Entertainment Properties Trust Reports Third Quarter Results  

Entertainment Properties Trust (NYSE:EPR) today announced operating results for the third quarter and nine months ended September 30, 2011.

Total revenue was $76.0 million for the third quarter of 2011, representing a 2% increase from $74.5 million for the same quarter in 2010. Net income available to common shareholders was $25.7 million, or $0.55 per diluted common share, for the third quarter of 2011 compared to $27.5 million, or $0.58 per diluted common share, for the same quarter in 2010. Funds From Operations (FFO) for the third quarter of 2011 was $37.6 million, or $0.80 per diluted common share, compared to $40.7 million, or $0.87 per diluted common share, for the same period in 2010. FFO as adjusted for the third quarter of 2011 was $40.5 million, or $0.86 per diluted common share, compared to $40.7 million, or $0.87 per diluted common share, for the same period in 2010.

Total revenue was $224.1 million for the nine months ended September 30, 2011 representing a 4% increase from $215.2 million for the same period in 2010. Net income available to common shareholders was $52.4 million, or $1.12 per diluted common share, for the nine months ended September 30, 2011 compared to $58.0 million, or $1.29 per diluted common share, for the same period in 2010. FFO for the nine months ended September 30, 2011 was $71.6 million, or $1.53 per diluted common share, compared to $96.2 million, or $2.14 per diluted common share, for the same period in 2010. FFO as adjusted for the nine months ended September 30, 2011 was $118.4 million, or $2.52 per diluted common share, compared to $111.6 million, or $2.48 per diluted common share, for the same period in 2010.

David Brain, President and CEO, commented, "We continue to deliver solid, consistent operating results in our primary entertainment and charter school businesses due to the ongoing resilience of theatres and increasing demand for public charter schools. Opportunities in our primary categories are beginning to accelerate which should carry forward into 2012. Additionally, during the quarter we made significant enhancements to our credit facility and redeemed our Series B Preferred shares. These steps reduce our cost of capital and will drive higher shareholder returns.”

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

Portfolio Update

As of September 30, 2011, the Company’s real estate portfolio consisted of 112 megaplex theatres (including two joint venture properties) totaling approximately 8.8 million square feet, and restaurant, retail and other destination recreation and specialty properties totaling 4.6 million square feet. The Company also owned 34 public charter schools (including one public charter school property under construction), five vineyards totaling approximately 726 plantable acres and eight wineries totaling approximately 640 thousand square feet. At September 30, 2011, the Company’s megaplex theatres were 99% occupied, public charter schools were 100% occupied, and its overall real estate portfolio was 97% occupied.

In addition, as of September 30, 2011, the Company’s real estate mortgage loan portfolio had a carrying value of $315.2 million and included financing provided for entertainment, retail and recreational properties, including ten metropolitan ski areas covering approximately 6,100 acres in six states.

Investment Update

The Company’s investment spending in the third quarter totaled $36.4 million bringing the total for the nine months ended September 30, 2011 to $106.9 million. The Company’s investment activity in the third quarter included $19.7 million for the completion of six public charter school properties and the purchase of one public charter school property for development located in Colorado. In addition, the Company expects to initiate several build-to-suit projects in the fourth quarter, including three or four new public charter schools as well as four or five new theatres.

Vineyards and Wineries

The Company continues to make progress on the sale of its investments in vineyards and wineries. During the third quarter, the Company completed the sale of a 60 acre vineyard and winery facility in Paso Robles, California for $13.3 million and a gain on sale of $16 thousand was recognized during the three months ended September 30, 2011.

Balance Sheet Update

The Company’s balance sheet remains strong with a debt to gross assets ratio (defined as total long-term debt to total assets plus accumulated depreciation) of 37% at September 30, 2011 and no debt maturities through September 2012. Combined unrestricted cash and credit line capacity at September 30, 2011, as adjusted for the additional capacity available under the amended and restated revolving credit facility further discussed below, was approximately $219.0 million.

Capital Markets Update

On August 31, 2011, the Company redeemed all $80.0 million of its callable 7.75% Series B preferred shares at par plus prorated dividends. In conjunction with the redemption, the Company recognized a charge during the quarter of $2.8 million representing the original issuance costs that were paid in 2005 and other redemption related expenses.

On October 13, 2011, the Company amended and restated its unsecured revolving credit facility. The facility was increased from $382.5 million to $400.0 million and contains an accordion feature in which the facility can be increased by up to an additional $100.0 million subject to certain conditions, including lender consent. The facility is priced based on a grid related to the Company’s senior unsecured credit ratings, with pricing at closing of LIBOR plus 160 basis points, a 140 basis point reduction in the credit spread from the former facility. The new facility has a maturity date of October 13, 2015 with a one year extension available at the Company’s option.

Dividend Information

On September 16, 2011, the Company declared a regular quarterly cash dividend of $0.70 per common share, which was paid on October 17, 2011 to common shareholders of record on September 30, 2011. This dividend represents an annualized dividend of $2.80 per common share, an increase of 8% over the prior year. The Company also declared and paid third quarter cash dividends of $0.3594 per share on the 5.75% Series C Convertible Preferred Shares, $0.4609 per share on the 7.375% Series D Preferred Shares and $0.5625 per share on the 9.00% Series E Convertible Preferred Shares.

Guidance Update

The Company is tightening its guidance toward the upper end of its previous range. The guidance range for FFO as adjusted per share is being revised to $3.37 to $3.42 from $3.35 to $3.42. Including charges of $0.99 per diluted share for costs associated with loan refinancing, transaction costs, impairment charges and the charge related to the Series B preferred redemption, the revised guidance for FFO per diluted share is $2.38 to $2.43. The Company expects 2011 investment spending to total approximately $150 million as a number of projects initiated in 2011 will be continuing into 2012.

The Company is introducing its 2012 guidance for FFO per diluted share of $3.44 to $3.64. The Company is also introducing 2012 investment spending guidance of $250 to $300 million, roughly one-third of which relates to expected carry-over spending on theatre and public charter school build-to-suit projects initiated in 2011.

Quarterly Supplemental

The Company’s supplemental information package for the third quarter and nine months ended September 30, 2011 is available on the Company’s website at www.eprkc.com.

The additional 1.9 million common shares that would result from the conversion of the Company’s 5.75% Series C cumulative convertible preferred shares and the additional 1.6 million common shares that would result from the conversion of the Company’s 9.00% Series E cumulative convertible preferred shares and the corresponding add-back of the preferred dividends declared on those shares are not included in the calculation of diluted earnings per share and FFO per share for the three and nine months ended September 30, 2011 and 2010 because the effect is anti-dilutive.

About Entertainment Properties Trust

Entertainment Properties Trust (NYSE:EPR) is a specialty real estate investment trust (REIT) that invests in properties in select categories which require unique industry knowledge, while offering the potential for stable and attractive returns. Our total assets exceed $2.7 billion and include megaplex movie theatres and adjacent retail, public charter schools and other destination recreational and specialty investments. We adhere to rigorous underwriting and investing criteria, centered on key industry and property level cash flow standards. We believe our focused niche approach provides a competitive advantage, and the potential for higher growth and better yields. Further information is available at www.eprkc.com or from Brian Moriarty at 888-EPR-REIT

CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS

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

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