Entertainment Properties Trust (NYSE:EPR), today
announced operating results for the fourth quarter and year ended
December 31, 2005. The Company reported record fourth quarter and
total year revenues, net income and funds from operations (FFO).
Total revenues increased 28% to $44.3 million for the fourth quarter compared to $34.5 million for the same quarter in 2004. Total revenues for the year ended December 31, 2005 increased 24% to $164.8 million compared to $133.3 million for 2004.
Net income available to common shareholders for the fourth quarter increased 9% to $15.2 million compared to $13.9 million in the same quarter last year. Net income on a diluted per common share basis increased 9% to $0.60 per share from $0.55 per share in the same quarter last year. For the full year ended December 31, 2005, net income available to common shareholders increased 20% to $57.7 million compared to $48.3 million for 2004. Net income on a diluted per common share basis increased 9% to $2.26 per share for the year ended December 31, 2005 compared to $2.07 per share for 2004.
Funds from operations (FFO) increased 11% to $22.2 million from $20.0 million for the same quarter last year. FFO per diluted common share increased 10% to $0.87 per share from $0.79 per share for the same quarter last year. For the full year ended December 31, 2005, FFO increased 19% to $85.0 million from $71.6 million for 2004. FFO per diluted common share increased 10% to $3.33 per share for the year ended December 31, 2005 compared to $3.03 per share for 2004.
Capital Markets
During the fourth quarter of 2005, the Company obtained six non-recourse mortgage loans aggregating approximately $79 million in proceeds. Each of these loans is secured by an individual theatre property. The loans bear interest at 5.77% and mature in 2015.
On January 31, 2006, the Company amended and restated its credit facility to increase the size of the facility from $150 million to $200 million, extend the term of the facility, improve the pricing, and change the facility from a secured to an unsecured facility. The amended facility carries an interest rate with prices ranging from LIBOR plus 130-175 basis points, compared to 175-250 basis points previously paid, and has a three-year term expiring in 2009 with a one-year extension available at the Company's option. As a result of this amendment and restatement, the Company will expense certain unamortized financing costs, totaling approximately $0.7 million, in the first quarter of 2006.
On February 2, 2006, the Company completed an offering of one million common shares at $41.25 per share. Subsequently, the underwriter exercised its over-allotment option to purchase an additional 150,000 shares, resulting in total proceeds to the Company, net of expenses, of approximately $46 million. On February 10, 2006, the Company obtained two non-recourse mortgage loans aggregating approximately $44 million in proceeds. Each of these loans is secured by an individual theatre property. The loans bear interest at 5.84% and mature in 2016.
Also on February 10, 2006, the Company retired approximately $109 million in maturing mortgage notes, which had a weighted average interest rate of approximately 8.0% over the term of the loans. At the time of retirement, these notes had a weighted average interest rate of 7.4%. The proceeds of the offering and financings completed in 2006 were used to repay the maturing mortgage notes.
Portfolio Highlights
As of December 31, 2005, our portfolio of 67 state-of-the-art megaplex theatre properties was 100% occupied. Our theatre portfolio consisted of approximately 5.7 million square feet, 1,327 screens and over 266 thousand seats. Our non-theatre real estate portfolio consisted of 1.4 million square feet of restaurant, retail and other specialty properties. The Company's real estate holdings are located in 24 states and Ontario, Canada.
For the year ended December 31, 2005, the Company's real estate acquisitions and development totaled $183.8 million comprised of theatre properties, complimentary retail and other specialty properties. The Company also invested $37.5 million in a secured mortgage construction loan for the purpose of developing a thirteen level entertainment retail center in downtown Toronto, Ontario, Canada. Accordingly, investments totaled $221.3 million for the year ended December 31, 2005.
