedges | | | | | |
Interest Rate Swaps | | | | | |
Amount of Gain (Loss) Recognized in AOCI on Derivative | $ | 1,539 | | | $ | (2,944) | | | $ | (11,612) | |
Amount of Income (Expense) Reclassified from AOCI into Earnings (1) | 96 | | | (9,156) | | | (6,159) | |
Cross Currency Swaps | | | | | |
Amount of Gain (Loss) Recognized in AOCI on Derivative | 1,898 | | | (99) | | | 5 | |
Amount of Income (Expense) Reclassified from AOCI into Earnings (2) | 276 | | | (262) | | | 441 | |
Net Investment Hedges | | | | | |
Cross Currency Swaps | | | | | |
Amount of Gain (Loss) Recognized in AOCI on Derivative | 665 | | | (518) | | | (4,664) | |
Amount of Income Recognized in Earnings (2) (3) | 170 | | | 367 | | | 599 | |
Currency Forward Agreements | | | | | |
Amount of Gain Recognized in AOCI on Derivative | 8,686 | | | — | | | — | |
| | | | | |
Total | | | | | |
Amount of Gain (Loss) Recognized in AOCI on Derivative | $ | 12,788 | | | $ | (3,561) | | | $ | (16,271) | |
Amount of Income (Expense) Reclassified from AOCI into Earnings | 372 | | | (9,418) | | | (5,718) | |
Amount of Income Recognized in Earnings | 170 | | | 367 | | | 599 | |
| | | | | |
Interest expense, net in accompanying consolidated statements of income (loss) and comprehensive income (loss) | $ | 131,175 | | | $ | 148,095 | | | $ | 157,675 | |
Other income in accompanying consolidated statements of income (loss) and comprehensive income (loss) | $ | 47,382 | | | $ | 18,816 | | | $ | 9,139 | |
(1) Included in “Interest expense, net” in accompanying consolidated statements of income (loss) and comprehensive income (loss) except for a cash settlement of approximately $3.2 million for the year ended December 31, 2021 which is included in “Costs associated with loan refinancing or payoff” in accompanying consolidated statements of income (loss) and comprehensive income (loss) related to the termination of the interest rate swap agreements.
(2) Included in "Other income" in the accompanying consolidated statements of income (loss) and comprehensive income (loss).
(3) Amounts represent derivative gains excluded from the effectiveness testing.
Credit-risk-related Contingent Features
The Company has an agreement with its interest rate derivative counterparty that contains a provision where if the Company defaults on any of its obligations for borrowed money or credit in an amount exceeding $50.0 million and such default is not waived or cured within a specified period of time, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its interest rate derivative obligations.
As of December 31, 2022, the Company had no derivatives in a liability position related to these agreements. As of December 31, 2022, the Company had not posted any collateral related to these agreements and was not in breach of any provisions in these agreements.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
10. Fair Value Disclosures
The Company has certain financial instruments that are required to be measured under the FASB’s Fair Value Measurement guidance. The Company currently does not have any non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis.
As a basis for considering market participant assumptions in fair value measurements, the FASB’s Fair Value Measurement guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
Derivative Financial Instruments
The Company uses interest rate swaps, foreign currency forwards and cross currency swaps to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The fair value of interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with the FASB's fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives also use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. As of December 31, 2022, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives and therefore, has classified its derivatives as Level 2 within the fair value reporting hierarchy.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
The table below presents the Company’s financial liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021, aggregated by the level in the fair value hierarchy within which those measurements are classified and by derivative type.
Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2022 and 2021
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
Description | Quoted Prices in Active Markets for Identical Assets (Level I) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Balance at end of period |
2022: | | | | | | | |
Cross Currency Swaps (1) | $ | — | | | $ | 1,523 | | | $ | — | | | $ | 1,523 | |
| | | | | | | |
Currency Forward Agreements (1) | $ | — | | | $ | 8,686 | | | $ | — | | | $ | 8,686 | |
Interest Rate Swap Agreements (1) | $ | — | | | $ | 1,240 | | | $ | — | | | $ | 1,240 | |
| | | | | | | |
2021: | | | | | | | |
| | | | | | | |
Cross Currency Swaps (2) | $ | — | | | $ | (4,626) | | | $ | — | | | $ | (4,626) | |
| | | | | | | |
| | | | | | | |
Interest Rate Swap Agreements (2) | $ | — | | | $ | (262) | | | $ | — | | | $ | (262) | |
(1) Included in "Other assets" in the accompanying consolidated balance sheets.
(2) Included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets.
Non-recurring fair value measurements
The table below presents the Company's assets measured at fair value on a non-recurring basis as of December 31, 2022 and 2021, aggregated by the level in the fair value hierarchy within which those measurements fall.
Assets Measured at Fair Value on a Non-Recurring Basis at December 31, 2022 and 2021
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
Description | Quoted Prices in Active Markets for Identical Assets (Level I) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Balance at end of period |
2022: | | | | | | | |
Real estate investments, net | $ | — | | | $ | 4,700 | | | $ | 33,670 | | | $ | 38,370 | |
Operating lease right-of-use asset | — | | | — | | | 7,006 | | | 7,006 | |
Mortgage notes and related accrued interest receivable | — | | | — | | | 7,780 | | | 7,780 | |
Investment in joint ventures | — | | | — | | | — | | | — | |
Other assets (1) | — | | | — | | | 1,316 | | | 1,316 | |
2021: | | | | | | | |
Real estate investments, net | $ | — | | | $ | 6,956 | | | $ | — | | | $ | 6,956 | |
Other assets (1) | — | | | — | | | — | | | — | |
(1) Includes collateral dependent notes receivable, which are presented within "Other assets" in the accompanying consolidated balance sheets.
As further discussed in Note 4, during the year ended December 31, 2022, the Company recorded impairment charges of $27.3 million, of which $25.3 million related to real estate investments, net, and $2.0 million related to an operating lease right-of-use asset. Management estimated the fair value of these investments taking into account various factors including purchase offers, independent appraisals, shortened hold periods and current market conditions. The Company determined, based on the inputs, that its valuation of one of its properties with a purchase offer was classified as Level 2 of the fair value hierarchy and was measured at fair value. Six properties, one of which included an operating lease right-of-use asset, were measured at fair value using independent appraisals which used discounted cash flow models. The significant inputs and assumptions used in the real estate appraisals included market rents which ranged from $6 per square foot to $22 per square foot, discount rates which ranged from 7.75% to 9.75% and terminal capitalization rates ranging from 7.00% to 8.75% for the properties not under ground lease.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
Significant inputs and assumptions used in the right-of-use asset appraisal included a market rate of $25 per square foot and a discount rate of 8.50%. These measurements were classified within Level 3 of the fair value hierarchy as many of the assumptions were not observable.
As further discussed in Note 6, during the year ended December 31, 2022, the Company recorded an allowance for credit losses of $6.8 million related to one mortgage note and $1.2 million related to one note receivable, as a result of recent changes in the borrower's financial status. Management valued the mortgage note and note receivable based on the fair value of the underlying collateral determined using independent appraisals which used discounted cash flow models. The significant inputs and assumptions used in the real estate appraisals included market rents of approximately $20 per square foot and a discount rate of 6.75%. These measurements were classified within Level 3 of the fair value hierarchy as many of the assumptions were not observable. Additionally, during the year ended December 31, 2022, the Company recorded an allowance for credit losses totaling $1.9 million related to one note receivable to fully reserve the outstanding principal balance of $1.9 million, as a result of recent changes in the borrower's financial status. Management valued the note receivable based on the fair value of the underlying collateral which was determined taking into account various factors including implied asset value changes based on current market conditions and review of the financial statements of the borrower, and was classified within Level 3 of the fair value hierarchy.
Additionally, as further discussed in Note 7, during the year ended December 31, 2022, the Company recorded impairment charges of $0.6 million related to its investment in joint ventures. Management estimated the fair value of these investments, taking into account various factors including implied asset value changes based on discounted cash flow projections and current market conditions. The Company determined, based on the inputs, that its valuation of investment in joint ventures was classified within Level 3 of the fair value hierarchy as many of the assumptions were not observable.
As discussed further in Note 4, during the year ended December 31, 2021, the Company recorded impairment charges of $2.7 million related to real estate investments, net, on two of its properties. Management estimated the fair values of these investments taking into account various factors including purchase offers, shortened hold periods and market conditions. The Company determined, based on the inputs, that the valuation of these properties with purchase offers were classified within Level 2 of the fair value hierarchy and were measured at fair value.
As discussed further in Note 6, during the year ended December 31, 2020, the Company entered into an amended and restated loan and security agreements with one of its notes receivable borrowers in response to the impacts of the COVID-19 pandemic and the Company recorded expected credit loss to fully reserve the outstanding principal balance. Management valued the loan based on the fair value of the underlying collateral which was based on review of the financial statements of the borrower, and was classified within Level 2 of the fair value hierarchy at December 31, 2022 and 2021.
Fair Value of Financial Instruments
The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instruments at December 31, 2022 and 2021:
Mortgage notes receivable and related accrued interest receivable:
The fair value of the Company’s mortgage notes and related accrued interest receivable is estimated by discounting the future cash flows of each instrument using current market rates. At December 31, 2022, the Company had a carrying value of $457.3 million in fixed rate mortgage notes receivable outstanding, including related accrued interest, with a weighted average interest rate of approximately 8.92%. The fixed rate mortgage notes bear interest at rates of 6.99% to 12.14%. Discounting the future cash flows for fixed rate mortgage notes receivable using rates of 7.15% to 10.00%, management estimates the fair value of the fixed rate mortgage notes receivable to be $500.0 million with an estimated weighted average market rate of 7.70% at December 31, 2022.
At December 31, 2021, the Company had a carrying value of $370.2 million in fixed rate mortgage notes receivable outstanding, including related accrued interest, with a weighted average interest rate of
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
approximately 9.04%. The fixed rate mortgage notes bear interest at rates of 7.01% to 11.96%. Discounting the future cash flows for fixed rate mortgage notes receivable using rates of 7.50% to 9.25%, management estimates the fair value of the fixed rate mortgage notes receivable to be $400.1 million with an estimated weighted average market rate of 8.05% at December 31, 2021.
Derivative instruments:
Derivative instruments are carried at their fair value.
Debt instruments:
The fair value of the Company's debt is estimated by discounting the future cash flows of each instrument using current market rates. At December 31, 2022, the Company had a carrying value of $25.0 million in variable rate debt outstanding with an average weighted interest rate of approximately 4.43%. The carrying value of the variable rate debt outstanding approximates the fair value at December 31, 2022.
At December 31, 2021, the Company had a carrying value of $25.0 million in variable rate debt outstanding with an average weighted interest rate of approximately 0.15%. The carrying value of the variable rate debt outstanding approximates the fair value at December 31, 2021.
At both December 31, 2022 and 2021, the $25.0 million of variable rate debt outstanding, discussed above, had been effectively converted to a fixed rate by interest rate swap agreements. See Note 9 for additional information related to the Company's interest rate swap agreements.
At December 31, 2022, the Company had a carrying value of $2.82 billion in fixed rate long-term debt outstanding with an average weighted interest rate of approximately 4.34%. Discounting the future cash flows for fixed rate debt using December 31, 2022 market rates of 7.42% to 8.35%, management estimates the fair value of the fixed rate debt to be approximately $2.39 billion with an estimated weighted average market rate of 7.94% at December 31, 2022.
At December 31, 2021, the Company had a carrying value of $2.82 billion in fixed rate long-term debt outstanding with an average weighted interest rate of approximately 4.34%. Discounting the future cash flows for fixed rate debt using December 31, 2021 market rates of 2.25% to 4.56%, management estimates the fair value of the fixed rate debt to be approximately $2.93 billion with an estimated weighted average market rate of 3.43% at December 31, 2021.
11. Common and Preferred Shares
On June 3, 2022, the Company filed a shelf registration statement with the SEC, which is effective for a term of three years. The securities covered by this registration statement include common shares, preferred shares, debt securities, depository shares, warrants and units. The Company may periodically offer one of more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplements, or other offering materials, at the time of any offering.
Additionally, on June 3, 2022, the Company filed a shelf registration statement with the SEC, which is effective for a term of three years, for its Dividend Reinvestment and Direct Share Purchase Plan (DSP Plan) which permits the issuance of up to 25,000,000 common shares.
Common Shares
The Company's Board declared cash dividends totaling $3.25 and $1.50 per common share for the years ended December 31, 2022 and 2021, respectively.
Of the total distributions calculated for tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid per common share for the years ended December 31, 2022 and 2021 are as follows:
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
| | | | | | | | | | | | |
| Cash Distributions Per Share | |
| 2022 | | 2021 | |
Taxable ordinary income (1) | $ | 2.5906 | | | $ | 1.2500 | | |
Return of capital | 0.6344 | | | — | | |
Long-term capital gain | — | | | — | | |
| | | | |
Totals | $ | 3.2250 | | | $ | 1.2500 | | |
(1) Amounts qualify in their entirety as 199A distributions.
During the year ended December 31, 2022 and 2021, the Company issued an aggregate of 23,196 and 11,798 common shares under its DSP Plan for net proceeds of $1.1 million and $0.6 million, respectively.
Series C Convertible Preferred Shares
The Company has outstanding 5.4 million 5.75% Series C cumulative convertible preferred shares (Series C preferred shares). The Company will pay cumulative dividends on the Series C preferred shares from the date of original issuance in the amount of $1.4375 per share each year, which is equivalent to 5.75% of the $25 liquidation preference per share. Dividends on the Series C preferred shares are payable quarterly in arrears. The Company does not have the right to redeem the Series C preferred shares except in limited circumstances to preserve the Company’s REIT status. The Series C preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. As of December 31, 2022, the Series C preferred shares are convertible, at the holder’s option, into the Company’s common shares at a conversion rate of 0.4192 common shares per Series C preferred share, which is equivalent to a conversion price of $59.64 per common share. This conversion ratio may increase over time upon certain specified triggering events including if the Company’s common dividends per share exceeds a quarterly threshold of $0.6875.
Upon the occurrence of certain fundamental changes, the Company will under certain circumstances increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the Series C preferred shares becoming convertible into shares of the public acquiring or surviving company.
The Company may, at its option, cause the Series C preferred shares to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company’s common shares equals or exceeds 135% of the then prevailing conversion price of the Series C preferred shares.
Owners of the Series C preferred shares generally have no voting rights, except under certain dividend defaults. Upon conversion, the Company may choose to deliver the conversion value to the owners in cash, common shares, or a combination of cash and common shares.
The Company's Board declared cash dividends totaling $1.4375 per Series C preferred share for each of the years ended December 31, 2022 and 2021. There were non-cash distributions associated with conversion adjustments of $0.1735 and $0.0522 per Series C preferred share for the years ended December 31, 2022 and 2021, respectively. The conversion adjustment provision entitles the shareholders of the Series C preferred shares, upon certain quarterly common share dividend thresholds being met, to receive additional common shares of the Company upon a conversion of the preferred shares into common shares. The increase in common shares to be received upon a conversion is a deemed distribution for federal income tax purposes.
