EPR Properties

02/26/2026 | Press release | Distributed by Public on 02/26/2026 08:41

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote an understanding of our financial condition, results of operations, liquidity and certain other factors that may affect future results. MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and notes thereto included in this Annual Report on Form 10-K. The forward-looking statements included in this discussion and elsewhere in this Annual Report on Form 10-K involve risks and uncertainties, including anticipated financial performance, business prospects, industry trends, shareholder returns, performance of leases by tenants, performance on loans to customers and other matters, which reflect management's best judgment based on factors currently known. See "Cautionary Statement Concerning Forward-Looking Statements." Actual results and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements as a result of a number of factors, including but not limited to those discussed in this Item and in Item 1A - "Risk Factors."
A discussion regarding our financial condition and results of operations for fiscal year 2025 compared to fiscal year 2024 is presented below. A discussion regarding our financial condition and results of operations for fiscal year 2024 compared to fiscal year 2023 is incorporated herein by reference and can be found under Item 7 of Part II of our Annual Report on Form 10-Kfor the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025.
Overview
Business
Our primary long-term business objective is to enhance shareholder value by achieving predictable and increasing Funds From Operations As Adjusted ("FFOAA"), Adjusted Funds From Operations ("AFFO") and dividends per share. FFOAA and AFFO are non-GAAP financial measures and are defined and reconciled below in the section titled "Non-GAAP Financial Measures." Our growth strategy focuses on acquiring or developing experiential properties in which we maintain a depth of knowledge and relationships, and which we believe offer sustained performance through most economic cycles. See Item 1 - "Business" for further discussion regarding our strategic rationale for our focus on experiential properties.
Our investment portfolio includes ownership of and long-term mortgages on Experiential and Education properties. Substantially all of our owned single-tenant properties are leased pursuant to long-term, triple-net leases under which the tenants typically pay all operating expenses of the property. Tenants at our owned multi-tenant properties are typically required to pay common area maintenance charges to reimburse us for their pro-rata portion of these costs.
We believe our management's knowledge and industry relationships have facilitated opportunities for us to acquire, finance and lease properties. Our strategy has been to structure leases and financings to ensure a positive spread between our cost of capital and the rentals or interest paid by our tenants. To avoid initial lease-up risks and produce a predictable income stream, we typically acquire or develop single-tenant properties that are pre-leased under long-term leases. We have also entered into certain joint ventures. We intend to continue entering into some or all of these types of arrangements in the foreseeable future.
Historically, our primary challenges have been locating suitable properties, negotiating favorable lease or financing terms (on new or existing properties), managing our expanding portfolio and having a cost of capital that allows us to grow our investments in new properties beyond those funded primarily with free cash and disposition proceeds.
As of December 31, 2025, our total assets were approximately $5.7 billion (after accumulated depreciation of approximately $1.7 billion) with properties located in 43 states and Canada. Our total investments (a non-GAAP financial measure) were approximately $7.0 billion as of December 31, 2025. See "Non-GAAP Financial Measures" for the reconciliation of "Total assets" in the consolidated balance sheet to total investments and the calculation of total investments at December 31, 2025 and 2024. We group our investments into two reportable segments,
Experiential and Education. As of December 31, 2025, our Experiential investments comprised $6.6 billion, or 94%, and our Education investments comprised $0.4 billion, or 6%, of our total investments.
As of December 31, 2025, our Experiential portfolio (excluding property under development, undeveloped land inventory and two joint venture properties) consisted of the following property types (owned or financed):
•148 theatre properties;
•60 eat & play properties (including seven theatres located in entertainment districts);
•26 attraction properties;
•11 ski properties;
•four experiential lodging properties;
•27 fitness & wellness properties;
•one gaming property; and
•one cultural property.
As of December 31, 2025, our wholly-owned Experiential real estate portfolio consisted of approximately 19.0 million square feet, was 99% leased or operated and included $54.9 million in property under development and $20.2 million in undeveloped land inventory.
As of December 31, 2025, our Education portfolio consisted of the following property types (owned or financed):
•46 early childhood education center properties; and
•nine private school properties.
As of December 31, 2025, our wholly-owned Education real estate portfolio consisted of approximately 1.1 million square feet and was 100% leased.
The combined wholly-owned portfolio consisted of 20.1 million square feet and was 99% leased or operated.
Geopolitical and International Trade Environment
Recent geopolitical events and macroeconomic trends, including evolving global armed conflicts and significant changes in U.S. trade policy, have produced heightened uncertainty. This uncertainty could lead to weakened economic conditions, contribute to inflation and increased borrowing costs and could lead to decreased consumer spending. For example, tariff increases may impact our business by increasing the cost of construction materials, which in turn may lead to higher development and renovation expenses. This increase in costs may result in reduced yields on development projects and potentially delay or result in cancelling planned projects. Additionally, our tenants and their customers are similarly experiencing these uncertainties, which could negatively affect their financial resources and ability to satisfy their obligations to us.
Operating Results
Our total revenue, net income available to common shareholders per diluted share and FFOAA per diluted share are detailed below for the years ended December 31, 2025 and 2024 (dollars in millions, except per share information):
Year ended December 31,
2025 2024 Change
Total revenue $ 718.4 $ 698.1 3 %
Net income available to common shareholders per diluted share 3.28 1.60 105 %
FFOAA per diluted share 5.12 4.87 5 %
The major factors impacting our results for the year ended December 31, 2025, as compared to the year ended December 31, 2024 were as follows:
•The effect of investments and dispositions that occurred in 2025 and 2024;
•The recognition of lower other income and other expense primarily related to having fewer operating properties for the year ended December 31, 2025 versus the year ended December 31, 2024;
•The recognition of higher general and administrative expense, retirement and severance expense, transaction costs and income tax expense for the year ended December 31, 2025 versus the year ended December 31, 2024.