As of December 31, 2005, the Company had six theatre development projects under construction for which it has agreed to either finance the development costs or purchase the theatre upon completion. These theatres are expected to have a total of 95 screens and their development costs (including land) are expected to be approximately $88.2 million. -0- ENTERTAINMENT PROPERTIES TRUST Consolidated Statements of Income (dollars in thousands except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2005 2004 2005 2004 --------- -------- ---------- --------- Rental revenue $37,997 $33,151 $145,227 $124,423 Tenant reimbursements 3,657 1,200 12,511 8,335 Other income 1,029 163 3,517 557 Mortgage financing interest 1,591 - 3,560 - ---------- -------- ----------- --------- Total revenue 44,274 34,514 164,815 133,315 Property operating expense 4,743 1,932 16,191 10,657 Other operating expense 1,016 - 2,985 - General and administrative expense, excluding amortization of non-vested shares below 1,251 1,031 5,544 4,716 Costs associated with loan refinancing - - - 1,134 Interest expense, net 11,660 9,753 42,427 38,054 Depreciation and amortization 7,216 6,329 27,597 23,365 Amortization of non-vested shares 423 356 1,705 1,377 ---------- -------- ----------- --------- Income before income from joint ventures and minority interests 17,965 15,113 68,366 54,012 Equity in income from joint ventures 181 172 728 654 Minority interests (34) 29 (34) (953) ---------- -------- ----------- --------- Net income $18,112 $15,314 $69,060 $53,713 Preferred dividend requirements (2,916) (1,366) (11,353) (5,463) ---------- -------- ----------- --------- Net income available to common shareholders $15,196 $13,948 $57,707 $48,250 ========== ======== =========== ========= Net income per common share: Basic $0.61 $0.56 $2.31 $2.12 ========== ======== =========== ========= Diluted $0.60 $0.55 $2.26 $2.07 ========== ======== =========== ========= Dividends per common share $0.625 $0.5625 $2.50 $2.25 ========== ======== =========== ========= -0- ENTERTAINMENT PROPERTIES TRUST Reconciliation of Net Income Available to Common Shareholders to Funds From Operations (A) (dollars in thousands except per share data) Three Months Twelve Months Ended Ended December 31, December 31, --------------- --------------- 2005 2004 2005 2004 -------- ------- ------- ------- Net income available to common shareholders $ 15,196 $13,948 $57,707 $48,250 Add: Real estate depreciation and amortization 6,986 6,032 27,043 22,379 Add: Allocated share of joint venture depreciation 61 60 242 223 -------- ------- ------- ------- Basic Funds From Operations 22,243 20,040 84,992 70,852 Add: Minority interest in net income - - - 750 -------- ------- ------- ------- Diluted Funds From Operations $ 22,243 $20,040 $84,992 $71,602 ======== ======= ======= ======= FFO per common share: Basic $ 0.89 $ 0.81 $ 3.40 $ 3.12 Diluted 0.87 0.79 3.33 3.03 Shares used for computation (in thousands): Basic 25,091 24,876 25,019 22,721 Diluted 25,557 25,444 25,504 23,664 Other financial information: Straight-lined rental revenue $ 595 $ 613 $ 2,242 $ 2,248 (A) The National Association of Real Estate Investment Trusts (NAREIT) developed FFO as a relative non-GAAP financial measure of performance and liquidity of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to Generally Accepted Accounting Principles (GAAP) net income available to common shareholders and earnings per share. FFO, as defined under the revised NAREIT definition and presented by us, is net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable operating properties, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. FFO is a non-GAAP financial measure. FFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or the Company's cash flows or liquidity as defined by GAAP. -0- ENTERTAINMENT PROPERTIES TRUST Condensed Consolidated Balance Sheets (dollars in thousands) As of As of December 31, 2005 December 31, 2004 ------------------ ------------------ Assets Rental properties, net $1,283,988 $1,120,792 Property under development 19,770 23,144 Mortgage note and related accrued interest receivable 44,067 - Investment in joint ventures 2,297 2,541 Cash and cash equivalents 6,546 11,255 Restricted cash 13,124 12,794 Intangible assets, net 10,461 10,900 Deferred financing costs, net 10,896 12,730 Other assets 23,016 19,292 ------------------ ------------------ Total assets $1,414,165 $1,213,448 ================== ================== Liabilities and Shareholders' Equity Common dividends payable $15,770 $14,097 Preferred dividends payable 2,916 1,366 Unearned rents 1,304 1,634 Accounts payable and accrued liabilities 7,928 10,070 Long-term debt 714,591 592,892 ------------------ ------------------ Total liabilities 742,509 620,059 Minority interests 5,235 6,049 Shareholders' equity 666,421 587,340 ------------------ ------------------ Total liabilities and shareholders' equity $1,414,165 $1,213,448 ================== ==================