For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid and non-cash deemed distributions per Series C preferred share for the years ended December 31, 2022 and 2021 are as follows:
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
| | | | | | | | | | | | |
| Cash Distributions per Share | |
| 2022 | | 2021 | |
Taxable ordinary income (1) | $ | 1.4375 | | | $ | 1.4375 | | |
Return of capital | — | | | — | | |
Long-term capital gain | — | | | — | | |
| | | | |
Totals | $ | 1.4375 | | | $ | 1.4375 | | |
(1) Amounts qualify in their entirety as 199A distributions.
| | | | | | | | | | | | |
| Non-cash Distributions per Share | |
| 2022 | | 2021 | |
Taxable ordinary income (2) | $ | 0.1735 | | | $ | 0.0522 | | |
Return of capital | — | | | — | | |
Long-term capital gain | — | | | — | | |
| | | | |
Totals | $ | 0.1735 | | | $ | 0.0522 | | |
(2) Amounts qualify in their entirety as 199A distributions for the year ended December 31, 2021. For the year ended December 31, 2022, no amounts qualify as 199A distributions.
Series E Convertible Preferred Shares
The Company has outstanding 3.4 million 9.00% Series E cumulative convertible preferred shares (Series E preferred shares). The Company will pay cumulative dividends on the Series E preferred shares from the date of original issuance in the amount of $2.25 per share each year, which is equivalent to 9.00% of the $25 liquidation preference per share. Dividends on the Series E preferred shares are payable quarterly in arrears. The Company does not have the right to redeem the Series E preferred shares except in limited circumstances to preserve the Company’s REIT status. The Series E preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. As of December 31, 2022, the Series E preferred shares are convertible, at the holder’s option, into the Company’s common shares at a conversion rate of 0.4826 common shares per Series E preferred share, which is equivalent to a conversion price of $51.80 per common share. This conversion ratio may increase over time upon certain specified triggering events including if the Company’s common dividends per share exceeds a quarterly threshold of $0.84.
Upon the occurrence of certain fundamental changes, the Company will under certain circumstances increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the Series E preferred shares becoming convertible into shares of the public acquiring or surviving company.
The Company may, at its option, cause the Series E preferred shares to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company’s common shares equals or exceeds 150% of the then prevailing conversion price of the Series E preferred shares.
Owners of the Series E preferred shares generally have no voting rights, except under certain dividend defaults. Upon conversion, the Company may choose to deliver the conversion value to the owners in cash, common shares, or a combination of cash and common shares.
The Company's Board declared cash dividends totaling $2.25 per Series E preferred share for each of the years ended December 31, 2022 and 2021. There were no non-cash distributions associated with conversion adjustments per Series E preferred share for both years ended December 31, 2022 and 2021. The conversion adjustment provision entitles the shareholders of the Series E preferred shares, upon certain quarterly common share dividend thresholds being met, to receive additional common shares of the Company upon a conversion of the preferred shares into common shares. The increase in common shares to be received upon a conversion is a deemed distribution for federal income tax purposes.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid and non-cash deemed distributions per Series E preferred share for the years ended December 31, 2022 and 2021 are as follows:
| | | | | | | | | | | | |
| Cash Distributions per Share | |
| 2022 | | 2021 | |
Taxable ordinary income (1) | $ | 2.2500 | | | $ | 2.2500 | | |
Return of capital | — | | | — | | |
Long-term capital gain | — | | | — | | |
| | | | |
Totals | $ | 2.2500 | | | $ | 2.2500 | | |
(1) Amounts qualify in their entirety as 199A distributions.
Series G Preferred Shares
The Company has outstanding 6.0 million 5.75% Series G cumulative redeemable preferred shares (Series G preferred shares). The Company will pay cumulative dividends on the Series G preferred shares from the date of original issuance in the amount of $1.4375 per share each year, which is equivalent to 5.75% of the $25.00 liquidation preference per share. Dividends on the Series G preferred shares are payable quarterly in arrears. The Company may, at its option, redeem the Series G preferred shares in whole at any time or in part from time to time by paying $25.00 per share, plus any accrued and unpaid dividends up to, but not including the date of redemption. The Series G preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. The Series G preferred shares are not convertible into any of the Company's securities, except under certain circumstances in connection with a change of control. Owners of the Series G preferred shares generally have no voting rights except under certain dividend defaults.
The Company's Board declared cash dividends totaling $1.4375 per Series G preferred share for each of the years ended December 31, 2022 and 2021. For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid per Series G preferred share for the years ended December 31, 2022 and 2021 are as follows:
| | | | | | | | | | | | | | | | |
| Cash Distributions per Share | |
| 2022 | | 2021 | | | |
Taxable ordinary income (1) | $ | 1.4375 | | | $ | 1.4375 | | | | |
Return of capital | — | | | — | | | | |
Long-term capital gain | — | | | — | | | | |
| | | | | | |
Totals | $ | 1.4375 | | | $ | 1.4375 | | | | |
(1) Amounts qualify in their entirety as 199A distributions.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
12. Earnings Per Share
The following table summarizes the Company’s computation of basic and diluted earnings per share (EPS) for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands except per share information):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2022 |
| Income (numerator) | | Shares (denominator) | | Per Share Amount |
Basic EPS: | | | | | |
Net income | $ | 176,229 | | | | | |
Less: preferred dividend requirements | (24,141) | | | | | |
| | | | | |
| | | | | |
| | | | | |
Net income available to common shareholders | $ | 152,088 | | | 74,967 | | | $ | 2.03 | |
Diluted EPS: | | | | | |
Net income available to common shareholders | $ | 152,088 | | | 74,967 | | | |
Effect of dilutive securities: | | | | | |
Share options and performance shares | — | | | 76 | | | |
| | | | | |
| | | | | |
Net income available to common shareholders | $ | 152,088 | | | 75,043 | | | $ | 2.03 | |
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2021 |
| Income (numerator) | | Shares (denominator) | | Per Share Amount |
Basic EPS: | | | | | |
Net income | $ | 98,606 | | | | | |
Less: preferred dividend requirements | (24,134) | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net income available to common shareholders | $ | 74,472 | | | 74,755 | | | $ | 1.00 | |
Diluted EPS: | | | | | |
Net income available to common shareholders | $ | 74,472 | | | 74,755 | | | |
Effect of dilutive securities: | | | | | |
Share options and performance shares | — | | | 1 | | | |
| | | | | |
| | | | | |
Net income available to common shareholders | $ | 74,472 | | | 74,756 | | | $ | 1.00 | |
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2020 |
| Income (numerator) | | Shares (denominator) | | Per Share Amount |
Basic EPS: | | | | | |
Net loss | $ | (131,728) | | | | | |
Less: preferred dividend requirements | (24,136) | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net loss available to common shareholders | $ | (155,864) | | | 75,994 | | | $ | (2.05) | |
Diluted EPS: | | | | | |
Net loss available to common shareholders | $ | (155,864) | | | 75,994 | | | |
Effect of dilutive securities: | | | | | |
Share options | — | | | — | | | |
| | | | | |
| | | | | |
Net loss available to common shareholders | $ | (155,864) | | | 75,994 | | | $ | (2.05) | |
The effect of the potential common shares from the conversion of the Company’s convertible preferred shares and from the exercise of share options are included in diluted earnings per share if the effect is dilutive. Potential common shares from the performance shares are included in diluted earnings per share upon the satisfaction of certain performance and market conditions. These conditions are evaluated at each reporting period and if the conditions have been satisfied during the reporting period, the number of contingently issuable shares are included in the computation of diluted earnings per share.
The following shares have an anti-dilutive effect and are therefore excluded from the calculation of diluted earnings per share:
•The additional 2.3 million common shares for the year ended December 31, 2022 and 2.2 million common shares for both years ended December 31, 2021 and 2020 that would result from the conversion of the
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
Company’s 5.75% Series C cumulative convertible preferred shares and the corresponding add-back of the preferred dividends declared on those shares.
•The additional 1.7 million common shares that would result from the conversion of the Company’s 9.0% Series E cumulative convertible preferred shares and the corresponding add-back of the preferred dividends declared on those shares for the years ended December 31, 2022, 2021 and 2020.
•Outstanding options to purchase 96 thousand common shares at per share prices ranging from $44.44 to $76.63 for the year ended December 31, 2022.
•Outstanding options to purchase 89 thousand common shares at per share prices ranging from $44.44 to $76.63 for the year ended December 31, 2021.
•Outstanding options to purchase 117 thousand common shares at per share prices ranging from $44.62 to $76.63 for the year ended December 31, 2020.
•The effect of 99 thousand contingently issuable performance shares granted during 2022 for the year ended December 31, 2022.
•The effect of 56 thousand contingently issuable performance shares granted during 2020 for the years ended December 31, 2022, 2021 and 2020.
13. Severance Expense
On December 31, 2020, the Company's Senior Vice President - Asset Management, Michael L. Hirons, retired from the Company. Mr. Hirons' retirement was a "Qualifying Termination" under the Company's Employee Severance and Retirement Vesting Plan. For the year ended December 31, 2020, severance expense totaled $2.9 million and included cash payments totaling $1.6 million, and accelerated vesting of nonvested shares and performance shares totaling $1.3 million.
14. Equity Incentive Plan
All grants of common shares and options to purchase common shares were issued under the Company's 2007 Equity Incentive Plan prior to May 12, 2016 and under the 2016 Equity Incentive Plan on and after May 12, 2016. Under the 2016 Equity Incentive Plan, an aggregate of 3,950,000 common shares, options to purchase common shares and restricted share units, subject to adjustment in the event of certain capital events, may be granted. Additionally, the 2020 Long Term Incentive Plan (2020 LTIP) is a sub-plan under the Company's 2016 Equity Incentive Plan. Under the 2020 LTIP, the Company awards performance shares and restricted shares to the Company's executive officers. At December 31, 2022, there were 1,983,595 shares available for grant under the 2016 Equity Incentive Plan.
Share Options
Share options have exercise prices equal to the fair market value of a common share at the date of grant. The options may be granted for any reasonable term, not to exceed 10 years. The Company generally issues new common shares upon option exercise. A summary of the Company’s share option activity and related information is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of shares | | Option price per share | | Weighted avg. exercise price |
Outstanding at December 31, 2019 | 118,030 | | | $ | 44.62 | | | — | | | $ | 76.63 | | | $ | 55.63 | |
Exercised | (1,410) | | | 44.98 | | | — | | | 44.98 | | | 44.98 | |
Granted | 2,890 | | | 69.19 | | | — | | | 69.19 | | | 69.19 | |
Forfeited/Expired | (2,820) | | | 44.98 | | | — | | | 44.98 | | | 44.98 | |
Outstanding at December 31, 2020 | 116,690 | | | $ | 44.62 | | | — | | | $ | 76.63 | | | $ | 56.36 | |
Exercised | (5,051) | | | 45.20 | | | — | | | 47.77 | | | 47.27 | |
Granted | 1,838 | | | 44.44 | | | — | | | 44.44 | | | 44.44 | |
Forfeited/Expired | (4,806) | | | 45.20 | | | — | | | 61.79 | | | 51.42 | |
Outstanding at December 31, 2021 | 108,671 | | | $ | 44.44 | | | — | | | $ | 76.63 | | | $ | 56.79 | |
Exercised | (12,559) | | | 44.62 | | | — | | | 47.15 | | | 46.43 | |
| | | | | | | | | |
| | | | | | | | | |
Outstanding at December 31, 2022 | 96,112 | | | $ | 44.44 | | | — | | | $ | 76.63 | | | $ | 58.15 | |
The weighted average fair value of options granted was $20.34 and $3.73 during 2021 and 2020, respectively. No options were granted during the year ended December 31, 2022. The intrinsic value of stock options exercised was
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
$62 thousand, $14 thousand, and $22 thousand during the years ended December 31, 2022, 2021 and 2020, respectively. Additionally, the Company repurchased 11,590 shares in conjunction with the stock options exercised during the year ended December 31, 2022 with a total value of $594 thousand.
The following table summarizes outstanding and exercisable options at December 31, 2022:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Options outstanding | | Options exercisable |
Exercise price range | | Options outstanding | Weighted avg. life remaining | Weighted avg. exercise price | Aggregate intrinsic value (in thousands) | | Options exercisable | Weighted avg. life remaining | Weighted avg. exercise price | Aggregate intrinsic value (in thousands) |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
44.44 - 49.99 | | 8,750 | | 5.6 | | | | 7,372 | | 1.6 | | |
50.00 - 59.99 | | 31,008 | | 1.5 | | | | 31,008 | | 1.5 | | |
60.00 - 69.99 | | 52,198 | | 3.5 | | | | 50,754 | | 2.8 | | |
70.00 - 76.63 | | 4,156 | | 5.0 | | | | 3,671 | | 4.9 | | |
| | 96,112 | | 3.1 | $ | 58.15 | | $ | — | | | 92,805 | | 2.3 | $ | 58.10 | | $ | — | |
Nonvested Shares
A summary of the Company’s nonvested share activity and related information is as follows:
| | | | | | | | | | | | | | | | | |
| Number of shares | | Weighted avg. grant date fair value | | Weighted avg. life remaining |
Outstanding at December 31, 2021 | 478,554 | | | $ | 56.57 | | | |
Granted | 243,286 | | | 46.65 | | | |
Vested | (215,752) | | | 59.94 | | | |
Forfeited | (2,176) | | | 46.98 | | | |
Outstanding at December 31, 2022 | 503,912 | | | $ | 50.38 | | | 0.86 |
The holders of nonvested shares have voting rights and receive dividends from the date of grant. The fair value of the nonvested shares that vested was $10.2 million, $6.6 million, and $17.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, unamortized share-based compensation expense related to nonvested shares was $9.5 million and will be recognized in future periods as follows (in thousands):
| | | | | |
| Amount |
Year: | |
2023 | $ | 5,250 | |
2024 | 3,030 | |
2025 | 1,217 | |
Total | $ | 9,497 | |
Nonvested Performance Shares
A summary of the Company's nonvested performance share activity and related information is as follows:
| | | | | |
| Number of Performance Shares |
Outstanding at December 31, 2021 | 158,776 | |
Granted | 98,610 | |
Vested | — | |
Forfeited | — | |
Outstanding at December 31, 2022 | 257,386 | |
The number of common shares issuable upon settlement of the performance shares granted during the years ended December 31, 2022, 2021 and 2020 will be based upon the Company's achievement level relative to the following performance measures at December 31, 2024, 2023 and 2022: 50% based upon the Company's Total Shareholder Return (TSR) relative to the TSRs of the Company's peer group companies, 25% based upon the Company's TSR relative to the TSRs of companies in the MSCI US REIT Index and 25% based upon the Company's Compounded
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
Annual Growth Rate (CAGR) in AFFO per share over the three-year performance period. The Company's achievement level relative to the performance measures is assigned a specific payout percentage which is multiplied by a target number of performance shares.
The performance shares based on relative TSR performance have market conditions and are valued using a Monte Carlo simulation model on the grant date, which resulted in a grant date fair value of approximately $6.0 million, $6.6 million and $3.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. The estimated fair value is amortized to expense over the three-year vesting period, which ends on December 31, 2024, 2023 and 2022 for performance shares granted in 2022, 2021 and 2020, respectively. The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the performance shares with a market condition for the years ended December 31, 2022, 2021 and 2020, respectively: risk-free interest rate of 1.7%, 0.2% and 1.4%, volatility factors in the expected market price of the Company's common shares of 71%, 69% and 18% and an expected life of approximately three years.