•The decrease in provision for credit losses, net, impairment charges and impairment charges on joint ventures for the year ended December 31, 2025 versus the year ended December 31, 2024;
•The recognition of higher gain on sale of real estate and early ground lease termination for the year ended December 31, 2025 versus the year ended December 31, 2024; and
•The recognition of lower equity in loss from joint ventures for the year ended December 31, 2025 versus the year ended December 31, 2024.
For further details on items impacting our operating results, see section below titled "Results of Operations". FFOAA is a non-GAAP financial measure. For the definitions and further details on the calculation of FFOAA and certain other non-GAAP financial measures, see section below titled "Non-GAAP Financial Measures."
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related notes. In preparing these financial statements, management has made its best estimates and assumptions that affect the reported assets and liabilities and the reported amounts of revenues and expenses during the reporting periods. The most significant assumptions and estimates relate to the valuation of real estate, accounting for real estate acquisitions, assessing the collectability of receivables and the credit loss related to mortgage and other notes receivable. Applying these assumptions requires exercising judgment as to future uncertainties and, as a result, actual results could differ from these estimates.
Impairment of Real Estate Values
We are required to make subjective assessments as to whether there are impairments in the value of our real estate investments. These impairment estimates may have a direct impact on our consolidated financial statements. We assess the carrying value of our real estate investments whenever events or changes in circumstances indicate that the carrying amount of a property may not be recoverable. Certain factors may indicate that impairments exist, which include, but are not limited to, under-performance relative to projected future operating results, change in the time period we expect to hold the property, tenant difficulties and significant adverse industry or market economic trends. If an indicator of possible impairment exists, the property is evaluated for impairment by completing the undiscounted cash flow test, which compares the carrying amount of the real estate investment to the estimated future cash flows (undiscounted and without interest charges), including the residual value of the real estate. If an impairment is indicated, we record a loss for the amount by which the carrying value of the asset exceeds its estimated fair value.
The assumptions used to derive the estimated future cash flows for the undiscounted cash flow test are subjective and include, but are not limited to, capitalization rates, anticipated future market rent and our anticipated hold period. Market rent assumptions used for the estimated future cash flows and the capitalization rate used to estimate the residual value of the real estate can fluctuate based on economic and industry specific factors. Changes in these assumptions could materially impact the result of the undiscounted cash flow test and lead to an impairment loss. If there is a shift in economic conditions, or a change in our property strategy, including a reduction in our anticipated hold period, these changes could materially impact the result of the undiscounted cash flow test and also lead to an impairment loss. Impairment loss is calculated based upon the difference between the fair value and the carrying value of the property. We generally use the income approach to derive the fair value of the property, which includes estimates for market rent, capitalization rates, and discount rates that are subjective and can be impacted by a lack of comparable transactions. We may also use the sales comparison approach or take into account real estate purchase offers to derive the fair value of the real estate if it is anticipated that the property may be sold.
Real Estate Acquisitions
Upon acquisition of real estate properties, we evaluate the acquisition to determine if it is a business combination or an asset acquisition. Our acquisitions are generally considered to be asset acquisitions, and, accordingly, we allocate the purchase price and other related capitalized acquisition costs incurred to the acquired tangible assets and identified intangible assets and liabilities on a relative fair value basis. Typically, relative fair values are based on recent independent appraisals or methods similar to those used by independent appraisers, as well as management judgment. In addition, acquisition-related costs incurred for asset acquisitions are capitalized.
The methods used to derive the relative fair value of the acquired tangible and intangible assets and liabilities generally include the income approach, cost approach and sales comparison approach. The assumptions used in these approaches include, but are not limited to, estimates for market rent, capitalization rates and discount rates. These estimates are subjective and can be impacted by a lack of comparable transactions. Assumptions used in the valuation of real estate can fluctuate based on economic and industry specific factors.
Collectability of Lease Receivables
Our accounts receivable balance is comprised primarily of rents and operating cost recoveries due from tenants as well as accrued fixed rental rate increases to be received over the life of the existing leases. We regularly evaluate the collectability of our 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 our tenants, historical trends of the tenant, property level metrics, current economic conditions and changes in customer payment terms. When the collectability of lease receivables or future lease payments are no longer probable, we record a direct write-off of the outstanding receivable to rental revenue and recognize future rental revenue on a cash basis.
To determine if the collection of lease receivables is probable, we review our tenants' financial condition, including estimates of their expected future operating results, which are subjective. The tenant's current and estimated future operating results, the tenant's ability to obtain additional financing, as well as the ability and intention to pay lease receivables can vary based on economic conditions and industry specific factors. If economic conditions or the tenant's financial condition decline, the anticipated collection of outstanding lease receivables may not be probable and could result in the suspension of accrual revenue recognition and the write-off of outstanding lease receivables.
Collectability of Mortgage and Notes Receivables
Our mortgage and notes receivables consist of loans originated by us and the related accrued and unpaid interest income. We regularly evaluate the collectability of our receivables by considering such factors as the credit quality of our borrowers, historical trends of the borrower, our historical loss experience, current portfolio, market and economic conditions and changes in borrower payment terms. We estimate our current expected credit losses on a loan-by-loan basis using a forward-looking commercial real estate forecasting tool. We record provision (benefit) for credit losses, net, and reduce our mortgage note and note receivables balances by the allowance for credit losses on a quarterly basis in accordance with ASC 326. In the event we have a past due mortgage note or note receivable and we determine it is collateral dependent, we measure expected credit losses based on the fair value of the collateral. If foreclosure is deemed probable, and we expect to sell rather than operate the collateral, we adjust the fair value of the collateral for the estimated costs to sell.
The significant assumptions used in the forecasting tool to estimate our current expected credit losses include loan level assumptions such as loan to value ratio and debt service coverage ratio, as well as market level assumptions such as unemployment rates, interest rates and real estate price indices. Changes in these assumptions could materially impact the allowance for credit losses. If economic conditions or the borrower's financial condition declines, this could result in additional provision (benefit) for credit losses, net, the suspension of interest income recognition or the write-off of the receivables.