About Entertainment Properties Trust
Entertainment Properties Trust is a real estate investment trust (REIT) and is the largest owner of entertainment related real estate in North America, owning megaplex movie theatre properties, entertainment retail centers and other specialty properties in metropolitan markets in the United States and Canada. Since November of 1997, EPR has acquired more than $1.4 billion of properties. The Company's common shares of beneficial interest trade on the New York Stock Exchange under the ticker symbol EPR. Entertainment Properties Trust Company contact: Jon Weis, 30 Pershing Road, Suite 201, Kansas City, Missouri 64108; 888/EPR-REIT; fax: 816/472-5794. The Company website is at www.eprkc.com.
Safe Harbor Statement: This press release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, identified by such words as "will be," "intend," "continue," "believe," "may," "expect," "hope," "anticipate," "goal", "forecast" or other comparable terms. The Company's actual financial condition, results of operations, funds from operations, or business may vary materially from those contemplated by such forward-looking statements and involve various risks and uncertainties. A discussion of the risks and uncertainties that could cause actual results to differ materially from those forward-looking statements is contained in the Company's SEC filings, including the Company's annual report on Form 10-K for the year ended December 31, 2005. Investors are cautioned not to place undue reliance on any forward-looking statements.
Total revenues increased 28% to $44.3 million for the fourth quarter compared to $34.5 million for the same quarter in 2004. Total revenues for the year ended December 31, 2005 increased 24% to $164.8 million compared to $133.3 million for 2004.
Net income available to common shareholders for the fourth quarter increased 9% to $15.2 million compared to $13.9 million in the same quarter last year. Net income on a diluted per common share basis increased 9% to $0.60 per share from $0.55 per share in the same quarter last year. For the full year ended December 31, 2005, net income available to common shareholders increased 20% to $57.7 million compared to $48.3 million for 2004. Net income on a diluted per common share basis increased 9% to $2.26 per share for the year ended December 31, 2005 compared to $2.07 per share for 2004.
Funds from operations (FFO) increased 11% to $22.2 million from $20.0 million for the same quarter last year. FFO per diluted common share increased 10% to $0.87 per share from $0.79 per share for the same quarter last year. For the full year ended December 31, 2005, FFO increased 19% to $85.0 million from $71.6 million for 2004. FFO per diluted common share increased 10% to $3.33 per share for the year ended December 31, 2005 compared to $3.03 per share for 2004.
Capital Markets
During the fourth quarter of 2005, the Company obtained six non-recourse mortgage loans aggregating approximately $79 million in proceeds. Each of these loans is secured by an individual theatre property. The loans bear interest at 5.77% and mature in 2015.
On January 31, 2006, the Company amended and restated its credit facility to increase the size of the facility from $150 million to $200 million, extend the term of the facility, improve the pricing, and change the facility from a secured to an unsecured facility. The amended facility carries an interest rate with prices ranging from LIBOR plus 130-175 basis points, compared to 175-250 basis points previously paid, and has a three-year term expiring in 2009 with a one-year extension available at the Company's option. As a result of this amendment and restatement, the Company will expense certain unamortized financing costs, totaling approximately $0.7 million, in the first quarter of 2006.