The performance shares based on growth in AFFO have a performance condition. The probability of achieving the performance condition is assessed at each reporting period. If it is deemed probable that the performance condition will be met, compensation cost will be recognized based on the closing price per share of the Company's common shares on the date of the grant multiplied by the number of awards expected to be earned. If it is deemed that it is not probable that the performance condition will be met, the Company will discontinue the recognition of compensation cost and any compensation cost previously recorded will be reversed. At December 31, 2022, achievement of the performance condition was deemed probable for the performance shares granted during the year ended December 31, 2022 and 2021, with an expected payout percentage of 200%, which resulted in a grant date fair value of approximately $2.3 million for each period. The performance condition for the performance shares granted during the year ended December 31, 2020 was not achieved resulting in no pay-out.
At December 31, 2022, unamortized share-based compensation expense related to nonvested performance shares was $8.5 million and will be recognized in future periods as follows (in thousands):
| | | | | |
| Amount |
Year: | |
2023 | $ | 5,713 | |
2024 | 2,775 | |
2025 | — | |
Total | $ | 8,488 | |
The performance shares accrue dividend equivalents which are paid only if common shares are issued upon settlement of the performance shares. During the years ended December 31, 2022 and 2021, the Company accrued dividend equivalents expected to be paid on earned awards of $579 thousand and $158 thousand, respectively. No dividend equivalents were paid for the years ended December 31, 2022 and 2021.
Restricted Share Units
A summary of the Company’s restricted share unit activity and related information is as follows:
| | | | | | | | | | | | | | | | | |
| Number of Shares | | Weighted Average Grant Date Fair Value | | Weighted Average Life Remaining |
Outstanding at December 31, 2021 | 43,306 | | | $ | 49.15 | | | |
Granted | 41,399 | | | 50.49 | | | |
Vested | (46,100) | | | 49.00 | | | |
Outstanding at December 31, 2022 | 38,605 | | | $ | 50.77 | | | 0.42 |
The holders of restricted share units receive dividend equivalents from the date of grant. At December 31, 2022, unamortized share-based compensation expense related to restricted share units was $817 thousand which will be recognized in 2023.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
15. Operating Leases
The Company’s real estate investments are leased under operating leases with remaining terms ranging from one year to 27 years. The Company adopted Topic 842 on January 1, 2019 and elected to not reassess its prior conclusions about lease classification. Accordingly, these arrangements continue to be classified as operating leases.
The following table summarizes the future minimum rentals on the Company's lessor and sub-lessor arrangements at December 31, 2022 and 2021 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2022 | | | December 31, 2021 |
| Operating leases | Sub-lessor operating ground leases | | | | Operating leases | Sub-lessor operating ground leases | |
| Amount (1) (2) | Amount (1) (2) | Total | | | Amount (1) (2) | Amount (1) (2) | Total |
Year: | | | | | Year: | | | |
2023 | $ | 534,742 | | $ | 24,795 | | $ | 559,537 | | | 2022 | $ | 487,344 | | $ | 23,232 | | $ | 510,576 | |
2024 | 519,773 | | 25,981 | | 545,754 | | | 2023 | 487,624 | | 22,915 | | 510,539 | |
2025 | 513,408 | | 26,118 | | 539,526 | | | 2024 | 485,383 | | 22,415 | | 507,798 | |
2026 | 510,542 | | 24,253 | | 534,795 | | | 2025 | 480,161 | | 22,552 | | 502,713 | |
2027 | 480,005 | | 23,493 | | 503,498 | | | 2026 | 477,702 | | 20,687 | | 498,389 | |
Thereafter | 3,485,821 | | 220,365 | | 3,706,186 | | | Thereafter | 3,687,535 | | 185,964 | | 3,873,499 | |
Total | $ | 6,044,291 | | $ | 345,005 | | $ | 6,389,296 | | | Total | $ | 6,105,749 | | $ | 297,765 | | $ | 6,403,514 | |
(1) Amounts presented above are based on contractual obligations and exclude the impact of COVID-19 deferred rent payments. As of December 31, 2022, receivables from tenants included fixed rent payments of approximately $2.1 million that were deferred due to the COVID-19 pandemic and determined to be collectible. The Company is currently scheduled to collect approximately $1.6 million in 2023 and $0.5 million in 2024.
(2) Included in rental revenue.
In addition to its lessor arrangements on its real estate investments, as of December 31, 2022 and 2021, the Company was lessee in 52 and 51 operating ground leases, respectively, as well as lessee in an operating lease of its executive office. The Company's tenants, who are generally sub-tenants under these ground leases, are responsible for paying the rent under these ground leases. As of December 31, 2022, rental revenue from several of the Company's tenants, who are also sub-tenants under the ground leases, is being recognized on a cash basis. In most cases, the ground lease sub-tenants have continued to pay the rent under these ground leases, however, two of these properties do not currently have sub-tenants. In the event the tenant fails to pay the ground lease rent or if the property does not have sub-tenants, the Company is primarily responsible for the payment, assuming the Company does not sell or re-tenant the property. As of December 31, 2022, the ground lease arrangements have remaining terms ranging from two years to 44 years. Most of these leases include one or more options to renew. The Company assesses these options using a threshold of reasonably certain, which also includes an assessment of the term of the Company's tenants' leases. For leases where renewal is reasonably certain, those option periods are included within the lease term and also the measurement of the operating lease right-of-use asset and liability. The ground lease arrangements do not contain any residual value guarantees or any material restrictions. As of December 31, 2022, the Company does not have any leases that have not commenced but that create significant rights and obligations.
The Company determines whether an arrangement is or includes a lease at contract inception. Operating lease right-of-use assets and liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. As the Company's leases do not provide an implicit rate, the Company used its incremental borrowing rate in determining the present value of lease payments. The incremental borrowing rate was adjusted for collateral based on the information available at adoption or the commencement date. Inputs to the calculation of the Company's incremental borrowing rate include its senior notes and their option adjusted credit spreads over comparable U.S. Treasury rates, adjusted to a collateralized basis by estimating the credit spread improvement that would result from an upgrade of one ratings classification.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
The following table summarizes the future minimum lease payments under the ground lease obligations and the office lease at December 31, 2022 and 2021, excluding contingent rent due under leases where the ground lease payment, or a portion thereof, is based on the level of the tenant's sales (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| December 31, 2022 | | | December 31, 2021 |
| Ground Leases (1) | Office lease (2) | | | Ground Leases (1) | Office lease (2) |
Year: | | | | Year: | | |
2023 | $ | 26,317 | | $ | 958 | | | 2022 | $ | 24,753 | | $ | 967 | |
2024 | 27,504 | | 958 | | | 2023 | 24,440 | | 967 | |
2025 | 27,622 | | 958 | | | 2024 | 23,939 | | 967 | |
2026 | 25,796 | | 717 | | | 2025 | 24,058 | | 967 | |
2027 | 24,235 | | — | | | 2026 | 22,232 | | 724 | |
Thereafter | 235,792 | | — | | | Thereafter | 202,135 | | — | |
Total lease payments | $ | 367,266 | | $ | 3,591 | | | | $ | 321,557 | | $ | 4,592 | |
Less: imputed interest | 129,066 | | 384 | | | | 106,878 | | 476 | |
Present value of lease liabilities | $ | 238,200 | | $ | 3,207 | | | | $ | 214,679 | | $ | 4,116 | |
(1) Included in property operating expense.
(2) Included in general and administrative expense.
The following table summarizes the carrying amounts of the operating lease right-of-use assets and liabilities as of December 31, 2022 and 2021 (in thousands):
| | | | | | | | | | | | | | | | | |
| | | | As of December 31, |
| | Classification | | 2022 | 2021 |
Assets: | | | | | |
Operating ground lease assets | | Operating lease right-of-use assets | | $ | 198,009 | | $ | 176,984 | |
Office lease asset | | Operating lease right-of-use assets | | 2,976 | | 3,824 | |
Total operating lease right-of-use assets | | | | $ | 200,985 | | $ | 180,808 | |
Sub-lessor straight-line rent receivable | | Accounts receivable | | 14,586 | | 12,894 | |
Total leased assets | | | | $ | 215,571 | | $ | 193,702 | |
Liabilities: | | | | | |
Operating ground lease liabilities | | Operating lease liabilities | | $ | 238,200 | | $ | 214,679 | |
Office lease liability | | Operating lease liabilities | | 3,207 | | 4,116 | |
Total lease liabilities | | | | $ | 241,407 | | $ | 218,795 | |
The following table summarizes rental revenue, including sublease arrangements and lease costs, including impairment charges on operating lease right-of-use assets for the years ended December 31, 2022, 2021 and 2020 (in thousands):
| | | | | | | | | | | | | | | | | | | |
| | | | | Year ended December 31, |
| Classification | | | | 2022 | 2021 | 2020 |
Rental revenue | | | | | | | |
Operating leases (1) | Rental revenue | | | | $ | 551,383 | | $ | 457,063 | | $ | 361,393 | |
Sublease income - operating ground leases (2) | Rental revenue | | | | 24,218 | | 21,819 | | 10,783 | |
Lease costs | | | | | | | |
Operating ground lease cost | Property operating expense | | | | $ | 25,167 | | $ | 22,863 | | $ | 24,386 | |
Operating office lease cost | General and administrative expense | | | | 904 | | 905 | | 905 | |
Operating lease right-of-use asset impairment charges (3) | Impairment charges | | | | 1,968 | | — | | 15,009 | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
(1) During the year ended December 31, 2020, the Company wrote-off straight-line rent receivables totaling $26.5 million, to straight-line rental revenue classified in rental revenue in the accompanying consolidated statements of income (loss) and comprehensive income (loss). Additionally, during the year ended December 31, 2020, the Company wrote-off lease receivables from tenants totaling $25.7 million, to minimum rent, tenant reimbursements and percentage rent classified in "Rental revenue" in the accompanying consolidated statements of income (loss) and comprehensive income (loss) related to tenants being recognized on a cash basis.
(2) During the year ended December 31, 2020, the Company wrote-off sub-lessor ground lease straight-line rent receivables totaling $11.5 million, to straight-line rental revenue classified in "Rental revenue" in the accompanying consolidated statements of income (loss) and comprehensive income (loss). Additionally, during the year ended December 31, 2020, the Company wrote-off sub-lessor ground lease receivables from tenants totaling $1.4 million to minimum rent classified in "Rental revenue" in the accompanying consolidated statements of income (loss) and comprehensive income (loss) related to tenants being recognized on a cash basis.
(3) During the years ended December 31, 2022 and 2020, the Company recognized impairment charges of $2.0 million and $15.0 million, respectively. See Note 4 for the details on these impairments.
The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for arrangements where the Company is the lessee as of December 31, 2022 and 2021:
| | | | | | | | | | | |
| | As of December 31, |
| | 2022 | 2021 |
Weighted-average remaining lease term in years | | | |
Operating ground leases | | 15.1 | 15.0 |
Operating office lease | | 3.8 | 4.8 |
Weighted-average discount rate | | | |
Operating ground leases | | 5.31 | % | 4.97 | % |
Operating office lease | | 6.04 | % | 4.62 | % |
16. Other Commitments and Contingencies
As of December 31, 2022, the Company had 15 development projects with commitments to fund an aggregate of approximately $205.1 million. Development costs are advanced by the Company in periodic draws. If the Company determines that construction is not being completed in accordance with the terms of the development agreement, it can discontinue funding construction draws. The Company has agreed to lease the properties to the operators at pre-determined rates upon completion of construction.
The Company has certain commitments related to its mortgage notes and notes receivable investments that it may be required to fund in the future. The Company is generally obligated to fund these commitments at the request of the borrower or upon the occurrence of events outside of its direct control. As of December 31, 2022, the Company had four mortgage notes with commitments totaling approximately $85.4 million. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments.
In connection with construction of the Company's development projects and related infrastructure, certain public agencies require posting of surety bonds to guarantee that the Company's obligations are satisfied. These bonds expire upon the completion of the improvements or infrastructure. As of December 31, 2022, the Company had three surety bonds outstanding totaling $2.7 million.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
17. Segment Information
The Company groups its investments into two reportable segments: Experiential and Education.