If a loan is determined to be collateral dependent, the assumptions used to determine the fair value of the underlying collateral vary based on the type of collateral that secures the mortgage or note receivable. The fair value may be impacted based on economic factors, an estimate of future operating cash flows of the collateral and capitalization rates, which are subjective and can be impacted by a lack of comparable transactions. Changes in these assumptions could materially impact the estimated value of the collateral and lead to increased provision (benefit) for credit losses, net.
Recent Developments
Investment Spending
Our investment spending during the years ended December 31, 2025 and 2024 totaled $288.5 million and $263.9 million, respectively, and is detailed below (in thousands):
For the Year Ended December 31, 2025
Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures
Experiential:
Theatres $ 8,167 $ - $ 8,167 $ - $ - $ -
Eat & Play 77,763 72,724 4,765 - 274 -
Attractions 37,452 - - 37,452 - -
Ski 1,880 - - - 1,880 -
Experiential Lodging 4,038 - 32 - - 4,006
Fitness & Wellness 159,235 - 19,316 91,984 47,935 -
Total Experiential 288,535 72,724 32,280 129,436 50,089 4,006
Education:
Total Education - - - - - -
Total Investment Spending $ 288,535 $ 72,724 $ 32,280 $ 129,436 $ 50,089 $ 4,006
For the Year Ended December 31, 2024
Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures
Experiential:
Theatres $ 370 $ - $ 370 $ - $ - $ -
Eat & Play 42,254 30,058 1,118 - 11,078 -
Attractions 78,025 - 164 33,437 44,424 -
Ski 2,018 - - - 2,018 -
Experiential Lodging 9,411 - - - - 9,411
Fitness & Wellness 129,710 24,080 48,412 - 57,218 -
Cultural 2,132 - 2,132 - - -
Total Experiential 263,920 54,138 52,196 33,437 114,738 9,411
Education:
Total Education - - - - - -
Total Investment Spending $ 263,920 $ 54,138 $ 52,196 $ 33,437 $ 114,738 $ 9,411
The above amounts include $3.9 million and $3.5 million in capitalized interest and $0.3 million and $0.2 million inother general and administrative direct project costs for the years ended December 31, 2025 and 2024, respectively. Excluded from the table above are $5.2 million and $7.3 millionof maintenance capital expenditures and other spending for the years ended December 31, 2025 and 2024, respectively.
Dispositions
During the year ended December 31, 2025, we completed the sale of three vacant theatre properties, two operating theatre properties, four leased theatre properties, one vacant early childhood education center, four land parcels and 10 leased early childhood education centers for net proceeds totaling $141.8 million and recognized a net gain on sale totaling $36.1 million.
On March 7, 2025, we received $8.1 million in proceeds representing prepayment in full on two mortgage note receivables that were secured by two early childhood education center properties. Additionally, on October 1, 2025, we received $18.4 million in proceeds representing partial prepayment on one mortgage note receivable relating to the sale of one of the five fitness & wellness properties that secure the note.
On August 5, 2025, we exercised an early termination option of a ground lease on an eat & play property. As a result of the early termination, we recognized a gain of $3.4 million due to the reassessment of the lease term and the corresponding remeasurement of the lease liability and right-of-use asset. The gain is included in "Gain (loss) on sale of real estate and early ground lease termination" in the accompanying consolidated statements of income and comprehensive income included in this Annual Report on Form 10-K for the year ended December 31, 2025.
Chief Investment Officer Transition
During the year ended December 31, 2025, our Executive Vice President and Chief Investment Officer, Greg Zimmerman, notified us of his intention to retire from his position in the first quarter of 2026. On February 23, 2026, he notified us that his retirement will be effective March 2, 2026. The role of Executive Vice President and Chief Investment Officer will be assumed by Ben Fox, who joined us in August of 2025. Mr. Fox previously served as Managing Director in the Net Lease Division of Ares Management Corporation ("Ares"), a global alternative investment manager operating in the credit, private equity and real estate markets. Prior to Ares, Mr. Fox served as Executive Vice President, Asset Management and Operations at Realty Income, where he oversaw and managed approximately 7,000 properties across the U.S. and U.K. For the year ended December 31, 2025, we recorded retirement and severance expense related to Mr. Zimmerman's expected retirement totaling $3.0 million, which included cash payments totaling $0.8 million and accelerated vesting of nonvested shares totaling $2.2 million.
Capital Markets Activity
As discussed below in Liquidity and Capital Resources, during the year ended December 31, 2025, we had the following capital markets activity:
•Upon maturity, on April 1, 2025, we repaid in full $300.0 million of senior unsecured notes using borrowings under our $1.0 billion senior unsecured revolving credit facility;
•On June 3, 2025, we filed a new universal shelf registration statement and a new shelf registration statement for our Dividend Reinvestment and Direct Share Purchase Plan ("DSP Plan") with the SEC;
•On September 22, 2025, we entered into amendment number one to our Fourth Amended, Restated and Consolidated Credit Agreement, dated as of September 19, 2024 (the "Amended Credit Agreement"), to remove the SOFR index adjustment with respect to loans denominated in U.S. dollars;
•On November 13, 2025, we issued $550.0 million in aggregate principal amount of senior unsecured notes due on November 15, 2030, which bear interest at an annual interest rate of 4.75%; and
•On December 5, 2025, in connection with the commencement of an "at-the-market" offering program ("ATM Program"), we entered into an equity distribution agreement with certain institutional investment banks pursuant to which we may issue common shares having an aggregate sales price of up to $400.0 million on the open market or in privately negotiated transactions deemed to be "at-the-market" offerings under SEC rules.