On February 2, 2006, the Company completed an offering of one million common shares at $41.25 per share. Subsequently, the underwriter exercised its over-allotment option to purchase an additional 150,000 shares, resulting in total proceeds to the Company, net of expenses, of approximately $46 million. On February 10, 2006, the Company obtained two non-recourse mortgage loans aggregating approximately $44 million in proceeds. Each of these loans is secured by an individual theatre property. The loans bear interest at 5.84% and mature in 2016.
Also on February 10, 2006, the Company retired approximately $109 million in maturing mortgage notes, which had a weighted average interest rate of approximately 8.0% over the term of the loans. At the time of retirement, these notes had a weighted average interest rate of 7.4%. The proceeds of the offering and financings completed in 2006 were used to repay the maturing mortgage notes.
Portfolio Highlights
As of December 31, 2005, our portfolio of 67 state-of-the-art megaplex theatre properties was 100% occupied. Our theatre portfolio consisted of approximately 5.7 million square feet, 1,327 screens and over 266 thousand seats. Our non-theatre real estate portfolio consisted of 1.4 million square feet of restaurant, retail and other specialty properties. The Company's real estate holdings are located in 24 states and Ontario, Canada.
For the year ended December 31, 2005, the Company's real estate acquisitions and development totaled $183.8 million comprised of theatre properties, complimentary retail and other specialty properties. The Company also invested $37.5 million in a secured mortgage construction loan for the purpose of developing a thirteen level entertainment retail center in downtown Toronto, Ontario, Canada. Accordingly, investments totaled $221.3 million for the year ended December 31, 2005.
As of December 31, 2005, the Company had six theatre development projects under construction for which it has agreed to either finance the development costs or purchase the theatre upon completion. These theatres are expected to have a total of 95 screens and their development costs (including land) are expected to be approximately $88.2 million. -0- ENTERTAINMENT PROPERTIES TRUST Consolidated Statements of Income (dollars in thousands except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2005 2004 2005 2004 --------- -------- ---------- --------- Rental revenue $37,997 $33,151 $145,227 $124,423 Tenant reimbursements 3,657 1,200 12,511 8,335 Other income 1,029 163 3,517 557 Mortgage financing interest 1,591 - 3,560 - ---------- -------- ----------- --------- Total revenue 44,274 34,514 164,815 133,315 Property operating expense 4,743 1,932 16,191 10,657 Other operating expense 1,016 - 2,985 - General and administrative expense, excluding amortization of non-vested shares below 1,251 1,031 5,544 4,716 Costs associated with loan refinancing - - - 1,134 Interest expense, net 11,660 9,753 42,427 38,054 Depreciation and amortization 7,216 6,329 27,597 23,365 Amortization of non-vested shares 423 356 1,705 1,377 ---------- -------- ----------- --------- Income before income from joint ventures and minority interests 17,965 15,113 68,366 54,012 Equity in income from joint ventures 181 172 728 654 Minority interests (34) 29 (34) (953) ---------- -------- ----------- --------- Net income $18,112 $15,314 $69,060 $53,713 Preferred dividend requirements (2,916) (1,366) (11,353) (5,463) ---------- -------- ----------- --------- Net income available to common shareholders $15,196 $13,948 $57,707 $48,250 ========== ======== =========== ========= Net income per common share: Basic $0.61 $0.56 $2.31 $2.12 ========== ======== =========== ========= Diluted $0.60 $0.55 $2.26 $2.07 ========== ======== =========== ========= Dividends per common share $0.625 $0.5625 $2.50 $2.25 ========== ======== =========== ========= -0- ENTERTAINMENT PROPERTIES TRUST Reconciliation of Net Income Available to Common Shareholders to Funds From Operations (A) (dollars in thousands except per share data) Three Months Twelve Months Ended Ended December 31, December 31, --------------- --------------- 2005 2004 2005 2004 -------- ------- ------- ------- Net income available to common shareholders $ 15,196 $13,948 $57,707 $48,250 Add: Real estate depreciation and amortization 6,986 6,032 27,043 22,379 Add: Allocated share of joint venture depreciation 61 60 242 223 -------- ------- ------- ------- Basic Funds From Operations 22,243 20,040 84,992 70,852 Add: Minority interest in net income - - - 750 -------- ------- ------- ------- Diluted Funds From Operations $ 22,243 $20,040 $84,992 $71,602 ======== ======= ======= ======= FFO per common share: Basic $ 0.89 $ 0.81 $ 3.40 $ 3.12 Diluted 0.87 0.79 3.33 3.03 Shares used for computation (in thousands): Basic 25,091 24,876 25,019 22,721 Diluted 25,557 25,444 25,504 23,664 Other financial information: Straight-lined rental revenue $ 595 $ 613 $ 2,242 $ 2,248 (A) The National Association of Real Estate Investment Trusts (NAREIT) developed FFO as a relative non-GAAP financial measure of performance and liquidity of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to Generally Accepted Accounting Principles (GAAP) net income available to common shareholders and earnings per share. FFO, as defined under the revised NAREIT definition and presented by us, is net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable operating properties, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. FFO is a non-GAAP financial measure. FFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or the Company's cash flows or liquidity as defined by GAAP. -0- ENTERTAINMENT PROPERTIES TRUST Condensed Consolidated Balance Sheets (dollars in thousands) As of As of December 31, 2005 December 31, 2004 ------------------ ------------------ Assets Rental properties, net $1,283,988 $1,120,792 Property under development 19,770 23,144 Mortgage note and related accrued interest receivable 44,067 - Investment in joint ventures 2,297 2,541 Cash and cash equivalents 6,546 11,255 Restricted cash 13,124 12,794 Intangible assets, net 10,461 10,900 Deferred financing costs, net 10,896 12,730 Other assets 23,016 19,292 ------------------ ------------------ Total assets $1,414,165 $1,213,448 ================== ================== Liabilities and Shareholders' Equity Common dividends payable $15,770 $14,097 Preferred dividends payable 2,916 1,366 Unearned rents 1,304 1,634 Accounts payable and accrued liabilities 7,928 10,070 Long-term debt 714,591 592,892 ------------------ ------------------ Total liabilities 742,509 620,059 Minority interests 5,235 6,049 Shareholders' equity 666,421 587,340 ------------------ ------------------ Total liabilities and shareholders' equity $1,414,165 $1,213,448 ================== ==================
About Entertainment Properties Trust
Entertainment Properties Trust is a real estate investment trust (REIT) and is the largest owner of entertainment related real estate in North America, owning megaplex movie theatre properties, entertainment retail centers and other specialty properties in metropolitan markets in the United States and Canada. Since November of 1997, EPR has acquired more than $1.4 billion of properties. The Company's common shares of beneficial interest trade on the New York Stock Exchange under the ticker symbol EPR. Entertainment Properties Trust Company contact: Jon Weis, 30 Pershing Road, Suite 201, Kansas City, Missouri 64108; 888/EPR-REIT; fax: 816/472-5794. The Company website is at www.eprkc.com.
Safe Harbor Statement: This press release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, identified by such words as "will be," "intend," "continue," "believe," "may," "expect," "hope," "anticipate," "goal", "forecast" or other comparable terms. The Company's actual financial condition, results of operations, funds from operations, or business may vary materially from those contemplated by such forward-looking statements and involve various risks and uncertainties. A discussion of the risks and uncertainties that could cause actual results to differ materially from those forward-looking statements is contained in the Company's SEC filings, including the Company's annual report on Form 10-K for the year ended December 31, 2005. Investors are cautioned not to place undue reliance on any forward-looking statements.