The financial information summarized below is presented by reportable segment (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance Sheet Data: |
| | As of December 31, 2022 |
| | Experiential | | Education | | Corporate/Unallocated | | Consolidated |
Total Assets | | $ | 5,164,710 | | | $ | 473,580 | | | $ | 120,411 | | | $ | 5,758,701 | |
| | | | | | | | |
| | As of December 31, 2021 |
| | Experiential | | Education | | Corporate/Unallocated | | Consolidated |
Total Assets | | $ | 4,995,241 | | | $ | 505,086 | | | $ | 300,823 | | | $ | 5,801,150 | |
| | | | | | | | | | | | | | | | | |
Operating Data: | | | | | |
| | For the Year Ended December 31, 2022 |
| | Experiential | Education | Corporate/Unallocated | Consolidated |
Rental revenue | | $ | 535,382 | | $ | 40,219 | | $ | — | | $ | 575,601 | |
Other income | | 37,558 | | 7,000 | | 2,824 | | 47,382 | |
Mortgage and other financing income | | 34,139 | | 909 | | — | | 35,048 | |
Total revenue | | 607,079 | | 48,128 | | 2,824 | | 658,031 | |
Property operating expense | | 55,499 | | (8) | | 494 | | 55,985 | |
Other expense | | 33,984 | | — | | (175) | | 33,809 | |
Total investment expenses | | 89,483 | | (8) | | 319 | | 89,794 | |
Net operating income - before unallocated items | | 517,596 | | 48,136 | | 2,505 | | 568,237 | |
| | | | | |
Reconciliation to Consolidated Statements of Income (Loss) and Comprehensive Income (Loss): |
General and administrative expense | | | (51,579) | |
| | | |
Transaction costs | | | | | (4,533) | |
Credit loss expense | | | | | (10,816) | |
Impairment charges | | | | | (27,349) | |
| | | |
Depreciation and amortization | | | (163,652) | |
Gain on sale of real estate | | | 651 | |
| | | |
| | |
Interest expense, net | | | | | (131,175) | |
Equity in loss from joint ventures | | | (1,672) | |
Impairment charges on joint ventures | | | | | (647) | |
| | | |
| | | |
| | | |
Income tax expense | | | (1,236) | |
| | | |
| | | |
| | | |
| | | |
| | | |
Net income | | | 176,229 | |
| | | | | |
Preferred dividend requirements | | (24,141) | |
| | |
Net income available to common shareholders of EPR Properties | | $ | 152,088 | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
| | | | | | | | | | | | | | | | | |
| | For the Year Ended December 31, 2021 |
| | Experiential | Education | Corporate/Unallocated | Consolidated |
Rental revenue | | $ | 441,423 | | $ | 37,459 | | $ | — | | $ | 478,882 | |
Other income | | 18,416 | | — | | 400 | | 18,816 | |
Mortgage and other financing income | | 32,980 | | 1,002 | | — | | 33,982 | |
Total revenue | | 492,819 | | 38,461 | | 400 | | 531,680 | |
Property operating expense | | 56,027 | | (109) | | 821 | | 56,739 | |
Other expense | | 21,864 | | — | | (123) | | 21,741 | |
Total investment expenses | | 77,891 | | (109) | | 698 | | 78,480 | |
Net operating income - before unallocated items | | 414,928 | | 38,570 | | (298) | | 453,200 | |
| | | | | |
Reconciliation to Consolidated Statements of Income (Loss) and Comprehensive Income (Loss): |
General and administrative expense | | | (44,362) | |
| | | |
Transaction costs | | | | | (3,402) | |
Credit loss benefit | | | | | 21,972 | |
| | |
Impairment charges | | | | | (2,711) | |
Depreciation and amortization | | | (163,770) | |
Gain on sale of real estate | | | 17,881 | |
Costs associated with loan refinancing or payoff | | (25,451) | |
| | |
Interest expense, net | | | | | (148,095) | |
Equity in loss from joint ventures | | | (5,059) | |
| | | | | |
| | | |
Income tax expense | | | (1,597) | |
| | | | | |
| | | |
| | | |
| | | |
| | | |
Net income | | | 98,606 | |
| | | | | |
Preferred dividend requirements | | (24,134) | |
| | | |
Net income available to common shareholders of EPR Properties | | $ | 74,472 | |
| | | | | | | | | | | | | | | | | |
| | For the Year Ended December 31, 2020 |
| | Experiential | Education | Corporate/Unallocated | Consolidated |
Rental revenue | | $ | 311,130 | | $ | 61,046 | | $ | — | | $ | 372,176 | |
Other income | | 8,085 | | 13 | | 1,041 | | 9,139 | |
Mortgage and other financing income | | 32,017 | | 1,329 | | — | | 33,346 | |
Total revenue | | 351,232 | | 62,388 | | 1,041 | | 414,661 | |
Property operating expense | | 55,500 | | 2,283 | | 804 | | 58,587 | |
Other expense | | 16,513 | | — | | (39) | | 16,474 | |
Total investment expenses | | 72,013 | | 2,283 | | 765 | | 75,061 | |
Net operating income - before unallocated items | | 279,219 | | 60,105 | | 276 | | 339,600 | |
| | | | | |
Reconciliation to Consolidated Statements of Income (Loss) and Comprehensive Income (Loss): |
General and administrative expense | | | (42,596) | |
Severance expense | | (2,868) | |
Transaction costs | | | | | (5,436) | |
Credit loss expense | | | | | (30,695) | |
| | | | | |
Impairment charges | | | | | (85,657) | |
Depreciation and amortization | | | (170,333) | |
Gain on sale of real estate | | | 50,119 | |
Costs associated with loan refinancing or payoff | | (1,632) | |
| | | | | |
Interest expense, net | | | | | (157,675) | |
Equity in loss from joint ventures | | | (4,552) | |
Impairment charges on joint ventures | | (3,247) | |
Income tax expense | | | (16,756) | |
| | | |
| | | |
| | |
| | | |
Net loss | | | (131,728) | |
Preferred dividend requirements | | | (24,136) | |
| | |
Net loss available to common shareholders of EPR Properties | | $ | (155,864) | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
EPR Properties
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2022
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Initial cost | | Additions (Dispositions) (Impairments) Subsequent to acquisition | | Gross Amount at December 31, 2022 | | | | | | | | | |
| | | Location | | Debt | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Total | | Accumulated depreciation | | Date acquired | | Depreciation life | | | |
| | | Theatres | | | | | | | | | | | | | | | | | | | | | | | |
| | | Sugar Land, TX | | $ | — | | | $ | — | | | $ | 19,100 | | | $ | 4,152 | | | $ | — | | | $ | 23,252 | | | $ | 23,252 | | | $ | (12,707) | | | 11/97 | | 40 years | | | |
| | | San Antonio, TX | | — | | | 3,006 | | | 13,662 | | | 8,455 | | | 3,006 | | | 22,117 | | | 25,123 | | | (11,395) | | | 11/97 | | 40 years | | | |
| | | Columbus, OH | | — | | | — | | | 12,685 | | | 771 | | | — | | | 13,456 | | | 13,456 | | | (8,081) | | | 11/97 | | 40 years | | | |
| | | San Diego, CA | | — | | | — | | | 16,028 | | | — | | | — | | | 16,028 | | | 16,028 | | | (9,817) | | | 11/97 | | 40 years | | | |
| | | Ontario, CA | | — | | | 5,521 | | | 19,449 | | | 7,130 | | | 5,521 | | | 26,579 | | | 32,100 | | | (13,695) | | | 11/97 | | 40 years | | | |
| | | Leawood, KS | | — | | | 3,714 | | | 12,086 | | | 4,110 | | | 3,714 | | | 16,196 | | | 19,910 | | | (8,411) | | | 11/97 | | 40 years | | | |
| | | Houston, TX | | — | | | 7,957 | | | 22,861 | | | (1,455) | | | 7,712 | | | 21,651 | | | 29,363 | | | (13,473) | | | 02/98 | | 40 years | | | |
| | | South Barrington, IL | | — | | | 6,577 | | | 27,723 | | | 4,618 | | | 6,577 | | | 32,341 | | | 38,918 | | | (18,527) | | | 03/98 | | 40 years | | | |
| | | Mesquite, TX | | — | | | 2,912 | | | 20,288 | | | 4,885 | | | 2,912 | | | 25,173 | | | 28,085 | | | (14,261) | | | 04/98 | | 40 years | | | |
| | | Hampton, VA | | — | | | 3,822 | | | 24,678 | | | 4,510 | | | 3,822 | | | 29,188 | | | 33,010 | | | (16,489) | | | 06/98 | | 40 years | | | |
| | | Pompano Beach, FL | | — | | | 6,771 | | | 9,899 | | | 10,984 | | | 6,771 | | | 20,883 | | | 27,654 | | | (19,362) | | | 08/98 | | 24 years | | | |
| | | Raleigh, NC | | — | | | 2,919 | | | 5,559 | | | 3,492 | | | 2,919 | | | 9,051 | | | 11,970 | | | (4,533) | | | 08/98 | | 40 years | | | |
| | | Davie, FL | | — | | | 2,000 | | | 13,000 | | | 11,512 | | | 2,000 | | | 24,512 | | | 26,512 | | | (13,526) | | | 11/98 | | 40 years | | | |
| | | Aliso Viejo, CA | | — | | | 8,000 | | | 14,000 | | | — | | | 8,000 | | | 14,000 | | | 22,000 | | | (8,400) | | | 12/98 | | 40 years | | | |
| | | Boise, ID | | — | | | — | | | 16,003 | | | 400 | | | — | | | 16,403 | | | 16,403 | | | (9,660) | | | 12/98 | | 40 years | | | |
| | | Cary, NC | | — | | | 3,352 | | | 11,653 | | | 3,091 | | | 3,352 | | | 14,744 | | | 18,096 | | | (7,537) | | | 12/99 | | 40 years | | | |
| | | Tampa, FL | | — | | | 6,000 | | | 12,809 | | | 1,452 | | | 6,000 | | | 14,261 | | | 20,261 | | | (8,844) | | | 06/99 | | 40 years | | | |
| | | Metairie, LA | | — | | | — | | | 11,740 | | | 3,049 | | | — | | | 14,789 | | | 14,789 | | | (6,718) | | | 03/02 | | 40 years | | | |
| | | Harahan, LA | | — | | | 5,264 | | | 14,820 | | | — | | | 5,264 | | | 14,820 | | | 20,084 | | | (7,719) | | | 03/02 | | 40 years | | | |
| | | Hammond, LA | | — | | | 2,404 | | | 6,780 | | | 1,607 | | | 1,839 | | | 8,952 | | | 10,791 | | | (3,829) | | | 03/02 | | 40 years | | | |
| | | Houma, LA | | — | | | 2,404 | | | 6,780 | | | — | | | 2,404 | | | 6,780 | | | 9,184 | | | (3,531) | | | 03/02 | | 40 years | | | |
| | | Harvey, LA | | — | | | 4,378 | | | 12,330 | | | 3,735 | | | 4,266 | | | 16,177 | | | 20,443 | | | (7,183) | | | 03/02 | | 40 years | | | |
| | | Greenville, SC | | — | | | 1,660 | | | 7,570 | | | 473 | | | 1,660 | | | 8,043 | | | 9,703 | | | (4,041) | | | 06/02 | | 40 years | | | |
| | | Sterling Heights, MI | | — | | | 5,975 | | | 17,956 | | | 3,400 | | | 5,975 | | | 21,356 | | | 27,331 | | | (12,602) | | | 06/02 | | 40 years | | | |
| | | Olathe, KS | | — | | | 4,000 | | | 15,935 | | | 2,558 | | | 3,042 | | | 19,451 | | | 22,493 | | | (10,371) | | | 06/02 | | 40 years | | | |
| | | Livonia, MI | | — | | | 4,500 | | | 17,525 | | | — | | | 4,500 | | | 17,525 | | | 22,025 | | | (8,945) | | | 08/02 | | 40 years | | | |
| | | Alexandria, VA | | — | | | — | | | 22,035 | | | — | | | — | | | 22,035 | | | 22,035 | | | (11,155) | | | 10/02 | | 40 years | | | |
| | | Little Rock, AR | | — | | | 3,858 | | | 7,990 | | | — | | | 3,858 | | | 7,990 | | | 11,848 | | | (4,012) | | | 12/02 | | 40 years | | | |
| | | Macon, GA | | — | | | 1,982 | | | 5,056 | | | 1,462 | | | 1,982 | | | 6,518 | | | 8,500 | | | (2,581) | | | 03/03 | | 40 years | | | |
| | | Lawrence, KS | | — | | | 1,500 | | | 3,526 | | | 2,017 | | | 1,500 | | | 5,543 | | | 7,043 | | | (2,199) | | | 06/03 | | 40 years | | | |
| | | Columbia, SC | | — | | | 1,000 | | | 10,534 | | | 339 | | | 1,000 | | | 10,873 | | | 11,873 | | | (4,399) | | | 11/03 | | 40 years | | | |
| | | Hialeah, FL | | — | | | 7,985 | | | — | | | 22 | | | 7,985 | | | 22 | | | 8,007 | | | (2) | | | 12/03 | | 5 years | | | |
| | | Phoenix, AZ | | — | | | 4,276 | | | 15,934 | | | 3,518 | | | 4,276 | | | 19,452 | | | 23,728 | | | (8,227) | | | 03/04 | | 40 years | | | |
| | | Hamilton, NJ | | — | | | 4,869 | | | 18,143 | | | 20 | | | 4,869 | | | 18,163 | | | 23,032 | | | (8,506) | | | 03/04 | | 40 years | | | |
| | | Mesa, AZ | | — | | | 4,446 | | | 16,565 | | | 3,263 | | | 4,446 | | | 19,828 | | | 24,274 | | | (8,506) | | | 03/04 | | 40 years | | | |
| | | Peoria, IL | | — | | | 2,948 | | | 11,177 | | | — | | | 2,948 | | | 11,177 | | | 14,125 | | | (5,146) | | | 07/04 | | 40 years | | | |
| | | Lafayette, LA | | — | | | — | | | 10,318 | | | — | | | — | | | 10,318 | | | 10,318 | | | (4,767) | | | 07/04 | | 40 years | | | |
| | | Hurst, TX | | — | | | 5,000 | | | 11,729 | | | 1,015 | | | 5,000 | | | 12,744 | | | 17,744 | | | (5,776) | | | 11/04 | | 40 years | | | |
| | | Melbourne, FL | | — | | | 3,817 | | | 8,830 | | | 320 | | | 3,817 | | | 9,150 | | | 12,967 | | | (4,118) | | | 12/04 | | 40 years | | | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Initial cost | | Additions (Dispositions) (Impairments) Subsequent to acquisition | | Gross Amount at December 31, 2022 | | | | | | | | | |