Results of Operations
Year ended December 31, 2025 compared to year ended December 31, 2024
Analysis of Revenue
The following table summarizes our total revenue (dollars in thousands):
Year Ended December 31, Change
2025 2024
Minimum rent (1) $ 547,090 $ 530,664 $ 16,426
Percentage rent (2) 22,063 14,540 7,523
Straight-line rent 16,100 17,327 (1,227)
Tenant reimbursements 21,374 20,758 616
Other rental revenue 1,978 1,878 100
Total Rental Revenue $ 608,605 $ 585,167 $ 23,438
Other income (3) 45,592 57,071 (11,479)
Mortgage and other financing income (4) 64,160 55,830 8,330
Total revenue $ 718,357 $ 698,068 $ 20,289
(1) For the year ended December 31, 2025 compared to the year ended December 31, 2024, the increase in minimum rent resulted from an increase of $11.5 million related to property acquisitions and developments completed in 2025 and 2024. In addition, there was a net increase in minimum rent of $8.4 million related to rental revenue on existing properties. This was partially offset by a decrease in rental revenue of $3.5 million from property dispositions.
During the year ended December 31, 2025, we renewed five lease agreements on approximately 160 thousand square feet and experienced an increase of approximately 1.6% in rental rates. In addition, we paid $1.0 million in leasing commissions with respect to one of these lease renewals.
(2) The increase in percentage rent (i.e., amounts above base rent) for the year ended December 31, 2025 compared to the year ended December 31, 2024 was due primarily to higher percentage rent recognized from our theatre tenants, one of our early childhood education center tenants and from our attraction tenants.
(3) The decrease in other income for the year ended December 31, 2025 compared to the year ended December 31, 2024 related primarily to a decrease in operating income from three operating theatre properties (including one that became vacant prior to sale) that were sold during the year ended December 31, 2025.
(4) The increase in mortgage and other financing income for the year ended December 31, 2025 compared to the year ended December 31, 2024 related to interest income on new mortgage notes funded and additional investments on existing mortgage notes in 2025 and 2024. In addition, $2.5 million of participating interest income was recognized during the year ended December 31, 2025 from one ski borrower, of which $1.8 million related to amounts under review regarding the calculation of participating interest income from prior periods that was resolved during the year ended December 31, 2025.
Analysis of Expenses and Other Line Items
The following table summarizes our expenses and other line items (dollars in thousands):
Year Ended December 31, Change
2025 2024
Property operating expense $ 59,172 $ 59,146 $ 26
Other expense (1) 45,756 56,877 (11,121)
General and administrative expense (2) 55,830 50,096 5,734
Retirement and severance expense 2,995 1,836 1,159
Transaction costs 2,199 798 1,401
Provision (benefit) for credit losses, net (3) 8,477 12,247 (3,770)
Impairment charges (4) - 51,764 (51,764)
Depreciation and amortization 169,160 165,733 3,427
Gain on sale of real estate and early ground lease termination (5) 39,533 16,101 23,432
Costs associated with loan refinancing or payoff - 337 (337)
Interest expense, net 133,079 130,810 2,269
Equity in loss from joint ventures (6) 3,790 8,809 (5,019)
Impairment charges on joint ventures (7) - 28,217 (28,217)
Income tax expense 2,496 1,433 1,063
Preferred dividend requirements 24,144 24,144 -
(1) The decrease in other expense for the year ended December 31, 2025 compared to the year ended December 31, 2024 related primarily to a decrease in operating expenses from three operating theatre properties (including one that became vacant prior to sale) that were sold during the year ended December 31, 2025.
(2) The increase in general and administrative expense for the year ended December 31, 2025 compared to the year ended December 31, 2024 related primarily to an increase in payroll and benefit costs, including annual incentive and share-based compensation.
(3) The change in provision (benefit) for credit losses, net for the year ended December 31, 2025 compared to the year ended December 31, 2024 related primarily to credit loss expense of $6.2 million recognized to fully reserve one mortgage note receivable during the year ended December 31, 2025 versus credit loss expense of $10.3 million related to one mortgage note receivable recognized during the year ended December 31, 2024.
(4) Impairment charges recognized during the year ended December 31, 2024 related to one vacant theatre property, two theatre properties being operated through third-party property management agreements and two leased theatre properties. No impairment charges were recognized during the year ended December 31, 2025.
(5) The gain on sale of real estate and early ground lease termination for the year ended December 31, 2025 related to the sale of three vacant theatre properties, two operating theatre properties, four leased theatre properties, one vacant early childhood education center, four land parcels and 10 leased early childhood education centers, as well as the exercise of an early termination option of a ground lease on an eat & play property. The gain on sale of real estate and early ground lease termination for the year ended December 31, 2024 related to the sale of two cultural properties, eight vacant theatre properties, one leased theatre property and two vacant early childhood education centers.
(6) The decrease in equity in loss from joint ventures for the year ended December 31, 2025 compared to the year ended December 31, 2024 related primarily to the decision in 2024 to exit our joint ventures in Breaux Bridge, Louisiana and St. Pete Beach, Florida.
(7) Impairment charges on joint ventures recognized during the year ended December 31, 2024 related to other-than-temporary impairments on our equity investments in joint ventures holding three experiential lodging properties. No impairment charges on joint ventures were recognized during the year ended December 31, 2025.
Liquidity and Capital Resources
Cash and cash equivalents were $90.6 million at December 31, 2025. In addition, we had restricted cash of $8.1 million at December 31, 2025, which related primarily to escrow deposits required for property management, mortgage note and debt agreements or held for potential acquisitions, developments and redevelopments.
Mortgage Debt, Senior Notes, Unsecured Revolving Credit Facility and Unsecured Term Loan Facility
As of December 31, 2025, we had total debt outstanding of $2.9 billion of which 99% was unsecured.
At December 31, 2025, we had outstanding $2.75 billion in aggregate principal amount of unsecured senior notes (excluding the private placement notes discussed below) ranging in interest rates from 3.60% to 4.95%. The notes contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the ratio of our debt to adjusted total assets to exceed 60%; (ii) a limitation on incurrence of any secured debt that would cause the ratio of secured debt to adjusted total assets to exceed 40%; (iii) a limitation on incurrence of any debt that would cause our debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of our total unencumbered assets such that they are not less than 150% of our outstanding unsecured debt. Interest payments on our unsecured senior notes are due semiannually.