| | | Location | | Debt | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Total | | Accumulated depreciation | | Date acquired | | Depreciation life | | | |
| | | D'Iberville, MS | | — | | | 2,001 | | | 8,043 | | | 3,612 | | | 808 | | | 12,848 | | | 13,656 | | | (5,113) | | | 12/04 | | 40 years | | | |
| | | Wilmington, NC | | — | | | 1,650 | | | 7,047 | | | 3,033 | | | 1,650 | | | 10,080 | | | 11,730 | | | (3,745) | | | 02/05 | | 40 years | | | |
| | | Chattanooga, TN | | — | | | 2,799 | | | 11,467 | | | — | | | 2,799 | | | 11,467 | | | 14,266 | | | (5,112) | | | 03/05 | | 40 years | | | |
| | | Conroe, TX | | — | | | 1,836 | | | 8,230 | | | 2,304 | | | 1,836 | | | 10,534 | | | 12,370 | | | (3,903) | | | 06/05 | | 40 years | | | |
| | | Indianapolis, IN | | — | | | 1,481 | | | 4,565 | | | 2,375 | | | 1,481 | | | 6,940 | | | 8,421 | | | (2,504) | | | 06/05 | | 40 years | | | |
| | | Hattiesburg, MS | | — | | | 1,978 | | | 7,733 | | | 4,720 | | | 1,978 | | | 12,453 | | | 14,431 | | | (4,776) | | | 09/05 | | 40 years | | | |
| | | Arroyo Grande, CA | | — | | | 2,641 | | | 3,810 | | | — | | | 2,641 | | | 3,810 | | | 6,451 | | | (1,627) | | | 12/05 | | 40 years | | | |
| | | Auburn, CA | | — | | | 2,178 | | | 6,185 | | | (65) | | | 2,113 | | | 6,185 | | | 8,298 | | | (2,642) | | | 12/05 | | 40 years | | | |
| | | Fresno, CA | | — | | | 7,600 | | | 11,613 | | | 2,894 | | | 7,600 | | | 14,507 | | | 22,107 | | | (7,410) | | | 12/05 | | 40 years | | | |
| | | Modesto, CA | | — | | | 2,542 | | | 3,910 | | | 1,889 | | | 2,542 | | | 5,799 | | | 8,341 | | | (2,053) | | | 12/05 | | 40 years | | | |
| | | Columbia, MD | | — | | | — | | | 12,204 | | | — | | | — | | | 12,204 | | | 12,204 | | | (5,111) | | | 03/06 | | 40 years | | | |
| | | Garland, TX | | — | | | 8,028 | | | 14,825 | | | — | | | 8,028 | | | 14,825 | | | 22,853 | | | (6,208) | | | 03/06 | | 40 years | | | |
| | | Garner, NC | | — | | | 1,305 | | | 6,899 | | | — | | | 1,305 | | | 6,899 | | | 8,204 | | | (2,874) | | | 04/06 | | 40 years | | | |
| | | Winston Salem, NC | | — | | | — | | | 12,153 | | | 4,188 | | | — | | | 16,341 | | | 16,341 | | | (6,252) | | | 07/06 | | 40 years | | | |
| | | Huntsville, AL | | — | | | 3,508 | | | 14,802 | | | — | | | 3,508 | | | 14,802 | | | 18,310 | | | (6,044) | | | 08/06 | | 40 years | | | |
| | | Pensacola, FL | | — | | | 5,316 | | | 15,099 | | | — | | | 5,316 | | | 15,099 | | | 20,415 | | | (6,040) | | | 12/06 | | 40 years | | | |
| | | Slidell, LA | | 10,635 | | | — | | | 11,499 | | | — | | | — | | | 11,499 | | | 11,499 | | | (4,600) | | | 12/06 | | 40 years | | | |
| | | Panama City Beach, FL | | — | | | 6,486 | | | 11,156 | | | 2,704 | | | 6,486 | | | 13,860 | | | 20,346 | | | (4,671) | | | 05/07 | | 40 years | | | |
| | | Kalispell, MT | | — | | | 2,505 | | | 7,323 | | | — | | | 2,505 | | | 7,323 | | | 9,828 | | | (2,807) | | | 08/07 | | 40 years | | | |
| | | Greensboro, NC | | — | | | — | | | 12,606 | | | 914 | | | — | | | 13,520 | | | 13,520 | | | (8,264) | | | 11/07 | | 40 years | | | |
| | | Glendora, CA | | — | | | — | | | 10,588 | | | — | | | — | | | 10,588 | | | 10,588 | | | (3,750) | | | 10/08 | | 40 years | | | |
| | | Ypsilanti, MI | | — | | | 4,716 | | | 227 | | | 2,817 | | | 4,716 | | | 3,044 | | | 7,760 | | | (543) | | | 12/09 | | 40 years | | | |
| | | Manchester, CT | | — | | | 3,628 | | | 11,474 | | | 2,315 | | | 3,628 | | | 13,789 | | | 17,417 | | | (4,022) | | | 12/09 | | 40 years | | | |
| | | Centreville, VA | | — | | | 3,628 | | | 1,769 | | | — | | | 3,628 | | | 1,769 | | | 5,397 | | | (575) | | | 12/09 | | 40 years | | | |
| | | Davenport, IA | | — | | | 3,599 | | | 6,068 | | | 2,265 | | | 3,564 | | | 8,368 | | | 11,932 | | | (2,348) | | | 12/09 | | 40 years | | | |
| | | Fairfax, VA | | — | | | 2,630 | | | 11,791 | | | 2,000 | | | 2,630 | | | 13,791 | | | 16,421 | | | (4,159) | | | 12/09 | | 40 years | | | |
| | | Flint, MI | | — | | | 1,270 | | | 1,723 | | | — | | | 1,270 | | | 1,723 | | | 2,993 | | | (560) | | | 12/09 | | 40 years | | | |
| | | Hazlet, NJ | | — | | | 3,719 | | | 4,716 | | | — | | | 3,719 | | | 4,716 | | | 8,435 | | | (1,533) | | | 12/09 | | 40 years | | | |
| | | Huber Heights, OH | | — | | | 970 | | | 3,891 | | | — | | | 970 | | | 3,891 | | | 4,861 | | | (1,265) | | | 12/09 | | 40 years | | | |
| | | North Haven, CT | | — | | | 5,442 | | | 1,061 | | | 2,000 | | | 3,458 | | | 5,045 | | | 8,503 | | | (1,767) | | | 12/09 | | 40 years | | | |
| | | Okolona, KY | | — | | | 5,379 | | | 3,311 | | | 2,000 | | | 5,379 | | | 5,311 | | | 10,690 | | | (1,329) | | | 12/09 | | 40 years | | | |
| | | Voorhees, NJ | | — | | | 1,723 | | | 9,614 | | | — | | | 1,723 | | | 9,614 | | | 11,337 | | | (3,125) | | | 12/09 | | 40 years | | | |
| | | Louisville, KY | | — | | | 4,979 | | | 6,567 | | | (1,046) | | | 3,933 | | | 6,567 | | | 10,500 | | | (2,134) | | | 12/09 | | 40 years | | | |
| | | Beaver Creek, OH | | — | | | 1,578 | | | 6,630 | | | 1,700 | | | 1,578 | | | 8,330 | | | 9,908 | | | (2,382) | | | 12/09 | | 40 years | | | |
| | | West Springfield, MA | | — | | | 2,540 | | | 3,755 | | | 2,650 | | | 2,540 | | | 6,405 | | | 8,945 | | | (1,556) | | | 12/09 | | 40 years | | | |
| | | Cincinnati, OH | | — | | | 1,361 | | | 1,741 | | | — | | | 635 | | | 2,467 | | | 3,102 | | | (715) | | | 12/09 | | 40 years | | | |
| | | Pasadena, TX | | — | | | 2,951 | | | 10,684 | | | 1,759 | | | 2,951 | | | 12,443 | | | 15,394 | | | (3,565) | | | 06/10 | | 40 years | | | |
| | | Plano, TX | | — | | | 1,052 | | | 1,968 | | | — | | | 1,052 | | | 1,968 | | | 3,020 | | | (615) | | | 06/10 | | 40 years | | | |
| | | McKinney, TX | | — | | | 1,917 | | | 3,319 | | | — | | | 1,917 | | | 3,319 | | | 5,236 | | | (1,037) | | | 06/10 | | 40 years | | | |
| | | Mishawaka, IN | | — | | | 2,399 | | | 5,454 | | | 1,383 | | | 2,399 | | | 6,837 | | | 9,236 | | | (1,975) | | | 06/10 | | 40 years | | | |
| | | Grand Prairie, TX | | — | | | 1,873 | | | 3,245 | | | 2,104 | | | 1,873 | | | 5,349 | | | 7,222 | | | (1,469) | | | 06/10 | | 40 years | | | |
| | | Redding, CA | | — | | | 2,044 | | | 4,500 | | | 1,177 | | | 2,044 | | | 5,677 | | | 7,721 | | | (1,556) | | | 06/10 | | 40 years | | | |
| | | Pueblo, CO | | — | | | 2,238 | | | 5,162 | | | 1,265 | | | 2,238 | | | 6,427 | | | 8,665 | | | (1,777) | | | 06/10 | | 40 years | | | |
| | | Beaumont, TX | | — | | | 1,065 | | | 11,669 | | | 1,644 | | | 1,065 | | | 13,313 | | | 14,378 | | | (3,913) | | | 06/10 | | 40 years | | | |
| | | Pflugerville, TX | | — | | | 4,356 | | | 11,533 | | | 2,056 | | | 4,356 | | | 13,589 | | | 17,945 | | | (3,930) | | | 06/10 | | 40 years | | | |
| | | Houston, TX | | — | | | 4,109 | | | 9,739 | | | 2,617 | | | 4,109 | | | 12,356 | | | 16,465 | | | (3,339) | | | 06/10 | | 40 years | | | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Initial cost | | Additions (Dispositions) (Impairments) Subsequent to acquisition | | Gross Amount at December 31, 2022 | | | | | | | | | |
| | | Location | | Debt | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Total | | Accumulated depreciation | | Date acquired | | Depreciation life | | | |
| | | El Paso, TX | | — | | | 4,598 | | | 13,207 | | | 2,296 | | | 4,598 | | | 15,503 | | | 20,101 | | | (4,455) | | | 06/10 | | 40 years | | | |
| | | Colorado Springs, CO | | — | | | 4,134 | | | 11,220 | | | 1,427 | | | 2,938 | | | 13,843 | | | 16,781 | | | (3,939) | | | 06/10 | | 40 years | | | |
| | | Hooksett, NH | | — | | | 2,639 | | | 11,605 | | | 1,376 | | | 2,639 | | | 12,981 | | | 15,620 | | | (3,599) | | | 03/11 | | 40 years | | | |
| | | Saco, ME | | — | | | 1,508 | | | 3,826 | | | 1,124 | | | 1,508 | | | 4,950 | | | 6,458 | | | (1,266) | | | 03/11 | | 40 years | | | |
| | | Merrimack, NH | | — | | | 3,160 | | | 5,642 | | | 107 | | | 3,160 | | | 5,749 | | | 8,909 | | | (1,684) | | | 03/11 | | 40 years | | | |
| | | Westbrook, ME | | — | | | 2,273 | | | 7,119 | | | — | | | 2,273 | | | 7,119 | | | 9,392 | | | (2,106) | | | 03/11 | | 40 years | | | |
| | | Twin Falls, ID | | — | | | — | | | 4,783 | | | — | | | — | | | 4,783 | | | 4,783 | | | (1,266) | | | 04/11 | | 40 years | | | |
| | | Dallas, TX | | — | | | — | | | 12,146 | | | (12,146) | | | — | | | — | | | — | | | — | | | 03/12 | | n/a | | | |
| | | Albuquerque, NM | | — | | | — | | | 13,733 | | | — | | | — | | | 13,733 | | | 13,733 | | | (3,119) | | | 06/12 | | 40 years | | | |
| | | Austin, TX | | — | | | 2,608 | | | 6,373 | | | — | | | 2,608 | | | 6,373 | | | 8,981 | | | (1,500) | | | 09/12 | | 40 years | | | |
| | | Champaign, IL | | — | | | — | | | 9,381 | | | 125 | | | — | | | 9,506 | | | 9,506 | | | (2,159) | | | 09/12 | | 40 years | | | |
| | | Opelika, AL | | — | | | 1,314 | | | 8,951 | | | — | | | 1,314 | | | 8,951 | | | 10,265 | | | (1,902) | | | 11/12 | | 40 years | | | |
| | | Gainesville, VA | | — | | | — | | | 10,846 | | | 95 | | | — | | | 10,941 | | | 10,941 | | | (2,474) | | | 02/13 | | 40 years | | | |
| | | Lafayette, LA | | 14,360 | | | — | | | 12,728 | | | 1,438 | | | — | | | 14,166 | | | 14,166 | | | (3,000) | | | 08/13 | | 40 years | | | |
| | | New Iberia, LA | | — | | | — | | | 1,630 | | | — | | | — | | | 1,630 | | | 1,630 | | | (377) | | | 08/13 | | 40 years | | | |
| | | Tuscaloosa, AL | | — | | | — | | | 11,287 | | | — | | | 1,815 | | | 9,472 | | | 11,287 | | | (2,191) | | | 09/13 | | 40 years | | | |
| | | Tampa, FL | | — | | | 1,700 | | | 23,483 | | | 3,648 | | | 1,579 | | | 27,252 | | | 28,831 | | | (8,252) | | | 10/13 | | 40 years | | | |
| | | Warrenville, IL | | — | | | 14,000 | | | 17,318 | | | (5,417) | | | 8,270 | | | 17,631 | | | 25,901 | | | (5,397) | | | 10/13 | | 40 years | | | |
| | | San Francisco, CA | | — | | | 2,077 | | | 12,914 | | | — | | | 2,077 | | | 12,914 | | | 14,991 | | | (2,260) | | | 08/13 | | 40 years | | | |
| | | Bedford, IN | | — | | | 349 | | | 1,594 | | | — | | | 349 | | | 1,594 | | | 1,943 | | | (396) | | | 04/14 | | 40 years | | | |
| | | Seymour, IN | | — | | | 1,028 | | | 2,291 | | | — | | | 1,028 | | | 2,291 | | | 3,319 | | | (534) | | | 04/14 | | 40 years | | | |
| | | Wilder, KY | | — | | | 983 | | | 11,233 | | | 2,004 | | | 983 | | | 13,237 | | | 14,220 | | | (2,879) | | | 04/14 | | 40 years | | | |
| | | Bowling Green, KY | | — | | | 1,241 | | | 10,222 | | | — | | | 1,241 | | | 10,222 | | | 11,463 | | | (2,358) | | | 04/14 | | 40 years | | | |
| | | New Albany, IN | | — | | | 2,461 | | | 14,807 | | | — | | | 2,461 | | | 14,807 | | | 17,268 | | | (3,348) | | | 04/14 | | 40 years | | | |
| | | Clarksville, TN | | — | | | 3,764 | | | 16,769 | | | 4,706 | | | 3,764 | | | 21,475 | | | 25,239 | | | (4,406) | | | 04/14 | | 40 years | | | |
| | | Williamsport, PA | | — | | | 2,243 | | | 6,684 | | | — | | | 2,243 | | | 6,684 | | | 8,927 | | | (1,592) | | | 04/14 | | 40 years | | | |
| | | Noblesville, IN | | — | | | 886 | | | 7,453 | | | 2,019 | | | 886 | | | 9,472 | | | 10,358 | | | (2,010) | | | 04/14 | | 40 years | | | |
| | | Moline, IL | | — | | | 1,963 | | | 10,183 | | | — | | | 1,963 | | | 10,183 | | | 12,146 | | | (2,330) | | | 04/14 | | 40 years | | | |
| | | O'Fallon, MO | | — | | | 1,046 | | | 7,342 | | | — | | | 1,046 | | | 7,342 | | | 8,388 | | | (1,670) | | | 04/14 | | 40 years | | | |
| | | McDonough, GA | | — | | | 2,235 | | | 16,842 | | | — | | | 2,235 | | | 16,842 | | | 19,077 | | | (3,841) | | | 04/14 | | 40 years | | | |
| | | Sterling Heights, MI | | — | | | 10,849 | | | — | | | (3,712) | | | 6,949 | | | 188 | | | 7,137 | | | (147) | | | 12/14 | | 15 years | | | |
| | | Virginia Beach, VA | | — | | | 2,544 | | | 6,478 | | | — | | | 2,544 | | | 6,478 | | | 9,022 | | | (1,269) | | | 02/15 | | 40 years | | | |
| | | Yulee, FL | | — | | | 1,036 | | | 6,934 | | | — | | | 1,036 | | | 6,934 | | | 7,970 | | | (1,358) | | | 02/15 | | 40 years | | | |
| | | Jacksonville, FL | | — | | | 5,080 | | | 22,064 | | | — | | | 5,080 | | | 22,064 | | | 27,144 | | | (6,685) | | | 05/15 | | 25 years | | | |
| | | Denham Springs, LA | | — | | | — | | | 5,093 | | | 4,162 | | | — | | | 9,255 | | | 9,255 | | | (1,515) | | | 05/15 | | 40 years | | | |
| | | Crystal Lake, IL | | — | | | 2,980 | | | 13,521 | | | 568 | | | 2,980 | | | 14,089 | | | 17,069 | | | (4,287) | | | 07/15 | | 25 years | | | |
| | | Laredo, TX | | — | | | 1,353 | | | 7,886 | | | — | | | 1,353 | | | 7,886 | | | 9,239 | | | (1,380) | | | 12/15 | | 40 years | | | |
| | | Corpus, Christi, TX | | — | | | 1,286 | | | 8,252 | | | — | | | 1,286 | | | 8,252 | | | 9,538 | | | (1,221) | | | 12/15 | | 40 years | | | |
| | | Kennewick, WA | | — | | | 2,484 | | | 4,901 | | | — | | | 2,484 | | | 4,901 | | | 7,385 | | | (1,431) | | | 06/16 | | 25 years | | | |
| | | Franklin, TN | | — | | | 10,158 | | | 17,549 | | | 9,018 | | | 10,158 | | | 26,567 | | | 36,725 | | | (6,966) | | | 06/16 | | 25 years | | | |
| | | Mobile, AL | | — | | | 2,116 | | | 16,657 | | | — | | | 2,116 | | | 16,657 | | | 18,773 | | | (4,602) | | | 06/16 | | 25 years | | | |
| | | El Paso, TX | | — | | | 2,957 | | | 10,961 | | | 3,905 | | | 2,957 | | | 14,866 | | | 17,823 | | | (3,841) | | | 06/16 | | 25 years | | | |
| | | Edinburg, TX | | — | | | 1,982 | | | 16,964 | | | 5,680 | | | 1,982 | | | 22,644 | | | 24,626 | | | (5,806) | | | 06/16 | | 25 years | | | |
| | | Hendersonville, TN | | — | | | 2,784 | | | 8,034 | | | 4,245 | | | 2,784 | | | 12,279 | | | 15,063 | | | (2,403) | | | 07/16 | | 30 years | | | |
| | | Houston, TX | | — | | | 965 | | | 10,002 | | | — | | | 965 | | | 10,002 | | | 10,967 | | | (1,666) | | | 10/16 | | 40 years | | | |
| | | Detroit, MI | | — | | | 4,299 | | | 13,810 | | | — | | | 4,299 | | | 13,810 | | | 18,109 | | | (2,839) | | | 11/16 | | 30 years | | | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Initial cost | | Additions (Dispositions) (Impairments) Subsequent to acquisition | | Gross Amount at December 31, 2022 | | | | | | | | | |
| | | Location | | Debt | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Total | | Accumulated depreciation | | Date acquired | | Depreciation life | | | |
| | | Fort Worth, TX | | — | | | — | | | 11,385 | | | — | | | — | | | 11,385 | | | 11,385 | | | (1,304) | | | 02/17 | | 40 years | | | |
| | | Fort Wayne, IN | | — | | | 1,926 | | | 11,054 | | | — | | | 1,926 | | | 11,054 | | | 12,980 | | | (2,480) | | | 05/17 | | 27 years | | | |
| | | Wichita, KS | | — | | | 267 | | | 7,535 | | | (6,312) | | | 67 | | | 1,423 | | | 1,490 | | | — | | | 05/17 | | 23 years | | | |
| | | Wichita, KS | | — | | | 3,132 | | | 23,270 | | | — | | | 3,132 | | | 23,270 | | | 26,402 | | | (5,937) | | | 05/17 | | 23 years | | | |
| | | Richmond, TX | | — | | | 7,251 | | | 36,534 | | | (27) | | | 7,251 | | | 36,507 | | | 43,758 | | | (5,444) | | | 08/17 | | 40 years | | | |
| | | Tomball, TX | | — | | | 3,416 | | | 26,918 | | | — | | | 3,416 | | | 26,918 | | | 30,334 | | | (3,912) | | | 08/17 | | 40 years | | | |
| | | Cleveland, OH | | — | | | 5,060 | | | 21,072 | | | 374 | | | 5,060 | | | 21,446 | | | 26,506 | | | (5,217) | | | 08/17 | | 25 years | | | |
| | | Little Rock, AR | | — | | | 1,789 | | | 10,780 | | | — | | | 1,789 | | | 10,780 | | | 12,569 | | | (1,518) | | | 01/18 | | 40 years | | | |
| | | Conway, AR | | — | | | 1,316 | | | 5,553 | | | — | | | 1,316 | | | 5,553 | | | 6,869 | | | (977) | | | 03/18 | | 30 years | | | |
| | | Lynbrook, NY | | — | | | 1,753 | | | 28,400 | | | — | | | 1,753 | | | 28,400 | | | 30,153 | | | (3,270) | | | 06/18 | | 40 years | | | |
| | | Long Island, NY | | — | | | — | | | 12,479 | | | (2,449) | | | — | | | 10,030 | | | 10,030 | | | — | | | 12/18 | | 25 years | | | |
| | | Beaumont, CA | | — | | | 2,421 | | | 12,026 | | | — | | | 2,421 | | | 12,026 | | | 14,447 | | | (573) | | | 01/19 | | 40 years | | | |
| | | Brandywine, MD | | — | | | 5,251 | | | 10,520 | | | — | | | 5,251 | | | 10,520 | | | 15,771 | | | (1,363) | | | 03/19 | | 34 years | | | |
| | | Cincinnati, OH | | — | | | 2,831 | | | 11,430 | | | — | | | 2,831 | | | 11,430 | | | 14,261 | | | (1,408) | | | 03/19 | | 35 years | | | |
| | | Louisville, KY | | — | | | 3,726 | | | 27,312 | | | — | | | 3,726 | | | 27,312 | | | 31,038 | | | (2,827) | | | 03/19 | | 40 years | | | |
| | | Riverview, FL | | — | | | 2,339 | | | 15,901 | | | — | | | 2,339 | | | 15,901 | | | 18,240 | | | (1,807) | | | 03/19 | | 37 years | | | |
| | | Savoy, IL | | — | | | 1,938 | | | 10,554 | | | 904 | | | 1,938 | | | 11,458 | | | 13,396 | | | (2,172) | | | 06/19 | | 25 years | | | |
| | | Dublin, CA | | — | | | 15,662 | | | 25,496 | | | — | | | 15,662 | | | 25,496 | | | 41,158 | | | (3,568) | | | 06/19 | | 30 years | | | |
| | | Ontario, CA | | — | | | 8,019 | | | 15,708 | | | — | | | 8,019 | | | 15,708 | | | 23,727 | | | (2,616) | | | 06/19 | | 24 years | | | |
| | | Columbia, SC | | — | | | 7,009 | | | 17,318 | | | — | | | 7,009 | | | 17,318 | | | 24,327 | | | (1,729) | | | 06/19 | | 40 years | | | |
| | | Columbia, MD | | — | | | 12,642 | | | 14,152 | | | — | | | 12,642 | | | 14,152 | | | 26,794 | | | (1,860) | | | 06/19 | | 34 years | | | |
| | | Charlotte, NC | | — | | | 4,257 | | | 15,121 | | | — | | | 4,257 | | | 15,121 | | | 19,378 | | | (1,774) | | | 06/19 | | 35 years | | | |
| | | Foothill Ranch, CA | | — | | | 7,653 | | | 14,090 | | | — | | | 7,653 | | | 14,090 | | | 21,743 | | | (2,431) | | | 06/19 | | 29 years | | | |
| | | Wilsonville, OR | | — | | | 2,742 | | | 1,301 | | | — | | | 2,742 | | | 1,301 | | | 4,043 | | | (370) | | | 06/19 | | 23 years | | | |
| | | Raleigh, NC | | — | | | 5,376 | | | 12,516 | | | — | | | 5,376 | | | 12,516 | | | 17,892 | | | (1,835) | | | 06/19 | | 30 years | | | |
| | | Gastonia, NC | | — | | | 4,039 | | | 9,199 | | | — | | | 4,039 | | | 9,199 | | | 13,238 | | | (1,375) | | | 06/19 | | 30 years | | | |
| | | Abingdon, MD | | — | | | 4,613 | | | 6,171 | | | — | | | 4,613 | | | 6,171 | | | 10,784 | | | (1,356) | | | 06/19 | | 24 years | | | |
| | | Midland, TX | | — | | | 2,495 | | | 12,965 | | | — | | | 2,495 | | | 12,965 | | | 15,460 | | | (1,577) | | | 06/19 | | 35 years | | | |
| | | Port Richey, FL | | — | | | 1,564 | | | 7,103 | | | — | | | 1,564 | | | 7,103 | | | 8,667 | | | (1,356) | | | 06/19 | | 26 years | | | |
| | | Hillsboro, OR | | — | | | 3,392 | | | 5,697 | | | — | | | 3,392 | | | 5,697 | | | 9,089 | | | (1,373) | | | 06/19 | | 23 years | | | |
| | | Woodway, TX | | — | | | 2,376 | | | 7,309 | | | — | | | 2,376 | | | 7,309 | | | 9,685 | | | (1,467) | | | 06/19 | | 24 years | | | |
| | | San Jacinto, CA | | — | | | 1,960 | | | 5,073 | | | — | | | 1,960 | | | 5,073 | | | 7,033 | | | (1,043) | | | 06/19 | | 23 years | | | |
| | | Albany, OR | | — | | | 2,049 | | | 3,920 | | | — | | | 2,049 | | | 3,920 | | | 5,969 | | | (663) | | | 06/19 | | 30 years | | | |
| | | Lake City, FL | | — | | | 1,257 | | | 4,756 | | | — | | | 1,257 | | | 4,756 | | | 6,013 | | | (825) | | | 06/19 | | 27 years | | | |
| | | Anderson, SC | | — | | | 1,554 | | | 3,948 | | | — | | | 1,554 | | | 3,948 | | | 5,502 | | | (819) | | | 06/19 | | 24 years | | | |
| | | New Hartford, NY | | — | | | 946 | | | 11,985 | | | (141) | | | 946 | | | 11,844 | | | 12,790 | | | (1,393) | | | 10/19 | | 31 years | | | |
| | | Columbus, OH | | — | | | 5,211 | | | 14,179 | | | 571 | | | 5,211 | | | 14,750 | | | 19,961 | | | (1,881) | | | 10/19 | | 38 years | | | |
| | | Kenner, LA | | — | | | 5,299 | | | 14,000 | | | — | | | 5,299 | | | 14,000 | | | 19,299 | | | (2,740) | | | 10/19 | | 34 years | | | |
| | | Marana, AZ | | — | | | 2,384 | | | 5,438 | | | — | | | 2,384 | | | 5,438 | | | 7,822 | | | (881) | | | 12/19 | | 28 years | | | |
| | | Bluffton, SC | | — | | | 1,912 | | | 3,053 | | | 202 | | | 1,912 | | | 3,255 | | | 5,167 | | | (550) | | | 03/20 | | 25 years | | | |
| | | Cherry Hill, NJ | | — | | | 5,038 | | | 9,206 | | | — | | | 5,038 | | | 9,206 | | | 14,244 | | | (1,885) | | | 03/20 | | 25 years | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Eat & Play | | | | | | | | | | | | | | | | | | | | | | | |
| | | Westminster, CO | | — | | | 12,055 | | | 29,914 | | | 25,132 | | | 10,848 | | | 56,253 | | | 67,101 | | | (31,747) | | | 06/99 | | 40 years | | | |
| | | New Rochelle, NY | | — | | | 6,100 | | | 97,696 | | | 14,357 | | | 6,100 | | | 112,053 | | | 118,153 | | | (54,432) | | | 10/03 | | 40 years | | | |
| | | Kanata, ON | | — | | | 10,044 | | | 36,630 | | | 29,943 | | | 9,303 | | | 67,314 | | | 76,617 | | | (29,479) | | | 03/04 | | 40 years | | | |
| | | Mississagua, ON | | — | | | 9,221 | | | 17,593 | | | 20,969 | | | 11,231 | | | 36,552 | | | 47,783 | | | (14,706) | | | 03/04 | | 40 years | | | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
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| | | | | | | Initial cost | | Additions (Dispositions) (Impairments) Subsequent to acquisition | | Gross Amount at December 31, 2022 | | | | | | | | | |
| | | Location | | Debt | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Total | | Accumulated depreciation | | Date acquired | | Depreciation life | | | |
| | | Oakville, ON | | — | | | 10,044 | | | 23,646 | | | 13,892 | | | 9,303 | | | 38,279 | | | 47,582 | | | (16,426) | | | 03/04 | | 40 years | | | |
| | | Whitby, ON | | — | | | 10,202 | | | 21,960 | | | 30,921 | | | 12,139 | | | 50,944 | | | 63,083 | | | (20,765) | | | 03/04 | | 40 years | | | |
| | | Burbank, CA | | — | | | 16,584 | | | 35,016 | | | 12,852 | | | 16,584 | | | 47,868 | | | 64,452 | | | (19,338) | | | 03/05 | | 40 years | | | |
| | | Northbrook, IL | | — | | | — | | | 7,025 | | | 586 | | | — | | | 7,611 | | | 7,611 | | | (2,115) | | | 07/11 | | 40 years | | | |
| | | Allen, TX | | — | | | — | | | 10,007 | | | 1,151 | | | — | | | 11,158 | | | 11,158 | | | (4,105) | | | 02/12 | | 29 years | | | |
| | | Dallas, TX | | — | | | — | | | 10,007 | | | 1,771 | | | — | | | 11,778 | | | 11,778 | | | (4,178) | | | 02/12 | | 30 years | | | |
| | | Jacksonville, FL | | — | | | 4,510 | | | 5,061 | | | 4,748 | | | 4,510 | | | 9,809 | | | 14,319 | | | (3,758) | | | 02/12 | | 30 years | | | |
| | | Indianapolis, IN | | — | | | 4,298 | | | 6,320 | | | (4,754) | | | 1,813 | | | 4,051 | | | 5,864 | | | (1,129) | | | 02/12 | | 40 years | | | |
| | | Oakbrook, IL | | — | | | — | | | 8,068 | | | 536 | | | — | | | 8,604 | | | 8,604 | | | (2,164) | | | 03/12 | | 40 years | | | |
| | | Houston, TX | | — | | | — | | | 12,403 | | | 394 | | | — | | | 12,797 | | | 12,797 | | | (3,383) | | | 09/12 | | 40 years | | | |
| | | Colony, TX | | — | | | 4,004 | | | 13,665 | | | (240) | | | 4,004 | | | 13,425 | | | 17,429 | | | (3,021) | | | 12/12 | | 40 years | | | |
| | | Alpharetta, GA | | — | | | 5,608 | | | 16,616 | | | (19) | | | 5,589 | | | 16,616 | | | 22,205 | | | (3,531) | | | 05/13 | | 40 years | | | |
| | | Scottsdale, AZ | | — | | | — | | | 16,942 | | | — | | | — | | | 16,942 | | | 16,942 | | | (3,600) | | | 06/13 | | 40 years | | | |
| | | Spring, TX | | — | | | 4,928 | | | 14,522 | | | — | | | 4,928 | | | 14,522 | | | 19,450 | | | (3,147) | | | 07/13 | | 40 years | | | |
| | | Warrenville, IL | | — | | | — | | | 6,469 | | | 9,625 | | | 2,906 | | | 13,188 | | | 16,094 | | | (4,466) | | | 10/13 | | 40 years | | | |
| | | San Antonio, TX | | — | | | — | | | 15,976 | | | 79 | | | — | | | 16,055 | | | 16,055 | | | (3,137) | | | 12/13 | | 40 years | | | |
| | | Tampa, FL | | — | | | — | | | 15,726 | | | (67) | | | — | | | 15,659 | | | 15,659 | | | (3,230) | | | 02/14 | | 40 years | | | |
| | | Gilbert, AZ | | — | | | 4,735 | | | 16,130 | | | (267) | | | 4,735 | | | 15,863 | | | 20,598 | | | (3,173) | | | 02/14 | | 40 years | | | |