Upon maturity, on April 1, 2025, we repaid in full $300.0 million of senior unsecured notes using borrowings under our $1.0 billion senior unsecured revolving credit facility.
On November 13, 2025, we issued $550.0 million in aggregate principal amount of senior notes due November 15, 2030 pursuant to an underwritten public offering. The notes bear interest at an annual rate of 4.75%. Interest is payable on May 15 and November 15 of each year beginning on May 15, 2026 until the stated maturity date. The notes were issued at 98.8% of their face value and are unsecured. Net proceeds from the note offering were used to repay the outstanding principal balance of our unsecured revolving credit facility and the remaining amount of net proceeds for general business purposes.
At December 31, 2025, we had no balance outstanding under our $1.0 billion unsecured revolving credit facility. Our unsecured revolving credit facility is governed by the terms of the Amended Credit Agreement. On September 22, 2025, we entered into amendment number one to the Amended Credit Agreement to remove the Secured Overnight Funds Rate (SOFR) index adjustment with respect to loans denominated in U.S. dollars. The facility will mature on October 2, 2028. We have two options to extend the maturity date of this 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. The Amended Credit Agreement provides for an initial maximum principal amount of borrowing availability of $1.0 billion, which includes a $100.0 million letter-of-credit subfacility and a $300.0 million foreign currency revolving credit subfacility. The credit facility contains an "accordion" feature under which we may increase the total maximum principal amount available by $1.0 billion, to a total of $2.0 billion, subject to lender consent. The unsecured revolving credit facility bears interest at a floating rate of SOFR plus 1.05% (based on our unsecured debt ratings and with a SOFR floor of zero), which was 4.71%at December 31, 2025. Additionally, the facility fee on the revolving credit facility is 0.25%.
At December 31, 2025, we had outstanding $179.6 million of Series B senior unsecured notes that were issued in a private placement transaction and are due on August 22, 2026. At December 31, 2025, the interest rate for these Series B private placement notes was 4.56%. The private placement notes were originally issued in two tranches: Series A due 2024; and Series B due 2026. On August 22, 2024, we repaid in full the Series A notes for $136.6 million using funds available under our $1.0 billion senior unsecured revolving credit facility.
Our unsecured revolving credit facility and the private placement notes contain financial covenants or restrictions that limit our levels of consolidated debt, secured debt, investments outside certain categories, share repurchases and dividend distributions and require us to meet certain coverage levels for fixed charges and debt service. Additionally, these debt instruments contain cross-default provisions if we default under other indebtedness exceeding certain amounts. Those cross-default thresholds vary from $50.0 million to $75.0 million, depending upon
the debt instrument. We were in compliance with all financial and other covenants under our consolidated debt instruments at December 31, 2025.
In 2024, two experiential lodging properties located in St. Pete Beach, Florida, in which we hold unconsolidated equity investments, were severely damaged by two hurricanes. We continue to work in good faith with our joint venture partners, the non-recourse debt provider and the insurance companies to identify a path forward in which we expect to result in the eventual removal of the unconsolidated equity investments in these experiential lodging properties and the related non-recourse debt from our portfolio. Accordingly, we determined that our investment in these joint ventures had no fair value and was not recoverable, and during the year ended December 31, 2024, we recognized $12.1 million in other-than-temporary impairment charges on joint ventures related to these equity investments. There can be no assurance as to the ultimate outcome of our negotiations regarding our exit from these joint ventures.
Our principal investing activities are acquiring, developing and financing Experiential properties. These investing activities have generally been financed with senior unsecured notes and the proceeds from equity offerings. Our unsecured revolving credit facility and cash from operations are also used to finance the acquisition or development of properties, and to provide mortgage financing. We have and expect to continue to issue debt securities in public or private offerings. We have and may in the future assume mortgage debt in connection with property acquisitions or incur new mortgage debt on existing properties. We may also issue equity securities in connection with acquisitions. Continued growth of our real estate investments and mortgage financing portfolios will depend in part on our continued ability to access funds through additional borrowings and securities offerings and, to a lesser extent, our ability to assume debt in connection with property acquisitions. We may also fund investments with the proceeds from asset dispositions.
Capital Markets
On June 3, 2025, we filed a new universal shelf registration statement with the SEC that 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. We may periodically offer one or 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 supplement, or other offering materials, at the time of any offering.
Additionally, on June 3, 2025, we filed a shelf registration statement with the SEC for our DSP Plan that is effective for a term of three years and permits the issuance of up to 25,000,000 common shares.
On December 5, 2025, we commenced our ATM Program and entered into an equity distribution agreement with certain institutional investment banks pursuant to which we may issue common shares up to an aggregate sales price of $400.0 million to the banks as sales agents (or principals when acting directly for their own account) or forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. As of December 31, 2025, $400.0 million remained available for sale under the ATM Program. Future sales will depend upon a variety of factors including, but not limited to, market conditions, the trading price of our common shares and our capital needs. We are not obligated to issue and sell any common shares. For additional information on the ATM Program, see Note 11 to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
Liquidity Requirements
Short-term liquidity requirements consist primarily of normal recurring corporate operating expenses, debt service requirements, and distributions to shareholders. We have historically met these requirements primarily through cash provided by operating activities. The table below summarizes our cash flows (dollars in thousands):
Year Ended December 31,
2025 2024
Net cash provided by operating activities $ 420,953 $ 393,137
Net cash used by investing activities (121,681) (176,352)
Net cash used by financing activities (236,726) (261,619)
Liquidity and material cash requirements at December 31, 2025 consisted primarily of maturities of debt. Contractual obligations as of December 31, 2025 are as follows (in thousands):
Year ended December 31,
Contractual Obligations 2026 2027 2028 2029 2030 Thereafter Total
Long Term Debt Obligations $ 629,597 $ 450,000 $ 400,000 $ 500,000 $ 550,000 $ 424,995 $ 2,954,592
Interest on Long Term Debt Obligations 125,720 88,145 65,683 52,877 37,892 23,730 394,047
Operating Lease Obligation - Corporate Office (1) 717 - - - - - 717
Operating Ground Lease Obligations (2) 28,871 28,011 27,110 25,552 20,901 153,854 284,299
Total $ 784,905 $ 566,156 $ 492,793 $ 578,429 $ 608,793 $ 602,579 $ 3,633,655
(1) Subsequent to December 31, 2025, we signed a new office lease for a term of 10.5 years for approximately 41,525 square feet of office space. The lease is expected to commence January 1, 2027 with an initial annual rent payment of approximately $1.0 million.