| | | Overland Park, KS | | — | | | 5,519 | | | 17,330 | | | — | | | 5,519 | | | 17,330 | | | 22,849 | | | (3,243) | | | 05/14 | | 40 years | | | |
| | | Centennial, CO | | — | | | 3,013 | | | 19,106 | | | 403 | | | 3,013 | | | 19,509 | | | 22,522 | | | (3,572) | | | 06/14 | | 40 years | | | |
| | | Atlanta, GA | | — | | | 8,143 | | | 17,289 | | | — | | | 8,143 | | | 17,289 | | | 25,432 | | | (3,206) | | | 06/14 | | 40 years | | | |
| | | Ashburn VA | | — | | | — | | | 16,873 | | | 101 | | | — | | | 16,974 | | | 16,974 | | | (3,103) | | | 06/14 | | 40 years | | | |
| | | Naperville, IL | | — | | | 8,824 | | | 20,279 | | | (665) | | | 8,824 | | | 19,614 | | | 28,438 | | | (3,596) | | | 08/14 | | 40 years | | | |
| | | Oklahoma City, OK | | — | | | 3,086 | | | 16,421 | | | (252) | | | 3,086 | | | 16,169 | | | 19,255 | | | (3,032) | | | 09/14 | | 40 years | | | |
| | | Webster, TX | | — | | | 5,631 | | | 17,732 | | | 799 | | | 5,210 | | | 18,952 | | | 24,162 | | | (3,376) | | | 11/14 | | 40 years | | | |
| | | Virginia Beach, VA | | — | | | 6,948 | | | 18,715 | | | (304) | | | 6,348 | | | 19,011 | | | 25,359 | | | (3,324) | | | 12/14 | | 40 years | | | |
| | | Edison, NJ | | — | | | — | | | 22,792 | | | 1,489 | | | — | | | 24,281 | | | 24,281 | | | (3,632) | | | 04/15 | | 40 years | | | |
| | | Jacksonville, FL | | — | | | 6,732 | | | 21,823 | | | (1,201) | | | 6,732 | | | 20,622 | | | 27,354 | | | (3,210) | | | 09/15 | | 40 years | | | |
| | | Roseville, CA | | — | | | 6,868 | | | 23,959 | | | (1,928) | | | 6,868 | | | 22,031 | | | 28,899 | | | (3,470) | | | 10/15 | | 30 years | | | |
| | | Portland, OR | | — | | | — | | | 23,466 | | | (541) | | | — | | | 22,925 | | | 22,925 | | | (3,667) | | | 11/15 | | 40 years | | | |
| | | Orlando, FL | | — | | | 8,586 | | | 22,493 | | | 1,120 | | | 8,586 | | | 23,613 | | | 32,199 | | | (3,333) | | | 01/16 | | 40 years | | | |
| | | Marietta, GA | | — | | | 3,116 | | | 11,872 | | | — | | | 3,116 | | | 11,872 | | | 14,988 | | | (2,664) | | | 02/16 | | 35 years | | | |
| | | Charlotte, NC | | — | | | 4,676 | | | 21,422 | | | (867) | | | 4,676 | | | 20,555 | | | 25,231 | | | (3,048) | | | 04/16 | | 40 years | | | |
| | | Orlando, FL | | — | | | 9,382 | | | 16,225 | | | 58 | | | 9,382 | | | 16,283 | | | 25,665 | | | (2,137) | | | 05/16 | | 40 years | | | |
| | | Fort Worth, TX | | — | | | 4,674 | | | 17,537 | | | — | | | 4,674 | | | 17,537 | | | 22,211 | | | (2,484) | | | 08/16 | | 40 years | | | |
| | | Nashville, TN | | — | | | — | | | 26,685 | | | 136 | | | — | | | 26,821 | | | 26,821 | | | (3,696) | | | 12/16 | | 40 years | | | |
| | | Dallas, TX | | — | | | 3,318 | | | 7,835 | | | 4 | | | 3,318 | | | 7,839 | | | 11,157 | | | (1,320) | | | 12/16 | | 40 years | | | |
| | | San Antonio, TX | | — | | | 6,502 | | | 15,338 | | | (628) | | | 6,502 | | | 14,710 | | | 21,212 | | | (1,689) | | | 08/17 | | 40 years | | | |
| | | Huntsville, AL | | — | | | 53 | | | 17,595 | | | (1,938) | | | 53 | | | 15,657 | | | 15,710 | | | (2,383) | | | 08/17 | | 40 years | | | |
| | | El Paso, TX | | — | | | 2,688 | | | 17,373 | | | — | | | 2,688 | | | 17,373 | | | 20,061 | | | (2,655) | | | 02/18 | | 40 years | | | |
| | | Pittsburgh, PA | | — | | | 7,897 | | | 21,812 | | | (1,039) | | | 7,897 | | | 20,773 | | | 28,670 | | | (2,483) | | | 07/18 | | 40 years | | | |
| | | Philadelphia, PA | | — | | | 5,484 | | | 25,211 | | | 97 | | | 5,484 | | | 25,308 | | | 30,792 | | | (2,829) | | | 12/18 | | 40 years | | | |
| | | Auburn Hills, MI | | — | | | 4,219 | | | 27,704 | | | (2,881) | | | 4,219 | | | 24,823 | | | 29,042 | | | (2,688) | | | 12/18 | | 40 years | | | |
| | | Greenville, SC | | — | | | 6,272 | | | 18,240 | | | — | | | 6,272 | | | 18,240 | | | 24,512 | | | (2,475) | | | 06/18 | | 40 years | | | |
| | | Thornton, CO | | — | | | 5,419 | | | 23,635 | | | — | | | 5,419 | | | 23,635 | | | 29,054 | | | (2,199) | | | 09/18 | | 40 years | | | |
| | | Eugene, OR | | — | | | 1,321 | | | — | | | — | | | 1,321 | | | — | | | 1,321 | | | — | | | 06/19 | | n/a | | | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
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| | | | | | | Initial cost | | Additions (Dispositions) (Impairments) Subsequent to acquisition | | Gross Amount at December 31, 2022 | | | | | | | | | |
| | | Location | | Debt | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Total | | Accumulated depreciation | | Date acquired | | Depreciation life | | | |
| | | Katy, TX | | — | | | 5,210 | | | 16,247 | | | 232 | | | 3,431 | | | 18,258 | | | 21,689 | | | (1,351) | | | 06/19 | | 40 years | | | |
| | | Gwinnett, GA | | — | | | 3,318 | | | 17,873 | | | — | | | 3,318 | | | 17,873 | | | 21,191 | | | (1,131) | | | 06/20 | | 40 years | | | |
| | | San Jose, CA | | — | | | — | | | 26,752 | | | — | | | — | | | 26,752 | | | 26,752 | | | (1,489) | | | 03/21 | | 40 years | | | |
| | | Ontario, CA | | — | | | — | | | 34,943 | | | — | | | — | | | 34,943 | | | 34,943 | | | (1,070) | | | 12/21 | | 40 years | | | |
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| | | Ski | | | | | | | | | | | | | | | | | | | | | | | |
| | | Bellfontaine, OH | | — | | | 5,108 | | | 5,994 | | | 8,327 | | | 5,251 | | | 14,178 | | | 19,429 | | | (5,870) | | | 11/05 | | 40 years | | | |
| | | Tannersville, PA | | — | | | 34,940 | | | 34,629 | | | 4,377 | | | 34,940 | | | 39,006 | | | 73,946 | | | (19,883) | | | 09/13 | | 40 years | | | |
| | | Northstar, CA | | — | | | 56,005 | | | 106,644 | | | — | | | 56,005 | | | 106,644 | | | 162,649 | | | (30,543) | | | 04/17 | | 40 years | | | |
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| | | Attractions | | | | | | | | | | | | | | | | | | | | | | | |
| | | Kiamesha Lake, NY | | — | | | 34,897 | | | 228,462 | | | (5,165) | | | 34,897 | | | 223,297 | | | 258,194 | | | (40,435) | | | 07/10 | | 30 years | | | |
| | | Tannersville, PA | | — | | | — | | | 120,354 | | | 1,615 | | | — | | | 121,969 | | | 121,969 | | | (22,564) | | | 05/15 | | 40 years | | | |
| | | Denver, CO | | — | | | 753 | | | 6,218 | | | — | | | 753 | | | 6,218 | | | 6,971 | | | (1,226) | | | 02/17 | | 30 years | | | |
| | | Fort Worth, TX | | — | | | 824 | | | 7,066 | | | — | | | 824 | | | 7,066 | | | 7,890 | | | (1,354) | | | 03/17 | | 30 years | | | |
| | | Corfu, NY | | — | | | 5,112 | | | 43,637 | | | 2,500 | | | 5,112 | | | 46,137 | | | 51,249 | | | (12,063) | | | 04/17 | | 30 years | | | |
| | | Oklahoma City, OK | | — | | | 7,976 | | | 17,624 | | | — | | | 7,976 | | | 17,624 | | | 25,600 | | | (4,187) | | | 04/17 | | 30 years | | | |
| | | Hot Springs, AR | | — | | | 3,351 | | | 4,967 | | | — | | | 3,351 | | | 4,967 | | | 8,318 | | | (1,154) | | | 04/17 | | 30 years | | | |
| | | Riviera Beach, FL | | — | | | 17,450 | | | 29,713 | | | — | | | 17,450 | | | 29,713 | | | 47,163 | | | (7,020) | | | 04/17 | | 30 years | | | |
| | | Oklahoma City, OK | | — | | | 1,423 | | | 18,097 | | | — | | | 1,423 | | | 18,097 | | | 19,520 | | | (4,416) | | | 04/17 | | 30 years | | | |
| | | Springs, TX | | — | | | 18,776 | | | 31,402 | | | — | | | 18,776 | | | 31,402 | | | 50,178 | | | (7,620) | | | 04/17 | | 30 years | | | |
| | | Glendale, AZ | | — | | | — | | | 20,514 | | | 2,969 | | | — | | | 23,483 | | | 23,483 | | | (5,997) | | | 04/17 | | 30 years | | | |
| | | Kapolei, HI | | — | | | — | | | 8,351 | | | 1,542 | | | — | | | 9,893 | | | 9,893 | | | (2,314) | | | 04/17 | | 30 years | | | |
| | | Federal Way, WA | | — | | | — | | | 13,949 | | | (12,149) | | | — | | | 1,800 | | | 1,800 | | | (490) | | | 04/17 | | 12 years | | | |
| | | Colony, TX | | — | | | — | | | 7,617 | | | 305 | | | — | | | 7,922 | | | 7,922 | | | (3,828) | | | 04/17 | | 30 years | | | |
| | | Garland, TX | | — | | | — | | | 5,601 | | | 1,188 | | | — | | | 6,789 | | | 6,789 | | | (2,661) | | | 04/17 | | 30 years | | | |
| | | Santa Monica, CA | | — | | | — | | | 13,874 | | | 15,717 | | | — | | | 29,591 | | | 29,591 | | | (7,543) | | | 04/17 | | 30 years | | | |
| | | Concord, CA | | — | | | — | | | 9,808 | | | 5,787 | | | — | | | 15,595 | | | 15,595 | | | (3,814) | | | 04/17 | | 30 years | | | |
| | | Tampa, FL | | — | | | — | | | 8,665 | | | 2,493 | | | 2,493 | | | 8,665 | | | 11,158 | | | (1,540) | | | 08/17 | | 30 years | | | |
| | | Fort Lauderdale, FL | | — | | | — | | | 10,816 | | | — | | | — | | | 10,816 | | | 10,816 | | | (1,863) | | | 10/17 | | 30 years | | | |
| | | Valcartier, QC | | — | | | 5,906 | | | 81,534 | | | — | | | 5,906 | | | 81,534 | | | 87,440 | | | (2,262) | | | 06/22 | | 31 years | | | |
| | | Ottawa, ON | | — | | | 13,482 | | | 32,357 | | | — | | | 13,482 | | | 32,357 | | | 45,839 | | | (1,153) | | | 06/22 | | 20 years | | | |
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| | | Experiential Lodging | | | | | | | | | | | | | | | | | | | | | | | |
| | | Pigeon Forge, TN | | — | | | 5,697 | | | 14,100 | | | 16,869 | | | 8,604 | | | 28,062 | | | 36,666 | | | (1,363) | | | 04/20 | | 15 years | | | |
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| | | Fitness & Wellness | | | | | | | | | | | | | | | | | | | | | | | |
| | | Olathe, KS | | — | | | 2,417 | | | 16,878 | | | — | | | 2,417 | | | 16,878 | | | 19,295 | | | (3,235) | | | 03/17 | | 30 years | | | |
| | | Roseville, CA | | — | | | 1,807 | | | 6,082 | | | — | | | 1,807 | | | 6,082 | | | 7,889 | | | (1,231) | | | 09/17 | | 30 years | | | |
| | | Fort Collins, CO | | — | | | 2,043 | | | 5,769 | | | — | | | 2,043 | | | 5,769 | | | 7,812 | | | (1,076) | | | 01/18 | | 30 years | | | |
| | | Pagosa Springs, CO | | — | | | 9,791 | | | 15,635 | | | 2,339 | | | 9,791 | | | 17,974 | | | 27,765 | | | (3,435) | | | 06/18 | | 30 years | | | |
| | | Chicago, IL | | — | | | 4,501 | | | 13,461 | | | — | | | 4,501 | | | 13,461 | | | 17,962 | | | (373) | | | 02/22 | | 40 years | | | |
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| | | Gaming | | | | | | | | | | | | | | | | | | | | | | | |
| | | Kiamesha Lake, NY | | — | | | 155,658 | | | — | | | 19,524 | | | 156,785 | | | 18,397 | | | 175,182 | | | (1,842) | | | 07/10 | | 50 years | | | |
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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
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| | | | | | | Initial cost | | Additions (Dispositions) (Impairments) Subsequent to acquisition | | Gross Amount at December 31, 2022 | | | | | | | | | |
| | | Location | | Debt | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Total | | Accumulated depreciation | | Date acquired | | Depreciation life | | | |
| | | Cultural | | | | | | | | | | | | | | | | | | | | | | | |
| | | St. Louis, MO | | — | | | 5,481 | | | 41,951 | | | — | | | 5,481 | | | 41,951 | | | 47,432 | | | (5,952) | | | 12/18 | | 40 years | | | |
| | | Branson, MO | | — | | | 1,847 | | | 7,599 | | | — | | | 1,847 | | | 7,599 | | | 9,446 | | | (796) | | | 05/19 | | 40 years | | | |
| | | Pigeon Forge, TN | | — | | | 4,849 | | | 9,668 | | | — | | | 4,849 | | | 9,668 | | | 14,517 | | | (1,023) | | | 05/19 | | 40 years | | | |
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| | | Early Childhood Education Centers | | | | | | | | | | | | | | | | | | | | | |
| | | Lake Pleasant, AZ | | — | | | 986 | | | 3,524 | | | 902 | | | 986 | | | 4,426 | | | 5,412 | | | (1,339) | | | 03/13 | | 30 years | | | |
| | | Goodyear, AZ | | — | | | 1,308 | | | 7,275 | | | 222 | | | 1,308 | | | 7,497 | | | 8,805 | | | (2,383) | | | 06/13 | | 30 years | | | |
| | | Oklahoma City, OK | | — | | | 1,149 | | | 9,839 | | | 979 | | | 1,149 | | | 10,818 | | | 11,967 | | | (3,061) | | | 08/13 | | 40 years | | | |
| | | Coppell, TX | | — | | | 1,547 | | | 10,168 | | | 635 | | | 1,547 | | | 10,803 | | | 12,350 | | | (3,153) | | | 09/13 | | 30 years | | | |