(2) Our tenants who are sub-tenants under the ground leases are responsible for paying the rent under these groundleases. Two of our ground leases do not currently have sub-tenants. Inthe event our tenant fails to pay the ground lease rent or the property does not have sub-tenants, we would typically be responsible for the payment, assuming we do not sell or re-tenant the property. The above amounts exclude contingent rent due under leases where the ground lease payment, or a portion thereof, is based on the level of the tenant's sales.
Commitments
As of December 31, 2025, we had 14 development projects with commitments to fund an aggregate of approximately $53.7 million, of which approximately $36.1 million is expected to be funded in 2026. We advance development costs in periodic draws. If we determine that construction is not being completed in accordance with the terms of the development agreement, we can discontinue funding construction draws. We have agreed to lease the properties to the operators at predetermined rates upon completion of construction.
We have certain commitments related to our mortgage notes and notes receivable investments that we may be required to fund in the future. We are 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, 2025, we had two mortgage notes with commitments totaling approximately $48.1 million, all of which is expected to be funded in 2026. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments.
Liquidity Analysis
We currently anticipate that our cash on hand, cash from operations, funds available under our unsecured revolving credit facility and proceeds from asset dispositions will provide adequate liquidity to meet our financial commitments, including the amounts needed to fund our operations, make recurring debt service payments, allow distributions to our shareholders and avoid corporate level federal income or excise tax in accordance with REIT Internal Revenue Code requirements.
Long-term liquidity requirements consist primarily of debt maturities. We have $629.6 million of debt maturities due in 2026. We currently believe that we will be able to repay, extend, refinance or otherwise settle our debt maturities as the debt comes due and that we will be able to fund our remaining commitments, as necessary. However, there can be no assurance that additional financing or capital will be available, or that terms will be acceptable or advantageous to us.
Our primary use of cash after paying operating expenses, debt service, distributions to shareholders and funding existing commitments is growing our investment portfolio through acquiring, developing and financing additional properties. We expect to finance these investments with cash on hand, excess cash flow, proceeds from asset
dispositions or borrowings under our unsecured revolving credit facility as well as debt and equity financing alternatives. If we borrow the maximum amount available under our $1.0 billion unsecured revolving credit facility, there can be no assurance that we will be able to obtain additional or substitute investment financing. We may also assume mortgage debt in connection with property acquisitions. The availability and terms of any such financing or sales will depend upon market and other conditions.
Capital Structure
We believe that our shareholders are best served by a conservative capital structure. Therefore, we seek to maintain a conservative debt level on our balance sheet as measured primarily by our net debt to adjusted EBITDAre ratio (see "Non-GAAP Financial Measures" for definitions). Because adjusted EBITDAre, as defined, does not include the annualization of investments put in service, acquired or disposed of during the quarter, or the potential earnings on property under development, the annualization of percentage rent and adjustments for other items, we also look at an additional ratio that reflects these adjustments. We also seek to maintain conservative interest, fixed charge, debt service coverage and net debt to gross asset ratios(see "Non-GAAP Financial Measures" for calculations).
Non-GAAP Financial Measures
Funds From Operations (FFO), Funds From Operations As Adjusted (FFOAA) and Adjusted Funds From Operations (AFFO)
The National Association of Real Estate Investment Trusts ("NAREIT") developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. Pursuant to the definition of FFO by the Board of Governors of NAREIT, we calculate FFO as net incomeavailable to common shareholders, computed in accordance with GAAP, excluding gains and losses from disposition of real estate and early ground lease terminations and impairment losses on real estate, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. We have calculated FFO for all periods presented in accordance with this definition.
In addition to FFO, we present FFOAA and AFFO. FFOAA is presented by adding to FFO retirement and severance expense, transaction costs, provision (benefit) for credit losses, net, costs associated with loan refinancing or payoff, preferred share redemption costs and impairment of operating lease right-of-use assets and subtracting sale participation income, gain on insurance recovery and deferred income tax (benefit) expense. AFFO is presented by adding to FFOAA non-real estate depreciation and amortization, deferred financing fees amortization and share-based compensation expense to management and Trustees; and subtracting amortization of above and below market leases, net and tenant allowances, maintenance capital expenditures (including second-generation tenant improvements and leasing commissions), straight-lined rental revenue (removing the impact of straight-line ground sublease expense), the non-cash portion of mortgage and other financing income and the allocated share of joint venture non-cash items.
FFO, FFOAA and AFFO are widely used measures of the operating performance of real estate companies and are provided here as supplemental measures to GAAP net income available to common shareholders and earnings per share, and management provides FFO, FFOAA and AFFO herein because it believes this information is useful to investors in this regard. FFO, FFOAA and AFFO are non-GAAP financial measures. FFO, FFOAA and AFFO do not represent cash flows from operations as defined by GAAP and are not indicative that cash flows are adequate to fund all cash needs and are not to be considered alternatives to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO, FFOAA and AFFO the same way so comparisons with other REITs may not be meaningful.
The following table summarizes our FFO, FFOAA and AFFO including per share amounts for FFO and FFOAA, for the years ended December 31, 2025, 2024 and 2023 and reconciles such measures to net income available to common shareholders, the most directly comparable GAAP measure (unaudited, in thousands, except per share information):
Year ended December 31,
2025 2024 2023
FFO:
Net income available to common shareholders of EPR Properties $ 250,792 $ 121,922 $ 148,901
(Gain) loss on sale of real estate and early ground lease termination (39,533) (16,101) 2,197
Impairment of real estate investments - 51,764 67,366
Real estate depreciation and amortization 168,545 165,029 167,219
Allocated share of joint venture depreciation 4,010 9,419 8,876
Impairment charges on joint ventures - 28,217 -
FFO available to common shareholders of EPR Properties $ 383,814 $ 360,250 $ 394,559
FFO available to common shareholders of EPR Properties $ 383,814 $ 360,250 $ 394,559
Add: Preferred dividends for Series C preferred shares 7,752 7,752 7,752
Add: Preferred dividends for Series E preferred shares 7,752 7,752 7,752
Diluted FFO available to common shareholders of EPR Properties $ 399,318 $ 375,754 $ 410,063
FFOAA:
FFO available to common shareholders of EPR Properties $ 383,814 $ 360,250 $ 394,559
Retirement and severance expense 2,995 1,836 547
Transaction costs 2,199 798 1,554
Provision (benefit) for credit losses, net 8,477 12,247 878
Costs associated with loan refinancing or payoff - 337 -
Deferred income tax benefit (846) (1,539) (344)
FFOAA available to common shareholders of EPR Properties $ 396,639 $ 373,929 $ 397,194
FFOAA available to common shareholders of EPR Properties $ 396,639 $ 373,929 $ 397,194
Add: Preferred dividends for Series C preferred shares 7,752 7,752 7,752
Add: Preferred dividends for Series E preferred shares 7,752 7,752 7,752
Diluted FFOAA available to common shareholders of EPR Properties $ 412,143 $ 389,433 $ 412,698
AFFO:
FFOAA available to common shareholders of EPR Properties $ 396,639 $ 373,929 $ 397,194
Non-real estate depreciation and amortization 615 704 814
Deferred financing fees amortization 8,808 8,844 8,637
Share-based compensation expense to management and trustees 15,329 14,066 17,512
Amortization of above/below-market leases, net and tenant allowances (324) (333) (535)
Maintenance capital expenditures (1) (5,205) (7,299) (12,399)
Straight-lined rental revenue (16,100) (17,327) (10,591)
Straight-lined ground sublease expense (37) 97 1,099
Non-cash portion of mortgage and other financing income (1,502) (1,984) (1,088)
Allocated share of joint venture non-cash items - 712 -
AFFO available to common shareholders of EPR Properties $ 398,223 $ 371,409 $ 400,643
Year ended December 31,
2025 2024 2023
FFO per common share:
Basic $ 5.05 $ 4.76 $ 5.24
Diluted 4.96 4.70 5.15
FFOAA per common share:
Basic $ 5.22 $ 4.94 $ 5.28
Diluted 5.12 4.87 5.18
Shares used for computation (in thousands):
Basic 76,040 75,636 75,260
Diluted 76,495 75,999 75,715
Weighted average shares outstanding-diluted EPS 76,495 75,999 75,715
Effect of dilutive Series C preferred shares 2,348 2,314 2,283
Effect of dilutive Series E preferred shares 1,668 1,664 1,663
Adjusted weighted average shares outstanding - diluted Series C and Series E 80,511 79,977 79,661
Other financial information:
Dividends per common share $ 3.52 $ 3.40 $ 3.30
(1) Includes maintenance capital expenditures and certain second-generation tenant improvements and leasing commissions.
The effect of the conversion of our convertible preferred shares is calculated using the if-converted method and the conversion, which results in the most dilution is included in the computation of per share amounts. The conversion of the 5.75% Series C cumulative convertible preferred shares and the 9.00% Series E cumulative convertible preferred shares would be dilutive to FFO, FFOAA and AFFO per share for the years ended December 31, 2025, 2024 and 2023. Therefore, the additional common shares that would result from the conversion and the corresponding add-back of the preferred dividends declared on those shares are included in the calculation of diluted FFO and FFOAA per share and would be included in a calculation of AFFO per share for these periods.
Net Debt
Net Debt represents debt (reported in accordance with GAAP) adjusted to exclude deferred financing costs, net and reduced for cash and cash equivalents. By excluding deferred financing costs, net and reducing debt for cash and cash equivalents on hand, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. We believe this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding our financial condition. Our method of calculating Net Debt may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Gross Assets
Gross Assets represents total assets (reported in accordance with GAAP) adjusted to exclude accumulated depreciation and reduced by cash and cash equivalents. By excluding accumulated depreciation and reducing cash and cash equivalents, the result provides an estimate of the investment made by us. We believe that investors commonly use versions of this calculation in a similar manner. Our method of calculating Gross Assets may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Net Debt to Gross Assets Ratio
Net Debt to Gross Assets Ratio is a supplemental measure derived from non-GAAP financial measures that we use to evaluate capital structure and the magnitude of debt to gross assets. We believe that investors commonly use versions of this ratio in a similar manner. Our method of calculating the Net Debt to Gross Assets Ratio may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
EBITDAre
NAREIT developed EBITDAre as a relative non-GAAP financial measure of REITs, independent of a company's capital structure, to provide a uniform basis to measure the enterprise value of a company. Pursuant to the definition of EBITDAre by the Board of Governors of NAREIT, we calculate EBITDAre as net income, computed in accordance with GAAP, excluding interest expense (net), income tax (benefit) expense, depreciation and amortization, gains and losses from disposition of real estate and early ground lease terminations, impairment losses on real estate, costs associated with loan refinancing or payoff and adjustments for unconsolidated partnerships, joint ventures and other affiliates.
Management provides EBITDAre herein because it believes this information is useful to investors as a supplemental performance measure because it can help facilitate comparisons of operating performance between periods and with other REITs. Our method of calculating EBITDAre may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDAre is not a measure of performance under GAAP, does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. This measure should not be considered an alternative to net income or any other GAAP measure as a measurement of the results of our operations or cash flows or liquidity as defined by GAAP.