| | | Las Vegas, NV | | — | | | 944 | | | 9,191 | | | 373 | | | 944 | | | 9,564 | | | 10,508 | | | (2,913) | | | 09/13 | | 30 years | | | |
| | | Las Vegas, NV | | — | | | 985 | | | 6,721 | | | (2,705) | | | 828 | | | 4,173 | | | 5,001 | | | — | | | 09/13 | | 30 years | | | |
| | | Mesa, AZ | | — | | | 762 | | | 6,987 | | | 1,501 | | | 762 | | | 8,488 | | | 9,250 | | | (2,925) | | | 01/14 | | 30 years | | | |
| | | Gilbert, AZ | | — | | | 1,295 | | | 9,192 | | | 316 | | | 1,295 | | | 9,508 | | | 10,803 | | | (2,731) | | | 03/14 | | 30 years | | | |
| | | Cedar Park, TX | | — | | | 1,520 | | | 10,500 | | | 418 | | | 1,278 | | | 11,160 | | | 12,438 | | | (3,003) | | | 07/14 | | 30 years | | | |
| | | Thornton, CO | | — | | | 1,384 | | | 10,542 | | | (6,116) | | | 841 | | | 4,969 | | | 5,810 | | | — | | | 07/14 | | 30 years | | | |
| | | Chicago, IL | | — | | | 1,294 | | | 4,375 | | | 19 | | | 1,294 | | | 4,394 | | | 5,688 | | | (905) | | | 07/14 | | 30 years | | | |
| | | Centennial, CO | | — | | | 1,249 | | | 10,771 | | | (5,700) | | | 814 | | | 5,506 | | | 6,320 | | | — | | | 08/14 | | 30 years | | | |
| | | McKinney, TX | | — | | | 1,812 | | | 12,419 | | | 1,841 | | | 1,812 | | | 14,260 | | | 16,072 | | | (3,886) | | | 11/14 | | 30 years | | | |
| | | Ashburn, VA | | — | | | 2,289 | | | 14,748 | | | (12,017) | | | 876 | | | 4,144 | | | 5,020 | | | — | | | 06/15 | | 30 years | | | |
| | | West Chester, OH | | — | | | 1,807 | | | 12,913 | | | 455 | | | 1,807 | | | 13,368 | | | 15,175 | | | (3,047) | | | 07/15 | | 30 years | | | |
| | | Ellisville, MO | | — | | | 2,465 | | | 15,063 | | | — | | | 2,465 | | | 15,063 | | | 17,528 | | | (3,159) | | | 07/15 | | 30 years | | | |
| | | Chanhassen, MN | | — | | | 2,603 | | | 15,613 | | | 523 | | | 2,603 | | | 16,136 | | | 18,739 | | | (3,479) | | | 08/15 | | 30 years | | | |
| | | Maple Grove, MN | | — | | | 3,743 | | | 14,927 | | | 561 | | | 3,743 | | | 15,488 | | | 19,231 | | | (4,058) | | | 08/15 | | 30 years | | | |
| | | Carmel, IN | | — | | | 1,567 | | | 12,854 | | | 366 | | | 1,561 | | | 13,226 | | | 14,787 | | | (3,071) | | | 09/15 | | 30 years | | | |
| | | Fishers, IN | | — | | | 1,226 | | | 13,144 | | | 700 | | | 1,226 | | | 13,844 | | | 15,070 | | | (2,792) | | | 12/15 | | 30 years | | | |
| | | Westerville, OH | | — | | | 2,988 | | | 14,339 | | | 362 | | | 2,988 | | | 14,701 | | | 17,689 | | | (3,402) | | | 04/16 | | 30 years | | | |
| | | Las Vegas, NV | | — | | | 1,476 | | | 14,422 | | | (1,287) | | | 1,476 | | | 13,135 | | | 14,611 | | | (2,874) | | | 06/16 | | 30 years | | | |
| | | Louisville, KY | | — | | | 377 | | | 1,526 | | | — | | | 377 | | | 1,526 | | | 1,903 | | | (326) | | | 08/16 | | 30 years | | | |
| | | Louisville, KY | | — | | | 216 | | | 1,006 | | | — | | | 216 | | | 1,006 | | | 1,222 | | | (215) | | | 08/16 | | 30 years | | | |
| | | Cheshire, CT | | — | | | 420 | | | 3,650 | | | — | | | 420 | | | 3,650 | | | 4,070 | | | (756) | | | 11/16 | | 30 years | | | |
| | | Edina, MN | | — | | | 1,235 | | | 5,493 | | | (323) | | | 1,235 | | | 5,170 | | | 6,405 | | | (986) | | | 11/16 | | 30 years | | | |
| | | Eagan, MN | | — | | | 783 | | | 4,833 | | | (286) | | | 783 | | | 4,547 | | | 5,330 | | | (989) | | | 11/16 | | 30 years | | | |
| | | Louisville, KY | | — | | | 481 | | | 2,050 | | | — | | | 481 | | | 2,050 | | | 2,531 | | | (416) | | | 12/16 | | 30 years | | | |
| | | Bala Cynwyd, PA | | — | | | 1,785 | | | 3,759 | | | — | | | 1,785 | | | 3,759 | | | 5,544 | | | (762) | | | 12/16 | | 30 years | | | |
| | | Schaumburg, IL | | — | | | 642 | | | 4,962 | | | — | | | 642 | | | 4,962 | | | 5,604 | | | (903) | | | 12/16 | | 30 years | | | |
| | | Kennesaw, GA | | — | | | 690 | | | 844 | | | — | | | 690 | | | 844 | | | 1,534 | | | (169) | | | 01/17 | | 30 years | | | |
| | | Charlotte, NC | | — | | | 1,200 | | | 2,557 | | | — | | | 1,200 | | | 2,557 | | | 3,757 | | | (393) | | | 01/17 | | 35 years | | | |
| | | Charlotte, NC | | — | | | 2,501 | | | 2,079 | | | — | | | 2,501 | | | 2,079 | | | 4,580 | | | (320) | | | 01/17 | | 35 years | | | |
| | | Richardson, TX | | — | | | 474 | | | 2,046 | | | — | | | 474 | | | 2,046 | | | 2,520 | | | (329) | | | 01/17 | | 35 years | | | |
| | | Frisco, TX | | — | | | 999 | | | 3,064 | | | — | | | 999 | | | 3,064 | | | 4,063 | | | (482) | | | 01/17 | | 35 years | | | |
| | | Allen, TX | | — | | | 910 | | | 3,719 | | | — | | | 910 | | | 3,719 | | | 4,629 | | | (598) | | | 01/17 | | 35 years | | | |
| | | Southlake, TX | | — | | | 920 | | | 2,766 | | | — | | | 920 | | | 2,766 | | | 3,686 | | | (444) | | | 01/17 | | 35 years | | | |
| | | Lewis Center, OH | | — | | | 410 | | | 4,285 | | | — | | | 410 | | | 4,285 | | | 4,695 | | | (639) | | | 01/17 | | 35 years | | | |
| | | Dublin, OH | | — | | | 581 | | | 4,223 | | | — | | | 581 | | | 4,223 | | | 4,804 | | | (627) | | | 01/17 | | 35 years | | | |
| | | Plano, TX | | — | | | 400 | | | 2,647 | | | — | | | 400 | | | 2,647 | | | 3,047 | | | (435) | | | 01/17 | | 35 years | | | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Initial cost | | Additions (Dispositions) (Impairments) Subsequent to acquisition | | Gross Amount at December 31, 2022 | | | | | | | | | |
| | | Location | | Debt | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Land | | Buildings, Equipment, Leasehold Interests & Improvements | | Total | | Accumulated depreciation | | Date acquired | | Depreciation life | | | |
| | | Carrollton, TX | | — | | | 329 | | | 1,389 | | | — | | | 329 | | | 1,389 | | | 1,718 | | | (235) | | | 01/17 | | 35 years | | | |
| | | Davenport, FL | | — | | | 3,000 | | | 5,877 | | | — | | | 3,000 | | | 5,877 | | | 8,877 | | | (906) | | | 01/17 | | 35 years | | | |
| | | Tallahassee, FL | | — | | | 952 | | | 3,205 | | | — | | | 952 | | | 3,205 | | | 4,157 | | | (525) | | | 01/17 | | 35 years | | | |
| | | Sunrise, FL | | — | | | 1,400 | | | 1,856 | | | — | | | 1,400 | | | 1,856 | | | 3,256 | | | (295) | | | 01/17 | | 35 years | | | |
| | | Chaska, MN | | — | | | 328 | | | 6,140 | | | — | | | 328 | | | 6,140 | | | 6,468 | | | (909) | | | 01/17 | | 35 years | | | |
| | | Loretto, MN | | — | | | 286 | | | 3,511 | | | — | | | 286 | | | 3,511 | | | 3,797 | | | (537) | | | 01/17 | | 35 years | | | |
| | | Minneapolis, MN | | — | | | 920 | | | 3,700 | | | — | | | 920 | | | 3,700 | | | 4,620 | | | (550) | | | 01/17 | | 35 years | | | |
| | | Wayzata, MN | | — | | | 810 | | | 1,962 | | | — | | | 810 | | | 1,962 | | | 2,772 | | | (305) | | | 01/17 | | 35 years | | | |
| | | Plymouth, MN | | — | | | 1,563 | | | 4,905 | | | — | | | 1,563 | | | 4,905 | | | 6,468 | | | (762) | | | 01/17 | | 35 years | | | |
| | | Maple Grove, MN | | — | | | 951 | | | 3,291 | | | — | | | 951 | | | 3,291 | | | 4,242 | | | (502) | | | 01/17 | | 35 years | | | |
| | | Chula Vista, CA | | — | | | 210 | | | 2,186 | | | — | | | 210 | | | 2,186 | | | 2,396 | | | (364) | | | 01/17 | | 35 years | | | |
| | | Lincolnshire, IL | | — | | | 1,006 | | | 4,799 | | | — | | | 1,006 | | | 4,799 | | | 5,805 | | | (918) | | | 02/17 | | 30 years | | | |
| | | New Berlin, WI | | — | | | 368 | | | 1,704 | | | — | | | 368 | | | 1,704 | | | 2,072 | | | (336) | | | 02/17 | | 30 years | | | |
| | | Oak Creek, WI | | — | | | 283 | | | 1,690 | | | — | | | 283 | | | 1,690 | | | 1,973 | | | (333) | | | 02/17 | | 30 years | | | |
| | | Minnetonka, MN | | — | | | 911 | | | 4,833 | | | 659 | | | 931 | | | 5,472 | | | 6,403 | | | (1,127) | | | 03/17 | | 30 years | | | |
| | | Berlin, CT | | — | | | 494 | | | 2,958 | | | — | | | 494 | | | 2,958 | | | 3,452 | | | (550) | | | 06/17 | | 30 years | | | |
| | | Portland, OR | | — | | | 2,604 | | | 585 | | | — | | | 2,604 | | | 585 | | | 3,189 | | | (98) | | | 01/18 | | 35 years | | | |
| | | Orlando, FL | | — | | | 955 | | | 4,273 | | | — | | | 955 | | | 4,273 | | | 5,228 | | | (637) | | | 02/18 | | 35 years | | | |
| | | McKinney, TX | | — | | | 1,233 | | | 4,447 | | | — | | | 1,233 | | | 4,447 | | | 5,680 | | | (576) | | | 02/18 | | 30 years | | | |
| | | Fort Mill, SC | | — | | | 629 | | | 3,957 | | | — | | | 629 | | | 3,957 | | | 4,586 | | | (521) | | | 09/18 | | 35 years | | | |
| | | Indian Land, SC | | — | | | 907 | | | 3,784 | | | — | | | 907 | | | 3,784 | | | 4,691 | | | (529) | | | 09/18 | | 35 years | | | |
| | | Sicklerville, NJ | | — | | | 694 | | | 1,876 | | | — | | | 694 | | | 1,876 | | | 2,570 | | | (316) | | | 06/19 | | 30 years | | | |
| | | Pennington, NJ | | — | | | 1,018 | | | 2,284 | | | — | | | 1,018 | | | 2,284 | | | 3,302 | | | (552) | | | 08/19 | | 24 years | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Private Schools | | | | | | | | | | | | | | | | | | | | | | | |
| | | Chicago, IL | | — | | | 3,057 | | | 46,784 | | | — | | | 3,057 | | | 46,784 | | | 49,841 | | | (8,772) | | | 02/14 | | 40 years | | | |
| | | Cumming, GA | | — | | | 500 | | | 6,892 | | | — | | | 500 | | | 6,892 | | | 7,392 | | | (1,155) | | | 01/17 | | 35 years | | | |
| | | Cumming, GA | | — | | | 325 | | | 4,898 | | | — | | | 325 | | | 4,898 | | | 5,223 | | | (845) | | | 01/17 | | 35 years | | | |
| | | Henderson, NV | | — | | | 1,400 | | | 6,914 | | | — | | | 1,400 | | | 6,914 | | | 8,314 | | | (1,129) | | | 01/17 | | 35 years | | | |
| | | Atlanta, GA | | — | | | 2,001 | | | 5,989 | | | — | | | 2,001 | | | 5,989 | | | 7,990 | | | (886) | | | 01/17 | | 35 years | | | |
| | | Pearland, TX | | — | | | 2,360 | | | 9,292 | | | — | | | 2,360 | | | 9,292 | | | 11,652 | | | (1,456) | | | 01/17 | | 35 years | | | |
| | | Pearland, TX | | — | | | 372 | | | 2,568 | | | — | | | 372 | | | 2,568 | | | 2,940 | | | (396) | | | 01/17 | | 35 years | | | |
| | | Palm Harbor, FL | | — | | | 1,490 | | | 1,400 | | | — | | | 1,490 | | | 1,400 | | | 2,890 | | | (229) | | | 01/17 | | 35 years | | | |
| | | Mason, OH | | — | | | 975 | | | 11,243 | | | — | | | 975 | | | 11,243 | | | 12,218 | | | (1,660) | | | 01/17 | | 35 years | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Property under development | | — | | | 76,029 | | | — | | | — | | | 76,029 | | | — | | | 76,029 | | | — | | | n/a | | n/a | | | |
| | | Land held for development | | — | | | 20,168 | | | — | | | — | | | 20,168 | | | — | | | 20,168 | | | — | | | n/a | | n/a | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Senior unsecured notes payable | | 2,816,234 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | n/a | | n/a | | | |
| | | Less: deferred financing costs, net | | (31,118) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | |
| | | Total | | $ | 2,810,111 | | | $ | 1,346,062 | | | $ | 4,388,502 | | | $ | 378,409 | | | $ | 1,332,555 | | | $ | 4,780,418 | | | $ | 6,112,973 | | | $ | (1,302,640) | | | | | | | | |
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020
EPR Properties
Schedule III - Real Estate and Accumulated Depreciation (continued)
Reconciliation
(Dollars in thousands)
December 31, 2022
| | | | | |
Real Estate Investments: | |
Reconciliation: | |
Balance at beginning of the year | $ | 5,943,355 | |
Acquisition and development of real estate investments during the year | 223,514 | |
Disposition of real estate investments during the year | (11,018) | |
Impairment of real estate investments during the year | (42,878) | |
| |
Balance at close of year | $ | 6,112,973 | |
Accumulated Depreciation: | |
Reconciliation: | |
Balance at beginning of the year | $ | 1,167,734 | |
Depreciation during the year | 153,242 | |
Disposition of real estate investments during the year | (839) | |
Impairment of real estate investments during the year | (17,497) | |
Balance at close of year | $ | 1,302,640 | |
See accompanying report of independent registered public accounting firm.
EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020