Adjusted EBITDAre
Management uses Adjusted EBITDAre in its analysis of the performance of the business and operations of the Company. Management believes Adjusted EBITDAre is useful to investors because it excludes various items that management believes are not indicative of operating performance, and because it is an informative measure to use in computing various financial ratios to evaluate the Company. We define Adjusted EBITDAre as EBITDAre (defined above) for the quarter excluding sale participation income, gain on insurance recovery, retirement and severance expense, transaction costs, provision (benefit) for credit losses, net, impairment losses on operating lease right-of-use assets and prepayment fees.
Our method of calculating Adjusted EBITDAre may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. Adjusted EBITDAre is not a measure of performance under GAAP, does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. This measure should not be considered as an alternative to net income or any other GAAP measure as a measurement of the results of our operations or cash flows or liquidity as defined by GAAP.
Net Debt to Adjusted EBITDAre Ratio
Net Debt to Adjusted EBITDAre Ratio is a supplemental measure derived from non-GAAP financial measures that we use to evaluate our capital structure and the magnitude of our debt against our operating performance. We believe that investors commonly use versions of this ratio in a similar manner. In addition, financial institutions use versions of this ratio in connection with debt agreements to set pricing and covenant limitations. Our method of calculating the Net Debt to Adjusted EBITDAre Ratio may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Reconciliations of debt, total assets and net income (all reported in accordance with GAAP) to Net Debt, Gross Assets, Net Debt to Gross Assets Ratio, EBITDAre, Adjusted EBITDAre and Net Debt to Adjusted EBITDAre Ratio (each of which is a non-GAAP financial measure), as applicable, are included in the following tables (unaudited, in thousands except ratios):
December 31,
2025 2024
Net Debt:
Debt $ 2,929,411 $ 2,860,458
Deferred financing costs, net 25,181 19,134
Cash and cash equivalents (90,577) (22,062)
Net Debt $ 2,864,015 $ 2,857,530
Gross Assets:
Total Assets $ 5,699,762 $ 5,616,507
Accumulated depreciation 1,714,886 1,562,645
Cash and cash equivalents (90,577) (22,062)
Gross Assets $ 7,324,071 $ 7,157,090
Debt to Total Assets Ratio 51 % 51 %
Net Debt to Gross Assets Ratio 39 % 40 %
Three Months Ended December 31,
2025 2024
EBITDAre and Adjusted EBITDAre:
Net income (loss) $ 66,904 $ (8,395)
Interest expense, net 33,574 33,472
Income tax expense 954 653
Depreciation and amortization 43,582 40,995
Gain on sale of real estate and early ground lease termination (5,297) (112)
Impairment of real estate investments - 39,952
Allocated share of joint venture depreciation 1,000 1,965
Allocated share of joint venture interest expense 516 589
Impairment charges on joint ventures - 16,087
EBITDAre $ 141,233 $ 125,206
Retirement and severance expense 1,901 -
Transaction costs 471 423
Provision (benefit) for credit losses, net (985) 9,876
Adjusted EBITDAre $ 142,620 $ 135,505
Adjusted EBITDAre (annualized) (1) $ 570,480 $ 542,020
Net Debt to Adjusted EBITDAre Ratio 5.0 5.3
(1) Adjusted EBITDAre for the quarter is multiplied by four to calculate an annual amount but does not include the annualization of investments put in service, acquired or disposed of during the quarter, as well as the potential earnings on property under development, the annualization of percent rent and participating interest and adjustments for other items.
Total Investments
Total investments is a non-GAAP financial measure defined as the sum of the carrying values of real estate investments (before accumulated depreciation), land held for development, property under development, mortgage notes receivable and related accrued interest receivable, net, investment in joint ventures, intangible assets, gross (before accumulated amortization and included in other assets) and notes receivable and related accrued interest receivable, net (included in other assets). Total investments is a useful measure for management and investors as it illustrates across which asset categories the Company's funds have been invested. Our method of calculating total investments may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. A reconciliation of total assets (computed in accordance with GAAP) to total investments is included in the following table (unaudited, in thousands):
December 31, 2025 December 31, 2024
Total assets $ 5,699,762 $ 5,616,507
Operating lease right-of-use assets (170,755) (173,364)
Cash and cash equivalents (90,577) (22,062)
Restricted cash (8,071) (13,637)
Accounts receivable (97,855) (84,589)
Add: accumulated depreciation on real estate investments 1,714,886 1,562,645
Add: accumulated amortization on intangible assets (1) 31,584 31,876
Prepaid expenses and other current assets (1) (37,237) (39,464)
Total investments $ 7,041,737 $ 6,877,912
Total Investments:
Real estate investments, net of accumulated depreciation $ 4,494,259 $ 4,435,358
Add back accumulated depreciation on real estate investments 1,714,886 1,562,645
Land held for development 20,168 20,168
Property under development 54,905 112,263
Mortgage notes and related accrued interest receivable 679,254 665,796
Investment in joint ventures 12,316 14,019
Intangible assets, gross (1) 63,239 64,317
Notes receivable and related accrued interest receivable, net (1) 2,710 3,346
Total investments $ 7,041,737 $ 6,877,912
(1) Included in "Other assets" in the accompanying consolidated balance sheets. Other assets include the following:
December 31, 2025 December 31, 2024
Intangible assets, gross $ 63,239 $ 64,317
Less: accumulated amortization on intangible assets (31,584) (31,876)
Notes receivable and related accrued interest receivable, net 2,710 3,346
Prepaid expenses and other current assets 37,237 39,464
Total other assets $ 71,602 $ 75,251
Impact of Recently Issued Accounting Standards
See Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information on the impact of recently issued accounting standards on our business.
EPR Properties published this content on February 26, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 26, 2026 at 14:41 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]